There really wasn’t a good, free, entrepreneurship organization that was limited to founders.  To fill the gap, I founded Capital Entrepreneurs, an invite only meet up for founders of startups.  We meet up once per month at a bar in Madison, grab drinks and talk about our businesses, ideas and how we’re moving forward.

Here’s some Capital Entrepreneurs stats from the last year:

• Grew from 10 companies at the first meeting to over 65 now
• CE companies raised over $7.5m in funding
• CE companies were featured in The Washington Post, New York Times, Tech Crunch, Mashable, Lifehacker, BBC, Fox Business and tons of others
• There have been 15+ partnerships and services exchanged between CE member companies
• We’ve started the CE incubator that has six early stage companies sharing office space right off the Capital Square.  Entrustet and Hardin Design and Development are anchor tenants.
• Started the CE Angel List to help connect startups and investors in Madison
• Instrumental in creating Google Fiber effort in Madison

Best of all, it’s been something that we all look forward to each month.  It’s lonely starting a startup.  In the early stages, you might only see one other person (your cofounder) each day for months at a time.  Founders groups like CE help create a scene and allow you to commiserate with others in your situation.  You also get “coworkers” and if you’re lucky like we are in Madison, most of the startups will be located close together to facilitate lunches and happy hours.

The awesome thing is that it’s been really easy to get Capital Entrepreneurs started and it’s been incredibly successful, moreseo than I ever envisioned back in May 2009.  If your city doesn’t have a good founders group, I’m here to give you the steps to take to replicate the success that we’ve had with Capital Entrepreneurs.

Your startup group should have the following characteristics:

1. Exclusive to Founders – No attorneys, accountants, people searching for jobs, consultants etc.  These are all nice people, but do not belong in an entrepreneurship group.
2. Private Email List – People like to keep their emails private.  Use BCC to send out invites
3. Open to new members – You’ll never grow if you exclude startups
4. Free – Do not charge admission
5. Website – Create a website and post updates
6. 1-2 people should control it – If there’s more, it gets too complex
7. Sponsors – After you’ve been going for awhile, you’ll find that attorneys, accountants and others will want to be invited.  We started offering sponsorships where service providers can attend one meeting per year as long as they do not try to sell their services.

Step 1

Survey the existing startup groups in your city and try them all out.  There are 6-7 entrepreneur and young professional groups here in Madison.  All are valuable, but none provided exactly what we wanted to do with Capital Entrepreneurs

Step 2

Reach out to your network.  I emailed all of the founders that I had gotten to know, about 15 of them, and asked if they were interested in a meet up specifically for founders.  I got a good response and moved forward.

Step 3

Set up a wordpress site.  I bought the Capital Entrepreneurs domain name and installed wordpress.  I created a members page that includes everyone’s logos and a 2 sentence description of their business.  The home page is a feed of press that our member companies gets and we have a contact form so that new businesses, press and other can get in contact with us.  We later added a resources page that lists some service provider sponsors to advertise to our members, along with a list of helpful articles and resources that came from Entrepreneur 101.

Step 4

Find a location.  We’ve been fortunate that we’ve had a regular meeting location.  The great guys at Brocach let us have a private room upstairs, give us free appetizers and run us a tab for drinks.  I called 5-6 bars in town to find the one with the best deal and you can too.  Try to find a place that will not charge you fees.

Step 5

Pick dates and time that people will be able to come to.  We’ve picked Wednesdays or Thursdays from 7-9pm, as we are a somewhat younger crowd and most of the people walk to the events.  Pick a time that works for your members and your city.

Step 6

Send invitation.  Shoot emails to all of the people who’ve expressed interest and tell them that they should forward the email on to any other startup founders.  Make sure that everyone understands that it is for founders, not service providers like attorneys, accountants or for people searching for jobs.

Step 7

At the first meeting, make sure to introduce everyone so that everyone is comfortable.  Explain that this will be a monthly event and that it is for founders.  Keep it casual and then schedule the next monthly meeting at the end of the event.

Overall

Overall, you want to create a place where founders can come to meet up, exchange ideas, get to know each other, without the burden of talking with service providers are those handing out resumes.  Once you get a group together, make sure to keep emails private and set up a twitter handle and website where you can post updates about group members.

If you follow these steps, you’ll likely be able to replicate what we’ve done in Madison.  I think cities of just about any size can benefit from founders groups.  Even if the groups are small, they can be fun, easy ways to connect with your fellow entrepreneurs.  If you’d like help starting a founders group in your city, please feel free to contact me.

Are there good startup groups in your city?  Have you started one?  Would you go to one if there was one in your city?

                          

It is incredibly easy to start a business and find funding in the United States compared to the rest of the world.  You can start an LLC in Wisconsin in less than 10 minutes, compared to up to over year in some developing countries.  The US has the deepest and most well developed network of Venture Capitalists and Angel Investors anywhere in the world and if new businesses are looking for angel investment, they can obtain it with minimal paperwork.   According the the Kauffman Foundation, over the last 25 years, “angel investors were responsible for up to 90 percent of the funding these businesses received.”  This angel funding allowed these startups to create jobs and bring innovative ideas to the marketplace. In 2008, angels invested $19.2 billion in over 55,000 companies.

The US innovation and “job creation engine” is the envy of the rest of the world.  So what’s the best way to destroy this engine?  It sounds ridiculous, but it seems like the politicians who drafted the Restoring American Financial Stability Act of 2010 asked themselves this question when they were writing the bill.

Hidden inside the 1300 page bill are a few paragraphs that have the potential to kill job creation and innovation in the USA.  Currently, new businesses can raise money from Angel Investors fairly easily if the investors meet a few criteria.  Investors must have at least $1m in net worth or make $250k in income per year.  If your investors meet the criteria, they are considered Accredited Investors and startups can accept their money with a simple 5 page informational filing that goes to the SEC.  Startups can potentially raise hundreds of thousands of dollars in weeks if they have an amazing idea and find the right investors.

If this bill passes, it will raise the accredited investor net worth criteria to $2.3m in net worth or $450k in annual income, eliminating close to 60% of the potential angels in the USA.  I’ve raised close to 500k in angel investment between both of my businesses and we wouldn’t have been able to accept ANY of it if these rules were in place. If anything, the rules should be changed so that the net worth requirement is lower.  We allow anyone to invest in stocks, bonds, options, futures and other exotic investments, but not in new businesses.  Says John Maudlin:

Why should 95% (or maybe soon to be 99%!) of Americans, simply because they have less than $1,000,000 (or $2,500,000?), be precluded from the same choices available to the rich? Why do we assume those with less than $1,000,000 to be sophisticated enough to understand the risks in stocks (which have lost trillions of investor dollars), stock options (the vast majority of which expire worthless), futures (where 95% of retail investors lose money), mutual funds (80% of which underperform the market), and a whole host of very high-risk investments, yet deem them to be incapable of understanding the risks…”

The other change in the bill is even more damaging.  The bill requires that all startups register with the SEC and implements a 120 day waiting period so that the SEC can approve new businesses.  Startups move in minutes and hours, not weeks and months.  Entrustet has been live for just over 1 month now and we’ve gotten real users and made real money.  A 120 day waiting period would kill companies before they even get off the ground. But the waiting period isn’t even the worst part.  Registering with the SEC would cost up to $100k in legal, accounting and other fees, not to mention lost productivity when startup founders could be working on their idea instead of battling the government for access to capital.

And what if a small project like Facebook started to grow rapidly?  It could take weeks to draft all of the legal paperwork, plus another 4 months of waiting around on the SEC.  And this is assuming the SEC doesn’t get backed up like the US Patent Office.  I also don’t want some government bureaucrat processing SEC applications while I am hurting for investment.  Facebook could have very easily died in Zuckerberg’s Harvard door room if he had to wait 120 days for SEC approval before getting his first round of funding. I have no doubt that if this bill passes, the waiting period will be over 200 days within 2 years.  After all, it takes an average of 34 months for the patent office to review new patents.

The last change in the bill devolves some of the power to regulate angel investors to the states.  This change means that instead of one filing, every state will be different.  For Entrustet, we have investors in multiple states.  We would have had to file new paperwork in each state if the rules change.

So why is Congress attempting to change the one part of the US economy that is creating jobs?  The US currently regulates angel investors as if they were investing in hedge funds.  We do need more regulation on hedge funds, but the problem is that angel investors are getting caught in the net.  This is a huge mistake.

There is a fundamental difference between hedge funds and startups.  While both are risky, hedge funds generally shuffle money around to make money and don’t create much, if any, value, whereas startups spark innovation, create jobs and improve society as a whole.  Startups use the money to create new jobs and innovate.  Think betting that the South African Rand will fall in value vs. funding the next Google.  Here’s Maudlin’s solution, which I agree with 100%:

Here’s what needs to happen. Get rid of the disastrous rule requiring filing with the SEC. It makes no sense and will cost hundreds of thousand of jobs and divert the SEC from their main tasks. Angel investing has not been a problem to date, and there is no need to fix something that is not broken.

Second, if you really think we need to raise the accredited investor limits, then carve out an exemption for venture capital.

And keep the clause that gives startups federal exemption.

And, if you really want to create jobs, then cut capital-gains taxes on new ventures and angel investing to 10% or less. Let’s create some incentive to get America moving!

If passed without any amendments, these rule changes will be a huge detriment to the US economy.  They are short sighted and attempt to protect us from ourselves.  By lumping angels with hedge funds, the government is painting with a broad brush and there will be all sorts of unintended consequences.  This issue is not a republican vs. democrat issue either.  Everyone should want to make it easier for startups to create new businesses and new jobs, especially in this economy.  This bill does the exact opposite and would be terrible if it passes.  I hope that there is enough negative publicity so that this part of the bill never makes it into law.

Do you think this bill will pass as is?  Do you think hedge funds and angel investors should be treated the same way?  What do you think will happen in your own startup?

HT: Forrest Woolworth and the PerBlue Blog

                          

Rework – Rework is the newest book by 37 Signals founders Jason Fried and David Heinemeier Hansson.  They are well known for creating simple, easy to use online products that help business get things done.  Rework is the follow up to their first book, Getting Real, and attempts to show people how to work more efficiently and effectively.

I first became interested in 37 Signals when I heard Jason Fried speak at an entrepreneurship conference in Milwaukee where I was also speaking. Fried stressed simplicity, focus and building something you would use because if you are building something you’d use, you are already an expert.

My favorite chapters were Go, Progress, Promotion and Productivity.  They explain how to get started, make progress and then promote your business.  They also have a ton of great tips about how to be more productive.  My biggest take away is that companies should be teaching instead of promoting.  Most companies do not teach, they promote.  Companies that teach lessons to their customers have bigger followings, which leads to free promotion.

The book is a little repetitive at times, but is worth reading.  I’m fairly familiar with 37 Signals because I read their blog regularly, so most of the ideas weren’t groundbreaking, but it was nice to hear everything in a single place.  If you don’t read their blog or haven’t heard about 37 Signals, this book is a must read.  If you are familiar, you can save the money and just read their blog again.

Mark Cuban recently said “if I had to choose to invest in someone who’s read Rework or has an MBA, I’m choosing rework every time.”  While I wouldn’t go that far, I’ll want any new Entrustet hires to read the book as part of their initial training.

The Checklist Manifesto – I heard about Checklist by Atul Gawande while reading Switch last month.  It sounded interesting and I planned on picking it up.  Luckily, my Aunt came to visit and happened to have the book.  I read the book on the plane to SXSW and really enjoyed it.  Gawande is a brilliant surgeon who wanted to know how he could improve medical care.  He got interested in checklists after marveling about airline safety.  In the book, he investigates how checklists can be used to prevent mistakes in any industry. He first helped implement a clean IV lines program that help Michigan hospitals reduce infections almost entirely, which saved lives and millions of dollars.  He later helped the WHO implement a standard checklist for surgeries that has saved countless lives and money.

The book is a quick read because it is written more like fiction than non fiction and provides tips to increase productivity and help you get things done, while avoiding mistakes.  Highly recommended.

Leadership and Self-Deception – Someone gave me this book right before I got on a plane when I was complaining that I didn’t have anything to read.  It’s a self help book, styled as dialogues between an employee of a company and his bosses.  Written in 2002, the main idea is that it is not what you do, but why you do it that matters.  The central advice is that whenever you want to do something to help another person, you should do it, otherwise you make excuses for yourself and it starts a downward spiral.  I don’t agree with everything from the book, but I believe that the world would be a better place if people were motivated to help others more often.

The Last Lecture- I had seen Randy Pausch’s last lecture on youtube before, but had not read the book.  For those who don’t know, Randy Pausch was diagnosed with terminal pancreatic cancer and was given 6 months to live.  He spent that time trying to make life better for his wife and his three young children.  Pausch was a professor at Carnegie Mellon and was given the opportunity to give a “last lecture.”  It was recorded and Pausch used the time to talk about how to live life, pursue your own dreams and enable the dreams of others.  It is a sad and uplifting book at the same time.  It is well written and funny, informative and wise.  I especially liked the section about enabling the dreams of others.  The Last Lecture is one of the best books I’ve ever read and should be required reading in high school classes.

                          

Introduction to the Course

Too many classes focus on theory and large, overarching issues instead of practical things that you will need to know to start a business.  Hopefully this class will prepare you to actually start your business by giving you the tools to do all of the nitty gritty work that is necessary to get started.  At the end of the semester, students will compete in a business plan competition in front of a panel of judges.

Week 1 – Introduction to Entrepreneurship

Class: There are many types of entrepreneurship, not just high tech.  It’s easier than you think and college is the best time to start. How to Live Before You Die.

Required reading: How to Start a Startup, What Startups are Really Like, The 3 Advantages of a Startup, Entrepreneurs Come in All Shapes and Sizes

Week 2 – Idea Generation and Business Plans

Class: How do you take an idea to a business plan?  How do you write a business plan? Malcolm Gladwell on Spaghetti Sauce

Required reading: The World is Flat, 9 Business Selection Criteria, 13 Sentences, College is the Best Time to Start a Business

Homework: Start thinking about a business to start for the business plan competition.

Week 3 – Types of Businesses Organization

Class: What type of entity should I use? LLC, Corporation, Non profit?  Learn how how to sign up for LLC.

Required Reading: 18 Mistakes that Kill Startups , The Top Ten Lies of Entrepreneurs

Homework: Sign up for an LLC, but don’t pay for it.  Start working on your business plan.

Week 4 – What are the Necessary Legal Docs Required?

Class: Operating agreements, partnership agreement and their  importance.  Guest speaker: A lawyer familiar with these issues.

Required Reading: Top 10 Geek Business Myths, The PayPal Wars

Week 5 – Taxes, Banking, Accounting

Class: How to setup a FEIN, get a free business bank account and start learning about Quickbooks.

Homework: Go to a bank and get a free business bank account set up (you don’t actually have to sign up), start exploring Quickbooks.

Week 6 – Quickbooks

Class: How to use Quickbooks in a small business or startup

Homework: Create a Quickbooks file for a hypothetical startup.

Required Reading: How to Get Taken Seriously Running A Startup Under 25

Week 7 – Credit Card Processing

Class: Teach how credit card processing system works, fill out forms

Homework: Call multiple resellers and see who can get the best rate.

Week 8 – Servers and SSL

Class: Overview of types of servers, server companies.   What is an ssl? Overview of ssl companies.  Test on first half of class.

Required Reading: Don’t Be Afraid of the Competition, My Rules for Startups

Homework: First draft of business plan due

Week 9 – Overview of Programming

Class: Types of programming languages, how programming works works, explanation of databases, what to look for when hiring a programmer.  How to register a domain name.

Required Reading: The Tipping Point

Homework: Register a domain for under $8.

Week 10 – Legal

Class: What to look for in a lawyer, what you need from them and the importance of a legal advisor.

Week 11 – Mentors

Class: Overview of why you need a mentor, who is willing to help, how you should look for a mentor.

Required Reading: Every Startup Needs a Mentor Team, The Entrepreneurial Push

Homework: Connect with a potential mentor on Linkedin, Twitter, email or phone.

Week 12 – Networking

Class: Why you need to network, strategies for successful networking, how to stay in contact with people.

Required Reading: The Business of Meeting People, Freakonomics

Homework: Get business cards for yourself, check out Brazen Careerist.

Week 13 – Blogging and Online Stores

Class: How to set up a blog, overview of WordPress, Blogger etc.  Overview of online shops.  Intro to Shopify.

Homework: Set up free wordpress blog.

Week 14 – Online Advertising, Social Media, Analytics, Document Sharing

Class: Overview of online advertising, CPM, CPC, Twitter, Facebook.  Intro to Google Adwords, Analytics, Docs and Calendar.

Required Reading: Made to Stick

Homework: sign up for Google docs, share a document with me.

Week 15 – Guide to Raising Money, Office Space

Class: How to value your business? Overview of friends & family, angel investors, VCs.  When is the right time to get an office?  How do you get the best deals?  Where should you look?

Required Reading: The Top Ten Lies of Venture Capitalists, To Office or Not to Office

Week 16 – Business Plan Competition

Final Exam – Business Plan Competition with panel of judges, based on Burrill Business Plan Competition.

—

I really think that this sort of course would be incredibly beneficial to a student who is thinking about starting a business or even thinking about working for a startup.  These types of skills will give students a nice foundation so that they can start their own business.  Check out my full list of resources on my Entrepreneur 101 page for links to all of the companies I would use for each of these lessons.

So help me out: What am I missing?  Would you take a class like this?  Do you think universities would be willing to offer a class like this?

                          

Justin Beck is the co-founder and CEO of PerBlue, a software startup in Madison.  PerBlue’s flagship product, Parallel Kingdom, is the first location based game built for the iPhone and Android and has over 80,000 players worldwide.  Founded in January 2008 while he was still in school, Beck and his team have worked to create a successful game and an interesting business model.  Beck graduated with a degree in Computer Engineering from the University of Wisconsin.

Nathan Lustig: Hi Justin, thanks for taking the time to answer my questions.  Can you give me a brief overview of your company?

Justin Beck: Sure.  PerBlue was created when we started developing our flagship game, Parallel Kingdom, in January 2008. The first version was released in October 2008 and we’ve been steadily gaining players and improving the game ever since. The game is on its 3rd major version and we currently have over 80,000 players.

We have 7 more or less full-time people working for us and are growing nicely. We have also developed several other applications for the iPhone and Android platforms but our most successful app remains Parallel Kingdom.  As we’ve grown we have found our business to be building great multiplayer games for mobile platforms.

NL: What kind of background did you have to be able to start a mobile gaming company?

JB: I have been programming since I was 12 years old and love to do it.  I graduated from UW-Madison with a Computer Engineering and Computer Science Degree and I interned as a software engineer at Google and as a program manager at Microsoft on their ASP.NET team.

NL: Many founders of startups have some sort of an “ah-ha moment” when they first got the idea for their company.  Did you have one and what was it?

JB: I’m thinking that could be true for us.

I was working on a different startup with some friends from Google.  We were going to build a community bar and real-time chat for webpages as a script mashup, which was going great.  But when Andrew Hanson (my partner) and I were doing homework one night, we starting thinking about the next game we should make.  I was like, we should build something mobile, something people actually would play, simple, and we should throw GPS into it somehow to make it interesting.

From that conversation, we started with Parallel Kingdom.  It was about a month later when I realized the mobile space was really growing and I should invest myself into build a company around that space.  This was before the iPhone Appstore even existed.  I would say that was my “ah-ha” moment.  I just knew it.  It wasn’t a tough choice.

NL: What is the biggest reason you founded your startup?

JB: I love adventure.   I saw building a company as the next challenge in my life.  Two of my life goals were to work at Google and Microsoft.  I had been there and gotten offers from them, but this opportunity came up and the timing couldn’t get much better.  Many people assume lots of things about people who run their own business, many of these are explicitly not true with me.

I actually really like working for someone else and trying to make them as successful as possible.  I also really have no interest in the money.  I took a 2 year pay cut to do PerBlue.  So for me, it’s the adventure and challenge.

NL: What is the biggest unexpected challenge you had to overcome?

JB: I would say my biggest unexpected challenge was how hard it is to be a really good manager of a creative team. I am still working on it, but doing it well is very hard.

NL: What advice would you give to someone who is thinking about starting a startup?

JB:

1.       Play to win, commit yourself to playing the game and be willing to be very flexible in how you navigate the pathway.   Watch and model people who have built successful companies and learn from them.  (Watching failure doesn’t teach you how to succeed)

2.       Have a specific goal: we are going to do “this.” Drive yourself and your team to this goal.

3.       Have a schedule, (roadmap) that is a reasonable plan of getting to that goal.

4.       Commitment and talent are the 2 most important traits of your teammates.

5.       Stay focused.  You can only build one business at a time.  Choose your business and stick to it till its done.

6.       It’s a marathon not a sprint, pace yourself emotionally, mentally, physically

NL: What are three websites you check everyday?

JB: Not many. Pandora, Facebook, Google Analytics, PKStats, Bug Tracking is my honest list. But websites I check weekly bi-weekly when I am thinking about strategy or competitive research.

http://techcrunch.com
http://news.ycombinator.com/

I have my executives I try to watch.  Marc Pincus (Zynga), Eric Schmidt (Google), Jason Fried (37signals)

I like watching talks, Google Tech Talks are amazing.

NL: Do you have any funny stories or amusing anecdotes about starting or running the company?  Do people ask you “when are you going to get a real job?”

JB: There are lots of funny stories.  One of the easiest ones to explain is DB Death Day and yes it is a PerBlue holiday.  We had some problems with the database and issued a statement that:  “There was a massive forest fire in PK, resulting in every tree in the western hemisphere being burnt to the ground.”  Along with the loss of every GeoBuzz post.  It was a sad day, but somewhat comical looking back.

I have actually never heard that statement about getting a real job.  Most people are very encouraging.  Most people don’t understand what it takes to build a business. So that makes their empathy hard. I think the most negative person towards PerBlue was my recruiter at Microsoft when I turned down their offer and counter offer, but that was her job.

NL: What/who has been the biggest help to you and your company?

JB: My mentors have been amazing.  During PerBlue’s life I have now had about 7 mentors, as the life stage of the company changes the mentors I use and depend on also changes.  But I can’t imagine doing this without mentors.  My partner Andrew has also been an amazing asset, starting a company with a partner is an extremely wise idea.  Team is what makes the company, without the PerBlue team, we would have never gotten off the launch pad.

NL: What is the most fun part of running your company?  The least?

JB: I would say the most enjoyable parts of running PerBlue, are working with the team, building and solving big problems, having things work, and seeing players love the game and play it so much and actually see our business become successful.  I personally get a lot of gratification when I see my co-workers growing and become excellent at what they do.  I think the least enjoyable part of my job are the days when it seems like everything “breaks” or when things just don’t go like you need them to.

NL: Thanks for taking the time to answer my questions, you had some great advice.  Good luck in the future.

                          

HI! my name is Sukara Sterling and I am a young entrepreneur. I opened up my very own clothing boutique when I was 21 years old on famous State Street in Madison,Wisconsin.  I named my shop after me, calling it Sukara Sterling.  I owned and operated it for nearly 5 years, closing it in July 2009.  After closing my store, I searched and searched for the right job, and was offered many, but I really realized I really wanted to be my own boss.

People always ask me “how did you go from growing up in the country to owning your own boutique at age 21?”  It all started at a young age.  I was always interested in fashion as a child.  I grew up in the country playing outside with my siblings, exploring abandoned buildings and playing in the Maribel caves. Being the outdoorsy child that I was, I somehow also had an interest in fashion.

I can remember making my first garment, I think in 4th grade. It was made out of a farm print fabric (I’d like to bring that look back….hahaha). Anyway, from there I continued to have an interest in fashion and also started to learn more about business. I remember buying my first business book as a Sophomore in high school and bringing it to class with me.  The book brought a ton of attention and lots of questions from the my teachers and students. I told everyone I wanted to own my very own clothing boutique. I definitely got a mixed response.  Some thought I could never do it and others gave me their full support. (Thanks to those who did .

Next, I graduated from high school and went on to college. Let’s just say I picked the wrong school and switched colleges a few times. Never finding my niche at school, I ended up dropping out, even though I loved fashion and had been able to choose to major in fashion marketing.

I had two major problems.  First, I had to pay all my bills through school, leaving me with hardly any time to study. I had two part time jobs and I was also a full time student.  My first job was as a waitress.  I loved that job, the money was good, and I had a blast running around the restaurant with my co-workers.  Some of the girls are now my life long friends, they were also college students at the time, and moved on to other things.

The second problem, and this one was a BIG one was, in class I would sit and think, “gosh why cant I just do this in ‘real life’, and skip the stuff I don’t need?” Well, that is exactly what I decided to do. The second part time job I had was at a clothing boutique called Lupe. The women who owned it wanted to get out of her lease and I saw this as a great opportunity to start my own store by taking over her lease.

That is exactly what I did. After a few weeks of getting everything needed together including taking out a small loan, I inked my name on the lease with a hefty monthly rent. I really wasn’t worried about how I would pay the bills, I just knew that it was what I wanted. For me when there is a will, there is a way.

I changed the name of the store to Sukara Sterling, restocked the store with my own inventory and was on my merry way for a great learning experience. Let’s just say I jumped into this.  I didn’t know much about business and only had read a few books. I went with the flow and learned what I needed to run a successful business and grew with my new company. I learned to do everything including, HR, Accounting, Taxes, Managing, Operations and my favorite the buying. I remember going to my first show for a buying trip in LA and having no idea what I was doing. I just nodded my head and agreed acting the part, they bought it. It worked.

A few weeks later I was ripping open boxes of new inventory, and reaping the benefits of checking out customers and making some cash. As a few years went on, I got bored with being in the same place; I needed more flexibility in my life, not to mention the economy decided to tank and sales were down. I saw this as the perfect time to sell out my inventory and move on with new ventures. Owning and operating the store gave me tons of experience and exposure and enabled me to be qualified for some pretty sick jobs. I closed in July of 2009 and attempted to move to Los Angeles. I made some money, learned a ton, but it was time to move on.

My beautiful sister is also an entrepreneur, running her own jewelry label out in LA.   She was lovely enough to fly home and road trip with me and my dog Benson across the country from Wisconsin to California. In California I was lucky enough to find some great job opportunities even though California’s unemployment rate is very high compared to other places. I was offered an office job and a job as a store manager for a fashion label, but, let’s just say LA is not my bag, so I turned down the job offers.

I found that it was great to visit, but decided it wasn’t right for me to be living there. Among other reasons, oddly enough I needed rain, and there was hardly any rain in California and bunch of other stuff I didn’t love. I packed up everything and came back to where I am from, still in search of my perfect place to live.  I was comforted where there was fresh rain and green cut grass in good old Wisconsin. I drove solo across the states in 36 hours.  If you drive straight through, it takes 30 hours. So if you do the math, you can see I slept little and only stopped when needed for gas. I slept once for 4 hours in the beautiful Rocky Mountains, waking up to a shiny dusting of snow. I loved driving across the country solo, it gave me plenty of personal one on one reflection time and thinking time, which I love.

I applied for jobs in several different states when I got back.  I still didn’t know where I wanted to have my home base. I was lucky enough to get job offers in several different states from several different companies. I was offered a job in Boston, but wasn’t ready for Boston.  Got offered a job in Chicago as Store Manager for a clothing line that I love, but I finally realized that I did not want to live in a big city whether it was LA or Chicago. Finally, I took a job in Milwaukee, working as store manager for a large clothing retailer.  I saw this as a huge opportunity because I would be managing a store that did $7mm  a year in sales, and it was a different path for me coming from my background in boutiques. However, that wasn’t for me either.

I realized that corporate America is really not my friend and I needed more freedom and flexibility in my life. That is when it dawned on me that I need to be doing my own thing again, fully running my own show. I decided I would look for some consulting work and quit when I found that.

Fortunately, my experience has given me a leg up in the harsh world of trying to find a job. The work came to me faster than I thought. I went in for an interview and I was on the payroll 5 minutes after my interview ended and immediately started working that same day. I am now currently working for a company called Madison Avenue Worldwide. This awesome couple who I adore dearly has given me a great opportunity. They were looking for someone to help them start a retail store from scratch. That is where I come in. I was hired to do exactly what I know how to do. Start a retail business. It is the closet thing to working for myself that I can get right now.

My job is to implement all the procedures and operations for a retail store that was just started called Fashion Playground. I am in charge of basically starting the store from scratch and getting it running and profitable. I am doing all the public relations, marketing, HR, writing the store manuals and implementing all the procedures and policy’s etc. for store operations. It is a great concept idea for a store where the kids get to come in and be their own designer for their own garment. I was recently informed that after I finish up with my current project with them, I get to start traveling for their other company and will be doing marketing and PR which I am really excited about. The owners of this business are very lovely and have given me the flexibility that I want and positive feedback that I was hoping for.  This jobs gives me a good mix of entrepreneurship and the steadiness of knowing I’ll have a paycheck.

While moving around and trying to figure out where I should live I also realized that I need to be a citizen of the world, because I love traveling so much. I do however, still want a home base but am not sure yet where that is going to be. I am thinking a mountain town somewhere, perhaps Big Sky, Montana where my brother lives or the northern west coast in Portland to join my friend Mrs. Tedford.

I’ve also learned that its kind of fun not knowing.  I like to go with the flow and see what happens because it keeps life more exciting. The moral of my professional life story thus far is that I would ultimately like to be fully running my own show from a laptop and a cell phone from anywhere in the world. In order to get to this point, I need to work hard and get my own business’s going.

In addition to working fulltime, I am working on a few other companies that I am starting, designing a fall 2010 clothing line, representing a clothing line outside of New Zealand called Federation as the USA and Canada rep, working with global summit (a non-profit that I helped found) and doing other consulting on the side. Hopefully it will all will pay off so I can get the lifestyle that I want and ultimately strive for!

                          

The Entrustet informational site is live and ready for the world. I’ve been working on Entrustet.com for the past 14 months with my friend and co-founder Jesse Davis and have loved every minute.  Entrustet is a secure, organizational tool that brings together people like you, estate planning lawyers and the companies that provide online accounts and memberships. Entrustet allows users to maintain a secure portfolio of online assets, nominate heirs and manage asset distribution and deletion after their passing. Entrustet’s wide range of services allow you to organize and decide what happens to your digital assets, before your loved ones or your executor are faced with the unknowns and complexities of protecting your online legacy.

For example, you could use Entrustet to create a list of all of your important digital assets like your domain names, digital photos and online accounts and tell your heirs what you would like done with them when you die.  I know I want my digital photos to be preserved so that my heirs can have access to them once I’m gone.

My partner Jesse Davis came up with the idea while he was reading Thomas Friedman’s book The World Is Flat and we partnered up a few months later.  You can read more about how Jesse came up with the idea on our company blog, here. We have been working full time ever since and are excited to share what we have been doing with the world.  It’s been an amazing experience so far and we are excited to continue working to make Entrustet a success.  I’ve learned so much, met some great people and throughly enjoyed myself over the past 14 months.  I’m confident that it will continue!  Jesse and I would like to thank our Merlin Mentor team, our lawyers at Neider and Boucher, family and friends and everyone else who has helped us to get where we are today.

I invite you to check out our informational site and give us your feedback!  You can also find us on Twitter @Entrustet

                          

Bryon Shannon is the founder of Wisconsin Relic, an apparel company that he started in January 2009.  Bryon graduated with a degree in Management and Real Estate from the University of Wisconsin‘s business school and started Wisconsin Relic while he was still a student.  He describes Wisconsin Relic as:

Wisconsin Relic is an apparel company that I started in January 2009.  It is a creative, colorful brand centered on shirt slogans that resonate with young people in Wisconsin. We sell clothing on our website, www.wisconsinrelic.com, as well as through stores such as the University Bookstore in Madison and Milwaukee.  Wisconsin Relic is a lifestyle brand providing premium quality apparel that celebrates the Midwest and its young pioneers.  We sell vintage, organic and Wisconsin Relic original tees at numerous outlets, as well as on WisconsinRelic.com.

Here are a few of Bryon’s shirts:

Nathan Lustig: How did you come up with the idea for Wisconsin Relic and why did you start the business?

Bryon Shannon: I got sick of walking around campus and seeing red and white Wisconsin t-shirts.  I knew I could design some pretty cool tees for kids in the state that would be more interesting than the traditional red and white Wisconsin shirts.  I’d consider myself a very creative and trend-savvy person and keep up to date on social culture through print media and online blogs, so I thought that I could do something based around Wisconsin.

NL: Did you have any experience before you started Wisconsin Relic?

BS: I didn’t have much experience starting a business, but during school, I had attended case study training at the Harvard Business School and competed in an entrepreneurship competition at the London School of Economics.  I got to travel to London and compete alongside other people interested in entrepreneurship and it was a good learning experience.

I had also worked at Abercrombie & Fitch and was a consultant to Fair Indigo Clothing Company and had done some graphic design and marketing for brands and had done a some modeling as well.  Earlier in college, I was the branch manager for a college focused magazine and newspaper that was just breaking into the UW market and I was a founding member of my frat.  Overall, I had a good foundation before I started Wisconsin Relic.

NL: Many founders of startups have some sort of an “ah-ha moment” either when they first get the idea for their company or after they’ve been in business that makes the business work.  Did yo have one and what was it?

BS: My biggest ah-ha moment was during Mifflin! (NL note: The Mifflin Street Block Party is an alcohol-fueled campus-wide block party that occurs each spring right before finals) Imagine an intelligent revelation coming from Mifflin, suprising!

Tons of people were coming to our website to buy Mifflin Street Block Party tees and that really helped raise awareness for our company and brand.

NL: So you had some initial success, what was the biggest challenge you had to overcome starting Wisconsin Relic?

BS: Managing money. You always assume that when you get a big sale you’ll make alot of money. When the University Bookstore ordered 300+ shirts, we got really excited, and then realized we needed to print and give them 300 shirts, and we weren’t going to get paid for a month, so cash flow all of a sudden became an issue. The hardest thing is having enough free cash on the side for the company and knowing what is a good investment for the company and what isn’t.

NL: Do you have any funny stories or amusing anecdotes about starting or running the company?  Do people ask you “when are you going to get a real job?”

BS: Haha, that question is most frequent question I hear these days. My great uncle owned his own sign company and said people always think being your own boss is easy because you can get away working just half a day. To that he said, “yes and I have to pick out what 12 hours that’s going to be.” Just shows that owning your own company is way more difficult than getting a “real job” which sometimes makes real jobs tempting, but sometimes not as rewarding in the end.

Funniest anectdote is getting called by Pabst Blue Ribbon’s Legal Deptartment with a threat to sue if we do not stop selling our Mifflin tee (It was inspired by the PBR logo). They laid off once they found out we were a student company, but it did make for a fun “limited edition” shirt.

NL: What is the most fun part of running your company?  The least?

BS: Being your own boss and being your own boss. You can do whatever you want, and make your business something you are really proud of and connect with, but also, there is no paycheck and no one above you telling you to get up and do something when it gets rough, so there is alot of responsibility.

NL: What/who has been the biggest help to you and your company?

BS: Financially Allen Dines at the University’s Office of Corporate Relations, and the Student Business Incubator for grants and office space respectively. Also my parents for helping fulfill online orders and supporting my ideas.

NL: What are three websites you check everyday?

BS: nyt.com, concreteloop.com, everyoneisfamous.com, hypem.com

NL: What advice would you give to someone who is thinking about starting a startup?

BS: As Richard Branson said, “Screw it, just do it,” and then stick with it. It is so difficult to actually bring yourself to action, and then once you do, you will encounter so much opposition, so many obsticles that you want to toss the business sometimes, so you’ll need alot of determination.

NL: Thanks for taking the time to answer my questions.  Do you have any other interesting stories, facts, advice to share?

BS: No problem.  I’d tell people to join networks, ie. Capital Entrepreneurs, and share ideas and resources. It makes business easier and more interesting.

                          

Startup friendly cities need to have a high density of smart people.  Potential founders of startups need other smart people who could be potential partners, contractors or employees.  Most cities that have a high density of smart people happen to be cities with large universities that attract a huge supply of smart people each year.  It helps that these cities have universities because it’s even better to have young smart people, rather than simply smart people.  Young people can afford to take bigger risks and are more willing to work longer hours for little or no pay than older people who may already have families, mortgages or other obligations.

Another helpful characteristic is low cost of living.  If founders can live cheaply and find cheap office space, it makes it much easier for a startup to get off the ground.  Additionally, having a low cost of living allows startups to stretch their investment dollars much further.  Employees, rent and just about everything else is cheaper.  I talked to one Madison-based founder who has successfully sold one company and is on his second startup who believes that Madison’s low cost of living is one of the most important reasons why his company succeeded and his competitors did not.

Access to affordable office space in a business incubator is another key characteristic of startup friendly cities.  Business incubators are an important asset for startups, especially if they are affordable.  Unfortunately, many incubators I’ve seen end up charging close to market rates.  Incubators are an important step for startups because they are usually the first move from working out of the founder’s bedroom.  They also provide camaraderie, connections and bring startups out of isolation because the rest of the people in your office are also running startups.  It’s much better for a startup to move into an affordable business incubator with other startups, rather than move into an affordable office space next to a lawyer, construction contracting company and a non-profit.

It is extremely important for startups to interact in a community of other startups. Having other entrepreneurs around, especially entrepreneurs who have been successful in the past, is important because founders can ask for advice when they have problems.  A mentor program like MERLIN Mentors is very important because it matches up experienced people who have been successful before with inexperienced startup founders.  These mentor programs not only build a community of startups, but they provide specific feedback to startups and help them overcome challenges that they might not if they were left on their own.

Another important aspect of an entrepreneur community is free networking events like the High Tech Happy Hour and Capital Entrepreneurs. Events like the High Tech Happy Hour bring smart people together who are not necessarily focused on entrepreneurship and startups, but are fertile ground for finding employees.  Local, free entrepreneurship groups like Capital Entrepreneurs offer founders of startups a place to meet others who are doing what they are doing.  It also creates a community and gives founders of startups some semblance of co-workers.  Starting a startup can be lonely if you do not get out and interact with others who are facing the same challenges and dilemmas that you are.

These free networking events provide a way for experienced entrepreneurs to mingle with people who are just getting started.  Experienced entrepreneurs set an example and show everyone in the city that starting a company is viable.  They can also provide advice, but simply having experienced, successful entrepreneurs in your city makes your city startup friendly.  Cities like Boston, San Francisco and Seattle have these networks.  Others like Madison and Boulder are just getting started, but are on the right track.

These experienced entrepreneurs can introduce inexperienced founders to professional service providers like lawyers and accountants who are willing to help entrepreneurs.  It also helps if your city cultivates a network of experienced, flexible professional service providers.  These service providers should be willing to take equity, give discounts or defer payments into the future for startups that they think are going to be successful.  It is extremely helpful if startups can still get top notch professional services, without breaking the bank during the company’s research stage.

These professional service providers can help startups gain access to capital that they need to fund their business.  Ideally, a startup friendly city will have VCs, angels and other rich people who are interested in investing in startups, but not all cities must have all three.  A strong network of professional service providers who work with entrepreneurs can make introductions to rich people who are willing to invest.  Some startup friendly cities can be heavy on angel and rich individuals, but light on VCs.  Another way cities can help entrepreneurs is by advocating for small business loans and other alternative ways of funding.

Startup friendly cities generally have support programs in place for entrepreneurs.  They tend to have low taxes.  It is much easier to start a startup in a city that does not have 10% sales tax, like the city of Chicago.  The state of Wisconsin provides a 25% tax credit to angel investors who invest in certified Wisconsin startups.  Wisconsin also offers low interest loans that are forgiven if the startup fails.  Both of these programs help entrepreneurs succeed.  Other states have implemented programs that fund early stage startups.

Finally, many people who start statups generally like living in cities.  They like walking to work and living in tolerant environments.  They like to be able to meet in coffee shops, go to interesting restaurants and enjoy life with their peers.  It’s best to have good weather.  Low crime and good schools are also helpful.  Overall, creating a city with high quality of life keeps the three most important ingredients, experienced entrepreneurs, rich people and smart, young people, in one place.

Cities can begin to implement policies that help foster entrepreneurship.  Cities can start by creating a business incubator for startups that offers offices (with windows) at 50% discounts.  They can start to create mentor programs like MERLIN and create entrepreneur networking groups like Capital Entrepreneurs.  Service providers can start offering discounts or equity for service deals.  Once one service provider has success offering this deal, it quickly becomes the industry standard.  I’m not advocating that government do all of this.  People who want to see their cities become more friendly to startups have to do some of the work themselves.

Government does have a place.  It can offer incentives for startups to move to their cities.  It can lower taxes or offer government programs that provide easier access to capital.  It could create a new business incubator and it could help create a community of entrepreneurs by publicizing entrepreneur success stories or the local startup community.  Government could help make cities more startup friendly simply by being more friendly to startups themselves.

Characteristics of Startup Friendly Cities

Figure out if your city is startup friendly.  Rate your city on a scale of 0-2 for each characteristic and score total the score at the end.  0 means that your city does not do it at all, 2 means your city does is very well.

1. Access to capital
2. High concentration of smart people
3. Low cost of living
4. High concentration of rich people
5. Network of experienced entrepreneurs
6. Mentor programs
7. Low cost startup incubator
8. Low taxes
9. Governemnt support
10. Flexible professional service providors
11. Free networking events
12. High quality of life
13. Tolerant, vibrant, walkable cities
14. Large universities
15. Culture of entrepreneurship
16. Educated workforce
17. Good weather
18. High concentration of science and technology workers
19. Direct national flights
20. Entrepreneurship advocacy groups

I would say Madison, WI gets a score of 23/40.  Milwaukee gets a 13/40.  San Francisco gets 36/40.

How startup friendly is your city?  Do you agree with my list?  Do you have any characteristics to add?

                          

My partners and I continued to work out of our respective bedrooms for the next three years.  We hired two programmers, one who was local in Madison and one from Poland.   It was great.  We were able to save money by not spending on an office, work from home, and stay warm in those long Wisconsin winters.  We were productive and grew our business from about 15,000 users to over 125,000.   We were able to raise six figures from investors, all without getting an office.

In our third year, we were asked to meet up for an interview about starting a business in college.  We all went over to one of my partners’ houses for the interview.  My two partners and I were joined by our US based programmer.  We quickly realized that it was the first time that we were all in the same room, even though we had been working together for almost three years.  There had been just about every other combination, but never all four of us in one place at a time.  It was pretty amazing to see that we could run a successful company without ever meeting in person.

After we were acquired, we all talked about whether we should have gotten an office earlier or not.  I was always happy to work from home and save the money.  One of my partners was a big proponent of getting an office and believed that we would have been more productive if we had been in an office earlier.  After the acquisition, Corey Capasso, my partner who had wanted an office, moved to New York City to pursue his new company, Add The Flavor, a company that infuses flavor inside plastic.  He quickly got an office in Manhattan and got to work.  He kept calling me and emailing saying how much more productive he was now that he was in an office.

I stayed in Madison and founded my current company.  My co-founder, Jesse Davis, and I resisted getting an office.  We worked from our house, the business school and the Union Terrace.  I began to call the terrace “my office” and we worked outside with the beautiful view of Lake Mendota all summer.  One of my friends called me one day to tell me that “someone was sitting in my office.”  We were productive and worked well without an office, but we decided that we were not being as efficient as we could.  With Corey’s constant emails about how much better it was to work out of an office in the back of my mind and the business progressing nicely, we started to look for some space.

We ended up getting a great deal on some space in downtown Madison that was too good to pass up.  We had looked at multiple business incubators, but finally settled on sharing some office space with another young Madison company because we wanted to have connections with other startups, they had the best location and they had the best price.

We moved in and our productivity increased noticeably.  We filled the walls with tile board or what I call poor man’s whiteboards and our brainstorm sessions were much better.  We spent less time sending documents back and forth and increased our productivity in just about all aspects of our business.  Getting an office has been one of our best decisions so far.

So when should you get an office and how do you still make sure that you’re not just getting an office for the sake of an office?

I think it’s time to get an office when you are about to raise money.  This does not have anything to do with actually taking money, but it serves as a good proxy for when you you are about ready.  Every startup is different, but if you can do all of our business planning and initial programming before getting an office, you will come out ahead.  If you are raising money, it usually means that you have written a good business plan, done a good amount of initial research and pitched your idea to variety of people.

It’s also important to note that just because you have an office, you don’t have to turn into an 9-5.  My partner and I still work from home when we are too tired to come in, have other things we want to do during the day or simply want to work by ourselves for the day.  Getting an office does not trap you if you don’t let it.  It’s not like getting an office makes you automatically have a boss, stuck in a cubicle.  Try to find an office within walking distance of your house.  It will allow you to go back and forth and give yourself flexibility that you need in a startup.  Don’t spend a ton of money on your space.  All you need is a place to hang some white boards, get wireless Internet and work without the distractions that can happen at home or in a coffee shop.

What have your experiences been with working from home or at an office?  When do you think is the right time to get an office?  What sorts of characteristics do you look for in office space?