Bootstrapping to Exit: TimeSlips CEO Mitch Russo (Part 2)

Mitch Russo: As soon as I had the idea that I wanted to start my own company, I really started thinking about it. I would open up The New York Times every Friday and look at the opportunities section to see if there were companies I could invest in or buy. Opportunities started to show up in my life. Some of them were silly.

What ended up happening was the house next door to me was vacant. It was, all of a sudden, occupied by a young couple. I went over to visit. I got to know this very cool guy named Neil. Neil and I had a lot in common. We both loved electronics and computers. We both played guitar, but he was a programmer. I shared with him some of my frustrations of using my new PC. This is 1985.

I couldn’t quite figure out how to get it programmed correctly. He volunteered to help me. The problem I was trying to program was all about how to keep track of the time I spent doing these types of sample requests. The sample requests were engineers who wanted our parts to sample. I had so many of them. It was so hard to manage. I wanted to write a database program to get it done.

Then I found out that it was impossible to deduct my brand new $6,000 IBM PC from my tax return as a business deduction because the IRS thought computers were toys and not true business instruments. As a result, I did some research and found out that if you have a record of its usage, where you could actually deduct the cost of your computer from your tax return. I said, “There’s got to be some kind of software that would let me keep a record of its usage.” I found nothing. I said to Neil, “There is no actual software to keep track of computer usage. Wouldn’t it be great if there was? What do you think about helping me write one?”

Together, we sketched out the idea of what it would be like to keep track of time and then create the proper reports for the IRS. Neil went back and about six weeks later called me up and said, “I want to show you something.” He showed me what looked like a little taxi meter counting down seconds and a stop and start button on computer screen. I got excited because you can change the activity that you were doing and then it would produce a little report. I said, “Wow this is exactly what we need for the IRS. Do you want to start a company?”

We then both invested $5,000 each. We spent some of that money to draw up documents. At that point, we started working on the software. About five to six months into the project, we both quit our jobs. The software was ready. We started writing the manual. A week after we quit our jobs, my accountant called me and up and said, “I’ve got some bad news. It turns out that the IRS relaxed their ruling on contemporaneous record keeping and will now allow you to deduct your PC.”

This segment is part 2 in the series : Bootstrapping to Exit: TimeSlips CEO Mitch Russo
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