As famous investor Marc Andreessen said, “Software is eating the world.” In other words, software is and will remain relevant, making software startups popular and attractive. For aspiring and current entrepreneurs, this talk will focus on the practical aspects of creating and running a software startup. Topics will include: managing a software project, hiring tech people, hosting and operations, security, intellectual property, which programming language to use, and social media, with a dual emphasis on what to do and why to do it that way.

1. Why and How to do a
Software Startup
Carolina Innovations Seminar
January 7, 2015
Jeff Terrell, Ph.D.
@kyptin

2. Jeff Terrell
Founder and CTO,
Altometrics (2011)
Ph.D. Computer
Science, UNC (2009)

3. Overview

4. 1. Why Software
(5 mins)

5. 2. How to do a
software startup
(40 mins)

6. 3. Questions

7. 4. !

8. Why Software?

9. “Software is eating the world.”
–Marc Andreessen (2011)

10. “All of the technology required
to transform industries
through software finally
works and can be widely
delivered at global scale.”

11. Ubiquitous computers

12. Ubiquitous broadband

13. Cost of a basic Internet application
In 2000, $150k In 2015, $500 (if that)

14. Examples

15. 41% of all new book
unit purchases

16. Largest video service by
number of subscribers (2011)

17. Music
28M paid
subscribers
39% of revenue ($5B)
from digital channels

18. “Disney—Disney!—had to buy
Pixar, a software company, to
remain relevant in animated
movies.”

19. “Photography…was
eaten by software
long ago.”

20. Self-driving cars

21. Military power (drones)

22. But why?

23. The market abhors
a vacuum

24. Software is fluid

25. “Software is eating the world.”
–Marc Andreessen (2011)

26. How to do a
software startup

27. Preamble:
It depends

28. Everything is vitally
important
…according to somebody

29. Meta-advice:
Be a good intestine

30. Overview
(in order of execution)

31. 1. Types of software
businesses

32. 2. Prerequisites

33. 3. Legal aspects

34. 4. Accounting

35. 5. Programming
languages

36. 6. Managing a
software project

37. 7. Evaluating
technologies

38. 8. Hiring tech people

39. 9. Websites, hosting,
SEO

40. 10. Infrastructure

41. 11. Intellectual
Property

42. 12. Security

43. 13. Social media

44. 1. Types of software
businesses

45. Consulting
(We'll build it for you.)

46. On-premise solution
(You host our servers.)

47. SDK or engine
(You code with it.)

48. Plugin
(If you're using <platform>,
you can use our add-on too.)

49. Standalone app
(You download and install it.)

50. App-store app
(e.g. apps on your phone)

51. Web app
(You login and use it online.)

52. 2. Prerequisites

53. Mutual trust

54. Have a programmer!
(on the founding team)

55. Determine equity split

56. Set reasonable
expectations
(e.g. there will be a ramen phase)

57. 3. Legal aspects

58. Vesting
(Or, protection for the
corporation)

59. Incorporation

60. Cookie-cutter route

61. Custom route: find a
(relevant) lawyer

62. 4. Accounting

63. Use a payroll service

64. Justify business
expenses

65. Save receipts

66. Hire a CPA to do taxes

67. CPA service
(not generally available)

68. 5. Programming
languages

69. Sometimes an early
consideration
(e.g. difficult to hire until
this is decided)

70. Go with what
you know

71. Else, use Clojure

72. Aside: why Clojure?

73. Immutable
data structures

74. Immutable
data structures

75. Immutable.
Data.
Structures.

76. “Mutable stateful
objects are the new
spaghetti code.”
–Rich Hickey,
inventor of Clojure

77. “[They are] hard to
understand, test,
and reason about.”

78. Immutability makes much
of the concurrency problem
go away.
Share freely between
threads.

79. Software
Transactional
Memory

80. Runs on the JVM
(Full access to Java
libraries)

81. 6. Managing a
software project

82. Understand tradeoffs
Scope, cost, and speed: pick two.

83. All the features and cheap →
gonna take a while!

84. All the features and fast →
gonna cost a lot!

85. Cheap and fast →
only some features!

86. Prioritize features
From How to build great products
http://www.defmacro.org/2013/09/26/products.html

87. 1. Game-changing features:
something new and useful
hard, but worth doing 1–3

88. 2. Show-stopping features:
people won't buy it unless
it has these
do the bare minimum

89. 3. Distractions
show no mercy

90. Communicate:
clearly,
precisely, and
in writing

91. Specify “what”
not “how”

92. Be open to
alternative solutions
(separate essential from
incidental features)

93. Make predictions,
then evaluate them
after completion

94. The tar pit:
complexity breeds complexity

95. Simplicity

96. Simplicity is hard
and takes time

97. Towards simplicity
1. Beware verbose language
and “boilerplate”

98. 2. Beware ill-fitting
databases
Or, “Representation is the
essence of programming.”
–Frederick P. Brooks, Jr.
Towards simplicity

99. Towards simplicity
3. Don't be afraid
to start over

100. Towards simplicity
4. Do be afraid of
pushing devs too hard

101. Towards simplicity
5. Decent proxy for
simplicity: lines of code

102. When should I
outsource projects?
● It's outside your team's expertise,
● You can clearly describe what you
want and what success looks like,
● It uses non-proprietary languages
and technologies, and
● You have the money to pay for it.

103. 7. Evaluating
technologies

104. Don't be afraid to dive in
(even for huge topics)

105. Sometimes the shortest
path is the long one
(Or, books and manuals are good)

106. Find an expert, and
ask them:
● What solutions exist?
● What would you recommend? Why?
● Why wouldn't somebody do that?
● What alternatives exist?
● Why is this the best choice?
● Push until you're satisfied

107. 8. Hiring tech people

108. Be slow to hire
(firing is no fun)

109. Avoid arguers
from authority
Your employees should not
say, “Because I said so.”

110. Hire “smart and
gets things done”
From The Guerrilla Guide to Interviewing
by Joel Spolsky
http://www.joelonsoftware.com/articles/GuerrillaInterviewing3.html
(See also: http://qz.com/258066/this-is-why-you-dont-hire-good-developers/ )

111. Smart and gets things done
Smart isn't enough.
“Knowledge is for wisdom,
and wisdom is for living.”

112. Smart and gets things done
“Gets things done” isn't
enough.

113. Smart and gets things done
smart ≠ knowledgeable
smart = able to explain
things to non-technical
people

114. Understand developer
motivations:
autonomy
mastery
purpose

115. Test candidates

116. Have an IP rights
assignment

117. Have a vesting
schedule

118. 9. Websites, hosting,
SEO

119. Find a content
management system

120. Find a good theme

121. Focus on content

122. A good website will be
one on a phone, too.

123. I like
StrikinglyWordpress

124. Example
Strikingly site
(time: 1 day)
(Sales pitch: check
out visclay.com!)

125. 10. Infrastructure

126. Why infrastructure?
Because a static
website isn't enough.

127. Cloud computing
It's here to stay.

128. 11. Intellectual
Property

129. Not every startup
should get a patent

130. Why not to get a patent
1. You aren't doing
anything that novel

131. Why not to get a patent
2. You don't want to
publicly disclose your idea

132. Why not to get a patent
3. They're expensive to get
($10–30k)

133. Why not to get a patent
4. They're expensive to
defend (at least $1–2M)

134. Why not to get a patent
4. They take a long time to
get (1–3 years)

135. Patent upsides

136. Why to get a patent
0. You want to get royalties
(good luck!)

137. Why to get a patent
1. You want to grow large

138. Why to get a patent
2. You want to get acquired

139. Why to get a patent
Large companies use
patents Cold-War-style:
Mutually Assured
Destruction

140. Why to get a patent
Large companies use
patents to enable
collaboration

141. Why to get a patent
3. You can afford
10–20 patents

142. Patent strategy

143. Patent strategy
1. Know the basic
requirements: statutes,
novelty, usefulness,
nonobviousness

144. Patent strategy
2. Know what counts as a
disclosure (starts a 1-year
clock ticking)

145. Patent strategy
3. Understand provisional
patents

146. Patent strategy
4. Consider how you can
discover and prove
violations

147. Patent strategy
5. Consider your patent
from an adversary's
perspective. If possible,
patent the chokepoint.

148. Patent strategy
6. If you're UNC-affiliated,
talk to the Office of
Technology Development

149. Early stage advice

150. Early stage advice
1. Be aware of what you
could patent

151. Early stage advice
2. Be aware of whether you
have to disclose your idea

152. Early stage advice
3. Focus on execution first

153. Early stage advice
4. Consider a provisional
patent

154. 12. Security

155. Detectify:
Go hack yourself

156. Always use a firewall

157. Use key-based
authentication (and
keep your keys safe)

158. Keep systems
up to date

159. Keep passwords and
keys out of source
code

160. 13. Social media

161. Product comes first
(although building a
following takes time)

162. Frequent updates
lend credibility

163. Beware the time-suck

164. Queue up posts for
later

165. Nothing beats good,
original content

166. Questions?
Thanks for coming!
Follow me on Twitter @kyptin
http://altometrics.com
http://visclay.com