All posts tagged startups

10 Things I’d Tell My Pre-Startup Former Self

This post is a part of this week’s Startup Edition, a collection of posts inspired by the question: “What advice would you give young entrepreneurs?”

I never planned on being an entrepreneur.

I never really planned on a career at all, like most of the people in my generation. I spent the first 22 years of my life thinking I might play professional soccer, and when that stopped feeling right I walked away from the sport without a Plan B.

I primarily followed my nose after that, and it lead me on a path to trying to build companies and products.

If I could go back to my senior year in college and share a few nuggets of wisdom with my youthful self, these are a few of the things I’d say:

  • Building products, services, and companies is an enlightening experience that’s likely to redefine your paradigm for the idea of work. If it’s right for you, you feel as if you’re almost always working but it never feels like work.
  • Think about networking any which way except for the way you’re taught to think about it. Don’t do it with a specific goal in mind – do it because people are what will truly make the difference for you.
  • Speaking of people, focus on meeting as many great ones as you can. Good people lead to good things, always.
  • Hypothesize and prove yourself wrong as often as possible. Every day if you can. Being wrong is hard for most people, and the more comfortable you are with it the better equipped you are to succeed.
  • There’s a big difference between acting like a founder and acting like an owner. Founders are leaders, owners are bosses.
  • Co-founding is akin to marriage in a lot of ways. Don’t do it lightly, and hold up to your end of the bargain.
  • One of the tricks to being efficient (as opposed to busy) is learning to say no more often than you say yes.
  • Work hard at becoming a great product picker. If it’s not your thing, find a co-founder or team member who’s already great at it. It’ll make all the difference going forward.
  • Stay fit. The energy, clarity, and strength you’ll get from exercise is a competitive advantage.
  • Eat real food and make food a priority, even if money’s tight. Ramen profitable doesn’t mean you actually have to eat shitty ramen.

There’s probably hundreds of little insights I’d like to share with my former self, but these jump out based on my experience over the last few years.

What advice would you give yourself prior to the path your currently on?

8 Simple Insights Early Founders Forget When Pitching

I try to talk to as many early stage founders as I can.

I do that because I learn so much by hearing other people’s ideas around building a business from scratch, and I appreciate how difficult it is to start a company so I want to help whenever the opportunity strikes.

I also spent two years working on a startup that never really got the kind of traction we were looking for. I went broke in the process of learning quite a bit (as anyone will if they crack at it for two years). We made plenty of mistakes, some of which are listed below.

There are a few signals I get when talking to new founders that suggest they’re thinking about the wrong things when they pitch their idea to new stakeholders.

They’ve got their eye on the wrong carrot.

NOTE: I’m not really talking about marketing your product to customers here. I’m talking about building a group of stakeholders that includes investors, advisors, and team members.

The following are a few insights I think early founders, especially first-timers, should take to heart when talking about their project.

  1. You can only do one thing. Your big vision usually clouds a conversation about how you’ll survive your first six months. Get crystal clear on the most simple way you can explain what you’re doing NOW. What’s the problem you’re solving and what’s the unique value you’re bringing to that problem? The biggest signal for missing this insight is the words “and then”. Never say “and then”.
  2. Sexy doesn’t survive a seed round. You can raise “dumb” money from people who don’t know anything about technology by telling a good story. It’s actually not that hard. What is hard is identifying a valuable problem and surmising a plausible strategy for solving it that will convince real stakeholders (who’ll act as multipliers) to buy in. Stop selling and start learning more than anyone else about your market by gathering real data.
  3. Flashy, showboating decks are like websites that play music. I know you want to stand out, and there are stories of pitch decks that broke convention and got a lot of buzz. Ignore those stories. Build 10 slides and crush what’s important. Think about it this way: the best decks get forwarded to people’s networks…nobody’s forwarding a video deck or overblown sales pitch to their network.
  4. Your story matters a lot. People get behind people they like. It’s true in sales and it’s true in startups. Don’t be afraid to share your story and a bit of your ethos in your deck (or in your accompanying email). Your background doesn’t have to demonstrate you’re an ideal customer, but you do need to highlight why you’re the team who’s got what it takes to persevere when things get really ugly. Hint: Things will get really ugly.
  5. You don’t have all the answers. Too many early founders present themselves as if they’re right about all of their assumptions. Startups are mostly about being wrong. The winning founders have a plan to figure out how they’re wrong quickly, via product design and iterations. What if you presented your idea as a series of hypotheses you needed time to prove? Would it change your pitch?
  6. Never fudge material signals. An almost Fortune 500 customer isn’t a Fortune 500 customer. A non-material acquisition conversation isn’t an acquisition offer. It’s far more helpful to discuss the reasons you didn’t land a customer or acquisition deal. Focus on what you’ve learned so far, and use “almost signals” as data points that you’re seeking knowledgeable advice on.
  7. Outline your revenue model. An amazing amount of pitch decks don’t outline a revenue model. Businesses are made to earn profits, so assuming you don’t have incredible retention or growth metrics yet, you should have a really strong grip on the ways you might make money. Have a favorite revenue model, but be open to exploring other ideas.
  8. Humble intelligence wins. You’re pretty smart. Anyone who gets a company off the ground has a bit of smarts in them. Mute the ego and become a great listener, absorbing the feedback you’re getting without taking it personally. Defend your hypotheses but listen to outside perspectives and treat startups like professional sports…very few rookies make an impact in their first season. Be a rookie in your Rookie Year.

A lot of these insights are based on the idea that the benefits of being open, humble, and honest when you’re just getting started outweigh the natural inclination you have to present yourself as as a big deal.

The biggest companies in technology are almost exclusively the ones that nobody thought were going to be huge.

Live in that space while you can, and learn as much as possible quickly, leveraging the smart people you have the opportunity to meet with.

Now I’ll ask you readers…

Founders, what mistakes have you made while pitching your idea?

Stakeholders, what kinds of things do you see repeatedly that you wish everyone knew before you sat down to meet founders?

 

Are Startups Cool?

I was catching up some friends and someone at the table said, “I don’t really get what you do…but it just sounds cool. Anything with ‘startup‘ in it sounds cool…so good job!”

That’s pretty much how the world thinks about startups right now.

I think that’s an unhealthy way to think about startups.

I didn’t get into startups because they’re cool, but I have a sense that people are starting to do just that.

A sad economy and bleary job prospects have made even my most risk-averse friends consider leaving their jobs to join a startup. The excitement surrounding early stage tech is so high right now that for some people “sitting on the sidelines” has become the risky career move.

That’s insane. The idea that starting or joining a startup is a rational career move is straight up crazy.

Any startup founder would agree that the last reason they got into this game was because they were thinking about their career.

My Story

An early draft of this post didn’t include much about my own experience and the few I asked to read it suggested I include a bit about my own experience. I think they’re right in that it’s helpful context. I’m not writing from the top of the hill, having sold my company for millions. My first startup is still alive but it’s a company we’re still pushing to find real success in.

I went broke as a startup founder. Dead broke. The kind of broke that people get uncomfortable talking about.

It was the kind of broke that left me unable to pay rent in Vancouver, having relocated there following our seed round. Unable to pay rent, I ended up taken in by an entrepreneur friend to crash on his couch. At 30 years old I was living on someone else’s couch without a dime in my pocket, working on our startup at every spare moment.

Every day, waking up presented two major challenges:

  1. Find a way to push our startup towards success and find a revenue model that worked.
  2. Find a way to survive by acquiring food.

If that sounds basic, it was. When was the last time you worried about eating enough?

I reached a point at which I’d ration out my week on less than 20 dollars. I was forced to ask for help from other entrepreneurs who would buy me meals. I couldn’t always feed myself.

Unable to pay bills, I stopped doing so. My credit card debt began to build all around me. My phone went dead.

The fallout of going really broke is immersive. You lose your sense of the normalcy most people experience. You’re doing it for the dream you’ve committed to, so you’re left with nothing except for the work you’re doing.

You work.

You have nothing else you can afford to do.

It’s brutal. It’s not glory.

A startup means uncertainty. Startups mean risk and pain and embarrassment. Startups can mean homelessness.

So…are startups “cool”?

Let’s look at the good and the bad. This is by no means an exhaustive look at startup life. If you’re in it, please share your insights in the comments for my mostly non-startup audience.

The Good Stuff

  • DREAMS – Creation IS cool: Building something new is cool. It’s as cool as writing a hit song or making a beautiful movie. Mainstream culture is now idealizing Sean Parker in the ways that they used to idealize The Rolling Stones.
  • INNOVATION – Risk aversion drives innovation: Startupheads are risk averse and face uncertainty in a way that most people don’t have the stomach for. Facing failure forces people to keep on pushing their boundaries. The survivors persist because it’s what they’re meant to do. That selection process benefits all of us.
  • BENEFITS – Work your own hours, unlimited vacation, blah: Startups build their own culture from the ground up, and we are lucky to have that fortune. It’s not 9 to 5. It’s a life very driven by results.
  • COMMUNITY – Altruism makes it all possible: Startup people are passionate. That passion birthed an industry full of collaboration and support that puts other industries to shame. Newbies in the startup world are met with encouragement and mentorship. It’s a competitive world, but it’s generally more friendly than other industries (I’ve worked in high finance and law, others can comment otherwise).

The Real Stuff

Here’s a bit about the stuff that isn’t “cool”.

  • DREAMS – Uncertainty is horrible: Imagine never knowing if you’ll have a job tomorrow. Or if you can pay your bills next week. Founders have it the hardest, but no matter where you are in the ecosystem, you’re always living a life that’s got no guarantees. Startups aren’t a career, they’re a lifestyle.
  • INNOVATION – Failure, always: In a startup you’re always fucking everything up. There’s nowhere to hide; you will feel bad at your job. You will often go to sleep knowing you could have done more. You will always know how much more there is to do. Everything but work can become “not working”, if you aren’t working.
  • BENEFITS – Paychecks are unstable: In Startupland, salaries are kind of a joke. Being an early team member on an unproven technology venture means you may find yourself elated every time you get paid. Financial instability is pretty consistent and it affects nearly aspect of a startup team members’ life.
  • COMMUNITY – You don’t complain: Whether you’re a founder or an early employee, every early stage ship is a rocket ship, and saying otherwise is sacrilege. There isn’t a lot of room in the startup culture to complain about your job. Startup jobs aren’t jobs. They’re tribe memberships.

I think it’s important to recognize that joining a startup is an admirable endeavor, but it’s equally important to acknowledge that it’s not for everyone. In fact, it’s not for most.

Startup work is a mishmash of incredible strength and passion living right next to complete uncertainty about a final outcome.

That uncertainty is the result of a 99% chance of dying early. Have you ever taken a job with a company you expected to fail?

That’s a prerequisite to working in Startupland.

I’d love to hear more thoughts on the hype I’m seeing around being a part of Startupland. We need to talk about how hard this is. We need to recognize that we’re all choosing to struggle.

If we deserve the accolades that we get when we succeed, we should honor and celebrate the challenges we take on for what they are.

Thoughts?