I took a class at Harvard Law School with the professor who wrote this book. I think it is a must-read/must-have for any Internet startup despite the fact no one has heard of it right now outside of law schools. It contains legal cases and descriptive text on pretty much all legal aspects of an Internet startup.

This book is basically a transcript of 30 some-odd interviews with famous startup founders. Most of the startups are Internet related, and all technology related. I highly recommend reading it if you are involved in or want to be involved in an Internet startup in any way. It really gives you a sense, through narrative, of what it is like and how different people approached the challenges involved. As an experienced Internet entrepreneur, I found it validating and extremely interesting.

This is a really short guide to the common terms you see when taking investment. If you are considering such, you should really get this book and understand it.

This is a really easy to use introduction to the balance sheet, income statement, and cash flow statement. Basically, if you know nothing about accounting, get this book and understand it.

If you have traffic at your site, this is a great way to monetize it (that means make money). You basically grab some code and put it on your site and then Google puts some contextual advertising there. I personally think it is actually a win-win for you and your users because the links are usually quite useful. It is of course possible to get better advertising rates, but for small sites without an advertising sales force, I haven't found anything better yet.

This is a service that gives you statistics about who is coming to your sites. It was a product that Google acquired a while ago called Urchin. I have used so many of these over the years, both hosted and local (remember hitbox?). Lately I have settled on this one and AwStats for local stuff. But recently, I have found dealing with local analysis really gets you nothing over the Google service, so I have switched everything there. Locally, you have to worry about upgrades, managing files, security (AwStats has had serious issues). I had been concerned about slowing down my sites, but that is no longer an issue. So if you have any sites, I recommend just signing up for this. It is free and easy to set up. You just put a little code at the bottom of your pages.

I'm sure you have heard of Gmail by now. If not, it is an email service hosted by Google. You're saying, I already have an email service. But Gmail is great for customer service because of their conversation view, and I highly suggest you use it for that. All you do is put a unique id in your messages, and then when people reply, they will be automatically put in the right thread (this mostly works without the id too). That way, you always have the whole thread together there for you to review. I know there are all sorts of products that do this for you too, but Gmail is free and simple and I have used it for years at this point for this purpose and never looked back and really haven't had any issues doing so.

When you ask people for accounting software recommendations, people send you to Peachtree or Quickbooks desktop software. Go here instead. You can have everyone doing accounting be able to log in and edit and review stuff (including an auditor or external accountant) without sending files around. Last I checked they don't do inventory, but hey, Internet startups don't usually have inventory. I've long since gotten over the backup and security issues. In fact, they are probably more reliable and secure than your desktop, and certainly your laptop.

One thing that startup founders find confusing is payroll. They end up paying through the roof by outsourcing. PayCycle makes it so simple there is no reason you shouldn't do it yourself. They even go so far to submit your state filings for you electronically, even multiple states (for you truly virtual companies).

There are a ton of voice mail/800 people. Go with these people. Cheap and it just works. People call in to your 800# and they will email you a sound file of the voice mail. If you run it through your server, you can send that out to a distribution list or whatever. It is just a great way to handle this stuff. You get to keep a record of everything digitally.

I have been very happy with this service. You get a fax number for like $4.95 a month and they PDF and email you all the faxes. And you can login and send faxes to anywhere, from anywhere, by uploading PDFs or other docs for nominal fees. This service has proved invaluable just to have around, even if you have a fax machine. You will find yourself out and about wanting to send a fax from a document on your laptop with no printer or fax machine in sight. Either you find a kinkos or just login to a Wi-fi network or use your broadband card and use Innoport.

Skype is that Voice Over Internet Protocol (VOIP) service that lets you make calls using your computers. It is free to make calls to other Skype users, and costs a little to make them to land-lines. Get a good headset (something from Plantronics) and then your customer service will be so much easier. The costs are minimal, and the connection is clear. Also, they don't show your caller-id so that is a plus. Finally, I have also found it invaluable to quickly set up conference calls. As long as you know the numbers, you can just keep adding people and it works flawlessly.

For a variety of reasons, I think you should run your own servers. I won't go into that here, but if you do, look to iLand for co-locating them (which means hosting them for you). iLand is really a sales force for Level 3 Communications for smaller customers like startups. They rent rack space as small 1 1U server in Level 3 data centers across the US and Europe. You can't really get closer to the Internet than a Level 3 data center. It just works.

From 2003-2006, I used iLand for hosting my servers (see link above), and I would do so again. However, right now I am hosting it right out of the office. I had tried doing this in various ways from 2000-2002, and it never worked great. Verizon FIOS may change that. It hasn't gone down yet and is basically as fast as I want. It is little known that they have a business version where you can get static IPs. The entire network is Fiber!

I used this service for the first time in 2007 to send a 2006 1099. It worked flawlessly. $3.79 and they electronically sent it to the IRS and then mailed out the forms to the contractor.

I have probably spent more hours using this program than any other (except for probably Windows). It is a secure way to connect to a server and type commands and such. I have done years of programming through putty and emacs on the server. No matter what you do, don't use telnet. It isn't secure!

This is a secure drag and drop file transfer program to servers. If you are familiar with FTP, it is like that, but secure, using the SSH protocols. Don't use FTP. It's not secure!

This is a JavaScript/AJAX/Web 2.0 tool-set that can do a ton of different things for your Web site. The two greatest things about it are 1) Yahoo! actually uses it and so it is tested across the world (they have lots of documentation on what that means exactly); and 2) Yahoo! will host the files for you.

This is a piece of JavaScript that makes the rounded corners on this site. Pretty cool. Granted, when Yahoo! YUI comes out with it, I will probably switch to it.

This is a little program that makes nice graphs telling you about things going on in your server, Web application, or whatever. Out of the box it will monitor your bandwidth. You can then write really short scripts to make graphs of new user signups, CPU utilization, or whatever.

FireFox is an alternative browser to Internet Explorer. I personally use both so that I can be logged in to different Google accounts at the same time. FireFox + Google Sync AddOn has changed the way I use the Internet (see next link for info).

This is a little known FireFox Add-on by Google. It has literally changed the Internet for me for the better. It stores all your FireFox bookmarks, passwords, forms, history and tabs on a central server, encrypted. When you switch computers, say from your desktop to laptop, all your stuff is right there. You even stay logged in!

This add-on for Firefox makes developing Web sites (and reverse engineering them!) a lot easier. It has countless little tools to give you info about the page you are viewing that are useful in debugging and creating certain browser behaviors.

This piece of software is used to access your desktop across the Internet. There is a free version, but it isn't secure! Get the paid version; it's cheap. There are other tools out there that do similar things, but this one works fast and it is about an order of magnitude cheaper.

If you can't tell from reading the other descriptions here, I care about security. You should too. If someone steals your computer right now, what's on there you don't want other people to have? I have a lot, and so it is all encrypted with this program. It is really easy to set up. You make a virtual drive and then you can just keep your private files on it. Every now and again you type in a pass phrase to unlock it.

If your hard disk broke right now, do you have a good backup? The hard disk, the component in your computer that stores the data, is the most likely component in there to break. My desktop actually has two hard disks that mirror each other, and one has broken before and it worked flawlessly. I suggest doing that too. But you should also have a backup kept off-site (think fire). This program works great for that and it is relatively cheap. You can back up your whole hard drive. If it breaks, you just get a new one and restore the whole thing. I tested it extensively. It just works.

Photoshop used to cost $500. Illustrator still does and I still think it is worth it, but Photoshop Elements is now a must have at $100. It has a "Save for web..." feature that just works great.

OK, this costs $500, so I can see the hesitation. But, seriously, it makes it so easy to make really cool stuff that differentiates you, like Fang (upper right).

Most people don't know that TurboTax makes a business product. It works just like the personal product where it asks you all sorts of questions and then at the end you have your taxes done. For pass-through entities like S-corps and most LLCs, you don't need this. But when you are a C-corp you do. I have used it for several years, and it works great for startups because our taxes aren't that complicated. For early-stage startups, I really believe the founders should do the accounting. If you are doing the accounting, then it is a quick step to do the taxes too. Just get this program and answer the questions.