MileLogr is already worth $1674 – Applying Lean Startup

Last Fall while driving to a meeting I was struck with this idea for a service that would help self-employed people and small businesses track automobile mileage in order to get a tax deduction. As I was leaving the Borg I found myself driving all over hell and back meeting with business partners, startups I was advising, and business events such as Lean Startup Seattle meetings. I knew the mileage was deductible but keeping track of it was a total pain.

It was immediately obvious that while this was probably a “good” idea, it clearly wasn’t a “big” idea.^† I could, however, see the potential for a revenue generating “lifestyle” business and I really wanted to see if I could execute on it.

In the spirit of making lemonade out of lemons, the delays in getting my “big idea” startup funded gave me the opportunity to spend some real time on this “small idea”.^‡

Thus MileLogr – The Only Completely Automatic Mileage Logger was born!

The concept is pretty simple. I’m not yet willing to give away the core of the idea because the patents have not been filed, but the gist of it is described in this blog post from January.

In building MileLogr I applied the 5 Ps framework. The Purpose is:

Launch a new product/service that will enable self-employed individuals and small businesses track their business mileage for tax and reimbursement purposes.

The Principles I wrote down are:

• We will spend as little money as possible. Use barter and other forms of compensation to get work done.
• We will balance Business, user eXperience, and Technology (BXT) in a holistic way.
• We will use “lean startup principles” to ensure laser like focus and continuous learning and product improvement.

Those of you who have actually read Eric Reis’s Lean Startup know that the model he suggests is not really about being fiscally lean. The Lean Startup movement is really about how you execute and not about how much money you spend executing. It is perfectly reasonable to spend millions and still apply Lean Startup principles.

In my case, I explicitly wanted to actually be fiscally lean as well. In fact, it was my goal, at least through getting my 2011 taxes filed to NOT SPEND A DIME on MileLogr.

The Priorities I wrote down for MileLogr are:

1. Build a features & functionality that can be used by Charlie Kindel for his 2011 tax return.
2. File related patents.
3. Get the product into the hands of other users to prove/disprove core hypothesis.

I am happy to report complete success against the first priority. This last weekend I used MileLogr to generate my 2011 mileage log. I drove 3,017 miles for business purposes in 2011. I sent the log to my accountant who said:

The MileLogr log meets all the criteria for the substantiation of business mileage. This counts as a $1,674 deduction from your 2011 Federal Income Taxes.

To get this done, I found an excellent partner who took my initial prototype implementation and turned it into an end-to-end functional website that met our goal for this time period. The initial agreement was based simply on this being a fun project to collaborate on. We’ve subsequently agreed to become business partners in this venture (based on the fact that we’ve proven a bunch of early hypothesis).

Simultaneously I connected with an IP attorney I’ve worked with before and built an agreement whereby he helped me file inventions behind MileLogr as patents in a barter arrangement. We are now on track to have the patents filed by the end of the month.

The team is now focused on tackling priority #3 (which is now priority #1) by building a private beta by this summer. As we learn more we will re-visit the current “5 Ps” plan with an eye towards having MileLogr generating revenue by the “2012 tax season”. We are also going to start putting some money into this.

I had 3 goals in posting this:

1. Highlight that Lean Startup is distinct from being monetarily lean, but show that they can be linked.
2. Provide another real-world example of how a prioritization framework like The 5 Ps can work to help you get an idea past idea stage into execution.
3. Start to build mindshare and interest (SEO) around MileLogr. <grin>

I’d love to hear your thoughts and reactions. And if you drive around a lot and wish you could get a sweet tax write-off head over to www.milelogr.com and enter your email address.  That way you’ll be notified when the beta is ready.

^† I think I have some deep thoughts on how to think about “big” ideas versus “small” ideas. If you think that would make an interesting blog post please comment below.

^‡ People ask me the biggest thing that surprised me about leaving MS after 21 years. My response is “The liberation I feel for being able to actually execute against many of the small ideas I come up with.” A topic for another blog post? Let me know.

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