I cannot afford to start my startup

February 11th, 2009

From all the entrepreneurs I’ve met in the past 1-2 years, there are many of them who couldn’t afford fully dedicating themselves to their starup at first. That’s pretty normal and if you’re one of those people (or you feel like you are) then this article might help you get started with your own venture.

To cover your daily expenses, you’ll need to choose from one of the following options:
1. Work part-time and consider your startup as a full-time gig
2. Work full-time and consider your startup as a part-time gig

In order to see which of the above options works better for you, you have to answer the following questions:
1. How much money do I need at minimum to make ends meet (always leave a small buffer because things don’t always go as planned)
2. Do I really believe so much in my idea that I want to put my 100% into it or am I not so sure yet and I want to look more into the idea? Is time a huge factor for my idea?
3. What are the chances of me getting a descent part-time job? This is crucial because finding a flexible, well-paid part-time job might be slightly tougher than a full-time job with the same criteria.
4. Am I in a position that I need the benefits that come with a full-time job? Such as health care, dental for my family and myself?
5. Am I a big risk taker? If you look back at your life and you don’t see a lot of waves, then you’re not a huge risk-taker and it will help your sanity in the long run if you start your startup as a part-time gig.
6. Do I have partners and who are they? This is huge. This can get very complicated especially when partners have different answers to the above questions.
7. [You need to be really honest about this one] Do I really see myself put at least 3 hours a day to my startup after a full day of work? If you don’t know the real answer, try it out and then answer it and not the other way around.

Once you answer the above questions, you’ll have a somewhat better idea of which option works better for you.

If you can think of any other questions, please post them as a comment and thank you all in advance,

Rokham Fard

Where to look for funding

January 11th, 2009

I’ve recently researched the rules and resources of looking for funding for a startup in Toronto and Canada. I haven’t yet raised any funding, but I thought I’d share my findings with you.

There are a few rules you should know about. There are always exceptions though. Raising capital is usually broken down to 4 different categories. 1) Raising from the 3 Fs; Friends, Family and Fools. 2) Raising from Angel investors. 3) Raising from Venture Capitals (VC). The 4th source is usually neglected most of the times; Government grants and loans.

If your startup can go without funding, then don’t spend time on it, because it can take a while. Also when you look for funding you should look for “smart money”. Smart money is when the investor not only brings their money, but they also bring 2 more things; their expertise and more importantly their connections.

Which of the above sources you go to, really depends at what stage of your startup you are at and sometimes on how much money you need. I’ll try to break each source down blow:

1. The 3 Fs: At the very early stages. This is also referred to as “love money”, which comes from people who know you and care about you and your success. You cannot really put a number on how much such people would invest but it could be anywhere from $500 - $15,000 or more if you’re from a wealthier family. Here’s a list of some private investors across Canada if you’re not surrounded by rich people :)
https://strategis.ic.gc.ca/app/scr/srcsFncng/instRgstrtn/Srch?lang=eng&stg=1&type=F&instTyp=P

2. Angel investors: These are generally wealthy individuals who most of the times acquired their wealth through their own startups. They are full-time investors, which means their job is to read business plans all day and decide whom they’d like to invest in. Angels usually come into play during or pre revenue generation. They usually come in when you have a product or you are very close to having one. You should approach angel investors if you’re looking for $100,000 - $500,000 of investment.

Angels are usually invested in 5-10 startups at a time. They don’t usually work alone and are part of an “Angel Group”, where maybe 30-50 angels work together. So if your startup’s application gets approved, you would have to give a 20-30 minute presentation to all those investors in one sitting. Let’s say out of 40 investors in one angel group, 5-10 of them are interested in your idea. Then you’ll get a second meeting which is about 3 hours long. You go through more details of your business with those interested investors and see if they’d like to take on your project. If everything goes well, then those investors will collectively invest in your startup. Each investor usually invests around $50,000 and expects a 10x return over 5-7 years. The most important thing to angels about your startup is your team. You need people who can cover many aspects of the business if not all.

3. VCs: From my research, you’d usually like to avoid them. They’re known to be very harsh. I’ve spoken to founders and some said “I’d rather work twice as hard, and not have a VC on my ass”. Others have said, when such and such guy (the VC) is not in the office, it means everything is good :). You usually go to VCs at a much later stage of your startup, where you’re looking for an investment of $1 million or more. If you raised fundings from angels, they usually help you find VCs and raise money from them.

4. The Government: From my research apparently many people underestimate this source (at least in Canada). I have some really interesting tips on how you should go about approaching these government departments that I can share with whomever is interested. I’m not putting them here because this post is already too long :). But here’s a great database of many government programs for startups: https://strategis.ic.gc.ca/app/scr/srcsFncng/instRgstrtn/Srch?lang=eng&stg=1&type=F&instTyp=G

Please make sure you do two things. If you have any other tips, leave them as comments and also if any of the above tips works for you, please let everyone know. Thanks.

Rokham Fard

Start Now

January 7th, 2009

So when should you start your startup and why?

I recently met with a few friends back from school because two of my friends work outside of Canada. One works in the Valley and the other works in London, England. After I chatted with them for an hour or so, this is what they told me. One said “We’ve had two batches of layoffs so far and I’m worried that I’ll be in the next batch.” Now this guys is really smart and really good at what he does. He’s responsible and he’s got great inter personal skills. He’s a fresh graduate (so his salary is probably lower than some of the more seniors in the company and he’s still worried).

The other guy told me that they’ve had some layoffs lately and the company had warned their team that they’re next if the order comes in. Now these guys wouldn’t be layed off, it was worse. They were to be relocated to another department under the same company to a different city. Now each one of these cities were in a different country (New York, Toronto, some place in Singapore).

Another thing I did 3 days ago was post a job posting to craigslist looking for a PHP developer. I received 10-12 replies in less than 24 hours. 3 were spams. 2 or 3 hadn’t read the post properly and were applying to work from a different country. We picked 3 to interview from the rest. One thing I noticed as I was going through the resumes, I realized some people had finished their last job in the last 1-2 months or they had started a part time gig 2-3 months ago. Now that’s a sign that the wave of recession has started hitting the tech industry too and perhaps there are more layoffs to come. Plus it’s January and many companies freeze their hires for another 2-3 months, because 4th quarter of 2008 wasn’t so gloomy for them.

So to answer the first question, if you are thinking of starting a startup, START NOW. To answer the second question, read the above 3 paragraphs. You don’t have to dedicate all your time to it at this stage. Start small and go forward. If you have an idea that you believe in, start researching it. Then start building a really really simple version of it. Something that I would look at for 30 seconds and know exactly what it did. If you don’t have any ideas, look around you. See what your former companies were missing. Try to be creative and change the way things are done. Look at your friends and see what bothers them a lot at work, or in their life. There are a lot of niche markets that you can find a technical solution or improvement to. If you need motivation, read Netscape time. If you need fuel for creativity follow Tim Ferris’ blog. This man is really creative and thinks outside the box. When you’re trying to be creative, don’t think money or cool. Think what are some problems and how you can solve it.

Start small and you will be surprised how the wheels of motivation start rolling in you :)

Rokham Fard

The right development machine

January 6th, 2009

If you are a programmer and are or will be buying a new laptop, you’re probably wondering what you should buy. It’s a tough decision because it’s one of those things that if you make a mistake you’re stuck with it for years. Kind of like having an ugly kid. Well not that bad. The good news is that if you really seeking quality in your next laptop, your choices boil down to 2. Do you want an IBM thinkpad (or a Lenovo) or do you want an Apple. Well I’ve had the privilege of being provided with a free laptop through my employers in the past 4.5 years. Yeah working has some perks :)

5.5 years ago I bought an iBook G3 on eBay and used it for 1 year. That was my first mac and I really enjoyed it. Then I went to IBM and was given a thinkpad T23. I was really excited about the new laptop and enjoyed that one for a year until I realized it was a really ugly, slow machine. Then they changed my thinkpad to a T43, which was a lot faster but it still was ugly and it wasn’t as fast as I wanted it to be. I am not complaining about specs, I mean when I switched applications, my brain had already done the context switch where the machine hadn’t. That makes a computer slow. Then I started working at UofT.

I was given a MacBook pro and I’ve been using that for 1.5 years. It’s absolutely awesome. Here is my comparison between the two machines I’ve used very extensively.

Mac qualities:
- Extremely beautiful and bright screen. You will learn that a bright screen is fundamental in a healthy, developer, machine relationship. Thinkpad’s screen, not so bright.
- Great feel on the keyboard and the nice back-light beneath it. Thinkpad’s keyboard was great and I particularly loved the little knob that acted as the mouse inside the keyboard.
- It’s fast. yeah it’s really fast.
- Great wireless card. Thinkpad’s card was great but the software was freaking dumb in finding available networks.
- The basic softwares come with the OS.
- The speakers suck I admit; but so did the thinkpad’s.
- I used to hate iTunes, but once you find some friends who are mac users, you’ll learn to love iTunes. I have access to about 60 gigs of music on my partner’s macBook every day at work. I’m so glad I convinced him to buy the mac. You have access to all sorts of radio stations and a huge library of podcasts.
- It looks fabulous. Yes aesthetics are very crucial in a longterm relationship.
- The battery is amazing, amazing, amazing.
- You always have access to the terminal (that includes ssh, sftp, grep, ps … and all those useful commands)
- The OS is amazing. I restart the machine once a week.

So overall I think the MacBook pro is the best laptop out there by far. I know it’s slightly expensive but you can get great discounts from the UofT bookstore and you can get them even cheaper if you can buy a used one from one of the profs. Believe me if you use your laptop a lot (I use it 10-12 hours/day) you should buy a MacBook Pro.

One little note for Java developers though. If you are going to compile java 6 code on the machine, make sure you buy a Core 2 duo. The “2″ indicates that the OS is a 64 bit OS and Java 6 only runs on a 64 bit Mac OS. Happy coding.

Rokham Fard

Our rent-free officeS!!

December 28th, 2008

If a startup has more than 1 founder, it needs an office. It needs a place with a short commute, where you can talk (not scream). You obviously need comfortable furniture with free reliable wireless internet. The place should also allow for cell-phone reception. And finally you need somewhere that you can spend long hours, without having to constantly buy something (like a coffee shop).  In Toronto’s case specifically, since it’s so damn cold, you’d really want to be near the subway station. If that matches your needs, then read on, because we have found this place in Toronto.

We have had several offices in the past year. We started off at one of my partner’s apartment and after about 1-2 months, and not really having comfortable furniture we decided to move the operation. My other partner’s parents had kindly accepted to give us one of their rooms in their basement. We worked there for another 2-3 months but the basement had several problems. The commute was long, we had a tiny little window and the lighting wasn’t enough. The cell-phone reception wasn’t that great either. We finally decided to move the operation once again and this time we found the right place. North York reference library, 4th floor.

The reference library is fantastic for many reasons. They have good furniture (if the chairs were more like Yonge & Bloor’s reference library it would be much better). We have an amazingly large window looking out at Mel Lastman square. It’s right out of the subway station and there are several coffee shops, eateries and a food court. You’ll never have to step into the cold if you want something. I strongly recommend Cafe Supreme (they have great, healthy food for both breakfast and lunch). There are also areas on the 4th floor where you can go and talk. The beauty of those areas is that you can talk but you cannot scream. Yes you will end up screaming many times when you get involved in heated conversations. We literally spend 10 hours every day at the library and we get a lot of work done. Oh by the way you can bring food and/or drinks into the library as well. If you find the location somewhat inconvenient or you rather sacrifice the view for better chairs, then I’d recommend the Yonge & Bloor reference library.

One quick note. You’ll notice that I have added several buttons to each post, which allows you to share them through your favorite bookmarking or social networking channels. Please kindly share them, so that more people can give me feedback. More feedback will really help me get better at writing what you’d care for.

Yours truly,

Rokham Fard

Call out

December 25th, 2008

I’ve been involved in the Toronto startup community and I’ve realized just like any other profession, entrepreneurs should be connected with each other. It’s fundamental for entrepreneurs to see beyond their own projects and ambitions and see what other entrepreneurs are spending their time and efforts on around the world.

I’ve made it my mission to get connected to entrepreneurs across the world and I’m calling out for your help. Whether you’re an entrepreneur yourself, or you work for one, or even if you know someone who is an entrepreneur, please kindly leave either their name, twitter, blog, or facebook etc. account for me as a comment so that I could connect with them.

I am hoping not only will I be connected to these great people all over the world but perhaps I could be a connecting point where many of them would meet each other. So please be kind and do me 2 huge favors:

1. Leave the info of any entrepreneurs you know as a comment.

2. Forward this post through your channels so that I could find more like-minded people.

Your help is much appreciated.

Rokham Fard

IQ or EQ

December 22nd, 2008

If you’re in an academic environment, you probably have wondered from time to time whether more IQ would help you along the way. It obviously depends a lot on the discipline you’re in but there are many cases where you’re right and having a higher IQ would help. A startup is different.

Having a better IQ will definitely help in a startup and is crucial if your startup relies on sophisticated algorithms such as Idee, a Toronto based startup which specializes in image recognition. Idee has recently come up with TinEye, a search engine for images online. Not every startup’s technology is as sophisticated as Idee’s though and technically speaking, you can get smarter over time but you cannot really increase your IQ. Increase your EQ instead.

I believe if you’re starting a startup, having a better EQ over an IQ will really go a longer way. Understanding social relations and being able to connect to people will really take you a long way in the startup world. Being able to think on your feet, will help you take long leaps. Those who can think well on their feet can close a deal a lot better and convince someone to join their team a lot easier. I have just started reading How to win friends and influence people but this book has been recommended to me by over 5 people and it definitely is a fantastic start to getting better at social relations. You can increase your EQ.

The beauty of EQ is that you can definitely increase it over time. If you like to increase your EQ, try to be more sociable and make this a mission for yourself. Every time you find someone new and interesting try to figure out their strengths and make sure when you walk away from them you can at least name one thing that they could be really good at. More importantly keep in touch with people who impress you and try to get to know them better. I am against keeping in touch with someone who might be of some use to you at some point in your life. I think there are enough interesting people out there that you can find people who are actually someone you’d like to be around, so try to keep them close. Remember every social interaction you have, is an opportunity to build a relationship and increase your EQ so target your efforts towards your goal. Email, tweet, status update on facebook, photo update on flickr, blog post, comment on a blog post are all various forms of social interaction these days. Never lose sight of your objective and use these tools to reach your goals.

Be the dumbest person in the circle of your friends. You definitely aren’t dumb, but you don’t want to be the smartest person in your circles of friends. Surround yourself with people who are smarter than you and learn from them. Don’t hate, appreciate. It’s not always that easy to be surrounded by people who are smarter than you. You might feel inferior and not up to par with them. A trick that I have learned over time to make myself interesting to the rest of the people is to learn something from one friend and apply my learnings to another friend. When people see you do something that impresses them, they usually associate that quality to you and therefore you look smart to them. And the beauty of this exercise is that you’re not immitating anyone, you actually have learned that skill. Having older friends is usually very helpful as well.

If you have an older friend or sibling, try to spend more time with them. Try to be part of their circle of friends. You can learn a lot from their mistakes and if they’re kind enough, they can give you a lot of priceless advise. Let them know what you’re planning to do and ask for their advise. People in this country are dying to give you their opinion and if you listen hard enough, you can learn good pointers. Don’t forget though, whichever of the above approaches you take, never lose sight of your objective; starting the next big Canadian startup :)

Yours truly,

Rokham Fard

Research - always a good FIRST step

December 18th, 2008

Research is a great way to get started with anything. But the real question is when do you research and more importantly how long do you research. Coming from UofT has really framed my thinking academically. Like everything else, being academic has its pros and cons. But for a startup you cannot be too academic and you need to mix that with enough agility. You need to realize research never ends unless you end it and get to do some real work. Research can really daunt you in any stage of your startup. You might spend too much time figuring out what features should go into your product. You might end up spending way to much time in the design, or perfecting the business plan or even in your implementation. I was having a conversation with some friends tonight on whether J2EE is better or PHP for developing a social networking web-application. My answer was PHP simply because it’s more agile and therefore it suits a startup environment better.

Having an academic background can constantly force you to feel insecure as if you haven’t done enough research but the nature of a startup is so that you cannot purely approach it academically. A tech startup is all about building stuff, putting it out there, getting user feedback and building upon those feedbacks. You basically have to accept that you will make mistakes and you will learn not to make them again. You cannot avoid many of those mistakes by simply doing more research. I recently watched a presentation by Dharmesh Shah which he gave at Business of Software, and he said “if you’re not ashamed of your first release that means you waited too long.” The presentation was really great and I think if you’re interested enough to read so far of this post, you should definitely watch it. The point is that you will make mistakes and why not make them earlier than later. Your early adopters are usually forgiving enough.

So make sure you start with research but don’t get stuck in the details because as I said in one of my previous posts the devil is in the details. Once you figure out the skeleton of what’s next on your agenda, then go ahead and bring it to life. You can iterate over it later and make it better. Us entrepreneurs tend to get tired of research after a while and it sort of slows down our motivation. We’re all about getting things checked off the list and making them work better and better.

Yours truly,

Rokham Fard

Choose who you tell your idea to

December 9th, 2008

Many people believe sharing your idea with people will result in great feedback and no one is out there to steal your idea. WRONG! They promote that thought in university courses and there are people who evangelize this. Sharing is great but you have to choose who you share your idea with. Sure many people are not out there to steal your idea, but there is one or two people. Also maybe someone will tell your idea to someone else and they might find it interesting and take it away from you.

So I’m going to tell you a real story that our startup went through to show you what I mean. In this story I will keep the person and the company involved anonymous for privacy reasons. So we were at a specific stage of our startup that we needed to hire a contractor to do a little piece of our work. The project was literally a 2 week project and required a certain skill that we didn’t have. So we started putting out ads and asking around among “friends”. Finally a “friend” who I’d known for about 3 years and I knew had the skills came through. I was very happy about that person because the nature of the project was so that we were forced to expose a lot of our business to them. So we ran my friend through the idea of our project briefly. We needed to get some work done before we were able to outsource the little piece to my friend. So things didn’t work as scheduled on our end and we missed our deadline by two weeks. I called my friend and asked if we could meet up to go through the details of the project and start working on it. My friend had accepted a position at a startup by then and was unable to take on the project. I wasn’t told about the company or what the company did.

We, just like any other startup were constantly keeping an eye on our competition and one day a little google alert appeared in my gmail account. It was a job posting by one of our competitors, which I’m not going to name. What really grabbed my attention was the URL the job was posted at. It was on UofT’s job forum (which I was familiar with), so I clicked the link and read the job posting. At the end of the posting I came across a user name which was very familiar to me. The user name was part of the email of my “friend”. I couldn’t believe my eyes. So I double checked the email and I was right. But that wasn’t enough proof so I had to log into my student account at UofT (my user name was g6camus after my favourite writer Albert Camus — If you are looking for one of the best existential novels of twentieth century, check out The Fall) and `finger` that user name. Guess who? Yes it was my “friend”.

I was really shocked. My friend knew what our project was about and was supposed to work on it with us. Now my friend was on the opposite team? That was a scary moment. So I did some further investigation and realized that my friend was part of a startup which is funded by the same company, funding our competition. Scary enough if you ask me.

So lesson learned is that if “friends” or people you know can do things like that, believe me there are strangers who would do worse. This doesn’t mean you shouldn’t share your idea with anyone because that is plain wrong and will not let you grow. You just need to be careful whom you share your idea with. Share it with those who have a high potential of being useful in your company. They at least might worth the risk.

Yours truly,

Rokhm Fard

Make everyday count

November 27th, 2008

Tangible work is your fuel to get through the hard times at a startup. If you’re a handy man you mostly work on tangible things at your work. If you are a philosopher or a theoretician, you probably work on concepts and ideas most of the time. But at the early stages of a tech startup you need to do both and you need to do them well. But what you have to keep in mind is that you need a regular dose of tangible duties in your work. That’s because in the early stages of the startup the only reward you get are those tangible tasks. You may not have a full product, and therefore no users. If you’re looking for investors and haven’t found any money, you have no money either. See there’s no rewards but those tangibles. So include them in your work diet.

Some good tangible tasks can include writing code, making connections at events, work on your presentation slides (if you’re looking seeking investment), start a blog about your company, tweet either about your company or even better, about the industry you’re in. Show people that you really care about what you’re doing. These tasks really help you feel rewarded and therefore you have some fuel to move forward. When people see you care, then they’ll care about you. Don’t forget though that coming up with strategies for various parts of your startup are very important and you should strategize well in order to succeed.

Have fun at work. You and your partners and your employees (if you have any) should feel excited about coming to work every single day. You know that excitement that corporate victims have on Friday afternoons for the day to end? That’s what I’m talking about. You may have to give up an hour of work for fun everyday but all the other 14 hours are going to be much more productive. Never forget that in a startup all you have is each other and people should energize one another. Make an everyday effort to make someone’s day. Buy people chocolate or their morning coffee. Fix that annoying bug and tell everyone the good news. Come up with fun, creative games (like chair hockey during Netscape’s startup days). If it’s a really cold and snowy day, and everyone is a bit down, get everyone together and go skiing for the day. Think of your startup as your baby. Wouldn’t you always try to have fun with the baby while you’d also make sure he was doing his homework?

Stay focused on what you’re doing now. Being in a startup really means doing 15 things at a time and these things aren’t fix bugs 1-15. That’s just one of those 15 things labled “fix the bloody bugs :)”. You should be organized but you should stay focused. You cannot think of all the things at the same time and do them well. Working on all these things is the fun part of being in a startup because you don’t do the same thing everyday. Startups are very exciting and excitement needs effort. A good party doesn’t just happen on its own. It requires a good amount of effort but it’s damn worth it. You see, us entrepreneurs have a tendency to measure our performance over short intervals of time. We ask ourselves what did I get done today? And we tend to value a task that is complete more than several half completed tasks. That’s just how we think, so stay focused to get tasks done. Then move onto the next task. And by the way that doens’t mean you’re not multi-tasking.

Yours truly,

Rokham Fard