50 Startup Lessons Learned in 12 months
Just over a year ago I started work on Vinetrade. Looking back it’s amazing to see just how much I've learnt, how many skills I've developed and what I'd do differently if I were to start another company or build a product today. Inspired by a surge of recent posts by other founders on the lessons they have learnt, I thought I would post my own.
In no particular order:
You need to just get on and build something. It's easy to have an idea - building a product is the hard part. Just getting started is a big leap and will set you apart from so many others who never even get this far.
You need a good knowledge of code. It's critical that you know how to build software or at least what's involved. If you don't have a firm grip on the basics you'll struggle to execute on your vision. It is pretty easy to get to grips with the basic concepts and there's no excuse not to. Sites like Codeacademy and Treehouse will help you get to grips with the basics.
Don't spend too much time debating which technologies to use. Mark and myself spent a couple of weeks playing with Rails and Django before trying to decide which we preferred and which was the best. In reality there's barely any difference - just pick what you're most comfortable with and run with it.
Your Minimum Viable Product can be much more minimal than you think. We built a Rails app with many features, a nice design, and worried about scalability and infrastructure. We could have easily got away with a much more basic site.
User Experience (UX) is more important than visual design. A great looking site is important - but not nearly as important as your customers/users being able to do what they want fast and efficiently. Only hire a visual designer when you've got a grip of the UX.
Don't keep your plans to yourself. Put ideas out and get criticism. Feedback is vital and you'll learn lots. Don't be afraid that people will steal your ideas - they might think about it but there's a lot of hard work involved and the risk is small.
That includes your site designs and UX. Find people (preferably potential customers) to sit in front of your site and see what works and what doesn't. Where do they get confused? Do they hit any brick walls? Don't give any prompts - just sit and watch. You'll be surprised by what you find.
A startup is not a lifestyle business. You're not building something designed to give you a regular income. You're building a company and business that is designed to grow.
You need to pick a large market if you want to raise venture capital investment. A business that makes £10m profit per year may look great to you, but it's small fry for a VC.
Banks are a nightmare to deal with. They're almost universally awful and can get away with it because heavy regulation makes the market so difficult to disrupt. They often require more detailed business plans, financial forecasts and accounts than venture capital investors.
Be resourceful and take opportunities. Go to events and network. You'll be surprised by who you meet.
Focus on building relationships. Be genuinely interested in other people. Enjoy being sociable.
Don't meet people just because you want something out of them. Play the long game and build a relationship. People will be happy to help if you have a good relationship and track record.
Meet investors before you need to raise money. It’s much easier if they have seen you progress over a period of time and they've gotten to know you. It's about lines not dots.
It's best to meet people through introductions. You can still get there on your own (it's just a bit harder) - but everyone has to start somewhere. Investors are always looking for the best deals and will attend events to meet people. If you've got a product and you're making progress they'll be happy to stay in touch.
Focus on the people who show the most interest. If you're looking for customers, focus on those who put their money where their mouth is. Genuine buyers will likely do this very quickly. Same with investors. Lots of people like to talk and many will happily lead you up the garden path with no intention of buying.
There's nothing wrong with rejection. If you're getting rejected by different people on a daily basis you're doing at least one thing right (getting in front of more eyeballs). Focus on those who accept you. They're the people who really matter.
Those who initially reject you will likely come running back later. No one wants to be first and many people want to feel like others are taking away or reducing their risk.
Starting and running a company costs way more than you think. If you haven't done this before find someone who has to check your figures. Factor in the costs of office space, legal fees, events, salaries, taxes etc. Adzuna is an incredibly useful site for researching salaries in the UK.
Make sure you've got extra cash to use as a contingency. You'll often encounter problems that are easy to make go away if you throw a bit of cash at them.
Time costs money. It's often better to be decisive, spend money and get something done than spend months deliberating and making no progress. Agonise over big purchases, but don't spend an hour deciding whether or not to buy that £20 UX book you saw on Amazon. Just buy it and get on with building your company/product. That hour will cost you more than £20 in the long run.
There's a difference between price and value. Price is what you pay, value is what you get.
Don't get hung up on things that haven't worked out. If you've spent cash on some design work that bombed get over it and move on. Fix the problems and forget about the money you spent - you can't get it back. It's gone. Learn from your mistake.
Finding good staff takes more than money. Good people are likely to be in stable jobs or have other offers on the table. What else makes you exciting? How much autonomy will they have? What is your culture like?
Your first few employees will set the culture. Even at just 3-4 people you'll start to set the tone for the entire company. Cultural fit becomes increasingly important with each employee you add.
Don't be scared to say no. This could be to features that customers ask for or requests from employees. Be able to justify your decisions and people will respect you for being decisive.
Be prepared to change your mind. You'll learn lots as you progress and the world won't stop changing around you. Be open to changing your mind and take advantage of changing circumstances.
Base your decisions around actual data. Learn about metrics and why they're important.
As the founding CEO you need to be a good product manager. You need to be able to work with a broad range of people. Read up on agile and scrum methodologies - have a think about how you can adapt them to your business and build good products quickly.
Similarly - learn how to sell. You need to be able to get people interested in you, your product and how it will improve their lives. Learn how to close down objections and get deals done.
Don't be scared to ask for money - from customers and investors. If you want to build a company it must be profitable and this won't happen unless you ask for the cash.
Don't get burnt out. You don't need to work 20 hours a day, 7 days a week just because you're a startup founder. Some people can do this, but most probably can't. Your health is important. You'll be much more productive and make better decisions when you're well rested.
There's always more work that you could be doing. Learn to prioritise and make sure the most important work gets done first. Don't worry if you don't get some minor tasks done. Don't feel like you have to reply to every email - if it's important people will chase and you can reorder your priorities.
Choose your investors carefully. Don't take the first deal that you've been offered. Keep going until you find the right people. If something makes you uncomfortable then it's probably a bad sign. Trust your gut.
Avoid people who only care about money. Work with people who have genuine passion for what they do. A happy and motivated team is dangerous.
You'll have to deal with lots of people who want to make a quick buck out of you (e.g. recruiters). Don't be scared to say no or simply hang up if you can't get rid of them quickly. Your time is valuable and you can't be friends with everyone.
Be patient. There's no such thing as overnight success (despite what TechCrunch may have you believe). It has to be worked for.
Be confident. Be clear about what you're doing and why your team is the one that will do it.
But don't be arrogant. Be open about what you don't know and mistakes you've made. Ask for advice when you need it.
KPIs (key performance indicators) can show hidden progress. You may feel like you’ve been banging your head against a brick wall but some of your metrics may show improvements that you weren't previously aware of.
Get a good lawyer. The best are expensive but worth the money. Not only will their work be better but they'll do a better job of making your problems go away and giving you the confidence need to get on with your job. You'll probably need to work with multiple lawyers before you find (or realise who is) a good one.
Don't be afraid to fire (or not return to) people who you're not completely happy with. This rule applies any time you outsource work.
Equity should always vest over a period of time. Never give it out up front. It can be worth far more than cash and it's very difficult to hold people to account if you can't claw it back.
The company is bigger than you as an individual. As soon as you have multiple shareholders you're no longer running it solely in your own interests. This can be an odd paradigm shift - while you're executing on your own idea you need to build a machine that is bigger than and can survive without you. If you perform badly you could be fired.
You'll get frustrated and feel like you're not making any progress, particularly when you compare yourself to other startups and their founders. Take a step back to appreciate just how far you've come.
Be aware of the long term vision. Where do you want to be in 5 days, 5 weeks, 5 months or 5 years? What is your long term goal and how will you get there?
Don't be afraid to admit to your mistakes. Learn from them, put them right, and move on. Don't make the same mistake twice.
Read, but don't read too much. Keep an eye on posts over at Hacker News and cherry pick the stuff that is useful to you. Subscribe to mailing lists such as Startup Digest. Reading startup articles is a good way to procrastinate during the day - I've stopped myself from doing this by sending the ones that look interesting to Instapaper and having an evening or two per week to catch up.
This game is not for quitters. Sometimes it can be incredibly tough and you find it hard to see why you should keep going. But don't do this. Keep going for as long as you possibly can. Remember that there's no such thing as overnight success and that many of the most famous founders years to make it.
It can be an incredibly rewarding experience and there's no better way to learn than doing. When you look back on what you've achieved you'll be surprised at the progress you've made in a year. I'm rather pleased that I didn't do a postgrad.