Tech Entrepreneurship

• 2008-04-24: implement karma board
• 2008-04-24: research web for how to make web payments.
• 2008-04-24: research on rent-a-coder.
• 2008-04-24: find a exploded diagram of an engine and of a class diagram.

2008-04-24

Vestment schedules

• grant stock in portions every year
• award subject to board vote

What about stock they already own

• buy/sell agreement - can buy back stock first.
• owners by stock
• company buys back stock

Book Value

• based on accounting

• requires an audit

• if not doing anything, buy back for small price.

Protecting your company when someone leaves

• Buy/sell protects your options
• trade secrets, customers
• NDAs
• Non-Compete
• Non-solicitation: can't steal accounts
• more important to get good people.

Selling agreements

• Drag along rights

Starting your own e-business

• Advice, tips, etc.
• reference page.

Advantages

• extremely low capital expenses
• modest time investment
• no distribution problems

• labor can be expensive
• you need good contact (low barrier to switching)

Minimum steps needed to start an electronic business

• Get a domain name
• Figure out your server requirements
• Set up backups
• Develop the website
• Prepare analysis tools
• Get Paid:
  • Set up ads
  • Set up payments
• Advertise your site
  • SEO and google rank
  • Impact from ads
  • word of mouth

Get a Domain name

• Organization of DNS (need picture)
• Registrars will enter your name in for a price
• Can see all registrar information with "whois" database
• Tips
  • DON'T get a domain name through a hosting provider. If the bill doesn't get paid, you loose the name. You want to be responsible for that.
  • Registrars can request any domain name they want for 5 days at no cost.
  • DON'T use Network Solutions, they automatically request any domain name you search so you can't buy it from competitors.
  • If you loose your domain name, DON'T visit the site. If a site doesn't get hits, most registrar front runners will abandon it after 5 days.

• Reference: I used GoDaddy? (recommended by a friend). 2 years: $14.30 with RetailMeNot? .com coupons.

Figure out your server requirements

• Storage - For a static webpage, 5 GB is enough. Media/databases increases the size of the data.
• Bandwidth - 3.5K/html page, 15K/image. Start small, make sure you can upgrade.
• Hosted vs Non-Hosted -
  • Hosted: cheaper, less control, lower CPU loads
  • Non-hosted: must pay server+electricity, more control, easier to add computers, higher CPU loads.
• Tips:
  • DO investigate your hosting provider before buying, lookup "XXX sucks"

• Reference: Personal wiki with 2 years personal photos + entire life notes = 100 MB
• Reference: I used A2Hosting? , was recommended to me.
  • Great software, can log in like personal computer.
  • $95/year, $8 month, 500GB storage, 500GB bandwidth. More than enough for starters.

Set up backups

• Equivalent of insurance for businesses. A must.
• Reference: for small sites, use Amazon S3.
  • You only pay for the storage you use
  • Data massively backed up, might survive nuclear war.
  • Amazon S3: storage costs for my wiki (100MB) are about $0.21/mo.
  • Extremely new, can be hard to set up. Check my webpage for my scripts.
• Reference: for larger sites, use RAID if non-hosted.
  • Thermaltake blacx: $40
  • SATA harddrives: $200/750GB
• Tip: Use Newegg for computer hardware purchases.

2008-04-10

Read the book about IDEO guy and how they rate ideas.

2008-03-27

Shoe Project:

• material cost per shoe: $4
• equipment - $500,000 / machine, initial payment
• sell for $8.00,
• expenses: sales force, warehouse,

state and federal forms.

• pick a name
• federal trademark search
• http://www.uspto.gov
• state trademark search
• cyberdiveillinois.com

trademarks need to be registered in every state as well as the federal

Corporations have to be located in a certain state:

• http://da.sos.state.mn.us/minnesota/corp_inquiry-find.asp?:Norder_item_type_id=9

types of corporations : use C corp or LLC. NEVER AN S CORP

• want to set it up right
• need to keep up your annual minutes
• need to keep up your annual dues
• you can be the initial agent

products need product liability insurance in order to consider to be sold.

Need a pre-incorportaion agreement for our business.

most companies register in delaware

• FEIN number SS4.
• register with the county courthouse.
• NUC-1 resellers/sales tax registration.
• open a checking account in company name.

Insurance

• product liability
• workers comp - (must be true for all but the officers)
• business policy

http://www.netsuite.com

2008-03-13

Something this professor does often, he collects first impressions about a word to collect student preconceptions.

2008-03-06

Financial statemtns

• Income statements (Profit or Loss, PNL)
  • part of tax return
  • when you post a loss for taxes, you can apply them to the profits in the future.
• Balance Sheet -
  • also shows up on tax return.

Real estate

• low risk
• appreciates in value
• easy to understand
• always in demand
• leverage money that you don't already have.

By a $1Mil home,

• pay bank 200k,
• houses get about 3% per year
• after 1 year, house worth 1030k.
• got 15% in one year.

Income statement

• Revenue: 701,000
• Expenses: 230,000
• Profit before tax: 471,000
• Profit after tax: 330,000

Get 10% loan, can get a loan for 4.5 million, still turn profit.

• If interest rates go 5%, can get $9Mil loan
• If interest rates go 20%, can get $2.25Mil loan.

best time to buy when interest rates are low, sell when rates are high.

• Revenue
  • Gross Sales
  • Net Sales (gross minus returns, etc.)
• COGS - Cost of Goods sold
  • Beginning inventory
  • add purchases + direct labor
  • subtract ending inventory
  • = COGS
• Gross profit = Revenue - COGS
• Gross Margin: (earn - cost)/(earn)
• Expenses

• recommend: get quickbooks, takes care of expenses and payroll
• recommend: if you pay yourself a salary, just write a check to the govt right there.

Next week, set up an appointment

• come up with 3 next actions.

Balance Sheet

• Net Worth = Assets - Liabilities
• equity = got - owe
• Types of assets
  • Current Assets
    • Cash
    • Inventory
    • Recievables - money that you are owed (for sales)
  • Fixed Assets
    • Hard to turn into cash immediately
    • Equipment
    • buildings
    • land
    • tooling
• Cant expense fixed assets, but can depreciate them
• Liabilities
  • Current liabilities
  • long term debt

Can start by loaning your money to the company (high interest), can get starting net worth of 0

2008-02-13

• Sales: importent because they meet the customer, on the ground with them
• Marketing: creates the big plan of how you'll go about selling your product.

Big picture:

• How big is the problem/market

Industry sales: Selling a squirt gun to miller brewery

• goal: get a customer to life
• start: talk to the sanitation workers, get them to find the gun they like the most.
• once you have support, the plant managers fall in line.
• next: go talk to purchasing agent. Hard times because it's more expensive.
  • you want the question: "Why is it more expensive?" This gives you the chance to explain why you are better.
  • never bash the competition.
• next: Maintenance staff. Plants usually have someone who repair things.
• next: Safety people. They hate change, because they get all the blame if something goes wrong.
• next: sell to other miller plants. Idea, get people on the same team talking. "Can I use you as a reference if I go to another plant."
• next: Coors

Sales techniques.

• cold call: leave literature, call a week later, get permission to talk to the workers.
• other techniques: join a trade association, pay for a list of contacts of people on that organization

key in business: how you respond to problems.

don't undercut price when you sale direct versus catalog. It pisses off the people who make a catalog. A good compromise is to throw something extra in, so you can't compare the price to the catalog version.

sales reps - live on commission. Usually don't sell competing products, know your product.

When you get to selling the whole USA, you need a sales manager that can train people.

Buy low sell high doesn't work. You buy low, add value, and sell high.

Retail management

• Buyer - handles a category, in charge of an area of the store.
  • gets bonus if things sell well.
  • usually they have a dog they want to get rid of, makes your job easier.

Walmart marks up about 35%

2008-01-24

Talk on Market Research

• Hire right
• Provide them with the resources to succeed
• Reward
• Get out of the way

Business people don't do well with inventors.

Two needed things for a business.

• Engineering
• Sales

http://www.heartlandangels.com/

2008-01-31

types of market research

• video - secondary research.
• primary research - actually talking to the customers.

Case study on eht 14th -- Jim Pass.

Case Study: John Roughneen

Qualities of a salesman:

• outgoing
• Idea man
• likes networking
• enjoys learning.

Qualities of engineer

• risk taker
• details

pros and cons of friends in business

• pro: loyalty
• con: clouds judgement
• con: authority and

timeline -

• 87 - john starts catering buisness. It ends up puttering out.
• 88 - john and glenn become friends
• 89 - they get separate jobs.
• 90 - Glenn developed software for a vending business.

http://forum.wgbh.org/wgbh/forum.php?organization=WGBH+Lectures http://online.engr.uiuc.edu/webcourses/ge498grn/index.html

???

Past people in the class:

• http://theaudeo.com
• http://www.microlution-inc.com/
• http://visual3d.net

Question: Is this class bullshit?

Zeiv - corn based, can be made into film, bio-degradable, make plant trays, bury the trays.

http://www.tec.uiuc.edu/

http://www.tec.uiuc.edu/syllabus/TE%201%20Syllabus%20Fall%202007.pdf