Any company that respects a traditional resume is a company I don't want to work for.

I would say AWS has a mildly steeper learning curve (various AWS command line utilities to install, etc.), but nothing I found difficult.

A really nice thing about AWS is that you can pick and choose which AWS services you want to use. For example, suppose you were doing a backup app where wanted to securely store terabytes of customer data, but the server requirements were really light. You could start off with a $20/month Linode server and store the data in Amazon S3. Then later you could move to EC2 at $70 per small server per month if you needed it.

Or, on the other hand, if you knew that you were going to need lots of servers sooner or later, and you have enough money that the price differential doesn't make a difference to you, you might start off with AWS to avoid needing to do a switchover later.

I'm working on an app of my own now, and I'll be hosting it on Linode to start off with. Then, if it becomes popular, I'll be able to measure what my server requirements are, and I'll be able to easily move it to EC2 if I decide to. (Though my app though isn't doing anything cpu intensive server side, so I wouldn't be surprised if I can run if off of a single Linode server for a long time).

The point behind tip #7 was to advocate having a single person in charge of editing a component, to avoid two people making changes to the design and confusing one another. The point wasn't to suggest a total lack of caring about the other developer's work.

This smells very much of political fence building, and an overly zealous drive to strictly segment responsibility.

I think the other great benefit is that each person can afford to become an expert in their areas, rather than each person becoming merely competent at everything. I think 3 people who are each experts at 3 different things is more powerful than 3 people who are merely competent at the same 9 things.

I assume you are personally liable for the business credit card debt. (As you generally can't get a business credit card without personally guaranteeing it). So, just to be clear on your situation, you are 30K in debt. (Regardless of what happens to the "business", you, personally, have 30K of debt).

Step one is to get yourself stabilized emotionally and financially. Good job on selling your car and moving out of your apartment.

These four servers that are sitting idle? Are these the ones that cost a total of $600/month, and you are contracted to keep paying $600/month through the end of January? (Am I clear on the situation?) Go and talk to the hosting company (the company you owe the $600/month to). In person. Not email, not phone, go sit down with a manager in person. Ask for mercy. Lay out the facts of your situation, just as you've done here. Say, "I know I owe you $600/month, and legally you have a right to that out of my last $6k check. Since I'm in this bad situation that I didn't expect, I'm asking if you would have mercy on me and let me out of my contract. Is there anything you can do to help?"

Next, write down a minimum monthly budget that contains the bare necessities: food, gas for the car, small gifts for your parents and friends to thank them for letting you bum off of them, the minimum payments on your credit cards. I mean this literally, write it down. On a piece of paper, or in a spreadsheet. You need to be able to look at the number, "$X/month", and say, "I can survive on that". Temporarily. While you catch your breath, and decide what next to do.

Next, I recommend you stop using debt as a tool to build your business. If you have a great money making idea that needs some capital, go get investors. Yes, you will pay the investors more in their share of the business than you would on interest payments, but you're making lots of money anyway, so what? And if the business fails, you walk away free and clear.

From a business point of view, the problem with debt is that is deadens the signal that you'd otherwise be hearing that you're on the wrong track financially. It's like some who suffers from leprosy, who loses the ability to feel pain in their extremities. The greatest damage comes not from the leprosy itself, but that people accidentally wound themselves (leave their feet in the campfire or something), and don't notice because they don't feel pain. Run your business on a cash basis, and you'll feel the pain of not being profitable right away, and make course corrections immediately. Run your business of debt, you rationalize things like you "have to" pay for ads upfront and invoice in arrears. Then you don't notice you've gone off course until you've gone over the edge.

You have a lot of ideas for things you can do now, and that's great! Find one that is going to be cash flow positive from the beginning. For example, those customer sites you could finish, or that product you could launch? Talk to people and bang on doors until you find someone who will pay you in advance, at least that portion which will be enough to pay for your minimal monthly budget for however long it will take you to get the project done. If your idea is good enough, if someone really wants it, they will pay upfront. If not, that's a signal that you need a better idea, something that your customers actually want. Don't go further into debt so that you can ignore the signal, instead pay attention to the signal.

OK, the 30K in debt that you're in now? Don't worry about it. Pay the minimum payments, and forget about it. Don't go further into debt, but for now don't worry about paying off the debt (aside from the monthly minimums) either. Sooner or later you'll get yourself back on your feet, make some money, and write a check to pay off the 30K. Until then, ignore it.

The CS degree? Don't worry about it. Employers and clients only care about what you can do for them. Now, if you haven't done anything yet, and you have a CS degree, then the CS degree is evidence that you're able to do things. (You at least made it through graduate school, and you're at least fairly smart). But you can show what you've done, and only a tiny, tiny percentage of employers or clients are going to care if you have a CS degree or not, as long as you can show them, as you can, what you can do.

But again, the very first thing to do is to put together you minimum monthly survival budget, and say, "OK. All I need to do, for now, is make this much to survive. I can do that". Once you do that, once you have your survival needs taken care of, then your stress lifts, your creativity comes back, and you will find it easy to start making money again.

Whatever you do, you really must pay down the debt. Minimum payments aren't going to cut it -- this is revolving debt that you're talking about, and if you don't make more than the minimum payments, it's only going to get worse. People routinely go bankrupt by ignoring their credit cards.

Moreover, so long as you're paying tens of percent interest on your debt (as with most credit-card interest rates), every other investment that you make has to return more than your interest payments for the investment to be worthwhile. If you view a business as an investment -- just like a stock or bond -- then it makes no sense to start one while indebted unless you're sure that the return will exceed he cost of the debt. Otherwise, you're just taking careless risks with your finances, in the name of a more adventurous lifestyle.

Living frugally, you can easily pay down $30k in a few years at any decent job. Negotiate with your lenders, get the interest rate as low as you can, liquidate the corporate assets, and get rid of the debt. Starting a company is hard enough -- don't saddle yourself with the additional burden of serious personal debt before you begin.

So I want to be clear what my advice is... if you still think it's terrible advice, that's fine, as long as I'm not being confusing as to what I'm trying to say.

If I found myself in patryn20's shoes, or in my own shoes again, I personally would pay off the credit card debt before doing anything to upgrade my lifestyle. I'd stay bumming with my parents and friends, or, if that was starting to impact my productivity, get a really cheap apartment. No luxuries until the debt was paid off.

However, I wouldn't now make paying off the debt the very first priority. If I found myself in the same shoes again, I would not now stay in a contracting job just to get rid of the debt.

Absolutely I would want to see the debt going down. However I understand now the reason that is important is because it means that I'm now paying attention to the financial signals in my life.

The debt itself is only 30K, and if I paid even 30% interest on that, that's only 9K a year. That's not going to kill me.

What's important is the mindset, the understanding, that I'm now going to steer my business and my personal finances in the correct direction, and that I'm going to listen to the financial signals in my life instead of papering over them with debt. Get that right, and it won't matter if I end up paying off the debt in three months or two years.

For decision making purposes (such as, suppose patryn20 wants to start another business, should he do it or not?), I claim what's important is the time derivative of his net worth. Does the proposed business put him further into debt, making the derivative of his net worth negative? Then I would say, no, don't do it. If it is going to make money, leading to raising his net worth, and he wants to start a business, he's fired up about starting a business, he's excited by starting a business, go for it. I wouldn't base the decision on the net worth itself, I wouldn't say "don't go into business while your net worth is negative".

I wouldn't necessarily give the same advice to anyone. If someone had 30K of consumer debt from overspending, I'd be concerned at their successful ability to manage their business finances when they can't manage their personal finances. For such a person I probably would recommend getting a job and getting their personal finances under control (paying off the debt), before getting into a business. However patryn20 has a track record of a successful business, just in my opinion over leveraged, and right at the moment he reeling from a pretty hard blow. So my advice for him is different than it would be for a hypothetical person who was in 30K of credit card debt for a different reason.

Even if you're "only" paying $9k a year in credit-card interest, that's still $9k that could be invested directly into your future. And if you truly believe in your business, then why wouldn't you want to invest everything into it? Is it worth starting a business two years earlier, only to have $9k less per year to funnel into your dream?

More practically, you need every last dollar that you've saved to start a business. Few entrepreneurs can afford that extra $9k a year, and I doubt that you'll meet many successful business owners who will tell you that they couldn't have used additional capital. It really doesn't make much sense to invest in a business when you're saddled with consumer debt.

Starting a business is not a high-risk investment (unless you put your own money into it)

And if you truly believe in your business, then why wouldn't you want to invest everything into it?

Because, excuse me for saying so, that would be silly. Think about my business separately from me for a moment. If the business needs money, the best place to get it is from people who have money, not from me who has little.

A business is exceptionally high-risk, if you value your time at more than zero. It's not like a savings account, where you put your money in, ignore it, and you're guaranteed to get it back someday. It's not even like a stock or a bond, where you have a framework to evaluate your investment, and can make prudent choices with a little bit of effort. When you start a business, you're investing your time -- your future earning potential -- into a vehicle that has a poor history of return, and no framework for evaluating the odds. That's as risky as it gets.

This point plays into your second comment: sure, it makes sense to get as much of your funding from outside investors as you can get on favorable terms, but it's naive to think that outside investors are going to save you from investing in your own company. Investors don't want to take the risk unless you have some skin in the game, and founders don't want to relinquish control before they need to do so. Thus, in reality, founders end up investing in their companies heavily. They're already committing their most valuable possession (time); it makes sense to double-down with money, too.

For example, suppose I want to take a year off and go hiking. I could have worked that year instead, made 100K, invested that in the stock market, and be a multimillionaire by the time I retire. So from a financial point of view, going hiking is a really terrible idea.

Or, suppose, I feel like taking that year and doing a startup. And suppose I have a 90% chance of failure. OK, you can run the numbers, and probably show that, on average, I'll do worse than if I took a job for a year. So, yes, looking at it that way, you can say that my starting a business is an "exceptionally high risk".

Except... what if I'm working on a project that I feel like working on?

A part of the interview with Steve Wozniak that I found quite fascinating was that he said he didn't feel like he was taking a risk with Apple. Sure, he could have worked all those extra nights and weekends and had it come out to nothing. Yikes! Invest all those hours, that he could have been working to make money, and end up with zero. But so what? He was doing something he wanted to do, that he found really exciting, building one of the first computers that people could own themselves.

Is there a danger that one will become overly caught up in a startup, and do foolish things? Sure. I been there. I've done that. If I had found the right mentor they could have advised me to bail on my startup a year and half before I did, and saved me a lot of grief. Does that mean that you "have to" or that it is "realistic" that you're going to wildly over commit? No. Just because most Americans are overweight and unhealthy doesn't mean that it is "realistic" for me not to have a moderate exercise program and eat healthy food.

it makes sense to double-down with money

hmm, I've already responded to this point, as far as I can tell. I'd be happy to expound more if someone wants a more detailed explanation, but otherwise I think I'd just be repeating myself.

If you stop using the card, you will slowly pay down the debt by making minimum payments. You will end up paying a lot more in interest than you would if you paid it down faster, but it won't spiral out of control.

To put it succiently, 1. Cut down expenses, right now and ruthlessly. Negotiate with everyone on everything. Everything is open for negotiation.

2. Economic stress WILL KILL creativity. Your only focus right now should be get to positive cash flow. Not debt free but positive cash flow. Debt free will take time, but it will happen but what you need absolutely right now is +ve cash flow. Debt is ok as long as you meet minimum commitments. -ve cash flow will lead to economic stress which will kill creativity which will make it longer to go debt free.

3. Plan for Cash flow positive. On paper - In writing - Get someone to proofread.

4. If you are not able to get cash flow positive - get a consulting assignment or a job. START LOOKING RIGHT NOW.

5. If you are able to get to cash flow positive - look at your existing ideas-business lines and pick out the one which will create revenue fastest with the most amount of confidence. Work on it, and leave everything else for a while.

6. Don't go back to school. You know that is not a solution. There was a reason why you crossed into the free world.

Also, a lot of the time economic stress forces you to make the changes in habit and self-discipline that allow you to thrive as an entrepreneur. CatDancer makes an excellent point that lack of profitability ("economic stress") is a signal to improve your business.

What it does mean is that this situation makes you lose any bit of your laziness or ego or threat of embarrassment. Where as previously you may have been shy to tell your hosting company you can only pay $100 instead of $600, now you may have NO OTHER OPTION but to pay $100 instead of $600.

Of course the hosting company can refuse and pursue another route such as collection. But from my experience, most small businesses aren't looking to pick a fight if you talk to them genuinely and explain your situation. In hosting, this is even more true because it is a high margin business. ie. the $600/month you are paying may only be costing the provider $50/month.

We have weathered similar situation on more than one occasion in last one year. What has usually worked for us is to go "broke": tell the folks you need to pay that you cannot pay until x date or that you can only pay $y/month. Most vendors will work with you especially if you have been doing business with them for some time.

Ridgely Evers wrote a great post about this back in March "Guiding Your Business Through the Recession" http://blog.netbooks.com/index.php/2008/03/24/guiding-your-b...

5. Conserve creditworthiness. Just like you don’t want to be your customers’ banker, don’t get into the position of being overextended with vendors, especially the ones you really depend on. This is often the opposite of what your instincts are--we all think our key vendors need us, which is true right up until they decide they can’t afford you as a customer. If you have to stretch payments, do it with ancillary vendors, and don’t wait for them to call you--tell them that you’re going to pay them later than you think you can, so you then pay them sooner than you said you would.

6. If things are tight, pay off all the little bills first. You’ll spend as much time and energy answering calls from the little guys as you do from the big ones. And remember the old adage: "If you borrow $1,000 and can’t pay it back, you have a problem. But if you borrow $100,000 and can’t pay it back, the lender has a problem." Your bigger vendors will work with you--they don’t want to lose you if they can help it. So pay off the little guys, and then communicate with the big ones openly and frequently. And pay something--it shows good faith, and makes it harder to cut you off.

I think you are just playing with semantics;) In general, trying to change your agreement with a vendor is negotiating in my books. Remember if I proposed $100/month, the vendor could well come back and make a counteroffer of $110/month. I might sleep over it. And then agree to it. I'd call that negotiation.

I can see value in Ridgely Evers book. But I see NOT negotiating aggressively as a bigger problem than negotiating too aggressively. Totally agree with Ridgely in that you have to have a sense of to what extent the vendor will go to accommodate you before it is not worth his time and investment.

For hosting, it is not too difficult to calculate that point. ie. say we are paying $3000/month for a high-end server. We know the hardware cost $6,000 to the host. We know we have been with the host for 6 months and paid them $18,000. We know, thus, that the host has already recovered the cost of the hardware. In addition, we know that the bandwidth at the datacenter costs the host no more than $500/month and the rackspace for our server ~$200/month.

With the server cost paid, we are costing the host ~$700/month and making them a rough profit of ~$2300. At this point, we may be tempted to start our negotiation by telling them we can only afford to pay $1500. Realistically, we can settle on $2,000...saving 33%/month.

All the numbers above are almost real from our recent negotiation with a host.

I am completely in favor of negotiating aggressively, but I like my word and my signature on a contract to mean something, if only because that has value in future negotiations.

As to your situation I don't understand why you didn't negotiate a better deal up front if all of these numbers were available to you? Why not break out hardware reimbursement from bandwidth, rack space, and other services and work out a payment schedule that meets your needs and theirs in parallel with negotiations with other vendors? You have far more leverage when negotiating in parallel than when you are refusing to pay.

Why sign a contract and then renege six months in? The impact on your reputation (based on who else they may talk to or get called for a reference) and your next negotiation with this vendor has yet to be felt but I wouldn't rely on it being negligible.

Hey, now you are implying that my signature on a contract does not mean anything and that, that is how I prefer to run things. We are talking about ONE certain contract...and in this case, it involves a month-to-month contract.

As for negotiating earlier, again, you sound like you are reading from a college textbook. Nothing wrong with it, but I run a start-up and things are not usually as perfect as books may make it seem. ie. We did just as aggressive negotiation at the time of signing up and got the best deal in the market at the time. Also note that at the time the server was given to us, the host had put in money that they had yet to recover. When we went back to renegotiate, that cost had been recovered.

"Why sign a contract and then renege six months in?"

Usually because some unexpected variables change. Happens all the time, especially in a start-up. And right now, in this economy, even more so!

Lastly, your point that you should negotiate just as aggressively at the beginning is well taken. However, doing that and re-negotiating to get the best deal at all times are not mutually exclusive.

Numbers from "The Giant Pool of Money" episode of This American Life. Transcript: http://www.thislife.org/extras/radio/355_transcript.pdf.