Archive for April, 2007

Corporate Productivity Falters

Posted in Daily Entries on April 30th, 2007 by Mike Taber – Be the first to comment

This past week, corporate productivity from the home office took a nosedive. No, my 20Mbps network connection didn’t die on me. I bought a Nintendo Wii. While my golf score isn’t quite as low as I’d like for it to be, I’m going to be making an effort to get a lot of serious work done over the next several weeks. It’s crunch time these days and things need to get done.

And no, I’m not going to sell you my Wii so I can get some work done.

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Hiring for a Single Founder Company

Posted in All Articles, Bootstrapping a Business on April 26th, 2007 by Mike Taber – 2 Comments

Hiring your first employee is hard. In a single founder company, the job is even harder because there are many complex issues that you need to juggle simultaneously, some of which aren’t remotely related to evaluation of the person you’re trying to hire. In this article, we’re going to completely ignore how to evaluate a developers’ technical abilities and focus on the business problems that are associated with hiring and some mistakes that you need to avoid.

What do I want this person to do?
One of the biggest mistakes you can make when hiring is not determining job responsibilities in advance. This seems like a no brainer. After all, when you’re writing up the job advertisement, you need to put this together, right? Unfortunately, in a single founder company you’re probably barely keeping up with what’s going on. If things are moving quickly, what you need in an employee can change very quickly as well, regardless of the size of your company.

The solution is to determine what you want from your new employee long term. Try to think 3-5 years out, not 3-5 months. If you hire for short term needs, you’ll solve the short term problems, but you may be creating long term problems. You never want to be in a position where you have to even consider getting rid of an employee because you didn’t think about both his short and long term role with the company.

Can I afford to hire someone?
This is a very hard question to answer for many companies. It seems straightforward but there are many unknowns to consider. For example, potential employees can have wildly different salary requirements for the same position. One person might only want $75k, while another is looking for more than $100k. And these expectations may be much different than those of the employer. These variations are largely based on experience and where someone is in their career. It’s probably best to know what everyone’s expectations are in the beginning, but due to convention, salary discussions don’t typically take place until much later in the interview process.

If you’re running a small company, feel free to discuss salary in the very first interview session. You need to be careful here because it’s possible that two similarly qualified people might have salary expectations that differ by quite a bit. Some employers give more weight to the person requesting the higher salary, while others do just the opposite because the lower salary means more profit for the business.

Don’t get trapped by this situation. The third and best scenario is to ignore salary as a hiring criteria unless it falls significantly outside your anticipated offering range. The requested salary should have very little bearing on whether you make an offer to hire someone. Whether the prospect accepts your offer is an entirely different story. If you are running your business correctly, then hiring the right people is far more important than saving a few thousand dollars on an employees’ salary. The right person will more than make up for the cost of their salary in the work that they do for your company.

From a strictly monetary point of view, you need to consider several factors because salary is not the only cost associated with a new employee. There’s salary, employment taxes, health & dental benefits, workers comp insurance, vacation time, holidays, computer hardware, and computer software. There are also indirect costs associated with office space, office furniture, electricity, and any special perks that you want to offer like comfy chairs, free lunches, free parking passes or special company outings. You need to meet all of these financial needs for however long it takes for the new employee to start generating revenue for the business. Ideally, your business will have enough revenue to meet these costs on day one, but that’s not always feasible.

Can I afford to not hire someone?
This is simply another way of asking the previous question, but it’s an important distinction. If the sole reason for hiring someone is to have a minion, you need to wait. If you’re hiring for an upcoming or future need, you should wait. Never hire before the business needs and financial capabilities of your business can support the new employee. It’s easy to find meaningless work for an employee to do, but it’s much harder to find work that is generating revenue for the business. Don’t spend thousands of dollars going through the hiring process, and doing training for someone only to be in a position where you have to let them go a short time later because you can’t support the employee any longer. If you think this is the case, then you should hire a contractor, not an employee.

How much overlap do I want?
A lot of people when they’re hiring tend to lean towards hiring people who have the same background as they do. This is bad, or at the very least, it’s not good. People who are like you will have the same strengths, but will also have the same types of weaknesses. Web developers aren’t likely to know a lot about pointers in C. Windows developers seem to have a hard time with Linux. I like to think I’m pretty talented with SQL Server. If I hire someone else with the same talents, how much good are they going to be if I start developing a DB2 or Oracle application? You can say that SQL code is SQL code, but it’s not. Compare T-SQL to PL/SQL and they’re different enough that you will run into trouble when developing an enterprise level application.

You should look for is someone with a set of skills that will complement your own while still contributing to the business. This is one of the things that Venture Capitalists look for in development teams. It’s also what most entrepreneurs look for in a potential partner to start a business and be successful. It’s hard to argue against complimentary skillsets but people do it all the time when they hire their own personal Mini-me’s.

Should I hire an experienced employee or an entry level employee?
There are pros and cons to hiring any employee, regardless of whether they are experienced or entry level. Entry level employees cost less, but are probably going to make mistakes. They’re going to need a bit more oversight than experienced employees and are going to ask for more feedback about whether what they’re doing is right or not. Experienced employees can usually be given a task and more discretion about how to get the job done. They are expected to require less oversight and be more productive out of the gate. Their salaries are also higher. In either case, if you have very specialized software that they will be working with, there are training costs that you are going to need to bear.

These are somewhat sweeping generalizations and they don’t always hold true, but the real issue here is the size of your company, and who the new employee will be reporting to. If you’re a single founder who is 25 years old, would you feel comfortable hiring someone who has 25 years of software experience as your first employee? It wouldn’t bother me at all, but it’s something that you have to think about. While it’s obviously illegal to discriminate based on age, it’s not illegal to turn down an applicant if you think that problems will develop due to differences of opinion on issues that come up. Will this person be easy to get along with? Are you going to be comfortable being a manager at all? If not, you might need to rethink how you grow your business by hiring a manager or some entry level developers first.

This is something that you may or may not be able to determine during an interview. I’ve interviewed people who I immediately felt would be problem employees because no matter what was said, the candidate was right. Sometimes it’s what a person says. Other times, it’s not so much what a person says, rather how he says it.

It’s important to realize that with your first employee, you need to get it right. Most mistakes you want to make early on in the development of your business because later on they are going to cost more. Hiring is not one of those mistakes. In fact, hiring mistakes can be your most costly, no matter when you make them. But if your first hire is a bad one, you could go out of business. I don’t want to scare you, but don’t screw this up. The bottom line is that there’s no right or wrong answer to whether your first hire should be entry level or experienced. You need to do what makes sense for your business in terms of what needs to be done, and how much money you have at your disposal to do it.

What benefits will I offer my potential employees?
When I first started the hiring process, I had a decent idea of what sort of things I would offer as employee benefits. My office is in downtown Worcester, and parking costs around $7 per day, which is roughly $140/month. I strongly disagree with asking employees to pay to go to work so I pay for parking passes at a nearby garage out of company revenues. I also had an idea of what I could offer for health, dental, vacation time, etc. What I wasn’t prepared for was questions about things like telecommuting. What exactly was my holiday schedule? What did I think about part time work? What was my ‘exact’ timeline for hiring, because apparently some potential employees are on a timeline as well.

These kinds of questions threw me the first time they were asked, so I started making a list of what people were asking, and then put together what my answers would be the next time I was asked. By the time I was finished with my interviewing process, I had answers to pretty much everything (except the holiday schedule, which I still haven’t nailed down completely).

If you search the web to see what kinds of benefits you can conceivably offer your employees, you’ll find that they are as numerous as they are varied. Everything from free soda, free M&M’s, cell phones, company cars, and more. Some companies bring in arcade games, pool tables, televisions, and other stress relieving gadgets to keep their employees happy and ‘in the game’ so to speak.

Ultimately, the choice of benefits to offer is up to you. However you should think long term about the type of employees you want to attract and how you intend to keep them around. The hiring and training process for new employees is a significant cost to your business, if not one of the most significant costs. As the SAS business model clearly demonstrates, the right perks can significantly reduce the turnover rate at a company and improve your bottom line. In any case, give some serious consideration to what you want to offer your potential employees and use it to help sell your company to potential candidates. After all, hiring isn’t just a one way process. Just as you are interviewing the candidate, the candidate is interviewing your company to figure out if you’re worth a career change. They’re also going to ask themselves if your business is solid enough to support the proposed addition of an employee and whether they will still be employed in six months.

Tips for hiring your first employee:
Having gone through the process myself, I can tell you that hiring your first employee is a completely different experience from hiring as an employee of another company. It’s somehow a lot different when the money is coming out of your own pocket. With that in mind, I’ll leave you with a few tips for hiring your first employee.

1) Be very selective. The first employee you hire could drag down your entire company.
2) Decide on a salary range and make that clear to prospective candidates. You can’t go outside of that range without jeopardizing your business and consequently, their job. Don’t take chances you can’t afford.
3) Above all, be honest with the people you’re hiring. Don’t make promises you can’t keep. You will need to explain a lot about your business, how you intend to keep it going, and how this employee fits into your plans. Keeping it all a ’secret’ will simply turn people away rather than attracting them to your cause.
4) Use the phone screen to tell people about your business. Don’t waste valuable face to face time doing that. See if they’re interested in what you’re doing. If not, then move on. I had a candidate tell me over the phone that he didn’t feel qualified for the position. This kind of thing will happen and it saves both your time and theirs. Be thankful, not irritated or disappointed.
5) Remember that money isn’t everything. Most people are willing to work for a salary that is relatively competitive for the region, especially if they are working on interesting stuff or you’re treating them a lot better than they were being treated at their last job.
6) Think long term. If you’re not, you might as well close up shop and start looking for a “real job”.

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The Netflix prize

Posted in Daily Entries on April 24th, 2007 by Mike Taber – Be the first to comment

The past two weeks, I’ve been in Boston, Denver, Las Vegas, Minneapolis, and Providence. Needless to say, it’s been a bit tiring. Fortunately, the next several weeks I get to work out of my office and then I’m back on the road again for a bit. I have an article on hiring for single founder companies that I’m nearly finished with. Also due up is an article on how to find clients if you’ve decided to build a consulting company to help fund your software company.

Of course, if you don’t feel like spending all that time doing consulting work and think you’re the best hotshot programmer since Hugh Jackman in the movie Swordfish (go ahead… spin your chair when programming. All the cool kids are doing it and it really does make you a better programmer…), you can skip that part and try to snake yourself a cool million dollars by winning the Netflix Prize.

“What’s that?” you ask?!?!

Let me enlighten you my friend. Netflix is holding a contest where they are providing a set of non-personally identifiable data about some of their customers and their viewing habits. If you can write an algorithm that will predict what people might like to watch that is 10% better than their current algorithm, they’ll pay you $1 million dollars. (Insert Dr. Evil hand gestures and maniacal laugh here).

The contest has been going on for a while now, but I really haven’t heard too many people clamoring about it on the websites I tend to frequent. Less than 11,000 entries have been submitted so it’s not as if you have a snowball’s chance in hell to win. You just have to come up with an algorithm that works better than 11,000 other algorithms.

While this isn’t something that I would participate in at this stage of my life, I suspect that there will be more contests like this in the future from other companies to harness the collective talents of people from all over the world. For Netflix, this type of algorithm development is a bargain. They’re paying for results, not for research and development that might or might not pan out. It’s similar to buying a startup company, but they have already specified the output they want, and if it doesn’t happen, then Netflix doesn’t pay a dime.

Pretty ingenious if you ask me. Kudos to Netflix.

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The Widescreen Laptop Conspiracy

Posted in All Articles, Business on April 4th, 2007 by Mike Taber – 48 Comments

For the past six to eight weeks, I’ve been on the lookout for a new laptop. Now, I know that I have high standards, but I can’t believe that some of the things that I really want in a laptop are no longer available. About a year ago, my old Dell Inspiron 8100 was about to bite the dust. It was 6 years old, overheated frequently, one of the two batteries I had was essentially a short circuit, and did I mention it was six years old?

One of the main reasons I bought that laptop was that it went well with my 20″ LCD monitor. They both had the same resolution, and 1600×1200 resolution on a 15″ screen really isn’t that bad once you’re used to it. In fact, when you get used to it it’s very hard to go to anything else. The middle of last year, I broke down and bought a new laptop. I was a little bit concerned that the screen resolution wasn’t quite what I was used to, but it was a widescreen monitor. Apple didn’t make anything else for their 15″ MacBook Pro series, so that’s what I went with.

I’ve been using this thing for just shy of a year now, and I have to be honest: I have some pretty major gripes about this laptop, which I’ll cover in a different article. Don’t get me wrong, the raw power and the light weight of the MacBook Pro are great. But using BootCamp isn’t all it’s cracked up to be. More on that later.

So here were the criteria that I put forth for my new laptop:

  • Dual core is a must. Don’t care whether it’s Core 2 Duo or Athlon X2. Either would work fine.
  • I want 2GB of RAM. This shouldn’t be hard to do, although I would prefer a single 1GB RAM chip installed so I could buy the additional RAM at a reasonable price.
  • 15″ screen. It can be 15.0″, 15.1″, or 15.4″. I don’t really care. I don’t want 14″ because the screen is too small, and I don’t want 17″ because they’re too heavy. Neither of those would fit well into my laptop bag and I don’t care to blow another $60 on another laptop bag.
  • 1600×1200 resolution. Having been running my Macbook Pro at 1440×900 for the nine months, I can’t tell you how much I miss that extra 300 pixels at the bottom of the screen. I’m not a fan of widescreen, so I’d prefer not to have WUXGA.
  • 7200 RPM main hard drive. Doesn’t need to be large. 60GB would probably work fine. I use an external 80GB USB drive to house VMWare images and the system performs better with VMWare running on a separate drive.
  • Must be reasonably light weight. I’m somewhat willing to compromise on this. I know I won’t find anything as light as the Macbook, but the 1600×1200 resolution is more important.

I didn’t think that these requirements were too much to ask. My current search for a new laptop has run the gauntlet of every reputable notebook maker I could find. I’ve looked at Dell, HP, Alienware, Prostar, Sony, Toshiba, Gateway, etc… It turns out that finding a laptop with a screen resolution of 1600×1200 these days is close to impossible. Since I bought my last laptop back in the year 2000, the 1600×1200 screen resolution has become less common rather than more common. The ONLY laptop I’ve found that meets that criteria is a Panasonic Toughbook 51 from NexTag.com and it’s really not what I’m looking for. Everything else has been widescreen, which as I said before, isn’t something I particularly care for.

Part of the reason laptop manufacturers no longer make UXGA screens is that widescreen laptops are cheaper to manufacture because the screens have less screen real estate overall. It’s hard to quantify this without having two LCD’s that are nearly identical to compare, so as an example we’ll use Dell’s 20″ 2007FP monitor and compare it to the Dell 20″ 2007FPW because excepting the screen resolution, they are virtually identical. The first thing you notice is that the 2007FP retails for $449 while the 2007FPW retails for $399. Comparing the screen resolutions, we have 1600×1200 and 1680×1050. So what? That’s basically the same, right?

Actually, they’re not. You don’t need to be a rocket scientist here. Just do the math. 1600×1200=1,920,000 pixels while 1680×1050=1,764,000 pixels. That’s nearly a 9% difference in screen real estate for the “same 20 inch screen” yet the retail cost increase is roughly 12.5%. But nobody pays retail for these things, right? After all, Dell runs deals every week in an effort to top your local supermarket in the number of deals they give you. Current sale prices are $384 and $359, respectively. Voila! You’re getting a better deal by buying the 4:3 format screen as opposed to the widescreen based on raw percentages. With computer margins as thin as they are, laptop manufacturers are being squeezed to save money anywhere they can. Going back to our widescreen laptop problem, using widescreen monitors on their laptops is how they shave dollars off the cost.

If you look at LCD monitors larger than 20″ from Dell, you’ll find that all of them are widescreen and it’s not possible to get one larger than 20″ with the 4:3 format. One rumor I read from a laptop forum last fall was that there were production problems making UXGA screens, but I suspect that’s not the case. They were making 15″ monitors with 1600×1200 resolution 7 years ago so unless someone deleted a hard drive that had some important information on how to do it, they still have the technology to do it. If there were supply problems, laptop makers would get it resolved. If you go to Pricewatch.com and look for UXGA notebooks, there’s only one on the entire site.

You also might think that these are laptops, so their video cards aren’t up to par but that’s not true either. Again, laptop makers were selling UXGA screens on laptops 7 years ago so technology has only gotten better. Besides, my Macbook Pro supports an external connection to a 2560×1600 monitor!!! I never did real well at Calculus, but something tells me that’s a much larger number than 1600×1200.

So we know that it’s still technically possible to make UXGA notebooks; what bothers me is that they’ve stopped making them. What’s even more mystifying is why more developers and CAD engineers aren’t complaining. There are a few people commenting on the lack of high screen resolutions for higher end laptops on the Dell IdeaStorm website, but not enough to make a difference. In a world where mobility has become more and more important, laptop vendors are responding with 17″ laptops with WUXGA screens. Let me make one thing clear to laptop makers.

For software development purposes, or dare I say most business purposes, widescreen sucks.

Are we clear on that? Now, I realize that widescreen has a place in the world. People in the accounting department use spreadsheets for which widescreen could be useful to see more columns of their financial statements. Home users would certainly want to be able to watch movies on their laptops. But isn’t it entirely possible that having more vertical screen real estate would be just as important as horizontal real estate? Indeed it would. I like ketchup on my burgers. On my cheesecake, not so much. I love widescreen for movies. For writing code… not so much. Everything has a place, and widescreen does not have a place on my laptop.

The astute reader will point out that there are many 15″ notebooks out there that feature 1920×1200 LCD’s. To this, I will refer you to my previous point: that widescreen sucks for software development and most business purposes. Somehow, writing a design document in letterbox format doesn’t appeal to me and I don’t remember the last time I had a single line of code that was so long that I needed a widescreen monitor to see it all. The problem with widescreen is that you are sacrificing height for width, when for software development purposes, the opposite is what you need. I need to see more lines of code, not less. The only conceivable benefit of a widescreen would be to have multiple windows open, and 1920 pixels just isn’t enough to have multiple software development applications open side by side. Anyone who’s ever used Visual Studio would know this. Heck, when I’m using Viso Enterprise Architect on my desktop, I use two 20″ monitors to get me 3200×1200 and shift all of the tabbed windows onto my other monitor. Guess what? I still wish I had more vertical real estate. I’m tempted to move to 4 monitors in order to get it.

It’s an unfortunate reality that over the past few years, the push for widescreen televisions has carried over so much into laptops. It’s as if laptops are suddenly no longer used for anything else except watching movies. Let’s think about this for a minute. What percentage of time that you use your laptop are you watching movies vs. doing something where widescreen really doesn’t help? I think I’ve watched a grand total of 3 movies on my widescreen laptop in the last 9 months. To me, that in no way justifies a complete transition to widescreen laptops.

As applications move from the desktop to the web, browser based applications will become more and more prevalent. If you’re a web application developer, widescreen is a terrible waste of otherwise good screen real estate. There’s a limit to the width of the web pages that you design because you have to be sure that the majority of people will be able to see everything horizontally without scrolling right and left. The standard 4:3 format seems like a better fit for not only the developers, but for the web application users as well. What’s worse is the fact that our option to choose widescreen or standard format is being eliminated entirely. We no longer have a choice, as illustrated by the fact that there is only one high resolution laptop left on the market.

I blame Apple for part of this transition. For years, widescreen has been the only format available for their computers. They’ve morphed their company into something of a media mogul with the iPod and iTunes. With the recent release of AppleTV, they’re poised to enter the video market after dominating the audio market. Somehow, that translates into hundreds of lemming companies yanking standard format laptops from the shelves and replacing them with widescreen. Is there a good reason? I don’t think so, but lets take a closer look.

What are the real arguments for widescreen? As I mentioned before, you can fit more columns on a screen in Excel. Ooh. A whole 3 extra columns and 30 less rows. Yea, I’m not excited about that, either.

How about the fact that using a laptop on a plane is a little bit easier because the laptop isn’t as deep and fits better onto the tray table. That’s a good reason. Of course, since it’s wider, you no longer have room for soda and peanuts. What, no peanuts? Just soda I guess. I’ll hold it and type one handed because my laptop is too wide to actually set my soda down.

Yep. That sucks too, and it’s a legitimate problem for those of you who haven’t had the ‘pleasure’ of this problem.

What about watching movies? Ah yes. The proverbial golden hammer. In my eyes, that’s something of a lame excuse given that business class laptops are meant for well… business purposes and I don’t know anyone running a business that makes money from watching movies. For all you widescreen fanatics out there complaining about “artists rights“, feel free to chime in on this at any time. Artists rights have nothing to do with the screen. It has to do with the format of the medium (that being VHS, DVD, Blu-ray, HDDVD, etc). If you want to watch a movie, get a TV, a PSP, or a portable DVD player. Let the rest of us get our laptops with screen sizes and resolutions that actually help us do our jobs.

I can’t think of any particularly good reasons to have widescreen LCD’s on laptops or to make them generally unavailable on larger LCD’s that are intended as desktop monitors, so I pose this simple innocuous question. What good is widescreen on a laptop? Anyone?

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