So if you’re a non-technical person with an idea for a tech startup and you need to find a cofounder, how do you do it? The first step is to stop thinking about what you can offer them to join your startup, and start thinking about what you can offer them, period.

If you’re starting a web company and you can’t code, there are a few things you can bring to the table, including:

• experience managing a successful startup
• sales and marketing experience, especially in a startup environment
• valuable connections, especially in a startup environment
• money

If you have the first three, you’re probably not going to have a tough time finding developers willing to work with you, so you probably won’t be reading this post. And if you had the fourth one, you could just hire developers, so what’s left? I’ll tell you what’s not left: your idea. The reality is that the only thing the vast majority of non-technical founders can really offer is the ability to hustle and work their ass off to support the development effort. And that’s not something most of them want to hear or want to do.

My advice: if you’re looking for a skilled developer for a software startup, consider them an equal founder and split the pie accordingly. And then work 10x as hard as them to make up for the fact that they’re probably better off without you than you are without them.

Or maybe this is just the arrogant developer in me? Feel free to post counter-examples where non-technical founders didn’t bring any of the above 4 things to the table and the startup was a success.

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That was two years ago, and HN has quite literally changed my life. It’s by far the best community I’ve ever been a part of online, and perhaps one of the best offline as well. I’ve learned a ton, gotten involved in other ventures that I wouldn’t have otherwise, and made lots of very valuable connections. There’s a lot to say, but here’s the gist of what makes HN so awesome:

Less sizzle, more steak

HN is inherently different from Reddit (a YC company, btw) and Digg, for a few reasons. I think the association with PG / YC has helped tremendously, but there’s also the fact that it’s not a democracy. PG and the YC alumni have the power to kill stories and comments, or change their titles, and I think this has a tremendous effect on keeping the right kinds of people interested in the site, and also shaping the behavior of those who stick around. Tech community sites always seem to be a victim of their success, and as the community grows and becomes more diverse, the only content that reaches the top is that which appeals to the lowest common denominator. So after the site gets a more mass-market audience, you start to see lots of flamebait, top 10 lists, funny videos, etc. It’s designed to appeal to our baser instincts, and it usually works. By contrast, HN discourages any kind of hyperbole, top 10 anything, linkbait, etc. Titles are encouraged to be short, descriptive, and simple. And often if they aren’t, an editor changes or kills them. Submitted stories that link to blogspam instead of the original article are often changed to point to the richer source. The end result is an incredibly high signal-to-noise ratio. I often find that almost every single story on the front-page is an in-depth and thought-provoking piece on a deep and intellectually engaging subject. Where else can you find that?

Deep intellectual curiosity

HN definitely skews more to the subjects of technology and startups, but you can find good articles and commentary on almost any intellectually-engaging subject (and if you can’t, you should submit some). As an example, some of the top articles from the last week or so include this piece from Gourmet magazine on bribing your way into exclusive restaurants, an article about how to fail a Ph.D., an article about how India’s “red rain” may contain life from elsewhere in the galaxy, and a report about marginal tax rates at different socioeconomic levels. And all of these stories have amazing commentary by the HN users, which brings me to my next point:

Rich conversations

The comments on HN are incredible. Mind-blowingly so. Maybe I’m stupid and other users aren’t impressed, but hanging out on HN is like sitting in a room with a group of thousands of super-smart folks with incredibly diverse life experiences and deep domain expertise across a huge variety of topics. And all you do all day is bring up interesting topics and really explore them in detail, listening to the folks with the most experience in each topic, asking questions, etc. I love all the articles on HN, but I’d estimate that 2/3rds of the value I derive from HN is in the comments, not the articles. And why are the comments so incredible? Glad you asked:

Amazingly accomplished members

I doubt anyone tracks the stats, but it sometimes seems like 50% of the rockstars in the tech world are on HN, from founders and CEOs to investors. It’s not uncommon to see a news story about a technology company and then see the CEO or founder on HN telling folks what’s really going on.

And on top of that, you’ve got the real stars, the folks slugging it out in the trenches of small, medium, and large companies all over the world. Some of these folks are much, much smarter than their humility would lead you to believe. When I see stories on patent or startup law, I wait for grellas to show up and tell us what’s really going on. If security issues are up for discussion, I know that I’ll learn something when tptacek posts. And then there are the folks who have such an intelligent and unique voice that you can tell who the comment is before you see their username (patio11 and edw519, to name two).

Incredibly supportive and helpful community

Multiple times per day, people post links to their new startup or project and ask for advice or feedback and the community always responds. I can tell you from experience that you can expect: a) encouragement for launching something (this is huge), b) positive feedback on the stuff you’re doing right, and c) someone kicking your ass for the areas you’re falling short. It’s a humbling experience to have people who have started, built, and sold startups for tens of millions going through your baby startup project, but it’s a great way to turbocharge your growth.

Additionally, the HN community is always ready to offer advice. Not sure if you should take that promising job with a startup or go back to grad school? Want to know who’s hiring? Want to meet like-minded people in Toronto, Tokyo, or Timbuktu? Need a cofounder to apply to YC with? These are the types of questions that get answered on HN every day, and it creates a vibe that’s hard to find elsewhere. People email you back if you reach out to them, and it’s not uncommon to get emails from other HN folks about a post submitted or a good comment.

OK, enough fawning. In spite of all the awesome-sauce, there are some things I don’t like:

Huge time-sink

This is one of those negative things that’s the result of something positive, but the consequences are definitely negative. I can easily burn up a couple hours a day on HN. That’s almost without trying. I head there when I’m bored, when I hit a hard problem, or when I’m standing in line at the grocery store. I’ve learned an incredible amount over the last couple years, so I wouldn’t say it’s a waste of time, but it’s easy to spend too much time here, instead of applying what you’ve learned.

Can tend towards group-think

There’s definitely a variety of opinions on most topics, and watching several very smart people skillfully debate all sides of a complex issue is a rare treat. That said, there are a number of positions that aren’t well-received. Some of them are related to typically controversial topics like politics and religion, so the community tends to avoid those subjects altogether. But there are other examples as well. For example:

A bit elitist, especially about programming vs. business

For whatever reason, hackers seem to really look down on business folks, portraying them as empty, vapid suits and no skills other than schmoozing their way into a top MBA program. Speaking as a developer who served as a product manager at a large company, there’s definitely a cultural divide from the other side as well, and business people don’t always give tech people the respect they deserve either. On HN, you see this kind of attitude being displayed all over the place, sometimes explicitly, but often more subtle. You can almost guarantee that any post about a disagreement between management and the tech guys will result in the community posting support for the tech folks. And the hackers almost always minimize the contributions of the business folks to a venture. The really ironic thing is that the majority of the startups and projects created by the HN crowd will fail, not for lack of technical excellence, but because they don’t understand the fundamentals of sales and marketing.

However, in spite of these caveats, I deeply value the time I’ve spent interacting on HN, the amazing stories I’ve heard, the connections I’ve made, and the lessons I’ve learned through the experience of others. If you’re into tech, business, startups, or anything that might appeal to a group of independent, logical, curious, and incredibly smart folks, please do check out HN. Just be sure you read the guidelines first.

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At any rate, I found The New Elite last year but hadn’t had a chance to read it until now. It’s an easy read that can be done in a weekend or so, but it explores with some really interesting topics. The authors are consultants from the marketing and branding industries who decided to mount a comprehensive effort to study the truly wealthy. They conducted several studies and used two different definitions of wealthy for the book: $5 million in liquid assets (not including primary residence, collections, or any nonliquid business ownership interests), and/or $500k in disposable income. These criteria put these households in the top 0.5% of those in the US, and there are 750,000 such households.

These were my favorite observations from the book:

Start your own company

If you want to build wealth in America, you pretty much have to start a company. Start it on the side in your living room or garage, but start something. The vast majority of the wealthy families covered in this book made their money initially through entrepreneurship.

Money attracts more money

The amount of time that a person has been wealthy is a strong predictor of how wealthy they are. The authors split the respondents into three groups: apprentices (wealthy for 5 years or less), journeymen (wealthy for 6 – 14 years), and masters (wealthy for 15 years or more). The three groups exhibit different psychological and behavioral patterns, which is to be expected, but what’s interesting to me is that you can see the effects of the “gravitational pull” of money. The apprentices had an average net worth of less than $10 million, while the masters average net worth was more than $75 million. Income also more than tripled from apprentices to masters, going from $1 million annually to $3.3 million annually. The implications are clear: the hardest part of getting super-rich is cracking into the bottom tier of the wealthy and then waiting.

Difficulty of studying the wealthy

Probably the most interesting thing in the book was something I had never stopped to think about: it’s really hard to study the wealthy. The rich and famous we see on TV aren’t representative of the wealthy households of this country. The vast majority of wealthy households fly under the radar, are private, and aren’t motivated by the small stipends that market research companies give out for filling out surveys and participating in studies. The authors detail how they went about overcoming this hurdle, but they pointed out that because of the difficulty of reaching the wealthy, very few studies cover households with income in excess of $250k / yr, which is considered affluent, but not wealthy. Coupled with the images the media shows of celebrities misbehaving, we end up with a very skewed perception of the wealthy and how they live. This inability to properly survey the wealthy has other consequences as well. For example, researchers have conducted numerous studies that show that once your basic needs are met, having more money does not make you happier. However, the majority of these studies had essentially no participants above $250k / yr. The authors of the book asked their wealthy participants this question and more than 95% responded that they were very happy in life, a statistically-significant amount above the national average. Now, the issue of cause or effect can wait for another day, but it’s interesting to think about other areas in which our inability to even connect with this demographic limits our understanding of wealth.

If you enjoy reading about wealth or you work in an industry that caters to the wealthy, I recommend this book.

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1. Magento is much better than most of the alternatives.

The popular PHP open-source competitors are OSCommerce, ZenCart, QuickCart, and X-Cart. There are others, but these are the ones I see most often. I haven’t used QuickCart and X-Cart much, but I’ve worked on multiple sites with the first two, and they’re all universally terrible. It’s hard for me to imagine a piece of software more poorly designed than OSCommerce is. There are no “modules”: plugins are “installed” by following directions in a text file to hack the application core. Stuff like: “open cart.php, find line 37, which should look something like this, and paste this in after it.” This means that after you install a few plugins, you can never upgrade the core, and you’ll have more and more issues installing future plugins, because the core code won’t look like those text instructions expect it to. Truly awful. If you designed OSCommerce, you should be ashamed of yourself.

By contrast, Magento is pretty clean, follows a standard, uses object-oriented design patterns, and is completely modular.

2. Magento still is pretty terrible.

The main issue I have with Magento is the documentation. Specifically, that there isn’t any. It’s an incredibly powerful ecommerce platform, built around an extensible architecture that developers can extend, and the docs would all fit on a few sheets of paper. It’s very, very frustrating, and even more so because the business model of the company who produced Magento apparently is to sell subscriptions to the “Enterprise Edition” at $12,000 a year, so they have little incentive to create good docs to help developers avoid the need for their expensive services.

3. If you can, use Shopify.

Ecommerce is a fairly complicated area and the software generally reflects that. So if you can avoid reinventing the wheel, you should. You can do this via using open source platforms like Magento, but you’ll still spend a pretty penny on design and development talent. Another way to go if you need something a little less flexible are hosted ecommerce offerings like Yahoo Stores or Shopify. From what I’ve seen of Shopify, they offer an incredible value for people just getting started in ecommerce (and even some pretty big stores) for a very reasonable price. And you still have the option of customizing things to a great degree. However, there will be those times when you just need more control than hosted solutions offer. And when those times come, I can honestly say that Magento is a great solution. Just be prepared to pull your hair out for a few weeks (or months) while you learn your way around.

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So if you’re about to go to college or you’re in college and you’re thinking that maybe you should skip it because so many other successful folks did, take a second look. If you don’t have that something that pretty much forces you to drop out, I wouldn’t do it. If you feel like you’re torn and you’re not sure what to do, don’t quit. You should only quit if you literally just can’t keep going because you’ve started something on the side and it’s blowing up so fast that you can’t keep your head above water. And even then, you should try and leave the doors open to return in a year or two if things don’t work out.

Oh, and if you’re entrepreneurially-inclined, do seriously consider starting something in college. You probably will never have as easy a launching pad and such a plethora of potential co-founders. It could go nowhere (but you’ll learn something), it could pay for books and beers, or it could be the start of the story you’ll tell someday about how you dropped out of Harvard to run your fledgling company that’s now worth billions. You really have very little to lose.

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Dreaming with your mind alone gets you nowhere. Today is my 28th birthday, and for too many of those years, I’ve lived in a fantasy-land, dreaming of what I’ll do Someday. I make a lot of plans. I consider myself a person of great passion and vision. But after 28 years, that hasn’t taken me nearly as far as I thought it would. If you had asked me at 18 where I would be at 28, I would have probably been outwardly modest, but I thought I’d be running the world by now. So what happened? Somewhere along the way, I got really caught up in the idea of accomplishment. It become more about the end goal, the destination. I lost sight of the importance of the journey, of living well, of being a good man, a good husband. I thought those were byproducts of the destination, just more accomplishments along the way. But I’m starting to realize that they’re really the whole point. That life is more about the inputs, the journey, and who you are than it is about what you accomplish. And it’s really difficult to change who you are from inside your comfort zone.

Birthdays are usually full of angst for me. But this birthday has been different, somehow. It’s been a really good year so far. There have been disappointments and setbacks, but something is different. If I had to put my finger on just one thing, I’d say that I feel better about who I am than I ever have. I’m proud of my dreams for the future. But mostly, I’m proud of the fact that my dreams have escaped the prison of my mind, that I’m risking something, that I’m working harder than ever on building a foundation of character and discipline.

Aristotle said: “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” I’d put the emphasis in that quote on the word “do”. You can’t reach for the stars with your mind. You can’t play it safe and hope that someday things will magically change. Ultimately, you have to step out, take risks, do the work, do something.

So don’t stop dreaming. Dream, and dream big, but dream with your hands.

Note: the title of this post comes from a similar phrase in this recent Corvette ad . I was surprised when I googled it and found absolutely no results, as I think it’s a perfect and succinct way of expressing a complex thought.

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The article makes the really good point that you should be in the startup game primarily for the love of what you’re doing, not the money. But this is true for almost any endeavor, because the reality of almost anything where you can get rich is that it’s definitely not a sure thing. So if you’re going to spend years of your life slaving away at something without a good chance of a big payoff at the end, you better be enjoying the journey itself or you might get to the end of your life and find that you wasted it on something you hated for nothing.

I can’t deny that the math of the piece is solid, but I really do question the assumption that you should take that money that you made creating value by running a business and invest it in the stock market, where you have zero input or control over the outcome. There are lots of other paths you can take, but I’ll focus on the one that I know best: multifamily real estate.

I know, I know: real estate is such a risky proposition right now! Am I crazy?!? Let me run through the numbers with you, and you can tell me.

Let’s take our hypothetical entrepreneur who just cashed out for $4.3mm and see if we can retire her within a year or two. And to be more conservative, let’s just use $1.3mm of the money for real estate. She can put the rest in stocks, bonds, or Uncle Morgan’s ice cream truck business.

Our goal is to purchase a nice, class B apartment complex in a good market with solid fundamentals. For the sake of this example, let’s use the Dallas market. I jumped on LoopNet.com for a few minutes to look for good prospects, which is also conservative, as the best deals don’t ever make it to LoopNet. You’d be better off retaining an experienced multifamily broker in the market, but this will suit our purposes for now. We’re going to take our $1.3mm and put a 20% down payment on an apartment complex, obtaining financing for the remaining 80%, either through a traditional bank loan, seller financing, or some combination. This will give us the ability to purchase a property valued at around $6.5mm. Let’s be conservative and limit to $6mm, so we can keep some cash in reserves and pay for any deferred maintenance on the property. So a perusal of LoopNet turns up this potential investment:

Asking price is $5.5mm, it looks like a solid class B place, it’s got 151 units, mostly 1 bedrooms, it’s 80% occupied (more on this in a bit), and it was built in 1985, so hopefully it’s not falling apart yet. The effective gross income on the property is $920k / year. Now, obviously this would require a LOT more due diligence, but this is one of several properties like this that I found with a few minutes of searching in one market in the US, so it’s not terribly unlikely to find a similar deal even if the numbers didn’t pan out on this one.

Operating expenses on properties like this vary, but 50% of the gross income is a good rule of thumb. The listing for this property says $500k, so that’s about right. Let’s use $500k as the number for the operating expenses, which includes maintenance, taxes, insurance, management, etc, basically everything except for debt service.

So our hypothetical entrepreneur does her due diligence and decides to buy the property. Let’s assume that she pays the asking price, puts down her $1.2mm (holding $100k in reserve) and gets a 6% loan for the remaining $4.3mm. With a 30 year amortization, that’s an annual debt service of about $310k. Her net pre-tax cashflow is therefore $920k – $500k – $310k = $110k / yr. This represents a cash-on-cash return of just over 9%. So not quite $200k / yr, but we’ve also only invested about 1/4th of our total cash to get that annual cashflow. And there are some other big benefits here as well:

First, our entrepreneur is in control, unlike the stock market. If things change with her property, she can be proactive and adjust her strategy, having a direct impact on the management of the asset.

Second, there are other potential sources of return beyond just the annual cashflow. She’s amortizing the loan every year, building up equity in the property. And there may be appreciation as well, though you don’t want to count on this. Still, it’s a nice bonus if it happens.

Third, real estate is a natural hedge against inflation. The rents can be raised annually to keep pace with inflation. (Bonus: your mortgage payments do not increase annually.)

Fourth, this particular property may offer some attractive options for adding value. The occupancy rate of 80% could be improved, for example. Improving the condition of the property, putting in new management, cutting expenses where possible, raising rents, and getting the property leased up to 95% could easily double the pre-tax cashflow on the property, and seriously increase the overall value.

Finally, we should take tax benefits into account. You’re allowed to write off a portion of the value of the property (excluding the value of the land) each year as depreciation. And thanks to this write-off, it’s very likely that this property would show a paper loss for the first few years, which means our intrepid entrepreneur would pay zero income taxes on that cashflow. Zip, zilch, nada. No federal income tax, no state income tax, no FICA, nothing.

Is this an easy or risk-free investment? No, it’s really not. You’ll need to learn a lot about real estate before you head down this road. Buying an apartment complex like this is buying a business, and you should treat it accordingly. But you should also learn a lot about the stock market before you head down that road. If you turn your money over to some wealth manager and have no idea what they’re doing with it, you’re putting yourself in a bad position. And it’s definitely true that real estate is a lot more work than just pulling up etrade.com and buying some shares. But then, that’s the difference between growing your net worth from $4m to $400m, or running out of money at 50. In the end, which approach is really riskier?

Update: if I could recommend just one book on the type of investing I’m describing above, it would be this one: The Complete Guide to Buying and Selling Apartment Buildings

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For American Apparel, while I admire their quixotic approach to business, this latest turn of events has reminded me that the road to hell is paved with bad intentions. You can set out to do the right thing for everyone involved, but without a dose of reality, you’re likely to only make things worse. Is it really going to be better for all those thousands of American Apparel employees who were making a “living wage” to be unemployed? I’m not trying to make the point that you shouldn’t take care of your employees. You absolutely should. But you also have a responsibility to keep the business solvent, because a business going under ultimately does a lot of harm to the employees and other stakeholders.

In spite of the news yesterday, I remain something of an idealist myself, and look forward to creating businesses that create long-term sustainable value for their customers, employees, and investors.

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3. Why not?

Style

CodeIgniter is a pretty loose MVC framework. It’s not quite just a collection of libraries, but it doesn’t have the strict adherence to the MVC pattern that CakePHP does. In general, CI will let you break the rules pretty easily, while CakePHP makes it harder. The end result in my experience is that I see a lot more poorly architected code written in CI than in CakePHP. CI just makes it too tempting to be sloppy and cut corners, but ends up costing you more in the long run. On the other hand, learning and using CakePHP won’t automatically make you a good developer, just like using CI won’t make you a bad developer. In fact, if you’re a great developer, CI might be a good choice because you have the experience to know what rules to break. However, if you’re reading this comparison right now, you might not quite be there yet.

Winner: CakePHP

Ease of Use

CodeIgniter doesn’t do as much of the magic for you behind the scenes like CakePHP does. For those new to MVC or even new to programming, this can be comforting, because you know what to expect. However, once you learn the CakePHP way of doing things, you can fly through projects. And when the automagic way of doing things isn’t working, you can always override it and do it your own way. This is what makes rapid development so fun in CakePHP: you can build your prototype or version 1 using the built-in automagic dust that CakePHP provides, and then swap out what you need to later as your project matures.

Winner: CakePHP

Performance

CakePHP is slow. Not super-dog-slow, but it’s quite a bit slower than CI. This is a big concern for some folks, and if you’re one of them, then you should weigh this more heavily. I almost never worry about this, for several reasons. First, a lot of that slowness won’t be the bottleneck in your application. Your database is far more likely to be the bottleneck than your application is. And you can do a lot with some simple caching and scaling methods to speed up your app.

But more importantly, hardware is pretty cheap. Developers, on the other hand, are not. In my opinion, if you’re building something that you’re not 100% sure will experience heavy load, don’t pre-optimize. Get it out there ASAP and let people start pounding on it. You can always throw more hardware at the problem if it’s a success. That’s not to say you should ignore scalability completely or ignore best practices in performance, but I wouldn’t make it your primary focus.

Winner: CodeIgniter

Documentation and Community

Eighteen months ago, I would have easily given the edge here to CI, but the CakePHP community has matured a lot over the last year or two, and the documentation situation has improved drastically. Today, my assessment is that both communities are very strong, with lots of good folks in both camps writing documentation, plugins, modules, and other enhancements to their frameworks. You’ll find great people no matter which path you choose.

Winner: Tie

Conclusion

As I admitted at the beginning of this comparison, I’m biased in favor of CakePHP. It’s true that you do give up some advantages in speed, and you’re also forced to adhere more to the MVC pattern than you might be comfortable with, but in my experience, CakePHP lets developers write cleaner code and do it faster than they would if they were using CodeIgniter. You might pay a small hit in performance, but hardware is usually cheaper than developers. Regardless of which you choose, just pick one and build something awesome.

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This week is my three year anniversary of quitting my last job. It’s been a rough and interesting ride, and I constantly find myself feeling like maybe now I’m just starting to get it. Hopefully I’ll keep learning and growing and I’ll look back at this blog post in a few years and chuckle at how little I knew. That’s ok, as long as I’m learning, growing, and having fun.

Anyway, I don’t want to get too sappy, just wanted to say thank you to all of those out there who have had the courage and imagination to take that leap of faith and fly solo. You’re making the world a better place and you inspire and challenge me every day.

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