Are you ready to start?
- job to learn or job to earn?
- starting work at a company that already raised capital is only an opportunity to learn
- if you want to buy house outright, need to earn and start a company
What do you need from ‘learn’?
- network of talented execs and VCs
- more responsibility
- specific industry or tech skills
- chance to partner with companies you want to work with later
To earn, need to be top 3 or 4 in company
In the beginning
1. form a company
2. found only with one other
3. research the market
- identity a problem that exists
- calculate how much time/money causing people
- sketch solution: what solution using today
- put thoughts into spreadsheets, powerpoint and HTML
4. get customer input: get feedback immediately from customers
- test with customers
5. build prototypes and/or product
6. make sure you own the IP
7. assemble a team
- talk to potential employees
- if no founder, bring on a 20% founder/partner (10 - 30%) and treat them like a co-founder
- get people around, teams are companies not individuals
8. implement restricted stock with vesting at earliest stages (this prevents founder walking away early)
Learning to work with lawyers
If venture/angel backed tech company, get to know or meet lawyers long before starting company
- US experience
How to pick:
- start focused
- bill with “fixed fee +” for company registration, angel deals, series A+B, Employee Stock Option Plans (ESOP), IP things etc
Do you still need a business plan?
- launch and learn era (lean startup)
Financial spreadsheet / financial model:
- outlining assumptions and thoughts to customer problem
- tells a story: how many customer will acquire and how much will charge for product
- value: hours saved, costs avoided, extra sales, better conversions etc
- competition: how much do they charge
Cost of Goods Sold (COGS): how bid Allowable Acquisition Costs (AAC)
- if consumer: how big the funnel is, how to fill top of the funnel and what conversion rates will be
Cost of People: 70-80% of costs
- how many hires and in what sequence?
- running rate for engineers?
How will costs scale as revenue scales?
- review financial model each quarter
- what assumptions proved wrong last quarter?
- how does that change assumptions going forward?
Choose investors carefully
- watch out for VC seagulls: know enough about the project to have an opinion, but not enough to help
- swoop in to “check in on things”, shit on you then fly away
Hiring / Understanding yourself
Know thy weakness:
- a shaper vs. a completer-finisher?
- externally savvy vs inwardly operational?
- leader vs manager?
- technically inclined?
- understand how to lead a sales process?
- worked in marketing / customer acquisition?
- intuitive vs process orientated?
- plug the gaps
Don’t drink koolaid
- don’t listen to what journalists say about your company
- don’t get excited by fame
- focus on customers
- do capitalise on hype cycles to raise money
- enjoy the moment
- PR doesn’t mean anything about your core performance or your business
- press = free advertising, that’s all
1. press coverage does matter, but in a subtle way
- people influenced by what they read
2. in pitch, just have logos of journals and short quotes if necessary