Top Startup

Take care of yourself - Health insurance for you and your startup.

Im young, Im in decent shape and I eat healthily. Do I need health insurance? Maybe, maybe not. Im not willing to take that chance.

Wakeup Call

Last week, I got a call from a friend of mine to say that our friend Jason in the band “The Hudsons” was hit by a car while crossing the street in Austin. It was a hit-and-run and the driver fled the scene. Jason didn’t have health insurance and is going to have a huge hospital bill. Im sure Jason is just glad that he is alive.

I have not had health insurance for the month of March. I wanted to postpone adding additional expense for as long as possible, but the risk of long term problems from not paying a few hundred a month is too great. Im getting health insurance.

Starting Point

I went to US News and World Report’s Best Health Plans 2006 to find a starting point. According to US News, “Harvard Pilgrim” has the best health plan in the country, and they are based in MA and ME. I called Harvard Pilgrim and they referred me to 3 companies who handle their plan for 10 or fewer employees. I wont name names… but 2 of the 3 were incompetent. The first one, I spoke with the operator about 20 times as she told me to please hold. After a while a gave up on getting a quote. The second company promised me a quote and never got back to me. The third one, I will name because they deserve to be commended. I spoke with Paul Yoffe at Northeast Business Trust. He was professional and knowledgeable. I was very happy. He gave me quotes for four different providers: Fallon (11), Tufts(2), Neighborhood(210), Harvard Pilgrim(1).

A decision to be made

In the process of writing this article, I checked the US News ratings for the four providers above. They are in the parentheses. I was going to say that I will be going with Neighborhood, but in all honesty, I am now nervous. Number 1, Number 2, Number 11 and Number two-hundred-and-ten?

Here’s a table to better diagram what I was looking at:

Most of the plans I looked at were on the lower end of the spectrum. Paul advised me that MA has some of the best health care because the state has a lot of mandated minimums for coverage - such as mental health and in-vitro fertilization. I dont take or will likely need prescriptions at the moment. I can also change to another plan within a month of needing a prescription.

Welcome to the Neighborhood?

Neighborhood is the lowest cost provider. $10 per office visit… max $500 per hospital stay whereas the others have a $2000 deductible. What’s concerning is the rating. Can you analyze healthcare purely quantitatively, or is there something Im ignoring such as quality of care or how difficult it is to make a claim that makes Neighborhood the wrong choice? Part of buying health insurance is protecting yourself against being in a horrible situation in the future. Is Neighborhood another version of Tenet Healthcare (provides poor healthcare and unethical treatment of patients worldwide). All of these questions are troubling. Even with the higher deductibles on in-hospital care, Im going with Harvard Pilgrim. It’s about the same price, and I know that if I do get sick, I will have access to the number 1 health care in the country.

Im glad I wrote this. My opinion on what to do has changed in the process!

Popularity: 7% [?]

What we’re watching: Dragons’ Den

You know something is good when you discover it from two sources in one day. That’s exactly what happened today. My mother recommended Dragons’ Den to me this morning and my business partner sent an email about it tonight.

… These people are very sharp, ruthless, tactless and sometimes downright ignorant. They see the bottom line immediately and tear people with seemingly solid inventions and businesses to shreds. On this side of the world this attitude is described positively as being able to “cut through the shit”. While I personally dislike the manor of these types I find myself fascinated by them, most of whom have come from nothing and have very little education but just seem to have the knack for business.

Here’s an episode from 2006. If you’re outside the UK, you can sometimes find these episodes on Bittorrent. Apparently, there is a Canadian version of this show too!

Dragons’ Den Season 3 Episode 7

Popularity: 3% [?]

What title to have in a new business

Every startup has a unique situation. Our business has four founders with equal share and say in the company but distinctly different skillsets. We’re getting a first run of business cards printed this week and decided what content to put on the cards. One of those items is our “title”. So what title do you choose?

Traditional

CEO, COO, CIO, CTO etc. Aside from the point that these are “big (publicly traded) company” titles, how do you decide who is CEO, the top dog? Well, luckily we didnt get into an all-out brawl over this. Traditional titles are a bad idea for a startup or really any company with < 20 people in my opinion. If you are the CEO... what are you the CEO of? I am the king of my part of the apartment, but do I go around telling people that? They would laugh at me! Unless you have something substantial to be the "Chief" of, forget that title

What do you do?

I really like this approach. Too often, people give you a business card that says “Vice President” on it. What the heck is a “Vice President”, and why do large companies have so many “Vice Presidents”? Examples of this approach would be: Systems Architect, Business Developer, Masseuse. This is the opposite of titles that obfuscate what it is you do… a janitor is not a “Aesthetic & Hygiene Specialist” or something ridiculous like that. Like many people in start-ups, all of us are wearing many hats. We know how we occupy our time now, but if we put that on a card, will it be relevant in 6 months? Probably not!

Identical

This option would be modeled after W.L. Gore and Associates (maker of Gore-Tex) as described by Malcolm Gladwell in “The Tipping Point” (required reading for the latest wave of web 2.0 entrepreneurs). At Gore, everyone is an “Associate”. This eliminates the feeling that anyone is truly above anyone else in rank and allows you to focus on the business. For now, this is the approach we took. The only thing on our card in the title position is “Founder”.

Additional Resources

• Entitlements: How to Choose Business Titles for Your Startup
• Job title for Startup’s first employee?

Popularity: 4% [?]

A picture of my office

Here is where I work right now. I’ve got my headset for skype conversations, an extra monitor to get rid of my desktop clutter, an external harddrive for backing up, printer, a wooden chair (I would kill for an aeron), a borrowed desk, clock, iPod HiFi for music. It’s a pretty basic setup… oh, and off to the right is our first development “server”, if you could call it that… an old Powerbook G4 that I got in 2003. All in all, it’s pretty basic and low-cost.

Popularity: 4% [?]

Why we went “all mac”

One of the exciting things about starting a company is the blank slate you have to set things up the way you want. The unfortunate thing is the lack of money you have at the time critical decisions are being made. It’s kind of like how most expensive sports cars are driven (slowly) by old bald guys or the wives of old bald guys. By the time you can afford the ideal, it’s too late to truly enjoy it.

Well, we toyed around with the idea of buying inexpensive linux laptops or even windows machines. We decided to go with Macbook Pros for the following reasons.

• Software costs - Apple’s OS X does more out of the box than Windows XP (or Vista). Many of the tools we use are either part of the package (Mail.app, iCal, Address book) or free (Firefox, Openoffice, AdiumX, Cyberduck, Vienna). We made a decisions to not use Microsoft Office. Overall, if we were to become an all-Microsoft company, the cost per employee would mean we would save a couple hundred on hardware, but spend a significant amount more on software.
• *nix underneath - Right now, 3/4 of us are working with linux / unix in some capacity and OS X is a better way to interface with those systems.
• Maintenance Costs - Right now, Im the sysadmin. In my experience, a Mac gets fewer (or no) viruses, does not fragment and requires little to no regular maintenance. Users find it more intuitive so they dont cry for help as much. Overall, the systems are less time consuming to maintain
• Pride - I’m a believer in the motto that your environment can either hurt or help your success. When staring at a computer for long periods of time, the machine should be something you enjoy using and enjoy looking at.

Every company is of course different. With the move of applications from the desktop, to the net, there is little tying us to any one platform. So far, the choice has been excellent. We also have Parallels Desktop in our back pocket in case anyone gets stuck and really needs windows.

Popularity: 3% [?]

How entrepreneurs travel.

No, it’s not first class, or private jet. It’s Fung Wah Bus. Im going on monday to meet NetProSys to discuss how we are going to use our $4000 in software development services. Well, I looked at my different options to get to Bridgewater, New Jersey.

Car

I dont have one anymore so this would mean renting. It would also mean driving a long distance. Something that is not a good use of my time!

Train

The train from boston to NY on Amtrak is $136 round trip. It leaves from Back Bay station which is walking distance. Then I would take the commuter rail to NJ at a cost of $20 round trip for a grand total of $156. The only problem with this is that the train back to Back Bay from Penn Station returns at 2:00 pm. So likely, I would have to go to a different station in Boston if I wanted to leave later.

Multi-modal

To save the most money, Im going multi modal. Im taking the T (subway) to South Station (i’ve already paid for a monthly pass), then taking the Fung Wah Bus - $30 round trip, then taking the subway to Penn Station - $4 round trip and then taking the commuter rail to NJ $20 round trip for a total cost of $54. This is less than half the Amtrak cost.

Time wise, I anticipate the Multi-Modal route to take me an additional 2 hrs, so I will be valuing my time as at least $51 an hour. During this time, I will be able to read, and work on my laptop, so the real cost to me of the longer route is even less!

As an entrepreneur, a little bit of ingenuity can save you a bunch of money. If you apply this across all facets of your business, you’re less likely burn through cash on things like travel and will be able to spend more money building your core business.

Update: How it worked out

Multi-modal was good. I got lost getting from the Fung Wah Bus to the subway and getting from the subway to the fung wah bus. This meant that I missed the 7pm bus and took the 8pm bus instead. If you have the extra money or someone else is paying, Amtrak is a better way to go. If you are spending your money. Go by Fung Wah!

Popularity: 4% [?]

Penny-Wise Pound-Foolish

At the moment, the office of our “Top Startup” is virtual. I work largely from home, but I take my laptop with me everywhere. In the first week I was here, I was selling my car - a personal matter, but the below example can apply to business too. In order to submit payment to my finance company, the process was:

1. Write letter
2. Buy FedEx label
3. Walk to bank & get certified check
4. Walk to Print shop and print letter and label
5. Walk to FedEx to acquire envelope and mail documents

This process was time consuming and required expending a lot of mental energy prior to leaving my house to make sure I had everything in order. So, after having to go through a similar process twice and being frustrated with it, it was time to get a printer. Initially, I didnt want to because so many print shops are within a 5 minute walk. However, this is a penny-wise pound-foolish attitude. They are all not as close as in my office. Not being able to print on demand (directions, forms, documents for review) directly affects stress.

So, I decided to buy an inexpensive multi-function printer for around $80. I expect the printer to last up until we have a physical office and buy a proper office printer.

The key here, is that when you start something new, it is good to watch your cash and spend wisely - but not to the point where you can’t get your job done. In the long run, to get my $80 worth, I need to print 200 pages. I will do this easily.

Popularity: 6% [?]