Forums: Discussions for entrepreneurs and small business.

Thanks a lot for your reply, it was indeed helpful.

But a couple questions remain. You seem to imply that an S Corporation can`t sell stocks, and I`ve read that an S Corporation is pretty much exactly the same as a C Corporation except its exempt from double taxation like you said. Wouldn`t it make sense, then, to start an S Corporation and then turn into a C Corporation if you decide to solicit investors. When we start out, we surely won`t want to sell shares of stock, so it would seem to make sense to reap the benefits that the S corporation provides.

I guess one other basic question I have is if it`s helpful to have and associate a business entity with contracts--like an LLC, SP, or CORP--when you write up contracts and such. I think I need to get a book about contracts!  

Thanks again.

-------------------------

I want to know, if I can live with what I know. And only that.

I apologize for that. An "S" corp can sell stocks. However, they are limited to a small number of authorized shares. Thus, limiting your options for investors at some point. As far as going from an "S" corp to a "C" corp, I am not sure how that would work. I would assume it would just require an ammendment to the articles of incorporation. Which of course costs just as much as filing for the corporation to begin with.

The contract question....well, honestly if you are writing a contract that names the [Business Entity], in the case of a Sole Proprietor, you are the [Busniess Entity] and so the contract holds just as much water as if you were incorporated. Of course the implied validity of a contract feels more professional if the [Business Entity] is a corporation. But as for legality, it doesn`t really make any difference. If I am wrong, someone please slap me and tell me to shut up! Best Wishes!

Ken~

In some cases you can protect a website with a patent.  Such patents protect the method that is used on the website (each step of the process).  You have to use "method patents" since, obviously, the website hardware (server), the infrastructure (Internet), and the user`s computer aren`t new to the invention.  That is to say, the physical structure of the invention isn`t new, but the method is.  Such patents tend to be complicated and expensive, and if your method isn`t truly novel then it`ll be rejected (even if the method is used elsewhere in a different industry, under different circumstances, etc.).

For example, GoTo.com (now Yahoo! Search Marketing) has a patent on their idea of keyword-base bidded advertising combined with web search.  They developed their website around this method, and patented the method.  The patent number is 6,269,361, and I`ve uploaded it to my website at http://www.dirtcheappatents.com/clients/US06269361__.pdf  (it`s 2.1MB).  Read this patent and the claims, and you`ll see the level of detail you`ll need just to write the patent application!  But, obviously, for Yahoo! it has paid for itself many times over.

(No, I don`t write such patents for the $1,499 fee listed on my website!  That`s for relatively simple, mechanical inventions.)

Hmm, a different thought... make stone soup.

1) Hire someone to do the look you want... but password protect the site so nobody can see it.  Then, swap in bogus placeholder text, graphics and links as described below.

2) Hire someone to build one feature or component.  Add that to your password protected site.  Disable the feature by adding a different password to it, so you can show someone the main pages but not let them play with any currently build functionality.

3) Hire someone to build one additional feature or component.  Add that to your password protected site.  Play the same games with password protection.

There should be a series of things you can do and put together which doesn`t let people figure out the full gist of your idea.  Web site password protection can be implemented fairly easily (independent of sessions and a login database using HTTP basic authentication -- the pop-up box).

Some things to keep in mind...

1) You can build a database for storing your information but potentially not describe the topics or products you are dealing with precisely.  Use different terms to describe the work but make sure it is directly useable by your main idea.  For example, if you worked with model cars you could construct the database based on real cars or parts.

2) You can switch out graphics, buttons, links, text and so forth, such that they don`t indicate what is going on.  This way a developer can be shown a section of your site without seeing a description of what it does when they work on some component.  You can honestly say it`s under construction.

Alll this subterfuge and paranoia will cost you time and money.  However, if it is how you think you should best proceed and you don`t have a ton of money up front to get everything done anyway, it might be worth considering.

Thank you all for your ideas and help. It`s important to consider everything before I go into something like this, and not make a mistake I`m going to regret.

I must say though, I`m not as freaked out about showing my ideas to people because of what I plan to do to offer myself protection, and all the help that people have given me. An underlying theme I seem to have picked up from not just this site, but others as well (although this has been the best :)), is that worrying too much won`t get you anywhere; and could even prevent the whole thing from commencing at all.

What I plan to do to offer myself protection seems to be a solid plan. One thing I`ve learned from all of this is that NDA`s seem to be a great means of rudimentary protection as far as legality goes (I read the person who created hotmail and sold it to Microsoft only used NDA`s), and even more as far as mentality goes. The idea that someone is going to go running off with my ideas to try to create something without the creator`s guidance and a full understanding of  the ultimate goal would be a little silly, even without any papers in place. But add that to the fact that they will be signing binding contracts composed professionally (you would all recommend a patent lawyer correct?), and it makes it even more absurd. (I have ordered a 300 page book on NDA`s exclusively, and hopefully that will give me a greater understanding of what they can offer) Finally, what helps give me more peace of mind is that I plan on securing the actual name of the site under my ownership before I even go into it. And because I believe I have thought of the perfect name (sorta like everyone would agree ebay is the perfect name for ebay), that should be enough to solidify my protection. Add that to the fact that I will hopefully only be reveiling things to those who seem to be trustworthy, and we`re in business.

---

New Question

Where I`m at now, is I`m nearly ready to purchase the domain name under which the site will run. The problem (hopefully not too large) is the fact that it is already operating under someone. The good news (actually great news) though, is that it`s a site that looks like it was put together in 30 minutes with nothing but links and ads to other sites. I think you all know what kind of site I`m talking about, the site offers nothing but a bunch of news links and ads.

Once again, I ask you all for your help going into this. Based upon what kind of site it is, there clearly should be an amount of money enough to make them agree to part with it. Anyone have any suggestions on how I should conduct this bartering affair? I would like to get the name for as little as possible. I was thinking I might be able to pick it up for $1000 (hopefully for lower), but how should I work the offers? And what do you guys think is the best way to present myself to secure the deal?

After I buy the domain name, I figure I should trademark it as well. Would you guys recommend that as well?

Thank you all for your continued help on my daring venture for the ultimate dream. It is more than just the words of wisdom, but also merely the moral support that goes along with the help. Thank you all!

-------------------------

I want to know, if I can live with what I know. And only that.

The "links" type of site that you`re referring to is typically hosted by a "domain aggregator" like www.sedo.com.  I`ve got several domain names parked there myself, just producing click-through revenue for me (and Sedo) while I wait for someone to either offer me enough money for the domain, or until I figure-out what to do with it.  See www.LunchDeals.com as an example.

Although I`m not a trademark attorney (and patent agents can`t give trademark advice), I`d really encourage you to file for the trademark.  If you get the trademark you`ll be in a better position to negotiate with the owner of the domain name (if you have to use that trump card), because it will show him that he can`t use the domain name to compete with you or do anything like what your goods/services are listed as in your trademark.  That is to say, if you have the trademark, he can`t infringe it by offering like goods or services with the domain name that`s confusingly similiar.  Well, he can, but then you can stop him (worst-case for the price of litigation).

By the way, when you say "the perfect name," don`t think that someone else can`t come-up with a completely non-descriptive name and put enough money into it to make it work (ie., TowCows, SnapFish, eBay, etc.).  If you`re too greedy and have the "perfect name" locked-up, then a competitor can just think of a new name.  Granted, having the trademark, the domain name, and perhaps a patent application makes a nice package of IP to sell.  But again, don`t be greedy.  The market will find a way around you, if you put-up enough walls, just like water finds the ocean!

Thank you for your replies

The site running under the domain name I`m looking to purchase doesn`t seem to be operating under any form of larger, standardized "domain aggregator," as you speak of, although it shares all of the same characteristics of a site like that. It looks to me, if I had to guess, that the individual put it together themselves.

You mention that you sit on these sites until someone comes around and offers you enough money for the name. What for you, typically, is enough money?

I also saw that there is a service that will actually go out and negotiate with the individual who owns the domain name and reach an agreed price that they will sell it at. I was not thinking of using one of these at all, and merely conducting the negotiations myself. However, if these are much better for some reason, maybe that`s something I should consider.

As far as trademarking the name before going to the owner of the domain, well that definitely is a possibility. It seems as if the name for the trademark is dead, so I should be able to trademark it if I choose. The reason I didn`t want to do that, and definitely wouldn`t tell the owner I did that, is because it would seem that the more stuck on this name they know I am, the more money they would expect and squeeze out of me for it. If they know I went as far to trademark the name, they`ll also know I`m very serious about acquiring it. I want to get the name for what it`s worth to them, not how much they know/think it`s worth to me.

So I was thinking of conducting the bartering in somewhat of a deceptive manner (aka not telling them more than they need to know). Email the owner telling them I`m interested in their domain name, and tell them that I have narrowed it down to a few that I am considering as a name for a website I would like to construct--I have narrowed it down to a few, they just don`t need to know that there`s is leading the pack by far. I was then thinking that I would ask how much the domain name is worth to them, in order to help me figure out which domain name would be best for me. In other words, leave it in the hands of the domain owner to tell me how much the name is worth to them, knowing that I am considering other names and the offers they extend. If they`re interested in selling it for a sum of money, this will help keep them competitive. Also, I will compose the email in a "standardized" form, to suggest that it`s a standard email I send and merely personalize it by changing the domain name in pursuit. This, I suppose, should help convince them my position is aloof, and hopefully ensure their offer is based on what it`s worth to them.

Anyway, this is just one way I thought of going about it. I`m interesting in how you guys would normally conduct a proposal like this. Like I said, this is one of my next steps, and before I make my move I want to make sure I`m taking the right steps.

Doing what I`m doing is a large enough challenge, and when money is tight, that doesn`t really help. I have to be smart, and make sure I don`t shoot myself in the foot.

Thank you all.

-------------------------

I want to know, if I can live with what I know. And only that.

Hi all.

It`s been a while since I`ve posted, but I figured I`d give you all an update. Well, I still haven`t made any moves towards securing the domain name, but I`m on the verge of making some form of an offer. Once again, I ask for anyone`s help who has any advice in this regards, as bartering for domain names is something I`m very new with. I figure my above message was a bit too intimidating in length, so hopefully that narrows it down a bit.  

My website itself is coming along great, I`m about 80 percent done with my portfolio, and it`s looking great. I`m working on the summary/pitch for the idea right now, and it`s really coming together nicely. I`m quite excited . I`ll be looking to pitch it to interested web designers in a month or so, so hopefully I`ll have made some move with the domain name by then. While I don`t need to acquire the name to continue on with the project, it would be nice to do it sooner rather than later. Never know what can happen with names.

Thank you all for your support and help, and I will continually update you with my progress. One way or another, this thing is going to come to head. Either I`ll hit a brick wall, or we`ll all hopefully be using the website one day. One way or another, you`ll will be the first to know.

Thanks again.

-------------------------

I want to know, if I can live with what I know. And only that.

More information. After doing a domain name inquiry, it appears as if they name is registered under "bulkregister.com." I can`t seem to find a way to email the owner either. If anyone knows the implications of this, please enlighten.

-------------------------

I want to know, if I can live with what I know. And only that.