All startups start with an idea. Usually, the idea comes from one individual, who has a problem that existing products cannot solve efficiently. In some cases, the “efficiency” is linked to “how you feel about” the existing solutions, e.g. higher price, cumbersome usability, outdated design, limited functionality, etc.
What ever the reason, you decide to do something about it. You speak to few close friends and their friends, and eventually find few who might want to join you to build a product and create a tech startup in the process.
Unless you have founded a company before, or have worked in a startup team, you and your team would need to learn fast all aspects of starting and running a tech startup. If you are not in the Valley or another tech startup hotspot, its even harder. Yes, it’s much easier to find information online now than 5 years ago, so that you can hopefully learn fast and make less mistakes than those who started before you.
During the early stages, more than anything else, you need to keep your team motivated and intact. This is probably the hardest thing to achieve, especially if you do not achieve traction fast.
Let me share my experiences, and hopefully you will not make the same mistakes as I have done.
Startup 1: Building an electronic invoicing document exchange (ebdex)
Solo founder with a concept taken from a startup I joined three months before, which went into voluntary liquidation. I hired a software development house as my partner which ended real badly two years after loosing a fortune.
Startup 2: Electronic document repository (edocr | edocr)
We setup the company few weeks after I discussed the idea with CEO of a competitor to my first startup. We brought two other friends with plenty of experience. Without naming individuals, one person dragged on, resulting in others loosing interest. As the only non-coder in the team, I pushed for early release. We launched Alpha in Oct 2007 through TechCrunch. Six months after, we were selected as one of the 20 most promising startups in the UK with companies like Huddle.
You would think above was sufficient to keep the moral high and go from strength to strength. Unfortunately, it wasn’t. The problem lied with the interests of others, as they were already running companies, and my startup 2 was only a side project to them. In their eyes, they had nothing to loose, but only to gain. Yet they could not commit the time to improve the product due to demand placed on them by their own companies.
Last year, we grew by 250% adding over 50,000 user accounts.
Startup 3: Universal contact database (http://CRMthis.com)
This was initially inspired by the opportunity I saw with Twitter in its early days. I then saw the same when G+ was launched. Developed the initial idea further and assembled a team very quickly. The API was coded in few days followed by the back-end. Then the front-end guy simply stalled. After 2 months, I resigned.
Unlike startup 2, we agreed not to register a company or discuss how the shares would be split. We worked on trust, when the product stalled, I knew it would be a repeat of early days of Startup 2. Whilst the opportunity had legs, the hard decision had to be taken.
If you are well capitalised, you can easily replace team members, if they do not perform. If you are self-funded, then this is not an option, especially if you cannot code, like me.
So finding and retaining a team of co-founders has been my biggest challenge when starting up. Luckily, I ended up with 96% of Startup 2 with all the other co-founders leaving at free will. Not many startups are this fortune. I have come across startups that were crippled by co-founders demanding to be bought out at high prices.
So make sure you pick the right team, but have flexibility to replace them quickly if needed and find ways to keep the team active and intact!