I am a geek (or developer if you like) with entrepreneurial drive. I founded 3 startups, one of them which went through an international accelerator. This experience allowed me to personally observe roughly 40 young startups in their life cycle. Observing the good and bad things they did. Most of them are zombies by now but some did a great job. Mine being the former.
In this post I have made a reflection on the last 12 months in one of my startups where I was CEO/CTO. The sum of that flashback would be:
1. I screwed up
2. I screwed up
3. I’m an idiot
These are 3 common points in any failed startup leaders ego. At least the one in touch with reality. I will try to convey my experience to future startup founders in early stages of their venture.
I extremely enjoy metaphors for easier conveyance of ideas. Let’s imagine your new startup as a ship about to set sail in search of vast treasures. Like Columbus, Marco Polo or Cook did before you.
This trade is as old as man, although many try to reinvent the wheel and present startups as something new and fresh…
Your startup, being a boat with crew and all, would greatly benefit in having a map of underwater rocks that can destroy it on its course. I will try to map out “underwater rocks” as I encountered them during my journey. In this way, you will be able to avoid them. And if you find new ones… well, welcome to the startup life.
The only thing you will read here is what NOT to do in your startup. Those points are certified to be bad (as experienced in the before mentioned accelerator). If you need advice on what to do, go read Cosmopolitan.
No founder with self-respect will have the balls to tell you what to do.
The reason is that those founders realize that no one can tell you what to do to succeed. If they did, they would be all-knowing God.
To cut it short, here you can find the X’s on the map and the description of what is probable to happen when you hit one of these:
1. Don’t pick the wrong crew
There is nothing easier than making a mistake with crew selection. Both founders and first employees. Good, skilled and motivated people who think like you and will follow your plan are more rare than a valid invoice in Greece!
It is understandable why you would want to rush and pick anyone who qualifies. But seriously, DON’T!
If you pick the first decent candidates out of frustration, you will waste few years of your life, learn a hard lesson and have a sunken ship. Don’t rush. Research and verify skills of your coworkers before they become coworkers. Ask for references and past experiences and projects you can see. Be sure that you can count on them and their skills before your ship sets of. After that moment, you are most definitely stuck with them.
Last thing to keep in mind is to have a contract that protects you. This must guarantee that you can throw anyone overboard and take back shares, in case of troubles. If you don’t, this will almost guarantee you serious core issues in your business.
2. Don’t fail to assemble a band of brothers
Having an all star crew means nothing if they don’t have enough mental fuel. Will they stick around and travel with you through rough seas?
You should ask them about future plans. Will they promise you loyalty? If not, don’t be surprised if one day some of them will leave your ship for a nicer one with a fat paycheque which you wont be able to match. Make no mistake, if the crew does not have assurances of treasure ahead, they will leave. It’s only logical, captain. The same applies if they feel like they have no input in the decision making.
Startups are hard, exhausting and unrewarding 90% of the time you are working on them. Be sure the crew knows what they are getting themselves into.
Have in mind that they might have personal or family issues. Don’t be a prick. Offer a helping hand and let them know you understand and will help them. Let them know you will also wait for them to return after they settle any issue. Create family members, not employees.
3. Avoid spineless or shady navigators
Blurry goals, frequent shifts in course and no checkpoints reached will create a fertile ground for distrust and doubts. Hesitances about navigators’ capabilities (or C level guys). Everyone in the ship needs to know what they are doing at all times.
Your employees are not idiots. They are smart and pick up on slightest hints of bullshit as bullshit tends to be very noticeable in closed quarters. If someone needs help, at any time, this should be your responsibility, captain.
All C level guys need to speak the same voice. Otherwise, the ship will stop and travel only lead by currents. And this will eventually lead it to the shallow waters.
4. Picking the wrong partner
As any expedition, yours needs money if treasures are far and take years to reach. Taking a wrong financier can end your voyage rather soon.
Well, once you take the money, you are signed up for something. This means that there is no going back, no slowing down and NO excuses.
If you are not ready, if your crew is not ready or your ship is not ready you will sink. The same moment you sign that VC contract, you have cut the lines and your ship has no place being in safe harbour anymore. It is not expected to return empty. The seas don’t forgive mistakes. Neither do the VCs.
If they think you are headed the wrong way, they WILL try to influence you. Sometimes even bully you to go the path they think is right (even though they don’t know the route)
This can only mean that they have lost the confidence in you as a captain. Their interference can break the cohesion your startup has. Be wary of this and don’t allow it if you believe in your path.
Keep in mind that there is a high chance that your VC is full of s@#t! From my experience, most of them have no clue of what they are doing. If you are lucky they read other superstar VC’s blogs and are using your startup as a showcase to build a name for themselves. If they put accent mostly on their “network of contacts”, tell them you are not looking for yellow pages… It’s not worth it.
Not researching your VC with same rigor as you do for your founders and employees, it is pretty much sure you will end up as fish food..
5. Don’t fall for the sirens
Aaah, the shiny and all alluring startup competitions! Pitch contests, business plan contests, demo days, conferences, summits, hangouts, chillouts, startup days, startup lives, anything else?!
What a bunch of bullshit!
I have been to almost dozen of those and in those we pitched we were almost exclusively among top 3 or winners.
Wow! Bravo to us!
It pains me now to think about the time wasted doing this. Except siting and picking your nose, there is no bigger waste of time you can burden your company with. At least picking your nose costs you nothing.
In retrospect, I cannot name a single positive thing we received from these events. On the contrary, we just got more spam in our inboxes.
I was thinking for some time that we “did not take advantage” of these in the right way. However, talking with and seeing other winners later convinced me that all this is a waste of time on epic proportions.
6. No life rafts
Being self confident is nice. It’s even a must have in this line of business.
Being so self confident you don’t make a back up plan in case the ship sinks is just plain stupid and lazy.
Have a clear path out so you can restart as another startup soon maybe even with the same crew.
Don’t be struggling to find job to repay debts for years to come (and be sure, you will have personal debts). You will have learned so much that not applying that knowledge to something useful ASAP is the true tragedy. Your startup is dead, who else is crying than yourself?
7. Learning nothing
If you closed this startup, it’s cool. It’s a necessary step for you to become a serial entrepreneur and finally an established businessman.
But if you do close your startup and start another one doing the same mistakes, you should rethink your dogmas. Being dogmatic is the single most damaging character quality you can posses as an entrepreneur. Get over yourself and have an open mind. Listen to smart people and apply what you learn
Having startups is fun and it can only bring good things in your life. Just don’t make mistakes that can affect you greatly. Be smart, trust yourself and your instincts and ability to learn along the way. Startups are a gamble, and a smart gambler never bets all on one hand.
Remember, success is also about luck, so don’t beat yourself down when things start going the wrong way. There is always the next big thing, and you might be the one making it.