The Reminger Report: Emerging Technologies

Avoiding Common Start-Up Pitfalls with Devin Miller (Part 2)

February 24, 2022 Reminger Co., LPA Season 2 Episode 36
The Reminger Report: Emerging Technologies
Avoiding Common Start-Up Pitfalls with Devin Miller (Part 2)
Show Notes Transcript

Zachary Pyers is once again joined by Devin Miller, Founder and CEO of Miller IP Law.  Based in Utah, Devin provides resources for start-ups and small businesses to learn about patents, trademarks, and copyrights and how they can build value into their business and protect their assets. 

In this episode, Zachary and Devin review common problems faced by start-up entrepreneurs and how to avoid/overcome them. 

Highlights of their discussion include:

  • Why he started his podcast, The Inventive Journey, and what he's learned from interviewing 300+ entrepreneurs.
  • Common start-up pitfalls: lack of focus, waiting too long to establish an LLC, and not having a quality website.
  • How can entrepreneurs overcome/avoid common pitfalls? (Listen for Devin's Post-It note trick for evaluating new ideas).
  • Opportunities and challenges he's faced during the COVID-19 pandemic, and his future for Devin Miller IP Law.

Visit our website for information about our legal services related to emerging technologies.

ZBP     Zachary B. Pyers, Esq.
 DM      Devin Miller, Esq.

 | ZBP   | Thank you for joining us for the second segment of our discussion with Devin Miller, founder of Miller IP Law, about issues surrounding entrepreneurship and start-up businesses.  Since you’ve been in this space, I mean you’ve talked about 350 essentially conversations you’ve had with people who are in this journey. I mean you’ve ben in this start-up space yourself and worked with a lot of start-ups. Do you see any common problems start-ups experience so if there’s somebody who’s listening, let’s say, that’s trying to start their own or thinking about going into a start-up, is there anything that you would say hey these are some, and I’m not like talking about like necessarily tiny, tiny pitfalls, but large scale problems. Are there any lack of planning or lack of financial forecasting or something like that that you see?
 | DM | Well that could be a long conversation. It’d be a fun conversation. I’ll leave that up to you. I could probably sit there and talk about that for hours, but one of the things I think the very first thing, or one of the very first things, it’s always hard to say the very first thing, that people are getting into is they always think, or people get into it and they do they watch Shark Tank, and I love Shark Tank I think I’ve seen every episode, they’ll listen, you know they’ll go watch shows like the Profit, which is another great one, I’ll listen to Business Wars which is a podcast.  Everyone always thinks that all you have to do is have that one idea, and if you have that one idea and it's the one immaculate idea, that’s really what you need to start a business. And then they have this misconceived notion that once you have that idea, it’s easy to implement and you’re going to be successful.  And then they get into it and they find out ideas are great as a good starting point, but 95% of the business is the plan and execution. In other words, you have to figure out how are you going to build this, how are you going to sell it, how are you going to fund it, how are you going to market it, how are you going to get it out there and that’s nothing to do with the idea. You can have a mediocre idea and if you’re really good at executing it and getting it out there, you can have a successful business.  I’ve seen the world’s best ideas, and they are really good ideas and yet they just don’t have the wherewithal to execute on and it never makes it anywhere.  So one of the things I think that people need get out of or overcome is that it’s not like Shark Tank, even the like the people on Shark Tank, most of them have had serial failures or they’re still losing money or they’ve finally got to a position and it’s not this hey I had this great idea, I started it and now I’m multi-millionaire.  So that’s kind of one of the big things.  One of the other ones you touched on is I think that there’s a lack of planning.  Now, I’ll give it way before you do the 20 or 100 page or whatever business plan, I think that I don’t love those in the first place, but that may be a different conversation. But I do think for an entrepreneur there is one big problem that a lot of entrepreneurs – and I am absolutely guilty of it – is you’ll have 10 ideas before you get to work in the morning, you’ll have 20 more ideas by the time you’re done with work and you’ll have 10 more ideas by the time your head hits the pillow.  So you’ll have 30 or 40 ideas that 95% of them are terrible, and yet every time you have those ideas you think it’s a great idea and it’s going to be the next thing that changes your business. And so my rule of thumb and the one that I always counsel with is if you have an idea that you are really excited about and you think it’s good, write it down.  I usually do it on a sticky note. I’ll stick it on my desk and let it sit there for a week.  I don’t touch it.  If I come back and I’m saying I’m as excited about this idea a week from now as I am when I originally had it, then there’s at least motivation to move forward.  But 95% of the time I crumple it up, say that was a stupid idea.  I’ll throw it in the garbage and go back to what I was doing.  But it is a weeding process.  So I think more than just planning, you need to do the planning and figure it out but you need to have a system in place where you sift through the ideas and you can figure out which ones are the worthwhile ones to pursue and which ones you’re just excited because it’s a new idea that popped into your head that’s really not going to go anywhere.  If it passes that first test, then it is the planning, and I see a lot of people – first of all they jump past that first step and they’ll chase an idea, second of all they’ll never actually think that. My caveat is I think every plan goes out the window, you’ll do your best to figure things out and then you’ll get into business in 6 months or a year down the road your business is nothing like you planned on which is perfectly fine.  It doesn’t mean you don’t do a plan. It doesn’t mean you don’t figure that out because, in my mind, the reason you plan is you’re convincing yourself to go do the business, why is it a good opportunity, what are some of the milestones, what are some of the directions, how are you going to get things going.  If you can convince yourself, it does more to you will then have wherewithal to continue forward. If you jump over that, the first time you hit an assembly block or you have a hard point, then you’re never going to make it.  I know I’ve talked – I’ll give one more thing, I’ll give my caveat – I don’t like business plans or the law of business plans. I think the best thing is to go do a really good website.  Because if you think about it, when you do a website, you have to figure out who’s your target audience, how much are you going to sell this for, who are you going to sell this for, how are you going to drive business, what are all the ways that you’re going to, manufacture this, produce this.  So it was interesting, I talked with somebody, it was actually somebody that was on our podcast and they said you know what I’d rather have someone go build a website even if it’s not pretty and immaculate, if they do a good job of figuring out all of those questions, it’s the same thing that you’re going to put in a business plan.  So those are the first few things that do it.  The last one is never form a business or an LLC.  I would say that’s a big stumbling block that people often, they say got a good idea, I want to go get my business started, I’m excited so I’ll just get going on it.  And then they’ll be down a year or two or three down the road, they’re still doing it as a sole proprietorship and they’ll get someone that comes along and sends them a cease and desist letter.  Or they find out that they accidentally copied someone’s copyrighted image and now they’re getting someone that’s made at them and threatening to sue them. Or they have an employee issue that’s saying hey you did something that I don’t think it right and now I’m going to sue you.  And if they don’t get that business set up, they don’t have that protection.  Now their house, their life savings, their retirement, they’re all on the line.  And so I always counsel that that’s one that people jump over. It’s pretty simple, it’s reasonably straightforward and it’s one that people often miss. So I know I through out a few. There’s a lot of different things so as I said I could probably talk on it for hours. And I’d find it interesting and nobody else would.  But those are a few things I consider.
 | ZBP | So a couple of comments I have.  One, I’ve got a question in the comment.  The first comment I’ll say and do it in kind of reverse is that I thought the post-it note comment you made about writing the idea down, posting it and leaving it for a week is actually really interesting because I actually use that technique with my oldest child when it comes to purchases.  Because – and it’s not, this technique is not just used for children but I mean when you’re making a major purchase a lot of people will say instead of, when you go to the store and just saying oh my gosh I’m in love with “x” and it’s a thousand dollars I’m just going to buy it.  Wait, go home and then think about that purchase for a day, two days, a week, whatever it is before you actually commit to make sure it’s not just an emotional purchase that you’re making.  And so as you’re describing this – and I do this, I kid you not, my child has to write down what it is that she wants to buy, how much it is and then the date on which she originally wanted to buy it and then post it somewhere so that we know a week has passed, that she thought about the thing and then the costs associated with it so she can say do I really want to part with this much money.  And it’s just a technique to help get over that impulsiveness. But it’s essentially the same thing that you’re describing is that you get caught up in this emotion, this excitement and it gives you time to ponder it, think about it, do I really want to pursue this. The other thing and it's kind of a question, is when you’re working and you talked about the importance of kind of establishing the LLC, establishing a business, you know a legal structure to the business or the entity, do you find it hard to rewind or unwind?  So, for example, do you find it hard when you’re counseling a start-up that’s come to you a year in and said now we want to get this LLC. Do you find it difficult that you maybe already entered into contracts without that legal entity or they’ve already secured insurance one way or financing or, and now you have to kind of undo some of the work that they’ve done to get that into place, is that something that you encounter as well?
 | DM | Absolutely.  The short answer is yes, absolutely.  I mean you’ll have everything from bank accounts, maybe you set the bank account up in your personal name – don’t do that, first of all, don’t set it up in your personal name.  It makes it so that your comingling funds and it creates a big problem. Set up a separate business account, only use that for business purposes. If you want to pull out money for yourself, do it as a dividend, do it as a paycheck. Don’t just go and start using the business fund as your personal fund or your personal fund as the business fund.  But you’ll have it as far as business accounts, you’ll have it for insurance if you’re smart enough or have the foresight to get insurance, you’ll see it for employment contracts. Get employment contracts, don’t just do it on everybody’s word or handshake. You’ll see it on all sorts of agreements, supplier agreements, and now you’re going – you can go and unwind it, it’s possible, or you can go and redo all the contracts, first of all, then you always have a bit of that what happened for that first year, how do we fix that and sometimes you can fix some of it.  And some of it you’re just hoping that there wasn’t anything big that was going to happen that first year or however long you missed it. But then you’re doing a ton more work to have to go and reestablish all that.  I mean think about going to all of your vendors and saying hey, you know, I actually never actually had a business or an LLC set up.  It was just me as a sole proprietorship.  I fixed that. Here’s all the new contracts you need to sign; hopefully you don’t mind.  And then you go to all your employees and say you know, I told you I was going to pay you  but there’s was never actually an agreement, so here’s an agreement – go sign this – with an actual business instead of me, myself and I and on a handshake.  And all those things.  So one, it’s harder to unwind and it takes more time and effort.  And two, it still leaves an openness and a liability and now you’re having to go and explain it to everybody.  And really LLCs, to do a simple LLC, we do it and I know Legal Zoom and others do it was well.  I mean for us, as an example, we offer for $99 plus the state filings.  So for most states, you’re in the $200 or $300.  And it’s much easier to get it done on the front end, plus we didn’t even get into taxes and how ramification on all the tax issues, but it’s much easier to set up an LLC. It takes a day, it takes less.  To actually get all the information it takes like 30 minutes and then to have somebody set it up for you, it takes a week or two.  Get it in place because you’re going to waste so many more headaches and you’re going to have a lot more security that if you set it up right and you do it right, now you’re not worried that if somebody comes and sues you, guess what? Now they can come take my house and my life savings and my cars and my property.  So, yes, absolutely you see people that you can unwind it. It’s possible. It’s an absolute headache and most people don’t want to do it.  Then they just kick the can farther down the road and make even bigger problems.
 | ZBP | You mentioned just the insurance, you mentioned something that caught my attention. You said “if they have the foresight to secure insurance.”  Is that an issue that you see with start-ups – or whether they’re in the tech space or not – about, I mean. As I will tell, people know I’m a litigator.  I deal with insurance a lot.  It’s not uncommon for me on any given day to deal with a lot of insurance.  Do you see that that’s a step that sometimes people skip over or they just don’t think about, or I mean how does that conversation come up?
 | DM | Yeah, I mean sort of people skip over it.  I get how it happens so I feel like I’m hammering on it.  It’s an easy progression because a lot of times you start out a business, it’s an idea, it’s side hustle.  And you say hey I’m only going to make a few hundred dollars off this or I just want to try it out.  Well at that point, yeah it probably doesn’t make sense to go get insurance that’s going to cost more than the whole start-up, you’re saying you know it just doesn’t have the value especially if it’s low risk.  But you start to do that and then you proach on and then you just never really think about it and then you get busy and then you hire your first employee, and then you have orders to fill.  And you never really think about the insurance because there’s no pressing need. There’s nothing that’s causing you to have to go get it until you need it, until somebody comes after you, you do it.  So a lot of times, if you’ve been through it before, if you’re a legally minded person or sometimes an accountant or you work in insurance, you’re going to think about it. But the average person is going to think, well no I’m just making a product.  I’m going to go sell it on a website, or I’m going to go offer a service.  I don’t need insurance.  What am I going to need insurance for?  I’m just going to do it.  You know and those types of things. And then you’ll get into, probably you’ll see a litigator.  You’ll get into product liability or you’ll get into employment dispute.  Or you’ll get into, even just stupid things like return policies.  Or you’ll get into did you follow the right guidelines for how you text people.  Or you’ll get an employee that downloads a copyrighted material that they didn’t know was copyrighted or they didn’t really think about, and they’re just so many things that they don’t think about. They think about insurance when there’s a cause of it; they already should have had insurance. But it’s kind of like if your house is burning down, you’re saying yeah I probably should have gotten insurance; it would have been a lot nicer.  But you don’t really think about it when you’re building the house; you’re just excited to build the house and get it.  Most people get homeowner’s insurance because they think about it. They realize it’s a sizeable investment, but with a business it’s much more incremental and slowly and you’re thinking of it – you’re doing other things that you’re needing to deal with and it never has that same trigger point as a lot of other things and so you don’t think about it until a lot of times it’s later down. So it’s one where people overlook because there isn’t a necessity on the front end, they don’t really think about it, they’re starting small and by the time they get big then they’re doing it.  Unless they have a trigger or a motivation to get it.
 | ZBP | Now I know one of the things, and I don’t know that we’ve touched on this, but your firm also offers web design services, is that correct?
 | DM | Yes.
 | ZBP | How did you – when I think of a traditional law firm – I don’t necessarily think of web design services.  How did you end up in that space?
 | DM | It’s a good question.  I don’t know if I…no I’ll give you the real answer.  But you know it’s one of those that kind of naturally evolves so.  And we were actually – excited.  We just launched it and we soft launched it.  And so the web design service is formally – now we’ve been doing it for a lot longer – but I’ll give you the answer.  But we, it’s technically you go to two separate websites.  So you go to my law firm website. You’re not going to see a lot of website design because it gets confusing. And you go to the website design.  So under the same house, and we help clients on both primes, but we try and help to not meddle our message.  Now, to answer your questions, which that wasn’t an answer to your question.  So where it started out is, first of all it started out with me having to build my own website.  And so I had done it for a few of my businesses.  I started on the law firm.  I hate law firm websites, most of them.  Because you go to them and they all look pretty and they have nice pictures, but you don’t know any – it doesn’t tell you anything about them.  You know, how much things are going to cost, what the turn around time is, what do you actually need, how do I ever get in the education and how to I reach out – half the time attorneys don’t even have their – or how do get in contact with them.  It’s this little form that you put in your information and it goes off to nowhere and they never reach out to you.  So it started for me when I was starting the website, law firm, saying I need a website. I hate all law firm websites.  How am I going to do it differently. So our web site is by far not the conventional law firm website with intentionality. So that’s where it started.  And then it kind of incrementally, we had clients that started to say hey I like your website.  I brought on a developer and designer. He does an awesome job, and he made my website like 10 times better than I ever did, but kind of built in what we did.  And so as he now made it look better and improved it, and they said he I love your website.  It's easy to navigate, I understand what your services are, what your price is and everything else. Who did you use or do you know anybody you can refer over?  And I said well we did it internally.  And so we started to have a few clients that were saying well can you do it for us?  And say oh yeah we can probably figure it out.  And so we figured out a price, theme and structure. And so we started to do that for a few clients as kind of one-offs along the way.  And so it kind of started there.  The other place that it also started was we, you know kind of separate from that, is we were doing a lot of client development.  In other words, finding new clients, bringing them on board, seeing who we can help out.  And we kept running into over and over the same marketing efforts we were finding people that needed intellectual property, they were also looking for website development and website design.  And so a lot of, there’s enough of the overlap with our marketing efforts that we were saying if we’re doing all the work to find these people and they happen to be needing a website and we’re already doing this kind of one-off for clients, why don’t we, and we already have the internal talent, we already have people that can offer and help provider those services.  There was a natural lead to say hey our mission is to help start up some small businesses. That’s where the law firm is focused.  But this is something that a lot of start-ups and small businesses need.  I think we can it awesome. I think we can dig in and do it differently than what’s out there and make it a lot easier the navigate, make it more transparent and help understand the pricing and the turn-around time, make the process better.  Let’s take the same things that we’ve done on the law side and apply it.  And it’s interesting, when we started to look at all the things that we did on the intellectual property side, a ton of the systems that we put in place worked in the website design.  To give you a quick example, we do for a patent, you have a disclosure form or you launch it through the information we need to know about your invention in order to draft the patent application form.  Guess what you need if you’re wanting to build a website?  You need a disclosure form where we need all the details you need in order to build a website. Who’s your target customer? What do you want them to do when they get to your website? What is your pricing?  And it’s kind of that same thing.  How do we go about then doing the review process?  Similarly, we give you a review and you give us your feedback, a lot is the same.  So as much as it seems different, it was really we looked and said we have the internal talent, we’re already seeing these clients are needing this, we’ve already done it a few times and a lot of the same systems we’ve already put in place for the law firm translate very well over. So with all of that said ok let’s do it; we’ll pull the trigger. Now we can help start-ups and small businesses one more leg on their journey.
 | ZBP | You know it’s interesting because you described the fact that the processes are similar.  I mean even though the end result, you know the patent application and website are two different products, the inputs and the processes are at least very similar.  And I think that – honestly I just never thought about it that way.  And it makes me wonder, starts to make me think, how many other processes are out there out there – and I’m not asking you to answer this on the spot – but how many other processes are there out there that are similar where you’re looking at a similar set of inputs or at least you know have some overlap where the process could be simplified.
 | DM | Absolutely. No and I think there are a lot – and I said these ones you look and say patent, a website, those are pretty different, right? And I’d agree.  You know the end result they look completely different and yeah you know as an example one of the things with the legal industry that I hate and that I was solving, we moved everything over to flat fees.  Well almost everything, we have a couple if you get into litigation on the IP stuff, we might get into on hourly because there’s some variable, but 95%.  Well figuring out the pricing structure, when we did that on our own website, how do we convey that information and how do we do that, and how do we you know make it clearly, and then that’s the same thing as a website.  You’re having to figure out your product pricing. So we had to do it. It was our own process. How do we convey that information.  Another thing we do is, we have strategy meetings where we have one on one client counseling sessions.  Guess what you need if you have somebody that’s not knowing what they need on their website? They need a strategy meeting where they sit down, they talk through, what do I need, when do I need it, how do I go about doing it, what questions do you have? Do a disclosure. Do a review process. I mean and I think that there’s a lot more out there that even if you’re looking, you can start to see that even if the end result may be different, there’s a lot of it, you know if you figured out 80% of the things that are going to be the commonalities and you can leverage that, why not leverage that?  And that’s the same reason why we need the DIY legal products. We had to figure out a system that we would do it internally that we could start to optimize and make things automated and make things better then we said we can offer a version of this as a DIY legal product that’s going to do a lot of what we’re doing internally and make it available at a much less expensive price.  And so I think that if you start to look at where the overlaps and where the opportunity, if you keep an eye out, it provides for a lot of opportunities.  
 | ZBP | Yeah. So let me ask you and I like to sometimes ask these questions, and I know this is super broad, but you know being in the space that you’re in kind of gives you a unique perspective.  So you know as we close out, I’m always kind of curious if you see any really big opportunities or challenges or maybe opportunities and challenges because they’re not necessarily mutually exclusive, you know in the years ahead as it relates to the things that start-ups are facing or may be facing in the near term future.
 | DM | Yeah, and I would say those go hand in glove because those that can figure out how to address a challenge are going to be the ones that are successful.  And I think that a great example is then Covid. In other words, I’ll even do that with the legal industry. Most of the legal industry up until Covid was set up that you had a high rise building downtown, you had very immaculate office space and everybody came into your office space. What happened when Covid came along? Everybody shut down their offices, they all worked from home, you didn’t have an office space, even worse if you had that office space you’re still paying a high rent and it’s not even doing any good and now you’re saying ok how do I adjust all that.  Guess what we were doing before?  We did Zoom for three years which is two years before it was cool with Covid. We had, we were working with clients all across the U.S., 50 states, we were doing it – not everybody came to you – very few people came to you. We have some clients in Utah and they’re awesome, but more of our clients are outside of Utah and so it was those looking for the difficulties at firms and we just happened to be – doing that because we wanted to set up a firm that was going to be nationwide that we can help anybody especially when we’re on the federal level. But those are the difficulties law firms have found. The ones that figured it out, figured out how to do it remotely, how to do it without having to come to the office, how to do it with reduced office space and reduced costs, those are the ones that are thriving. The ones that are still shut down or the ones that were shut down for a year and a half and they’re saying we have this big office space and all this immaculate space and we are not even set up to deal with things remotely and how do we deal with clients, and where do we put all our files, those are the ones that are facing the difficulties. So I think that there are a lot of things that you start to look for where are the difficulties that are going to lie and how do I address those. Those are where your biggest opportunities are.  Same thing with, you know, I am a big proponent of automation. I love automation. I probably automate too many things, but I also love – I think that we find a good balance. Because automation, if you automate everything and you remove the personal aspect of it, it does not do you a good service.  If you do it right, it gives you a whole lot more time to have the one on one personal aspect because you’re offloading things. Those type of things, but again, if you’re looking for what are things, where are the opportunities, what are the difficulties, where are we spending all the money? Do we need to spend the money there? Can we do it better? All of those difficulties that people say that’s the way it’s always been done, if you could figure out a different way to do it, it provides such a better opportunity.  And so I think those difficulties are the opportunities.  
 | ZBP | I think that’s good. I think that’s good. Devin, I want to thank you for taking time to talk with us today and coming on. We really appreciated it.  And I’m sure that, you know, we’ll be running into each other in the future, but I just wanted to thank you for taking the time to come on the podcast.
 | DM | Absolutely.  It’s been a pleasure to be on. And I don’t know, I can definitely, for people that, I’d love to offer to your audience a way to connect up with me. If they want to call up and do a one on one strategy meeting where they, if they have any other follow-up questions, so if you don’t mind.
 | ZBP | Yeah.
 | DM | Yeah, so with that, if people want to reach out to me and they want to do a one on one, one of the things that we found that clients hate is that every time you go to an attorney’s office from the time you step foot in there, their meter starts running and you always figure you’re going to receive a bill as you’re walking out the door. So we turn that on to say we do free strategy meetings where we sit down, you can do it legal – we can do it via Zoom, we can do it via phone, we can do it via face to face. But if they want to do that, they can reach out to us. They just go to  I link that right to my calendar. You can see the times that are available on my schedule and makes it easy to connect up to me. So if people have additional questions, if we didn’t cover everything, if they want to be my next best friend or they want to chat, I’m definitely happy to connect up with them if they go to
 | ZBP | Well perfect.  Devin, we really appreciate it and appreciate you taking the time today to talk with us.
 | DM | Hey, it’s been my pleasure. It’s been an awesome conversation.
 | ZBP | Great. Thanks, Devin.