As the end of the year one approached for my tech startup, I took a quick look back on what I had learned. I had started several successful bricks and mortar businesses over the years. But this ‘tech startup’ think was different.
Like most of us, when I get a great idea I research it, validate it, determine how to monetize it, review the market potential/size and evaluate the comp set. Then I build a brief pitch deck and go out and run it by the smartest people I know along with close friends I have in that specific industry. Ta-dah! If I get thumbs up instead of people looking at their watch, I get started on the business. Yet here, in the tech startup world, things were different;
#1: You used to have friends
What happens is that if you did your homework before you ran this by your soon to be ex-friends, they will buy into the idea right away. They will tell you all they can do: research, email contacts, raise money and work numerous hours per week getting this off the ground. You, because you trust them, sign them on as founders or partners. BIG MISTAKE.
With hindsight being 20/20, I recommend (besides an attorney) a one page co-founder agreement with some specific deliverables for anyone that pretends to believe in the project and wants to be a founder too. Bottom line here, establish your expectations for participation and value in advance. You’ll get to keep your friends and have better business partners.
#2: There is an “I” in TEAM
There is…you just can’t see it. Go look in the mirror because that “I” is you.
This may be the loneliest job you ever accept. That doesn’t mean your partners and co-founders are less than excellent. What it means is that it is all riding on you. Investors, lenders, vendors, family, friends…anything that goes good or bad here is on your back. You are the “I” in ‘team’. That’s a lot of pressure and no one around you really understands what you are going through. It’s a lonely, poorly funded and long road. Be prepared.
#3: Tech is a four-letter word
This does not mean your engineers, coders, UI, UX or geeks are your enemy. You may even be the geek. What it means is that the technical aspect of your product will be the visual stimulation investors, partners and advertisers are looking at. Everything takes double the time and triple the budget you expect. Prepare for it, know it and save money for it.
If you’re not a tech person, beware. Your tech partners must have passion for your product or service. They should be willing to accept some stock for a part of compensation. That makes them vested in your success. You must be able to trust them if you are not a tech person. And, find yourself a good advisor in the tech field to have on the side – even if you are a techie…you’ll need someone to run through some of your ideas and challenges.
#4: Funding can be Fun
Maybe because I’m a marketing guy, I like this. Maybe not. The bottom line here is that when you get a check from a lender, investor, partner or advertiser it is totally awesome. That means you had a clear vision, succinct business goal and presented it all quite well. This is the validation you want and need.
Be prepared, be honest, be open minded. You will hear NO much more than you will hear YES. But those “YES’s” are awesome. Enjoy the fruits of victory…they are not as frequent as you may like!
#5: Timing really is everything
That’s not a double entendre joke. Make sure the market is ready for your project. Bill Gross of Idealab has a great example of launching Z.com for online entertainment/video content before 2001 – broadband service was too slow and the company went out of business. Two years later with Adobe Flash and broadband service increased, YouTube is a Unicorn.
Remember that example before you quit your day job…sometimes being last is good enough. It worked for Google with search after all. When your product hits the market at the right time, and you solve problems that actually need solutions you are headed in the right direction.
Startups are not for the weak-willed and needy. Find reasons to celebrate along the way or you will find yourself in a deep valley of doubt.
Stand tall and succeed!
A storyteller by nature, a revenue repairman by trade and a founder by passion.