The Startup Playbook contains very specific advice about building a technology startup that we’ve learned building Connect Software in San Francisco and launching our web app and iOS App. It also comes from experience building iContact from 2003-2012 to from startup to 300 employees.
We are building this resource simply to share what we’re learning along the way as we believe in open sharing and a strong community of entrepreneurs working together. It will be updated frequently, so bookmark this page and join our updates newsletter via the right sidebar. Thanks for coming and sharing.
Setting Up Our Company
Connect Software Corporation is registered as a Delaware S Corporation, and headquartered in the Castro neighborhood of San Francisco, CA. We incorporated via our law firm Bagchi Law in August 2013. We elected to be an S corporation initially as it saves us money on taxes. We don’t plan to raise venture capital this year. When we raise venture capital we will likely convert to a C corporation as venture investors are often required to invest in Delaware C Corporations. C corporations get double-taxed on profits (at the corporate level and personal level).
By being an S corporation now, the losses of your company offset any other personal income your shareholders may earn from other sources, so it can be beneficial to be an S corp in the beginning. To become an S Corp, corporations in the United States must file IRS form 2553 within 60 days of incorporation. We have eight employees currently (3 engineers, 1 designer, 1 office manager, 1 CEO, and 2 product people). We have set up a basic Restricted Stock plan. My investment fund Connect Ventures is funding the company until we get to either 100,000 Weekly Active Users (WAUs) or to revenue.
Creating Our First Product
We have developed a wep application at http://app.connect.com and an iPhone application on the iOS App Store. We will be in a private beta for a few more months while we get our product ready to scale. To us, “private beta” means we’re requiring users to have an invite code prior to being able to use the application. We have a queue of more than 10,000 people in line who have signed up to use our beta when it comes out.
We have been working on the backend technology for our product since September 2012. We are working on building the world’s best contacts application for iPhone and web. We are re-imagining the primary phone book on 1 billion smartphones worldwide. We are in a very fun and creative phase–though there remains pressure to launch and get to market. It’s important to launch early and often and iterate based on real market feedback.
We don’t believe in raising outside capital until we have demonstrated that we have something that users love and frequently use. We believe that raising an angel round of less than $500k is fine–but more funding should wait until you gotten real traction–either over 100,000 weekly active users or over $40,000 in monthly revenue. We are a fan of raising capital responsibly and never raising more than 1x your current annualized revenue (current month x 12).
We were in the Summer@Highland incubator in Menlo Park in the summer of 2013 and really enjoyed the experience. We applied to Y Combinator in the Summer 2013 class and got to the final round of interviews but didn’t make it in. We were told we were solving too big of a problem. Other incubators include 500 Startups and Plug and Play.
Launching at Conferences
We had a demo table at the TechCrunch Disrupt conference in September 2013. We launched our private beta version there. We purposely chose not to participate in the Startup Battlefield as we want to improve the product more before we seek press exposure. We are considering having some form of launch event at the LAUNCH conference in SF in March and SXSW in Austin in March.
YCombinator – Started by Paul Graham, Jessica Livingston, Trevor Blackwell, and Robert Morris in 2005, based in Mountain View, CA.
TechStars – Started in 2006 by Dave Cohen, Brad Feld, David Brown, and Jared Polis. Runs programs in Boulder, Austin, Boston, San Antonio, Chicago, New York City, Seattle, London.
500 Startups – Started by Dave McClure, based in San Francisco, CA.
Stanford StartX – For startups with at least one Stanford founder who has graduated in the last 5 years.
Harvard iLab – For startups with at least one current Harvard student on the team
StartupWeekend – Holds 54-hour startup weekends in which entrepreneurs, designers, and developers create initial products. Has been held in 478 cities globally. Built a global network of passionate leaders and entrepreneurs on a mission to inspire, educate, and empower individuals, teams and communities. Founded in 2007 by Andrew Hyde. Acquired by Marc Nager, Clint Nelson, and Franck Nouyrigat in 2009. HQ’d in Seattle, WA. Operates the StartupDigest newsletter, originally founded by Chris McCann.
LeanStartupMachine – Holds workshops on building a lean startup in 40 cities around the world.
Founder Institute – Provides training for early stage entrepreneurs in 55 citites around the world.
Shared Office Space
We work out of an office in the Castro. Shared office space options in San Francisco include: