This post suggests what are the most important resources you at the beginning of your own company and how to manage them. On my previous point I discussed the importance of people and how I think they should be the central premise yours or any company should be thinking of at any time.
If you are new to this blog, I suggest you first see the About this blog section to catch up.
Most venture capitalist websites and blogs that I have found say that an idea is worth nothing. Unless you have something to grasp from, most investors will not “show you the love”. And I think they are right. Think of it this way: An idea’s value can only be measured by the value that it brings to others. It may have a lot of potential by itself, but lacks value for society, and therefore, investors.
However, I have to disagree in that at the very beginning, an idea is worth nothing. In my opinion, there are three incredibly valuable assets you already have around it. These three are interconnected in a way in which one complements the other and the success of each part depends entirely on the performance of the others.
1. The idea
At this point, your idea does not bring anything to the rest of the world. But to you, it is invaluable. So first things first: what is the actual value of the idea? If you ask me, the potential does not rest on itself, but on how you intend to execute it.
These are not shocking news. However, you may be amazed on how many aspiring entrepreneurs fail to see this. They think an idea is all you need, and that if it is good enough, people will use it, buy it and enjoy it.
On this note, I suggest you watch this video from SXSW 2012 by Eric Ries on Lean Startups. Do the whole course if you want to, but the first video is where the cool stuff happens. Keep in mind, there is a lot of entrepreneurship mambo-jumbo here – like the term “start-up guru”. But overall, besides learning a bit about the Lean Start-up movement, Eric points out some clear lessons for the future, specially about execution.
A final suggestion, don’t fall in love with your original idea and execution plan. The fact that it is one of the most valuable things you have does not mean it cannot improve. Fact of the matter is, most likely during the next couple of months, you will end up doing something quite different from what you originally intended. Startup “gurus” refer to this as the “pivot” point, and it has become one of the central ideas of lean startups.
In this blog, I will share with you a great deal of my execution plan of “iO”. Mainly because I think it can bring some light over the uncertainty an entrepreneur faces in the beginning. Also, I hope that as a reader, you can comment on my strategy and tell me if you think I am on the wrong train here.
Back to the post, why do you think a startup has value, even if it changes the idea and the execution plan? The answer is on the other two:
2 & 3. The potential of the founder and co-founders.
On this issue, I suggest you read Y Combinator’s How to Apply post by Paul Graham. It addresses the concept of changing the whole idea of your start-up. Most importantly, it tells you first hand, from the most successful start-up accelerator in the world, how much more important are the founders and co-founders compared to the idea. Also, it helps clear one of my central principles on investment: You invest in people.
But finding a co-founder is not an easy task. You can just browse the web to find hundreds of companies that attempt to help entrepreneurs find co-founders. You can start with friends like I did on EC Travel. But of course you always risk putting your friendship at stake in the long run (like I did).
If you decide to go with a friend or family. I think the key to success lies in two factors: First, keep every single thing you decide from the beginning in writing. Define the rules of the game. Second, have a very clear understanding on what type of decisions you make together and which ones you do separately.
In general, I think it is healthy to have the “dirty” talk right from the start, before even the first penny is put in the table. This will help you keep your friendship as it clearly separates your business life from your personal life. Needless to say, you should do this if you are building your company with anyone. Edited: There are of course other options. There are two very interesting blog posts on an alternative by Joshua Hays here and here.
In my case with “iO” I decided not to get any family member or friend involved as a co-founder. Although I have asked some friends to become partners.
Finding a programmer co-founder is probably even harder than getting a date with Scarlett Johansson if you are not in the right circles. Good programmers are making so much money that they don’t really care to venture somewhere else and leave their jobs, and new programmers are recruited incredibly fast this days. So if you don’t have the resources (which most likely you don’t), there are a couple of websites that help you find a programmer partner, the most popular one seems to be techstars.com.
I am in Norway, I moved here a year or so ago and have few friends to network with. I am trying to attend as many start-up conferences as I can, trying to meet a right match, but until then I have decided to start learning programming myself. I don’t want that my project falls behind just because I couldn’t find a co-founder so I am doing my best to prepare to do it myself. In the end, if I do find someone, my programming knowledge will help me to better understand the challenges a programmer faces, and give me the necessary tools to manage them.
In that sense, my best piece of advise, if you are doing a technology or IT startup is to learn to program (If you are not one already). It applies to any startup really. In Hai-Ku, one of the reasons for my monumental failure was not to know enough about the restaurant business in order to know when I was being cheated.
If you were wondering why I put 2 and 3 together, this is why. You can be a single founder as well. But things will be much easier if you have someone to paddle with. (The most important part of entrepreneurship remember? People)
Resources on where to look for start-up information and programming basics:
Y Combinator: Start-up accelerator. Known for helping huge companies like Dropbox get started.
Tech Stars: Another important start-up accelerator. Also features a co-founder finding website and tech co-founder service.
Udemy: A website offering free courses in everything. You can find some beginner courses for programming here or some start-up courses.
Coursera: An amazing website offering free online courses from top universities in the world such as Stanford, Princeton, Berkeley. Business courses and programming courses are available.
TryRuby.org: A very basic introduction to Ruby on Rails.
Rails for Zombies: A very cool way to learn Ruby on Rails once you get the grip of it.
Eli the Computer Guy: An awesome YouTube channel with very video seminars on PHP, Cloud computing and much more.