For the next 12 weeks I’m going to be creating a set of blog entries for a series of videos I’ll be watching as part of “How to Start a Startup” which is a program hosted by CoLabJax and put on by TheBunkerJax.
If you want to watch the video to follow along, check it out here on YouTube: Before the Startup (Paul Graham)
This is primarily a brain dump of thoughts and ideas I had while watching the video, they are laced with opinion and your mileage may vary. There are areas I disagree with Mr. Graham, so keep in mind that he’s worth hundreds of millions of dollars, and I am not. I’d love to chat about them on twitter though! Follow me @axe9
Work with people you genuinely like and respect
This is crazy, crazy important. Starting a startup with [a] co-founder[s] is pretty similar to being married. Actually in some cases it may even be worse than getting married. There aren’t any social or religious stigmas about breaking up a company to consider when things get rough, so the only thing keeping founders together is passion for the product, and a desire to succeed at all costs.
Picking co-founders is incredibly difficult, but here would be my suggestions:
- Pick people you really enjoy being around. They should energize you, make you happy most of the time, and generally contribute to your well-being. There will be 50, 60, 70, 80 hour weeks when you’re starting a company, and they’ll likely be around a lot.
- Pick someone with similar tastes and lifestyle to yourself. You can’t imagine how much friction and dissension can brew from the dumbest things.
- Pick someone that has the same views on money that you do. When it comes to making hard financial decisions later on, this can only help.
- Pick people you trust implicitly if you can. You’ll need to have a lot of faith in these people, and there are times when you need to hand over the reigns and let them make decisions without driving yourself mad with worry.
- Pick people with complimentary skills, traits, and personality to yourself. The only reason to have a co-founder is if you can enhance each other so that the partnership is greater than the sum of it’s parts.
Don’t get trapped by the ‘startup’ culture.
Do things you need to do, not what you think you should be doing. This seems like a very obvious thing, but not as much as you might think. Startups, and the culture that tend to go along with them are currently in vogue. Every college student, basement programmer, and guy on the street is coming up with starutp ideas, and they all think they know the best way. This is my favorite part about living in The United States, is that in most cases these people could go on to be millionaires if their idea catches on.
You need to take some caution though when proceeding with your startup , as starting a company isn’t really the way they portray it on TV. It’s not all loft offices, parties, VCs, and trade shows. Only one in a thousand companies will make any real money, getting funding is soul suckingly hard, and you will work your ass of for a very long time, with very little support. Only do things you need to do to be successful. And treat every dollar as if it was your last dollar. You’ll be amazing at how much more runway you can have following those rules.
Read ‘The Lean Startup’ by Eric Reis if you can, I would also recommend ‘The Ultralight Startup’ by Jason L. Baptiste as great starting points to getting into the right mindset for building your company. Read The Lean Startup first, as The Ultralight Startup builds on it.
There are no tricks, or shortcuts to success.
You have to have something worthwhile to be successful.
Different ideas have different levels of possible success, you cannot expect that every idea is a million dollar idea. Some ideas are only lifestyle businesses, and that’s okay too. The goal here is gauge the potential of each idea, and put the correct amount of effort and investment into it. You will work hard, you will suffer, you will invest everything you have, so it’s important to know if you’ll see any return.
Startups are hard work. You can’t bullshit and part time it, you need to be ready to commit everything into it, or you should walk away. You need to have a plan for gritting your teeth and getting down to business. Having a startup is like having children, it’s all-consuming, rewarding, but tough. You’ll laugh, you’ll cheer, you’ll cry, and you’ll get into fights with people you care about, but it’s all worth it if you can power through and meet your goals.
The market knows what it needs, or rather, it will know it when it comes around. It probably wouldn’t be able to articulate what it needs, but there’s a Darwinian component to product success, and that cannot be ignored. In the world of new products, it’s very much the survival of the fittest, or rather the survival of the best fit. You can’t fool your customers, and you can’t game the system.
Only two things you need?
Paul says there are only two things you need to start a startup; an idea, and a co-founder, but I’d argue that a third, and even more important component is your personal / professional network. When I look back at the businesses I’ve started, I wouldn’t have been able to do any of it without the help from my friends, family, colleagues, professors, mentors, and advisers. Whether it came to paying the bills, or getting past a tough problem, I had to rely heavily on my network to build my businesses. This may have been an implied point, but I really think it’s worth explicitly stating. You need to have a healthy personal and professional network before you even start to build your business.
I think I’ll dedicate an entire post to this at some point, and link it here when complete.
The best ideas are natural, pulling ideas that have their own gravity.
They will tug at your mind; when you talk to people about them, they draw people in; and when you put pen to paper you’re carried along and are not so much creating the idea, as you are following where it goes. It’s a living breathing concept or vision that has it’s own path and personality.
The reason why the unicorns of the startup world don’t start as startups are because of the ‘why’. People were working on the project because they had a need, and solved it to make their lives easier. They had passion to solve this need, and it gave them the motivation to tough it out through the myriad of challenges that are thrown their way, and complete it. Without a real need, and without real passion to succeed it is much, much harder to complete your task.
With passion, you need expertise.
Not necessarily in programming, or engineering. But you need to have expertise that will be complementary to your idea. Like Paul said, the non-technical co-founder can sometimes be the hardest working person. You could be a sales expert, an industry expert, a technical expert, a growth expert; you need to be able to contribute something to the startup of yourself. If all you have is an idea and some passion, you don’t have a company yet.
To Business School or not to business school
One of the questions from the audience was around whether or not there was value in going to business school if you’re interested in entrepreneurship. Paul gives a bit of a glib, narrow answer on this topic, but you could devote a whole ream of writing on the pros and cons of a business degree for entrepreneurs.
I’ll admit that I am terribly biased when it comes to business school because I went to business school, but I went to business school for a very important reason for me.
As a highly technical person by temperament, I’ve never been very naturally good at networking, disseminating ideas, or winning people over. I’ve found that rare is the technical person that possesses any of that triad of traits requisite for a successful entrepreneur. Seeing these deficiencies in myself, the first thing I did when considering schools is pick up marketing and business administration minors to my computer science degree. These were hard classes for me, and they stretched me as a person quite a bit. When finishing up undergrad I still felt like I had some work to do on what I was missing, so I dove into the MBA program to learn more presentation skills, and to build my professional network.
To me, an MBA is more about learning how to assimilate large abstract ideas, and disseminating them to your stakeholders in such a way that convinces them you know what you’re talking about is a worthwhile concept, and this is an extremely important skill for an entrepreneur. You need to take vague ideas, and communicate them effectively enough that people will give you money and resources to make them happen.
Yes, some people are naturals at this (You see them on the covers of Forbes and Entrepreneur on a regular basis) but for every entrepreneur that has this skill from birth, there are thousands of them that have to read books, get a mentor, or go to business school to gain them.
Also if you trust my anecdote, I find it funny that some of the first hires that most startups make after their series A round usually involve CFOs, ivy league MBAs, and COOs, but you see the CEOs of these companies constantly trashing MBAs and business schools… You also see these people telling people to drop out of college altogether, but then if you look at the job ads at their companies, they all require college degrees to even be looked at.