A few weeks ago, I wrote a post about Joining a Startup. In it, I discussed some of the important things to consider before joining a startup including responsibilities, career path, v1.0 vs the Vision, and funding. The post itself got a great response but more importantly, it generated some questions about funding. Apparently, many geeks don't know how startups are funded, so here's some perspective.

There are a variety of ways that a company can be funded. One route - bootstrapping - involves building revneues to take the next step, building those revenues to take the next step, lather, rinse, repeat. While this can work, it tends to be slow and plodding and it's not what I'm talking about here. When a company needs a certain critical mass (Eg. Ebay, Amazon, Twitter), this doesn't work very well. The alternative is Funding.

As many do this time of year, I'm taking a few moments to review last years' goals and set new ones for this year. I don't do this lightly. I simply share them here as a form of public accountability. Without further ado...

In the last few weeks, I've talked with a number of friends about career changes. Some are feeling antsy and just want to move, others are starting their own consulting, and others are starting and joining startups.  While I've done all the above - to varying levels of failure success - I thought I'd share the things I've learned along the way.

Under no circumstances am I being critical of any friend or associate's startup, this is about patterns.

First, everyone does everything. Check your ego at the door. In the first startup I was with, I was in charge of adding reporting to the eCommerce application and taking the garbage out. Was it an effective use of my time? Not at all. Did it have to be done? Yes. Did we have the money to hire someone else? Nope. If your startup is renting office space, you probably won't have to worry about this... but who signs for packages? Who re-orders coffee? On the flip side, you could be the one taking technical questions at the next investor pitch or invited to the big customer Christmas party.

Last week, I was teaching the Security Class for php|architect and talked not only about protecting your applications from security vulnerabilities but what to do after you've found (or have been notified of) one.

Unfortunately, I have some bad news for you, it's not a question of "if" you'll have a problem, but a question of when.

Depending on the type and scope of the vulnerability, this can range from "doh" to "call the lawyers and update your resume".  Either way, it can be a disaster.

And we all know there are two times to come up with a disaster recovery plan:

Before it happens OR

While it's happening... oh wait, that's not planning.

I use this space about once or twice a year to talk about political issues.  Honestly, I try to avoid it as much as possible but it's impossible to separate economic policy and entrepreneurship.  If you read anything from Paul Graham, you'll notice how he intricately threads these issues together time and time again.

If you've ever read my Twitter stream, it's not hard to guess what I think of the Bailout/Stimulus Bill signed into law recently.  In short:

I think the "Stimulus" is irresponsible, illogical, and a threat to the economic liberty and risks that entrepreneurs require.

While I'd love to write a whole treatise on this, I'll keep it to three points:

In the last month or so, I've had a number of conversations with startups about their recruiting efforts and how much trouble they've had finding good people... whether they're looking for 1, 4, or 10 people.

One aspect of their problem is understandable.  To be blunt, the market sucks.  Investment dollars are moving slowly if at all and the majority of startups will never see funding anyway.  It makes the best developers - aka the people they really need - hesitant about leaving the positon they're in.  

The second aspect of their problem is the compensation package.  I understand startups not having much money - no seriously, I understand - so these startups spend the only thing they have lots of - Equity - without realizing the risk situation they've set up.

I've written previously on Capturing your Idea and Clarifying that Idea and thought I need to write one more to cap it off...

Odds are most of your ideas are crap.  I know mine are.  I have notebooks, wiki pages, and whiteboard drawings describing everything from new Facebook applications to wireless control circuits to stories that I'd like to write.  If you're anything like me, you get ideas that would take up 10 times the time you have available.  At some point you have to decide which ones you're going to try.

While this will vary from person to person based on your individual priorities, etc, there are a few things everyone should do:

Capture the Idea - Just as I wrote earlier, write it down somewhere safe... a notebook, your whiteboard, etc.  The old geek-legend about a napkin would work too, just put it somewhere you won't lose it.