The word startup is not a fancy name for a company in its early stages, it represents a concept.
Seen from the investors point of view, it describes a tool that allows them to mobilize high risk money in lots of small packets of funding that can lead to nothing, or immensely lucrative speculations. Note that the word company does not even appear in my sentence.
From our perspective, the creators, the startup concept represents the loss of all our fears around starting a company. All of us startuppers got dazed by the idea that it would have been fun, painless and risk free. We’ve been – implicitly – told that the necessary money would have appeared in front of us as an endless stream of resources and all we had to do was accomplishing our dreams. Sure, failure is always on the radar, but there really was nothing to worry about.
As an Italian living in Italy, I am used to being suspicious of dream-fulfilling formulas. We as a people, have this encoded in our DNA: nothing comes for free, and no one except your parents gives any amount of fuck about your dreams.
However the American market and optimism really got me drunk pretty quickly.
I didn’t lose my pragmatism though, and when we got all started, I wanted everything to be set up as a lucrative company, not a fluffy dream. Business plan, product, go-to-market strategy, all that. I wanted to live off someone else’s money for the time needed, but not one minute more.
Little I knew of what was coming next! So here’s 6 things I wish I knew before creating a startup:
1. Invest time and sweat researching your future customers
Most startup products come from direct observation of unsolved problems. In your workplace, in your daily life, in your spare time.
Be humble enough to realize you’ve seen a tiny fraction of the world around you. Sure the problem is real, but it may manifest itself in a completely different configuration in other workplaces, families, countries.
Before even facing your market, make sure all your assumptions on what your future market needs are broad enough for a large subset of contexts, or at least acknowledge whom you’re leaving out of your picture.
The classic process of creating a management software, for example, includes the identification (and employment, if necessary) of a domain expert, the person with all the truths in her sleeve.
Whether you are the domain expert, or are capable of becoming the domain expert, or a buddy of yours can be, make sure you can master the domain in most of its incarnations.
Understand that innovation needs to work with real users’ familiarity with certain concepts. Unless you’re inventing something completely unseen before, make sure your domain expert explains to you what the current expectations are, and accepts your innovations with enthusiasm rather than scepticism.
2. Don’t underestimate the amount of work ahead
Being ready when you join the first sales call is pure utopia. If they’re kind enough, they will get back to you with a lot of observations on what’s “not OK” in what you’re selling. Some of them will look so obvious you will feel dumb.
And it will go on like that for quite some time. So all of a sudden, your shiny roadmap describing the next 2 years of your innovative product, gets scattered with millions of things that certainly need to be done to meet the here/now expectations.
A good balance between user driven requirements and vision is essential. A strategy will slowly grow in you along the way, but even so the sum of the two can feel overwhelming.
And you’ll overwork, oh yes you will. To the point you’ll be entering your office in the morning and ask yourself “Did I even go home last night…?”.
3. Don’t be too conservative with money
So you have your first round of funding. You then launch your calculator app and start crunching ballpark numbers. Sooner rather than later, you’ll find yourself reducing costs at the very minimum to expand the life span of the company (assuming revenue will not flow in).
While this is wise, and many startups fail being reasonable with expenses, you need to clearly identify which expenses are not necessary, and which on the contrary are necessary.
NEVER cut on necessary expenses. NEVER, delay hiring someone you need because you’re acting conservative. This is a price you will pay later, and very dearly.
Sometimes delaying certain expenses delay success and a delay could ruin your timing to market. Running a three legged company for one more year not only does not guarantee success, but may burn you out because you’re trying to replace the missing leg with your efforts and time.
4. Sloppiness is not an option
When you start you have nothing ready. And when you have nothing ready you rush to get something ready. Sure what you have ready is not perfect, but it kinda works so…
So nothing. One of the most disturbing mistakes you can make is thinking that because you are a startup, customers will be merciful for your incompleteness / bugs / lack of documentation etc.
That is not the case.
Not only being a startup is not an excuse, it’s a obstacle already. You will need to win the prejudice larger companies have toward adopting a software that has been made by a company that may be dead in one year.
So? So invest in perfection. And if you’re too small to do well all the stuff you planned, then remove stuff from your roadmap and do a great job on what you can objectively achieve. If shrinking your roadmap is not an option, then you have a problem to address, but reducing quality is not the way.
5. Beware breakdowns
When you launch your first startup you have no idea what will be of you. Sure it is exciting, and certain media will very kindly show you the bright, adventurous side of it.
But there’s a dark side people rather not talk about.
Furiously overworking. Isolation. Lonely life-changing decision making. Responsibility. Taxes and expenses. Anxiety. And then you find yourself sighing in the shower asking yourself why you left your OK job for this nightmare.
This happens more frequently than you think and it’s part of the red pill you took.
Breathe. Understand that when you’re close to breaking down, your emotions are amplified. It’s hard to see the world objectively from a roller coaster. So no matter what, no matter how important your duty may seem, stop and take a break. There are very few things in life that can’t wait one day or two, or at least an hour or two. You have no alternative, because if you fall on the ground lifeless, no problem will get solved. And if things are meant to go bad, realize it’s not the end of the world. You are an adventurous person already. The next big thing starts when the previous ends.
6. You’ll be asked to be stone cold
A step back: being a good leader means doing great hires. And doing great hires implies a good amount of empathy. But empathy, sometimes, is a huge obstacle.
When you launch your startup, you’ll have few co-workers, you probably interviewed them yourself, and they most likely come from a close circle of friends, or friends of friends.
If you did your hiring job right, not only they are great professionals, but people you like to share the office with.
Unfortunately sometimes you need to take hard decisions, like firing someone.
Other times your pathetic revenue makes you think it’s not going to be OK, and you start thinking about the great people you involved, and wish you hired people you don’t like.
Guys, I must admit I don’t have a good solution to this. It’s tough, and I fight this thought every now and then.
A good advice that kinda works for me is clarity. These people did a bet on you and your project already, they were aware it was a risky business by definition, there’s no reason to keep them away from the kitchen.
You certainly shouldn’t rush to them and vomit out all your anxiety. I’m suggesting you take scheduled time to let your staff know how things are going in reality, being open to questions and make them feel like what they perceive is what’s really happening. If you let them guess, they may guess wrong, and then when reality strikes them it’s drama.
I’m not trying to discourage you even if it may sound like it. What I’d like you to learn from this reading is: you got to be strong, or at least believe you can become strong.
Don’t let TechCrunch (as an example) fool you, behind any great success there’s sacrifice, even in the glittering startup world.