6 Lessons From My First Start-up Experience
For the last 7 months I worked in a start-up — Here is what I learned:
We were trying to shake up the education sector by digitizing educational content and bringing it to life through augmented reality — What is Areeka? When I first heard about the idea I was really into it and motivated to be a part of such an endeavor.
I mean, how often do you get the chance to be part of building something up from the ground? An idea that you are actually passionate about and care for?
I quit the haven of my corporate job and took the plunge. I did not do this blindly, I had several discussions and negotiations with the founder who made me quite a few promises such as a year of funding secured, a solid salary and a seat at the table for me.
As usual, life has a way of shaking everything up while you are busy making plans.
It all started out very differently than planned. The start-up was founded together with a second founder who brought in:
- an existing technology stack
- a team &
- several products in our target market already bringing in some revenue
This sounds like a promising match and we thought so too. Even though I had a weird feeling in my gut about this partnership, I had already committed and wanted to see it through. I always saw this as the best next learning opportunity for me with a small, but still existing potential to also bring in some substantial financial benefits for me.
Well, the latter did not pan out, but I can take away several lessons I want to share with you here:
#1 Advice is good, but you need to make the experience yourself
I am fortunate to have a great network of friends, family, colleagues and acquaintances I feel comfortable enough with to talk about upcoming decisions.
If you do not have that don’t worry, never be afraid to ask for advice, the chances of someone declining are close to zero.
While I considered leaving my job I also got the opportunity to apply at a scale-up friends of mine had founded. During the application process I was open with them about both new opportunities and they were not only great about accepting this but encouraged me to pursue it — should it pan out — and gave me valuable advice and boxes I should check before joining.
I will talk more about their advice and one argument in particular in the second lesson, what I wanted to state here is that advice from people is good and you should consider it.
In the end I needed to make the experience myself.
To be honest, I believe this stands true for everyone. You can and you should learn from other people's experiences and if you are lucky enough to receive advice, consider it. But it is your life. You need to make the decision and all of the advice received in advance can and should be factored in. However, experiences from someone else cannot and should not replace your own.
#2 Start an argument
One piece of advice I received from two people I was interviewing at the same time was to go and start an argument with my future colleagues. Now, this sounded counterintuitive to me and might also do so to you. I want them to take me on board, now why the hell would I provoke an argument where there is none?
After 7 months on board I wish I had followed up on this:
- Not because we had a lot of differences
- Not because we could not settle an argument
So why the hell then?
Because I could have found out that similar to me they were likely to avoid conflict. Simply knowing this could have helped me not only in how to approach certain topics but especially in knowing that not approaching certain topics because I feared conflict would waste valuable time.
So the next time I will not shy away. I will start an argument to get to know the person or team and find out how they deal with conflict before I might work with them.
#3 Team set-up
About a year ago I stumbled over a great post on LinkedIn recommending 6 questions to evaluate a start-up before joining:
- Does the product really solve a large, burning, long-term market need?
- Do I believe the (founder) team is the right one?
- Will I enjoy working with my manager (& does he/she care about me=)?
- Do I believe in the tec advantage of the company & its solution?
- Can my experience & skills significantly contribute to solving the company’s biggest challenges?
- Will my learning curve be steeper than in my current role?
The recommendation actually said to write the answers down. I believe this is important to actually be able to follow your own thoughts, but also to hold yourself accountable.
I can still answer 4 out of 6 with a definite yes. However, I had doubts from the beginning about whether we were the right team. In a start-up, you cannot rely on a large back office and the fact that for nearly everything you need to consider there is already someone in the organization.
The set-up of the right team is vital for success.
I stated in the introduction that I had my doubts but joined anyway. So maybe here I should have trusted my gut.
However, looking back and going through this again I believe one of my most important learnings is that these six questions are crucial. No matter whether you are (co-) founding or simply joining a start-up. It does not even need to be a start-up. Seriously consider and answer these questions to find out whether the team set-up is right, whether the start-up is right and obviously whether you are the right person to join!
#4 Watch out for the CAP Table
I was reluctant to write about this topic as I was not on the cap table of the start-up I joined. But since this is about my lessons, why not:
The cap table, short for capitalization table, shows the equity capitalization of a company. Fancy words describing how much a company is worth and who owns how much.
What do I mean by watching out for your cap table? Usually, founders are very careful about the ever surrounding fear of running out of runway -again a fancy word simply meaning running out of money to pay the bills. Most of the time this urgent need for cash results in founders selling a stake in their company undervalued, just to keep the business alive and thereby starting to break their cap table in terms of valuation.
The lesson I am taking away though is that you need to watch out for who is coming on board. Now again, this was not my decision, but we had 4 people as shareholders. All 4 were not 100% operative in the company.
Not even the two managing directors who, together, owned 90% of the company. This does not work.
We had two investors, each owning 5%, who were supposed to give guidance and input through their experience. In the end, it turned out that one of time had barely any time at all. The other had a lot of decision power, but nobody had a good working relationship with him. He Unfortunately, in my perspective, the decisions he made were taken without the necessary information. An example is a rash decision to apply for a different than planned funding grant. Our start-up did not fit the criteria and in the end, we ended up not receiving any grants and eventually ran out of money.
So what I am taking away is that as stated before the right set-up is also crucial in terms of your cap table. People need to work together after all.
#5 Communicate everything & demand feedback
Before I joined I completed my first Coursera course. It was on project management and I enjoyed receiving lots of best practices on how to keep track, plan and delegate work, identify and plan for risks and especially, keep everyone informed. After the course, my summary of project management was that as long as you communicate everything more than half the job is done.
I tried to keep up with that standard. All documents, contracts, calculations, and even meeting notes were kept available to everyone in a shared workspace. I kept sharing links to the same documents every time I updated them. As mentioned before I was not part of shareholder meetings. However, no one ended up disseminating either what was discussed or what was decided in those meetings. So the top-down information flow was not only broken but nonexistent. Additionally, every time I sent out updates asking for feedback, I barely ever received any.
What I learned from this is that I will be even more persistent in sharing information, progress, updates, etc. in the future.
I will not ask for feedback or input, but demand it.
And since I had such a negative experience I will not only do this in written form but set up a communication schedule with regular standing meetings.
#6 Trust your gut
I worked as a (software) solution specialist for business intelligence and analytics software for several years, preaching about the importance of data and its analysis to take the best decisions.
I still believe this is valuable, but the context is also important. Here is an easy example: When planning a vacation I need to take lots of different data points into account: How many vacation days do I have? What is my budget? How big is the group I am going on vacation with? What do I want to do? Where do I want to go and what season/weather is it there? Most of these things can be plotted and analyzed to plan and decide what options are possible.
But to find out whether I want to have an active sports holiday or a relaxed spa trip I do not need data, rather a calm moment to listen to my body and find out — i.e. trust my gut.
I had a weird feeling when all this started. I was hesitant about whether we had the right set-up. In retrospect, I should have trusted that feeling. So when you encounter such a feeling, at least give it the time of the day and explore it. Usually, there is a reason why it is there.
To conclude — I do not regret any moment of this experience and I would not want to miss it. I got to experience and learn massively in a short timeframe. I am also sad it did not work out in the end, as I am still very passionate about the original idea.
I will take my learnings onwards and hopefully will not repeat all of the mistakes I encountered and made already and hope that some of these learnings will help you too.
Being a new writer here, I would appreciate some feedback and a hit on the follow button.
