15 Things I Wish I Knew Before Founding My Startup In College
I’ve received a lot of great advice during my journey as an entrepreneur and recently I’ve been paying it forward and mentoring others who are just starting out. I find myself often repeating the same general points and thus I’ve decided to compile a list of some of the most important lessons and pieces of advice I’ve learned and heard over the past two years. Much of this advice is particularly aimed at student entrepreneurs — much like myself — and how to manage balancing a college workload with the stresses of startup life.
Some of these points are a bit more nuanced than others while others still are seemingly obvious but important nonetheless. None of these are guarantees of success, but they will certainly keep you moving in the right direction. A slight disclaimer: this is all through the lens of a recent college graduate with a heavy engineering background working on physical products.
Life is 10% what happens to you and 90% how you react
The unofficial motto of AnyCafé, this is the guiding principle we have followed from the start. This is by far the single greatest piece of advice I have ever received and share it with everyone I meet. Resilience and the ability to adapt to change is the name of the game in the world of startups and being able to effectively recover from problems is the difference between life or death. Never be afraid to ask for help or consult your advisors and mentors for advice on what to do, and always lay everything out on the table for your team to discuss the best course of action.
We have faced some extremely difficult and dark times (as all startups inevitably will) and we were able to pull through them all due to taking the time to think things through and determine the appropriate action. There is no point in getting bogged down in despair when things take a turn for the worse because in the end it is up to you where things go from here. Also keep in mind that you have never truly failed if you learned something.
Everything is a lot more expensive than you think
This is one of those points that seems pretty obvious but it does not truly sink in until you are nose deep in your budget wondering how to stay afloat for the next year. From the start, we always accounted for at least a 20–40% “fudge factor” on top of cost estimates in our budgets. While this was usually a sufficient safety net, unexpected expenses and legal fees rapidly add up. This is especially true if you run into frustrating problems during prototyping, are negotiating contracts and agreements, or making revisions to a provisional patent.
There is a lot of merit to the phrase “you have to spend money to make money” and in the development of a physical product, this is law. The phrase should really be revised to say “you have to spend a lot of money and then eventually you might get some money back, maybe”. People do not become entrepreneurs for the paycheck (at least at first) because the dream is to invest a lot of blood, sweat, and tears for a few years so that you can enjoy a big payout later on. Infrequently will you actually turn an appreciable profit early on unless you masterfully bootstrap without any major obstacles or have one of those rare, brilliant ideas that sells itself and requires little effort to create. There are also those rare cases where you find a passionate customer or customers early on that gladly act as your early evangelists. Do not lose these people!
You’d be surprised what you can do on a budget or for free
Though this seems to contradict my earlier point about needing to spend money to make money, you don’t need to spend money on everything. In fact, the more you can avoid spending money without needing to, the better. You can get surprisingly good results without breaking the bank and there is a plethora of free resources for almost anything you can imagine a few Google searches away.
It’s become a bit of an in-joke among my friends due to how much I bring this up, but I always recommend looking into the second-hand market before buying new things. You’d be surprised what you can find at a huge discount that is practically brand new or “scratch and dent”. Likewise, if you are still a student take as full advantage of student discounts and deals as possible. They can save you a ton of money as well as give you the chance to try out a wide range of software without having to pay full price (or at all).
There is also the option of learning a skill to be able to do something without paying somebody else, such as learning how to create a website or how to design logos and other art assets. Resourcefulness and the ability to create something from nothing is one of the distinguishing characteristics of a successful entrepreneur. A great repository of startup resources that I’ve used is here: http://www.37angels.com/resources/#tools
Patents aren’t necessarily worth the money when you are just starting out
Patents are expensive. Good patent attorneys are even more expensive. Something we were urged to do right from the start is to pursue a patent to protect our idea. I’ve noticed several others be told this, as well, and have found that people generally have the wrong impression about patents. IP protection is important but not necessarily worth the money when you are just starting out with little to no money in the bank.
Many of those with a novel idea think that they need a patent before doing anything else and this is just not the case whatsoever. A useful piece of advice we were given early on by one of our most influential mentors is that “nobody is going to steal your stupid idea”. A bit harsh, yes, but true nonetheless when you break it down. At this point in your development, your idea is likely in such a nascent and amorphous state that it’s little more than a rudimentary proof of concept. Ostensibly, it’s worthless. The value comes from your execution. By extension, pursuing a patent at this point could put you into a very bad position later on if you find that you need to significantly change your design. You will have essentially wasted your time and money on your original filing. Unless you are Thomas Edison, patenting each iteration of your product is just not practical.
If you are truly worried about IP and don’t yet have a provisional patent or patent, you can have people you talk with sign a Non-Disclosure Agreement (NDA). There’s a fine line, however, between handing out NDAs to everyone you meet and having a level of trust and confidence in your mentors. Asking someone to sign an NDA can potentially turn them away since there are some who never sign NDAs on principle and others who will feel like you do not trust them and thus will not trust you.
If you really think you should pursue legal protection, a provisional patent is the best option for startups. A provisional patent will cover you for 12 months, after which you will need to file either a continuation in part (PCT application) or a non-provisional utility patent, but provisional patents can cost up to $3,000. You must also be aware that if you publicly disclose your idea without a provisional patent, you have 12 months to file one before it potentially becomes public domain.
Also, if you are thinking of getting a patent through your college I would strongly advise against this because you will more than likely get screwed. I’ve seen it happen far too many times and it is disappointing and tragic. However, I would recommend talking to the firm that your college uses for patents because they will very likely cut you a good deal.
Most companies move really, really slow
This is something I wish somebody told me a long time ago and didn’t have to learn for myself. Big companies move slow. Really slow. Sometimes so slow that you wonder how they even get anything done and stay in business. But then you realize that many of these companies have so many clients or customers that they don’t care, and everybody else moves slow, anyway, so why bother trying to speed up?
Then there’s the reality that since these companies deal with so many other things, you as a startup often get added to a long list of other priorities. It is true that many tasks take a long time to go through thoroughly and correctly, but it can be endlessly frustrating when you are hamstrung with waiting on something vitally important that you have no control over. Time is the greatest enemy as a startup and anything that disrupts your timeline is potentially life threatening.
The best example of this that I have experienced is getting the laundry list of insurances necessary to get an office space and to protect the company. The process of getting insurance is straightforward enough, but it can take anywhere from 2 weeks to a month to get a quote and then another 2 weeks to a month for the paperwork to get signed, sealed, and delivered so that you can actually begin occupying the space. If you need insurance for something, say an office space, take it from me and start the process 2 months before you plan to actually move in.
Another example of playing the waiting game that applies to physical products is when you are communicating with manufacturers. It is a meticulous process to ensure that something is manufacturable and cost effective to produce and unfortunately you will often be stuck waiting to hear back about how the process is progressing. Manufacturing timelines have significant lead times and any delays can significantly alter your own timeline. Thus, I would recommend vastly overestimating your production timeline to accomodate any possible delays. I highly advise getting someone to help you with the supply chain and to maintain open communication channels to streamline any difficulties.
Another important thing to remember is that it is best to communicate with and/or provide deliverables to another company from Tuesday through Thursday; on Mondays, people are busy catching up on everything in their inbox from over the weekend so you are likely to get lost in the sauce. Then on Fridays, people are often preoccupied with getting ready for their weekend and put off tasks until the next week if they cannot complete them relatively quickly.
Hire fast, fire faster
If there is anything you take away from this article that you should burn into your frontal lobe for eternity, it is this. Contrary to the more common phrase “hire slow, fire fast”, in the world of startups few things are as valuable as time and you cannot afford to waste it on a long and tedious hiring process. I am not saying that you should not properly vet your potential hires, however. As a startup, early hires can make or break your company before it even gets off the ground. Building a strong team is invaluable and the team’s ability to work together and communicate is directly proportional to how successful you are. If you are at the point where money is scarce, investing in people is one of the best investments you can possibly make.
We learned this lesson the hard way very early on in our development and perhaps one of the best decisions we have made was trying out a few people, seeing how the glove fit, and then letting them go. It is important to give people a sufficient chance, but if time and time again they prove to be unreliable or unresponsive don’t let them stick around. In a startup you cannot afford to have deadweight or any potential liabilities, especially if you plan to seek any amount of investment. It is a rare talent to be able to recognize and on-board the ideal individual(s) to fill out your team; it is an even rarer talent to be one of these individuals possessing a unique level of passion and self-motivation.
As a general rule, you shouldn’t be the smartest person in the room. At the same time, your team doesn’t need to consist of leading experts in their respective fields. A willingness and desire to learn and improve one’s own skillset is a much more valuable skill to have and will prove to be far more useful over time. Likewise, your team needs to be able to properly take and use “lovingly critical” feedback. Another plus is to find people with differing enough views that you can get a diverse set of perspectives and be able to make the optimal choices for the company. Surrounding yourself with “yes men” will only hurt you in the end. The people who disagree with you and are able to justify their reasoning logically are far more valuable to the company’s future. Finally, it is super important to find people who can effectively communicate. I’ll touch on this more in the next point.
The hardest conversations are the most important ones, don’t shy away from them and don’t take them personally
We find ourselves time and time again telling others how we believe that the leading cause of death for most startups is a lack of communication, transparency, and honesty. Another of our unofficial mottos is that you should always be open, upfront, and transparent with yourself, your teammates, your mentors, and your customers. This is especially true when it comes to money and the overall direction of the company.
In the ideal world your team would consist of a group of passionate individuals who are all on the same page about what is in the best interests of both the company and the individuals; however, this will likely not be the case. This is where communication comes in — you need to be able to have open and honest dialogues about company issues and you need to be able to have them without taking anything personally and becoming resentful or bitter. Perhaps the most difficult conversations to have are regarding compensation and finances.
It is time to put an end to the toxic practice of making pay a secret; not everybody will get paid equally, and that’s ok. Different positions rarely have equivalent responsibilities and with these responsibilities come different levels of compensation. Animosity is much more likely to crop up if everybody is left in the dark than if everything is laid out on the table for all to see. Many companies keep pay a secret in order to have control and prevent workers from being able to negotiate for themselves. This makes sense from the company’s perspective since it will save money, but it can negatively impact the workers and make them not trust the company or be unhappy.
Unhappiness leads to a loss of passion and a deterioration of productivity, hurting the company in the end. In a startup, you want to actively avoid people feeling like they are doing just another soulless job that they have no meaningful connection to. Is saving a few dollars really worse than the potential long-term loss from unproductive and unhappy employees? Openly discussing pay can be extremely difficult and awkward, but again, don’t take it personally. People have to be able to afford to live and potentially support others, which gives all the more reason to discuss this issue openly so that there can be mutual understanding of everyone’s situations. Likewise, the health of the company must also be considered so that it is not bled dry. There will be times (especially at first) where you will have to work very long periods of time without pay and that is just one of the many realities of a startup.
Finally, regularly have discussions about the overall direction of the company. This is important to both remind everyone of what they are actually working towards as well as to serve as a reality check in case the company vision or actions towards this vision no longer make sense.
Don’t be afraid to pay yourself or reward yourself for your hard work
Expanding upon the last point, when it comes to money, try to discourage people (including yourself) from being heroes and sacrificing their own pay for the good of others or the company. If you are at the point where you have some money to play with and can run payroll, pay yourself and others on the team. Obviously only do this if you are actually in the position to be able to do so (taxes and payroll are complicated and expensive). However, keep in mind that if you and/or your teammates are only working on your startup in your free time while working other jobs, this point isn’t necessarily as important. In my and several of my teammates’ cases, we are all fresh out of college and working on our startup full time with occasional outside sources of income to support ourselves.
If you are paying yourself and others, it is extremely important to remember and understand the concept of “value added versus effort expended”. Something that seems to go largely undiscussed by both startups and Fortune 500 companies alike is that there is a big difference between accomplishing a mission critical task in five minutes versus slaving over a low-priority task for days at a time. The artificial need to fit tasks into 8-hour workdays is the silent killer of productivity. We’ve all worked soul-crushing retail jobs where you often find yourself sorting fly poop from black pepper to make the time pass and this is not how a startup should operate.
Likewise, time spent with your butt in a seat is not necessarily time well spent. Money is often a scarce resource in a startup and using it wisely is a nontrivial financial challenge. A significant chunk of your expenses will likely be related to payroll (this is all assuming, of course, that you are in the position to be able to run payroll). Thus, it is vital to ensure that these dollars are being well spent. This is why the concept of value added is so important — time spent does not equate productivity.
Relating back to my point about hire fast, fire faster, finding people that can work effectively, efficiently, and be self-regulating is invaluable. People should never be idle on company time; likewise, they should also not be constantly asking what they should be doing. A degree of independence and self-delegation goes a long way in adding value to the company. To the same point, however, whomever is in charge needs to make sure that they are effectively delegating tasks and ensuring that everyone understands their role.
Lull periods come up from time to time as a startup (particularly if you are stuck waiting on something) and this time should be taken advantage of to work on self-development if possible. Actively encourage learning and discovery, it could come in handy down the road! We deal largely with engineering tasks that vary widely in necessary time to complete and as a result it is not out of the realm of possibility to have to work 80 hours one week to meet a deadline and then only 5 hours the next. This provides the perfect opportunity for self-development. Likewise, it provides an opportunity to reward hard work with well-deserved breaks. You come in and finish everything you need to do for an important deadline in an hour? Good on you! Stick around the rest of the day if you want, but you’re free to go home and relax the rest of the day. As will be discussed later, burnout is a frequent problem with startups and decompression time is a must if you want to have any hope of surviving.
Know when to give your 100% and when not to (hint: never give 100% of your effort 100% of the time)
It seems tempting to want to be constantly working day and night on your startup. It seems tempting to want to always work to your highest capacity. After all, your startup is your baby and you want to make sure that it gets the best care possible! But this temptation is dangerous.
As alluded to earlier, burnout is a common ailment of startups that can be fatal if left untreated. Being able to distinguish between when it is necessary to work yourself to the bone and when it is not is an important skill to avoid burnout. As someone who was an over-achiever throughout all of school and rarely had time to properly relax, take it from me, if you give your 100% every day you wear yourself out fast and your actual quality of work suffers greatly. You also become more easily stressed, are constantly exhausted and demotivated, and your friendships and relationships suffer. Take it easy from time to time, take days off. Do something fun with your teammates to build a sense of togetherness!
Get everything in writing
This point is pretty straightforward. Get everything in writing if you can. I could kick myself for how many times I made a handshake agreement with somebody and then later on found that they didn’t keep their end of the deal, or worse, completely changed their end of the deal. This is also of the utmost importance when it comes to any potential customers (if the customer is another business) since getting them to sign a contingent agreement for future sales can be a significant milestone for your startup. On a related note, make sure you always get people’s contact information.
You only need a strong social media presence on one, maybe two platforms when you are just starting out
A very wise person once told me that it is far better to be good at one social media platform than mediocre at all of them. Depending on your product or service, choose one or two platforms and stick to them religiously (this will likely be one of the Big Three consisting of Facebook, Instagram, or Twitter). For us, we use Facebook. And that’s it. We tried to keep up with Twitter, Instagram, and a few tech-centric websites at first, but trying to balance and manage these multiple platforms and build a meaningful audience across all of them is a Herculean task. You’d think casting a wide net would lead to more potential followers and engagements, but in reality all this does is spread you thin and bury you amongst the noise of social media.
When we decided to focus on only building our Facebook audience we found much greater success and dramatically increased our Likes and engagements practically overnight. We were better able to handle targeting and promptly responding to our followers. Tools like Hootsuite are great, but I feel that they can only be properly utilized if you already have a sufficient following and want to maintain consistency while expanding across other platforms.
A closely related point is that regularly posting content, particularly original content, is a must to build and maintain your audience. Podcasts and vlogs are particularly popular and effective at the moment as well as short and visually stimulating videos that are optimized for viewing on mobile devices. Podcasts and vlogs are great for your hardcore followers while short videos are great for sharing and reaching new potential followers on Facebook. This article has some great insight and tips on creating effective video marketing content for Facebook: https://blog.bufferapp.com/facebook-video
Finally, use tools like Google Analytics and Facebook Pixels to your advantage to learn more about who your followers really are and how to better target more people like them (a particularly useful feature on Facebook is Lookalike Audiences, which lets you find new potential followers that “look like” a given audience you already have).
Establish best practices early
Come up with an organizational paradigm for important documents and supplies and stick with it. Document everything. Take meeting minutes and send them to everyone (my friends at http://alignmeeting.com make the perfect webapp for this). Get and use good accounting software. Have regular meetings and let everyone voice their opinions. Follow up with people who you talk to. Check your email multiple times a day. Proofread what you write multiple times. Have a routine and stick to it. The list goes on. All pretty common sense practices, but it is never too early to start them.
Don’t be afraid to reach out to people, you’d be surprised how many will respond
This point is pretty simple — reach out to people! The worst they can do is either not respond or say no. Just remember to not pester people. We have a tendency to put people in executive positions on a pedestal when really a lot of them are much more down to earth and approachable than you’d expect. Asking a simple question or for advice can be the gateway to a long and meaningful relationship.
This is especially true if you are still in college since people are much more apt to respond to you if you have a .edu email account. People love to help students and will usually give you free advice or help. Make sure you give a good first impression!
Avoid outsourcing mission critical tasks if you can help it
If I had a nickel for every time I saw a fellow startup outsource a critical task only to have it screw them over… Let’s just say I could probably start my own VC fund. In most cases, these critical tasks are website development, app development, and solid modelling. Now unfortunately for a lot of startup founders, they don’t have experience with fulfilling these tasks themselves and often feel forced to outsource them to freelancers or specialist agencies. There are a variety of problems I’ve seen with both of these approaches, mainly control and long-term maintenance.
If you get a simple website through an agency in many cases they will give you an awesome product in about 6 weeks and then offer to provide support for a variety of time frames, but this can be pricey for a young startup. For more complex website projects, it can take up to 12–16 weeks to get your product for quite a pretty penny. Working with a freelancer is a cheaper alternative and could take more or less time depending on how quickly they work, but the tradeoff is you likely won’t get as much, if any, long-term dedicated support or maintenance. Countless times have I seen people pay a premium only to be left behind with a sub-par quality product that they have no way of fixing themselves, and then they have to find someone else to do the job again. The same situation can be seen with apps, as well, and often with even more headaches and time lost.
Now, it must be said that I am not saying to not use these services at all, but rather to thoroughly vet out potential people to ensure that you will be provided a quality product within a reasonable time frame. However, I still think that the best option is to either get someone you know that you can meet with in person to do it, or better yet, add a developer to your team. Having them on your team makes everybody’s life easier, especially if what you are creating requires building something proprietary. There is also the option of learning to create websites yourself through one of the many great free resources out there today.
Finding someone to solid model or design for you is a bit more complicated of a beast and is definitely something I would advise against outsourcing unless absolutely necessary. It can rapidly become expensive, you are often stuck playing cat and mouse with the person for revisions, and then there’s the big question that is ownership when dealing with anything proprietary. This becomes an even greater issue when working with people outside of the country. In a pinch, it may seem like a cheap solution, but it is really not worth the risk. Find someone who you can work with in person and if possible add them to your team. They will be an invaluable addition.
Something you will have to learn to deal with is that you’re young and a lot of people will look down on you and not respect you
This is one of those things that I wish wasn’t true but unfortunately is. There are a lot of great people in the world who will gladly help you out and treat you as their equal. And then there are the people who will see you and assume that due to your age you are somehow not “worthy” and will practically work against you. They won’t listen to you, will tell you to give up, say you are wasting your time, tell you to get a real job, or condescendingly treat you like an ignorant child. Sometimes, these people will be your parents, or even your friends. Ignore these people; don’t let them hold you back or get in your way. Prove them wrong by persevering and succeeding. Use them as motivation to not give in, and then one day you can laugh your way to the bank as you recall their lack of faith in you. Just remember, Blockbuster turned down the opportunity to buy Netflix because they thought it was a dumb gimmick that would never take off!
This article has gone through a few iterations (as will any product) and was originally 20 points. However, I found that several topics were far too large for the purposes of this article and desevred to be explored on their own. One of the main points ommitted is a lesson that many learn the hard way — you should never use crowdfunding for anything other than exposure and marketing. Trying to raise money through crowdfunding to actually fund your startup is extremely risky and ill-advisable and I will break this down into great detail in a future post.
If you have managed to make it through this seemingly endless stream of my rambling, thanks for reading and I sincerely hope that this was helpful to you! If you ever want more direct advice, feel free to reach out to me at firstname.lastname@example.org (please no soliciting unless you are giving away free money). I try to respond fairly promptly. À bientôt!