Jot Thought

In case you haven’t seen these yet, compare the following two videos from StartupSchool ‘08: the first by Greg McAdoo at Sequoia and another by David Heinemeier Hansson of 37 Signals and Rails fame.

We found them both particularly interesting because we are currently wrestling with the decision of whether to try to go raise money for our company or continue bootstrapping it. We have two products in the market: Paybackable, which provides very simple online expense reporting and has a bunch of users and Bootstrap, which is in private alpha. We are close to releasing a major upgrade to Paybackable that will add support for company accounts and employees. The release will also introduce paid plans, much like 37Signals’ products. So we’re about to learn first-hand how difficult it will be to try the approach in David’s video.

For Bootstrap, it’s a much grander vision and frankly, we don’t know if we can afford to do it justice in a reasonable amount of time by funding it ourselves. Hence the interest in raising money. We’re gathering as much advice as possible and will begin getting feedback on our pitch very shortly. But it seems clear that once we head down this path, it’s go big and exit or bust.

So we’re at an interesting crossroad. Do we shoot for the stars? Or do we try to become a “lifestyle” company - to use a popular term in the private investing space. Right now, all we know is that there are some pretty important problems that we can solve for small business owners like ourselves. We’ll see what the future holds.

If you look up the IRS instructions for tracking business miles, you won’t find the word odometer. And yet most solutions in the market ask for starting and ending odometer readings to calculate mileage.

We wrote a post about a better way to calculate mileage over on our Paybackable blog, including how we’ve made it easier to do so from Paybackable itself.

Self employment is about to get easier…

We have officially moved into private alpha on Bootstrap, our first major homegrown application. We aren’t saying much about it at this point while select users are banging away on it. But we can say this - it will definitely increase the time an entrepreneur can spend growing a business, rather than dealing with the hassles of running it. It’s entirely web-based and will work on all the major browsers…:-)

If you would like to learn more about Bootstrap, go to our home page at www.gobootstrap.com and submit your email. We’ll keep you posted as we open access to more folks and unveil specific features.

We just created a branded product page on Facebook, using their Page Manager application.‚ Check us out at http://www.facebook.com/pages/Esomnie-Software/9913611301.

One thing that struck me as being partifularly interesting is the potential use of Pages as a CRM (customer relationship management) tool. By inviting one’s customers to become “fans”, Facebook makes it drop dead simple to communicate with them, including opt-in inbox delivery of updates. Whether you’re a small business, an aspiring musician, or a large enterprise, it’s an interesting solution to‚ a traditionally thorny problem.

Kudos to whoever came up with this at Facebook - very clever.

We released an update to Paybackable.com this morning that adds mileage expense tracking. It uses up-to-date IRS rates (now 50.5 cents per mile for 2008) to calculate how much you can get reimbursed for those business miles. Just enter the date of travel, a description (purpose of trip, destination, who you saw, etc.) and the miles driven and Paybackable will calculate the correct amount.

One other interesting note about this feature: it actually solves a gap in QuickBooks. Their vehicle mileage tracking feature doesn’t support reimbursing employees for their miles. To quote their support site: “You cannot use vehicle mileage tracking to reimburse your employees for mileage.” Their suggested solution is to create a bill payable to the employee (or vendor) with line items for the trips. This is precisely what Paybackable does, which is nice.

Check it out at www.paybackable.com

Well, we got frustrated enough with handling our own out-of-pocket expenses that we wrote a small app to help create online expense reports. It’s live at http://www.paybackable.com. It lets you track expenses and submit expense reports as IIF files for import into QuickBooks. It will also pull the expense categories from a QuickBooks chart of accounts IIF file so everything matches up. There are some nifty elements, like auto-complete of payee names with memorized categorization, plus keyboard shortcuts for quickly changing the date.

While it’s been very helpful for us (took the whole process from 20-30 minutes per expense report down to less than 5), we were wondering if anyone else might find it useful. Feel free to give it a try and let us know what you think. You can email me (Kevin) at esomnie dot com

Borrowing a grandiose phrase from one of our clients, we have upgraded from our “starter” office and now have moved into Esomnie’s World Headquarters at 883 N. Shoreline Blvd, Suite B110, Mountain View CA 94043. We’re in a small four-building campus up the road from Google. There are a couple of picnic tables outside and the startup next door likes to barbecue on a grill they brought in.

So why the move? Two reasons:

1. We wanted to be closer to a train station with good baby bullet service, especially for people coming down from the city (like Dean.) Mountain View and Redwood City are the best for that. Funny thing, but downtown Sunnyvale, which is great for people heading north on CalTrain, is terrible for people coming from the city. We just never paid close enough attention before. Now we’re less than 3/4 of a mile from the Mountain View station, which works out great.
2. Having good lunch options turned out to be way more important that we originally thought. Our old location had very few places nearby, which meant quite a bit of driving. Now we’re back closer to downtown Mountain View and all the old places we used to haunt. We can even reuse a little Ning app for MV lunch options I created a while back when frustrated by the Intuit cafeteria (Yelp didn’t have quite the coverage yet.)

We’re still not fully moved in, since we’ve only hung 1 of our 4 whiteboard panels, but it’s a much nicer space. Next step: Dean’s going to help us pick out a coffee machine:-)

Last Friday, April 6, we took possession of our first office space - just in time for a 2pm client meeting:-) It’s at 830 Stewart Drive in Sunnyvale, Suite B304 - off Wolf Rd, right past Lowes. The office itself is about 600 square feet, which is plenty for our size right now. We’re hoping to grow to 6 or so people by end of year. The space isn’t lavish by any means, but it’ll work for getting us started. The rent is reasonable, all utilities are included, and it’s month-to-month.

As you can see, it’s pretty bare-bones. We picked up the furniture from a couple of liquidators. Both had listings on Craigslist, but also had lots of inventory to choose from, thereby reducing the need to run all over the place to multiple sellers. It was nice to be able to get $10 whiteboards and $100 3-lever ergonomic chairs. We’re particularly happy with the tables, which are 4′ x4′ and on wheels, making them very convenient for developer workstations.

Esomnie’s growing like gangbusters. We need to start hiring full time developers, which means we really need to find office space.

Now, I haven’t looked for office space or negotiated a commercial lease since my first job out of college. So, lots of homework to do. Right off the bat, lots of time on Google, looking for advice. I posted a request for advice in a couple of Yahoo Groups for ex-Intuit and ex-eGroup folks. I also reconnected with an old buddy, Jade Dauser, who does this for a living and is quite good at it. So, fairly well armed with my refreshed knowledge (note I say knowledge, not wisdom,) I began looking for space. Let the fun begin.

My favorite location (sarcasm noted) was the one where the entire floor vibrated from the furnace underneath. Not just one room, either - the whole place. For that “mild inconvenience,” the rate had been reduced to only $1.50/sq. ft. Think our developers would appreciate the savings as they bounced at their computers for 8-10 hours a day?

There was also the space near downtown Sunnyvale that, while large enough for 6-10 people, had one allocated parking space. With frontage on a major road (Mathilda) and one small side street (full of cars from local apartments,) it gave me visions of parking in North Beach on a Saturday night. Pass.

After looking at several more places, we found one that was extremely promising. Very close to the train station, high quality, shared conference room, shared kitchen, ability to grow into more spaces. Seemed like a no-brainer. Ah, but this is the west, and the world of commercial space is nice and wild. We were looking at a new space the landlord was going to build out. More square footage than 2 offices (which he rents out individually), plus we were willing to keep it all open (fewer walls and windows to build.) In addition, we’d sign a one year lease so he’d be guaranteed to get enough revenue to pay for the build out of an ongoing asset. The price? More money per square foot than the smaller offices. I’m still having trouble with that one.

On to the next space. We find another promising one, again close to the train station. This time it’s the front downstairs of an office condo. Great space, wide open, and the landlord is willing to provide a good deal on the rent. Only one problem - because we’re a new company (5 months old,) he wants a personal guarantee. We say we’re happy to guarantee the rent payments. Not enough - he wants us to sign as individual and severable tenants. Well, there goes all the protection we have from our LLC. Sorry, can’t sign this lease either - thanks for playing.

Where do we net out? We just signed a month to month lease with a second-tier building. The cost is about 2/3 what we were going to have to pay at the other places, it’s month-to-month, has lots of space to grow, all utilities are included (even T1 internet) and they don’t even require that you name them as insured on your liability policy. Based on our experiences to date, I’m waiting for the other shoe to drop. But for now, we appear to have a place to build a company.

This may be old hat to a number of folks, but here’s some real data on how much better it is to include an HTML form on your web site’s contact page rather than a simple email.

When Ben re-launched the Esomnie web site in late August 2006, he included a “contact us” page with a simple email address: info at esomnie dot com. By early November, we had received exactly ZERO emails to that address, despite the fact that we had some spikes in traffic from other efforts.

In early November, we added a simple HTML form instead of the email link. Since that simple change, we’ve had 6 inquiries about our services, despite no material change in overall traffic to our site. While not a staggering number, for a new business that treasures every lead it can get, it’s a big deal.

There’s a simple usability lesson behind this - removing barriers for your customers, even seemingly trivial ones, can add up.