Here are the Two Best Ways to Start a Company. And The Steps To Ensure It Is a Success
Amidst headlines touting the success stories of three year old companies purchased for billions in cash and the seemingly endless news of another startup raising millions of dollars, I thought it appropriate to share some broad pointers in case you are looking to enter the world of start-ups.
To start, find something to sell or create something to gather the masses. People want cool products and services, and they want to communicate with others. As human beings, we acquire naturally and seek community. However, getting your message out there can be tricky.
With limited time for discovery, most consumers are not trail blazers. They wait until they are told about something and if they like the product or service, they will splurge or join in. Unfortunately, because of the sheer volume of similar services, products or communities that are vying for the same eyeballs, there is no easy way to attain brand awareness. Here are some points to help ensure your success.
First, find an idea or avenue to offer a product that is lacking or differs in approach. Most great ideas come from a necessity or convenience that has not already been properly exploited. This necessity or convenience can be right in front of you, but we are so used to doing things a certain way, that we unknowingly overlook these opportunities. So stop and think, is there an easier way?
Next, test the idea or product in a small market such as friends or family. If it is a hit, try and find a co-founder who compliments your work ethic and brings things to the table that you lack. While not imperative, two minds are always better than one. Also, reach into the depths of your past connections to find someone with solid business experience. It is always helpful to have an adviser to bounce ideas off of. Give them a title and a few equity points. Then build the best damn platform you can to support your idea. It has to be easy to navigate and purchase from, and you have to be able to connect with your consumer. Hand-holding each and every person that comes to visit is imperative. You are catering to a very skeptical potential customer who will only visit for a brief time. If they don’t like what they see, they may never return. You must implement technology or human assets in order to greet this wary visitor and entice them to stay for a while.
Once you pique the interest of your consumer, word of mouth is your best friend. Word of mouth is best portrayed by a positive experience whether it is great customer service, fast shipping, or a product that simply works well. Create a terrific experience and stick with it. Customers tend to notice the bad before they notice the good. And they do not hesitate to spread the word when the experience is bad. With so much choice out there, the customer is king. They have grown to expect perfection in delivery of services, and rightfully so. This makes your challenge greater. Of course, you will make mistakes in the beginning. It is how you recover from them and handle the fallout that ensures your survival. Build the business, staff it with competent smiles and work hard to please your user, consumer, guest and critic. Remember, people want what you have; you just have to make sure they know about it and then do your best to ensure they enjoy the experience getting it.
Once you have built a product or sales platform and developed a following, you want to start advertising, engaging social media (the two go hand-in-hand now-a-days) and PR. Many people have mixed feelings about PR. It is an effective tool when done properly. However, a lot of people make the lazy mistake of blanket emailing a boring press release to a recently acquired database of reporters. Take care to research the reporters’ beat and tailor the press release to make it intriguing. Remember, you (hopefully) know your company inside and out. But the average consumer does not, so it is up to you to break it down for them. Keep the message consistent and make it quick, because no one has time to listen to your grand plans on taking over the universe.
If you are selling something, product placement is effective, but costly. Offering a portion of proceeds to charity is useful and you are doing some good in the world. But it’s not earth shattering in terms of making news for your company. Sit down with a knowledgeable adviser, your team or a book, and come up with a list of strategies. Prioritize your strategies based on your company goals and execute accordingly. Working with a PR/Social Media/Marketing ninja is always advisable. Try to get someone with at least one year of agency experience so they have an idea as to how to communicate with reporters and take advantage of social media. Blasting pitches to reporters is not effective anymore because of the shear volume of press releases they receive. Instead, pitch profiles, thought leadership, 1–2 key announcements, trends, bylines from your company blog which you can use as a news engine by distributing blog features to tier 1 sites to drive traffic, and potentially speaking engagements. Content is king. If you can’t afford to hire someone to kelp with this, throw them a few dollars on the side. And of course, you can always offer them a small percentage of equity in exchange for their services. Just make sure this person is worthwhile and you are willing to be locked in for the long haul. Be careful about one trick pony agencies or publicists, who kill it for you in the first few weeks, then stale mate. Make sure they are out-of-the-box thinkers and that they share your vision.
This brings me to hiring. Over the years, through failures and successes, ideas and exits, one thing has become crystal clear to me. You MUST surround yourself with the right people. I have never been able to do that just by looking at a resume. A resume is a well formatted lie. A person can say whatever they wish and indulge as much as they want, and meeting them in person once or twice is not much better. If they are confident, then first impressions are not going to be a great tell. You have to hire someone who goes out of their way to introduce themselves to your company. This can be via videos, ideas, props, examples, portfolios, energy, or personality. There are a lot of components and I am not going to pretend I know them all. I get a feeling when I am in the company of great people so I adhere to the “when you know, you know” outlook on hiring. But sometimes that just doesn’t cut it. It takes time and creative recruiting to find the right people. I have found that bringing people with you from one project or company to the next works well — these are the tried and proven troops.
When seeking a talented programmer or engineer though, these methods may differ. I have gotten burned so many times by people who promised the world and ended up delivering mediocre at best. Part of the problem is that I am an operations guy, so my unfortunate ignorance when it comes to programming impedes the process. The fact that I was not steered toward coding in school is something I continue to regret on a daily basis. I hope school curriculums take a good look at this. Anyway, if you are in the same boat and unfamiliar with the dev side, then hiring a talented programmer or designer can be tricky, as you do not have a way to measure their skills. Additionally, the majority of true talent gets snapped up by big tech. My suggestion would be to spend time at events or around people who know the right people, and lure them away with your passion, idea and the potential to start something big.
Once you have your idea, a following, and a small team that is capable and passionate, you have a company. It is not necessary to have these people under the same roof. A distributed work force is effective, however, not ideal. I have run companies with both a distributed workforce and a centralized team. The office works to create passion, maintain that fire that can waiver in down times, and generally offers better communication which leads to faster and more efficient execution. The creative energy and team mentality can be a huge boost and serve to keep you on track.
A distributed workforce is more challenging because people cannot communicate as effectively and things can fall through the cracks. In these cases, you have to have a strong leader and a very capable team who believe in the success of the company beyond just a paycheck. This is accomplished by hiring passionate individuals who want the same thing you do. You can also accomplish this by giving them an equity stake. I am a strong believer in making your core team, equity owners. Owners are more likely to succeed. Whatever you choose, make sure they are not just in it for the paycheck, otherwise, show them the door.
When developing your PR/Social Media/Marketing strategies, I recommend that you do so on a short leash. Don’t throw a blanket of strategies out there just because others are doing it. There are the typical methods such as contests, give-a-ways, press release saturation, charity partnership, product placement, event sponsorship, celeb placement, buying likes, sponsored editorial and everything else companies do to raise awareness. Any PR agency has all of these methods stacked in their boiler plate proposals. Sure, these methods work, but you want to hone in on a strategy that takes advantage of your goals and roll it out using a calculated formula. What you don’t want to do is overwhelm yourself or your staff with a barrage of strategies, only to have them fizzle before they get off the ground due to lack of follow through. Your customer will see this and it may make you look incompetent. Focus on key components and follow-up like a maniac. Then follow-up some more.
And finally, the more successful you become or the more hype you generate, the more requests for partnerships and ideas for collaboration you will receive. These ideas and requests are sometimes great. But you cannot entertain all of them, no matter how good they may be. You don’t want to spread yourself too thin or abandon your core model, customer or user. All good things come to those who wait. Focus on your company, the customer and your initial goals. Once you have truly reached the level of success you strive for, then all opportunities can be explored with the proper staff who can weigh the pros and cons.
To me, success is happy customers, an efficient and consistent platform, passionate employees and excited co-founders. With a loyal following and great team, money will follow. Sell something or gather people, and you will have a great start to building a successful business. And always keep your customers smiling.