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5 things I knew (or should have) before my startup, but didn't learn until now

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Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#21

Post by altenante »

billclerico wrote: post #10
thinkbohemian wrote: post #3

Interesting, i'm a technical sole founder who is very capable of doing EVERYTHING, though i would be much more efficient if i could compartmentalize. I'm constantly on the lookout for my "otherhalf" but can't quite find any non-technicals that seem up-to-snuff any tips on what to look for in a non-technical co-founder? Nobody in the world has Bill’s exact skill set, and looking back on it, that skill set is exactly w…

I think it is important to find a cofounder who you truly respect. besides a few specific skills, the skill set is almost irrelevant since you learn so much on the fly

Co-founders skill sets should be complementary not similar. Essentially, one partner should have a deep understanding of the customer and the other should be able to add value ie. a salesman and an engineer.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#22

Post by _pius »

epi0Bauqu wrote: post #20

"Traction is the only thing that matters." I could not agree more with this. If you get traction everything else falls into place so really you should be spending all your time figuring out how to do this and then making it happen. The problem is as you say, it is of course non-trivial. However, while all cases are different, I do think there are strategies and best practices that one can employ. Your next post shoul…

very cool idea for a book ... looking forward to it!

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#23

Post by johnl »

epi0Bauqu wrote: post #20

"Traction is the only thing that matters." I could not agree more with this. If you get traction everything else falls into place so really you should be spending all your time figuring out how to do this and then making it happen. The problem is as you say, it is of course non-trivial. However, while all cases are different, I do think there are strategies and best practices that one can employ. Your next post shoul…

Yes, I would put traction right on top.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#24

Post by patio11 »

zhyder wrote: post #15

We too have learned the hard way about 5.: customer acquisition is tough. 5.1. We'd read it before but hadn't quite internalized the cardinal rule: Cost of Customer Acquisition 5.2. It's easy to think "hey my product costs me only $1, and the competition charges $100: I'll do great by just charging $10". But when you're charging $10 you won't be able to pay $30 per ad click, and so will (continue to) lose customers t…

I could talk about reason 5.2 for a whole afternoon. It is one of the best reasons not to compete on price.

Additionally, if you're doing ads on Google, there are some weird interactions here that Econ 101 would not predict. For example, although Google describes AdWords as an auction, it is really "auction-like": the highest bid doesn't necessarily win. One factor which can cause lower bids to beat higher bids is if the lower bids have account history. You get account history by winning the auction lots of times.

If you're scratching your head thinking "How does that matter?", consider a software market where one vendor has a product priced at $30 and another has a competing product priced at $22. Their conversion rates and CPCs might very well be similar on day one, resulting in a cost-per-action of $25. One vendor might choose to participate in the auction while the other does not. As the participating vendor's campaign picks up positive history, Google may cause their CPC to decline due to improved account history, perhaps resulting in a CPA closer to $12 ~ $15. Vendor #2, seeing this, might think "Darn! I'd sure love to advertise if it cost $12 ~ $15", and then turn on their ad campaign... only to find that it still costs them $25. (In some cases, it could actually cost more as a result of their competitor's success.)

The above example is somewhat simplified. AdWords can get complex fractal-style.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#26

Post by cullenking »

jon_dahl wrote: post #6
thinkbohemian wrote: post #3

Interesting, i'm a technical sole founder who is very capable of doing EVERYTHING, though i would be much more efficient if i could compartmentalize. I'm constantly on the lookout for my "otherhalf" but can't quite find any non-technicals that seem up-to-snuff any tips on what to look for in a non-technical co-founder? Nobody in the world has Bill’s exact skill set, and looking back on it, that skill set is exactly w…

How business savvy are you? As a single founder, you might be better off with a hybrid co-founder who can code and do business stuff too. Like sales - the ability to sell is probably the most important non-technical skill for a startup founder. Startups need to sell all the time - to customers, partners, investors, journalists, etc. It doesn't hurt to have 2+ founders who can sell.

This is how my co-founder and I operate. We both code and we both swap business duties. It works VERY well when bootstrapping, as one person dipping out for a week for school/work/family time doesn't bring the operation to a halt.

Additionally, having two founders familiar in tech and business allows you to become very productive when one needs work over the other. The ability to tag-team and push out work is fantastic, because there is often a lull in one or the other.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#27

Post by cullenking »

chime wrote: post #2

Does anyone else who quit their job and went fulltime into their startup want to add anything about their experience? Did it make you a lot more productive? Were you worried about paying the bills? How were you able to stay on track? Where did you find the motivation? How did you stay sane and not go crazy?

I am not quite to full-time on ridewithgps, but it's so close I can see it. Just knowing that I will, in a matter of a couple months, have only one focus is enough to get me working like crazy to make it happen. Until then it's odd-jobs to make rent.

If there was a single founder instead of our team of three, we'd be at ramen profitability - a hazard of a larger bootstrapping team, however, it has huge benefits in ability to actually produce something.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#28

Post by cullenking »

I posted a response comment on the article itself, and I'll expand here.

Customer acquisition is more expensive in some markets and cheaper in others. If you are building out a tool for a group of people who already have an internet presence (forums, news sites etc), acquisition is MUCH cheaper. In the beginning of the business you have time but no money, so use that time to talk on those forums, get those people helping you design your product. They will become fanatical users and spread the word about the cool new site THEY helped shape, not to mention provide you insight that you never would have gotten yourself.

We get a huge amount of comments/suggestions/feedback from our users (10-20 a day), and it is very very common to see ones like this, which came in today from one of our early acquisitions:

"BTW, I continue to 'pimp' the site ever chance I get. I post my rides on facebook, BF, and RBR, and share rides and routes with club members. Garmin Connect and TC are so weak, but thats what a lot of them use. Should be low hanging fruit!"

The best advice I can give (in my limited experience) is to engage with your users and build that sense of community and loyalty. It will payoff big, as we are starting to finally realize!

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#29

Post by patio11 »

gridspy wrote: post #19
billclerico wrote: post #11

Earlier quoted context omitted.

when we started wepay we quit and had cash for a few months. we ran out. i worked odd jobs off craigslist to pay rent (like tutoring math, wordpress consulting, etc). i was still 10x more productive than when I was working fulltime in another job and trying to work parttime at night. i think it all comes down to comfort. you're too comfortable in a fulltime job.

I'm still in my fulltime job (see http://blog.gridspy.co.nz/2010/02/part-time-entrepreneur.htm... ) but I can see the benefit of having the "sink or swim" pressure. Everyone close to me, including my co-founder, keeps telling me to stay fulltime until I have a replacement income from GridSpy. It sounds like there is contradiction on this from the HN crowd.

People I respect (here and elsewhere) have a multiplicity of perspectives on the fulltime thing. I think you can make it work, for some value of "it" and some value of "work", on full-time, part-time, consulting-subsidized-time, etc.

Re: 5 things I knew (or should have) before my startup, but didn't learn until now

#30

Post by cullenking »

gridspy wrote: post #19
billclerico wrote: post #11

Earlier quoted context omitted.

when we started wepay we quit and had cash for a few months. we ran out. i worked odd jobs off craigslist to pay rent (like tutoring math, wordpress consulting, etc). i was still 10x more productive than when I was working fulltime in another job and trying to work parttime at night. i think it all comes down to comfort. you're too comfortable in a fulltime job.

I'm still in my fulltime job (see http://blog.gridspy.co.nz/2010/02/part-time-entrepreneur.htm... ) but I can see the benefit of having the "sink or swim" pressure. Everyone close to me, including my co-founder, keeps telling me to stay fulltime until I have a replacement income from GridSpy. It sounds like there is contradiction on this from the HN crowd.

It depends on what stage of life you are in. If you are young and have plenty of time to develop savings and family in front of you, going all out and dropping your full-time job isn't a crazy risk. You make it, or you snag another job when you can no longer operate without more income.

On the other hand, if you have responsibility to children, a partner, a mortgage payment etc then yeah, you need to know you won't let those things fall apart.

I personally am used to living off a small income because I've been going to school for the past many years. If I was used to $80k a year in earnings, it would take alot more to make the plunge to full-time.

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