What We Learned From Our First Startup
By Aaron Pollak
Use Your Domain Expertise
Venture.co is not our first rodeo. Our first was called Dynapower. It was a company within a company, showcasing a new product line around an end market that adhered to the core technology we were already producing. We had all the infrastructure in place to launch the company. We only needed to take a new product line to market. I write “only” as though it were a small thing. Of course, it was a big deal.
Renewables are on the radar now, and they were gaining visibility when we were founding Dynapower, a very large-scale renewable energy storage system. Starting a new business and establishing a customer base for it is easier when there is an existing social or consumer movement to leverage. At the time we were starting Dynapower, there was a growing international movement supporting renewables. People realized that renewables were important to the fate of the planet. That realization drove some of our success with Dynapower. There was something else, as well.
Since we were launching a company-within-a-company, we did not have to worry initially about all of the other ancillary parts that come along with starting a business, like setting up payroll, setting up an accounting system, and getting all the operations and manufacturing set up.
Having an infrastructure in place allowed us to laser in on the iterative process of product development, connecting that with business development, and constantly honing it until we became market leaders in the industry. That makes it sound too easy perhaps, but that could never have happened without having an infrastructure in place first.
The lesson for you, as a founder or somebody just starting out, is simple: get your infrastructure in place — first. Work out your corporate structure (a C corporation is recommended over an LLC.) Work out payroll, hiring, facilities and insurance. Sure, it all sounds a little boring, but if you get those things in place, you can more easily focus on the bigger picture of developing a product and getting it to market.
Another Valuable Lesson Learned — Live Your Product Development Cycle
Engineering and design cycles are a constant challenge. You are never going to get it right on day one. You have to test and iterate. We made estimates as to what the product development cycle was going to look like before we committed to large orders. Only then — once we had an order flow in place — did we do the vast majority of design and manufacturing for that product line. It was the nature of the company to build things to spec, but we knew we had to get it right and that meant pacing ourselves and testing before we considered large-scale production. We weren’t about to potentially risk customer relationships with some new first-up orders.
How We Applied these Ideas to Venture.co
When you are a small team like we are, and you need to ramp up or double your production capability, it’s easy. You add another person. Being small makes Venture.co, compared to a 50-year-old legacy business, tremendously more flexible. We are nimble. When a decision needs to get made, everybody here at the office is present to make it. When we need to pivot, we pivot. There is much less bureaucracy. Compare that to working within a 50-year-old legacy business with 300 employees.
I’ve written about infrastructure here, and you can see that it helps provide stability. Now let’s look at the flip side — the advantages of being new and small.
Use Your Domain Expertise
My co-founder, Kyle Clark, and I have domain experience in business and product development. This has taught us a lot about how to identify what customers’ needs are and design products around those needs. It is a transferable skill — one that we brought with us from Dynapower into Venture.co.
Venture.co is a platform for investment. It has the tools needed for investors to evaluate potential businesses. It also contains a platform for issuers (startup founders) to set up offerings. Doing that work properly is product development. Like any other product managers, we’re developing a suite of products focused on targeting pain points. The vast majority of today’s businesses are doing just that. They are looking for a solution for an existing customer or seeking a business-to-business pain point. Do you see how that might apply to your business, start-up or new venture? We took our experience in the iterative process of product development at Dynapower, and we are applying it here at Venture.co. That’s our domain expertise. What’s yours? Use it as the backbone of your new venture.
Looking Toward the Future
Whether you are considering developing your business as a “100 Year Company” or seeking to be acquired, don’t underestimate the power of infrastructure. The infrastructure that goes into supporting your business will pay off in many multiples. Whether we are talking about budgeting skills, forecasting skills, or accounting practices, or legal structuring, all of those things on day one will make your job easier in 24 months when you’re going out and talking to really savvy, strategic venture capital investors or angel investors who are going to go and invest, potentially, millions of dollars. The cleaner all that looks, the better it’s structured, it will result in a positive impact when you go out for money.
If you remember one thing from this blog, remember this: The supporting stuff will make your life easier.
Originally published at blog.designbook.com.