5 lessons before launching your startup

“Nine to five is how to survive – I ain’t trying to survive… I’m trying to live it to the limit and love it a lot”

-Jay-Z

Last week I had a discussion with someone considering leaving their job to launch a startup.  They wanted some honest feedback on their business model. It occurred to me that objectively evaluating a startup idea is a skill that can only be learned through experience and that I finally felt marginally comfortable giving advice on the topic. After 8 months of making mistakes, listening to great mentors and thinking through many ideas it felt great to give back. For those of you I haven’t spoken with, I wanted to jot down some of the key lessons I’ve picked up along the way.

1 – Understand your goals – You need to be honest with yourself about whether you want a massive business or a lifestyle supporting income source.  All your thoughts about the startup must flow through the answer to this question.

2 – Passion – If you are creating the next big thing, realize you’ll need to have the passion to devote 70+ hours a week for 3-5 years to make it a success. Is this an industry and product you will stay excited about? Note that I’m not saying the product has to be sexy, plenty of people make huge profits on products others didn’t even consider working on.

3 – Test instead of talk – Try to test your idea without spending money and time on development. If your core-product is a consumer website, there are ways to test your prototype extremely cheaply. Once its built, give it to customers and ask them if they are willing to pay for it. Try to avoid the echo chamber of your friends and family. Their support will carry you through the tough times, but they are terrible judges of what constitutes a great business idea.

4 – Financial resources – You need to eat, you need a roof and you need to provide for your family. If you can’t do this while devoting the time and effort for a startup, then its not for you. Getting funding is a long and arduous process and will likely require that you’ve already gotten traction with your product.

5 –  Product-Resource Fit (Viability) – What resources do you need to make your company successful? Do you have, or can you acquire, the skills, money and other resources needed to implement your idea? Be optimistic but honest. In order to make your dream a reality you will need to fully believe you can do it.

A lot of you are founders of companies, use that comment box to talk about your own lessons or expand on mine.

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5 lessons before launching your startup

4 thoughts on “5 lessons before launching your startup

  1. Good post Joel, I’d also add what I think is the most important piece of advice I’ve heard from the startup world (from Mark Suster ):

    JFDI (Just “freakin” do it)

    Sort of coincides with #2 and #3. Getting more done, effectively, on a daily basis, separates those who like to think about entrepreneurship vs. those who actually go out and do it.

  2. 1. Slightly disagree. I think you can start a company and see where it goes. If your revenues hit $10k month after a year and you want to keep a nice lifestyle business around, neat. If at that point you want to go raise more money, awesome. I think all thoughts about a startup need to flow through the answer to the question: “What creates the most value for my users”

    2. Completely disagree. Sorry dude. I’ve been there twice, and spending 70+ hours per week for 3-5 is not only insane, but few people actually do it. That being said, making others aware of your passion is paramount. Putting work before friends, partying, or a girlfriend EVERY NOW AND THEN is to be expected. And your friends and girlfriend need to be aware that this is the case and be on board. If not, disaster will strike.

    3. Completely agree. Your mom is not a valid test market.

    4. Agree. If you’re bootstrapping, don’t go spending $10 per day on lunch at Lucky’s like I did. Hunker down. Ramen is cliche, but it’s reality.

    5. Not really sure what you mean in this one. You talk about product viability at the start, but believing in your product at the end. Both are important. Should probably be two bullets. Agree with both.

  3. Very interesting. I’d add that there are “non-startup” startup business models like ours (an agency model where we are business consultants) that require less of a 70hr/week for 3-5 years without profit and a more gradual and consistent business growth over time that starts with enough profit in the beginning to be able to buy a couple of beers Friday evening.

    I guess my point is every start-up is different. Doesn’t make 70hrs/wk wrong or right – but there are many ways to do it.

    Best of luck you iterative card gnomes.

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