Hopefully not another one of “those” blog posts...
I’ve spent the last 3 years of my mid-twenties starting, failing at, and working at startups. This might not seem like a long time to you, but in Silicon Valley being 3 years out of grad school at Stanford without a thriving startup or a comfortable job at Facebook is like floating in outer space with an expensive rocket and no destination. It’s empty, it’s overwhelming, and you’ll struggle to find your bearings as you try to resist the gravitational pull of far away Facebooks, Googles, and (yes, even) Microsofts. You don’t need to take my word for it — earlier this month Marc Andreessen (of Andreessen Horowitz) tweeted on this dilemma.
Even my Sunday nights have been ruined by this heavy decision. After watching Game of Thrones last week I tuned-in to Silicon Valley to watch the lead character criticized for his over-the-hill age of 27.
So what does one do when one is faced with a paralyzing decision? A normal person might heed the advice of their peers, mentors, parents, and all logical reasoning. However, I don’t consider myself a normal person. And so, I am (perhaps stupidly) cranking away long hours every day working on a beta product for my next startup company.
I write this post for everyone who has that insane, crazy feeling that no job they will find on LinkedIn, Hired, or in the deepest corners of the internet is ever going to fully cut it. I write it for those who thrive on uncertainty and those who feel a rush of adrenaline every time they are told “no.” You might call yourself an “entrepreneur” but, honestly, it’s just a fancy world for “crazy.”
My goal is to write an honest, realistic guide to starting and building a tech company in the year 2014. I will try to tie in personal experiences, dispel as many bogus theories as possible, and link to every useful article I can think of. This is the first of what I intend to be 5 essays on the subject.
How to build a company in 2014
So here you are. You decided to do it. Or perhaps you are just flirting with the bold idea of creating a billion (maybe trillion??) dollar business. In any case, you are probably asking yourself as many questions as you hope to have dollars in your Series A pre-money valuation.
Starting a company is really hard and the odds are always stacked against you. I’m here to remind you again and again that you are an idiot. This is not a wise decision for your finances or health.
How you get started relies heavily on several factors — how I (a designer with some web/iOS development chops) would get started and how an HSB graduate would get started are two entirely different conversations. There are a couple questions that should apply broadly enough to get you going.
1. What are your goals?
Let’s start by figuring out what the heck you are planning to accomplish. What are you going to build? Do you want to build a thriving tech company with hundreds of employees that IPOs in five or ten years? Do you want to build something you can quickly sell to a larger company? Do you just want to make something because you think it should exist? What kind of company culture do you want to create? Do you need to raise venture capital?
Too many questions!
Oh, you’re right — starting a company is all about taking your time, planning out every step, and always being prepared to handle any challenge.
In reality you will never be able to prepare for what’s around the corner and there will always be questions that leave you feeling like that cushy corporate job was the right choice. Ambiguity is your new best friend and from now on your response to, “Hey, how are you?” is going to be, “Overwhelmed.”
Knowing your goals is absolutely essential for inspiring others to join you, coercing timid investors to fund you, and convincing Mom that her child isn’t 100% insane (but you are).
2. Who are you?
Great. You now know your goals. That’s a fantastic starting point. The next step is to figure out how you fit in to these crazy plans. Knowing what your most valuable skills are and how you can apply them is essential when deciding what to do first.
What kind of startup founder am I going to be and what the heck am I capable of accomplishing before bringing on additional help?
Generally you can break startup founders into 4 categories:
- The Builder — You probably have a pretty sick Github profile and contribute to some bomb open-source projects. As long as you don’t have your head too far up your ass, you might be in the best position to start a company. Finding a technical co-founder can be insanely challenging, but you are the technical co-founder! Of course, you’ll have plenty of your own problems like tunnel vision, being overly attached to your product, and wasting too much time on useless features. Strive to be like Zuck but know you aren’t.
- The Designer — You see the flaws in the world as exciting opportunities, you get chills when you see proper kerning, and you recognize your favorite fonts by name. Some great companies were started by designers, like Airbnb. Your eye for design will be appreciated by both customers and investors. What about building your product? I always suggest learning to code (it worked for me), but there are many ways to test and prototype without typing a single <div>. At the end of the day at least you’ll be able to create sexier pitch decks than the other 3 founder types. Just avoid designing for yourself. Talk to users and test often; you will save weeks or even months.
- Strictly Business — So you might not know how to code or have a keen eye for “pixel perfect” design but you’ve been consulting for 5 years, saved up a bit of money, and are ready to take that check from your former employer to start the “next big thing.” Your skills can be HUGELY valuable if you know how to use them. Selling and managing are not taught in engineering schools and they can absolutely make or break your company. I do, however, have two pieces of advice: learn how to code (at least enough to interview an engineer) and don’t ever think you are Steve Jobs. You aren’t.
- The Potato — Everyone likes potatoes. They are bland, go well with other dishes and provide a good source of carbohydrates. Big companies can always find a place for a potato. The potato can be a valuable asset. But guess what? Potatoes are absolutely useless on their own. If you don’t have any of the skills of the other 3 founder types, you need to fix that. You can learn anything and become anything you want, just don’t be a potato.
OK, so what should I do now?
Before you decide to start building your MVP (minimum viable product), I’d focus on these (not necessarily) simple tasks.
- Figure out if anyone actually wants this product.
- Do research. Map out your product and niche.
- Find a way to get it built.
Your idea is not precious!
This is the #1 thing that derails first-time entrepreneurs. Nothing about your startup idea is new — someone is working on it in some capacity somewhere in the world. If you are reading this and shaking your head because your “stealth startup” really is unique, I will gladly come hit you in the back of the head.
When I first started working on Quixplore (an event discover application) I thought we had the most novel idea in the world. I would tell people that it had to do with events but nothing more. What if they stole our idea? I later found out that dozens, maybe hundreds, of other startups were trying the exact same thing.
Ditch the stealth and talk about your idea. There are countless benefits and very few drawbacks. How will you know you are building something worthwhile if you never talk to anyone about it? Start with friends and family (they won’t be so hard on you) and move on to discussing it with strangers (they will provide more honest feedback). This is a great chance to refine your pitching skills, validate your idea, and maybe even score some useful introductions. It will eventually all come down to how you execute your idea so don’t worry about someone stealing your idea. Keep your “secret sauce” to yourself if you must.
Do your homework
As I said, your idea is not novel, nor is it likely “first to market.” Some version of your idea exists somewhere. There are some very simple tools that can help you figure this out quickly. When you finally discover how crowded your space is don’t be discouraged, it just means you’ve found a big opportunity. Your job is to make something 10x better than everything else. If you can’t find anything, then you suck at research, have a shitty market, or (.0000001% chance) found an idea that is actually unique. Here’s how you can get started:
- Scour the internet. My favorite resource is AngelList — they have fantastic search capabilities. Try searching by industry, keywords, or even guessing company names. You can also look at VC websites. Do a Google search for “top VC firms” and dig through their portfolios. You’ll be able to quickly find potential competition, get a solid idea of what kinds of investments are hot, and start forming thoughts on how you might get your logo on that page.
- Ask your potential users if they’ve heard of your competitors. If they use a competing product, find out what they love and hate. Make yours better. If they don’t use another product, then it looks like you’ve found your first customer.
- So you are hopefully getting a better idea of your new company’s competitive landscape. Time to start thinking about how your product will fit in and how you are going to create a product that’s 10x better. Maybe you want to make a business plan. I’m not a big fan of business plans — they take a lot of your valuable time and change faster than you can keep up (early on at least). Instead, try mapping your business out using a Business Model Canvas. They use these in several Stanford classes because they are quick, clear, and lean. Print out a copy of the canvas and use sticky notes to fill it in because it is going to change!
Now go get yourself a developer!
This essay should hopefully help you decide what it is you are going to build and what sort of company you plan to create. (Heck, some of you could probably even raise funding at this point.) The next natural step is to find a way to get it build. There are plenty of ways to test features before you bring on technical help, but the sooner you can start building, the better. Time is a founder’s best friend.
I’ll be devoting the entirety of my next post to some of the in’s and out’s of successfully (or not so successfully) finding a developer and inspiring them to join your “world changing” company. Look for it in a week or so.
[Note on Fundraising]
Don’t focus too much on money right now. Many startups (especially “apps”) can be thrown together on about $5000. There are plenty of exceptions to this generalization and plenty of options to raise money from the get-go. I would suggest waiting for some solid signs of customer validation before taking money from others. Putting together a KickStarter is a great option for hardware startups — it can provide that essential validation and some cash all at once. I’ll be perfectly honest: being poor sucks. If you have an offer that won’t screw your cap table, take it. Otherwise, just work on creating value for your customers.
Coming up next: “Hey Crazy, Let’s Find a Developer”
Then: “Hey Crazy, Let’s Build an MVP”
Later: “Hey Crazy, Let’s Launch”
About the author
Matt Kandler is a designer/developer living in Brooklyn after spending a few years in Silicon Valley. Most of the local baristas know him as “that guy who orders a coffee and uses our wifi all day.” He’s working on his next startup and looking for any passionate or awesome people to join. To escape the inevitable clutches of poverty he does consulting & freelance work as well. He might be crazy, and if you got this far, you might be too.
Follow me on Twitter @mattkandler