[geeks] Sun Startup Essentials

[gsm at mendelson.com]

On Fri, Jun 12, 2009 at 01:14:08PM -0400, Jonathan J. M. Katz wrote:

>Has anyone signed up for this? What were your benefits from it? I have
>an idea and no cash right now *thinks*

(sent on the list)

No cash is not a problem. The first thing to do is to STFW for the idea.
DO NOT do a patent search and do use several search engines. Be vague,
back when IBM had the only online patent search engine, they data mined
the queries. I'm sure plenty of people searched for ideas only to find six
months later IBM or someone else announced their new product.  

The reason for no patent search is if you find anything close, you have to
disclose it on all applications for patents (provisional and real), any 
applications for money and in any pitch.

If once you get funded and have a real patent search done, if you find anything
you can modify what you are doing to not infringe. For example, there is a 
patent from the early 1990's for placing radio programs and internet streams
on the same tuning dial in on continuous line. 

If you were going to build a combination AM/FM/ radio and web "tuner", getting
seed funding would be difficult if you disclosed that patent, but after you
have the funding, you could easily pay a technologist to come up with
a non infringing alternate. 

Do make sure it really is YOUR idea, I know of someone who spent $150k on 
developing a device, announced it at a show and had their funding pulled
the same day. It turned out that the person who mentioned the idea to the
person who went to the sponsor for funding neglected to mention he had seen
the idea originally when he applied for a job and signed and NDA.

Be aware that software patents exist in the US, but not the EU. If you
expect to patent it be aware that a software idea will come out the day
after you start shipping somewhere in a reverse engineered free software
version. If you can't make a product that competes with that, stop now,
or rething what's hardware (patentable) and what's software.

Make sure there aren't any articles or papers about it. One person I
spoke to the other day was unaware that while the company he bought had
developed and patented the basic concept of their device 12 years ago,
they had not patented how to implement the concept.

In 2000, the then CTO of the company gave a presentation on the
implementation of everything they learned and it was NOT followed by any
patents. So while they could claim patent protection on that one very
narrow device they patented, you could use the technology freely in anything
else as it was in the public domain.

This wasn't a difficult hidden thing to find, I found it when I was first
interested in talking to the guy, who had left the company when it was sold
and I did a web search for him. The paper showed up as the fourth hit.

Then you need to write up your idea. The first writeup is a single
paragraph the describes your idea in a form that people will "get it",
but not so detailed that someone who is really smart and well versed in
the subject will be able to do it, or even worse do it better.

Once you have that you need to write up a single page description of it.

Take the single page description, make a provisional patent application, 
and send it along with $100 to the USPTO. This will give you the ability to
claim for one year "contains/based upon  patent pending technology". It also
gives you priority for a patent if you do file for one. The downside is that
if you really mess up the application, you ignore it and lose your priority,
but if you decide not to persue it, the technology becomes public domain.

Since no one actually reads provisional patent applications, the last thing may
be difficult to prove.

Now shop around for some pre-seed money. You need enough money to buy a 
fax machine, a VoIP line in the state you incorporate and to incoporate.

Make sure to license the technology to the corportation, not give or sell it,
and have an out clause if they just sit on it, try to steal it from you,
or go into stockholder war limbo.

This will run about $1000, but if you have a friend who is a lawyer you can
do it all for about $500.  Nevada is a good state to incorporate, so is
Delaware. A relative of mine in Dover, DE. is a registered agent and has 
well over 100 companies whose headquarters are his office. 

There will be other expenses of the corporation, including filing tax returns,
local registration fees (as a foreign corporation doing business in your
state,county and possibly city) and so on. But in the end it's much cheaper
and safer than either incoporating locally, or trying to raise money without
incorporating.

It also limits your liability in case the corporation fails (75% of all
startups fail in the first year), you run up big bills (always in the
corporation's name, never in yours) and so on.

Once you are incorporated, you set up a web site. You can get the domain
names etc, first, just make sure to identify yourself as a corporation in
formation (check with your lawyer) and not as an individual. 

I did not look at this particilar SUN program, but they have some nice ones
for companies at the seeded stage. As long as you are incorporated, have
4 or more employees, and a web site, they will give you heavily discounted
hardware and lots of free support, with no payment or promise of equity.

I don't think they need one, the reality of the situation is that if you
get set up on SUN equipment with SUN software, you are not going to switch
and they have a customer for life. :-)

Geoff.


-- 
Geoffrey S. Mendelson, Jerusalem, Israel gsm at mendelson.com  N3OWJ/4X1GM