What You DON’T Need to Start a Startup (Lesson 5)

Anyone who has ever attempted to found a startup will tell you that they have wasted incredible amounts of time doing things that don’t matter. The key to a successful startup is finding a product-market fit before you run out of cash. The clock is ticking and you need to be super selective about what you choose to work on. Time is not on your side, so today I will share my insights on what you should not focus on if your goal is to get to market faster. [Note: this advice is more relevant to first-time founders of enterprise software startups.]

Business school “essentials”

1) Don’t write a business plan. As Mike Tyson said, “Everyone has a plan, until they get punched in the mouth.” And in the startup game you will get punched in the face very quickly, very hard, and many times over. Get used to painting the plane in mid-air.

2) Don’t get business cards. Everyone has LinkedIn.

3) Don’t spend money on an overpriced logo design. A great logo doesn’t have to break the bank. While Steve Jobs' spent $100,000 on the short lived NeXT back in 1986, the iconic Coca-Cola logo cost $0. Check out LogoJoy.

In fact, you shouldn’t even obsess over the name. A company name becomes cool when you are printing money. Just pick something that can easily be found in a search engine, and something that can’t be misunderstood. Don’t get super creative here. Simple is always better.

4) You don’t need a corporation or a bank account. Wait till you land a customer who is ready to pay you then move on to these more complex tasks.   

Perceived credibility

5) Don’t waste money on custom websites. Use Squarespace or Wix. It will not be perfect. Ever. Get over it. Just do a good job explaining what problem you solve for the customer. You don’t need fancy icons, there are plenty of free ones out there. Do pay attention to the quality of the images, because I think those matter – check out Placeit for screenshots and mock-ups.

6) Your sales decks will be rough. That’s fine too. A/B test the messaging to see what resonates with customers but focus on fast execution rather than perfection. 

7) Don’t focus on your social media following. I am convinced only founders look at these things. You also don’t need to be present on every social media channel. Pick one or two and be active there, but don’t obsess over it. In most cases social media is just noise and a black hole for your attention -- you will get stuck chasing another ‘Like’ or retweet rather than landing another demo call with a customer. In the early days, the odds of gaining a customer through social media are slim.

8) You don’t need an office to look credible on the web. If you really want to, just get a virtual office with one of the co-working spaces in the city and put their address on your website. Put your cellphone number there too. Regardless, I’d recommend having an About Us section and have the founder bio there with a photo. Demonstrating that the company has real people behind it is one thing that can instantly build credibility.

Perfect Product

9) “If only we had feature X, we’d finally be able to land a client” is a dangerous trap. You will never have a perfect product. And if you think you do, you better keep working like crazy because the world moves very fast and companies and technologies become obsolete very quickly.

Four years into our business, I have to say that I love our product (however, we try to run even faster now). But it hasn’t always been like this. When we started it was super raw. And somehow, we still managed to land clients and get paid. The key here is to realize that there is always low-hanging fruit (aka innovators) who are totally O.K. with a bare-bones product. They love to be the first ones to try new products out and are ready to deal with imperfections. You just need to get great at finding those people. And the best way to do that is to just pound the phones until you do.

Investors

10) One dollar from a customer is worth 10 dollars from an investor. The best way to get money is to just sell, sell, sell. When we started we basically sold consulting services. Not only did it allow us to start making money in the first month of business, but it also helped us get deeper insights into the market challenges our future product customers face now. Don’t be too proud here.

 

Summary

The items above are far from exhaustive. There are a million potential distractions to put off the hard conversation with your founders and yourself: “How many potential customers do we talk to on daily basis?” The longer you delay this key insight, the higher the probability will be that you will run out of steam, deplete your money reserves, burn out, or build a product nobody wants.