Just before last year, I set forth my Goals for 2006. I haven’t yet formally done that for 2007, but I’m only about a month late so lets get to it. I think we need to start off by taking a look back at the goals for 2006 and see how I did.

Goal 1: New logo and new web site by January 9th, 2006
Goal 2: Start advertising ‘Milestones‘ on January 13th.
Goal 3: Design a new product by January 20th.
Goal 4: Complete Beta 1 for the new product by the end of February
Goal 5: Launch new product by the end of March.
Goal 6: Design new products in April and July. Launch these products at the end of June and September, respectively.
Goal 7: Become completely self sufficient on software sales by the end of 2006.

I accomplished Goals 1 & 2, but didn’t come close on any of the rest of them. I think the entire plan pretty much went to hell on January 2nd when I received a phone call from a company I was being subcontracted through that the client was shafting us both. I didn’t write about it until months later when the dust settled, but it completely blew apart my forecast and all of my business plans. The bottom line is that things failed pretty miserably right out of the gate. I’d have done well to adjust the goals on January 5th, but I didn’t. By that time, my goals slid back to simply staying independent and making ends meet.

Today, things are much better than they were exactly one year ago but that just goes to show that even the best laid plans and goals can be shattered by a single wrong move. I know for a fact that I’m in a similar situation right now, where a single client could blow me out of the water, but I’m much more comfortable with where things are today than last year. So, with that in mind, I’m going to go ahead and set forth new goals for this year.

Goal 1: Launch a new version of ChitChat by the end of Q1.
Background: In January/February of last year, I purchased some forum software called ChitChat.net from a fellow blogger named Rob Walling. I received all rights to the ChitChat.net code, all rights to a product called SPROC Function Builder, and the clickcess.com domain name. In many ways, this was an experiment of sorts to see what I could do with someone else’s software. In other ways, it was a quick and dirty way to test the waters of a new line of software products without investing a whole lot of time into it. Over the course of the past year, a number of different marketing tests and various customer inquiries, I believe that I’ve found a place in the market for the software. Unfortunately, the software is written with a slightly older version of Visual Studio and there have been a lot of inquiries about converting it to work with Visual Studio 2005.

Now the easy answer would simply be to use Visual Studio’s conversion wizard to upgrade the project and call it done. But realistically, that simply doesn’t cut it. The fact is that ChitChat.net had a lot of shortcomings. For example, the installer was an msi file only. There was no ‘zip’ version of the software for those people who didn’t own their own servers. Also, the setup of the software was a bit messy. For example, even with the msi installer, you still had to browse to a web page and do all kinds of funky stuff to get it working properly, after which you had to upload a new web.config file. Last, the error messages simply blew chunks like Lardass Hogan. As an example, when you try to create a new account, if the SMTP server wasn’t set correctly, the user would get a cryptic “Internal error: Please contact the system administrator” error. And if you were the system administrator trying to create a personal account, this created either a support call if the person was patient, or a lost sale if they weren’t.

Most of these things were relatively simplistic fixes, but they would still take time and the code was sort of a mess. No fault of Rob Walling, as he acquired the code from someone else. But over the course of 2006, I learned a lot about what people were really looking for in ChitChat.net and it gave rise to the idea of a rewrite. It’s nearly time for that rewrite to come to fruition. For the past few months, I’ve been working with an old friend of mine who used to work at Clearwire with me back in the late 90’s. He still does a lot of web based programming, and was more than enthusiastic about helping out with the project. The fact that I was paying him for his time certainly didn’t hurt, I’m sure.

Within the next couple of weeks, the final version of this rewrite should be feature complete. We’ve got some cleaning up to do, and some bugs to fix, but overall the project is coming together pretty well. It makes use of a lot of Visual Studio 2005 constructs like master pages, and data adapters, etc. All of the front end code is separated from the business and data logic layers. It’s very well organized, and documented pretty well. The database uses consistent naming conventions, as do the controls on the various pages. It’s quite the upgrade.

The goal is to relaunch ChitChat.net by the end of Q1 under the Moon River Software name rather than the older ‘Clickcess’ name. New code, new name, new product. Short and sweet. I’ll keep you posted on the progress of this little gem. I have a good feeling that this is going to corner a niche of the market pretty well.

Goal 2: Stop doing consulting work as Moon River Software.
Background: This one is straightforward and is largely complete. A previous subcontracting arrangement has been terminated, largely due to differences of opinion on what is and isn’t fair and how a ‘potential partner’ should be treated. On March 3, my contracting agreement runs out with the last of my clients and it will not be renewed with Moon River Software, which is entirely my choice. There’s a distinct business plan behind Moon River Software and it in no way, shape or form coincides with consulting. There are other, more sinister forces working behind the scenes, but this isn’t the time or place to discuss them. I can’t give away everything, can I?

Goal 3: Turn a profit with Moon River Software on software sales alone.
Background: Last year, Moon River Software turned a healthy profit though mainly from the consulting business. This year is going to be much harder. Without the consulting income to prop up the company, the rewrite of ChitChat.net is going to need to pull its own weight. If it doesn’t, the business will likely tank. This is technically a huge risk, but it’s one that I’m willing to take. The software sales model absolutely must work. If it doesn’t, then I don’t have much of a software company now do I? I do have plenty of money to help get me through the next several months, but March 15th is coming up fast. That’s when business taxes must be filed. My estimate is that my business taxes are going to take roughly half of what I have in the bank, possibly two thirds as I turn away consulting income and prop myself up in the meantime. We’ll have to wait and see how all this pans out.

Goal 4: Evangelize the single founder startup
Background: This is something of a personal goal, rather than a business goal, but there’s a lot of merit to publicly stating it. There’s a lot of talk about how it’s so much harder, bordering on impossible to build a technology company as a single founder. With the guidelines that most people enforce on what constitutes ’success’, I would tend to agree. To many, if you build up a company but never sell it, then you have somehow failed. That line of thinking is thoroughly flawed in the sense that it doesn’t take into account what counts as a success. If I quit my job, and am able to build a business that has supported me financially for the last 18 months and is still going pretty strong, have I failed? I should think not.

<BEGIN RANT>I have absolute control over my future. I decide what I do and don’t do. I make the decisions about what constitutes a work day. I decide the chairs that I buy for myself and my coworkers. (Aeron’s if you’re wondering) I decide where the business goes and the future directions. Is that not considered a success? Just because I didn’t sell my company to Google for $1.65 billion doesn’t mean I’m not successful. I am master of my own destiny. And in my book, that’s what constitutes a success. I’m pretty sick and tired of people telling me that ‘it’ can’t be done, or it’s so much more difficult without a partner. It’s only difficult if you let it be difficult. Make a clear vision of what you want, then determine how to get it. I want freedom from the corporate BS that rules most companies. I’ve built it here at Moon River Software, and I’ll be damned if I’m going to leave it to be another cog in the wheel at some visionless company where the employees are treated like interchangeable parts in an assembly line. Kapiche?<END RANT>

I see a lot of people out there who want to start their own companies but simply don’t know where to start, or they’re thoroughly smitten with the idea that they need a partner to somehow be successful. No, you don’t. You need the drive. You need the passion. You need to want something different so badly that you’re willing to work all hours of the night doing what it is you do best to get it. Wake up, smell the coffee and get out there. Trust me, if I can do it, you can too. I’m a reasonably intelligent person, but I’m definitely not the smartest person I know. Far from it in fact. I have a friend who is a bone fide rocket scientist with a PhD in Aerospace Engineering from Virginia Tech. Yes, he’s that smart. Far smarter than I am. But he’s driven to learn about B-splines and heat transfer on the wings of a rocket traveling at supersonic speeds. I’m driven by the passion to live my life on my own terms, away from the corporate world where the dollar is king.

I could say so much more about the subject, but I’m going to stop there for now.

Goal 5: Hire 2 more employees by the end of the year.
Background: I’ve already hired one employee and he’s working for me full time. I have a consultant working for me (my friend from Clearwire) who came out to my office a couple weeks ago. I put him, his wife and their son up at a nice hotel nearby. She toured the area for the week, getting familiar with it while he and I worked our tails off trying to finish the next version of ChitChat.net. I think they’re convinced that it would be a good transition. It’s just a matter of making it financially feasible for them. They live in Buffalo, NY so the cost of living is a bit higher. I also have another Senior developer waiting on the wings to join my team. That will round out my team of 4 total employees, including myself. I expect that would take us to the end of the year and don’t forsee the need for any more employees, but you never know what will happen. At a minimum, I’d like to see them both join my team before May. So long as I can make ends meet and pay their salaries, I don’t think either one of them will have a problem joining the ranks.

Goal 6: Look the part of a full fledged business
Background: The Moon River Software website needs an overhaul. It was initially built from a web design template, and that shows. It doesn’t look nearly as professional as it could, or as it should. Up to this point, I’ve been using a combination of 2Checkout and PayPal to process orders. I think this is turning away some people. I just don’t think that some people appreciate that it’s really a business behind it, rather than looking at it and thinking to themselves that it’s some guy working out of his basement. That was true at the beginning of last year, but I’ve had an office in downtown Worcester for the better part of 6 months now and things are growing substantially.

A lot of things have changed, and the website needs to reflect that change. First impressions mean a lot, and a website is no exception. It needs to be more than functional. It needs to look and be professional. No ifs, ands, or buts. This is something of a top priority, although it will likely take some time to complete and get it right.

Goal 7: Review current products and future product ideas
Background: SPROC Function Builder and Moon River Milestones are both products that are also sold under the Moon River Software name. These aren’t exactly breadwinner products at the moment, and decisions need to be made about what to do with them. It will take market analysis and hard work to figure that out.

In addition, there are half a dozen other product ideas floating around that need to be reviewed for feasibility. Whether any of these product ideas come to fruition is a decision that needs to be made from a financial and marketing point of view. If they stand a chance in the market, then they could be some pretty serious contenders for full fledged products.

Summary: Well, that’s about all I have for my 2007 goals for Moon River Software. I think it’s always good to put these kinds of things down on paper… or bytes on a hard drive connected to the internet by loads of transistors, as the case may be. None of these goals seems so far out there that I think it’s in any way unachievable. I’ll keep everyone posted with the progress of them, and you can be sure I’ll check back on these goals in 2008.

In my previous article, I received a question in response to “Myth #1: I need to get VC funding to make my company successful.” I was asked to explain what it really takes to get a consulting company off the ground. How much money does it take to start a consulting company? How much constitutes a “little bit of money“? This is a great question, so let’s start at the beginning.

The Beginning
Starting a consulting business is no different than starting any other software company until you get past the paperwork stages. You file with the state, open a bank account, get a domain name, and do all of the typical software startup things. In fact, on paper a software company and a consulting business are exactly the same. You’re going to need hardware, software, developers, time, and a little bit of money. There’s that phrase again. How much!

I don’t think many people realize how easy it is to start a software consulting business. I started Moon River Software with about $5,000 and a couple of credit cards which I barely used. The plan was to start out consulting while writing software products on the side. When software sales exceed consulting revenue, it’s time to switch from consulting to full-time product development. That hasn’t happened just yet, and it will not happen for quite a while, but the software sales are slowly growing. The money that I had saved up didn’t go to software, hardware, or many of the other things that you might think. It went into my pocket. So, I put $5,000 into the company and promptly started giving myself paychecks.

Does that seem strange? Of course it does. That money should have gone toward resources that the company needs. Something important. Not back into my pocket. Right? Not so fast. For a consulting business, the lifeblood of the company is the incoming business, measured by the hourly rate times the number of billable hours. Guess what? You don’t get paid until the work is done. So, just like switching jobs, you need to have some money in the bank to help you get through what I call the paycheck gap. What schedule did your old company pay on, and what schedule does your new business pay on? Some companies withhold one full paycheck, which depending on the schedule could be 2-3 weeks. If the company pays on a monthly basis (and some of them do!), you might not see a paycheck for quite a while. Even if you want to pay yourself every week, chances are that you can’t because the business hasn’t made any money yet.

The Paycheck Gap
The Paycheck Gap is the time period when you must perform a careful balancing act between cashing incoming checks, writing checks for your own payroll, and sending money to pay business credit cards or other debts. The biggest problem with a consulting business is that there is a net terms payable agreement. That means that after you bill the company you do the work for, there’s still a lag between when you’ve done the work and when you get paid. Let’s say you start a job on June 1. On June 14th, you’ve done two weeks of work and you bill them. If the net terms are 2 weeks, you might expect a check around June 30th. That means an entire month has gone by and your company has had no income until you get that check. That’s hard.

To make matters worse, net terms of 15 days are not very common. Most companies use net 30, net 45, or even net 60. That means that even after you’ve done 2 weeks of work, it could be an additional 4, 6, or even 8 weeks before you see a check. That puts you into late July or even early August! The larger the company, the longer the net terms tend to be. This means that from the time you leave your old job to start consulting, it will likely be 6-8 weeks before you see a check. I’ve done work for companies that only allow you to bill them the last 3 days of the month. I did a two day job for a company the second week of last December. In addition to not being allowed to bill them for another 3 weeks, I had to wait another 4 weeks on top of that to receive my check. Total time from work complete to receiving a check: 7 weeks.

Let me make one thing perfectly clear before we go on: Do not expect your clients to pay early. Period.

You might get paid a day or two early. If there are quarterly or yearly accounting audits going on, you might expect a more timely payment. But there is only one situation I know of in which they will pay significantly early, and that’s if you start giving them discounts for doing so. In that case, you’re offering them an incentive, and are cutting their costs. If you’re desperate for the money, offer a 1%-2% discount for paying early and 9 times out of 10, you’ll be paid quickly. Otherwise, you’re going to have to wait.

Why does a 2% make a difference? Say you’re charging them $2,000/week. A 2% discount will save them $40. And for what? Writing a check a little earlier than it needs to be written. Accountants are penny pinchers for a reason. That’s what they’re paid for. Cash on hand is great, but if they can save $40 by writing a check a week early, they’ll do it. Because over the course of a year, saving 2% each week on your invoices alone could save the company more than $2,000 total. Arthur Anderson, eat your heart out.

Back to my example of not being paid for 7 weeks. That’s almost two months before you see any money for your business! Not only is that timeline typical, but who is to say that you’re going to be paid on time? What will happen to your business (and you) if you aren’t paid on time? What happens if you aren’t paid at all? Don’t think this will never happen to you. It happens to a lot of people and it very nearly happened to me, so be on your guard.

The Paycheck Gap ends when you are receiving checks from your clients on a regular basis.

Catch Up Mode
Once you have cleared the Paycheck Gap you are on your way to being successful. What happens is that your business will turn from being forced to survive on peanuts in the short term to what I will call ‘Catch Up Mode’. This is the time during which your business must issue back paychecks to you on a regular basis, typically for work done anywhere from three to nine weeks ago. Moon River Software’s Catch up mode period was six weeks of back paychecks.

Many people will be tempted to start paying off any business credit cards they have accumulated balances on, just to prove that their business has no debt. Take my advice. Don’t. Give yourself a paycheck and try to catch up on your back paychecks. Not paying yourself first is seriously demotivating. It seems like everyone is getting paid except you. Forget about the fact that you’re going to be paying interest on some purchases. Forget about the fact that your balance sheet could be closer to zero liabilities. Your salary is a big liability, and receiving paychecks is a huge morale booster. You start seeing the profits of your labor, and the fact that your efforts are actually paying off. Pay yourself first is typically a strategy used for retirement savings, but it works extremely well when growing your business. If you are constantly paying everyone else first, there will be very little or nothing left for you.

During this time period for Moon River Software, I had more than enough money in my bank account to pay the credit card bills for the equipment I was buying, but instead let the bills linger while the cash sat in my account and instead went to my payroll. Why? Well, my business credit card gave me a 0% interest rate on all purchases for one year, starting in October. Guess what? I had no incentive to pay them off early. Instead, the money went to me in the form of paying off the money I loaned the company to get off the ground and in terms of my payroll. In fact, I just paid off a $10,000 balance that I’ve accumulated over the last year because in October, interest would have started to accumulate. Had they offered me a discount to pay it off early, I would have.

At this point, if you’re running your consulting business properly, then you’re making a profit every week, and will slowly catch up with your payroll. In the case of MRS, every two weeks that went by I caught up by another week or so. Once you’ve caught up and are writing checks for payroll every Friday for work completed the week before, you will start logging a legitimate profit. Now you can put money away for those times when you will not be working, be it because you have taken a vacation, or are between clients.

Just to be clear, the billing cycle between you and your business is different than the billing cycle between your clients and your business.

Profit
It should go without saying that being profitable is a bare minimum requirement for running your business. If you’re not profitable, you’re going to go out of business, plain and simple. At the end of every quarter, you read about companies who log tens of millions of dollars in losses every quarter. The first quarter of this year, GM posted a $323 million dollar loss. That’s a lot of money, by any standard. How do they keep going you ask? How could they possibly stay in business while losing $323 million in a single quarter. That doesn’t even count the previous five quarters where they also logged losses of more than $1.3 billion the year before. Yes. Billion with a ‘B’.

Let’s switch gears and talk about the profit stage of a company. I think here is where a lot of people get confused about the long term goals of a company. As soon as a company is profitable, the owners start thinking about all kinds of things that they can do. Buy more equipment, hire more people, get a bigger office space, increase corporate benefits, buy gadgets and gizmos for employees as rewards, etc. These people have lost sight of the true goal of the company, and there is really only one.

Your primary goal is to stay in business.

Now repeat those words with me. “My primary goal is to stay in business”. The single best way of ensuring this is setting up a rainy day fund. Financial planners the world over recommend that individuals should have no less than a 3 month safety net. This is money in the bank for you to pay your bills, your mortgage, car payment, meet your monthly expenses, live a little bit, and still be able to make ends meet for at least three months with no income. You need to do this for your business. And not just for the founders. For every employee in the company, founder or not.

Rainy Day Fund
Moon River Software recently crossed the six month Rainy Day Fund threshold. Right now, in the business bank account I have enough money to cover all corporate expenses, including the office lease, payroll, internet access, colocation server costs, phone bills, and several thousand dollars in additional ’surprise’ expenses for six months with zero additional income. The business has zero debt beyond this months’ credit card bill and upcoming payroll expenses. It’s been said that running your own business is one of the most stressful things in the world. With this Rainy Day Fund behind me, running my business is one of the least stressful things in my life. I know that I can screw up all kinds of things and still be in business. Here’s why.

Let’s go back to the example of GM and figure out how they’re still in business. Their loss of $323 million in the first quarter of 2006 was on revenues of $52.2 billion dollars. Let’s assume they did the same thing that I did, and could theoretically operate for 6 months with no income. That would mean they had over $100 billion in the bank. Losing $323 million is a mere 0.3% of that. For arguments sake, lets triple that loss and say they instead averaged a $1 billion loss every quarter for the next X years.

With a $100 billion Rainy Day Fund, even losing $1 billion every quarter, they would still be in business for the next 25 years. Yes, that’s correct. 25 years! Isn’t that impressive? Between you, me and the engine block, GM doesn’t have that kind of money to spare. They’re in pretty poor shape. I think that untrained monkeys could do better by flinging poo against a ‘Corporate Strategies’ mat on the wall, but that’s why I work for myself instead of GM.

The point I’m trying to make is that once you get a 6 month Rainy Day Fund under your belt, you’re in good shape. Now is the time that you should start looking to expand your business, hire more employees, buy more equipment, and do all those other things with your money. While large corporations measure success on a quarterly basis, I would recommend measuring it every other week. Every day or every week is too often, and once per month is probably not often enough. Here’s why every week is too short.

If I bought a new laptop this week because my old one died on me, it would set me back about $3,000. By spreading out this expense over multiple weeks, my profit margin will be much lower for those weeks, but longer term, the profit is still there. If I were measuring my corporate progress on a weekly basis, adding $3,000 worth of expenses in a single week could kill my profitability curve. Depending on how much my consulting income is, it could put me into the red that week. Measuring every other week tends to smooth out the wrinkles in the curve. When you start hitting millions of dollars in revenue every year, that’s when you can measure every month or every quarter. Until then, stick to every other week.

Summary
No matter what niche market you’re trying to serve with your consulting business, you don’t need a lot of money to get started. All you need is enough income to get you through the next six weeks or so, and the willpower to not melt down into a steaming pile of mental ward biomatter. If you make your situation clear to your first couple clients that you need a reasonably fast turnaround on the first couple of invoices, most of them will be willing to help out a little bit. Push for 10 or 15 day net terms. If you negotiate well, this won’t be a problem.

The hardest part about the process is having the willpower to make the leap into being self employed. After that, it’s really not that hard.

Special thanks to Rob Walling for reviewing drafts of this article.

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Interesting… very interesting. So, after a long day (9 hours plus 30 minute lunch) of consulting, I come home to do my nightly routine. Check my email, check my traffic, do some programming till am, go to bed… whoa, wait a second… that’s odd. Traffic spike. Not just one site either.

Where’s it from though? Let’s see here… use 123LogAnalyzer… click Analyze…discuss.joelonsoftware.com? Odd. I haven’t been there in a very long time. type-type-click-click…

Are you kidding me?

I think I’ll start off with one very important piece of information, because some people have obviously got the wrong idea and like a disease from a bad zombie movie, they’re spreading it.

“For the record, I don’t have, nor have I ever had access to FogBugz source code.”

No, I didn’t copy the source code, translate it, pirate it, steal it, or anything else close to <insert your favorite words from a thesaurus for copying here>. And yes, I know it looks similar. Not that I think certain individuals are going to believe me(there are always a few diehards), but I still have on my whiteboard a note to myself to write up the design history of Moon River Milestones as of 1/22. Obviously that didn’t happen, and this post is going to be seen as reactive when in reality, I just never got around to writing the article.

For those of you who want to hear the full story I’ll start from the beginning.

Back in 1998:

Back in 1998 I started writingreal web based software applications. I’d written incredibly dumb things, like page counters and stuff like that, but nothing of substance. One of my very first web applications was for the company I worked for in Buffalo, NY named Clearwire Technologies. The company was a fixed wireless ISP offering fractional T1 Internet access via microwave radios in the 2.4GHz unlicensed spectrum. In 1998, nobody knew what that meant. In today’s terms, think of the wireless card in your notebook with range of up to 25 miles, limitation being it was connected to a satellite dish outside the building. Math and geography majors will note that this range is about the maximum line of sight due to the curvature of the earth. The range was weather dependent, and had a lot of problems with clouds the way any satellite dish used to.

My role at Clearwire was twofold. I was split between the MIS department, and the Engineering department. I would install software, fix computers, and write embedded systems code. I was cheap enough at the time that they could afford to have me working by the hour for 45-50 hours per week and not care too much about paying me overtime. I worked with real time compression algorithms, load balancing, fault tolerance, and was the backboard for one of the senior engineers to bounce ideas off of. I was sort of his 5 year old whose purpose was to see through the intricate plot of the evil overlord.(see #12)

But I digress.

The first full fledged web application I wrote for them was an online ordering system written entirely in Perl. A full year and 50,000 lines of Perl later, it was time for version 2.0. Yes, it really was that much Perl code, and by the end, I despised Perl. (I actually enjoy working with it these days.) You see, as sad as this is going to sound, they were ok with paying me by the hour for a couple hundred extra hours of work, but to pay a few hundred dollars for a real database to use was asking far too much of them. I would have given up body parts for even Access at the time. I had to use binary files to build my own database in Perl. Try that for a weekend exercise. It wasn’t a great solution, and it certainly didn’t scale well, but it worked well enough. The lack of scalability was a direct result of the fact that I didn’t have a real database to work with and didn’t have the time to spend on coding a ‘real database’ with B-trees, and indexes, and all the nice stuff that comes built in.

Eventually, the management was convinced that it was time to put some real financial effort into the project because my software was supporting nearly every operation they had. They brought in a consultant team to contract for the job. At 11 am on a Tuesday morning, I sat in a room with all of the senior management of the company who had flown in from the Dallas office and listened to the presentation. My boss told me it was probably a good idea if I kept my mouth shut. As annoyed as I was at having my pet project ripped out from under me, I had (and still have) the utmost respect for his opinion and guidance, I kept quiet and listened.

After about an hour of presentation hoopla, our CEO got a bit impatient and asked the ultimate, presentation ending questions. “How much will it cost, and when can we get it installed.”

“Umm… err… Well, we’d need to customize it to your needs and that could take up to six months.” came the reply.

“Well as is, how much does it cost, and when can we get it?” Brian asked again.

“Umm… uhh…” foot shuffling “$20 million, and it will be done within 18 months.

About that time, it was evidently quite clear that vaporware had entered the picture and these two guys were looking for funding for their own company more than anything else. It was the dotcom era of throwing money around like bottled spring water and these guys saw dollar signs. You see, they didn’t have a product. I don’t think they even had a development team. I’m sure they were going to outsource the whole thing to India for $1 million and pocket the other $19 million. Our CEO walked out, and within 5 minutes my boss, the two presenters, and only one or two other people besides myself remained.

Clearwire decided that they’d take a chance on me, and let me go through with building their online system while keeping close tabs on my progress.

Fast forward about 2 years, and I was working elsewhere looking for ways to make money with web based software. After all, dot coms were at their peak making money hand over fist. Or at least seeming to. In reality, they were spending money hand over fist, but I wouldn’t have known the difference then. All I knew was that I had been in the Buffalo office where we were getting the scraps of all hardware and software while our Dallas office was spending $30,000 on an anti virus server because our VP of Networking opened an attachment he shouldn’t have which ended up fragging his hard drive. As if it weren’t his fault.

From Yako Entertainment to Game Thoughts:

I moved on and began looking at starting my own company again. My first company had been called Yako Entertainment which I started in early 1998 selling computer gaming systems at about the time that it was blatantly obvious that Dell hardware really sucked. At Clearwire, every single day I was replacing some piece of hardware out of someone’s computer. Within a couple years, Dell systems got a fair bit better, low end hardware prices dropped dramatically and I decided it was time to get out of building computers. It wasn’t nearly as profitable anymore. It was getting difficult to convince Joe User that the computer he bought from me was far superior to the one he got from Dell at roughly the same price. Even worse was that my margins were decreasing, and I couldn’t keep up with Dell. I closed the company that year I think it was, and started Game Thoughts with my cousin in August of 2000.

One of the first things we did was purchase a software package called Bugaware. It was written with ASP, and was something that I knew we could have written on our own, but we felt our time would be best spent elsewhere. My quote is still on their testimonials page, nearly 6 years later.

As time went on, the gaming business we were running took more and more turns for the worse. I learned a great many things during that time about running a business, but the money just wasn’t coming in as fast as it was going out. Before I had started Game Thoughts, I had considered building a company writing business software, but I wanted to be able to leverage my forte which was web based programming and databases. At the time, I was having a really difficult time coming up with software that hadn’t been done before. Certainly I could have developed a bug tracking program, but that had been done before. What about web mail? Done. Forum software? That had been done too and in about 300 different programming languages. What else?

The more I thought about it, the more I realized that any software I could think of writing had already been done. It took me several more years before I realized one very important thing. Competition is a good thing. Not only is it a good thing, but it proves that there’s a market for that software.

It’s not hard to write software that’s never been done. How about a web page that checks a web site every 30 seconds to see if another web server is responding to requests? Certainly original, but I rather doubt there’s a market for it. I remember hearing a saying once that went something like this.

“The early bird gets the worm, but the second mouse gets the cheese.”

A lot of companies have very original ideas, but most go down in flames. Some of them simply don’t have a market, or their market disappears while they grow. Clearwire itself was a great example of a company whose market shriveled up before they even got started.

Initially, Clearwire charged nearly $2,000 for each installation and another $1,000/month for the Internet access at a synchronous 1.5Mbps. It turned out that the transmission rates really weren’t that fast and as they cut their installation and monthly charges due to numerous customer complaints, cable modems appeared on the scene, virtually wiping them out. I left the company in December of 2000 and less than 24 months later, the company practically self destructed. Everyone I knew who ever worked there had either left or been laid off. The entire executive management team was gone, the company was divided up, sold off in pieces, and life went on. So it goes.

The company is still around of course, and I find it somewhat entertaining that Craig McCaw claims to have founded the company in 2003. I think I probably still have a pay stub stating that I worked there in 1998, but I may have thrown that away last year, since my seven years of holding onto them are up. I guess “On the Internet, nobody knows you’re a dog.“

A few more years of bouncing around, and I kept working on different web based software applications which I could never quite bring myself to finish. Web server analytics, forum software, bug tracking, project management, etc… With one exception that never panned out financially, nothing original or exciting ever came to mind. Then the thought came back to me again.

“The early bird gets the worm, but the second mouse gets the cheese.”

The biggest hurdle I found to finishing the applications I wrote was that I would look at them and say “There’s no way I would ever pay money for this.” I think that dealing with games was too harsh on my sensibilities. I’ve said this before, but games and business software are fundamentally different. When you’re writing a game, version 1.0 can’t suck. If it does, you’re sunk and there’s really no fixing it. But, business software is different. It’s ok if Version 1.0 isn’t that great. It’s ok if it doesn’t directly address the needs of the market you’re intending to enter. In fact, it’s better if it’s not even feature complete, so long as the design is extensible to meet different needs.

Software that is feature complete is a lot harder to make fundamental design changes to. It’s hard to get things right on the first try, and each time you try, it will get better. Every version will get progressively better, and with each version, come more customers. If you never had any to begin with, you get exponentially more customers. Since you’re building the product incrementally, if it is functional you can gradually move into the market that you really intend to go into.

With that thought firmly entrenched in my mind, I started writing Moon River Milestones… sort of. Truth be told, Moon River Milestones isn’t the first name I came up with. It’s not the second name either. It’s also not the first time I’ve written it, nor is it the second time I’ve written it.

A trip down Alzheimer lane:

I’ve changed my mind on so many things over the years, it’s hard to keep track of them. Let’s take a mild trip back into history. For company names I went through Global Forefront (registered, but abandoned it), Brainstorm Software(already taken) and Bitclinic Software as decent candidates before I settled on Moon River Software. A good friend of mine and I were sailing with our respective wives (his fiance at the time) north of Marblehead, MA and he brainstormed some ideas with me. Bitclinic Software was the primary choice at the time, but my wife had commented on how harsh the consonants sounded together and how difficult it was going to be to understand over the phone. The name Moon River Software eventually arose out of the fact that ‘Moon River’ was the song that my wife and I danced to on our wedding night. It started as a joke, but all four of us really liked it. My wife definitely liked it, and that’s how it came about. She does tease me every once in a while about the fact that the initials are ‘Mrs’, as if it belongs to her.

Shameless plug: Incidentally, she also designed the Moon River Software logo. She has a Master of Fine Arts in Graphic design from RIT which is where we met when we were both doing our graduate work. If you’re interested, she does freelance work for $50/hour billed through Moon River Software, and I can put you together. FYI, she specializes in print design, not web design.

I do acknowledge the gross similarity of the names ‘Moon River’ and ‘Fog Creek’ and will state that it is complete coincidence. I wish it weren’t so similar, but I still like the name we came up with and wouldn’t change it for anything. Every single person I speak with about consulting always remembers the name of my company because the managers I deal with are all in the age range where they remember the song.

Moon River Milestones wasn’t the first name of the software either. It used to be called ‘Total Project System’, as in TPS reports. I’m a big fan of the movie ‘Office Space‘ and thought it would be an amusing tribute. Having worked in some truly hellish environments, it only made sense and fit well with how bitter I have been at times about how most companies treat their employees. I’m willing to bet that most of you can relate from one job or another. I also called it ‘Project Commander’ or ‘Total Project Commander’ at one point, but I never really liked either name. ‘Project Management System’ was number one for about 5 minutes until I realized the implications of the acronym and trying to explain to prospective clients that PMS was a good thing.

Moon River Milestones grew on me after a while. I was pretty annoyed after I launched the software to find that there’s another software company out there that makes a product called Milestones. Thankfully, I had some legal advice that had previously noted that the fact milestones is a relatively common word would make it difficult to make any sort of legal claim to the name, and might open me up to legal threat if anyone else already held a legal claim to it. The solution was to affix the company name, which is why it is always referred to as ‘Moon River Milestones’ on the web site, never just ‘Milestones’. Also, the fact that their software is client based, not web based does tend to help. I’ve never seen in my web logs any traffic that probably should have gone to their site, and until today had forgotten they even existed.

I did a usability test of my web site after I first launched MRM and my test subject clicked everywhere except on the ‘Moon River Milestones’ link for the software. He pointed out that to him, the heading meant company milestones, not a software package. *sigh* The trials and tribulations of not having someone else to bounce ideas off of certainly makes things much more difficult. I suppose that’s why you always hear about partners who build great companies, never great companies with just one founder.

So, back to the story. With each of those names came new code, different design specs, and even different technologies. Truth be told, I wrote a system back in 1999 as well for use inside of Clearwire for our MIS department using *shudder* Perl again. I’ve written this software with Perl, ASP(two or three times), and C#.NET so by now you’d think I would know everything that I want it to do. I can truthfully say that I don’t.

I had never seriously considered using .NET until this iteration, and I must say I absolutely love it. It’s so much easier than working with classic ASP, which is an incredible pain when you’ve got tons of code you’re trying to reuse. It’s not portable like Perl, but even Perl had its problems, particularly with installation and setup (yea, I mean Bugzilla). I’m a big fan of IIS and SQL Server to begin with, so not being too portable doesn’t bother me. It narrows my target audience, which equates to fewer customers. If you continue reading, you’ll see when you find out who my target audience is why this isn’t going to matter.

The result of all of my coding efforts, designs, redesigns, recoding, and extensive use of the software is what you see now. The UI looks like FogBugz you say? Yea. I know. It wasn’t intended that way, it just turned out that way. I saw a lot of things in FogBugz that I liked, the layout particularly and the fact that my software had a lot of the same types of high level objects made differentiating it somewhat difficult. I saw a some things in Bugzilla, Bugaware, Elementool, Bug-Track, IssueView, ExtraView, MS Project, and probably half a dozen other pieces of software that I liked too. I took what I liked and tossed what I didn’t. In the end, that’s my work on the software. I certainly wouldn’t take credit for the UI layout though.

If I had to guess, I’d say that probably 90% of the features found in both MRM and FogBugz are found in 90% of all web based bug tracking applications or software which touches that aspect in one form or another. It’s not merely a coincidence, because it’s partly a function of the software. I’ll point out that SourceGear’s Vault looks and acts incredibly similar to Visual Source Safe in nearly every aspect. It also emulates every feature of CVS, but I suppose that’s ok though, because we know Eric and we like him.

The UI is the most noticeable likeness to FogBugz. If I changed the background to orange and move the summaries to the right hand side of the page, it probably wouldn’t have drawn nearly as much notice, although I could be wrong. I find it interesting, that I get bashed for making the UI of my product look like another product. Yet the example given which I supposedly ripped the name off of is a blatant rip off of Microsoft Project. That goes to show that people see what they want to see. The fact is that it’s the application that sells, not the UI. FogBugz sells well because it’s a great bug tracking tool. I expect that MRM will sell well because it’s a decent project management tool. Selling well has nothing to do with the UI, unless you’re selling a game, and of course they don’t let you return them after opening the box based on the pretty pictures.

I also saw a lot of things  in many of those software packages that I didn’t like and purposely left those out. In FogBugz, it was the idea of no required fields. Come on Joel. It’s bug tracking. On one hand, you state that every good bug report needs X, Y and Z. Yet, no fields are required in your own software? It seems a contradiction in terms. I do understand the necessity of getting people to use the system, but if your employee is refusing to use the software, then maybe you need different employees. I could easily argue either way on that little tidbit. I don’t have exceptionally strong feelings on the topic, but I made far too many mistakes when using MRM myself that I made some fields required so that it wouldn’t accidentally submit the page when I didn’t want it to.

There are some things that at times, I really wish I had left out. I never thought that implementing sub-projects was going to be such a nightmare. The problem is compounded by the fact that all of the subproject milestones and stakeholders can inherit from the parent project. It can get ugly. My first customer tells me that’s why he bought the software though. It was the only software he could find that supported sub projects. Having used sub projects myself, they certainly are useful, but it’s painful to work on the code for some of it, especially for the more complicated custom queries where nearly anything goes and tables are joined to themselves multiple times, but only in certain circumstances.

In terms of blatant borrowing, I really liked Joel’s idea of Features, Inquiries, and Bugs. But something that always bugged the hell out of me (no pun intended) was that for general project management in a small company, the three categories of FogBugz simply didn’t cut it. Where do I put “Install iMail on the web server”, or “Order a new hard drive for the file server”. It’s not a Bug. Not a Feature, maybe an Inquiry. <high nasally voice> Johnny, can you install this software? <end nasal> So I added in the concept of Tasks, which to date has proven to be an incredibly useful part of the software.

On the other end of the spectrum, BugAware allows you to create all of your Issue types and set them to anything you want. This too was something that I had seriously considered for weeks on end. A quick check of the demo shows Bug, Failure, Change, Addition, Create, Purchase, Install, and Request. Umm… is installing iMail a Change, and Addition, or an Install? Technically, it could be any of the three. I never liked that either to be honest. BugAware was far too configurable, and FogBugz not enough so. I wanted something that was reasonably in the middle. I tried making changes to my previous install of BugAware and it was a considerable mess. Just terrible to deal with. The only option was to reinstall completely and delete what I didn’t want before I even started. Eventually, I settled on a solution that fell between what I felt were the two extremes.

Will Joel add ‘Tasks’ to FogBugz?

My guess is probably not. It’s possible and I think that he should, but I don’t think he will. You see, that is a marketing question, not a programming question. FogBugz is bug tracking software. It’s intuitively obvious that it is meant for tracking bugs and it does so very well. Milestones is meant to help small groups of people finish internal and external projects which means that not all of them involve writing software. That’s why ‘Tasks’ are there.

My first paying client was an IT/MIS department, not a software shop. Coincidence? Hardly. “Development teams, IT departments, blah blah blah. Mike you’re an idiot. There isn’t any real difference!?” you say.

These two may sound like the same thing, and even seem like it on the surface, but they’re not. Not by a long shot. If you’ve ever worked in an IT department, you’d know the difference between IT/MIS departments and true software development teams. As a developer, you probably don’t have to deal with most of the issues that most ‘normal people’ in the company run into because if you’re anything like me, you want admin rights on your computer. No, in fact you demand admin rights on your machine.

But Nancy Finance doesn’t have admin permissions. Hell, she can’t even install the latest and greatest version of ‘Fancy Pants Photo Viewer‘ because she doesn’t have permissions. She can’t install the latest Office Service pack either. What does she do? She calls tech support, they write it down somewhere, and eventually they might get to it. Every IT department on the planet is incredibly overworked. There are so many things they have to do that they never have time to get to, or they forget to do, or just isn’t important enough, or they lose track of.

One company I worked at had a lag time of 3 weeks to set up an email account for a new user. THREE WEEKS!!! Now, I know Exchange Server can be a bit slow with a lot of users on it, but isn’t that excessive? Hell yes! It takes 2 minutes to do it, and either you or I could do it with the right permissions and zero knowledge of how to do it. What was the real problem? Their trouble ticket system was a nightmare to use. They had two developers working on it full time. Clearcase anyone? Project management software that requires two developers working on it full time is crazy. Don’t bother commenting to me on how great Clearcase is, because I really don’t care. I’ve never actually worked with it personally, and I know it’s incredibly complicated. That’s about the extent of my knowledge. The point is, that trouble ticket software doesn’t need to be anywhere near as complicated as something like Clearcase.

The root of theproblem:

Why does it take 3 weeks to get simple things done in an MIS department? There are a few reasons that I can think of.
#1) They are overworked. There are too many things for them to do, and not enough time in the day to do them. Their Blackberries are going off every 3 minutes because another user accidentally had the CAPS lock on and locked themselves out of their account so they need the admin to unlock it before they can do any work. This interrupts the person a million times a day. Translate Joel’s articles on interrupting programmers to any other person. Crank up the interruptions to every 3 minutes, and it’s even worse than just annoying. It’s downright dehabilitating.
#2) They don’t have a good system of keeping track of everything that needs to be done.
#3) Even if they did have a good system, unless it lets everyone know what’s going on, it doesn’t help much. You get four people each with the same account to unlock because the user got impatient and asked everyone he could find to unlock the account. (hint: Spiral bound notebooks don’t cut it. I should know, because I’ve tried.)
#4) Reprioritizing things is hard unless you can see everything that needs to be done on a more global scale.
#5) Reporting, reporting, reporting, reporting… Did I mention people need reports?

Running a small company is a lot more like running an IT shop than running a software development shop. Joel may be violently opposed to letting reports be run on FogBugz, but for an IT department outside of a Utopian office in New York they’re a necessity. The larger the company, the more important those reports are.

Need an example? A company I used to work at, one of the teams had a meeting every morning for on average anywhere from an hour to two hours. Five days a week, they lost an hour or more. Nearly a full day every week spent in this meeting talking about what was being done, how it was going, etc. My team never had a meeting. Every week, I dutifully took an hour and submitted a 4 page report that detailed the progress of my team, what was going to be done the following week, what didn’t get done that week, problems we ran into, etc. I would go for weeks, even months without having a meeting. Either we were incredibly unimportant, or those reports meant something. Wasting that one man hour every week save us three man hours minimum, perhaps as much as fifteen. And everyone knew what was going on every week.

Important items of note:

There are three important things to note about Moon River Milestones. First, is where it was. Here’s UI mockup that a graphic designer I was working with sent to me in the early stages of development. He sent me some CSS code that I used as well, but translating things from Photoshop to web software doesn’t always come out the way you want it to, so the final result isn’t exactly what he sent to me.

Second, is where the software is now. It is bug tracking for the most part and is being advertised as such. The primary user of MRM for the longest time was myself. Nobody else. I’m working with a marketing consultant who is helping me figure out how best I can proceed and bring it to bear on the IT real target market.

Third, is where it is going. Corporate strategy would tell me to keep my mouth shut about where it’s going, but I think I’ve made it painfully clear. Project management for small IT organizations, targeting companies with under 50-100 users is one of those fields where the software really just sucks. Do I have reports yet? No, not per se. The reports I have are called ‘One Click Filters’ which can organize all open issues for you with just one click of the mouse. A full on reporting system is planned for version 1.2, but that’s probably 4-6 months off. Are development teams a focus for me? No, not a main focus to be honest. Dev teams are so hyper-critical of the software packages they use it’s not even funny. “Hello Pot, this is the Kettle. You’re Black!”. Yea, I know I know. But at least I use my own software. Developers are fanatical about nearly everything. Tools, operating systems, favorite blogs, best item on ThinkGeek.com, you name it. Go to the Slashdot forums and say “Linux sucks”. You’ll see what I mean. IT departments on the other hand want their software to just work. It doesn’t need to be fancy. It just needs to do what they need it to do.

Version 1.1 of the software is just around the corner. Nearly all of the improvements in version 1.1 are based on things that have simply been bugging the hell out of me. Sorting, more columns on the main page, issue groupings, SMTP server settings, HTML/plaintext email, etc. Version 1.2 has a lineup of pretty sweet functionality that will make it a serious competitor in the IT market. I’ll be renaming ‘Issues’ to ‘Tickets’ to help conform to that market as well.

Conclusions:

Well, running things on your own is hard. Anyone who has ever tried running a business on their own probably has at least a little bit of sympathy for what I’m doing. Turning a profit on a business by yourself in only 3 months with some hefty software expenses is actually pretty difficult. I don’t know whether after reading this it will be more or less. Regardless, I think I’d like to use this as a learning experience though.

Lesson #1: When writing the first version of your software, do not, under any circumstances, look at your competitors. Don’t look for ideas, don’t look to see what features they do and don’t have. Just resist the temptation. The fact is, that when you see something good, it’s very difficult to get it out of your mind. Even if it isn’t good software, it will leave an impression in your mind, and you are more likely to follow that impression than your own good sense. How do I know this? Because the first two versions of the software I wrote were probably pretty close to being what BugAware was. I scrapped them both for that reason. I certainly wasn’t basing my code off of theirs, but I didn’t want to be accused of any impropriety so I didn’t continue. In the case of MRM, I suppose that I felt that since I didn’t have the source code and had never seen it, then it wouldn’t matter. I think that was a mistaken assumption. Finding a design partner would probably have helped.

Lesson #2: Get a partner. Objectivity is hard to come by. Unfortunately, so are good partners which is why that to date, I don’t have one. Chances are a partner would have taken one look at it and said “No, this is too close to that. We need to change a few more things”, which would have avoided all of this controversy.

Lesson #3: Spend more time on your software than worrying about what other people think. The fact is, I didn’t copy someone else’s code. Deep down, I know that, and anyone who used the software once would know that immediately. But the court of public opinion is a harsh court, and everyone has an executioners axe.

Lesson #4: Give credit where credit is due, even if it’s only a vague reference. I wrote an article a little while back citing my goals for 2006. I spoke of McDonalds and mentioned it’s the same burger whether you get it on the New York State Thruway, or in Trinidad. To explain a bit, I grew up in upstate New York, and ate fast food on the Thruway quite often. I went to Trinidad one year with a bunch of friends, and after nearly a week, I needed some ‘normal food’. There was a McDonalds on Trinidad and knowing it would taste the same as what I was used to, I got two cheeseburgers, large fries and a Coke. It helped soothe the sickening feelings in my stomach that had been developing over the past few days of eating “Shark-n-Bake”(their words, not mine), goat something or other, and lots of stuff with curry. The McDonalds menu was different, as I stated, but the food tasted the same. This comment was based on personal experience, but I really should have given credit there to Joel for the original article, since that also came to mind when I was writing it. I’ve done so with a link back to his article. The fact is, that it wasn’t an entirely coincidental reference.

Lesson #5: Not all critics are right. One poster on Joel’s forums commented on a piracy article that I wrote, insinuating that I somehow am condoning piracy which is not correct. He’s apparently got the impression that I lurk in the forums condoning that action on occasion, which is also incorrect. I honestly don’t think I’ve  posted to Joel’s discussion forums in probably more than a year, possibly two or three. I couldn’t say for sure, because I simply don’t remember when it was. I simply don’t have the time to get involved in most forum groups anymore. On the other hand, piracy is a serious problem, and my article points out some of the problems with hunting down those people. That article was based on a personal experience trying to track down a Russian cracker who was posting cracked games on eDonkey that I was distributing at the time.

Lesson #6: Sort the wheat from the chaff. In every group, there is what I have come to know as the 10% weasel factor. There are obviously other terms, but that’s the most politically correct one I’ve ever heard. Basically, it says that in any group, there are 10% weasels, 10% leaders, and 80% sheep. As a leader, your job is to convince the sheep to ignore the weasels so that you can get good things accomplished. The weasels generally try to prevent anything from getting done and are mostly destructive in every way. I’ve received some pretty nasty emails over the past 12 hours or so, which is pretty sad since nobody has even heard the other side of the story. But of course, the weasels don’t care. They’re there to stir up trouble, thrive on controversy, and are bored otherwise. For those of you who didn’t grow up on farms, sorting the wheat from the chaff means to take the good and ignore the bad.

Lesson #7: Figure out the root of the problem. I certainly hope that my comment about Eric and Vault doesn’t piss him off. I think he’s a brilliant guy, an incredible writer, and an even more incredible teacher. I’ve certainly learned a lot from reading what he has to say over the past few years. But the fact is, that the entire Joel on Software thread discussing MRM is currently riddled with a level of hypocrisy that I haven’t seen since I turned on the news last weekend. As moderator of this particular thread, I would think people know who he is and are familiar with the stuff he has done. You should know that he made aconscious effort to copy Microsoft’s product. Yet, here I am being crucified for something far less serious, while he has been applauded both publicly and privately for what he made a conscious effort to do. Is there something that I’m missing? I’ll quote part of his article and link to it for those of you who haven’t read it.

“Painless transition
As far as we know, Vault is the only version control system designed specifically to replace SourceSafe. In every way possible, Vault presents a familiar interface with familiar terminology. Every major SourceSafe feature is supported, including things like Share and Pin. Our import tool will move your SourceSafe database into a Vault repository, including all historical information”

I’m certainly not perfect, but I’m definately willing to make an effort to correct anything that may be seen as personal transgressions and flaws in the things that I have done. I would think that this is evident above in #4 where I linked back to one of Joel’s articles. And if I missed any others, feel free to politely point them out. I will correct them as quickly as I am able.

But here’s what I’m really looking for. I’d really like for someone to in a coherently polite and honest fashion explain to me where I have gone wrong relative to Eric’s “Painless transition” for Vault, because this is the very sort of attitude and treatment that drives hard working developers away from communities rather than towards them. I can only come up with two things. 1) I should have reverse engineered FogBugz and marketed MRM as a replacement for it. From there, could I have done anything I wanted. or 2) If it were a Microsoft product, it would have been ok for me to do it. I simply don’t understand where I went wrong relative to Vault’s position statement of painless transition for Visual SourceSafe. Or are the weasels having a good laugh at my expense and this entire article was for naught?

The impression that I have is that JoS readers are pissed because they don’t know who I am, or much about the story behind Moon River Software. I haven’t talked a lot about my past, my background, or my history on my website and not knowing bothers the readers. I don’t think it’s really about a similar UI either. I think a lot of it stems from people thinking that I in some way was pirating FogBugz, rebranding and reselling it, and if that’s the case, I can understand because I’d be pissed too. But that’s not the case, which should have been evident from the fact that I actually purchased CityDesk, but not FogBugz. So, what is the real issue here?

If I missed anything, or you don’t feel like I covered something, please let me know, and I’ll try to respond.

“If everything’s under control, you’re going too slow.”

- Mario Andretti

For someone like myself, it’s a somewhat terrifying experience to be out of control. Airplanes freak me out a bit, and only half the reason is because I know a lot about engineering. The other half is that I don’t feel like my destiny is in my hands.

It’s a difficult feeling to put into words, but I think the best way that I could relate it is to describe it in terms of a video game, since that’s probably where most people would encounter it. The other place people experience it is during a high speed chase on “Cops” and that never turns out well.

Imagine, if you will, a racing game. Doesn’t matter which one. I always liked “Pole Position” as a kid. On the straightaways, you’re barreling down the track at 180+ mph with the pedal to the metal. “The brake is for amateurs” you say in your best German accent. Then a car nudges the side of your rear end. Just like on “Cops”, the rear wheels are nudged, you now have no control and head straight into the guardrail, exploding into a giant fireball. A dozen cars whip by you, and your car reappears on the track, ready to rock and roll again.

Other encounters where you can feel a bit out of control include downhill skiing, snowboarding, sledding to some degree, ice hockey, and the luge. Notice the winter theme. It’s cold in New England this time of year. The basics are the same though. When you exceed a safe speed, you start to get out of control. Your mistakes are magnified, and your successes are generally not. While taking a risk may net you a 1% overall time difference, one mistake can set you back by 10% or more. Is it worth the risk?

In short, yes. But that doesn’t mean that you shouldn’t do additional planning and take additional precautions. This week marks the first advertising campaign for Moon River Milestones and I’m feeling a bit like Mario(driver, not plumber). Things are happening fast and the only thing I even have time to do is follow my plan. I think that without that plan, I’d probably be in trouble.

And lets not forget that you need to plan for failure the same as you plan for success. What if my sales don’t come through? What if I lose sight of my goal? What if I put my underwear on backwards because I’m too busy looking at the target to realize what I’m doing? I’ll tell you what. Insta-wedgie. It won’t be comfortable, but it’s not going to kill you either. And the easiest way to cure that discomfort is to slow down enough to put your underwear back on straight so you can keep going. Not so bad, was it?

If you feel like you’re in complete control during the entire product launch, then chances are that you could be wildly more successful and you aren’t being aggressive enough. Don’t mistake this as an invitation to throw caution to the wind. Personally, I think it’s a very bad idea to take an initial product launch and try hyping it to everyone on the planet at the same time because version 1.0 generally sucks. What will happen is that you tell everyone about your product, it ends up posted on slashdot, and your website grinds to a halt while it struggles to keep up.

You must scale your product launches at a measured rate. Being in control and growing at a measured rate are not quite the same thing. Trains in the old west, for example, ran on coal. The more coal the conductor pumped into the furnace, the hotter it burned and the faster the train travelled. But in Colorado, where the mountains are very steep, it was easy for trains to go out of control. Many areas had alternative tracks for trains which were deemed to be moving too fast. These alternative tracks had inclines which helped to slow the train down to prevent it from going off the tracks.

Ideally, you should strike a balance where your product launch is progressing just slightly faster than you are comfortable with. If things are going too slow, you’re probably not meeting your payroll or your sales objectives because most people overstate their projected income and understate their costs. If your’re going too fast, your customers are going to suffer from poor service because the additional load wasn’t properly planned for. This happens more often with established companies whose products are very well liked, and the customer base is already there. When you don’t yet have a customer base. Well, you’re probably not going to create much of a splash.

The advertising plan I’ve put together for Moon River Milestones is fairly simple. I have some advertisements running through Google AdWords right now, and I’ve paid for some advertising on a couple of key websites that I think have the right audience of people who could use my software. I’ll monitor the traffic all week to see how things are going, and adjust my advertising next week to either increase, or decrease traffic, depending on where I am in relation to where I want to be. Chances are that I’ll be making adjustments to increase traffic, rather than decrease it. I’ve never been particularly adept at getting huge amounts of publicity. Tune in about a week from now to see how things are going.

The past week and a half, I’ve had a chance to reflect a bit on what’s gone right this year, and what hasn’t. Most people do this at this time of year because they have all decided that after feasting like a pig at various celebrations, they need to lose some weight. Others decide to try and kick bad habits that will simply come back in 4 weeks to haunt them like a mortgage payment. (”Hello there…. PAY ME!”)

I decided to put this time of reflection to good use and made a schedule that I’d like to adhere to this coming year. While I didn’t publicize it too much, I had two main goals that I wanted to achieve by the end of 2005.

1. Publish Milestones v1.0.0.
2. Log a profit for the year.

It would certainly seem easy enough to do both of these, and in fact I have. MRS Milestones Version 1.0.0 , which is our bug tracking software, was made available to the general public earlier in December, and v1.0.1 is due out within the next couple of days. Score 1 for the home team.

Logging a profit was a much trickier obstacle to overcome. Let’s take a look at the company expenses first. I’ll leave out a lot of the more trivial stuff, and only include things that cost over a few hundred dollars.

There are a number of other expenses that I’ve had as well. A few business meetings discussed over lunch that I expensed, snacks for the office, shipping costs for equipment/postage, $50 for a 2Checkout account, etc. Nothing really major aside from what I’ve listed, except for one last thing. My salary.

I’m in my 10th week of working for MRS full time now, and as of December 31st, I’ve come to the conclusion that my net profit for the year will have been $136.58, after all of the above expenses and my salary. I have to say, that I cut it extremely close. Unfortunately, there’s still that pesky little cash flow problem that I talked about during my Milestones postmortem.

While things are certainly better now than they were at the end of November, as of December 31st, I will have 8 open invoices that are owed to me. It’s a decent chunk of change, nearly all of which is owed to various places, including my own salary. So, while I have technically met my end of year goals, I certainly do not have the cash on hand to show for it. It will take close to 10 weeks before the net profit from my outstanding invoices catch up to the point that I am cash on hand positive. That just goes to show that unless you have the ability to manage cash flow properly, you’ll go out of business very quickly. Had I broken out from under the thumb of ‘the man’ earlier in 2005, I’d likely be cash on hand positive as well as cash flow positive.

However, the point of this article isn’t to talk about what could have been. I’d like to outline the goals that I have set forth for Moon River Software for 2006 and illustrate what setting goals should and should not be.

Goal 1: New logo and new web site by January 9th, 2006
Purpose: I think it’s fairly safe to say that by looking at the current MRS web site and logo, you can tell that a color blind monkey with a man in a yellow hat designed it. It doesn’t look professional, there’s more text than anything else, and it’s rather boring to look at. What’s worse, is that I did some usability tests on it, and realized that one of the navigation buttons said ‘Milestones‘. I never thought anything of it until I watched someone navigate the web site. Their first thought was that ‘Milestones‘ was referring to company milestones, not to a product named ‘Milestones‘Doh!

So, that needs to be changed. January 9th seems like an awfully aggressive date to get a new logo and a new web site put together. Fortunately, I have a designer who has been diligently giving me various proofs of different logos, and should have the final implementations ready by the end of today. Here’s a look at what will probably be very close to the final one.

Then, we’ll be working together to put together the web site itself. Next week, I’ll contact a marketing guru that I know and ask her to help me with some of the content, to be sure it’s on par with what people would expect from a corporate site.

Goal 2: Start advertising ‘Milestones‘ on January 13th.
Purpose: You may think that it’s intuitively obvious that if you have the best software in the world, you won’t have any problems selling it. This simply isn’t the case, even if you did have the best software in the world. If nobody knows it exists, it won’t matter how good your software is. You need to advertise and do effective marketing to drive traffic to your web site before people will start using your software and buying it.

The original deadline for Goal 1 was January 3rd, but some things have come up which pushed it back a week. That’s a good lesson in setting goals though. If you’ve ever used a Gaant Chart, you know that some tasks are dependent upon others, and if a task is late, it can push others out of the way and they will no longer be accurate. This is called “You just missed all of your deadlines”. If you can help it, always use soft dates for your deadlines, which is what I have done. There are no tasks that absolutely require the deadline to be hit. If it is missed by a little bit, that’s generally ok. The point of setting a goal date is to avoid procrastination.

College students are famous for waiting till the last minute to do homework or study for tests. It’s a widely accepted theory among professors that no matter how long students are given to complete a project, unless they are forced to meet various milestones along the way, some will inevitably wait until the last minute to start the project and miss the deadline.

Technically, part of Goal 2 has already been met because I have an advertisement for Milestones set to run on January 13th. We’ll see how that turns out. I also signed up for a Google AdWords account, but I haven’t paid anything yet, or started advertising. Throughout the course of January and February, I’ll be trying out various advertising techniques on Google, Yahoo, and MSN. I’ll keep you posted on how all of that turns out.

Goal 3: Design a new product by January 20th.
Purpose: Companies with more than one product have more than one revenue stream. The more revenue streams you have, the less dependent you are on any one of them. This is generally why large companies buy out smaller companies that have related products. I already have the idea for this new product, and a prospective buyer as well. The first few weeks of January will be spent doing research into the competition for this product, the potential demand, and sending design documents back and forth to my prospective buyer.

This product must meet his needs, and if it does, he’ll buy it. If not, then I just wasted a lot of time on a product which may not have any buyers. If at all possible, you should work closely with your first couple of prospective customers. Best case scenario is that you work on a consulting basis, building a product from scratch on somebody else’s dime with full rights to the final product. When you see the pink elephants start flying, be sure to look into that.

Goal 4: Complete Beta 1 for the new product by the end of February
Purpose: I’ve given myself a lot of room here to actually write the code for this product. It’s not particularly complicated, but it does need to be tested and written. It also needs to look good. This initial beta will give my prospective client a hands on look at the final version of the software, so he can see how it works in a live environment. Design documents are no substitute for a live product to play with. If you’ve ever had arguments with product management because the spec said one thing, and they meant another, then you know what I mean.

Goal 5: Launch new product by the end of March.
Purpose: By launching this new product at the end of March, MRS will effectively have two potential revenue streams in place by the end of Q1 2006. The rest of the year can be spent gathering customer feedback, implementing new features, and marketing these two products.

Goal 6: Design new products in April and July. Launch these products at the end of June and September, respectively.
Purpose: Again, back to the idea of having multiple revenue streams, more products is better, so long as you have the manpower and the resources to keep up with implementing new features and doing bug fixes for all of them.
Fallback Position: If time and resources do not allow the implementation of these new products, at the very least they should be designed. It is wise to have a fallback position which will set you up for the future. If you don’t have a fallback position, it can be very difficult to cut your losses in the pursuit of this goal. ‘Management by objective’ suffers from this problem.

Management by Objective is the idea that management will set forth goals that need to be achieved, and rewards are typically offered for achieving those goals. Typically, this is regardless of the price that has been paid to achieve those goals. Implementing software that will save the company $10,000 per year isn’t worth much if you spent $1 million to develop it. If the software is saving the company $10k for each employee, the $1 million can be easier to justify if the maintenance is low enough, the lifetime is long enough, and there are a high number of employees.

Goal 7: Become completely self sufficient on software sales by the end of 2006.
Purpose: Consulting is a decent gig to be honest, but it suffers from economies of scale which is a serious problem when you’re trying to make money.

If you start a business making birdhouses, assuming it takes you about 4 hours to build each birdhouse, and each provides you with a net profit of $10 after materials, then you’re making about $100 per week in profit. If you set up an assembly line, and are able to halve your production time, you can maybe get $200 per week. Beyond that, you need to start hiring people to help you make bird houses, which introduces a lot more overhead. There’s more materials, more tools required, and a lot more sawdust. Before you know it, your productivity drops because your operation has expanded and your birdhouses are no longer of a uniform quality.

Fast food restaurants used to have this problem, until McDonalds came along and specified that burgers must be cooked for thirty something seconds on each side and every burger is exactly the same. That holds true whether you get it in upstate New York at a rest stop on the Thruway, or in Trinidad. Trust me, the burgers from McDonalds in Trinidad are exactly the same. The menu is slightly different, but the hamburgers taste exactly the same. McDonalds has gone out of their way to ensure this conformity.

As a consulting business expands, the quality can suffer. Most successful startups are successful because the first few people were incredibly talented. As more people are hired, the overall talent level drops closer to the average. The larger a company gets, the more this becomes true. This is why large companies don’t seem to have hordes of incredibly bright people working for them. They certainly exist within the organization, but on average, they’re vastly outnumbered by the average and below average people.

McDonalds suffered from a manufacturing problem, which they were able to address. Consulting companies suffer from a slightly different scaling problem. It’s the fact that when someone is not performing billable work for a client, the company is paying the employee, but not being reimbursed in any way.

Compare a software company that makes $1,000 per week, and pays a developer $900. Over the course of a year, the company has made $5,200. Using similar numbers for a consulting company yields some very different results. If the developer is billing out $1,000 per week, most companies provide about 25 days (5 weeks) of vacation time. This will not be billable to clients. This means that revenue has instantly been cut by $5,000 while costs have stayed the same. The net result is that the software company yields $5,200 of profit, while the consulting company yields only $200 of profit. That’s a mighty big difference.

Software can be sold whether the developer is there working on it or not. To the customer, it doesn’t matter. Consulting companies also have the quality scaling problem as well. I like to think of myself as a pretty good developer, but when I hire people, will they have the same standards that I do? Of course not. They could be a little higher or lower, or they could be vastly different. Given the choice, I would much prefer to be in the software world than the consulting world.

From the goals I’ve listed above, you should notice a couple of different things. First, each of them is what’s called a measurable goal. They’re not as nebulous as “Increase Sales”. It’s stated as “Become completely self sufficient on software sales by the end of 2006.”. Nebulous goals should be avoided at all costs. The ability to argue whether a goal was met or not shouldn’t exist.

Second, there is a date that each goal must be completed. I could easily say “My goal is to make $1 million.” That’s a pretty silly goal to be honest. Unless I die way before my time, I’m going to reach that goal. The real question is when will I meet that goal. By placing a date on it, you associate a sense of urgency with it. This sense of urgency will help to get things done. If you’ve got 3 years to meet that goal, then setting intermediate milestones will ensure that you achieve it. These intermediate milestones help to form a closed feedback loop where you can make adjustments and corrections to help you achieve your ultimate goals.

Speaking of milestones, here’s part of one now.

Well, it was a long hard road, but Moon River Milestones is finally out the door. It’s less than a week after the launch, and while I accomplished a huge amount of work, there’s still a lot left to do. I use Milestones mainly for my own project management, both in the business, in my personal life, and while doing project estimates. It’s really nice to use it for everything to help keep me organized.

On the other hand, it’s a bit disheartening to see how much work there is left to do. For example, I have identified thirteen bugs in the software already. Thirteen! And it’s only been 5 days since the launch.

Some of them are exceptionally easy to fix, for example Issue 211 says that when viewing sub-project milestones, the ‘Inquiry’ field actually duplicates the ‘Feature’ field. While I haven’t looked into it yet, I’m certain that this was simply a copy/paste error in the code that went unnoticed for a very long time. I don’t make extensive use of subprojects myself, although I know that some users will.

Other bugs, like Issue 164 states that if a session expires, and the user had already uploaded some files, those file uploads are lost. Hmmm. Much more difficult to fix. Basically, it means someone started to enter a new issue and either took more than 20 minutes to do it, or left their machine after uploading the files, and then came back to do it. This is much more difficult to fix. It would involve creating temporary pointer objects embedded in the page to rows in the database representing these files. It’s a much more complicated problem, and addressing it can create even more problems.

I currently have 38 issues targeted to Version 1.1.0, and of those, 12 are bug fixes. The lone bug which will likely get pushed off to Version 1.2.0 is the file upload during expired session bug. Everything else works in that situation, it’s just that the files uploaded are lost if the page didn’t postback within the last 20 minutes.

What went right:

Time Management – Now that I’m doing contract work, my time is generally my own. It’s nice to not have to commute for 2 hours every day. It helps a lot in getting things done. By maintaining roughly the same schedule as I was before, I get 2 hours more to myself every day, and for the most part, I’ve been using those hours to help me get Milestones out the door. It also helps that my hours are no longer set.

If I want to work 10+ hours in a day doing contract work, I can. If I feel like I’m not getting anywhere with Milestones, I can switch to the contract work for a while, log some hours to help pay the bills, and come back later. I’m a total night owl when it comes to working. I’m very comfortable working till 3 or 4am and sleeping till 10am. On the other hand, I’ve had days where I’ve been up at 6:15am and working till 10pm before as well. What it amounts to is that my time is much more efficiently used than it ever was when I was on a strict 8 hour schedule.

Product Evaluations – With the lone exception of the ‘bug’ I ran into while evaluating the Wise Installer, everything seemed to go pretty well. It was a little bit frustrating attempting to set up my automated build environment though because I absolutely needed to have non-evaluation versions to get the batch processes running properly. The trial version of the obfuscator I chose didn’t allow command line mode. Also, the evaluation version of the Wise Installer forced the user to click on a dialog box every time it ran, command line mode or not.

But to be honest, neither of these problems was earth shattering, and both went away very quickly once I purchased the full versions of the software.

A Business Credit Card - Bank of America has been my bank of choice ever since they took over Fleet. I used to have my Game Thoughts business account with Fleet until they were acquired. I never had any problems and if anything, the service simply got better with Bank of America. When I set up my business checking account, I received a ton of business credit card applications in the mail. I ignored them for the most part, since I wasn’t quite ready to go full time with the business, but when it came time to do so, Bank of America laid down an offer I couldn’t refuse. 0% financing on all purchases for 1 full year.

With a new business, cash flow is a mighty big problem. How do you buy things without money? You buy it on credit. Well, as a new business, you have no established credit, so then what? Simply put, you’re screwed.

When I saw this offer from Bank of America, I knew I’d be killing two birds with one stone. The service would be great, I didn’t have to go outside my bank, and the 0% interest on all purchases for a year really put it over the edge. I applied for it, was accepted and given a healthy line of credit which I used to fund all of my business purchases. While I am personally liable for all charges incurred, by having a separate business credit card I can write checks out from the business checking account and not have to worry about paying for anything myself.

What went wrong:

Not Enough Time: While my time management skills are pretty good, and Milestones certainly helps me to budget my time wisely, there’s simply not enough hours in the day at times. It turns out that certain things, like marketing and research, take an extraordiary amount of time to do, and there’s very little immediate return on that time investment, which seems like a good reason to put it off. I’ve worked 16 hour days in the past 2 months trying to get everything done for the product launch, and the installer problem set me back a good 3-4 weeks. Even after I solved that problem was the additional issue that the connection string created by the Wise installer is an ODBC style connection string, not a Sql Server connection string. This forced me to do some pretty funky parsing to convert from ODBC to SqlConnection before using the connection string.

There are simply too many instances where time was a factor. Luckily for me, testing was done as time went on because I was using the software so much myself. Every day, I pounded on the machine, bravely vanquishing bug after bug as each of them reared its ugly head. I also went above and beyond my specs by adding in decent looking icons before the v1.0.0 release. The old icons were probably copyrighted anyway, and that simply wasn’t an issue I wanted to deal with if I didn’t have to. So, I bought an icon package and spent about a day integrating the new icons and making the UI look a lot better than it did before.

Cash Flow: As someone who is somewhat unfamiliar with the consultant market, I realized a very important lesson very quickly. You need to have a very strict budget when you first strike out on your own. It’s very easy to trick yourself into thinking that just because you’re getting paid x times what you were before, you’re going to have an easy time making ends meet. Welcome to the real world my friend.

Consultants don’t exactly get a weekly paycheck. In fact, after you submit a bill, it could be 30, 60, or even 90 days before you see a check, depending on your client. I was in the fortunate position of being subcontracted out to a company whose client had committed to paying within 21 days and had electronic invoice submissions. In addition, when the invoice is paid and the funds clear the account, I am issued a check. So after I submit an invoice, I get a check in about 30 days or so.

Don’t get me wrong though, I was sweating bullets at the end of November. I was able to make ends meet before I got my first two checks but only by dipping into my wife’s emergency fund. Now, things seem to be going well, but it was a bit stressful for about 2 weeks there. If you go the contractor route, make sure you get guarantees about when you’ll be paid, and have money stashed away to help make ends meet if they don’t come through when you need them to.

Not Enough Manpower: Doing everything yourself is a very difficult task. I wish that at the very least, I had a junior programmer helping me full time go through these things in Milestones. Even now, there’s documentation to be written which is likely to take a while because there are more important things to do than documentation. Everything is up and running, the online trials seem to be working perfectly, but marketing has a huge gap right now. People simply don’t know that Milestones even exists. It’s hard to make money on a product when nobody knows about it.

Milestones also has a great way of telling you how much work you have left to do on any given summary of the issues you’re looking at, so long as you filled in the time estimates of course. But it’s disconcerting to see that number trend steadily upwards as the work piles up and you’re spreading yourself too thin to keep up with it all.

Mild Burnout: When you’re working seven days a week and putting in more than 10 hours a day each and every day, it won’t take long before you burn yourself out. This is one of the more serious dangers when creating a startup, especially because of the smaller team size. If it’s just you, and you aren’t doing anything, you can be seriously screwed. Even if you have a partner, unless you talk about burnout, there’s likely to be some resentment because one person is doing a lot of work, and the other isn’t doing much at all. That’s no way to get a business off the ground.

It turns out that I’ve been experiencing a bit of mild burnout. Fortunately, I could feel it coming and took some steps to prevent it from ruling my entire world. In my off time, I like to play video games, and I like to read fantasy books. On my bookshelf, I’ve had some David Eddings books which I never quite finished reading. I read book 1 of The Tamuli, but never bought books 2 or 3. I reread book 1, and then bought books 2 and 3. I still have a little ways to go in the third book, but I’m nearly finished.

Reading does two things for me. First, it relaxes me because I’m not staring at a computer screen anymore. Second, it gets my mind completely off of work and I generally just forget about everything else. I’m an extremely fast reader though, which I think is one my my downfalls. I remember when I was about 12 years old, I would go to the town library, check out 6 fantasy books at a time, and have all of them read within the next 2 days. Doing nothing but reading, I can burn through about 1200 pages in a day, non-technical stuff only of course.

Conclusion:

It would seem that of the things that went wrong, there are a couple of areas which will straighten themselves out on their own. From this point on, I don’t forsee cash flow to be much of a problem in the near future. While that may change should my client decide to go in another direction, or the work tapers off, I think that the software side of my business should help buffer any sudden changes.

Not enough manpower is something which probably plagues every company on the planet. There’s always more work to do, and always more features to cram into the software. I think the key is to set a schedule, make your best guess estimates at how long anything is going to take, and continually revise and update the schedule to reflect ongoing changes.

Burnout is always going to be a problem. The key to burnout is managing it effectively. By keeping tabs on how close to being burned out you are, you can mitigate the effects by making sure to add time off to your schedules. In the game development world, it’s seen as a badge of honor to be working 12-16 hour days for weeks or even months on end. That’s just incredibly stupid. Once that final push is finished, the developer is so burnt out that it can take months, or even years to recover. I know this because I’ve been burned out for months at a time before. It’s not fun, you have no motivation, and the quality of your work really isn’t all that good.

I hope that this has been somewhat enlightening for you. Having written it, I’m certainly more aware of the things that have changed over the past few months, and some of the challenges that lie ahead for Moon River Software.