This Skin We're In by Dale Beermann

Entrepreneurship and Generation Y: Planning for Disaster

Everyone is starting to realize that Millenials are going to be a generation of entrepreneurs.  I'm also incredibly excited that the Madison, WI community is recognizing this.  Yet, with everyone helping to make our dreams of entrepreneurship become a reality, we need to be sure that we are ready for what lays ahead.

We held an event last week as part of our ongoing Entrepreneurial Toolkit series that focused on Business Succession Planning.  The turnout wasn't so great.  I attribute this partly to the fact that most people don't take the topic seriously.  However, with so many people wanting to jump into entrepreneurship earlier in life it becomes increasingly important to understand what you're getting into.

Let's look at a few examples that might not be so far-fetched:

Scenario 1:  You and your best friend decide to start a company and create a LLC.  If you're in Wisconsin, this means that you're adopting the default partnership status and you're splitting equity 50/50 (this goes for other states as well).  The company does very well and you start to take on employees.  In the meantime, one of you gets married.  Unfortunately, you also get divorced.  Guess who might own 25% of the company?

This particular situation can be taken care of using a certain type of buy-sell arrangement.  This agreement allows the equity to remain with the original founders by giving them an opportunity to buy out the shares of the others in certain situations.  There are other advantages to the agreement as well.  For example, it has the benefit of increasing the purchaser's cost-basis in the company, which can mean lower taxes down the road.

What happens if you don't have the funds for the purchase resulting from a particular buy-sell arrangement?  In the previous scenario, you may be able to take out a loan from the bank to cover your partner's share.  In some cases, such as death or disability, key person insurance might be an affordable option for preventing this scenario.  In others, maybe your company decides to set away money that can be used at a later date.

Here's another interesting situation:

Scenario 2: You and you're best friend decide to undertake another venture.  For the first six months, you both work tirelessly to get the company off the ground.  It's a struggle and at times your persistence wavers.  Six months in, one of you decides that you aren't interested in continuing with the company.  In leaving, you take 50% of the company with you.

While this particular topic isn't exactly addressed through succession planning per se, it can be addressed through other means.  Many companies (and investors) address ownership issues such as this through vesting schedules.  It is common that an individual's equity in a company will vest over a three or four year period, requiring them to stay with the company to receive their share.  Leaving a year into a three-year vesting schedule would only leave you with a third of the shares you were originally appropriated.  In addition, investing parties typically have additional terms, requiring key persons to stay on for a period of time.

There are a lot of reasons that buy-sell arrangements and vesting schedules might come into play.  A company's key employees may need to leave for many different reasons (a significant other moving away, a death in the family, or financial troubles are just a few others). I hope that these scenarios highlight the fact that these situations might not be that improbable.

Lastly, to be clear, I'm no expert in this area, and none of this is legal advice.  If you are interested in learning more, talk to a lawyer, financial planner, or your insurance company.  If they can't help, they can probably point you in the right direction.

Social Media: Leveraging the Conversation

A lot of friends ask "What's the point of Twitter?"  I didn't understand either until I spent some time trying to figure it out.  Once I dug in I realized that Twitter, and the other microblogging sites, can be a great resource.

There is a good video about common uses of Twitter here.  However, it doesn't address some interesting ways in which you can use Twitter.  Here are a few others:

Market Research

I started using Twitter because I wanted to keep tabs on our competitors.  Social gaming is a pretty new area so it was a great way to see what people were saying about it.  I started discovering new competitors, learning who was running the companies I already knew about, and finding the bloggers who were talking about it.  It helped give me a much better picture of the marketplace.

Travel Updates

The most common use of Twitter is for regular status updates.  However, Twitter becomes a lot more useful in situations where you don't have access to other tools.  A lot of people use Twitter when they're traveling so that they can let everyone back home know how things are going.  You might not have time to send a mass email to all of your friends and family.  It's a lot easier to do short updates that everyone can follow when you're out of town.

Branching Out

Twitter is a great way to find experts in interesting fields.  Following their updates and reading their blog posts is a great way to learn new things.  While my company is doing social gaming I am also interested in entrepreneurship, blogging and professional development.  I would have never learned as much about these topics if it wasn't for Twitter.

The Local Community

Twitter is a great way to find people in your area that are interested in the same things you are.  I use it to connect with the tech community here in Madison.  Maybe you want to find everyone who plays golf in your city.  Whatever your interest, Twitter can be a great way to find others close by who also share it.

News

Did you know that a lot of media outlets are using Twitter for updates?  Chances are, a local TV station or newspaper in your area is using Twitter to post new headlines.  You might have to search a bit though.  Even though it's not on their website, the Badger Herald student newspaper here has a twitter account.

So how do you get the most out of Twitter?

1. Start with a purpose

As I mentioned, there are a lot of ways that you can use Twitter.  However, if you start poking around aimlessly, chances are you're not going to get a whole lot out of it.  Decide what it is you're looking for before you jump in, even if it's just a hobby or your favorite sports team. 

2. Follow the leader

Twitter's a bit of a popularity contest.  Still, for the most part, people have amassed their followers for a reason.  Once you've picked a topic that you're interested in, go find the people that are saying a lot about it.

When tracking was working this was a lot easier but you can still do it.  Head to http://search.twitter.com and enter some search terms.  Start clicking on people and see who they're following.  If someone has over 1,000 followers, most likely they have something interesting to say.  Click on the "Follow" button to track their updates.  You can always un-follow them later.

3. Search local tweets

For any search query, you can find out who's talking about it locally.  Using the search above, just add "near:city,state" (e.g. here).  It's a great idea to keep track of what's happening in your community and this makes it incredibly easy.

4. Create RSS Feeds

For the searches that you're really interested in, create RSS feeds for them to see when they're updated (I track what everyone's saying about Sharendipity here).  This is a lot easier than going back to the search page every couple of days.  Look for the icon on each of those search pages.  Clicking on it will get you to the RSS feed, which you can then add to the RSS reader of your choice.

5. Engage in the Conversation

I see a lot of people on Twitter that are following just a handful of people and have a couple following them back.  This is great if they're the only ones you're interested in.  But Twitter is really all about the conversation.  To get the most out of it you can't be a passerby, you have to take part.

Embeddable Scripting Languages in Java

For those of you who have started poking around, this is an example of one of my more technical posts.  I am, after all, a programmer.  So if this one's not for you, stop by the RSS Feed or enter your email in the box on the right to keep updated.

Embeddable scripting can be a great way to allow users to extend your core functionality.  Some game companies also use scripting languages to allow their designers to modify functionality without interacting with the programmers.  Scripting could even allow you to pare back features and provide advanced functionality accessible only through scripts, getting your software released faster (just iterate quickly).

At Sharendipity, we use embedded scripts to access functionality that isn't yet accessible through the UI.  The demo below is a port of some of the code that we used to do this.  I originally wrote it for BarCamp Madison.  In the end, we didn't schedule in the session so I thought I'd post it here.  A while ago, I also wrote a post about how we moved from the Jython project for integrating Python into Java to the Rhino project, a JavaScript interpreter and compiler.  If you're interested in the differences between the two, that's a good place to go.

The demo shows how to integrate both the Jython and Rhino projects into a Java application.  A small window will pop up where you can select the scripting language, enter a script (try 'print "test"' as an example), and execute the script.  It does this by pre-compiling the scripts into Java byte code which it then uses for execution.  It's possible to run both Python and JavaScript in interpreted mode using each library but we needed them to run a bit faster. 

There is also a bit of code in there that shows how to secure script access to the rest of the application in Rhino.  It's possible to do this in Jython through the ClassLoader architecture but it gets a bit complicated.  Since we're sticking with Rhino for the time being I haven't explored it further.

Demo code: Download BCMad2.zip (Creative Commons Unported 3.0 License).  The file contains an Eclipse project, source code, and the libraries required to run it.  So you either need Eclipse or you'll have to build it on your own.

In the future, I'll talk about designing a scripting interface for your application.  In the meantime, if you have any issues with the demo, let me know in the comments.

Startup Weekend Coming to Madison

I'm a bit excited for Startup Weekend Madison.  It's a three day event where a group of people get together to start a company (or several) from concept to completion.  See more at the Startup Weekend website.

And it's not just for techies.  Every Startup Weekend needs people in PR, marketing, design, legal, and business development, as well as the tech savvy.  I also think that this is a fantastic opportunity for young professionals in these areas to get some great experience.  So mark your calendar for September 5th-7th.  Or better yet, go sign up here.

Join the Google Group.

Join the Facebook Group.

UPDATE: Startup Weekend Madison has been canceled until further notice:

Given some local organization and scheduling difficulties we will be postponing Startup Weekend Madison until a future date that has not yet been determined. With that, we will be refunding your registration fees and apologize for any inconvenience this may cause you. Please stay tuned to the local and main startup weekend blogs for updates and we hope that with the added time we can make the experience that much better the next time around! Feel free to contact me if you have any questions. Thanks, Clayton