Wednesday, September 27, 2006

Lesson #7 - Shoot First and then Plan

For years we have been trained to follow a certain process before we take action. The classic direction "Ready, Aim, Fire" is how we were all taught how to live life. The problem is that when starting a business, especially a technology startup where you are building products the world has not seen yet - it is almost suicidal to follow the process of ready, aim and fire.

Here are some reasons:

1. One of the classic problems an entrepreneur faces is "analysis paralysis" - where they get stuck in a rut while developing the product (that is, aiming at the target for too long but never pulling the trigger). I have seen more companies stuck in perpetual R&D then I have companies driving revenue and customer innovation. The most critical step in the life of an early startup is building customer relationships. Customers not only drive revenue, but they drive innovation. Stop aiming, and start firing - (if you miss - atleast you learned why, and you can fix it).

2. The second biggest problem with the "Ready, Aim, Fire" mentality is choosing the target. Unfortunately in an early-stage company - the target is not always a large circle painted in red and white. An entrepreneur may have a vision, and may even have a product - but very few have a clear idea on how to go to market (e.g. the target). So if there is no target, what are we aiming at? The more practical approach, is to fire as many bullets as you can, see which ones hit something, and then by deduction choose the optimal target.

3. The third problem - time and money. With any early-stage venture there is never enough time and money - and thus, we should never waste it. Too much planning can kill a company. Too much deliberation can kill a company. Decisions need to be thought through, but need to be made quickly. If a company is raising capital, it is more impressive to an investor to talk about customer experiences and references, then it is about what cool product is in development. Get customers first, and then finish the product.

Wednesday, September 13, 2006

Lesson #6 - A Startup is not a Corporation

Now that you are heading down the highway, looking out the window - its easy to day dream about everything that can be done on the way to the destination. Staring into the green pastures, and watching the tress fly by can be intoxicating and make even the most focused lose sight of what is important.

The first thing you realize when you start a company, is that it is nothing like company. You can pretend that you are running a "corporation", and go through the cycles of buying name plates, letterhead and give everyone titles, but in reality, running a startup is more like running with the bulls in Pamplona.

When running a "corporation" - a person can hide between middle-management, delegate important tasks, and disappear in bureaucracy when everyone is too busy meeting about the new logo change. In a startup, you focus on the essentials or die. You run with the bulls, or they run over you.

Here are the essentials:

1. Run fast, and don't look back - When running with the bulls, you need to focus on what's ahead - you can't afford to slow down, or risk tripping on someone. When running a startup, you need to make decisions quick - and they need to be great decisions. This is probably the hardest part of being part of a fast moving startup - is trusting your instinct.

2. Protect your Ass - When you know a bull is behind you and it has foot-long horns ready to stab you from behind - you need to protect yourself. In a startup - this is probably the most important thing you do. Not only do you need to protect your interests (personal and business) - but you need to protect the company's interests. A Startup is extremely vulnerable to people looking to steal ideas, demand more than they are worth in pay and stock, and more importantly find a way to kick you out.

3. Don't get distracted - As you are running through the streets, certainly you will hear screams of people being thrown and rundown. You may see some easy way out - an alleyway that looks appealing to hide in and getaway from the rumbling noise of bulls trampling behind - but don't. There are many distractions when running a startup - and due to the long nights, exhausting days and constant pressure - it is easy to get distracted. By keeping focused, and executing what is critical, and not wasting time on minutiae is critical. People live off minutiae in corporations - in a startup - minutiae is a virus.

4. Embrace the pressure - In a high-pressure environment, sometimes it can build up and begin to trigger real angst in an office. In a corporate environment, due to "political correctness" - pressure, turns into frustration and it builds up inside everyone. There is no outlet. In a startup, its pandemonium - like Pamplona - people screaming, running over each other - forgetting peoples feelings. A startup needs to operate the same way - Pressure needs to be embraced, and a culture needs to be created to allow people to laugh about failure and laugh about the stress. Imaging running with the bulls, and everyone politely walking through the streets, saying excuse me, and sensitive to each persons feelings - I think the bulls would win.