For week 2, I thought I would do a fun one to prime future weeks of this newsletter.
10 Surprises of Starting a Tech Startup: Insights from a First-Time Founder! Caveats. This is my first official startup at Markit Social, Inc. I’ve worked at 2 startups before (most recently at Realtime Robotics, Inc.), but this is the first company I’ve founded. Also, I am 25 years old. I will not pretend to say that I know everything. But I have been at this thing for almost 2 years now and have met some incredible people along the way that have taught me so much. So without further ado, here’s a list of things that will either scare or inspire you to start your own company.
Networking is everything! If you don’t have a network, it’s worse than having no money. It took me a while to realize this. If you’re a first time founder, especially if you are young, you will need to rely on the support of others. Find mentors, talk to other founders, and get friendly with potential investors before you ask for their money. There are so many opportunities and people willing to help in the startup world. There is no other community like it. Everyone is helpful to one another because everyone understands how hard it is to start a company. It’s part of the culture to pay it forward. Personally, I love accelerators (Techstars, YC, etc) as an opportunity to expand your network. It costs some equity, but when you’re just getting started, it’s totally worth it. Regardless of where Markit goes, one thing I know I will have with me forever is the network of some pretty awesome people I’ve met. Starting a company doesn’t have to be lonely.
You have to be able to weather the lows. There are highs, but there are A LOT and I mean A LOT of lows. You’re gonna have days where you literally question whether you should just give up now. That no one will want to use your product. Nights that you’re up all night trying to solve a problem so you don’t lose your first customer’s faith forever. Don’t start a company if you aren’t prepared to spend many years on it. If you’re going to be discouraged by your first sign of resistance, you’ll never make it. Lows are where you learn the most. It’s how you take what you learned and apply it to bounce back.
The more success you have, the more work it is. It’s easy to believe that once you have traction in your business, you can lay back, but it only gets more hectic. Be prepared. It doesn’t get easier. Early success can be fleeting. Your first plan that might have even led you to some success will never be your end result. A company goes through many phases, will need more and more food to stay alive, and will change in ways you will never expect.
You’re gonna have to do a lot of dirty work. At the beginning, you’re going to be stuck doing a lot of boring stuff. Even after you start hiring people. You gotta do taxes, pay bills, set up your corporation, limit your legal risk, set up your software tools, and set up all the processes. Thankfully I believe this new era of tech companies has helped make a lot of this stuff a lot easier such as incorporation tools (Clerky), payroll managers (Gusto), analytics tools (Mixpanel), automation software (Zapier), task management (Linear), and so much more. The costs of these tools do add up though. A small company like Markit pays over $1000 a month on just company tools. Also, let it be known. The government will take all your money. You gotta pay taxes on everything! Biggest lesson here, you gotta be as frugal as possible. Unexpected costs will always arise. Be lean, rely on startup discounts, and put your head down and work (doesn’t hurt that my dad is an accountant and my mom runs payroll. Thank you mom and dad!).
Be wary of everyone’s advice. This might sound like a counter to point number 1, but this is important. Everyone and their mother will try to tell you how you should build your business. Everyone has an opinion. The truth is, there is no one right way to build your business. You will probably get a lot of bad advice. The truth is, once you have been working on your business, you are the expert. Others can offer good general advice and things they’ve done, but you are the expert and have the most relevant experience in your company. Don’t let a random person, and more importantly, an investor tell you otherwise. One detractor can be easily dismissed. Begin listening if you start noticing a pattern.
Do listen to other founders. Learning from other entrepreneurs is invaluable. Be cautious with advice from investors. Listen to the people that have done the dirty work and built their own businesses. They are the only other people that truly understand the challenges you’re facing. An investor that hasn’t built their own company will never understand. They have their own experiences working with companies and don’t get me wrong, they do have valuable advice that you should listen to (they know how other investors think and you need to convince investors to believe in you), but don’t let them tell you how you should run your business.
A lot of people will tell you no. It will feel degrading. It’ll feel like being rejected. You’re gonna feel like dirt. You will talk to investors and think, “Don’t they see the potential? Are they really that dumb to not see the opportunity here?” You will talk to potential customers and think, “How are these people so stupid! Can’t they see how much our product would help them”. Your customers will honestly probably be the people you hate the most. There will be people that think of you like a scam artist. It’s the nature of running a for-profit business. You need to take the criticism and use it. If you can get the biggest idiot in the world to learn to use your product, then anyone will be able to use it. You just have to get used to it. Oh and don’t forget that things will go wrong even after they start using it. Your app will have bugs, things will break unexpectedly, you’ll hit a scaling issue with your biggest customer. It always happens to your biggest customer. But the feeling of getting your first customer, someone that is willing to pay to use your baby? With my limited life experience, I would imagine it’s a feeling akin to seeing your kid get their first A in school.
You’re gonna have to get people to like you. I thought at first I could just build a great product and then people would use it, people would give me money, and it would be smooth sailing. The reality is you gotta learn to play the game. You’re going to have to kiss up to potential customers, investors, and even to get people to work for you. I hate when people say “you must love being your own boss”. The reality is that your job is actually to make everyone around you happy when you’re starting a company. And counterpoint, you have to be okay with some people not liking you or your company. In fact, most people won’t like you or think you’re going to fail. Don’t let that discourage you. You’ll likely get turned down by dozens of investors before someone even gives you a yes.
You’re going to need help. You can’t do it all yourself. Choose who you go to war with wisely. The most important decisions you will have to make are your early hires. There’s a reason team is always the most important thing your early investors will care about. Find people that will execute. Find people that will be able to do the things that you can’t. Find people that can fill lots of roles and wear many hats. Ideas themselves aren’t worth much. There are billions of people and certainly thousands of people that will have the same idea as you. You think that no one else thought of setting up a worldwide taxi network from an app? The difference is execution. I cannot stress how hard you will find it to build something from nothing. Make sure to surround yourself with the right people.
Raising money isn’t easy. It’s easy to read online about how the latest startup raised XX million of dollars and all the glitz and glamor at the top of the startup world. In reality, it’s not that easy. 90% of companies will never be able to raise substantial capital. And most of the success stories you’ve heard came after YEARS of work, pivots, and failed companies. Unless you know people at the very top or have already had success in the past, it’s a tough battle where you will constantly have to prove yourself way more than you think you need to before someone will give you money to build your business. You gotta prove it.
BONUS! Don’t forget about your personal life. Don’t get me wrong. You must be prepared to make A LOT of sacrifices to your personal life and might not be able to do everything that your friends and family are doing. That’s part of the sacrifice. But I also love my social life. The best advice I’ve gotten from a mentor is don’t forget you are only in your 20s once. Don’t miss something if you think there’s any chance you might forget it. Go celebrate your friends’ birthdays, go on dates, join a sports league, and make sure to have fun.
If there is a specific topic here that you would like me to dive more into, please comment! Would love to write about the things that people want to hear about!