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According to an article in today’s Wall Street Journal, new businesses.

Unfortunately, in troubled economic times the language of recovery is too often tilted toward large, established companies or to “small businesses,” a broad term that traditionally applies to businesses with fewer than 500 employees. The conventional wisdom is that such businesses account for half of the labor force and are therefore the engine of future job creation.

That’s not quite the case. The more precise factor is not the size of businesses, but rather their age. According to the Census Bureau, nearly all net job creation in the U.S. since 1980 occurred in firms less than five years old. A Kauffman Foundation report released yesterday shows that as recently as 2007, two-thirds of the jobs created were in such firms. Put more starkly, without new businesses, job creation in the American economy would have been negative for many years.

Just another example of how the Georgia Legislature stifled economic growth in this state by making it harder to start new businesses with the passage of Amendment 1.

So, instead of passing laws that make it harder for people to develop new jobs in this state, what should we do? Well, I’m not necessarily a huge fan of all of the ideas listed in that article, but this one is something I’ve been passionate about since being introduced to it by Brad Feld’s blog some time ago.

If an automatic green card is not politically feasible, then let’s expand and rename the current “entrepreneur’s” visa, which is limited to immigrants who bring at least $1 million to this country. Let’s drop the $1 million capital requirement and award a renewable “job creator’s” visa to immigrants who have founded a company here and demonstrated they have at least one employee.

I and many others much smarter than me love this idea. If you want to support it too, check out Startup Visa. Hell, England just did it.

Brad Feld, of Foundry Group fame, wrote a post recently titled How To Create a Sustainable Entrepreneurial Community. It’s a very interesting first hand look at what Boulder has done to grow itself into a startup hub in the last 6 years.

While reading this I started wondering how he would grade Atlanta’s slowly maturing startup scene. Here are his main recommendations and my feelings of how Atlanta scores on them.

First is the recognition that Silicon Valley is a special place. It’s futile to try to be the next Silicon Valley. Instead, recognize that Silicon Valley has strengths and weaknesses. Learn from the strengths and incorporate the ones that fit with your community while trying to avoid the weaknesses. Leverage the natural resources of your community and be the best, unique entrepreneurial community that you can be. Basically, play to your strengths.

Atlanta’s pretty well aware we are not the valley, right Stephen? You see a lot more B2B startups than consumer plays, a lot more bootstrapping than idea-stage fundraising, and specialized clusters like internet security.

Next, get ready for a 20-year journey. Most entrepreneurial communities ramp up over a three- to five-year period and then stall or collapse, with the early leaders getting bored, moving away, getting rich and changing their priorities, or just disengaging. It takes a core group of leaders — at least half a dozen — to commit to provide leadership over at least 20 years.

Well, we’ve had a few people sell high, and another few that could if they wanted to.

While some of these people haven’t found the need to participate in a lot of the startup events now that they’ve got theirs, there is a clear group of key people who are driving the community forward. People like

David Cummings
Stephen Fleming
Sanjay Parekh
Lance Weatherby

[D]o things that engage the entire entrepreneurial community. Over the years I’ve been to many annual entrepreneurial award events and I’ve gone to endless cocktail parties for entrepreneurs. These are nice, but they get boring quickly.
…
You need to take the next step and create real events that have entrepreneurs work together on a regular basis. Meetups and Open Coffee Club type events that occur on a regular basis are a great start.

We’re pretty good here. Breakfasts at St Charles, Startup Drinks, Open Coffee, etc.

Hackathons, Startup Weekend, and Open Angel Forum events are the next level.

Not bad, but not great. We’ve done Startup Weekends, but no events really like Open Angel Forum. We have pitch events, but they tend to be more about either perfecting your pitches or more of a presentation showcase than a real event to gain funding

Events at the local university, such as CU Boulder’s Silicon Flatirons programs, including Entrepreneurs Unplugged and Entrepreneurial Roundtables, involve the entrepreneurial community with students who are the future entrepreneurs in the community.

Hmmm, now we’re getting a little worse. There is a great program called TI:GER that involves Georgia Tech PhDs and MBAs and Emory JDs. To my knowledge there isn’t a similar program for undergrads at Tech (yet) but there are things like the Edison Prize and GT Business Plan Competition that encourage entrepreneurship and innovation among the young folk.

It would be great to see more opportunity out there, especially at schools other than Georgia Tech (although clearly that’s where my allegiance would lie).

And programs like TechStars — which engage the entire entrepreneurial community for 90 days a year — are the icing on the cake.

The previously mentioned Sanjay Parekh and David Cummings introduced something like this with Shotput Ventures.

Next, you have to continually get fresh blood into the entrepreneurial ecosystem. It has to be easy for a new entrepreneur to emerge in your community and get connected with the experienced entrepreneurs and investors. If someone moves to your community, it has to be easy for him or her to engage. Experienced entrepreneurs and investors should want to work with new entrepreneurs and new entrepreneurs should have their minds blown when they move from their otherwise dull and disengaged community to your exciting, welcoming and engaging community.

This is probably where we are weakest. It takes more effort to find the Atlanta entrepreneurship crowd than it does in other cities. Some people like this, they see it as a self-selecting mechanism. If you aren’t willing to put in the effort to actually find the people you seek, are you really going to add anything after all?

I humbly disagree. I think we should be reaching out to as many people as possible when they show even the slightest interest and hope for the best. This is not intended to call out anyone individually, or even the community as a whole. There are a lot of people who make themselves as public as possible and respond to unsolicited emails or twitter messages (I know, I’ve sent them). However, there’s serious improvement that can be made here that will have a huge effect on the ecosystem as a whole.

I’m not sure why Facebook gets the kind of pass it does in the business world. I guess it’s because they’re the hot company, founded by a 20 year old, that is now one of the biggest sites on the net and just had a blockbuster movie come out about it.

Still though, if I were an investor, stories like this would make me sick.

“There’s no point right now in having a massive profit,” Zuckerberg said.

Really? Because by your own estimations you have 500 million users and a couple billion a year in revenue. If you aren’t turning profits right now, after 6 years of building this site, odds are you’re doing something wrong. Maybe someone can correct me, but I can’t think of a single successful company that had 500 million users and marginal profits. Even Google was making fat stacks of cash at that point.

I was doing a lot of research on Facebook’s rapid growth last year around this time. I probably read over 100 articles about the company and every bit of biographical information I could find about the important people involved. At the time I was sold on Facebook; sold on their leadership and their plan. Now, just a year later, I’m much less impressed.

They should be doing better than they are (or are letting on that they are), and people are giving them a pass. They seem to think that there’s some magical button Facebook can press and start making billions of dollars from advertisers. Well, they have ads already. Lots of them, in fact, that make lots of money. It’s not like they’re just sitting in Palo Alto waiting to start selling. I’m certainly not going to say that they’re advertising potential is tapped out, but it’s certainly not waiting to be unleashed like some people claim.

Zuckerberg also points out that much of their revenue right now is reinvested into the product. I can’t disagree with that, building a great product should be a top priority at every company. However, I worry that in this culture of hackers they are always going to want to play with new things. Always reinvesting and building something new is a ton of fun, I get that, but it doesn’t pay the bills. Facebook can’t let perfect be the enemy of good (and profit).

Of course Facebook isn’t going to fail. They’re going to make lots of money for lots of people and be around for a looooong while. I just don’t think they’ve got the right mindset right now.

I like getting emails at 3:15am from people I work with that start out

So, woke up at 3am and started thinking of another program to design

That’s the kind of dedication you should be looking for in a co-founder.

As most of you probably know, a friend and I have a new company that we’re getting up and running. In true customer development style I had another meeting with a potential customer today to talk about our software. They’ve been kind enough to meet with me before and are now going to be set up with a 2-3 month beta test so we can iron out bugs, see what features are useful, what else they might need, things like that.

I went through the functionality we’ve built in so far and they were really impressed. There’s not a better feeling in the world than creating something for a group of people, and having them turn around and actually appreciate what you’ve done.

The conversation went something like this:

Me: “And then there’s this, it isn’t linked up right now because we just finished it last night, but I should be able to type it in.”
Him: “Oh wow, you can automate the packing lists and BOLs?”
Me: “Yeah, and if you have a certain format you like to use we can set that up for you too.”
Him: “Man, this is all really professional and easy to use. Give me a month, but if I like what you’ve got I can think of at least a dozen other companies I can get you in touch with who could use this.”
Me: ::swoon::

If that’s not enough reason to deliver, I don’t know what is.

Starting projects is really easy. You’re all excited about the product, you’re making big progress every day, the results are tangible, it’s just all around cool.

Finishing projects sucks. You do a bunch of testing, you make little improvements, you finally do the things you put off earlier because they weren’t as fun.

We’re in that finishing stage right now with liquidWMS. I would say the backend functionality is probably between 90-95% completed and I have a feeling that Aaron is going to rock out and finish it by the end of this Labor Day weekend. Mostly because I think coding 12-16 hours a day is making him go insane and he wants a break, but hey, you take what you can get.

The front end and user interface is probably 70% finished since I  was also working on backend stuff for a while and now I have to wait for Aaron to complete something before I go in, tear it apart, and maintain all his functionality while redoing design. Probably not the most efficient way to develop, but we don’t have time to spend optimizing that right now.

Our work was starting to slow a bit this past week, until yesterday. We got together at 10am (we usually work separately due to living 35 minutes from each other and him having a real job) and started going. We worked for 3 good hours, grabbed some lunch and then relaxed to watch Georgia Tech beat South Carolina State 41-10. Then it was back on the grind for a few more hours before going our separate ways.

Being able to work next to each other and take a break to do something we enjoy was a great way to break up the routine. I think we both came away a lot more energized and ready to get back to work really knocking everything out for a completed product.

Santiago sure looks inviting, huh? It might be my home for a little while.

I’m working to put together an application for Start-Up Chile, a government program to bring entrepreneurs to Chile. The 6-12 month program pays $40,000 to 25 promising entrepreneurs who have a scalable business plan and connects them with mentors and other members of the local business community.

There is no requirement to keep the company in Chile after the program, although they would obviously prefer you maintain some presence.

It looks like an awesome opportunity in a number of different ways.

I guess a business card makes it official, huh?

Round 18 of the 50 book resolution was an old favorite of mine. Hackers & Painters is a collection of essays by Paul Graham. If you don’t know who Paul is, he was one of the three founders of ViaWeb (which became the software that powers Yahoo! stores), and started Y Combinator. He has a tremendous collection of over a decades worth of essays at http://www.paulgraham.com and he put some of the best into this book.

He’s a brilliant guy and has great insights into where technologies are going and how people should develop companies around them. One of my favorite examples, an essay of his from 2001 includes the footnote, “If Apple were to grow the iPod into a cell phone with a web browser, Microsoft would be in big trouble.” Well played, sir.

I bought this book a few years ago when I was living in California. Don’t ask me why I know that, but I know that I bought this book and Founders at Work one day at a book store there and pretty much immediately started reading them in the park across from my apartment. Since then I’ve read this book at least once a year, getting more from it each time.

The book starts out strong with a great essay titled Why Nerds Are Unpopular. I would definitely recommend going to check out that essay, and, if you like it as much as I do, going through some of his other work as well.

One of my favorites is How To Make Wealth, mostly because of the lines like these:

If you want to make a million dollars, you have to endure a million dollars worth of pain.

If you have two choices, choose the harder.

The Other Road Ahead is filled with amazing advice about building products and the philosophical problems of customer choice.

Hackers and Painters is the essay that lends the book its title.

What hackers and painters have in common is that they’re both makers. Along with composers, architects, and writers, what hackers and painters are trying to do is make good things.

This is probably my favorite non-fiction book. I believe you can cobble together all of the essays that make up this book on his website, but if you like the feeling of a book in your hands go buy it and enjoy it.

Hackers & Painters

RWW had an article 2 days ago called The Downside to Bootstrapping.  For those who don’t know, bootstrapping is building a business without taking any investment money.  Basically, you work really hard with as few people as possible, get paying customers as soon as you can, and then grow as the money comes in.  This is how Aaron and I are going about building our company right now.

It has a lot of benefits and negatives, just like taking money does.  It’s slower to grow, you start with niches and areas rather than full scale and nation-wide, it’s a lot more work on one or two people’s shoulders, etc.

However, I think Audrey Watters, the author of the post I linked, may have been a little off in identifying the important ones since the main source of the article was a Venture Capitalist.  Micah the commenter puts it better than I ever could.