I have co-founded two companies. The first company was a 20MM e-commerce company I affectionately named Blue Lava Group because it sounded cool and everyone at the time seemed to agree. The second company, Xperience Interactive was a successful digital agency specializing in user experience.
Today, I had the opportunity to meet with one of my close friends and a trusted advisor who has also founded his own technology startup. We were talking about the roller coaster ride that comes with the birth of every startup and he asked me if I had learned anything. As simple and obvious as it may sound I told him I’ve learned that relationships and integrity are everything and without those it’s very hard to get traction or momentum for any business…unless you are just plain evil (insert evil laughter here Muhahahaha).
In addition to that golden rule, I also wanted to share 10 other rules I wish someone had to told me before I founded my startups.
1. Pick Your Partners Wisely
It’s true, founding a company with someone is a lot like getting married. You’re going to be spending a LOT of time with this person or person(s), make sure you like them, trust them, and believe in them and they feel the same about you. If you don’t, you can always try to change that, but it’s better if you gel from the start.
2. Be Passionate and Damn Good
Make sure you’re passionate about your business. You’re trying to make a dent in the universe, right? You’re not just in it for the big exit. But if you are in it for the money then make sure you’re damn good at your role in the company and that it is clearly defined. Don’t have overlap in responsibilities. It will lead to confusion and poor exectution.
3. Relationships and Integrity are Everything
Bottomline, your business will test your relationships. Keep them. You don’t want to be a lonely a billionaire.
4. VC’s and Angels are Not Your Friends, They Are Your Investors
Although I was very good friends with the VC’s and Angels that invested in my company, I learned the hard way that they are first and foremost investors. Don’t assume that because you are friendly that funding will keep coming. You have to earn the investment through the performance of your company.
5. Focus but Don’t Get Tunnel Vision
I know the “Pivot” is very trendy for startups right now, but I think businesses run a higher risk of failure by not focusing on the core problem they are solving and creating a great customer experience. However, markets change, things happen and you can’t be so focused that you lose sight of what’s happening around you, in which case it might make sense to pivot.
6. Hire When You Absolutely Need to and Make Sure It’s a Damn Good Fit
What’s the most expensive mistake a company can make? If you said a “Bad Hire” then you win! But really you can’t win with a bad hire, you can only lose and lose really big. When you hire, make sure you absolutely need to. Don’t do it because you think you can afford to. And make sure that person fits with your team. If that person is a heavy hitter, it won’t matter if they don’t gel with the team. They will ultimately be negative value, not to mention additional overhead. If you can figure out a way to try before you buy, I would strongly recommend it.
7. Solve a Problem or Create a New Market
You can be a tried and true service provider or a maverick innovator or both. The bottomline is there needs to be demand and a form of distribution for what you offer. Obvious right? It is, but sometimes, we get so caught up in our revolutionary digital products that we forget we might be the only ones who would want them. Self-invention can be a powerful and intoxicating spell of disillusion. Do some market testing on your next big idea before setting up shop.
8. Create A Killer Customer Experience that Delights
Whether you intuit customer wants and needs like Steve Jobs or research and uncover insights to fuel your product design, you ultimately need to craft a customer experience that goes beyond practical need, you need to tap into emotion and the holy grail of experience, which is delight. If you’re going to build a Time Machine, why not make it a Delorian?
9. Get Real Fast. Prototype, Iterate, and Test
I’ll borrow a page from 37 Signals here, and just say get to a digital product as quickly as possible. Don’t boil the ocean and get bogged down in requirements when you could be prototyping, testing, and iterating with that precious time. Iteration will trump trying to create the perfect product specification every time.
10. Never, Ever Take Your Eyes Off Cashflow
Cashflow is the life-blood of your business. Always know where you stand and where break even is. Even if you have a CFO, you should still keep your eye on that target.
For anyone out there who is on the startup roller coaster ride or dreams of taking the trip, I hope these tips will help make it a little smoother for you.
Lover of tech startups, agile methodologies, and killer customer experiences. Serial entrepreneur and business book junky.