I'm not claiming to be an expert. After all I've only been on this planet for 25 years and doing "the startup thing" proper for about 5 of them. That said, I do give people advice on their startup ideas and aspirations very frequently, and I like to think that I'm generally somewhat helpful to these people.
One thing I've noticed is that I tend to give people variations on the same advice over and over again, which lead me to the idea of creating a guide in which I try to sum up these concepts so that people can get these tips without having to actually speak with me. Still if you do want to speak with me, feel free to reach out.
Here's my general outline for what I'd like to write about:
0. When to Start
1. What Makes a Good Team
2. What Makes a Good Idea
3. Explaining Your Idea
4. Raising Money
5. Knowing When (not) to Quit
In all likelihood I'm going to touch on themes that have already been extolled upon by others. Paul Graham's essays, for example, serve as a direct or indirect source of inspiration for many of the concepts that I preach when it comes to starting a company. I'm not going to be comprehensive in ascribing credit to all the sources because i'm not in college anymore : )
0. When to Start
If you want to start a company the answer of when to start is really quite easy: now!
What this does not mean is that your current idea, current team, current corporate entity, etc. are all the one that will bring you to success. I'll elaborate more on some of the signs you should look for to know whether you should stick or switch on any of these facets in later sections.
What this does mean is that if your intention is to get involved in entrepreneurship, and you've gotten as far as reading this guide, then you need to start the process of becoming an entrepreneur today. Yes, that means that you shouldn't "get a job at a big company for 2 years, and make enough money that I can do my own thing" if you can possibly avoid it, because it more than likely won't work out that way. What you should do starting today (if you haven't already) are things like:
- Learn to code
- Start hacking and iterating on your current idea
- Build something and try to get people to use it
- Don't plan for a future where you depend on someone paying you a salary to survive
- Go through the process of creating a company
- Find the people who will be your co-founder(s)
- Apply for incubators (the process of applying will force you to consolidate your ideas even if they aren't ready)
1. What Makes a Good Team
Founding team is more important than idea. Good founding teams will arrive at good ideas more frequently than good ideas will attract the appropriate founders.
Each member needs to bring something to the table in terms of execution ability. Please don't be that start up whose founders are two non-coders that "just need a third technical cofounder" to get their idea working. I think that there's a carrying capacity of one non-technical co-founder per company that can work, but what's better is if each member of the founding team is contributing to the actual building of the product.
If you don't know how to build what you are thinking of building, then you are likely to be making assumptions about how feasible it is or what things should be built first that may not be correct. In other words you can't accurately make a cost/benefit assessment of the features of your product if you don't viscerally understand the costs. This is what's so frustrating about hearing the "all I need is an engineer" storyline of many startup attempts.
The founding team that worked for us was this:
Walker - CEO / Idea Guy / HTML / CSS / Some JS / Photoshop / Investor Relations
Evan - CTO / Tech Guy / PHP / Some Dev Ops
So we basically had one front end dev and one back end, and our first angel investor helped us out with a lot of the nitty gritty business setup stuff. This was a perfect arrangement because it allowed us to focus on product, though we gave up a bit more control than we might have if we had had a business focused cofounder.
Another major ingredient to our success was initial failure. Our first company, Jobzle, did not take off but served as a didactic dry run for Teespring which ended up doing well. We learned that we worked well together, and a bunch of things not to do in our next company.
So yes I believe in "fail fast, fail early" and in the process of those failures, try to find the people that are willing to weather the storm with you and who have the right skills, and those will be your co-founders.
2. What Makes a Good Idea
A good idea is easier to find, but harder to identify, than a good team. The crazy thing is that nearly everyone thinks their idea is good but the vast majority of ideas are bad. In order to solve this issue I'm going to lay out a series of questions for you to ask yourself about your current idea.
1. Do other people seem to think that your idea is a good?
If No to (1):
1a. Do they actually understand it based on the way you pitched it?
If No to (1a):
- If they do not understand your idea because it is too complicated, you need to simplify your idea and start at (1) again.
- If they do not understand your idea because you can't get it across, review section 3 of this guide and start over.
If Yes to (1a):
- Maybe this person isn't the right person for your idea because they are too far from the use case. Find more relevant audience and start over.
- More likely, you should re-evaluate your idea if people generally don't resonate with it.
If Yes to (1):
2. Do people use or show interest in actually using your idea?
If No to (2):
- People may pay you lip service by saying they like your idea once they understand it, but if they don't actually use it or show genuine interest in using it then you have a problem. Reconsider your idea.
If Yes to (2):
2a. Do people show interest in paying for your idea or actually pay for it?
If No to (2a):
- You may still have hope if the idea is so contagious that 100's of millions of people could use it and you can do an advertising or data play. This is an extreme long shot though that many ideas fall into, and has a near 0 chance of success. Consider re-evaluating.
- If people won't pay for it and and you can't imagine it becoming used by the masses, then it won't work.
If Yes to (2a), then you pass the easy part... whew. Now for the hard stuff:
3. Does your idea require network affects to work (i.e. would your idea add value to one user if nobody else was using it)?
If Yes to (3):
- You have just opted yourself into a chicken-egg problem. This is going to be an uphill battle. Dangerous territory.
- The only way this can work is if your users recruit one another, and this behavior is built into the fundamentals of your idea.
If No to (3):
4. Does some or all of your idea replicate a technology that already exists?
If Yes to (4):
4a. Is the existing technology something people generally like?
If Yes to (4a):
- Then, please, do not attempt to rebuild it. If some component of your idea looks like Facebook, for example, then you should be thinking or building a plugin or leveraging Facebook's API, not rebuilding FB.
If No to (4a):
- There's probably a reason people haven't already switched. No offense to LinkedIn, but it's not an interface that everyone is in love with, yet people still use it. This doesn't mean that you should invent the next LinkedIn, it means that people don't have an appetite for a better LinkedIn, because if they did, it would already exist.
If No to (4):
4b. Do people use something that resembles or is similar to your idea?
If No to (4b):
- Great! You have an idea that's completely original. Actually, just kidding, if people aren't using anything that's somewhat similar to your idea, then why would they start now? Your idea is ahead of it's time and that means you should probably throw it on the back burner and go for something less idealistic.
If Yes to (4b):
- This is actually ideal! You can't create new user behaviors, people do what they do. Stick with the language of today and you'll be more successful.
5. Does your idea solve a problem people currently have, but don't have a solution for.
If No to (5):
- You probably won't get here because I'm sure everyone thinks that their idea is a yes on (5) but honestly ask yourself, if your idea is a vitamin or a painkiller (look it up).
If Yes to (5):
- Are you sure? Is it really a problem or is this just something that would be nice to have?
- If there's one part of your idea that's a Yes to (5) and No to (4) then focus on that component of your idea. That is your idea and the thing that will take you to success, the rest should be worried about later or by other people.
- If it truly solves a problem that many have, then it should resonate in (1) and (2). You may actually have a good idea. Congratulations.
So to review/summarize, a good idea is something that:
- Solves a problem currently not being solved
- That people actually have
- In a way that isn't foreign to today's users
- That they are willing to pay for
- And doesn't require network effects to work out of the gate
3. Explaining Your Idea
Even the best idea will go nowhere if you don't find a way to communicate it well. In the sea of thoughts swirling through your head of implementation details, feature possibilities, and use cases, it's essential to pin down the 30-60 seconds worth of description that will immediately get across what you are trying to do, why it's special, and why it will work to everyone you talk to about what you are doing.
Know your audience.