Matt Inouye

Learn from Noah Kagan and AppSumo

I’m always impressed by the willingness of entrepreneurs to candidly share learnings, failures, and experiences. Andrew Warner does a fantastic job of showcasing this at Mixergy (I’ve personally listened to hours of interviews there). Although everyone provides new insights, it’s exciting to hear the same lessons/learnings repeated over and over—either many people are on to something, or they’re all running over a cliff together (I like to think the former).

A friend forwarded me an interview with Noah Kagan (of AppSumo/Mint/FB fame) onFounderly and I was able to take away a ton from it. The most profound thing that I’ve heard Noah say in multiple interviews is marketing needs to be done in parallel to any development work (i.e. it’s not build then market, it’s market and build). You can look at his track record for ample evidence that he understands that principle. In the interview, he covers the origins of his current business, how he works with others, and things he’s learned along the way.

I’m still trying to work out the best way to aggregate my learnings from interviews so posting this on my blog is an experiment. If it helps me (and perhaps others), I’ll post more. I’ve embedded the videos below with my key takeaways:

PART 1

2:58 - App/game developers are desperately looking for customers
3:40 - Never start an “opportunity” business
4:20 - Outsourced protoptype for $60
7:10 - Communicate more often
8:39 - “You don’t need to build anything to validate a business idea”
8:48 - “It’s much easier to convince a partner/cofounder when you have momentum”
8:58 - “I’ve got this idea—build it for ME!”—no one wants to be an implementor of your ideas
9:50 - Yelp like directory for software—why didn’t that work?
10:50 - Imgur and Reddit deal—-great example of seeing an opportunity

PART 2

0:19 - Metrics need to be simple!
2:40 - Strategy vs. tactics
2:50 - Think about the process
3:30 - Setting up systems to improve business (reminds me of ‘The EMyth Revisited”)
4:58 - “I’m am the best at making things happen” - execution
6:23 - “Strategy is better than tactics”
7:38 - Marketing needs to be built in parallel; you don’t need to build, don’t waste time
9:10 - AppSumo wants to be the Amazon for professional tools.

Original Interview:

http://www.founderly.com/2011/08/noah-kagan-appsumo-1-of-2/
http://www.founderly.com/2011/08/noah-kagan-appsumo-2-of-2/

How to have personality: Lessons from Trader Joe’s 1.4 million price tags

Trader Joe’s knows marketing. They don’t want you to know this however. Their displays, signage, and advertising (including their kitschy “Fearless Flyer” newsletter) all convey the message that Trader Joe’s is just like the simple grocery store of yesteryear—healthy food, friendly staff, and a store that has a personality.

Nothing demonstrates this better than the beautifully hand-drawn price tags that adorn every product display in the store. That’s right folks—in this era of nearly ubiquitous digitization, Trader Joe’s hand-draws every single price-tag. Keep in mind it’s not just numbers and text, but often artistic elements, depictions of food, and other designs. They are amazing.

Based on some numbers sourced by Fortune Magazine, there are roughly 4000 SKU’s (stock keeping units) in a typical Trader Joe’s store. As of April 2011, there were 355 Trader Joe’s locations across the US. That means that there are over 1.4 million hand-drawn price tags—price tags that will change and need to be recreated based on season, promotion, and price fluctuations.

Who makes them?

According to an employee I spoke with at a San Francisco location, there are 4-5 artists on staff for that given store, who work full-time on producing artwork. I had a friend ask for a job application, and the manager said they were on the lookout for artists that do good, fast work. Wait. Trader Joe’s is actively looking for artists? Isn’t the job of creating in-store art best left to a graphic designer at TJ’s headquarters?

Why hire artists?

One of the key elements of any Trader Joe’s location is it’s strong ties to the local community, which furthers it’s ‘small-town grocery’ feel. Artists are able to incorporate depictions of local geography, places of interest, and subtleties that an employee in Monrovia, California (Trader Joe’s HQ), would have never heard of.

Having a personality is part of the plan

Trader Joe’s is a Fortune 500 giant. They generated sales in excess of 8 billion dollars in 2009. However, you don’t get that feeling inside a store. The illusion is a cleverly orchestrated masterpiece. I don’t say this as a critique of their model, because I am a loyal customer that eats up every bit of their marketing. They could clearly afford to follow every other major grocery chain, but their decision to hire local artists is an expensive, conscious, and brilliantly astute one.

Now back to you: Does your company have a pulse?

If a company with 5500 employees can feel human, then your startup of 10 or 5 or maybe just 1 person needs to feel human too. I don’t think that customers necessarily want to find new friends through the businesses they work with or shop at, but they certainly want to make sure they see signs of life. If you want some more examples of online companies that do this well, here’s a brief list:

Zappos - a joke of the day over the phone. Just call (800) 927-7671 and follow the prompts.
Woot - pretty much any writing they do is the best. For a stellar example see Woot Minions.
Groupon - before they did Super Bowl commercials, they did this.

Any more suggestions? Post a comment or send me an email.

AvantLink Stats Chrome Extension

AvantLink is an Affiliate Marketing network—think an intermediary between merchants who want to have an affiliate program and publishers who want to make money off of their content. If you need some more context about affiliate marketing, this video may provide some further clarification. As a long-time affiliate on the AvantLink network (i.e. somehow who makes affiliate commissions through merchants working with AvantLink), I’ve grown religious in checking my stats. Thanks to an Android app, I can see my daily commissions whenever I have 10 seconds to pull out my phone.

While AvantLink has made some cool tools for Firefox users, I primarily use Google Chrome, and there wasn’t anything to allow me to get my stats fix while I was on my laptop (other than actually disrupting my workflow to login to the AvantLink site). I spend a night whipping up a Chrome extension and figured that since I got some good use out of it, I might as well improve it to the point that others can use it too.

FEATURES

Here’s a basic rundown of what it does:

Your daily sales are overlaid on the extension icon
The daily sales icon-overlay updates every 15 minutes
You can view all the stats you can view with the AvantLink mobile app simply by clicking on the extension icon.

INSTALLATION

You can install the extension by visiting the following crazy URL:

https://chrome.google.com/extensions/detail/hkbnfcfgobgepemjabhnfkhnllnphodc

You’ll need to enter your Affiliate ID and API Authorization Key to configure the extension, but both are stored securely on your local machine and are never logged externally. Also keep in mind the that AffiliateReport API module (which the extension uses) has a limit of 1000 calls per day. If you get a little click happy, you may find your access temporarily disabled (I’ve spent a while debugging the extension—read clicking many times—and haven’t yet run into an issue).

If you find this useful, or have any feature requests, please let me know and I’ll try and add them in a new release.

San Francisco’s Tsunami Risks: The Facts

Due to several sensational news articles in recent days (most prompted by the tragic events in Northern Japan), friends and family (read my mom) have asked me about the dangers of living so close to the coast, and particularly about the risk of a giant tsunami. I currently live a little over 2 miles from the Pacific, and wondered exactly what the possibility was that my apartment would be taken out by a giant wave. I was also tired of all the hearsay about the risks. After sitting down for a couple of hours and doing some serious googling, I decided to write down what I found—hopefully others in San Francisco and even California will find it useful.

Disclaimer: I am not a geologist, scientist, or even scientifically inclined. I am also a pretty shoddy writer.

FIRST, MY FINDINGS

Yes, San Francisco is at risk. No, I (living in the Sunset) do not face any inundation risk. Continue reading for the details.

WHAT IS A TSUNAMI

Let’s start here because although slightly embarrassing, my knowledge of a tsunami up until recently consisted of the following facts: (1) Tsunamis are giant waves, (2) they can be deadly. Not too impressive.

Typically, a tsunami is generated by an underwater earthquake, where one plate is subducted, and another is pushed upward, causing a large wave. Local tsunamis can also be generated by strike-slip faults (where plates slide left-to-right), where underwater landslides result in large waves, although this is less common (the San Andreas fault is an example of a strike-slip fault) [2]. Waves generated by tsunami’s are obviously much more powerful and are shaped differently than normal, wind-generated waves [1].

Source: http://www.seismic.ca.gov/tsunami.html

CALIFORNIA TSUNAMI HISTORY AND GEOGRAPHY

California is no stranger to tsunamis, as it faces risks from both local and distant tsunamis. In the state’s recorded history, there have been 82 possible and confirmed tsunamis that have reached California shores. Nearly two-thirds of those events were the result of distant sources [4]. In the San Francisco Bay, 51 tsunamis have been recorded since 1850 [5]. The worst tsunami event in California occurred in 1964 as the result of a magnitude 9.2 Alaskan earthquake. The ‘64 quake produced waves between 10-16 feet along the California, Oregon, and Washington coasts and killed 12 people in Northern California. [1] [4]

California’s greatest risk is from the Cascadia Subduction Zone, the fault between the Juan de Fuca and North American plates. Located off the Northwest coastal US, a Cascadia earthquake would create giant waves that could hit the coast much faster than waves generated from distant events. There would be less time to warn those at beaches and in low-lying areas. The last Cascadia earthquake occurred in 1700 and resulted in waves of 15 feet reaching Japan (which is similar to the height of waves that reached African shores after the Sumatra earthquake) [1].

Source: http://www.usgs.gov/science_impact/risk.html

There is a lot of seemingly conflicting information about the potential and probability for tsunamis generated by a Cascadia earthquake. Wikipedia states that the probability of a large Cascadia earthquake occurring in the next 50 years is between 10-14% but I had a hard time pinning down reputable sources. Needless to say it poses a significant risk.

COMPUTER SIMULATIONS

In March 2010, the NOAA Center for Tsunami Research published a special report, modeling forecasted tsunami impacts on the City of San Francisco. In case you were wondering, NOAA stands for the National Oceanic and Atmospheric Administration—a government body that also oversees the National Weather Service and that is basically tasked (among other things) with keeping the general public safe from weather related disasters. The NOAA has actually published many reports for dozens of cities along the western and eastern coasts of the United States (you can find a report for you specific city at http://nctr.pmel.noaa.gov/forecast_reports/ in an easy to navigate Google Map).

The report uses existing tsunami data to create an inundation model for San Francisco—basically, what size waves will reach the shores of the city. The model was calibrated with data from historical tsunami events, and then dozens of scenarios were analyzed. The report found the following:

Sensitivity study results show that the San Francisco Bay area is at greatest risk from a tsunami generated in the eastern portion of the Aleutian-Alaska-Cascadia Subduction Zone. A maximum wave of 7.6 m is predicted for a tsunami generated in Aleutian-Alaska-Cascadia segments 29–38…Tsunami waves from the northern portion of the Kuril and Japan subduction zones and those generated along the southern portion of Chile pose a signiﬁcant risk to the San Francisco area with waves greater than 1 m predicted. [6]

Different Scenarios Tested along the Aleutian-Alaska-Cascadia Subduction Zone

Potential wave heights

This report shows that maximum wave heights actually reaching the shores of San Francisco would be generally no greater than 3-4 meters. It also confirms that that the Cascadia Subduction Zone poses significant risk (unfortunately, a scenario was not tested which simulated a quake occurring directly on the Cascadia fault).

INDUNDATION MAPS

In recent years, California has produced inundation maps that show potential water levels in a tsunami event. Unfortunately they seem rather unscientific—according to the California Geological Survey, “We used one elevation for the whole state. We just drew a line at 30 feet up from sea level.” Fortunately, most wave surges wouldn’t come close to this level. [7]

To view inundation maps for your area, you have two options:

If you discover that you live in an inundation zone, you’ll need to make preparations for what you’ll do in the event of a disaster and plan an escape route. Fortunately is looks like the Inner Sunset (where I live), is incredibly safe at roughly 200 feet above sea-level (to see elevation levels for where you live, you can use MyTopo’s interactive maps).

IS SAN FRANCISCO AT RISK?

The short answer is definitely yes. However, only a few portions of the city face inundation, even from a massive wave. Although you should exercise caution when near the shore, and should definitely have an evacuation plan in place if you live in an inundation area, destruction from land-shaking earthquakes is a much larger concern for most San Francisco residents.

HOW TO PREPARE

There are many resources available online for preparing yourself in the event of a tsunami. The USGS has produced an informative video on tsunami preparedness specifically for Northern California (go to 4:58 for some particularly fine acting):

You can also use the following helpful resources:

AlertSF - Sign-up for SMS alerts based on the San Francisco neighborhood you live/work in
72hours.org - Find instructions on what to do in various disasters and what to include in an emergency pack/go-bag (translated into 5 different languages)
Surviving a Tsunami - Read an interesting USGS report, which uses lessons from past tsunami’s to instruct those at risk on how to survive in the event of a tsunami

I’m sure I haven’t covered all of the resources out there, so let me know if I missed something (or especially if I made a factual error).

SOURCES

[1] http://www.seismic.ca.gov/tsunami.html
[2] http://quake.abag.ca.gov/tsunamis/
[3] http://quake.abag.ca.gov/wp-content/documents/ThePlan-C-2010.pdf
[4] http://www.seismic.ca.gov/pub/CSSC%2005-03%20Tsunami%20Findings.pdf
[5] http://www.baycitizen.org/disasters/interactive/mapping-risk-tsunami-plans-ba…
[6] http://nctr.pmel.noaa.gov/forecast_reports/final_reports/03_SanFranciscoCA_33…
[7] http://news.discovery.com/earth/california-tsunami-threat.html

Setting up an Amazon EC2 instance: A beginner’s guide

I recently decided to move a project onto Amazon’s EC2 from a dedicated box I’ve been running for a couple of months. Although it was initially intimidating, there are a wealth of blog posts, tutorials, and guides that really hold your hand as you get used to Amazon’s setup.

I heavily consulted the following three guides (keep in mind that I decided to go with an Ubuntu install)—strangely the second post is quite similar to the first.

Starting Amazon EC2 with Mac OS X
http://www.robertsosinski.com/2008/01/26/starting-amazon-ec2-with-mac-os-x/

How To: Getting Started with Amazon EC2
http://paulstamatiou.com/how-to-getting-started-with-amazon-ec2

Ubuntu EC2 Starters Guide
https://help.ubuntu.com/community/EC2StartersGuide

These tutorials walk you through the process of setting up an EC2 account, installing EC2 command-line tools, authentication, and loading an AMI (Amazon Machine Image) onto your instance. Since the tutorials do a great job of taking you through the above tasks, I’ll leave the majority of the explanation to them. However, I will give you a high level overview of each task so that you can get a feel for the roadmap.

Create an EC2 account

Simple and straight-forward—sign up for an AWS (Amazon Web Services) account, and then create an EC2 account. The process is very easy—note however that you will be asked to complete phone verification before your account is setup.

Setup Authentication

You’ll need to create an X.509 certificate and download both the resulting private key file and the X.509 certificate file to a safe place on your local machine. No passwords are exchanged—to learn more about how authentication works with EC2, be sure to read-up on Public-key cryptography.

The only gotcha’s I had in the entire process had to do with how I named my private key files. For the sake of simplicity, follow the Ubuntu guide as far as naming and locating your private keys.

Install the EC2 command-line tools

A simple install will allow you to interact with your EC2 instances from the command-line. There is a web-based GUI you can use, but the command-line can help you control your instances much more quickly.

Choose and load an AMI

Loading an Amazon Machine Image is surprisingly simple, especially if you decide to go with Ubuntu. Ubuntu maintains a list of official AMI’s—I went with 10.04 LTS, and the AMIs can be viewed at http://uec-images.ubuntu.com/releases/10.04/release/. Loading your selection is as simple as locating the AMI ID and installing it from the command-line.

SSH into your instance

After opening a port for SSH on your instance, you should be able to successfully access your instance from the command-line, and interact with it like any other remote machine.

That’s it! At this point, you can either press forward by either assigning a static IP and further configuring your instance, or by terminate your instance—both are explained clearly in all three guides. The whole process is surprisingly simple, and most of the legwork is a one-time deal. Once the basic setup is out of the way, creating new instances can be done in a matter of minutes.

URL Structure for Usability and SEO

Maybe it’s my love for all things organization, but well-formed URLs are just plain satisfying. Unfortunately for me, I’m revisiting an old project and my half-baked URL structure is quite the Frankenstein monster. Rehabing it hasn’t been fun, but I’ve learned a bit about what I’d like to do going forward, when I start a new project.

Properly formed and descriptive URLs are important for three primary reasons:

They will help users find and share the content they are looking for
They will improve your SEO (and thus help users find your content more easily)
They will help you sleep better at night. Seriously, a well thought out URL design will allow you to make changes and additions later on without fear of disaster or confusion

In planning out my new URL structure I’ve identified several points that should help anyone looking to acheive the three aims above.

Keep URLs short and sweet

Short URL’s force you to be as descriptive as possible, removing extraneous words. Short URLs will help users to better share your content and otherwise navigate your site. Think that adding a couple of extra words into your URL will help boost your SEO? The days of using keyword stuffing to improve search engine rankings are over. Matt Cutts advises that 4-5 words is a “natural” length and that any more words diminish the value of the additional words. I don’t think Google could make it any more clear when they state, ”a site’s URL structure should be as simple as possible.”

Words > Numbers

Words are always going to trump numbers, so don’t put them in your URLs when possible. Compare the following links for the same backpack from two different online merchants, REI and Backcountry.com:

Confusingly, the REI link tells the user that they will be viewing product “795624”, while the Backcountry link clearly shows the shopper what product they will be viewing. Although the REI link is a bit cleaner, don’t forget big G’s recommendation: “When possible [use], readable words rather than long ID numbers”. Enough said.

Reduce directory depth

Directory depth refers to the number of directories beneath the root URL that content exists. An example of a directory depth of 1 would be http://yourdomain.com/sub-directory/. Rand Fishkin said it best: ”A URL should contain no unnecessary folders (or words or characters for that matter), for the same reason that a man’s pants should contain no unnecessary pleats. The extra fabric is useless and will reduce his likelihood of impressing potential mates.”

Measure twice, cut once

Modifying your URL structure after the fact will result in pain, frustration, and frequent face-palming. Before embarking on nearly any project, you’ll need to sit down and give serious thought to URL design. Some even feel that URL design should be the, “first discussion of any startup directly after the idea is solidified.”

YOU MUST give serious thought to your URL structure—do your research, look at what competitors are doing, and make a concious decision about how your URLs will be structured. Don’t rely on a framework, or decide to just back into one option. If you do,you’ll regret it.

Some final fine tuning

Use puncuation in your URLs—hyphens are better than underscores
Don’t use upper-case letters. Rand Fishkin recommends that, “If you have a lot of type-in traffic, you might even consider a 301 rule that sends any incorrect capitalization permutation to its rightful home.”
If you use many parameters in your URLs consider eliminating non-essential parameters and making them as descriptive as possible. Also be sure to modify your robots.txt file to prevent the GoogleBot from indexing all of the variations of URLs with parameters attached.

Remember, a wise man once said, “If you fail to plan [your URLs], you plan to fail.” Don’t forget to give serious thought to URL structure the next time you start a new project—you won’t regret it.

How to form a California LLC by yourself (Part 2)

[Disclaimer: I am not a lawyer, nor do I aspire to be one]

I’m excited to finally be able to write this follow-up post. I submitted my Articles of Organization at the end of April, and received back filing confirmation in mid-July. It was a long wait and unfortunately, there are still a couple of more steps to complete. The good news is however, I’m almost there!

Ground to Cover:

Complete the Statement of Information (LLC-12)
Obtain an EIN from the IRS
Pay the Franchise Tax
You did it!
Additional resources

Complete the Statement of Information (LLC-12)

In the documents that I received back from the Office of the Secretary of State, there was an addressed envelope and a copy of FORM LLC-12, the Statement of Information. The instructions for completing the form are included and it is pretty straight forward. You’ll need to enter the name and address of the office of the LLC, the CEO of the LLC, and all of the managers of the LLC. You’ll also need the name and address of the Registered Agent (what you entered on the Articles of Organization). Keep in mind you’ll need to send this form within 90 days of the initial filing (of the Articles of Organization) to avoid a $250 penalty. Given the slow turn-around time, this doesn’t give you a big window in which to file this form. Complete it quickly and include a $20 check when you mail it off.

Obtain an EIN from the IRS

Before you complete the next step (pay the Franchise Tax), you’ll need to get an EIN (Employee Identification Number) from the IRS. This is surprisingly painless. You simply go to the IRS website (http://www.irs.gov/businesses/small/article/0„id=102767,00.html) and click Apply Now. You’ll be directly through a series of questions and you’ll be able to get your EIN instantly. Navigating through the questions took me less than 10 minutes.

Pay the Franchise Tax

By far the most painful part of forming an LLC in the state of California is paying the hefty Franchise Tax. Each year, you’ll need to pony up $800 for the privilege of doing business in California. You’ll need to pay this by the 15th day of the fourth month of your taxable year (April 15th if you are operating on a calendar year). In the year that your LLC is formed, you’ll need to pay by the 15th day of the fourth month after the LLC commenced business. To pay the the tax, you’ll need to complete the LLC Tax Voucher (Form FTB 3522). To fill it out, make sure you have both your Secretary of State (SOS) file number and your newly acquired EIN handy. Once you complete the voucher, mail it in along with a check for $800.

You did it!

Well it took a couple of months, but that’s pretty much all there is to forming an LLC in California. If you are forming an LLC with multiple members, you’ll still need to adopt an Operating Agreement that has been reviewed by a lawyer. If you are operating a single-member LLC, you should be good to go :-)

Additional Resources

How to form a California LLC by yourself (Part 1)

[Disclaimer: I am not a lawyer, nor do I aspire to be one]

I recently decided to take the plunge and incorporate—partially so I can have rad business cards, but mainly for legal and tax reasons. While operating as a sole-proprietorship has worked well so far, I run the risk that I could be held personally liable in the event of a nasty lawsuit. It also forces me to comingle my personal and business finances (which makes accounting and taxes difficult).

Ground to Cover:

Why an LLC?
Where to incorporate?
Should I pay LegalZoom $150 to mail a letter? No.
Prep. work
Completing the paperwork
Pay your fees and send
How long will it take?
Next steps
Additional resources

Why an LLC?

After some research both online and offline, I finally settled on a single-member Limited Liability Corporation (LLC). For me (a single founder), an LLC was a great choice for several reasons:

LLC’s provide me with sufficient legal protection—as long as I’m smart about how I operate, I will face no personal legal liability
Pass-through Federal tax treatment—my taxes will remain doable and I won’t be doubly taxed (i.e. only once at the personal-level, and not at the corporate level)
Since I don’t intend to seek VC funding (or any sort of significant outside funding for that matter), the shareholder restrictions of an LLC aren’t onerous enough for me to consider a C-corporation.

Where to incorporate?

Once I decided on an LLC for the business structure, I had to decide which state to incorporate in. Since I am a resident of California and am doing business there, I decided to register in California. Before doing research, I was contemplating registering in Delware—as far as I know, for California residents, this is a bad idea and will not prevent you in any way, shape, or form from paying franchise taxes and fees to the California state government. Bottom-line: if you live in California and are registering an LLC, do it in California.

If you are unsure at this point if an LLC is the right choice for you, I highly recommend consulting the book, The Entrepreneur’s Guide to Business Law. Chapter 4 is devoted to the pro’s and con’s of each type of business structure. It is a great resource for pretty much any serious startup founder (or startup employee for that matter).

Should I pay LegalZoom $150 to mail a letter? No.

Robert Shapiro would have you believe that you need his help to register your LLC. In fact he will do this for the low, low price of $150. Why this service thrives is beyond me. You will only need to file 2 forms and you can do everything in less than an hour. Please, do not use LegalZoom—you can do all of this by yourself.

Prep. work

Before you start filling out forms, you’ll need to answer 3 questions:

What will you call yourself? You’ll need to do a search to ensure that your company name hasn’t already been registered. The State’s website has a search function at http://kepler.sos.ca.gov/. Although it is pretty limited, it should be sufficient for most purposes—I picked a name for which I also own the dot-com and that made me feel a little bit more sure that it was unique.
Who will serve as the Initial Agent for Service of Process? This basically means, who will receive all legal communication for the company. The registered agent must be a resident of the state and have a physical address in the state (no post office boxes). While you can use yourself, I would strongly advise that you go with a registered agent service. This service is provided by companies who will collect documents on your behalf and forward them to your home address. I went with InCorp Services, but there are numerous options to choose from. The service should run you around $100 a year, and save you the hassle of changing your address if you move. You’ll need to sign-up beforehand so you can get the company’s address to use when you file the registration paperwork.
How many owners the company will have? If you’re a one-man show like me, this should be simple :-)

Completing the paperwork

The paperwork to register an LLC was initially intimidating—the instructions provided on the state’s website aren’t the best. While there are many books written to guide you through the process, it honestly isn’t that complicated. Let me restate that—it is surprisingly simple.

The first form you’ll need to complete is FORM LLC-1. The form along with instructions can be downloaded as a PDF from the California State Government website (http://www.sos.ca.gov/business/llc/forms/llc-1.pdf) There are only several places on the form that you’ll need to enter information—the instructions do a thorough job of covering what you’ll need to fill out.

Box 1 – Enter the name of the LLC you’ve decided on. Remember that you’ll need to add the proper ending to the name of the company (e.g. Limited Liability Company, LLC, or L.L.C.)
Box 2 – You can ignore this
Box 3 & 4 – Enter the name of your registered agent. If it is an individual (such as yourself), enter your full name in box 3, and your address in box 4. If you are using a registered agent service, enter the complete company name in box 3 and leave box 4 blank (the address for the company should be on file with the state)
Box 5 – Indicate how many managers your LLC will have
Box 6 – You can attach additional documents if you’d like to. I did not.
Box 7 – Date and Sign

Pay your fees and send

Once you’ve completed and signed FORM LLC-1, wipe the sweat from your brow and make a couple of copies—the state will certify up to two copies without charge. Write a check out to the Secretary of State for $70, and put the check and FORM LLC-1 along with the copies in a stamped envelope and send it to the address specified on the instructions.

How long will it take?

Unfortunately, at the time of this post the turnaround time on Articles of Organization filings are about 40 business days (or nearly 2 months). This is not normal and you can thank government furloughs for the delays. There are options for fast-tracking your filing, but this can potentially be very expensive.

Next Steps

Once you have successfully filed your Articles of Organization you’ll need to do the following:

File FORM LLC-12 within 90 days. Failure to do so will result in a $250 fine.
Pay a franchise tax payment of $800! Yes I know, it’s steep, but it’s the cost of doing business in California.
Adopt an operating agreement. For a single-owner, this isn’t as critical, but if you have multiple owners, this is a must. This document does not need to be filed with the Secretary of State—you can consult an attorney or use a boilerplate operating agreement, however the former would probably be most advisable.

I am still waiting to hear back on my Articles of Organization, so I’ll cover these three points in more detail in an upcoming post.

[UPDATE: The second post is now finished]

Additional Resources

Thanks to @driek for the great picture

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