Starting a business is an extremely exciting prospect. But before you get into it, here are 5 ‘how to start a startup’ tips.
1. Find your first customer, first. There is nothing more important when looking into how to start a startup. Before you build the product, before you quit your job. Mike Schuh of Foundation Capital taught me a great saying, “Until you sell something, you have achieved precisely…nothing”. Choosing a name is not progress. Setting up an office is not progress, building a product is not progress. The only thing that counts is getting revenue. This is the logic that leads to the minimum viable product (MVP) concept.
2. Innovation is a crap shoot. This is why the VC business is fundamentally a portfolio business. No one, no one, can “pick” winners. Some VC’s seem to be better than others, some entrepreneurs seem to be better than others, but basically this is a casino. Everyone bakes in the plan they will invest in at least 10 donkeys for every diamond. This has implications for someone starting up a company. You need to accept failure most assuredly is an option. So don’t remortgage your house. Make sure you only play with money and time you can afford to lose. Or have nothing to lose in the first place. Use our Business Plan template to help you run your numbers.
3. You can go it alone (many successful startups have), but it is a lot easier with co-founders. All the obvious stuff about more hands and broader skills, but possibly more important is the emotional workload sharing. Starting up is making a hundred critical decisions every day. It’s mentally and emotionally taxing. There is no “my boss can worry about that”. There is no “I’ll look at that tomorrow”. There is no “Hey, I can switch off now for the weekend”. The only people you can share this with are your co-founders. Everyone else is wittering on about work-life balance and free food at work.
4. Understand this is your business. Don’t let anyone tell you that you should bootstrap or you should get funding. It’s your decision that should be based on your goals. This is your chance to do something, not just follow others. You need to be the expert in your business. You need to stamp yourself on that. It’s personal. You need to care passionately about what you are doing.
5. “We are all in the gutter, but some of us are looking up at the stars”. Oscar Wilde. Yes, it’s a madcap idea. Yes, it will probably fail. Yes, working for Goldman Sachs would be a lot more sensible. It doesn’t matter. And if it does, you might want to reconsider if starting up a business is for you. This is a moonshot that will take you far out of your comfort zone. You need to be comfortable with being uncomfortable.