Tuesday, November 25, 2014

One Prototype Is Worth A Dozen Meetings

When I founded my company in 1995, things were different. The legal and tax classification of limited liability company was brand new, and there was so little legal precedent concerning LLCs that the best legal and tax advice I could get was to stick with a subchapter-S corporation or S-corp. The World Wide Web existed, but barely, so none of the incorporation process was online. I had to register actual physical paperwork, my articles of incorporation, with the state of Colorado. It was the same when I applied to the Internal Revenue Service for an Employer Identification Number, which is like a Social Security Number except for companies instead of people. The process was complicated enough that I used a firm that specialized in dealing with all that bureaucracy to guide me through it.

And, most shockingly, Google didn't exist. And wouldn't exist for years. I outsourced my email handling to a local service provider to which I connected (and still do today) via arcane protocols like SMTP,  POP and IMAP. My desktop was an Apple Macintosh Classic II, and the Linux distro I ran on my Dell server was Yggdrasil.

The entire process, both the business side and the technical side, took weeks to get set up and running, culminating in the creation of the Digital Aggregates Corporation nineteen years ago this month.

Just the other day I had suggested to one of my long-time clients that it might be a good idea to create a different company under which to productize and market some of the awesome intellectual property they had created as collateral from one of their projects. The more I thought about it, the more I realized that I really had no idea the magnitude of what I was suggesting. But I was pretty sure that it would be a whole lot easier today than it was in 1995.

There was only one way to find out.

Here's the thing: I'm a very hands-on learner. For me to understand something, I have to actually do it, touch it, play with it. For sure, I want to understand the theory behind it, and build my own abstract mental model of it, but I'm not going to be able to internalize those things and make them a part of me until I have my hands on it.

And that includes code. Until I suck the code base into Eclipse, peruse it, build it, install it, run it, until I look at your schematics, and then lay my hands the actual hardware and apply power to it and see some LEDs blink, it's all too theoretical for me. By which I mean, I can't claim to have any expertise in it or knowledge about it.

I have thirteen projects hosted on GitHub -- and a few more that are not -- all of which are the result of me deciding something like "Well, I guess I'd better learn Python." Thousands of lines of working code later, I feel that I can claim with a straight face to know a little Python. For me, just reading a book is not going to cut it.

It is the same for me in business. That's why I created Digital Aggregates all those years ago. I had some vague notion that maybe it would be a way to earn a living someday, but mostly I did it just to see how it was done.

So I decided to create another company.

Disclaimer: I'm not a lawyer, nor a tax accountant.  But I know people who are, from whom I get good advice. Before setting off on a new business venture, do what I did when I first incorporated in 1995, and talk to some experts.

First, I got out a few of my favorite coffee table reference books, ones with beautiful color pictures of largely historical artifacts, and started picking out potential domain names. All the good ones are already taken, of course. I didn't want some high falutin' name like "Framistat Systems" or "Extremely Awesome Products". I wanted something short, one word. It would be nice if it were pronounceable, but it wasn't a deal breaker. And in order to have some business credibility, it had to be in the .com top level domain. I made a list.

Next, I went to my domain name registrar, Network Solutions, and starting searching. To no one's surprise, the very first one I tried, gladius.com (gladius being the Latin name for the short sword used to such good effect by the Roman soldiers of ancient times), was taken. By LucasFilm. Bet there's a story there. I only went through a handful before I found one on my list that was available. I immediately registered cranequin.com, plus some additional services, for an annual cost of around US$45.00.

Crossbow winder (cranequin) by Ulrich Wildisen, Switzerland, c. 1550 - Higgins Armory Museum
(credit: Wikimedia)
Cranequin, if you mangle French like I do, is pronounced something like "krwa-ne-ke(n)" where that final nasal "n" is not even really said aloud. A cranequin is a mechanical winding apparatus used to draw back the bow on the kinds of crossbows you might use to take down large game. Or a man in armor.

Cranequin (Rack & Pinion)
(credit: Wikipedia)
The limited liability company now has a long history of success as the preferred organization for small businesses. And for a long time now, the State of Colorado allows you to file pretty much all your business paperwork online, something I have to do once a year or so, so I knew exactly where to go. It has become obvious to me over the years that both the State of Colorado and the U.S. government really want you to start a business, and they make it remarkably easy to do so. I established that Cranequin LLC was available as a business name in Colorado, so I submitted the electronic form to create it. After just a few minutes and US$50.00, I had my Colorado business identification number. In the eyes of the law,  Cranequin LLC is a wholly owned subsidiary of Digital Aggregates.

Then I went to the Internal Revenue Service web site and with some judicious searching figured out that I probably didn't really need a separate EIN, but it would probably make my tax accountant happy. So with the information from the State of Colorado web site in hand, I registered Cranequin LLC with the IRS and had a federal tax identification number for it. No charge.

Next stop was to Google to set up all the technical infrastructure like electronic mail in their cloud, for the cost of US$5.00 per user per month. There's an annual plan too, which saves you US$10.00 per user per year, but I decided to stick with the pay as you go plan. I was already familiar with the Google's Apps for Work from using the service at one of my clients. It seemed like the obvious choice for a tiny startup (and maybe now for large organizations as well). By far the hardest part of this step was having to laboriously edit the MX DNS records via the Network Solutions website to point electronic mail addressed to cranequin.com to Google, and then learning patience because it takes a while for everything to propagate across the interwebs.

I had already purchased web forwarding from Network Solutions. I hacked at the Digital Aggregates web site to create a really basic home page, nothing more really than a place holder. Then it was back to the Network Solutions website to set up the web forwarding, and www.cranequin.com was born.


All told it took about six hours total, spread across three days. I registered the domain name on Sunday, did the stuff with the State of Colorado, the Internal Revenue Service, and Google on Monday, and the home page and web forwarding on Tuesday. Everything was done online over a web interface. No paper, no signatures.

The up front costs were US$50.00, and the annual costs look to be about US$160.00 for domain services and (so far) two email users. If you do your own tax returns, that's probably it. I piggy backed Cranequin LLC on the same mailbox I rent for a mailing and shipping address for Digital Aggregates Corporation.

Will I keep my little prototype limited liability company? For a while at least. After all, when I created Digital Aggregates Corporation as an experiment, I really had no idea that years later it would become the principle mechanism though which I made a very good living. Maybe I'll have similar success with Cranequin LLC.

No comments: