Some wise words on start ups courtesy of Mark Suster (sucessful entrepreneur you know!)…
“I usually tell people that everything I learned about being an entrepreneur I learned by F’ing up at my first company. I think the sign of a good entrepreneur is the ability to spot your mistakes, correct quickly and not repeat the mistakes. I made plenty of mistakes.”
Below are some of the lessons I learned along the way. If there’s a link on a title below I’ve written the post, if not I plan to. The summary of each posting will be here but the full article requires you to follow the links.
For now it’s mostly an outline for me to follow (in no particular order). I’ve now started so be sure to look for links. If you want me to do one sooner rather than later leave a comment. If the topics seem interesting to you please sign up for my RSS feed or email newsletter on the home page.
Disclaimer: I ran two SaaS software companies. My experiences come from this. I can’t say they’re applicable to all businesses but I think many of the lessons will be applicable to most tech firms.
1 – Should you start a company or go work for someone else? – In this post I talk about whether it’s time to “earn” or to “learn” – a guide on thinking about when to start a company.
2 In the Beginning (most common early mistakes) – Many founders make mistakes in the first 12 months of business that cost them dearly as they build their companies. These mistakes revolve around intellectual property, founding team members, initial product that is built and market validation.
You also need to consider founder scenarios, ownership, prenuptials and stock options.
Learning to work with lawyers. Start early, build relationships, make them a part of your business.
3 Do you still need a business plan to start a company? Conventional wisdom amongst uber-startup CEOs and VCs is that you don’t need a business plan. Just launch and iterate. They’re wrong. While you shouldn’t write a Word document, a good financial model is a must. This post tells you why.
4 Choose your investors carefully. There are many bad investors out there – I call them VC Seagulls. Read here to see some of the signs to be careful about.
5 Hiring at a Startup or Looking for a Cofounder? Know thy Weaknesses – Before you build out your senior (or even junior) team you need to inventory your strengths / weaknesses. Be honest with yourself. And don’t hire 5 clones. Plug your weaknesses.
6. Don’t Drink Your Own Kool Aid – There is a hype curve in any company. Press, journalists, analysts, friends and family can reinforce the sense that you’re “killing it.” As Public Enemy says .. Don’t Believe the Hype. The only way to build a sustainable customer is to listen to customers, partners, suppliers and employees. This post talks about how the Kool Aid effect happens.
7 Save Your Spin for Someone Who Cares – How should you best use your PR with VCs or business development partners? This post covers the topic of why PR is so important but so often misplayed.
8. Good Judgment Comes from Experience, but Experience Comes from Bad Judgment – You can read lots of books or blogs about being an entrepreneur but the truth is you’ll really only learn when you get out there and do it. The earlier you make your mistakes the quicker you can get on to building a great company.
9. Beware Rocket Fuel
10. Naked in the Mirror – Most companies have growing pains and moments of intense self doubt. It is compounded because you read your competitors press releases yet you still stand naken in the mirror every morning. This post talks about this issue and how to get over it.
11. Punch above your weightclass – Startup founders are often tempted to bring in the heavyweights early. This is very frequent in sales because it seems like the easiest solution when you’re not hitting your numbers. I argue that you should always hire people who aspire to be one level above their last job (e.g. one “weight class” higher).
12. Turn your Organization Inside-Out – Many companies are too insular. You need to get all of your input from the outside and have that inform your company and product direction.
13. JFDI – What separates entrepreneurs from those the offer tons of advice but sit on the sidelines? Entrepreneurs guide themselves by the Nike slogan, “Just Do It.” They know that they need to move the ball forward everyday and make decisions with incomplete information. They know that at best 70% of their decisions are going to be wrong and they find ways to correct their direction. They JFDI. This post explains.
15. Elephant, Deer and Rabbits – Many companies make the mistakes that I made in trying to serve multiple customer segments early in your company’s existence. In this post I argue that most companies should be Deer Hunters but at a minimum narrow your range and hunt in one segment.
16. Embrace Losing – I hate losing. I really hate losing. But you need to embrace losing if you want to learn. Channel your negative energy. Revisit why you lost. Ask for real and honest feedback. Don’t be defensive about it – try to really understand it. But also look beyond it to the hidden reasons you lost. And channel the lessons to your next competition.
17. You’re Most Vulnerable Just After You Win a Deal – Competitors have nothing to lose. Internal enemies at your client play their cards more openly. Thing can get ugly. Never celebrate until the ink on the contract is dry and the check is in the bank.
18. Crossing the Chasm
19. When you’re a Hammer Everything Looks like a Nail
20. Flipping Burgers – In some companies the CEO does not have the complete grasp of every function of his/her company. They essentially outsource the thinking on technology, sales, customer service, whatever. This is always a warning sign to me. This post covers the lessons I learned the hard way, from trying to run a burger chain without first flipping burgers.
21. Crocodile Sales
22. The End of the Mexican Road
23. Beg for Forgiveness
24Lies, Damn Lies and Statistics
25. Cutting into Muscle
26. Rolling out the Red Carpet on the Way Out the Door – Many companies wait until their star performers quite before offering up serious incentives to stay. There are only 4-5 great people who make a difference in any startup. Know who yours are and roll out the red carpet while they’re still inside the castle.
27. Boards & Board Meetings
28. Advisory Boards – Many first-time entrepreneurs form advisory boards and grant 0.25-0.5% equity to each adviser. Should you? This post talks about why equity for advisers should only come if they write a check and if you do set up an advisory board what the best way to run it is. Also a quick note on how VCs view advisory boards (summary answer is – we’re cynical).
29. The Burning Platform – There are 3 steps you need to solve to effectively sell your products. 1) Why buy anything? 2) Why buy mine? and 3) Why buy now? The first two are easy – it’s the third that drives faster sales conversions. This post covers the three questions of sales.
30. Avoiding Death by a Thousand Cuts
31. Easy Money vs. Pure Strategy
32. Missionaries vs. Mercenaries
33. The Fallacy of Channels
34. Demo booths
35. International Licensing
36. Founders taking money off of the table. Controversial topic but in many scenarios this aligns the incentives of founders and VCs allowing both parties to “swing for the fences.”
37. Do you need an MBA to work in a start-up? Many careers require MBAs (investment banking, strategy consulting and private equity to name a few), but my opinion is that if you want to follow a start-up career an MBA isn’t necessary and considering the cost and debt you’d incur could actually make you more risk averse and a less likely entrepreneurs. The post talks about the “5 C’s” of an MBA.
38. Give in graciously
39. Swim with the Sharks without Being Eaten Alive
40. How to (re) approach people at conferences – Many people swarm a panelist after he/she finishes speaking. Other people turn up at conferences and just “wing it.” In this post I talk about how to maximize your attendances at conferences or trade events and meet the right people.
41. How to present at big meetings without going down a rat hole. Big meetings are hard to manage. Unless you have a sponsor to help you manage the process and know how to deal with detail merchants, naysayers and silent partners you’ll find yourself in big trouble.
42. The Yo-Yo Life of a Tech Entrepreneur: We all find ourselves in the habit of working late, traveling too much and eating like crap. In your twenties it’s manageable. In your thirties it starts to catch up with you. When you hit 40 life changes. You need to get serious about finding a way to bring health & fitness into your life as an entrepreneur. This is MY story.