So you want to do a startup?

Startups

I enjoy mixing with startup people; and I’ve been catching up with quite a few recently, a meeting here, a cup of coffee there, a presentation somewhere else. So it got me to thinking about the top 10 tips I’d pass on to anyone contemplating a startup…

1. PROBLEM: Focus on the problem you are solving – if your idea does not solve a large enough problem for a large amount of people (e.g. traffic congestion, boredom, finding a job, making friends…) you probably don’t have a business. Solving a problem creates value for those you are solving it for, and so they may even pay you something.

2. CUSTOMER: Find out who your customer is (they are the ones going to pay you to solve their problem). Build your whole business and systems around them. Talk to them, ask them things, listen. Never stop doing this.

3. REVENUE: There are only three revenue streams (most are variations on these three): subscriptions, advertising or selling – work out which of these (or a mix) you are going to deploy. In my humble opinion, subscription is nearly always the most sustainable model.

4. NETWORK: If you need others to join your team (and even if you don’t) head on down to the various startup events going on around Perth at the moment – the best of these is probably Perth Morning Startup held at Spacecubed (770+ members and counting) every second Wednesday. Also good are eGroup held monthly on a Tuesday evening and Silicon Beach (490+ members and counting). Find these and many more by searching on meetup.com.

5. TECHNOLOGY: much of the technology platforms these days are free, or very cost effective; open source software is available, much of which can be developed by some home grown or offshore talent. A basic rule of thumb – it is never the technology, it is always the people. Get the best people, and they’ll find a way.

6. FUNDING: if you need funds to get your business going, network your way to the money. If you are serious, you need to be holding many meetings daily, and if you do this you will find the people in Perth you need to talk to. Try to “get the no” – don’t be led on by those who are just going to say no but have a hard time saying it. Ask the ‘noers’ for 2-3 other referrals. Those that can’t say no, are interested. Land them (if you want to). In the end, it’s not about the money, it’s about the connections your backers can bring, and doors they can open.

7. GET JUST OUT THERE: If you don’t need much money yet, or can bootstrap it for now then soft launch with a minimum viable product (MVP); this will allow you to obtain the best feedback possible (from early customers) and give you credibility and perspective when and if you raise funds later.

8. EXECUTION: your best protection is to execute on your plan well; many people talk a lot, but few go out and do it well. Don’t hide from reality, and encourage your team to bring you the negatives, but equally, be firm, trust your instinct and go for it.

9. PIVOT: if things are not going well, you may need to change direction fast. Your early results will tell you how things are going, but it will take judgement to gauge whether things just need a bit of a push, or whether things will never turn out the way you want and a pivot is required.

10. ENJOY: overall, it should be an enjoyable journey. No doubt there will be sleepless nights, but your network will also help you get through the tougher times. In the end, if you don’t enjoy it, why do it? Your belief, passion and sense of fun will get you through.

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6 thoughts on “So you want to do a startup?

  1. Great top 10 Charlie! However, I think it may be useful to also emphasise, as Steve Blank does, that a startup is not a small version of a big company, and so isn’t really executing on a plan, it is searching for a business model that is repeatable and scalable. Also, the business model that needs to be validated includes customers and revenue but also value proposition, channels, key partners, key resources, costs etc. Just my 2 cents.

    • I agree that a startup (like any business) is constantly searching for something that is repeatable/scalable. Or should be! And the model needs validating – the best being actual customer paying you actual money, and repeating (preferably in scale). But I don’t agree startups don’t need plans, they do; but the balance is between developing a plan (so many get stuck here, overplanning) and having no idea at all. A plan is part selling document, part thought process ~ both are critical in business in my humble opinion 🙂

  2. I would add some tips for technology related startups.
    (1) You need a strong strategic competitive advantage (SCA). SCA can happen by luck, for example, you happen to be friends with a famous celebrity who is willing to promote the product. It is rare that a SCA will be found easily. Often a strong SCA is easier to find in an areas that require a high degree of skills that few people are able to tread. For example, a store that sells designer buttons may not receive enough customers to survive but turning the idea into an ecommerce solution can allow the idea to reach a wider audience.
    (2) Hardware is expensive, software is cheap. Making a mistake with your hardware product can be expensive to fix. Hardware can be expensive to transport. Mistakes in software can be far cheaper to fix, however ideas are easier to copy when they are software based. Hardware does have the advantage of less competition. Software is difficult to sell and to monetise (For example Facebook).
    (3) If you do make a hardware product try and make it small enough to carry around or at least fit into your car. There is nothing worse than having an amazing product that you can only show by video.
    (4) The best investors are customers.
    (5) Bad artists copy, great artists steal.
    (6) Don’t work on an idea because you think it will make money. Work on an idea because the idea is cool. Don’t compromise on vision.
    (7) If other people don’t understand the idea or know how to implement, don’t be disheartened. It is a sign the idea is good.
    (8) A product is a living creature in need of a life cycle, revisions and versions. Do not expect to develop the perfect product in one go.
    (9) Build trust with customers first with easy and known solutions before exploring more adventurous ideas.
    (10) Try to create a platform that is independent of other technologies. There is nothing worse than having your product become obsolete because another company has decided to end or change their product line.
    (11) You can complete with larger companies by moving closer to customers and filling niches.
    (12) Most people don’t know what they want until you show it to them.
    (13) Don’t confuse clients. Provide answers not questions.
    (14) If a client knew what to do then they would not have asked for your help.
    (15) Treat others how you would want to be treated.
    (16) Honest people are paid more.
    (17) Success is boring. When things are working well life can be repetitive and uninteresting. There is nothing to learn when you are winning. However success gives you energy to make changes, precisely when you should not be making changes. When you are winning there is no need to take risks. When you are winning you need to speed things up.
    (18) Failure is exciting. When things go wrong there is suddenly lots to do, lots to learn. Failure saps the energy to make the changes necessary to win. When you are losing you should take calculated risks. When you are losing you should slow things down. Never make a major decision when you are angry or emotional. Wait a few days to confirm your decision.
    (19) If a problem is to large to solve break it down into smaller parts.
    (20) The best way to learn is from other peoples mistakes. All the knowledge without the pain.

  3. Mr Gunningham,

    Thanking you for your kind words. I really enjoy talking about business. I started my consultancy business in 2000 and in 2007 I incorporated it into a private company called Upton Robotics Pty Ltd. Over the years I have had many clients and I used the business to support myself through my Masters in Business Administration (Advanced) at UWA with the Graduate School of Management and my Law Degree. I was originally an Electrical Engineer with a Bachelor of Engineering from UWA.

    I feel it is important to maintain a positive mental attitude in business. Nearly 90% of businesses fail. It takes a lot of effort and energy to maintain a viable business.

    I feel trust is very important to a successful business. The best place to start with trust is with oneself. It is important to keep ones word. To avoid unethical behaviour and unethical people. When looking for work a young recruit will often assume the employer has the knowledge to train them. I have found, in reality, employers rarely know what to do.

    Employers and clients seek out workers in order to solve a problem. If a client knew how to solve a problem they would not seek the help of others. I feel that point places a lot of power in the hands of a worker. The client has to trust that the worker is solving the problem in the best way possible. If the worker realises their advantage in knowledge then there is a temptation for exploitation by the worker. The balance is difficult to achieve between employers and workers.

    It used to be that a lawyer, engineer or accountant could graduate from university job ready. Today’s graduates require admission, chartering or other forms of licence. This has made it difficult for young graduates to be entrepreneurial. If a young graduate fails to find the appropriate work experience they are unable to practice in the profession for which they are trained. I feel a lack of entrepreneurship has resulted in increasing graduate unemployment.

    I feel the answer is to increase entrepreneurship in the community. It is only with a fresh start that the problems mentioned above can be solved.

    I feel strongly and I am passionate about this topic. Maybe we should hire a lecture hall and create a presentation. We could try to generate some community support? I know RTR fm like knew ideas. Maybe we could ask if we could present a radio show on entrepreneurship?

  4. Hello Ryan, I came across your CV and this thread when I was searching for a Robotics Engineer for my company Autronics. You seem to have moved on from the namesake of you company. For added interest I know Charlie Gunningham via the Angel Investing community. Cheers, Jim Tweddle

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