Posts Tagged 'Entrepreneurs'

October 2, 2012

A Catalyst for Success: MODX Cloud

SoftLayer has a passion for social media, online gaming and mobile application developers. We were in "startup mode" just a few years ago, so we know how much work it takes to transform ideas into a commercially viable enterprise, and we want to be the platform on which all of those passionate people build their business. To that end, we set out to find ways we could help the next generation of web-savvy entrepreneurs and digital pioneers.

About a year ago, we kicked off a huge effort to give back to the startup community. We jumped headfirst into the world of startups, incubators, accelerators, angel investors, venture capitalists and private equity firms. This was our new ecosystem. We started to make connections with the likes of TechStars and MassChallenge, and we quickly became a preferred hosting environment for their participants' most promising and ambitious ideas. This ambitious undertaking evolved into our Catalyst Program.

When it came to getting involved, we knew we could give back from an infrastructure perspective. We decided to extend a $1,000/mo hosting credit to each Catalyst company for one full year, and the response was phenomenal. That was just the beginning, though. Beyond the servers, storage and networking, we wanted to be a resource to the entrepreneurs and developers who could learn from our experience, so we committed to mentoring and making ourselves available to answer any and all questions. That's not just lip service ... We pledged access to our entire executive team, and we made engineering resources available for problem-solving technical challenges. We're in a position to broker introductions and provide office space, so we wanted didn't want to pass up that opportunity.

One of the superstars and soon-to-be graduates of Catalyst is MODX, and they have an incredible story. MODX has become leading web content management platform (#4 open source PHP CMS globally) by providing designers, developers, content creators and Unix nerds with all the tools they need to manage, build, protect and scale a web site.

Back in December 2011, the MODX team entered the program as a small company coming out of the open source world, trying to figure out how to monetize and come up with a viable commercial offering. Just over 10 months later, the company has grown to 14+ employees with a new flagship product ready to launch later this month: MODX Cloud. This new cloud-hosting platform, built on SoftLayer's infrastructure, levels the playing field allowing users to scale and reach everyone with just a few clicks of a mouse and not need to worry about IT administration or back-end servers. Everything associated with managing a web site is fully automated with single-click functionality, so designers and small agencies can compete globally.

MODX Cloud

We're proud of what the MODX team has accomplished in such a short period of time, and I would like to think that SoftLayer played a significant role in getting them there. The MODX tag line is "Creative Freedom," and that might be why they were drawn to the Catalyst Program. We want to "liberate" entrepreneurs from distractions and allow them to focus on developing their products – you know, the part of the business that they are most passionate about.

I can't wait to see what comes out of Catalyst next ... We're always looking to recruit innovative, passionate and creative startups who'd love to have SoftLayer as a partner, so if you have a business that fits the bill, let us help!

-@gkdog

August 9, 2012

Startup Series: Dudepins

The Catalyst startup incubator has been running at full-throttle for a while now, and I've been blown away by the killer startups that have joined the program. The best part of my job is meeting entrepreneurs who see a need in the marketplace and have a vision for how to meet that need in a targeted way, and the story behind Dudepins — one of the startups in Catalyst — is a perfect example of that kind of thinking. Their goal: Macho visual bookmarking.

Dudepins: Dudes like sharing stuff. Man up. Sign up. Pin up.

Pinterest has been getting a lot of attention since 2011, but it still hasn't really been able to penetrate the male demographic; maybe because it's been so effective at cultivating content around fashion, recipes, DIY home ideas and cute puppies (Watch College Humor's "The Fall of Pinterest," and you'll see what I mean). The Dudepins team noticed an unmet demand for a male-oriented visual bookmarking site, and they seized the opportunity to build that platform.

Their Formula: 2 dudes + 2 computers + 1 idea + infinite scotch – non-infinite income = Dudepins!

Dudepins: Dudes like sharing stuff. Man up. Sign up. Pin up.

I fired off a few questions to the Dudes at Dudepins to get a little insight into how they built their business and what they'd recommend to other entrepreneurs in the same position ... They did not disappoint:

Q: How do you describe what Dudepins does?

Dudepins is a collection of montages — or personal boards — of pictures and videos, sorted into various categories. Dudepins is a place where you can easily save, share and collect everything that you find on the Internet, and you're able to organize that content into different montages (i.e. cars, style, watches, cigars, planes, food, travel, etc.). When you want to see the stuff thousands of other Dudes just like you have uploaded, we make that easy as well.

More simply: Dudes, Gentlemen, Guys, Sirs and whatever else a Man might call himself can use Dudepins to collect, save, view and browse everything associated with being a Dude.

Q: How did you find out about SoftLayer?

A: We were initially contacted by two seriously awesome Dudes: Josh Krammes and Kelley Hilborn. Both Josh and Kelley were in Vancouver on business, and fortunately, we were able to get together with them for some dinner. Sparks flew, and Dudepins was invited to join Catalyst.

Q: What has your experience been since you signed up?

A: We knew we'd get solid hosting when we signed on with SoftLayer, but we were most surprised by how far the support and benefits of Catalyst go beyond the infrastructure actually running Dudepins. The SoftLayer team has been a great resource for technical questions, and they've helped us meet several industry experts who, in turn, have provided a lot of amazing feedback about what can help us take Dudepins to the next level.

You guys (Josh, Kelley, Paul and John) are rockstars, and we highly recommend Catalyst to any startup looking for a bulletproof hosting infrastructure and network of brilliant advisers.

Q: What advice would you give to other startups?

A: It's extremely important to stay focused, motivated, goal-oriented and (most importantly) driven. Don't get married to your ideas, and don't let passions overrule logic ... especially when the sky gets cloudy.

Check out Dudepins at dudepins.com, and make sure you visit their "about us" page ... Trust me, it's awesome.

I hate to cut the Q&A short, but TechStars Boulder Demo Day is starting, and I have to go meet the next class of future SoftLayer customers!

If you've got a brilliant, creative, innovative or otherwise awesome startup, and you think Catalyst could be a good fit for you, make sure you hit us up from the "Apply" page on the SoftLayer Catalyst site.

-@PaulFord

May 25, 2012

Tear Down the (Immigration) Wall ... Or at Least Install a Door

A few years ago, I went through a nightmare trying to get to permanent resident status in the United States. My file sat in a box for over a year, was lost, re-submitted and FINALLY rushed through by Ted Kennedy's office. And I was on a "fast track" due to a long record of published research and employment history. I had the means to pay lawyers and the time to repeat the filing and wait for a decision. If I didn't have the means or the time to wait for the process to complete, I don't know where I'd be, but in all likelihood, it wouldn't be here. It's no surprise that immigration reform is high on my list of priorities, and given SoftLayer's involvement in the USCIS Entrepreneurs in Residence program along with Lance's appointment to a Bloomberg committee focused on immigration reform, it's clear I'm not alone.

The bi-partisan Partnership for a New American Economy recently published a very interesting report — Not Coming to America: Why the US is Falling Behind in the Global Race for Talent — that speaks to a lot of the challenges plaguing the current US immigration policy. Because of those challenges, "the future of America's position as the global magnet for the world's most talented and hardest-working is in jeopardy." Here are a few of the projected economic realities of not reforming immigration laws to keep up with other countries:

SHORTAGE OF WORKERS IN INNOVATION INDUSTRIES: Jobs in science, technology, engineering, and math ("STEM" fields) are increasing three times faster than jobs in the rest of the economy, but American students are not entering these innovative fields in sufficient numbers. As a result, by 2018, we face a projected shortfall of 230,000 qualified advanced-degree STEM workers.

SHORTAGE OF YOUNG WORKERS: The US population is aging, baby boomers are retiring en masse, and the growth in the US labor force has slowed to historic lows of less than 1 percent. We cannot continue to produce the GDP growth the nation has come to expect without dramatic increases in productivity or welcoming more working age immigrants.

A STALLED ECONOMY: The US has faced years of stunted economic growth. History shows that new businesses are the biggest drivers of job creation, yet the most recent US Census data show that the number of business startups has hit a record low.

This concern isn't unique to the United States. With a global focus on innovation and technology, countries around the world are actively competing for the best and the brightest. In Canada, a report a few weeks ago spoke to Canada's need to double in size in the next few decades or risk losing relevance and becoming just another resource-rich colony. The nation's response? It's ready to open its doors to more immigrants.

The same applies to the United States ... It just may take longer.

Go back to how this country was built, and apply that to today. The biggest difference: The "skilled trades" we talk about in the most general sense are no longer carpenters like my grandfather but highly educated programmers, engineers and researchers. The idea isn't to replace the programmers, engineers and researchers in the US, rather it's to meet the existing unmet needs for programmers, engineers and researchers.

In all of SoftLayer's efforts to affect change in the US immigration policy, we have to make clear that our goal is not to drop the walls simply to add more permanent residents. It's about lowering many of the current artificial barriers that might prevent the next Fortune 500 founder from starting his or her business in the United States. If you don't think that's a serious concern, I'd point to a pretty surprising stat in the "Not Coming to America" report: "Today, more than 40 percent of America's Fortune 500 companies were founded by an immigrant or a child of an immigrant."

Immigration drives the economy. It's not a drain on the economy. Every country needs more smart people because smart people create new ideas, new ideas become new businesses, and new businesses create new jobs.

Because this is a politically charged issue, it's one I know many people don't necessarily agree with. Along with immigration, we have to look at how the education system can empower young people like my son to become the programmers, engineers and researchers that the US will need, and we have to be intentional about not simply adding permanent residents for the sake of adding permanent residents. If you have any thoughts one way or the other, I'd encourage you to share them with us here in a blog comment or link us to any of the resources you've found interesting in researching and discussing the topic.

-@gkdog

March 23, 2012

AMS01 DC Tour: Built by SoftLayer, Powered by Innovators

About a month ago, Kevin Hazard visited SoftLayer Amsterdam after a conference in London, and while he was here, I invited him on a data center tour. You saw a few glimpses of the data center in his "This is Different" video, but he turned the camera around on me to give a simpler "Data Center Tour" video to show off some of the key characteristics of the server room environment in AMS01.

Given the fact that nearly everything in the data center is the same, if you've ever seen a SoftLayer data center, this tour will seem very familiar. The configuration and architecture of all 13 of our data centers are identical, and with the exceptions of a few Dutch words on the walls, this tour could be given (and is frequently given to customers) in all of our facilities around the world:

As we were recording this video, I started thinking about all the similarities and differences between all the entrepreneurs I have worked with during my career — which coincidentally lines up well with Clayton's "Building. Business. SoftLayer." blog. I cut my technology teeth in Silicon Valley during the dot-com tsunami of the late 90's, and since then, I have collaborated on-location with entrepreneurs from the Netherlands, United Kingdom, Spain, Germany, Austria, Switzerland, France, Chile, Ukraine and Italy. While these cultures often vary widely with customs, manners, food and methods of business, I would have to say that entrepreneurs have far more similarities than they do differences.

At the peak of the dot-com boom, money was raining from the sky, and anyone with a decent PowerPoint presentation containing the word "Internet," could raise million dollars of dollars in a matter of days. After the bubble popped, funding all but dried up. Even real businesses with profitable business models couldn't raise a cent. My neighbor went from being worth over $10M on paper and keeping company with the Queen of the Netherlands to scrambling to pay the rent and fighting for a seat at the local coffee shop.

In my opinion, that's when the real magic happened: The creators just kept on creating. Despite all our friends making fun of us — telling us "the Internet thing" was dead — we kept building cool stuff and coming up with innovative products that pushed the limits of technology.

While entrepreneurs liked the idea of making tons of money and building a global company from a simple idea, money and fame are not the primary drivers of true entrepreneurs. They were really more interested in creating something that would impact peoples' everyday lives and disrupt tired industries ... Just look at SoftLayer. In 2005, "tired" would have been one of the nicest things you could have said about the hosting industry, and in response to that environment, our "Innovate or Die" mentality shot us to the front of the pack.

Entrepreneurs are a lot like our data centers ... They may look a little different from the outside, but they are exactly the same on the inside. Ask them how they'd change the world, and take note of the wild look in their eyes. Our growth is fueled by the passions of our customers, and as long as we have brilliant customers doing amazing things, you can expect to see more and more of these "new data center" tour videos in the coming months and years.

-@jpwisler

P.S. If you don't have time to watch the video right now, you can head to our Flickr page to see a few pictures we snapped while recording the tour: AMS01 - Amsterdam Data Center

P.P.S. Make sure you watch the video all the way to the end. :-)

November 10, 2011

Being True to Your Roots: SoftLayer Loves Startups

Not too long ago, SoftLayer was just 10 guys with a great idea to re-invent the hosting industry. The "Original 10" as we call them, took a huge chance by leaving the comfort and safety of their collective worlds to do something truly special. Those ten people pooled personal resources, mortgages, "Pay ya' back (someday maybe) friends and family" loans, credit cards and pretty much all they had to make this startup company dream come true: A truly automated system to provide a next-generation Infrastructure as a Service (IAAS) platform, the likes of which had never been seen.

So, when I say SoftLayer loves startups, it comes from many personal and collective experiences garnered as the startup we were not so long ago. We are, in my opinion (and at the risk of sounding grandiose), one of the great technology startup stories of the current tech era.

SoftLayer knows that startups are the lifeblood of our industry, no matter where or how they got their start. Facebook began in a dorm room in Boston and we all know how Apple got its start. If it hadn't been for the drive, determination, luck, timing and chutzpa of those startup founders, we wouldn't have the thriving technology economy we have today.

Today, startups have a real leg-up towards success. Incubators and Startup Accelerators are popping up all across the country and around the world. These groups are designed to not only help startups get funded, but to teach them how to be a "real" technology company, create products and services that people what to buy, and polish them up to a high-shine with the hopes that they will be attractive to investors everywhere.

This is where SoftLayer's Community Development team comes into play. This amazing and talented team works closely with startups at famous incubators like YCombinator and TechStars during their three-month formalized programs.

In addition to those formalize programs, we also support newer Incubator and Accelerator concepts like PeopleBrowsr Labs to help startups during the most critical time of their new lives. A startup's first year will usually make it or break it, and SoftLayer wants to help those companies power through by providing free hosting, best- and next-practices, scaling and "big data" advice, marketing and pretty much anything else we can share that could be of value to these young businesses.

PeopleBrowsr

As an example of the relationships we're building with startup accelerators around the world, one need look no further than what we've been doing with PeopleBrowsr Labs (PBL). PBL is a unique concept in the growing world of Startup Accelerators. In the heart of San Francisco's down town SOMA tech district, they provide a collaborative environment dedicated to "accelerating the Social Media Revolution."

I think focusing on Social Media startups is a smart move. Trying to create another Facebook would be a daunting task, and one that I'm not sure would be "worth it." A smarter thing is probably to figure out how to create value on top of that and other social media systems via new engagement platforms, games, and other features and functionalities that take advantage of the massive volume of social data that is created on established mediums every minute of every day. The startups who work in PBL have a huge advantage here. Not only do they get all of the SoftLayer goodness they could ask for, they also are allowed to tap in to PeopleBrowsr's 100+ Terabytes of social media data. PeopleBrowsr has almost every tweet ever tweeted, a data store of Facebook and Blog data and more that are all accessible to startups in the Labs via APIs. In today's "Social Evolution" this data is worth its weight in gold.

Modx

To get an idea of what a startup we're working with look like, you can check out ModX, recently featured in our Tech Partner Marketplace. ModX is a dynamic content management platform that allows users to build highly customizable websites through an easy-to-use template engine. They've added all the requisite tools for CMS and turned it into a fully capable web development platform upon which users can extend functionality, employ custom applications and do just about anything they can dream up.

We gave them advice and the robust infrastructure they needed in order to scale globally and support tens of thousands of users. There are some really big new things coming soon from these guys, so stay tuned...

In the coming weeks and months, we will be starting a new feature here on the InnerLayer Blog. We'll call it our "Startup Series," and it will be a showcase of some of the cool and interesting startups that are building their companies, their technologies and their brands on the SoftLayer Platform. We'll also take a more in-depth look at the Incubators and Accelerators themselves. This is just another way to give back what we've learned and hopefully "pay it forward" where we can. It's great to be at SoftLayer.

SoftLayer Loves Startups!

-@gkdog

October 14, 2011

Incubators - Beyond Middle School Science Class

The first thing that comes to my mind when I hear the word "incubator" is my middle school science class. I can't remember if we did a project or just read about it, but I am positive it was a point of focus for way too long. We learn about incubators as containers in which environmental conditions may be controlled and maintained to provide a suitable place for growth. In my middle school science class, incubators helped eggs embryos grow, develop and eventually hatch. When I heard the term getting thrown around in our offices, I was pretty confused.

As it turns out, incubators programs like Tech Wildcatters and TechStars do the same thing ... only with startups (and fewer egg shells).

As Paul mentioned in Fueling Startups with TechStars, TechStars has a series on Bloomberg TV that follows a few startups in TechStars New York from the application stage through their 3 month program and Demo Day. While I understood the basic premise of the incubator programs, seeing the way they documented it was like a crash course ... So much so that when I talk about it with family and friends (and see their confused faces), I just pull up the first episode:

Just like a science class incubator that provides an egg with light, movement and an environment to mimic conditions required for growth, startup incubators give young businesses seed money, opportunities to pitch businesses to investors, and access to mentors and sponsors who are all there to provide support. In the short program term, the companies get exposure, guidance about funding and access to every other service a they could need to succeed. Piecing together that experience outside of the dedicated incubator environment would require a lot more time, effort and capital.

These incubator organizations are also referred to as startup accelerators, and they're like a golden ticket to entrepreneurial success ... And that's why it's so difficult for a startup to get accepted to participate in one of them. The value a startup brings to the table is not just in the idea; it's also in the people behind the idea.

Recently, I attended the kick-off party for the new class of Tech Wildcatters startups, and I got a chance to meet some of these passionate startup owners. Their energy is contagious. My first-hand experience immediately reinforced to my why SoftLayer is so interested in helping foster companies that could redefine and reinvent the future.

All of these comparisons between about incubators and eggs have made me pretty hungry ... If you need me, I'll be down the street getting an omelet.

-Rachel

October 13, 2011

Fueling Startups with TechStars

One of the coolest things that we get to do as a company is support the growing and thriving community of technology entrepreneurs.

Programs like TechStars provide us with the perfect opportunity to directly plug into some of the best and brightest tech talent anywhere in the world. As the number one startup accelerator in the world, TechStars receives applications from thousands of companies each year, and they only select the best of the best to be members of the program. Member companies receive perks like top-notch mentorship, free hosting, funding and the chance to present their products to venture capitalists and angel investors at the end of the program.

Several SoftLayer executives serve as mentors for TechStars, which allows us to share some of the knowledge (and some of the mistakes) we've gathered along the way. In fact, the inaugural class of the new TechStars Cloud in San Antonio will have access to SoftLayer's CSO George Karidis, our CTO Duke Skarda and me as Mentors. Not too long ago, SoftLayer was a startup, too — just a bunch of guys with a great vision, a few credit cards, and not much more. We understand how important it is to get good help and advice from others who have traveled the road before.

That's why we created the SoftLayer Startup Program. Companies in our program receive more than just advice, best practices and industry insight from us; we also provide tangible resources. Every selected company gets a free year of hosting with SoftLayer. This includes:

  • A $1,000 per month credit for dedicated hosting, cloud hosting, or any kind of hybrid hosting setup
  • Advanced infrastructure help and advice
  • A dedicated Senior Account Representative
  • Marketing support

The selection process for the SoftLayer Startup Program is pretty competitive as well, but because Tech Stars member companies had to beat the odds to get into that program, they are granted automatic admission to our program. Several of the companies who've gone through TechStars and through the SoftLayer Startup Program have become loyal customers, and you can see many of them in our Technology Partners Marketplace, where we spotlight innovative ways members of the SoftLayer community are building their businesses on our platform.

Calling All Startups!

If you're involved in a startup right now, and you're looking to get the help you deserve, email me, and I'll help you get your application submitted for the SoftLayer Startup Program. If you're focused on Cloud Infrastructure or Cloud Tools development, you have an even bigger opportunity: Priority-consideration applications for the inaugural class of TechStars Cloud are due October 21. The first class will run in San Antonio Texas from January through April of 2012. If you need just a bit more time to apply, the final application deadline is November 2. Head over to TechStars Cloud to get more information and to apply to join the latest, greatest edition of TechStars ... And you get guaranteed admission into our program where you'll enjoy all of the SoftLayer-specific benefits above!

-@PaulFord

P.S. If you want some insight into what it's like to work in a technology incubator, we recommend the TechStars series on BloombergTV that has documented the ups and downs of a few of the participants in TechStars New York.

September 23, 2009

Who Are Our Customers?

When talking to a wide variety of outsiders about SoftLayer, one question inevitably comes up. “Who are your customers?” It always takes a bit of explaining – it’s a bit like asking the power company the same question. In the power company’s case, the answer is “anyone who needs electricity.” SoftLayer’s customers run the gamut. There is no one particular industry vertical that dominates our customer base. Pretty much anyone who needs dependable, robust, hosted IT services is our customer, or potential customer.

Now, if we look outside of the silos of industry verticals, there is one type of customer that stands out more than others. That is the entrepreneurial small business. Small businesses are the backbone of our economy and the engine of economic growth, and thus I need to keep up with what is going on with things that affect small businesses.

So I ran across a study worth passing along via a blog post. It is produced by Kauffman: The Foundation of Entrepreneurship and is entitled “The Anatomy of an Entrepreneur: Family Background and Motivation.” It contains some valuable insights into some traits of the majority of our customers. These traits below are taken straight from the report:

Company founders tend to be middle-aged and well-educated, and did better in high school than in college

  • The average and median age of company founders
    in our sample when they started their current
    companies was 40. (This is consistent with our
    previous research, which found the average and
    median age of technology company founders to
    be 39).
  • 95.1 percent of respondents themselves had earned
    bachelor’s degrees, and 47 percent had more
    advanced degrees.

These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds, and were better educated and more entrepreneurial than their parents

  • 71.5 percent of respondents came from middle-class
    backgrounds (34.6 percent upper-middle class and
    36.9 percent lower-middle class). Additionally, 21.8
    percent said they came from upper-lower-class
    families (blue-collar workers in some form of
    manual labor).
  • Less than 1 percent came from extremely rich or
    extremely poor backgrounds

Most entrepreneurs are married and have children

  • 69.9 percent of respondents indicated they were
    married when they launched their first business. An
    additional 5.2 percent were divorced, separated, or
    widowed.
  • 59.7 percent of respondents indicated they had at
    least one child when they launched their first
    business, and 43.5 percent had two or more
    children.

Early interest and propensity to start companies

  • Of the 24.5 percent who indicated that they were
    “extremely interested” in becoming entrepreneurs
    during college, 47.1 percent went on to start more
    than two companies (as compared to 32.9 percent
    of the overall sample).
  • The majority of the entrepreneurs in our sample
    were serial entrepreneurs. The average number of
    businesses launched by respondents was
    approximately 2.3; 41.4 percent were starting their
    first businesses.

Motivations for becoming entrepreneurs: building wealth, owning a company, startup culture, and capitalizing on a business idea

  • 74.8 percent of respondents indicated desire to
    build wealth as an important motivation in
    becoming an entrepreneur. This factor was rated as
    important by 82.1 percent of respondents who
    grew up in “lower-upper-class” families.
  • 68.1 percent of respondents indicated that
    capitalizing on a business idea was an important
    motivation in becoming an entrepreneur.
  • 66.2 percent said the appeal of a startup culture
    was an important motivation.
  • 60.3 percent said that working for others did not
    appeal to them. Responses to this question were
    relatively evenly distributed in a rough bell curve,
    with 16 percent of respondents citing this as an
    extremely important factor and 16.8 percent of
    respondents citing it as not at all a factor.

Not only do the traits above describe a big chunk of SoftLayer’s customers – they also describe the people of SoftLayer.

If you are an entrepreneurial small business and you need a hosted IT service provider who understands your needs, you will find a likeminded partner in SoftLayer. Many of the small businesses who joined with us two or three years ago aren’t so small anymore, and that’s fine! When our customers succeed, we succeed. We get that.

April 2, 2009

We Need New Small Businesses

It is often said that small business is the backbone of our economy. According to the U.S. Small Business Administration, small business employs half of all private sector employees. Over the past decade, small business has produced between 60 and 80 percent of net new jobs. We need small businesses to prosper and lead us out of the economic mess in which we find ourselves.

I track growth in domain names every week. I think it indicates how quickly new small businesses are being formed. After all, what business can you think of today (large or small) that does not have some sort of web site? I can’t think of any. One of the things on any small business start up checklist today is the web site. Hence, most all of them register a domain name.

So what’s been happening with growth in domain names? Lately, it’s not too pretty.

Chart

With all the talk lately about stimulating the economy, one of the best ways to do this would be to encourage the formation of new businesses.

Some would argue that we need to fix the credit market mess to help banks be able to lend to small business startups. This couldn’t be further from the truth. How many small businesses do you know that started with a commercial loan from a bank? I cynically say that banks do not want to loan to businesses until the business can survive without need of a bank, and that was true even before the credit crisis. This was certainly true in SoftLayer’s case – when the founders were preparing for launch in late 2005, there wasn’t a bank anywhere that would touch the SoftLayer business plan. What I’m saying is that the credit crisis isn’t that much of a barrier to small business startups. Passionate entrepreneurs will find a way to get going.

But all the passion to start one’s own business doesn’t go very far in the face of the real barriers to starting a business. One of the real barriers that an entrepreneur must overcome is tax issues. Do they begin as a sole proprietor? A partnership? An LLC? An “S” Corp? Should they incorporate? All of them have different tax implications. All of them have to deal with either income taxes at the personal level or corporate level. Some have to deal with self-employment taxes. Others must deal with 941 taxes. Then there are state and local tax issues, such as the margin tax if you’re in Texas. And don’t forget sales taxes and property taxes either.

One of the strategies that allowed the Internet to cement itself in our society during the 1990’s was this: just let it develop without taxing it. Without that burden, the Internet took off like wildfire.

Ergo, if we’d like a bunch of new small businesses to get going, let’s ease up on the tax burden on new startups. This would cost the government hardly any money at all. Think about it – businesses that don’t yet exist do not pay any taxes. Workers that are not yet employed do not pay any taxes. Currently unemployed workers do not pay income taxes, except for a pittance on unemployment benefits. So allowing new businesses to form and employ workers and transact business “tax-free” for a defined start-up period would produce an EXPLOSION of small business startups.

How long should this tax free period be? Per the SBA, if a new business survives 4 years, they have a great shot at surviving long term. So why not give all new business startups a tax holiday for four years as they establish themselves? Can you imagine how big the tax base would grow as these healthy, strong 4-year- old businesses begin paying taxes?

It seems that the biggest issue facing our new President and his administration is how to pay for all the things they’d like to do. Let me suggest that expanding the tax base is the best way to grow government revenues, as opposed to increasing the rates on the current tax base. Allowing a flood of new businesses to take root and grow our tax base may be the best way to fund our growing public budgets.

Naturally, SoftLayer would be more than happy to assist these new businesses with our enterprise class data center outsourcing services so that the new businesses focus on their business plan – not their IT overhead.

April 3, 2008

Lemonade Stands in an Internet Age

To borrow a phrase from my favorite movie from the time period in question… a long time ago in a galaxy far, far away... budding entrepreneurs had a few options for starting a business. Our options back then were pretty simple:

  • Newspaper Route
  • Collecting Pop bottles – if you don’t remember bottles made out of glass, don’t worry about trying to understand this one.
  • Lemonade Stand

Lucky for me, I grew up in a family business and did not have to worry about starting a business since I had one already – I was head dishwasher! Aside from that, my biggest concern was what bait to use to catch the bass that hid under the dock near our restaurant and when the parking lot would empty out so we could play baseball under the street lights. Of course, I did wash my share of dishes and bus an equal share of tables over a 13 year period. Still, life was pretty simple back then. Comics were $0.25, a pack of gum was $0.10, and you could go to a movie and have a drink and popcorn for about $3.00. A former colleague of mine would fondly refer to these as the salad days. But, times have changed… a movie is easily $20 and I am not sure any comics exist under $3.00. There are also very different “start-up” options available to the current generation of 10 year old entrepreneurs. Mom and Dad may still be out there shuttling kids around in the rain to deliver newspapers, or carving up and decorating an old box to sell lemonade (I did that too, but that was to raise money for Jerry’s Kids) to people wandering past a sidewalk-based store front, but I doubt it. I can’t in fact remember the last time that I saw anyone undertaking such a venture. Instead, it seems that this generation has fully grasped the value of the Internet. Whether it is our youngest blog contributor, or our youngest customer – a 13 year old web host who’s Mom did her part by setting up a PayPal account for him to run his new business. Not to be outdone, we have a slightly older generation of entrepreneurs that have taken inspiration from a number of areas, including turning hobbies into viable businesses. Take a look at www.mmoguildsites.com as an example.

The mantra at SoftLayer has always been to enable business through innovation and by empowering the customer with our delivery of Serverless IT to businesses everywhere. But, I am not sure that any of us ever envisioned the impact that this approach and vision would have. Who knows, we might be helping to stimulate the ideas that could lead to the next Microsoft, Google, or Apple.

So, here’s to entrepreneurial spirit at any age! And if you are one of those young entrepreneurs out there, best of luck and please continue to create new ideas. We are all relying on you. SoftLayer will continue to do its part to help you make your ideas real.

-@gkdog

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