The Value of Working for a Startup

January 18th, 2013 No comments

corporate job

I recently read a post from Rob May that he wrote about a month ago. He was explaining why he was really glad he spent his 20′s working on startups, but how difficult it was at times considering the stress, failures, and seeing friends who had nice jobs, new houses, etc. He was saying that it can be hard to know if you’re making the right decision to continue down the uncertain, risky path of startups, but how valuable it can be in the long run.

Reading it made me think about how much people underestimate the value of working at a startup. So often people get excited about the idea of hitting it big with an idea, but are quickly deterred when things dont as well or go as quickly as they would like.

Yes, the hours are long, the pay is low, and the failure rate is high, but there is a ton of value in working in that environment. I would definitely argue with Rob that its a good way to spend your early professional career. Here are a few of the benefits:

  1. New Skills – Working at a startup will allow (or force) you to learn new skills that you wouldn’t typically learn in a bigger company. Because more needs to be done with less people, you have the chance to do jobs you normally wouldn’t do. This can translate into skills that are valuable to employers and can increase job opportunities and pay. It can also allow people to find a new niche that they enjoy or are really good at.
  2. Independence - Along those same lines, founders have a chance to work for themselves and on projects that they want to. It can be a great learning experience, and if it works out, can provide you the freedom to move  your career in the direction you want as opposed to the direction to make ends meet.
  3. Pushing Yourself – Working in this environment will be a challenge and there will undoubtedly be times you would like to quit. But in the end you will be in a position where you have to push yourself in order to succeed. Without challenging and pushing yourself, you won’t improve and you’ll never actually know what you’re capable of.
  4. Opportunity – While you may be working long hours, building up debt, and neglecting your personal life, you have something that most people in this world don’t; opportunity. Opportunity to make a lot of money, opportunity to become an expert in your field, and an opportunity to change the world in a positive way. Dont discount that.

I think this is why entrepreneurs can find growth and opportunity that other dont usually see, but it doesnt come easily or quickly.

What are some other benefits to working at a startup as opposed to a big company?

Categories: Startups Tags:

The Value Of A Large Group Of Investors

January 16th, 2013 No comments

board table

In 2012 my company, Ucloser, closed a seed round of funding. The round included 20 investors, mostly angels. Besides the cash, the round afforded us several other benefits that I think were important. I thought I would list a few below:

Funding Connections – Getting the first few angels allowed us to get the next group, and the group after that. Once we got to 7 or 8 investors, the others started seeing the social proof and momentum. Those early investors were extremely important to introduce and help bring in the others.

Business Development – Talking and spending time with our investors resulted in a lot of valuable relationships with industry folks. Even when an investor didn’t invest, they almost always knew a potential customer or industry partner and were happy to introduce us.

Strategy – Along those same lines, spending time with our investors resulted in a lot of great feedback and advice. For first-time founders like us, this was extremely valuable. Discussions ranged from product support to legal structure and really helped to think differently about the business.

These are just a few of the benefits we found with our group of investors. Hopefully I can write another post with more as I think of them.

What else can you think of? What are some other benefits of a large group of investors?

Categories: VC's & Angels Tags:

Define Your Development Priorities

January 11th, 2013 No comments

Earlier today I was thinking of a video I saw about a year ago. It’s a presentation by Phil Lubin, CEO of Evernote, to the 2012 class at the Founders Institute . It’s a great talk on how to manage product development under strict resources, and how to build in a balanced and effective way.

He explains product planning, conflicting development priorities, and how to prioritize feature development.

Its 25 minutes long, so not short, but its worth it if you manage product or want to learn more about the process.  Enjoy!

Categories: Tech & Web Tags:

Lift App

January 10th, 2013 No comments

liftapp

Typically after I hear about a new mobile app, I’ll download it and try it out. I’ll use it a few times, and on the rare occurrence I begin to use it daily, I move it to my iPhone homescreen. I recently moved the Lift app over there. It was the first app I’ve moved over in about a year.

Lift allows me to set and track goals around “habits” I want to create. I set up the goals I want, then check them off as they are completed each time. I’m currently tracking:

  • Working out
  • Writing a blog post
  • Waking up by 7am sharp
  • Reading for 30 minutes
  • Setting my priorities for the next day

So far I’m doing a great job with working out, writing blog posts and setting priorities but havent done so well with waking up on time (I like to hit snooze) and reading each night. The cool part is I’m getting a bigger picture on habits and activities I need to work on.

Even better, I’ve found myself interested and focused on doing the activity and checking it off each day. There is a real satisfaction to seeing that big green checkbox. Plus, you share your habits with others who are trying to do the same things, creating social proof. I’m sure I’ll add new habits or remove others based on how things evolve in the future.

Either way, I’m enjoying using Lift and am looking forward to gathering more info. Maybe there is something to this quantified self movement.

Has anyone else tried using the app? What do you think?

Categories: Startups Tags:

3 Things I Want To Do More Of This Year

January 8th, 2013 No comments

new years

 

This year I want to try and focus on doing only a few things, but doing them really well. Here are the three things I’d like to focus on:

Writing – I’ve committed to trying to blog each evening during the week. I know I wont be perfect, with some missed days and bad posts, but I’m looking forward to the mental exercise of writing each day.

Exercise – I’ve always stayed in pretty good shape, but I seem to get in these spurts where I am very inconsistent with my workouts. I will get in a groove, then stop for an equally long period of time. Similarly with writing, I want to spend time working on this each weekday.

Work – I want to make a more focused effort around my professional growth. I want to work on expanding my skills and hopefully in turn my business will reflect that effort. I want to spend more time experimenting with new things and new skills.

I think if I can grow in only these areas, 2013 will be a success. Do you have any goals for 2013? What is the most important one?

 

Categories: Thoughts & Commentary Tags:

Identity

January 7th, 2013 No comments

fingerprint

When a product is created, the challenge is to find a niche and market that product.  Navigating that process is really tough, and it typically does not follow a straight line.  The single most difficult thing young companies seem to have a challenge with is finding their identity.

Companies are always trying to perfect the art of reaching the right market with the right message. What is that message? What is the value to a user?

Here are a few things to think about when finding the identity for a startup:

  • Keep it simple – Start things out simply and then expand from there. Find the one most important problem your product solves and build on it. Find the thing that will get peoples attention. Find the one thing people will talk about.
  • Learn from your users – Listen to them in order to learn what the one thing is. Facebook didn’t know photos would be so important to their product until users told them long after they launched. Learn what is similar to ‘photos on Facebook’ for your product.
  • Keep going – Companies rarely get it right the first time, but some are determined enough to ge there. Persistence is the single most important component to finding your niche.

What else? What are the other things companies should think about when trying to find their identity?

Categories: Startups, Thoughts & Commentary Tags:

How Not To Suck As A First Time Entrepreneur

January 4th, 2013 No comments

back-to-school

 

Starting a business is hard. Its even harder if you’ve never done it before. Here are a few things to think about if you are considering becoming a full-time entrepreneur:

  1. It takes time – Assume it is going to take some time to get things going. It is fun to read about companies like Instagram that sell in two years, but that is the exception to the norm. When starting out, you may want to go ahead clear your calendar for the next 5-10 years. 
  2. Pick something you know – Try to work within an industry you have some knowledge and understanding of. It can be tempting to start in consumer tech or something that looks fun, but you should take advantage of any special industry knowledge you may have.
  3. Learn fast – Wether you understand anything about the industry or not, you will have to learn and adapt fast to your environment. Things will change quickly and they will change often. Count on it.
  4. Its going to be tough – Be ready to get punched in the face a few times. There will be ups and downs guaranteed. Find ways to stay persistent because you will need it.
  5. Network early and often – Get out of the building and talk to potential customers, industry folks, advisors, etc. Share what you are doing with as many people that will listen. Good things will happen if you put yourself out there.

People like to glorify being an entrepreneur, but the reality is that it is not a pretty process. Stay persistent, work hard and you may have a chance.

What else should first time entrepreneurs know before starting out?

Categories: Startups Tags:

Sales in a Startup

January 3rd, 2013 2 comments

sales arrow

Working on sales in a startup can be a challenging process. Specifically, I think sales is harder in product based companies because sometimes the product hasn’t been finished yet or it is changing rapidly.

At times it can be a game of hurry up and wait, meaning you make a sale only to be told that the product is not quite ready yet to bring on customers.

Other times, sales can fall through because of resource allocation. Meaning you line up an opportunity, only to find out that the company doesn’t have the resources to service that type of customer. Potentially because of a focus on a different size or different type of customer.

Sales, among many other things will always be a battle within a growing organization. How many resources should we devote to it? How do we deal with sales cycles? How can we get more customers and meet our sales projections?

I’ve found the best approach to sales in a startup is to treat the process like an experiment. Treat potential customers as a discovery process, finding what pain points they have and how they view the solution you are providing them. Ask them for feedback and try and learn what messages and details work best to close new business.

Also experiment with different strategies along the process. From the marketing strategies that may produce sales leads to the way you handle emails and web demos for potential customers.

Treat it all like a process and try and learn along the way.

What other things should startups consider when beginning the selling process?

Categories: Startups Tags:

New Year, New Plans

January 1st, 2013 No comments

2013

With it being a new year, I’m starting a new blogging strategy: one short post a day. I’m using the Lift Mobile App to keep up with new daily goals like exercising and blogging.

I think the biggest challenge with doing one blog post each day is to come up with content and ideas consistently. I’m going to try and be less formal in hopes that it will help.

Stay tuned tomorrow for a new short post each day. Looking forward to trying this new strategy.

Happy New Year.

Categories: Thoughts & Commentary Tags:

Have A Throttle

July 5th, 2012 1 comment

Starting a company is an exercise in persistence and resourcefulness. How do you surround yourself and keep great employees? How do you keep your company adequately financed? What do you do when something goes wrong? All these challenges are part of building a business and great entrepreneurs find ways to handle these issues.

At the center of all this is watching expenses and balancing spending against pushing the growth of your organization. Most people will tell you that you need to spend money in order to make money, and I would agree. You need money to be able to create a fast-growing company that is hiring good people and marketing to drive new sales.  This is particularly true in software. You have balance product design and engineering before you can sell anything; so adequate finance, hiring, and marketing budgets are critical.

I have found that looking at spending like a throttle on an engine is really good analogy. You need to be able to quickly slow and speed up based on your current circumstances. I say “current” circumstances because in a startup these circumstances are changing constantly, a true roller coaster.  The important thing is to build in some flexibility to control cash flow for your company. I’ve added a few strategies that have worked well at Ucloser below:

Accounts Payable – This is a big, obvious one. Work with vendors that will allow you some flexibility in payments on bills. Lawyers, accountants, and other large firms are great for this strategy.

Make sure you establish this in the relationship early on and also build personal relationships with these partners to create rapport. Believe me, you will need these relationships in the tough times when bills are running behind.

Independent Contractors – Early on the majority of the people you work with outside of co-founders and core employees should be independant contractors. This does several things for you and your young business:

  • Creates a smaller cash burn than a full time employee because they only work for you essentially part-time.
  • Creates a strong incentive for productivity when you are only paid for work as it is completed.
  • Makes it easy to fire someone if they are not doing good work or you need to make cuts. Simply don’t renew them for any more work.
  •  Last, allows you to explore different types of help without any long term commitment. Maybe you think you need a new designer or an extra QA person? Try a contractor out first.

Equity or Deferred Payment  - Another way to watch your cash flow is to work in some deals where payment is tied to equity or some form of deferred compensation. Tie in extra compensation to funding milestones or run a cash note that can convert to equity in the next round.

When discussing the deal with any potential partner or hire, make sure they know this is an option you would be open to exploring. This could alllow a structure you may have not considered earlier. Still, make sure you save the equity deals for the best of the best, the people you are dying to get on your team.

Office Space – This ties into accounts payable with vendors, but I would consider extra flexibility in this department. Maybe you can start at your house for the first few years? Maybe you can work in some unused office space of another company? Whatever you do, don’t get yourself stuck in some long-term commercial lease right away where you are paying outrageous late fees and penalties for a missed payment.

As you are building your business, expect things to change along the way and build with that in mind. The more you can keep your throttle or cash burn low, the more options you create for you and your business. Want to build a new product or change your strategy? You better hope you have built in the flexibility to do that, because if you are driving too fast you might just wreck.

On the other hand, be ready to push the throttle forward when you need to. Be ready to make some key hires for sales or bring on a critical design and marketing firm you need help from. Either way, understand what you can handle and when you need it.

 

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