With the economy in shambles and the outlook for the next couple years looking pretty bleak, is now a good time to leave your safe job to start something of your own?

It depends.

VCs and angel investors are telling their portfolio companies to batten down the hatches and prepare for the worst, which doesn’t bode well. Money is going to be very tight and every company out there is going to have to do some serious belt-tightening. Getting investment is going to be even tougher. Exits are going to be extremely difficult and rare for awhile. We’re going to see layoffs, consolidation, and lots of bankruptcies as companies are not able to raise the cash they need to grow or sustain operations. It’s going to be very ugly.

That being said, downturns can be a great time to start a company, depending on the type of company you want to start. If you want to start something that’s focused on getting lots of eyeballs on the back of millions in venture funding, with little thought of profitability, now might not be the best time. On the other hand, if you’re starting something that truly adds value, has a clear revenue model, and helps individuals or companies be more efficient, then perhaps now is a great time. The key is going to be keeping things lean and understanding that the odds of a fast exit for untold millions just got a lot slimmer.

One practical note: throw a touch of realism into your plans. If you’ve got a great job with good benefits and no savings, now might not be the best time, especially if you have a family to support. Take the next six to twelve months, build up some reserves, build your company on the side, and then strike out on your own if it’s working. It’s very, very difficult to build a startup on the side (I speak from experience), but you don’t want to get into a situation where you quit, it doesn’t work out, and you’re homeless because you didn’t have a safety net and there are no jobs available. Think ahead and think defensively.

Tighten your belt, put your head down, and just keep trudging towards the goal of adding value at maximum efficiency. It’ll pay off eventually.

Well, I can’t believe it, but we’ve soft-launched BlueSwarm.com. We’ve been working on this project for a few months now and we’re proud to finally have something that the general public can play with. This is still a relatively early beta, but it’s functional! So what is it? BlueSwarm allows you to track your brand through online social media all in one place. With BlueSwarm you can see what people are saying about your brand on Twitter and blogs (many more services to come) all in one place.

Not only does BlueSwarm collect that information and display it in one easy to use location, we also do sentiment analysis and calculate an authority/popularity score (called a buzz score) for both the author and the item. This way you can see what’s important to you. You can sort by positive or negative items, by how popular the item is or by how much buzz the item has. That way you can get to the information that matters to you most, quickly and easily.

Once you have a chance to see what people are saying about your brand, you’ll want to be able to easily respond to these items to keep the conversation going. BlueSwarm makes it easy to flag items for later follow up or to respond to them via twitter without having to leave the site (and we’re going to be adding even more ways to respond soon).

This is just the start. We will be adding more services in the next few weeks, more ways to respond, display and interact with the data, as well as more ways to collaborate and share that data. We hope that you find BlueSwarm useful, please don’t hesitate to contact me directly or anyone else on the BlueSwarm team if you have any questions, feature requests or bug reports.

The “War on Terror” is a farce. It’s a marketing ploy, designed to get people fired up and inspired. But when you really evaluate it, it means nothing.

Let me be clear. Terrorism is evil, and should not be tolerated. We shouldn’t negotiate with terrorists and we shouldn’t hesitate to hunt them down and bring them to justice.

That being said, we’re not fighting a “war on terror” any more than we’re fighting a war on drugs or a war on poverty. A war is something that can be won or lost, but we can never truly defeat terrorism. That’s sad, and hardly hopeful or inspiring, but the reality is that terrorism will always be a part of an information-driven society. The only way to stop terrorism is to abolish information technology, because terrorism is fueled by fear, and specifically the magnification of fear that mass media enables. We can work hard to make sure that terrorism isn’t tolerated and we can work on our intelligence efforts to make sure that we know about it and stop it before it happens. But we’ll never truly eradicate terrorism, just like we’ll never eradicate poverty or drug use.

The sad thing about this truth is that the lie that these efforts are “wars” will undermine the very progress that we make. We’ll pour trillions of dollars into them and while we will see results, because we’ve launched them under the pretense of fighting a war that can be won or lost, people will eventually lose heart and demand more progress. They don’t want to be mired in a “war” forever with no victory in sight. They want to see that the war is won.

But it can’t be.

Ok, it’s only been a couple days since I said I was going to give Mint.com a two-week trial, but things are already looking a bit bleak in terms of Mint.com being my primary personal finance tool. Here are a few of the issues:

1. Budgeting feels like an afterthought

Budgeting and planning are pretty important parts of personal finance, but they feel like an afterthought in Mint.com. From what I understand, it launched without them, and then they were added later. It shows. Budgeting should probably have its own tab, but it’s just a box on the overview tab. Adding budget line items feels clunky and the list isn’t organized in any meaningful fashion that I can discern, so it’s hard to check a specific category without scanning all of them.

2. No way to enter manual transactions

Here’s another reason that budgeting isn’t terribly useful: transactions lag several days before they show up in Mint.com. This isn’t their fault, it’s just how the financial institutions work. But if I could enter a manual transaction and then clear it when it posts from my bank, I could keep my budget up-to-date. If Mint.com doesn’t know that I just dropped $300 on a new iPhone, it might think that I still have plenty of money left in my spending category, when it’s actually over budget.

Plus, I do occasionally spend cash and it would be nice to enter manual transactions for that. You can split ATM transactions into different categories, so perhaps that accomplishes the same thing for most people.

3. No way to enter manual assets or liabilities

I like tracking my net worth, and I currently enter all the numbers once a month into networthiq.com, but it would be great if the tool I use to track personal finances could tell me this. And Mint.com does have this feature, but the problem is that you can’t add manual assets or liabilities. This is a bit of a problem if some of your assets or liabilities are in institutions not connected to Mint, or if you’ve got real estate. Ironically, you can add mortgages, but not the underlying real asset that the mortgages are written against, so your net worth will be ridiculously skewed to the negative if you do this.

4. No custom categories

Mint lets you create budget tracking items and categorize your spending, but the categories are all pre-defined and there doesn’t seem to be any way to create your own categories. This is really annoying, because you spend a bunch of time hunting for the best category, and often end up using one that doesn’t fit super well. I’m guessing that one of the reasons they do this is that having every user on the same category taxonomy makes it much easier to automatically tag transactions based on how other users have tagged them. Still, it would be nice to have the option, even if you do give up some benefit.

5. No way to anticipate future spending

This is similar to #2, in that it prevents your budget from being a true picture of what you have available to spend. One of the best things about the envelope method of budgeting is that it allows you to allocate income for *future* expenditures that you anticipate. This is really handy, because if you have $15k in your checking account, it might be because you have a lot of free cash to spend, or it might be because your rent is $1500 and your taxes due are $13k and you’re paying them in two weeks, in which case you’ve only got $500 to spend. To be fair, this one isn’t completely Mint’s fault, as a lot of personal finance and budgeting tools work like this. However, it would be awesome if Mint could find some way to work it in.

6. No way to transfer money between budget categories

If you’re spending way too much in one category, and a lot less in another, it would be nice to adjust your budget temporarily for the month by transferring money from one budget category to another. You can do this with Mvelopes, but the only way to accomplish the same thing with Mint is to edit your budget and then remember to change it back at the end of the month.

So it’s looking like I’ll have to stick with Mvelopes for now, though I plan on checking Mint.com on a regular basis for its analysis tools. Perhaps they’ll get their act together on some of the points above, but for now, it’s just not that useful to me. Too bad, because the design and UI are one of the best I’ve ever seen on a web app.

If anyone from Mvelopes ever reads this, please listen to me: your model is awesome and your features are amazing. But your platform sucks. Ditch the flash, cut your price down, and you’ll have a customer for life.

I’ve been using Mvelopes.com off-and-on for the last two years, but I’ll confess that I haven’t been so good about it for the last twelve months or so. Here’s why: it sucks. It has a horribly flash interface, is ridiculously slow and clunky, has bugs, and is always having issues with downloading my account data. It’s also completely manual, so it adds a few minutes of work every day. Let it slip for a week or two and you’ve got 50 - 75 transactions that need to be categorized using a brutally painful interface. Ugh. On top of that, it’s like $7 - 15 / month.

So why do I keep using it (or trying to)? Because when you get it rolling, it’s amazing. The envelope method of budgeting works like this: for each spending category, you put money in as you get it, based on your budget, and you take it out as you spend it. When it’s gone, it’s gone. If you don’t spend all the money in that envelope for that month, it carries over to the next month. For example, let’s say I make $2000 per month. I put $700 into a rent envelope, $200 into food, $200 into utilities, $200 into spending, $300 into savings, and $400 into gas As I spend money out of each of those categories over the month, I take that money out of the appropriate envelope. At the end of the month, if I have $45 left in the spending envelope and everything else is empty, I’ll have $245 in my spending envelope for the next month. Envelope budgeting is a great way to control spending and save for things over a long period of time, like an annual insurance payment, or Christmas gifts.

Anyway, about a year or so ago, I signed up for Mint.com, which is kind of like Quicken, but online and free. The interface was good, but this was at the height of my enthusiasm for Mvelopes, and since Mint.com was mainly about seeing how you’d already spent your money, I didn’t spend much time on it.

Fast forward twelve months and Mint.com is starting to look a lot better. It’s got more robust budgeting features, some amazing graphing, trend analysis, automatic transaction categorization, and best of all, it’s all free. But at the end of the day, it still feels more geared towards tracking the money you’ve already spent than helping you spend correctly in the future.

So should I switch? I’m not sure. I really like the envelope budgeting method, but if the interface is so horrible and painful to use that I won’t do it, it’s not really giving me much benefit. If Mint.com would just add something close to the envelope method of budgeting, I would be a customer for life. I’d gladly fork over $10 / month to never have to log into Mvelopes.com again.

I’m going to get Mint.com all setup and rocking for the rest of this month. In two weeks, I’ll evaluate where I’m at and post a status update. If it’s working well for me, I’ll stick with it and cancel Mvelopes. If anyone has found any other alternatives, I’d love to hear about them

When I first heard that Yammer (the “twitter for business” startup) had won TechCrunch50, I had mixed feelings. On the one hand, I’ve been using Backpack’s Journal feature to do something similar with an agency that I do work with, and I immediately saw the value. It’s interesting to see what other developers or designers are up to. For a freelancer, Twitter itself is almost like working in an office, and I can see the value of doing something like a mini-twitter just within your organization.

On the other hand, it doesn’t seem that innovative or impressive from a technology standpoint, just a slightly modified take on a concept that’s been around for awhile.

But then I heard about Yammer’s business model. I’m sure this is a big part of why Yammer won, because it’s brilliant. Basically, users sign up to this thing using their corporate email address, which makes sense since they’re using it for work. It’s completely free for any employee to sign up, and they can do so without the knowledge or blessing of their employer. However, if the company wants to “claim their network” and have administrative control over the user account that their employees have, they have to pay $1 / month / account.

Here’s why this is brilliant: in a typical corporate environment, tools and services are imposed in a top-down fashion, and then HR spends tons of effort trying to get people to use them. I used to work at CNET, and we had this terrible internal productivity tracking tool that everyone was supposed to use. The interface was awful, the integration was terrible, and probably cost CNET a ton to use the service for thousands of employees. But it would have been worth it if it actually increased productivity by 1/10th of a percentage point, or allowed CNET to ferret out their most productive employees. But I doubt that it did, because the person using the system and person gaining value from the system were not the same person. Employees didn’t get much extra out of it, and largely saw it as what it was: more work so that management could keep an eye on them. All the value was to the organization, not the users.

Contrast that with Yammer. A couple people from CNET sign up, they want to see what their colleagues are doing at work, so they invite them. Some of those people sign up, invite more people, and so on. Pretty soon, hundreds of people at CNET are using Yammer to share what they’re working on, ask questions, etc. Then the organization finds out that there’s all this value locked up in Yammer, and they can pay a measly $12 / year for each employee to access that value. Think they’ll be willing to do so? You bet.

The problem with many enterprise tools is that the organization is the primary customer, and then they have to push their employees to use the tool, because the employees view it as just more work. But the brilliance of Yammer is that they’ve built a tool that infiltrates value into an organization, then charges the organization if they want to unlock that value. If you hit the users first and add value and then layer on features that the business wants, you’ve got an irresistible combination. Employees will sign up and use it on their own, without any prompting or cajoling from the organization, and the business will find that it needs to pay up to unlock all the value that employees are naturally creating because they want to. It’s a classic bottom-up strategy, and one that I’ve started to think about for some of my own entrepreneurial pursuits.

One of my favorite topics to discuss is the effect that technology has on social structures. Humans are social by nature and the effect of a completely new social medium has been an interesting one to observe over the last decade. I have several friends and family members who have an inherent distrust of new technology and generally think that the Internet is making people less socially adept. I usually find myself arguing the opposite side of this particular issue, and for three main reasons:

The Internet breaks down geographical barriers

I have three really great friends from high school who now live in three different parts of the country. If it wasn’t for IM, twitter, email, and skype, we probably would have lost touch over the years. Most of the people I’ve stayed in touch with over the years as I’ve moved around have been relatively tech-savvy, and I’ve reconnected with many others who have recently discovered Facebook, twitter, and other forms of social communication online.

This even works for business relationships. I’m a freelancer, and being on Twitter during the day while I’m working is very similar to working in an office, with people sharing links, asking questions, giving reviews of software or websites, etc. I think once we have a really seamless Twitter for video in a few years, this will be even more valuable.

The Internet breaks down time barriers

The Internet enables asynchronous communications so that people can contact me at any time that’s convenient for them, and I can respond whenever it works best for me. Of course, sending letters in the mail accomplishes the same thing, but now we have the additional benefit of being able to push and pull our communications to and from many people at once, based on a mix of their preferences and our own. One -> many channels like Twitter or Facebook’s News Feed make it dead simple to keep up with a lot of people passively, without needing to take up a lot of their time. It also lets me decide what’s important for me to pay attention to, and filter out a lot of the noise. That filtering isn’t perfect yet, but it’s getting better.

The Internet breaks down effort barriers

I guess this is related to the first two. I have some great friends here in San Francisco, and I love hanging out with them, but everyone is busy, we live in different parts of the city, parking is a pain, etc. The sheer effort required to coordinate a small group of busy professionals to meet at the same time and place is high.

On the other hand, Twitter and Facebook give me effortless insight into people’s daily lives that I wouldn’t get otherwise. I know who hasn’t been feeling well, who’s excited because they got a new puppy, who’s disgruntled about their job, who had a bit too much to drink last night, and so on. And I know all of this without very much effort on anyone’s part.

The Internet offers more communities to belong to

On the Internet, nothing is really a niche. Name pretty much any interest or topic and there’s probably tens of thousands or hundreds of thousands of people online who are interested in that. For example, there’s a thriving forum at christianpipesmokers.com that caters exclusively to pipe smokers who are also Christians. Thousands of people have posted hundreds of thousands of posts on this message board. If you live in Podunk, Iowa and you have an esoteric interest, you might have one or two people in a fifty mile radius who share that interest, but online, you’ve got thousands (or millions). This allows people to learn more about what they’re interested in and go deeper than they otherwise could because they’re sharing knowledge among many more people.

The Internet isn’t perfect, and it’s definitely had some negative effects on society. My attention span is about 8 minutes now, for example. And also, my memory is next to worthless for a lot of facts and trivia, because all I have to know is where to look it up. Google makes that easier every day. But I think that the end result of the Internet will be richer and more meaningful relationships.

When you freelance for awhile, you start to hear the same lines over and over from people trying to hire you. These are some of my favorites, and I’ve learned to just take them with a grain of salt. They’re not always untrue, but they’re cliche enough that I raise my eyebrow a bit when I hear them. Please note that clients are great people with solid ideas and we work together to create things that are special. I’m just poking a bit of fun at potential clients in general. If you can’t handle it, perhaps we wouldn’t be a good fit

“We’ve got a lot more work if you can just do this one at a discount.”
Great. So if I let you take advantage of me now, you’ve got a lot more chances to do it again in the future? Sign me up!

“We’ve gotten a lot of interest from VCs and investors…funding is pretty much a done deal.”
Deals fall through. Funding is hard and rarely happens. This is not to say that it won’t, but it’s a bad reason to take a freelance gig, in my opinion.

“This has never been done.”
It almost certainly has. Probably many times. If it hasn’t, perhaps there’s a very good reason.

“Someone will steal my idea.”
They won’t. Ideas are next to worthless. Execution counts.

“Would you be willing to work for equity only?”
No.

“This shouldn’t be that difficult.”
And yet it is. Weird.

“I’ll get that check in the mail.”

If you have any to add, share them in the comments.

I’m a big fan of the “release early, release often” philosophy, where you break your software into small chunks and release it to market as soon as you can, let people play with it and give you feedback, and iterate from there. The other common option is to build a huge release and push it all out there at once, and then only release changes every so often, and usually very large groups of changes.

I’ve been working on an idea with some friends for a few months now, which I’ll talk more about in a future post. Anyway, one of the constant challenges we face is where exactly to draw the line for our first release. We want to build something simple, but something that’s still useful. It can’t be too simple. As part of the process of deciding where to draw that line, I’ve been doing a lot of research and thinking a lot about other apps and sites and how they’ve dealt with the challenge of where to draw the line of simplicity. I wanted to give what I think is a good example of simple / too simple:

CheckYesOrNo

CheckYesOrNo is a small one-day project that was done by Ben Rasmusen and Gordon Brander, both friends of mine. It started out as a spur of the moment project that they quickly knocked out and put out there, which is awesome. It allows anyone to create a yes or no poll and solicit feedback from others via a URL. That’s it. There’s no registration, login, profiles, etc. Just a very simple concept and a beautiful design. However, once I used the app for a little while, I started to notice a small frustration: a lot of my questions didn’t fit into the “Yes or No” mold. Sometimes I had three alternatives that I wanted to ask people to choose between. Also, sometimes when I answered a poll, I wanted to provide more detail about my answer. And there was no way for me to keep track of the questions I had asked and the results other than keeping a list of URLs somewhere. In short, I felt like the app was just a little too simple for me.

FriendFeedback

Today, Ben released FriendFeedback.com, which is still a very simple poll creator, with three main differences from CheckYesOrNo:

• It allows you to define multiple answers (including yes or no, if you choose)
• It allows those responding to the poll to leave short comments
• It has a dashboard where you can track responses to all your polls

It still features a great design, clear functionality, and a solid user experience, but the usefulness is so much higher to me, just because it’s now just a bit more flexible, but virtually no usability has been sacrificed for the added functionality. It’s a great product and has drawn the line of simplicity quite skillfully.

In fact, I’ve been racking my brain for the last day or two and the only real enhancement I can think of at this point is to allow people to create polls without registering if they so desire. I’m sure other suggestions and improvements will emerge from people’s usage patterns and feedback, but that’s the whole point. When you throw it out there at the right point, it’s useful enough that people will actually use it and tell you what needs to be changed and improved. Any more simplistic and people won’t bother.

How simple is too simple to you?

Over the last couple years, I’ve watched a number of friends have kids and I’ve come to the conclusion that I’m so glad that I’m a guy and don’t have to go through that. Pregnancy and childbirth seem awful, so I’ve been wondering what the alternatives are. Turns out there’s some research that’s been done in the area of artificial uteruses. Of course, such technology is years, maybe even decades away, but imagine if you could have something like this in your living room:

I can see four main reasons that this would be a hugely positive thing:

• Pregnancy is hard on a mother’s body. Childbirth is worse. Skip them both.
• Safer environment for the fetus
• Allows women unable to carry their own child to still have kids
• It’s a lot more convenient and less painful

I think one of the biggest benefits is the last one. Who says that having kids should be a miserable experience? And I’m sure that many women would choose to give birth the “natural” way, just as many women currently choose to forgo the benefits and advances of modern science and medical technology. That doesn’t mean the rest of us should.

To be clear, I wouldn’t be in favor of this if it wasn’t as safe (roughly) or safer than natural gestation. And I think that pod-babies should have the same rights as natural babies, meaning that you shouldn’t be allowed to unplug the thing if you change your mind after a few months. But if the method can be made safe and we can enact the proper ethical and legal policies, then bring on the pod-babies.

Am I crazy? Is this treating humans as commodities? Tell me in the comments.

Note: that’s a picture of the WinePod, in case you’re wondering.