We talk to startups and investors, you get the value.
In the pursuit of changing the world with new “airbnb/uber for the housewives”, in the heat of excitement and inspiration by the original idea, hundreds of young and not that young startuppers start a day with pen and paper generating ideas for their startups. Piping hot CEO’s, CTO’s, CMO’s and minion, most likely, without any experience in business development, are paying too much attention to the insignificant details, making a lot of unnecessary costly decisions.
We talk to startups and investors, you get the value.
You don’t need to register a company until the trading begins.
This action is an unnecessary waste of money and time. Until you don’t have an income or/and clients, startup and its concept don’t have any value, like literally no value. Even if there are millions invested in that concept. So, it means that there is nothing to share.
You don’t need to hire a lawyer just because you think it is a good idea.
To divide the shares and the responsibilities between the founders, and to do so, it is better to make a simple contract-agreement. This can be done without law education and any other kind of legal experience. However, if you are not even able to make such an agreement, then you don’t need a startup as you will not be able to promote your startup successfully.
You don’t need to rent an office.
It goes as a rule that in the modern world, it is much easier for you to find somebody who will create your product from home, and at the same time will have high work effectiveness. Until you don’t have clients or, at least, a product release, there is no need to assemble the team on the office base as it will be economically unprofitable.
You don’t need to write day and nights to the fonds and investors.
Website or other application is not a product. Until you don’t have any clients/users, you as a startup, like a noteworthy startup is non-existent, like nobody knows you in this Universe. Maybe, nobody will ever know. Apart from all that, perhaps you don’t know how to present your product to the investor in the right and efficient way, as the product may not even exist. Do not freak out fonds and investors spamming them all the time, it’s only going to make them angry, what will negatively affect your karma.
Do not ignore pieces of advice from the experienced startuppers or businessman.
Of course, you may not think so, but if you don’t have any startup experience behind, you are a non-competent startupper. You will be getting different pieces of advice all the time, and you will be told that you are doing something wrong, and you are going to think, that everyone knows is wrong saying some strange shit, and you are the only one in a billion who knows the real facts. So to say, you are wrong. Listen attentively, say thank you and self-reflect on this topic.
Do not rely on your sales on a third person.
You need to sell your product by yourself to understand the feedback. If you don’t know why your offer is rejected, how will you improve your product? The founder is the one who has to bring money to the company in his own hands. There is no other way.
You don’t need to visit different paid conferences or meetups.
If the events are free — visit them as much as possible, but with no harm to your startup, everything else is a simple deflation of your valuable resources like time and money. The working team and sponsors you can actually find on the Internet, hoping to find any investments, simply visiting all those conferences on early stages, is senseless, that’s like a 99,99% chance (do you really believe you are so lucky?) It doesn’t matter how attractive is the landing page of the conference and the calls from sexy-shpeksi manager, do not go for «super price with access to the VIP-areas where are tons of investors only for 99 999₽». Punch yourself in a face, go and work hard. That’s going to be more useful.
You don’t need to overwork, and you don’t need to forget about having rest and doing sports.
If you are a workaholic, it’s quite okay if you are a persistent workaholic, then your chances to create a successful startup are more than high. But it is essential to know how to take rest (not to get wasted) and to keep your body in shape. The effectiveness doesn’t measure by the fatigue, as many may think. When will the micro-stroke happen or a “twinkle” illness will hit you hard as you will be switching on and off every 10 minutes, you will regret all the sleepless nights but nothing you would be able to do then.
Don’t be afraid to fail.
Nothing can be done correctly at first attempt. To succeed, you need to make a long persistent way of trials and errors which may last for months. Don’t believe in cheesy stories like “ we just sit for the whole night, wrote a working code and the next morning we became rich af”. Even if such happens, it is a game of luck and a complete coincidence. If you are to build your startup, only believing in a chance of success, you may not even start. Thought, this topic deserves a whole separate long read.
Don’t be afraid to offer people to work for free/ not to pay the salary.
There a lot of young (and not that young) people all around, who are wasting their spare time for pretty useless stuff. It is better for you that they will spend that free time on your stuff, the one you call a startup. The only thing you need to do is to persuade people to do so. Paying money to your friends and siblings is a whole new level of mind-fuck. Of course, at some moment you can start to pay; however, you have to do it in the right way, taking into account the quality of the work done and the time spent during the process. This is also a topic for a separate long read.
Don’t be afraid to offer and to hear “No”.
The very best way to understand whether the product you create is useful for somebody is to try to sell it. People buy useless trash every single day, transfer money to the swindlers and deposit cash into MLM companies. There is always somebody who would buy the stuff which is produced by your startup. The thing is that 100 rejections and one successful sell will give you more than “endless product improvements” striving to give it an attractive market look.
Do not be afraid of pivots.
The startup has to become a business, and business is all about money. Your product has to be flexible and one to adapt in order to bring more profit, even if it has to be changed to the out of all recognition. If market urges you to create smart vibrators instead of smart house systems, then it has to be done. What is more, you need to treat your product as your child, to present it like it is everything you have in your life and you have nothing else to lose. If you are not ready for such dedication, you should probably go and work in the office, so you won’t waste your life for catching the dream chance. Money must make money; if somebody says different than he wants to make money out of you.
Don’t be afraid to avow your mistakes.
The beginners in a startup field are convinced that you have to be always successful and do not show your weaknesses. On the other side, smart startuppers know that avowing the mistakes and feedback analysis are kind of critical factors why investors would like to buy your product; nevertheless, you have to do it in the right and natural way. However, the main point of this is to avow your own mistakes and let the team know about them. The sooner, the better. This teaches how to avoid such errors in the future, allows to avoid future quarrels and the collapse of the whole project. A lot of startups collapsed because of the founders who couldn’t agree with each other, and they should blame to that the unwillingness to compromise and to admit that you have fucked up.
Do not be afraid to optimise.
For sure, there will be situations when you will lack money. The usual lifestyle may be endangered, and this can become a reason to leave the project and to abandon it altogether. It gets even worse when the founders got assured that it is a fatality, the end of everything and a marker of their incompetence. It’s not at all. Shit happens, it’s life. You cannot even imagine how long a person can live on a low-end budget if such person has a purpose. Take your time to optimise your spendings, and this is also a deposit in your future. Possibly, it may even teach you how to be financially literate.
This material is prepared by Eduard Mirchev, co-founder of the thefandome.com startup and a NED of IQDEMY (iqdemy.ch). For the last 11 years (since 2008) I have been mastering marketing, sales marketing and project management. 95% of my experience is based on the work in stress conditions: market collapse, limited resources, international trades, new audiences and experimental ideas. I’ve been to different countries, I’ve seen different markets, various industries and a lot of other shit. Skepsis and pragmatism are helping me to keep my head cool and to create amazing products.