If I Started A Company Today

Startup Weekend Athens

Down economy?  Perfect time to start it up.

Chris Brogan posted a great post on if he started in social media today, what he would do.

It got me thinking of if I started a company today, what I would do:

Since I’ve done my homework, it should be a bit easier, but here are the steps I would take.

First Step: Listen

What are you passionate about?  Really, passionate about?  What needs are not being met by the marketplace?  This could be obvious, it could be niche.  What do you hear your friends complaining about?  What do you see users using a service for (that the service might not be intended for).

Niel Robertson says you never have to have an original idea in your life, you just have to listen to others.  Some questions to ask:

  • Do you see others making money in the space (hint, avoid starting a newspaper)?
  • Do you know what problem you are solving?
  • Where do you have expert knowledge?

You need to listen to others more than yourself, but both are mission critical.

Second Step: Form the Team

I would say to put your team together before your general idea, because it is that important, but you need to know the general area of business you are starting before putting the team together.  You can work on your ideas with a team, but someone that wants to start a cafe isn’t going to be a good cofounder with someone that wants to do online retail.  Decide on an equity split, as even as possible.

Having a cofounder is a sign of longevity.  Get one.  Seriously.

Third Step: Create A Schedule / Structure

Your idea is going to change dramatically over the first few months.  I would meet with the team on a regular schedule, like Monday nights for four hours, with the goal of having a prototype after a month.

Create a six month plan with milestones to meet.  Keep yourself and your team honest.

Finalize your name, and register it with every service you can think of (twitter, wordpress, myspace, etc).

Fourth Step: Get Feedback

Tell as many smart people as you can about the idea.  Learn how to listen.  Take notes.  Take everyone’s advice into consideration.  Ask people if they have heard any whispers about your team / company / field.  Ask about opportunities they see as a fit for you, such as TechStars, Knight News Challenge or a local SBA loan.

Tell as many smart people as you can about the idea.  Learn how to listen.  Take notes.  Take everyone’s advice into consideration.  Tell your friends to hold you accountable.  If you are looking for funding in the future, you might want to start a relationship with a couple select investors (know raising money is a long, and sometimes painful process) .

Fifth Step: Participate

I would find my first customers, and engage them as much as I could.  I could call this section building your product, but if you build your product without your customers in mind or involved, you are missing a huge point in building a company with today’s tools.  I love the thought of companies not building products, but engaging their real customers (not just early adopters) as the driving force behind their product roadmap.

I wrote this thinking about it applying to a Startup Weekend like project, which tends to be a Web2.0 ish consumer based web application.  Looking at it, it would work just as well with creating a physical store or a product line.

Your Turn

What has worked for you?  What did I leave out?  Are you going to start something up?

  • great posting! I wish I were at asw to meet you!
    for now, I'm just listening and reading… oh, and dreaming 🙂

  • I wrote a blog post the other day about getting feedback. Make sure you're asking the correct question: http://blog.aisleten.com/2008/11/20/youre-askin

  • andrewhyde

    Wish you were here as well!

    Think big!

  • andrewhyde

    Loved your post, left a comment.

  • Equal stock split is not always a good idea. Check out this artricle (not affiliated):

    http://www.andrew.cmu.edu/user/fd0n/35%20Founde

    As to your question, if I could go back to my earlier self I would have told me:
    1. Run the ads before building the product
    2. Build A/B testing into everything you do
    3. Imagine that 10 users call for support every day. How do you design software to minimize the calls and address remainign ones as quickly as you can?

  • I love the spin on step 5. It's so important (especially in the web realm) to just build it. Get people using it. And work alongside them. Starting to understand their business and how your product interacts with it will be more valuable than any sort of one-way feedback.

    I've been doing that with one of my sites for a while now and it has been invaluable. The eventual public release will be much better because of it. We've even identified new business opportunities we hadn't seen before.

  • andrewhyde

    Link goes to a 404 page.

    Very interesting and useful advice. You can't say enough about A/B.

  • Awesome post, Andrew. You're obviously packing away a ton of great learnings working with TechStars and your own startups.

    My only quibble is that a six month plan is way too long. It's great to plant a flag in the ground in terms of long-term goals, but as a brand-new startup you're unlikely to accurately predict anything beyond 60 to 90 days out.

    It's all about listening, as you wisely listed in your first point in the this article. If you set a 90-day plan you'll take 90 days to launch. If you launch a 180-day plan you'll take 180 days to launch. The longer it takes you to launch, the longer it takes you to start listening to your customers. And as soon as you start listening to them, your remaining strategy goes out the window.

  • Yep. Now's a great time to start working on something, especially if you do not require outside resources other than team members.

    From my experience I would reorder things to be 1, 5, 4, 2, 3 (though I'm not an MBA-style entrepreneur). I'd listen and then start building something to get feedback on. Then only after I've confirmed there is real potential would I spend the time and focus on building a team and business plan. I've found you can waste a lot of time on building team and plan before knowing you have a product people want. Of course this requires you as a founder can discern and develop a product into the testing period, but that too is also my bent because it reduces my risk.

    The exception on early team members is co-founders which I completely agree with you are near-critical. Anyone willing to work for free for a year to 2 and willing to stick by a company for the next 2 to 5 to 10 years is the best way to spend your equity ever 😉

    It's a pleasure reading your bullishness on the opportunity a downturn provides. I wrote a blog entry on the current environment called < ahref='http://blog.dogster.com/2008/10/10/frozen-vcs-will-be-a-boon-for-internet-entrepeneurs/'>VC Gloom Means Entrepreneur Boon.

  • andrewhyde

    Found the link from your hacker news comment: http://is.gd/8IFY

  • scott_miller

    great post. working on a new startup now and just so happens that my process is very similar. spending lots of time interviewing customers. next step will be launching a blog aimed at the target market. theory is to get to know the customers and their wants intimately before going too far down the prod. dev. road.

  • My co-founder and I are former Microsoft veterans and recently formed a research and development lab named 8ninths.com in Seattle

    We'll be launching our first site in December. The advice above pretty much echos the approch we've taken and just wanted to weigh in and let you know we enjoyed your post.

    Our founder blog is at http://8ninths.com and this is where we share our insights on what we find cutting edge and interesting on the web.

    You can subscribe at http://tinyurl.com/5zwz7d

    Thanks!
    Adam.
    Co-Founder, CEO
    8ninths

  • Great stuff. Many thanks!

  • why is it that you think that when there is a down economy it's the perfect time to start up? i'm just curious to know. good post.

  • Build cash. Build cash. Build cash.

    Too many people jump into business without the funds to support it.

  • Nice tips. I have been thinking along these lines of late, and currently struggling to form the right team for the project.

  • andrewhyde

    First time I have seen that link, very interesting way to do it.

    Josh Hug from Shelfari was a big advocate of this, in how he did it himself. I hear a lot of '80/20 split because I had the idea' theology, that is what I am getting away from.

  • andrewhyde

    Sites like UserVoice are helping with this as well.

    I like the spin as well 🙂

  • andrewhyde

    I would agree with your assessment of shorter goals. I get caught up in too many short term goals myself, and after 5 months look up and wonder what I spent all my time running around doing.

    Yes, all about listening, and Gnip is rocking it.

  • andrewhyde

    Finding the first batch of customers is really tough, but also fun.

    All the best!

  • andrewhyde

    Great blog, I grabbed the feed

  • andrewhyde

    That is the best company name, great site

  • andrewhyde

    Less competition, you really have to focus on your product and it is the best time to hire.

    Those are a few at least.

  • andrewhyde

    In the same mantra:

    Spend less. Spend less. Spend less.

    🙂

  • andrewhyde

    Organize some events, like Ignite or a BarCamp, let people know you are looking, work on smaller projects.

  • andrewhyde

    Good call, especially on the order.

    You are so right about contractors being more available and cheaper. Same goes for advertising buys.

    Great post as well!

  • Some very good points. Nice post.

    I am actually in the process of starting up a company, and this was very helpful.

  • DoubleDad

    I'm in the process of putting together a webapp (in the project management space) and I agree that assembling a strong team is key. While I also agree that building your product (or application) alongside your customers is key, so is having a strong starting point. We're putting forth a lot of effort into the initial design for the first release so we can avoid as many design flaws as possible. This way we can minimize the impact (read “cost”) of future enhancements. Also, if you don't start with a strong basis, you won't be able to engage your customers because they'll lose interest too quickly.

    What is everyone's experience with offering “deals” to your first few customers to generate interest and start relationships to help improve the product? Do you try to give the product away for free in exchange for a collaborative relationship?

  • Thanks Andrew! 😀

  • andrewhyde

    I'm glad I could help! Best of luck with it!

  • michy2

    As moderate-income and younger workers feel the pinch of money and time spent commuting, more large employers need to recognize alternative arrangements to recruit and retain these employees. According to a new survey by the Urban Land Institute, 69% of the larger companies (those with 100-plus employees) believe a long commute time increases employee stress, but 55% reported a lack of affordable housing near their location. The vast majority say this lack of affordable housing has a negative impact on retaining qualified entry-level and mid-level employees. And 58% say a lack of affordable housing has resulted in losing employees, at least in part to long commute times, as moderately priced housing is often located far from large employment centers.
    ———————————-
    mike

    Link Building

  • bcpjy04

    Another great company that started in a down economy is called Bestcovery.com

    Not only is it founded by a great CEO and managed by experienced team members, they listen to their members and really fill a niche untapped by typical web 2.0 sites. Bestcovery is the fastest, easiest way to find the best of everything. There is always one item in every category that stands out as the best. Whether you're looking for the best ultra-portable laptop, 42-inch LCD TV, iPod speaker system, or budget digital camera, our experts quickly identify the best one for your needs.

    Check it out, http://www.bestcovery.com

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