Author Archives: Inc. Staff

Start-ups always need to figure out a legal structure – it’s one of the most common questions asked early on in the formation of any company. For many years this process has been available online from a host of vendors at different price points and levels of service. At this year’s Blog World Expo , I met up with Nellie Akalp, CEO and Founder of CorpNet Incorporation Services to understand how she differentiates her company, and to learn why she returned to this industry. Akalp and her husband Phil were one of the originators of the idea of online incorporation, creating MyCorporation.com in 1997. The company was eventually acquired by Intuit and is now privately held again. Once the Akalps sold in 2005, they focused on raising their family and Nellie tried several other careers – including kickboxing instructor – before returning to the field she helped pioneer (once her non-compete ran out.) “We looked around, and there wasn’t a personal touch or hand holding when companies had questions,” said Akalp. “We heard President Obama talking about the need for more small businesses to start-up, and we created CorpNet in July of 2009.” CorpNet provides business incorporation services and filing services for entrepreneurs and small business owners looking to start a business, regardless of type. “If an owner doesn’t want to take the step to incorporate, we can help them create a fictitious name under which they can do business ,” said Akalp. And once they’re set up, CorpNet attempts to be a one-stop shop, helping owners protect, manage and keep business in compliance with all their legal obligations. Interestingly enough, CorpNet also provides services for the Company Corporation, potentially one of their competitors. “We have a partnership where we offer registered agent services through Company Corporation in all 50 states, and it is free for the first year.” (You can learn more about a registered agent in Inc’s Articles of Incorporation or Creating an LLC pages.) CorpNet also provides another useful service for free – a name check. If you want to call your start-up “Joe’s Deli” they can search your state’s database and tell you if other entities have already claimed that name, or reserve it for you. A full trademark search is $199. Additionally, CorpNet will help educate new business owners about this and other services, via phone, free. For example, CorpNet will talk you through the benefits of incorporation, the ins and outs of where and why to incorporate – but Akalp notes that for specific legal advice you must consult an attorney. This 10-employee start-up is located in California, and is bootstrapped and growing organically. I asked Nellie what her biggest start-up mistake was, and she told me “Spending lots of money on marketing without having a clear plan of action or clear business goals. When starting a business as a second time around I learned you can’t pay to play. You can’t just buy ads and expect business, and you can’t just put a site up and wait. You have to network, engage with people and get out there.” After spending almost $250K on advertising, Akalp changed marketing models, reaching out via social networking, engaging with clients on Facebook, Twitter, blogging, and sharing content. Since then, she reports, the company has taken a really positive turn. Doing your research about your corporate structure and legal needs is important, and CorpNet may be one place to learn, in addition to your own legal counsel. Where did you get effective advice about your company’s structure? Let us know in the comments below. Quick side note: I’ve been named to the board of advisers at the South by SouthWest (SXSW) Accelerator program for tech start-ups. If you have a new tech start-up and are looking for visibility read more . Continue reading →

FlyLow Gear Co-Founders: Dan Abrams, 33; and Greg Steen, 32 Location: Denver Employees: Six full time; about six part time, plus three owner-operators Funding: $38,000, borrowed on credit cards 2009 Revenue: $375,000 Start-Up Year: 2004 Breakeven: Winter 2004–05 Insider Insight: Sell to yourself. Abrams was at the heart of the changing ski scene, so he understood the trendsetters to whom he would be selling. Blind Spot: At first, it was hard to get manufacturers to fill small and out-of-the-ordinary orders. He learned to sell them on his company’s future: “I’d say, ‘FlyLow is going to be the next North Face.’ ” The first few rips didn’t bother Dan Abrams. In fact, the flaws in his backcountry skiwear could feel downright rewarding: the sound of a crotch seam tearing while taking that final step atop an 11,000-foot peak; the worn out Cordura knees that proved how hard he was lunging back down the mountain. After all, beat-up gear is a badge of honor for so-called soul skiers like Abrams, athletes who venture into the backcountry to hike up and ski down unpatrolled, ungroomed powder. “My friends and I were living in Jackson, Wyoming, after college, and we spent so much time in the backcountry that we were literally tearing apart our pants and jackets every few weeks or months,” says the 33-year-old. “Fortunately, the manufacturers who made that stuff were good about honoring their warranties, so we could always send our gear in for repair or replacements.” But if no one was making stuff that he was totally happy with, Abrams wondered, “why not just make it myself?” That was in 2001, the same year that Abrams ripped something else: the meniscus cartilage in his knee. The injury turned out to be a blessing. Laid up after surgery, Abrams, then in his mid-20s, made two life-changing decisions. First, he enrolled in business school at the University of Denver. Second, he decided to bolster his education by starting his own line of backcountry ski apparel, with the partnership of soul-skier pal Greg Steen. Naming the business was easy. “A friend once told us, ‘You guys don’t ski fast; you fly low.’ ” Done. Abrams, who had been bartending by night to pay rent at his mother’s house while in grad school, sank a few grand from his tip jar into an order of FlyLow T-shirts in the winter of 2003–04. “We sold — and gave away — shirts and stickers in ski-area parking lots all over Colorado,” says Abrams. “It was an easy way to test our logo and brand and get our name circulating throughout the skiing community.” As luck would have it, that community was entering a long-awaited growth spurt. Thanks to the advent of wide skis and alpine touring gear (bindings and boots that allow you to cross-country ski to the top of a mountain and then ski down), more skiers were hitting the backcountry. Resorts were letting skiers ski out of bounds at their own peril. Suddenly, the ski industry, which had been in decline, was on its way to the $4.5 billion mark. In the winter of 2004–05, using several credit cards, Abrams spent $38,000 on his first real order, from New Zealand and China: 1,000 jackets and 200 pairs of pants, all stitched and layered (sometimes triple-layered) for durability. He also equipped the pants with side zippers for ventilation, so skiers could stay cool when slogging up slopes for hours at a time. “Backcountry skiers are very particular about gear,” says Abrams. “And people appreciated that we were a small company making improvements so they could enjoy the sport even more.” FlyLow sold its entire first production run. Debt settled, Abrams pulled out his credit cards again, applied for a few others, and put in another order. The result was $180,000 in sales. Revenue climbed to $280,000 in 2007–08, $375,000 in 2008–09, and $500,000 in 2009–10. FlyLow now offers a full line of pants, jackets, and gloves that are available in 125 retail stores, and expects to break $1 million in revenue by the end of the 2010–11 season — not bad for a couple of guys who ski a combined 200 days a year. Ski – Dan Abrams – University of Denver – North Face – Backcountry skiing Continue reading →

PicPocket Books Founder: Lynette Mattke, 41 Location: Silver Spring, Maryland Employees: Two interns Funding: $30,000, from Mattke and two silent partners 2009 Revenue: $7,500 Start-Up Year: 2009 Breakeven: January 2010 Insider Insight: Mattke saw that her kids loved the iPhone’s touchscreen and that no one had built apps out of quality kids’ books. Blind Spot: It’s hard to generate profits selling books-as-apps for $1 to $3, even if you keep costs low. At established publishing houses, sifting through unsolicited manuscripts — the slush pile, as they are collectively, and derisively, known — for children’s books is the work of young editorial assistants hoping to get their big break by spotting the next J.K. Rowling. Lynette Mattke, founder and publisher of PicPocket Books, is happy to do the job herself. After all, her company didn’t exist two years ago. And though she studied literature in college and has a passion for children’s books, Mattke had never been involved in publishing. So reviewing manuscripts remains a thrill — as does her success at bringing them to market: In the past year, Mattke has put out 40 children’s book titles, to critical acclaim and modest commercial success. Mattke’s literary career is built partly on a technological innovation. She publishes children’s books in the form of iPhone apps. In early 2009, Mattke’s husband got an iPod Touch and started using some of the inexpensive software programs, or apps, available for download at the online App Store. (Apple says more than five billion such apps were downloaded in the past two years.) Mattke, for her part, noticed a striking lack of high-quality children’s books among the offerings. The stay-at-home mom had been thinking about what to do, given that her three kids, 16, 13, and 10, were getting older. So she set out to fill the void. Having little technological experience, Mattke found a part-time software developer — a family friend with a full-time job — to build a publishing platform to her specs. Then she approached some children’s book publishers and offered, for free, to turn some of their books into apps. A few saw that they had little to lose and agreed to share the revenue of any app sales. Mattke signed her first contract with a publisher in spring 2009; she found a team of graphic designers in Seattle to execute the transfer from paper to digital form and figured out how to navigate iTunes Connect, the Apple portal that outside developers use to upload and manage their apps. In July 2009, just a few months after getting to work, Mattke released her first app. Soon, unsolicited manuscripts began to find her, which meant she could publish original titles in addition to app versions of previously published books. She added another graphic-design team, this one in India, and by spring 2010, she had 30 titles for sale in the App Store and 10 more in the works. So far, her most successful is Monster Trucks, a board-book-format title by Robert Gould aimed at the “preliterate-male” audience, a.k.a. little boys. Mattke is particularly proud of Round Is a Mooncake, by Roseanne Thong, which is illustrated by Grace Lin, winner of a 2010 Newbery Honor. Reviews for PicPocket’s titles have been solid, including good mentions in Publishers Weekly and USA Today. Most marketing efforts, however, have taken the form of blog posts and networking, especially through Moms With Apps, a 130-member support network for entrepreneurs like Mattke, who co-founded the group. These days, sales range from 50 to 100 downloads per day, at prices from 99 cents to $2.99 each. Mattke splits revenue with the publishers and authors — and, of course, with Apple, which gets 30 percent. Revenue runs from $2,000 to $6,000 a month. That covers costs and the production of new titles but doesn’t yet allow Mattke to draw a salary. Adding more titles may change that, but Mattke has other strategies as well. Most notable, because so many traditional publishers are asking her to put their books on her app platform, she has started charging a modest fee to do so. Meanwhile, Mattke searches her slush pile for promising but unknown authors to champion. iPhone – Apple – Publishing – iPod Touch – App Store Continue reading →