That breakout job

In my work as a mentor for startups and as an informal career coach for others, I often tell people about the moment in time when I made a major career change. Many of you might enjoy this story as well, and use it to think about how you have gotten to where you are today.

The Internet has made it easier to stay in touch with people from our past: just this week I met with someone that attended my undergraduate college (whom I never met when I was there) and got an email from a co-worker from my past. It put me in a mood.

This job change was a big moment for me: it turned me towards my path of tech journalism and changed the nature of what I do every day.

I can remember it precisely: it was the winter of 1986, and I was working as an IT analyst for a large insurance company in downtown Los Angeles.

It was a fun job. Back then, end user computing was on the rise. Budgets and staff were big. We had, I think, somewhere north of 20 people working in various capacities, and we were installing PCs by the truck load across our three building “campus” (although no one called it that back then). I was good at my job, and enjoyed working with end users and helping them to learn about the few apps (by today’s standards) that we supported on their PCs.

I was an avid reader of PC Week, which (along with Infoworld) was the leading trade pub for IT workers. All work would stop when the internal mail delivered our copies Monday afternoon, as we tried to scan its pages before our users (who also were subscribers) would start calling us with questions about the tech they were reading about in the latest issue.

PC Week was starting a special edition that was going to be called Connectivity. It would be a supplement that would go to a subset of its readership, what publishers call a “demographic.” And they were looking for writers and stories.

I found out who was going to be running the publication and sent him what I now know is a query letter. At the time, I was just an interested reader of the pub and didn’t think anyone would be even interested in hiring me, let alone want to know what I thought was important and interesting. I mean, I was just this little cog in a big machine. I had zero professional writing experience. I didn’t know who the CEOs were of the major tech vendors by name. I was in the process of installing my company’s first LAN, so was interested in PC communications.

I was dead wrong. They were more than interested.

That query letter led to flying me out to Comdex in Vegas, the biggest tech show back then, and meeting the newly minted Connectivity staff, and eventually a job offer to join their ranks as a staff writer. I began working for them almost immediately, and the rest, as they say, is history.

That first year I wrote more than 300 individual stories for the publication. They were stories about how LANs were connecting to mainframes, and how PCs were changing the nature of American business. They were heady times: we had the ear of every major tech company around. I got to work with some of the most creative and interesting people of my career, some of whom I still am in touch with today. Many of the original PC Weekers went on to bigger and better things in the tech industry, and I am proud to count myself as part of them.

I went from installing my first LAN to telling thousands of people how to do it themselves. Back then, we could talk to anyone, including Bill Gates, just by calling them on the phone. Email was still a bright and shiny object, and the Internet was yet to be invented, by Al Gore or Vint Cerf or anyone else.

What motivated me to write that letter? I really don’t know. But it was a transformative moment for my career, to say the least. And I tell this story to you today in the hopes that you may share your own moment when your career went in a new and exciting direction, and you have the perspective to acknowledge and celebrate it. Please share your stories here if you feel so moved.

Slashdot: Finding your next superstar programmer

Tech firms are relying on non-traditional hiring methods, from programming contests to finding the right people via algorithm. I interview several hiring managers and shared some of their methods.

You can read my post on Slashdot here.

ITworld: Some quirky tech conferences worth attending

If you don’t want to go to Vegas for one of the mega-shows by IBM, Symantec, CA and whatnot, then perhaps you should consider one or more of the shows that I chronicle in my latest piece for ITworld. I tried to find conferences that you can actually learn something, and are small enough not to be overwhelming where you can spend some time meeting new people too.

You can read my article here.

Why small businesses need firewalls

I have been spending time this week at a small media company called Mercury Labs. Despite their name, they don’t normally test anything, but ironically that is what I have been doing there. I was testing a bunch of integrated network security devices for Network World.  These devices cover what is called unified threat management, but you can think of them as network firewalls with additional features, such as the ability to scan incoming and outgoing traffic for viruses and spam, blocking phishing URLs, and being able to set up a secure virtual private network connection when you are on the road.  I’ll call them advanced firewalls here for convenience.

I have a long history of testing these tools. Almost seven years ago, one of the Techtarget publications had me looking at them for larger enterprises, and I went out to the central IT department at Stanford University to put them through their paces. This time around, I wanted to find a small business site for the tests that I was going to be doing for Network World. That’s why I was over at Mercury this past week.

They have about 10 Macs connected to an Apple Airport, which is the center of their network, providing IP addresses, wireless connections and a shared hard drive to the entire office. The Airport is attached to a cable modem and the Charter broadband network.

Wait a minute. Don’t you need a firewall if you are going to connect your network to the badass Internet? Yes, and Mercury knew they were taking chances. A firewall is just the basic separation that keeps the bad guys from getting inside your network and causing havoc. That is why they were the perfect testing site. They were vested in my review and what I would find out about these products and their specific needs.

Interestingly, it isn’t just small businesses that don’t have firewalls. When I arrived at Stanford, the central network didn’t have any either. Partly that was because of some odd notion of academic freedom, but back then they realized they had to get better protection. Ironically, while I was doing my tests there we saw someone try to reach out from Germany one morning. Luckily, they had other defenses that prevented them from doing any damage, but it emphasized the reason why I was there testing these products. And coincidentally, when we brought up the advanced firewalls at Mercury, we could see all the network traffic where folks were continually scanning and looking for ways to enter their network too. It was a sobering illustration of why these products are essential.

When I first arrived on scene, I went into their phone closet where I tried to suppress a gasp. Yep, this was your typical small business: part storage room, part cable jungle, and mostly a mess. It was clear that trying to figure out the network topology was going to be a challenge, and my first act was to leave everything alone.

Inside the closet were two small gigabit switches from DLink that looked like they had been around since the days of DOS. This worried me, but since things were working, I wasn’t too concerned. Yet.

One of the vendors that were part of the test insisted on sending a product engineer to help with my testing, and I am sure glad that he was there. When we cut over to his device instead of the Airport, things initially went south. Turns out we found a bug in their firmware. Once that was fixed, all of the wireless Macs were quickly brought up on the network behind the new firewall. But the wired Macs had trouble connecting. It took a few reboots later before we got everyone back on board. It was ironic that the wireless portion of their network was easier to bring up than their wired portion. That was thanks to the wonky cabling in the closet.

So what are some takeaways from this experience?

If you are running gigabit Ethernet to your desktops, make sure your cable plant is up to snuff. Part of my problems had to do with the older cables used to connect things in their wiring closet. There is a difference between Cat5 and Cat5e, especially if you want to run the faster networks these days. Make sure you are using the right cables.

Disconnect any unused wired ports in your office.  This is just basic security practice, but bears repeating. And if your wiring contractor hasn’t done so, you should label your ports in the walls and in your closet so you can track things down more easily.

Understand the limitations of your core network gear, including switches, routers, firewalls, and wireless access devices. Your network installer should explain these things in terms that you can understand.

Have a separate guest network with the appropriate security measures. The Mercury folks were using the Airport guest network features, which were bare bones. One of the reasons they wanted to go to the advanced firewall was to provide better protection from their frequent guests and contractors who were going to be connecting in their offices.

Oh, and what happened with my review for Network World? Well, you will have to wait and read about it in their pages. I can tell you that I learned some interesting things about all the products that I tested.

At the FIRST Robotics finals in St. Louis

We have been fortunate to have the world finals for the student competition FIRST Robotics here the last several years, and I always try to spend some time wandering around, talking to the kids and the adults. This year I got to volunteer for a day, which was wonderful, even though my task was fairly mundane.

 

 

 

I spent some time talking to the folks from NASAtv who broadcast up to six different channels of programming during the event. These guys are amazing in how much they know about the various technologies to pull off broadcasting in harsh conditions. You might not think that having a TV truck in the middle of what usually is a football stadium is hard, but consider that they have to set up their own control room on what is usually the 35 yard line, and with a network topology shown above that has to be assembled in a matter of a few days. All of the competitions make use of wireless technology that is carefully tuned to ensure that each bot has a clear channel to its controllers and can only play on a particular field.

I took some pictures of the participants and their bots. One thing that I didn’t really grasp until this week was the wide range of equipment that the teams bring with them: the smaller kids in the Lego league mostly had fun decorating their pit stop areas, while the bigger bots (that can weigh more than 100 lbs.) bring in an entire machine shop as they have major surgery and last minute repairs to perform. Of course, there were fun costumes, hairdos, and other wild add-ons for the human participants.

Here is a Pinterest gallery of my photos. And here you can find a video that I shot two years ago.

Dice: Ways the AP Could Have Avoided Its Twitter Hack

A single tweet with a phony bit of news sent the stock market into a brief dive Tuesday, pushing the Dow Jones Industrial Average down more than 140 points in the three minutes from 1:07 to 1:10 p.m. ET. When the “news” — that two bombs had exploded in the White House, injuring the president — was debunked, the market regained its footing.

You can read my post on Dice.com here on what happened, and how the Associated Press could have avoided this exploit of their Twitter account.

What should a startup do to prepare for crowdfunding?

If you are thinking about using the crowd to fund your startup, you might want to think carefully about why, how and when.  Until SEC does finally promulgate the JOBS act regulations, it is mostly illegal.  Even when the final rules will be publicized, it still may not be very desirable to do so, depending on the type of business you are in and what kind of funding you are looking for.

Current status of crowdfunding

There are actually three different potential equity offerings that intersect with the online and crowdfunding world. First is a series of offerings that are made to accredited investors, such as some Missouri Venture Forum members. This is presently legal and goes under Regulation D, Rule 506 of securities laws. There are several equity-based crowdfunding sites such as AngelList, Bolstr, EarlyShares.com, Navocate.com, ReturnOnChage.com, RoyaltyClouds.com, InitialCrowdOffering.com and CircleUp, among others. The ventures can’t publically advertise for investors and the offerings have to be carefully prepared, much as an offline private placement offering is done now.

The JOBS act added two other situations, one which has proposed regulations that haven’t yet been adopted, called Title 2, and one which is still at the starting gate with nothing yet proposed, called Title 3. The former is just for accredited investors but the ventures can advertise for prospects, while the latter is for anyone who wants to buy in, with the specific circumstances still under discussion. Regardless of which way you go, your venture will probably be limited to raising one million dollars annually within any crowdfunding rounds. Given that one popular game raised that much in a day last year on Kickstarter, this could be a big possibility and a limitation. There will also be minimum and maximum equity amounts limits. These issues are still being worked out by the SEC.

One local venture that isn’t waiting for the SEC is Passer.by, which began operations earlier this year. Todd Metheny is their CEO and he said they started Passer.by “with the specific goal of providing an equity-based crowdfunding platform for indie films and allow a new breed of investors to have some say in what movies are made. If hundreds of people are interested enough in a film concept to invest, theoretically that movie has a much higher chance of finding an audience.” He calls this “social proof” and it is a powerful concept for his business. Right now they aren’t doing any equity funding, of course. They have gotten donors to back three different films, so they are starting slowly. Metheny is waiting to see how the SEC regs play out. “One of the big issues is whether the regs require audited financials. That is one of the potential deal killer provisions. It doesn’t really make sense to force a company with no financial history to provide audited financials, and the cost would be a significant risk for a new company anyway.”

Passer.by isn’t the only St. Louis-based crowdfunding startup: Former Center for Emerging Technologies COO Bill Simon’s Propelfund.com has also begun operations and is accepting ventures. They also plan on offering equity funding when approved by the SEC.

Outside of the US, there are numerous other sites such as the Dutch site Symbid.com that are used as a mechanism for raising equity or debt funding of business ventures. These countries have more permissive securities laws, and well, you can take your chances with that.

Next steps to take

So before the SEC acts, make sure you thoroughly understand the JOBS act and how it is written, and what it means for your startup. “You might be making a statement that inadvertently is fraudulent under one of the federal securities laws,” says Sara Hanks, the CEO for Crowdcheck.com, a startup due diligence firm for crowdfunding investors and companies looking for them.  “You don’t want to be overstating or overpromising something.” You might want to hire a lawyer, or use one of CrowdCheck’s services, or find other professional advice.

Should startups mix and match the crowd with traditional VC funding? The experts urge plenty of caution here. “With a larger number of investors comes greater investor relations management responsibilities,” says Metheny, who has a lot of questions about how things will work, especially for Title 3 deals. “What will the regs require in terms of updating the investors? Managing half a dozen investors is difficult–what about managing 500? How do you balance creating a system that provides adequate protection for investors but isn’t too onerous to be worth the trouble for startups?”

One possible mix-and-match scenario is to use the crowd for this social proof and pre-sell or pre-market a given product or service, to test the market, promote a startup’s efforts, and get the buzz going. Clearly, even some established companies are doing this already, such as the funding of a Veronica Mars movie to expand its popular TV franchise. Certainly, a major Hollywood studio doesn’t need the monies it raised from the crowd, but it helped get the project moving forward.

Another perspective comes from Bill Frezza, a venture partner in Adams Capital Management. Adams has $800 million under management, and Frezza thinks that startups shouldn’t mix funds from the crowd with the professionals. “If a startup does the initial angel round from the crowd and then does a subsequent round from VCs or sell any stock afterwards, you start getting more complex capital structures. And then liquidity becomes tough if things come apart with the company, if they have a down round or have to restructure. It could end up that the crowd-based investors get screwed and class action lawsuits will certainly happen.”

Metheny thinks it all comes down to how the JOBS regulations are written. “There could be some poor outcomes, but bad regulations have been written before, or you could have unintended consequences.”

Frezza says, “When you buy a security from a public company, it is a well-defined thing. From a venture financed company, it can be a Turkish bazaar, with very complex provisions that will make your head spin. We have enough problems with companies founded with doctors and dentists, but this could be even worse. It could be real easy to see your crowd-based ownership disappear entirely, because every new financing action can reshuffle the equity deck.”

Tim McFadden, a partner with Armstrong Teasdale LLP, recommends that startups interested in crowdfunding should get acquainted with the JOBS Act statute and what disclosures you may be required to make.  Prepare those in advance with help from your legal and accounting counsel so when SEC finally clarifies the crowdfunding rules, you have all documents in place and can act quickly.

(This originally appeared in the newsletter of the Missouri Venture Forum.)