Instructables

How to Start a Business

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Step 10: Bring On New People

Once we discovered we had no idea how to do half the things we wanted to do, we brought on some new people: Corwin, Geo, and Ryan. As an example of why we needed more people, Ryan wrote the initial version of Instructables and gave it much of the look and feel it still has today. Without him, it would have definitely never happened.

Perhaps notably absent from this list is a "business person." We interviewed and tried working with a few people whose job it was to license our technologies, fund raise, or do initial market research, but in the end, it never worked out. Right or wrong, most of the Squids saw these activities more akin to busywork than anything requiring real talent, and the results were near identical when we did it ourselves compared to when someone trained-in-the-art did it. While I will admit to learning some very valuable Microsoft Excel tricks from business-people, the Scientific Method applies to running a business, and, in my opinion, someone, who can identify measurable outputs, run experiments, analyze data, and rigorously synthesize it all into actionable items, is truly valuable with or without a business background.

With just the initial four founders, a Limited Liability Corporation appeared to be the easiest thing to start, so that's what we did. Our incorporation documents were largely drafted from books with titles like "How to Start an LLC." Ownership of the company and voting rights were determined on a time-based function. Initial ownership was equal across the four founding partners, and as new people were brought on, their ownership would be determined by their months worked at the company divided by the total months worked by everyone (effectively diluting the ownership of the founders). Ownership of a spin-off company or licensed technology would be determined at the time of the spin-off or licensing. The concept was to create a structure where "work done" would be rewarded rather than simply being first. We wanted to attract top talent in the future, and thought that the best way to do so would be to give the new people a shot at owning as much of the company as the founders, if they stuck around long enough and created enough cool stuff.

Bringing new people into an egalitarian partnership such as ours had its difficulties, which were compounded by our bizarre ownership structure. We tried, usually with success, to do everything by consensus. Everyone shared the same overall vision, but coming to agreement on the details proved time-consuming, and doing so among 7 people is exponentially more difficult than 4.

When I do it again, I still won't establish a "boss" and I'll still try to build consensus, but I would like to use a little more process to make decisions faster. We had established a process for making decisions (voting by percentage ownership), but we never actually used it. I think we could have made the same decisions, but arrived at them faster by using our process.
 
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