Denny K Miu › Comments

"My own experience is that entrepreneurship is a character flaw. Entrepreneurship is not something that can be rationalized and easily explained away. Entrepreneurship is a deep desire to create and destroy at the same time. It requires simultaneous distain for authorities and respect for past artisans. In fact, if I thought there was a cure, I would have taken the blue pill. Therefore if one could accept entrepreneurship as what it really is, then there is a much less immediate need for acceptance and validation (except in the marketplace). The end result is that entrepreneurs would have a very different perspective on listening to unpleasant truth, that rejection is not an undesirable and unavoidable side product, but in fact part of the journey." - Denny K Miu

"Entrepreneurs must bootstrap their companies through the R&D phase by forgoing salaries. By recruiting a small number of like-mind co-Founders to fill out the initial team, and convincing each to not take salaries, you are essentially making your own "pre-tax" investment, leveraging many-to-one. Since you don't need to put money in anyone's pocket (including your own), you don't need to raise lots of VC money. You might need a few tens of thousands of dollars. But no one needs a few millions or tens of millions to build a company anymore. My own experience is that if you can bootstrap your company to the point where your are generating sustainable profits, then you are in a seller's market. VC's will be kicking down your doors wanting to buy shares from the founding team, taking money off the table but yet allowing the company to continue to grow." - Denny K Miu

"When going after VC money, entrepreneurs should understand that while the financial interest of VC’s can be aligned with that of an entrepreneur, they can never be identical. VC's portfolio is much more diverse than ours. Therefore, after we take VC money, it is not enough that we succeed; we must succeed big enough to make up for their other losses (or losses by other partners of their firm). In general the VC's and their partners are willing to take much greater risk than entrepreneurs alone since in their eyes, succeeding small is as bad as failing big (“go big or go home”). So by taking money from VC, we will substantially increase our own risk profile and force our financial outcome to be binary, either a small piece of a big pie or nothing. My own experience is that with VC investment, your probability of having a zero outcome is not only real but common." - Denny K Miu

"This is a fun article to read. The central question is, "Is this a good time to start a company?" My own experience is that anytime is a good time to start a company because paradoxically, for a struggling entrepreneur, anytime is a bad time. When the economy is doing well, everyone is doing well and there are a lot more competitions for your customers' limited resources. When the economy is doing badly, as it is now, few entrepreneurs could afford to start companies. That's the good news. The bad news is that customers are really struggling so you must have an exceptionally compelling solution that could save them money and help them survive before they would listen. So in summary, unfortunately, the World basically conspires against an entrepreneur irrespective of the economy and it would be like asking, "Is this a good time to fall in love?"" - Denny K Miu

"There are infinite number of ways to fail a startup but in my experience, there is only one way to recover which is similar to getting up after a fall from riding a bike. You must first decide if you want to ride again. In another words, you must first make a binary decision, which is whether or not you want to try again. If you believe that being a successful entrepreneur is in your destiny, then there is no point of crying in the dirt (or even writing a post-mortem). But on the other hand, if you believe that you have had enough and don’t want to be an entrepreneur again, then you can do whatever you want and heck with what other people think. Either way entrepreneurship is a lonely business. Good luck, everyone. http://startupforless.org" - Denny K Miu

"Great article. Similar to the author's observation, my own experience is that consumer patterns have changed dramatically in recent years and a new generation of entrepreneurs is now at the best and unique vantage point to visualize what their peers need and want. So this is not about solutions looking for problems or problems looking for solutions. It is about creators of solutions being also the consumers of solutions ("entre-sumers"). There is much less need in gambling lots of money and wait to see "if the dog would eat the dog food". Entrepreneurs are the "alpha" dogs. We are our own "surrogate" customers which means that we don't need a lot of money to "supersize" our company anymore. As struggling entrepreneurs, I agree with you wholeheartedly that our first directive is very simple which is not to get funding but to acquire customers. http://www.startupforless.org" - Denny K Miu

"When it comes to releasing products, I have learned that the best way is to "Go Early, Go Ugly." Most first-time entrepreneurs prefer the opposite because their DNA is to avoid rejection. Their primary focus is to seek validation, from their peers and from their mentors (in time also from their customers). In their mind, rejection is merely an undesirable outcome, which they unfortunately tend to take very personally because they think of it as a failure and a painful reminder to be more prepared the next time around. So they prefer to get the product as perfect as possible. But rejection is not a failure. We don’t learn much from positive feedback. We learn a whole lot more from negative feedback. Entrepreneurs who avoid rejection are essentially depriving themselves of important “learning moments”. It's like learning how to sail, you don't start learning until you get wet. It seems obvious but it is tough to learn. Good luck, everyone. http://www.startupforless.org" - Denny K Miu

"I believe we are in total agreement. My experience is that as an entrepreneur, it is tough to get up in the morning if all I want is to make incremental change. But being audacious and being practical are not necessary mutually exclusive of each other. We need to be both. As I have written in the past ... “Entrepreneurship is all about creative destruction. Entrepreneurs exist for one purpose and one purpose only which is to destroy status quo, complacency and mediocrity, thereby giving renewal to excellence. But the successful entrepreneurs are the ones who actually respect the environment that they do determine to destroy. Without respect, they can never levitate themselves by the forces embedded in their hearts. Without respect, they can never learn from the mistakes of their elders. And without respect they can never stand on the shoulders of the giants who marched before them. Thanks." - Denny K Miu

"Regardless of your political conviction, there are definitely plenty of lessons that entrepreneurs can learn from our Upstart-in-Chief: product Simplicity, operational Agility, customer Intimacy and financial Leverage (SAIL). “It’s the simplicity, stupid”. Don’t try to change the World. Don’t attempt to “fly a new engine with a new air frame.” Minimum Viable Product is indeed the key. If your idea is a new product, don’t try to force a change on consumer habit. And if your idea is a new distribution scheme, don’t try to use it to introduce a new service. Don’t innovate, nanovate. Good luck. http://www.startupforless.org" - Denny K Miu

"While VC’s have become our favorite punching bags, it is important for entrepreneurs to understand that VC’s are “agents” no different than any other agent who gets a cut on the transaction. Whereas we are expected to put in our body-and-soul and our angel investors to invest their own cash, VC is all about making use of someone else’s money. So unlike us, VC’s financial interest is coupled with their professional interest, i.e., their career WILL come before ours. If they are not a partner of their firm, their personal goal is to make partner and and if they are not a managing partner, then their focus is on raising the next fund and becoming managing partner. They are not evil. They are simply an agent with different set of priorities. http://www.startupforless.org" - Denny K Miu

"This is a great article, truly enjoy it. In my own experience, I have learned that there are two kinds of decisions in startups. Any CEO who is capable of trusting his/her own instinct tends to make the right life-and-death decision, which is like avoiding a car accident that never happens. Decisions that are not life-and-death are much more difficult to make and are in fact more important to the success of startups. What I have learned is that the key is not in making the “right” decision but making any decision right. As technologists, we prefer to make the “perfect” decision, which means that we would have to have “perfect” data. Typically, in a startup, there are two ways to compensate for the lack of perfect data. One is to wait for more data and one is to seek consensus. CEO who procrastinates hoping to get incremental data is as deadly as a CEO who jumps to the wrong conclusion before enough data is in. Similarly, a CEO who is afraid to make tough and unpopular decision and..." - Denny K Miu

"A very short and very instructional video, from someone who has been in the trenches. My own experience is that most entrepreneurs do not understand is that building startups is not just about building products and features but about mitigating risks for your customers. Until you can successfully do that, no one can put their career and their families at risk by buying your products. So the best way is to get all your co-Founders and early employees together and have them focused on what it takes to best serve your customers. When you can do that then you will find that customers do expect a CEO and a bunch of VP's because their managers (who must approve the purchase) expect the same. So this is about helping your customers who are becoming your champion within their organization. But the trick is to make sure that everyone on your team knows that their titles and positions are only temporary (including the CEO) and their job is to build the company to the point when they can find..." - Denny K Miu

"Very nice article from a first-time entrepreneur. My experience is that most first-time entrepreneurs confuse action with activity, one is a vector and one is a scalar. If we start with a technical solution and then look for a problem, we are a scalar looking to become a vector. If we focus on a problem and a set of customers who are willing to pay for a solution (any solution), we will succeed when we can get some wood behind that arrow. It is too easy to keep yourself intellectually occupied with scalar activities. Wealth creation is a vectorial activity. Good luck everyone. http://www.StartupForLess.org" - Denny K Miu

"For those of us who grew up with auto shops in high schools (in the 70's) and had to fix our own rides knows that our car is more than just a fancy GPS and an iPhone adaptor. We understand that they…" - Denny K Miu

"We were honored to be given a pre-released copy of Nmap 5.0 by the inventor, Fyodor, and wrote a review based on first hand experience. We should all do our part to promote open source tools." - Denny K Miu

"We have just posted the first review of Nmap 5.0, enjoy. http://www.lovemytool.com/blog..." - Denny K Miu

"She is one of my favorite writers, someone who has actually been an entrepreneur, echoing a lot of what I have written recently about struggling entrepreneurs, especially the part about ... "How do you fund an early venture?" The answer is "You don't." http://www.startupforless.org" - Denny K Miu

"http://www.lovemytool.com/blog... 2nd part of the long article. Thanks, @bravura." - Denny K Miu

"I agree. I have written about my own experience which is for an LLC to elect to file tax as a S-Corp (filing a Form 2553). It is the best of both Worlds." - Denny K Miu

"For a bootstrapping entrepreneur, LLC is clearly the way to go. If and when you do receive VC funding (which is difficult if not impossible to do these day), you can do a tax-free transfer from a LLC to a C-Corp. In the meantime, it allows you maximum flexibility. The only big concern with LLC is that any income is taxed as personal income (not investment income) and therefore you would need to pay payroll tax (about 15%, before Federal and State tax). Also, the annual franchise fee is calculated based on "gross" income and not "net". This is an important subject. For those of us who are interested, I have written more on that in the following. http://www.startupforless.org" - Denny K Miu

"I subscribe to TWIT and Macbreak Weekly. I enjoyed the panel members (which are differently for the two shows, both the regular ones and the occasional). But what I enjoy the most is Laporte himself. I like his style and the effort that he puts in day in and day out to understand the technology. But mostly he is a very generous person, never cut off his guests and always let them be the experts. This is the first time that I have seen him standing up for himself and I like it. Good going, Leo." - Denny K Miu

"@apsurd, I am glad that you said it. This is my motto as well, don't explain, don't complain, true for an immigrant, even more so for any aspiring entrepreneur." - Denny K Miu

"@dejb, I was not being condescending and if my comment came across as such, I apologize deeply. I was merely saying that life is short and it is important not to take no for an answer. This is true if you are an immigrant or not. I just happen to be one." - Denny K Miu

"I was fifteen when I came to this country. I didn't speak English. I eventually graduated from high school but since at the time, Chinese was not taught in school, it was not considered a foreign language and therefore could not be used to satisfy the language requirement for getting into University. Instead, I applied to the local city college and spend the first semester taking high school math, physics and chemistry. Then after two more years, my English improved well enough that I was able to transfer to a four-year school, majoring in engineering. I also worked part-time in a laundry at minimum wage to save enough money so that I can move away from home to finish my degree. After my bachelor degree, I worked summer before returning to graduate school. Then after my master, I worked a few years before returning to get my Ph.D. Then I worked again and after a few years, took a teaching job at UCLA. When I was forty years old, I left the comfort of academia to start my first..." - Denny K Miu

"That sounds great. We are ALL on your side. Good luck." - Denny K Miu

"joshhart: If you are still reading the comments, you need to decide if you are a co-founder or an employee. If you believe you are an employee, then structure a better deal that is more fair which basically says that you are getting paid at market value ($3K now and $2K as deferred compensation which is essentially a senior loan to the company that the owner needs to pay you back in the future). Then at the same time, negotiate a stock plan which you can purchase upfront for just a few hundred dollars which the owner can buy back if you do not perform. However, my own advise is that being employee #1, you are essentially a co-founder (because of the current down market, there isn't going to be much upsides for a long long time)." - Denny K Miu

"I think it is a poor deal not because of the money or the tax consequence. I think it is a poor deal because he is being treated as an employee and not as a co-founder. Entrepreneurs often preceive their net worth based on how much effort they have put in and not on how much more it will take to get to the end goal. So it is not the details that made this such a bad deal but the assumption." - Denny K Miu

"But he is not getting $60K. He is getting $36K, or $18 an hour if he works just 40 hours a week. I suspect he works at least twice that which basically says that he will be working below minimum wage. My point is that he is being treated as an employee and as an employee, he is being cheated." - Denny K Miu

"I think everyone is giving you really good advise here so I am going to take a different tact which is to look at this from the owner's perspective (i.e., the founder). My guess is that he believes that he/she has invested quite a bit already and that this is his/her company and not yours. He needs you as an employee and he is treating you as such. But he is not willing to pay you market value so he is deducting $2K from your pay in exchange for a small piece of the company at an inflated price that at the moment only he can justify. What makes this one a brain-dead offer is that he is asking you to pay tax on your monthly gift." - Denny K Miu

"One thing to keep in mind of a LLC is that the annual franchise fee is not limited to $800. If you start to make money, you will need to pay a fee calculated based on the "gross" revenue, not "net" revenue (which is sales minus expenses). Also, you will need to pay self-employment tax on any money leftover. I summarize some of the tradeoffs in the following ... http://www.lovemytool.com/blog..." - Denny K Miu