This guest post was written by Meebo CEO Seth Sternberg. It is the first in a series of posts he’s writing about the decisions a young entrepreneur needs to make when she/he is first starting a business. The timing is perfect, there is more than a little overlap with Vivek Wadhwa’s guest post on venture capital earlier today. We’ll update this post with links to his further installments.
I was one of those kids who just couldn’t stop trying to start a company. I think I just really feared working for the Man. Problem was, I seemed to suck at the whole startup thing. Multiple attempts followed by multiple failures. At some point I just said, “screw it, I’ll get a high paying job.” Problem was, I couldn’t stop thinking of the next great thing that got me ridiculously excited. Turns out, it wasn’t so much that I was the problem. Rather, I didn’t have anyone around me familiar enough with startups to tell me that I was doing it all wrong.
This is the first post in what’s going to be a series of blogs on how to go from nothing – no connections, no team, no money and no knowledge of how the startup industry really works – to operating a growing business. I mentioned to Mike that I was going to kick this series off over on the Meebo Blog, but he suggested I start it here. Gladly! So for this first post, here’s the best advice I can give you: join an awesome founding team and get your product out the door ASAP. Then, forget everything else, VCs included, and just build.
One of the things I do as a founder of a later stage startup is to meet with early stage entrepreneurs to help them get their companies going. Nine times out of ten, the meeting ends with them asking me for introductions to VCs. Little do they know that, even if they could raise VC, it’d start them down the wrong path. So, this is what I tell them:
At the exact moment you had your idea, ten other people had the exact same idea. There was just something in the environment that made it the right time for folks to think that one up. The race has already begun! Who’s going to execute first? Who’s going to execute best? If you want to waste nine months trying to raise VC money for that idea, great. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door. Now.
Inevitably, the excuses begin: I need to hire people to build the product. I don’t know any developers. I need money for the servers. I want to get that last promotion at my current company first!
Here’s the rub: in consumer internet (and often enterprise), if your founding team doesn’t have the chops to get a prototype of your product out and in the hands of a blogger to test and write about, you might as well save yourself a lot of pain – you’re not going anywhere. Need proof? Just look at some of the most successful tech companies in the last decade: eBay, YouTube, Sun, Oracle, Apple, Cisco, Facebook, Yahoo!, and Google. All of them share a couple common traits: they launched before taking outside investment, and they were able to do it because they had a set of founders with the skills to build the initial version of the product themselves. Only eBay was founded by a single individual – the rest were team efforts.
With that background, let’s get to the three most important things you can do to go from nothing to a kicking startup.
First and foremost, find a great founding team. One person is almost never enough. You just can’t do it all. Rather, team up with one or two other people who have skills synergistic – not overlapping – with your own, but with similar goals and passions. I can’t tell you how frequently teams of three business school students tell me they’re going to start the next great consumer Internet company. When I point out that they’re all business people, and wonder who’s going to build the product, they almost always fall back on “we’ll get a couple of undergrads to do it,” or, “we’ll outsource it.” If I hear either one of those, I know the startup’s already dead. Sorry, folks. Harsh, but probably true.
The best composition is probably one engineer whose passion lies in the pixels on the screen and another engineer whose passion is making bits fly really fast through servers. In Meebo’s case, for example, I was lucky enough to partner up with Elaine and Sandy. Elaine is a JavaScript wizard who has a great visual eye and makes sure every pixel is in its place. Sandy is a straight C nerd and is all about efficiency. Together, they built the first versions of Meebo from scratch. Now, if you have a business guy along for the ride, that works too. But let me tell you, the sum total of my contribution to Meebo prior to our launch was getting us incorporated (read: easy) and suggesting that “the button might look better over there” (read: not much). Post launch, if you gain traction, is where the business person will help take the load off of the technical folks. The business person can take all the meetings while the technical folks work on making the product better.
Second, like I said, forget everything else and just get your product out the door. No office. No phone system. No hiring. No press. No legal muck. No raising money. No looking for partnerships (who’s going to partner with you anyway?). The success or failure of the adoption of your product is what will create 99% of the initial value of your company. If no one ever uses your product, you have no value. Oh, and for the record, raising VC does not help get traction – in another blog post, I’ll argue that if anything, it hurts. So just forget everything else and focus on what matters – getting an alpha of your product out the door and into the hands of your friends and family. Use some URL like www.mygreatstartup.com/shhh.html. Then, once you’ve fixed the initial bugs and incorporated a feature or two that everyone requested, go live. Remember: keep it simple. The initial product you build is for you – you don’t know what features everyone else wants. Launch fast and light, and listen to your users for feedback. In the product, always have a way to ask for user feedback. Remember, once TechCrunch or GigaOm writes about you, you’ll most likely get crushed with a single surge of traffic (we fondly call it the “blog spike”), only to watch almost all of it flitter away. Take advantage of that surge to learn and iterate.
Finally, get good mentors. If someone had been there and just told me “join a great founding team, focus on the product, and forget everything else,” I would have saved a lot of time and heartache. A good mentor is someone who has been part of the startup community themselves – someone who has a realistic understanding of some of the basic dos and don’ts of starting up. You don’t need many – one or two to begin. In Meebo’s case, two of our friends, Todd and Cam, gave us a ton of pre-launch advice. Every time we started straying down a wrong path, like flirting with just talking to that one VC or even thinking about approaching a company about a partnership, they’d always come out with something like, “is that going to get the product out faster?” Trust me, once you’ve launched and achieved traction, you’ll have your pick of mentors, VCs, partners and all the legal expenses you need.
I hope that some of this hit home for those of you who’ve been working on your own startups. In later posts I’m going to get into more detail on specific topics like hiring, raising money, what types of ideas have the potential to get big, finding your founders, and the like. You can follow them over on the Meebo Blog, so bookmark this post and Mike tells me they’ll link to subsequent posts. Alternatively, follow me on Twitter (@sethjs) where I’ll mention when I put up a new post.
Update:
Part 2: Finding Your Co-Founders
Great stuff! I look forward to reading more from you.
Do you think we can ever take http://f2bbs.com mainstream?
My first step would be a new design.
You know you’re right. It really needs some rounded corners for that web 2.0 look.
Retard.
I don’t think rounded corners would be the right approach for this particular site.
Troll much? The redesign suggestion was a good one, for usability & discoverability reasons, and because attractive things work better (a triumph of perception over logic, but demonstrable nonetheless). This is especially true for him since his goal is mainstream adoption.
So before you insult honest suggestions, try educating yourself about the difference between trends, style, and actual design.
Buther: Are you kidding? Content is primary and design is secondary. The layout has the top discussions immediately front and center. The simplicity of the design = ease of use and blazing fast response time. The only sites that need a flashy design are those without interesting content. Therefore they have to work harder to sell it. Don’t get too caught up in this blog and others who try to tell you it’s okay to have useless stuff in a pretty package. Content is king, and when you have content the goal is to deliver it as quickly as possible.
That being said, I honestly can’t think of a single thing that would improve the design of that site other than rounded corners. And rounded corners are lame.
It’s pretty clear you have no idea what you’re talking about. Show us something you’ve done that looks or reads better. Until then? *You’re* lame.
uuuh… is it more than just a forum with a menu bar on top?
Uhhh… is Twitter more than a forum with some pretty colors and a 140 character limit?
Cork: Looks or read better than what, troll?
What this site really needs is a fart app. Then it will be legitimate by techcrunch standards.
Hey Tim, what’s your Alexa rating, -1?
Wow, that site loads FAST! One of the main advantages of keeping it simple I guess.
Well, your site is blocked on my firewall (it’s flagged as a ‘HATE’ site… so I’d say that’s a bad first impression…
Todd, you sound like a hater.
Try http://clean.f2bb.com – it filters out the hate and leaves the love behind.
no.
(man, hate site trolling on techcrunch. bummer to see here)
Wrong. It’s a love site. You’re just a hater.
Liked the post…but the title should read: “How I Got There.” vs. “How To Get There.”
There is no magic recipe.
Get where? Meebo doesn’t even work right on Chrome or Opera.
From nothing to losing money every month with no business model in sight.
How to get there.
Exactly.
+1 @dave
+100
So true.
Looking back, every founder thinks his/her experience is the ONE and ONLY that’s possible and that THIS is the TRUTH.
Example:
Outsourcing is impossible as a start?
It might not be the best solution, but Digg DID outsource development to get off the ground.
So did Spamdoo..sorry, Squidoo
Not everyone can find a top notch developer to partner with. Do the best with whatever resources you have at hand, even if it means outsourcing.
You’re right. Not every businessman’s success formula is identical. While the point behind Seth’s recommendation has merit, it would’ve helped to explain why he feels your core team should have all the skills necessary. In the example he gave of a group of all business students, he’s right. They will need a developer as part of the team.
However, outsourcing work in the beginning works for other situations. Affiliate marketers outsource their content creation (articles, blog posts, ebooks, other written content) in order to focus on their platforms and other aspects of their business. That’s not the same level of commitment you’d need for say, coding your core product, but the principal is the same. In one case you have a one off freelancer right you an article, in another case, a 3rd party is developing your product. Scary to think of the latter situation, but still a possibility that shouldn’t be written off.
Wonderful post. You’ve really motivated me.
+1
Awesome writing indeed, keep up the great work!
awesoem article. would love your thoughts on our startup (well its well started) imorial.com
great post, since I don’t have a good mentor around me who has been in start up community, I will keep a copy of this post on my desk and read it like a bible. It will certainly be my mentor!! Thank you!
Well said. This is the blog post I needed to read. Thank you!
great, though meebo’s place as a “successful” start up is still open to debate – from consumer IM aggregator to white label IM, still not making big $$.
Intuit is in the process of acquiring Meebo. fits well with Mint..
An excellent and very practical article. I had the feeling of deja vu when reading some parts of it! Thanks a lot Seth.
Good advice though biased toward the young as it’s unrealistic for those outside the 20-early 30s age set who have bills to pay and kids to feed, hence the fear around connections and funding.
Granted, there are people who have saved up enough to live frugally for 6-12mos, but the ones who are willing and able to take the risk w/out ending up on the street, tend to be fresh college grads and 20 somethings.
Everyone has a choice and what’s most important to them.
To settle down and lead the normal life that 98% of the population does or take the risk and pursue your dreams. Even amongst having the other 98% of the population looking at you strange.
Me, I live with a parent (moved back in my late 20s) to pursue and enjoy start-up life. Now I am in my early 30s and start-up is my life and I am sure the sacrifice I have made not to lead the normal life will pay off either with my current work or next. If not it was a fun journey that schooled me in more stuff then college ever did.
I’d recommend to any tech person to do a start-up over college; anyone who dreams big and likes to take risks!
Um, you’re 30 live with your parents? You’re giving advice on what, exactly?
Naw, I’m 54 and have a start up! Age has nothing to do with it; in fact I’d say I’m doing better b/c of all the experience I have. Everything I’ve done for the past 30 years is coming into play with my new company! This is a cake walk, totally! And I am getting out the door — pronto! No VC, and no partnerships. Lots of synergistic team members who are eager to see this fly. I live and work by the motto: rules are made to be broken!
M
If you have a mortgage and children, you’ve pretty much decided whether or not you’re going to quit everything to do a startup (clue: the answer starts with an ‘n’ and ends with an ‘o’).
With that said, age is really besides that point. Whether you’re 20 or 40, what prevents you from doing this other than your own personal hangups about “being that close to the next promotion” as Seth mentions? When you’re older, I say that you have more financial resources and can go longer without pay.
I totally disagree.
There’s nothing like a mortgage and kids to provide you with the ultimate motivation.
I co-founded a startup with a 7 and a 5 year old, and a huge mortgage payment. I wasn’t reckless; I was very focused on making sure I could pay the bills and pay for college. 13 years later, not a problem. In fact, we’ve been very blessed.
People who say they CAN’T, and blame it on a mortgage, wife and kids, are making excuses. Sure, it takes more planning and conservation and solid execution.
If you are the type of person who makes excuses why you can’t, you probably can’t.
thanks. i’ll begin loving my wife and kid again
Yes, but you are, by far, the exception. Most people in your position could not take that uncertainty of not receiving a paycheck for 6 months to 1 year with a mortgage and a kid.
Sure, it’s doable but so is jumping into a pit of crocodiles and surviving.
You don’t have to assume that a middle aged man with a wife, kids, and mortgage has to quit his day job to start a company. Many people in that situation keep their day job and work in their spare time. This keeps the pay check coming in, while allowing them to dedicate their non-work time towards building something for their family’s future.
That’s not to say it’s easy to do, but it’s the most practical way.
And if you’re one of the 95% of businesses that fail in the first year, I’m sure your wife and kids won’t mind living in a crappy apartment after you lose your house. And I’m sure they won’t mind community college either.
Age doesn’t have as much to do with it as time and money. When you are young w/ no children you have all the time in the world and you can live cheap (on your friend’s couch if you have to) to get done what you need to get done. If you have children or other financial commitments, you can’t take the same approach. You just have to adjust your approach and do your startup as a side project. It might take a little longer, but you can still get there if you are persistent. It’s all about how bad you want it.
Nice blog post..Well said
This is only if you are ready with a product but if you are going to do some research on some subject (say AI) you need own money to sustain longer to pay the Servers..
This information is so obvious, but often overlooked or under-executed. Great info, I can’t wait to read more.
I can’t tell you how frequently teams of three business school students tell me they’re going to start the next great consumer Internet company. When I point out that they’re all business people, and wonder who’s going to build the product, they almost always fall back on “we’ll get a couple of undergrads to do it,” or, “we’ll outsource it.”
These are the geniuses clogging up Craigslist’s “Computer Gigs” with ads saying stuff like “Need iPhone Developer: Compensation: 30% of profits (when we get them)” or “Ruby on Rails ROCKSTAR needed: $20/hr”
Also see odesk
WAAIIITTT… wasn’t the coding of the first version of Digg outsourced to some guy on Elance?
HAHA no way!! is this true?!?! hahah
The critical stuff MUST be done in-the-house. But this critical part is typically 10% of the thing in terms of coding and resources.
The rest can be outsourced to wherever (Estonia – Skype; someone mentioned digg above; you can even send this junk to India and get it with questionable quality).
So, the guy is BS-ting you, people. He hasn’t read the final pages of his book yet. And what’s on the last page you may ask? Only one phrase: EVERYTHING SAID IN THIS STORY DOESN’T MATTER FOR YOU, KID – go out there and write YOUR OWN STORY with your deeds!
This echoes my own experience as an engineer with connections to MBA types. I’m never approached as a partner but, instead, get this spiel about “bootstrapping” and “seeking funding” and something about an exciting new project I could learn a lot of stuff doing.
It’s really sad. It’s like these people think we were born yesterday. I was happy to read Seth’s humble words about when he started with Elaine and Sandy.
Definitely a good read! Looking forward to reading your next post!
Great post Seth. Thank you for your great insights, and I’m looking forward to reading more.
I am working on a startup myself and I agree with your advise, but it is hard to find those great founding members. Unfortunately, I’m on my own for now, still looking for the right team – but I’m still doing what I can to move my ideas forward.
Thanks again.
-1
Nothing new.
I agree having a team helps, but an entrepreneur often does not get optimal resources at the optimal time. Part of the journey is figuring out how to get the best results from the resources that you do have.
Completely agree with you Seth. Thanks for the time and energy to write the article. Looking forward to your followups.
This post needs to also link to Mike’s “Greetings” Post.
This makes it sound like Seth was some kid who hadn’t the slightest idea of anything business, kept trying, and finally hit jackpot with Meebo, when in fact, his CrunchBase profile says he “worked in IBM’s mergers and acquisitions department, while also working on corporate strategy and venture capital initiatives prior to starting Meebo.”
Seems like a hell of a lot of advantage to have, on top of a great founding team, when heading into a startup.
ROFL
You nailed it.
Ouch… +1
+10
Unless your comment is read, Seth’s post can be quite misleading.
Just “build” is not enough.
“Build for yourself” is viable if you’re willing to spend tons of resources (time or money) on misses. The idea behind planning is to spend less time and money on the misses. You’ll miss, but you won’t lose as much.
Good post. Not sure about the mentoring, though.
Great post! Truly inspiring.. Can’t wait to read from you more.
most business-grads are too arrogant to realize that they are selling technology, not hot air, so they need a tech team to build upon, not a product. the author is not an engineer but he seems to get that
This couldn’t have come at a better time… I’m about to step into that small business selfemployment arena. I’m taking a 52 week course in how to start up, run, operate, and achieve self employment.
I wasn’t thinking in terms of VC, never even entered my mind. I am considering using what I’ve got though… and starting simple and adding as I find things working out for me. I plan to use the internet as my networking base, and friends as my streettalkers. All in all This is one blog I will not miss, thanks for starting it up and I’m looking at your meeblog next.
52 weeks is more than enough time to dream up and prototype a few different products. Perhaps you should redirect your time spent over the next year.
++1
You should hire the man who has sold you the 52 week course: at least then you have a good salesman in the house.
Spend 52 weeks getting experience or starting your company. Don’t wait. If someone knew how to build a successful company, they wouldn’t be wasting time teaching self-help courses.
This couldn’t have come at a better time… I’m about to step into that small business selfemployment arena. I’m taking a 52 week course in how to start up, run, operate, and achieve self employment.
I wasn’t thinking in terms of VC, never even entered my mind. I am considering using what I’ve got though… and starting simple and adding as I find things working out for me. I plan to use the internet as my networking base, and friends as my streettalkers. All in all This is one blog I will not miss, thanks for starting it up and I’m looking at your meeblog next.
great advice and really straight to the point – make a great product, focus on that and everything else will come.
one quick question – so is it just the situation that all those “business school” types are screwed? is it really that the only people who can build great startups are engineers? is there any advice you can give to the people who are “business” types on building a great founding team from scratch?
Hey Andrew – I definitely think business school types can form a great founding team – they just need to team up with folks who can actually help build the product! Not more folks just like them…
and this is why you are getting people from all walks of life and experiences going into startups, not just tech. you can now have the engineer who is also decent in business or a laywer who can be an entrepreneur and all these other crosspollinations.
geez i suck at spelling. lawyer. it doesn’t help when i’m working on 3 assingments while crusining tc and listening to the radio and eating. ugh. multi-tasking is the worst thing ever.
“go from nothing – no connections, no team, no money and no knowledge”
“join an awesome founding team”
How are you supposed to join/create an awesome founding team from scratch? Especially if you aren’t from around Silicon Valley.
Exactly. When I was starting out my company. I tried like hell to find a “founding team”.
Its advice like this that prevented me from starting for two years because I did not have a team.
I had numerous false starts because I tried to cobble together a team for the sake of having one. I’ve decided to go solo in the mean time and the jury is still out.
But IMHO its better to go solo (if you’ve got the skills) than to cobble up a team just to have one.
Starting yourself and cobbling together a prototype or solid concept can be the best way to inspire other talented individuals to join you. Also, industry meet-ups and events are great ways to meet other talented technical people, have fun and perhaps spark a new start-up.
That’s what I had done. I actually wouldn’t recommend going solo even if you can’t find a team. First step of a startup career should be finding good founding partners which could be a very time consuming task in itself.
i ‘d say start from yourself and a close friend. if you know none who’s motivated enough, start yourself. it really doesn’t matter if you’re not in SV, i think that’s what the author is trying to say
I’ve seen more than a few friendships end this way.
We still hate you, Bob.
Signed,
Your ex-friends
“join an awesome founding team and get your product out the door ASAP”
i was about to ask the same thing you did because he makes the assumption that people can just find great talent or have friends who do things like this…but he’s got a definite great point about finding people who are synergetic with your goals and can help you creat something that functions and where all of your are working on one big thing but delegated to different tasks. i think if you are willing to try on starting something you should also maybe try no matter what your background is (advantage or disadvantage) and find people who you think would help out your idea(s). if you don’t try you will never know. if you don’t do you won’t know. it’s all about putting yourself out there, because you’re going to have to do it one way or another, so it starts with when you go and create a team. i was thinking about joining a team myself and just putting a word out there that i’m looking for an experience that will help me in furthering my own idea(s), but i don’t know what works best. i’m also stuck on that point.
just read the replies to this and you’ve already got options…i was going to go the tenthings route and say go with a friend or family member who you know has the same goals as you, but that might not be a good starting point. i think you could always also meet people at tech meets and put it out there that you’re looking for people to work on an idea.
you can either go with others or by yourself. whatever works best for you and your situation. i actually think i’m going to go with a team first and learn as much as i can first and then go solo. i’ve been trying to figure out if i can go solo with no help (which i need) and it doesn’t work out. i might opt into a mentorship program even for startups and see how that works.
hey ian – finding a great team’s really really hard. but a lot of the previous responses nailed it – you’ve got to get out there. svase, for example, is a great organization that hooks people up who are trying to start up. schools have alumni databases that usually show what folks majored in and what they’re doing now – write them for advice or ask them if they know anyone interested in a particular idea you’re working on. there are a bunch of tech meetups in a number of geographies – sadly not all, but in most major cities. even something like joining a climbing gym can work – in silicon valley, they’re full of techies!
the biggest thing is just to get out there and, if you’re not a developer, meet people who are *not* like you. that’s really hard to do, but very important to get started on the right foot.
Thanks for this blog post, it’s SO REAL
In our case, it happened more or less that way. I was the business guy with very limited developer skills, I just went and asked engineering friends “Hey guys, who’s the prom major?”. Then I bought him a beer, and asked if he wanted to join me and build a start-up on the idea I had.
Took us 6 months to get a product up and running (http://www.gametube.org), and another year to get a *better* product (http://www.gamecreds.com) on the way + VC money
We’re based in Paris, working with limited seed money but the team is… 6 developers, 1 designer, 1 business guy!
Tech > everything else (at least, in the beginning)
thanks for sharing – looking forward to the rest of the series. a few follow-up questions for you, if you have time:
how did you meet elaine and sandy? were you introduced to them through friends for the sole purpose of starting meebo, or were you friends first who shared the idea?
were you ever concerned that the three of you might not work out as a team? how did you guys manage through that?
I love the article and picked up a few great tips! I’ve been an Entrepreneur for what seems to be a very long time and I am still looking for that HOMERUN! I will tell you, they do not come by very often and they are almost never easy! If it was easy, everyone would have a startup in the wings. I have a startup ready to hit the streets, it is NOT tech based but can and will help those in the tech world. I too am looking for someone to work with that knows the manufacturing and distribution end of a solid product. Cant wait for more posts on Techcrunch
Great article. I think you just saved me 6 months of pain.
Looking forward to reading more on these lines. I’ve forgotten more ideas than I’ve run with, if only because of focusing on the money, and other companies have come and gone, doing those same ideas, anywhere from about 6 months to 4 years after I gave up.
It’s exactly how it works!
So it sounds like with Meebo (your claim to fame) you were passionate about the idea but had no programming skill, partnered with two people that had strong programming ability and did very little to assist them in creating a succesful application.
“the sum total of my contribution to Meebo prior to our launch was getting us incorporated (read: easy)”
Post success you tell people that doing exactly what you did is not going to work and is a bad idea:
“When I point out that they’re all business people … I know the startup’s already dead.”
Your credibility is … already dead. The problem is that many programmers have loads of talent with no product sense and business students have great designs with no way to implement them. Programmers feel exploited when they build out a product that is successful but are reluctant to admit they wouldn’t have been able to design the product themselves.
So what ends up happening is great programmers are led sheepishly into the arms of suggestive Angel Investors, VC’s or mentor hybrids like yourself who guide the product into what they’d like to see. The real lesson you are trying to teach is that programmers should always cozy up to an experienced ex-entrepreneur and current financier so he can give their technology a direction.
Engineers don’t always have the best business ideas. If they did they’d all be billionaires because they could build out their own dynamite ideas at will!
So what is your point? Why was it ok for you to have no talent but a great idea and label yourself a co-founder of a company but advise against it for anyone else? How are you in a position to offer any advice other than: “Once you are successful it’s really easy to stay there and talk about it”
What advice would you give to someone who has a great idea for a tech company, but no programming ability? Partner up? Oops thats out, you already said programmers don’t need business people until post-launch. Outsource? Nope, thats indicates the startup is a zombie. Take a five week course on a new programming language so you can show your mutated brainchild to a programmer who thinks “great now I have to re-write this entire thing without hurting his feelings, why didn’t he just show me a flow-chart?” or just present your crappy, first-run code to investors then pay someone to re-write the entire thing. What did you do again?
Sounds like the only advice you can give is to people who are following a completely different path than yourself, making the advice questionable. And I can only assume by your post that programmers are the only ones who have ideas worth funding. Unless that person is … you?
So great that you have a Yale BA and a Stanford MBA, totally makes sense for you to talk at length about what entrepreneur engineers should do to get started.
Digsby and Adium smack Meebo around anyway.
good points…on both ends.
what he’s saying is he partnered up with engineers, not with other business grads/entrepreneurs, and that’s what’s important to have a team that can produce the product not just market it. your objections are irrelevant
i understand what you are saying because i have friends on both sides, but i don’t agree with you that seth has shot himself in giving us advice based on his experience. he doesn’t mean any harm by it and his absolutes may be questionable, but you won’t find a lot of people who create startups arguing with him because they’ve probably been there before. you don’t need have a degree from a top 10 school or even a degree to understand what he’s said. i’ve heard this same advice from my art teachers, to employers, and some mentors. what he’s saying is nothing new, but it’s important that he is saying it because not everyone can get it directly from the mouth of someone who has been there before who can just break things down so it’s simplistic. i was thinking that the best way for me to start out would be to either join a team or create a team and it has to be a synergistic team where i can be a part of something instead of just being the second person who can do something specific. i understood what seth was saying because i’ve been thinking about the same thing and getting the same advice from business people, designers, engineers, etc…i don’t really know what you’re arguing against. if you have some thoughts on this you could add to the conversation and provide some advice.
You have reading comprehension fail. That plus you should learn to be a little more concise.
If you’re trying to start a tech company, you really should have one or more tech people on the founding team who can come up with the necessary tech solutions. If you happen to be a business person and you’re looking for good tech people to join your team, what do you bring to the table? Is it enough to convince talented engineers to join your team?
Relevant business experience, contacts with industry insiders, seed funding, even an MBA from a top school (and all that comes with it), could be enough for you to land some top notch developers.
But if you decide to go it alone with two other business buddies of yours, hoping to outsource to engineers in Kazakhstan or a couple of undergrads, it probably won’t work. I think that’s the point Seth was trying to make.
And some of the biggest tech companies were started by just a couple of engineers. The business guys only started coming in after the core technology had been built out. Think Google, Microsoft, Yahoo, Apple. Engineers aren’t so clueless that they can’t start successful companies.
Let me guess: You’re the one with the MBA?
You say: “Engineers don’t always have the best business ideas. If they did they’d all be billionaires because they could build out their own dynamite ideas at will!”
Which begs the question: If MBAs always have the best business ideas, why aren’t all MBAs billionaires? It can’t be THAT difficult to find an engineer to do your brilliant project.
You lost credibility with your statement: “The problem is that many programmers have loads of talent with no product sense and business students have great designs with no way to implement them.” Take the top 10 largest tech innovators (take your pick of largest by revenue or largest by idea) of the last 20 years in Silicon Valley. How many were started by programmers? How many were started by MBAs?
Let me guess: You’re the engineer?
People with good software/technology ideas with no programming experience are automatically put at a disadvantage because they can not execute the idea themselves. They have rely on the engineers to bring their idea to life.
This could be a simple fix…telling that non-technical person to leave the playground OR finding a way to create a symbiotic relationship between the technical and non-technical parties.
I think it also comes down to the fact that the engineer did not have this idea before you brought it to the. One develops the idea and one executes.
Ideas are plenty and cheap. It’s the execution that counts. For software products, guess what execution entails.
What Seth is saying the idea man counts very little.
Great post, truly great post. However, on the “outsourcing” front I’d like to point out that Kevin Rose paid a programmer $2k to have Digg built and he did pretty well.
True.
Now compare Digg to YouTube, Google, Yahoo and FaceBook.
Thanks for taking the time Seth. It is a great read.
However, in defense of us “business people”………..every Woz needs a Jobs!
Jobs is actually reasonably technical
Dude, Jobs could hack some. And Woz’s personality is not typical for engineer-entrepreneurs.
Yawn. This is overly simplistic. One thing he doesn’t mention is that in order to build that prototype you need to sacrifice a certain amount of time without having an income.
This means that the “just build the prototype” phase has to occur under one of 3 conditions:
A) you and your cofounders are in college and living off loans
B) you and your cofounders are independently wealthy to begin with (this is the common and secret backstory to many startups you wouldn’t expect)
C) you and your cofounders have a nice cushion from stock options sold from the sale of another startup (very common see list of companies founded after purchase of Paypal)
If you try to build as you go while you’re an adult having to pay the bills at the same time (IE none of A, B, or C available) that prototype & plug to bloggers phase can be slow, painful and destructive.
There are other factors at work. For those who are truly outside the loop life is not as simple as this magical fairy tale goes.
There’s also the path where a programmer with a day job builds something at night that happens to take off like gangbusters, like the “plenty of fish” dating site. But in that example he did that just for grins in his spare time so I don’t know if that counts as a reliable premeditated path. It is an interesting question seeing as programmer forum “lounge” sections are replete with “don’t quit your day job” responses to budding entrepreneurs. But as any programmer will tell you (I’m one), any lucrative contract or full time job you can get, especially these days, will usually leave you so burnt out by the end of the day that the last thing you will want to do is sit down and bang out more code. Also, for the full time coder, you may violate your employee contract especially in the area of non-competes or just plain piss off your boss when he finds out how much time you have been putting into a side project when deadlines were looming. Cash allows things to grow that may not have a chance to do so if it wasn’t there to provide sustenance to those potentially involved.
Amen. The contract work burn out is totally where I’m coming from…
You can contribute without attacking. Better still, write your own post
You’re right and I don’t want to act like I’m attacking Seth, I love meebo and their story and think what they do is great.
I’m just really sick of how Techcrunch propagates this fairy tale scenario of web startups but spinning this best-case scenario success story as being the guide for others’ success when they really comes down to a number of jackpot background factors.
I’ve worked with dozens of startups and it only works that way for a small fraction of cases. Usually things are not so rosy…
i would get tired of tc if this is what they’ve been providing for their readers, but i think there was a guest author last month who had a complete shit company and model and he’s not doing so good, and there was another guest author who started out making a lot of mistakes who in the end managed to work out and there was also another guest author who had a pretty mediocre idea that went up then bellyflopped down. i think there’s been a couple of examples that go through the highs and the lows of startups. they don’t provide the exact same perspective that these guest authors do on their daily writings but i don’t think they spin that the life of startups is all fairytales. well maybe more than 50% but i completely blame people for reading it that way. people should be samrt enough to discern good or bad inforamtion for themselves.
Not overly simplistic at all. The beauty is in the simplicity! I know from experiencing both approaches!
I started my first company with 5 co-founders, none being an engineer, and tried to raise $$$ with hardly a line of code out the door. We eventually raised VC money, and all the founders were left with practically nothing when the company was acquired. And by the way, this was the company where I quit my job and put 100% of my time into it. So I fell into the trap you describe above…. I thought like you do…. all I need is 100% of my time and a VC.
This time around we have a team of 3. A rock star engineer, a product guy (me), and a business guy. We all have other jobs… but we spent the last 6 months getting a product out the door. Just finished Alpha and going into an invite only Beta.
Long and short of it, having done it both ways.. I can’t imagine doing it any different than we are now.
It simply is an attitude of being able to realize your product vision, having the team that can do it, and driving forward.
Oh, and keep it simple. And you can do it without the A, B and C you mention.
VC capital too early is a fail for sure, I agree with that 100%.
But doing the prototype while you have a day job is like trying to run a marathon with a 200lb weight on your back. Sure you can get to the finish line eventually without dying but you’re never going to win the race that way…
Ron, your opinion is right on target in YOUR situation.
I have had a programming job and tried to do side projects after work/ weekends. Its a big burden and very stressful. But two years ago I changed my day job from a programmer to compt. analyst (sit on butt and react to red light green light alerts all day). Now I can triple my work load for the side projects.
I feel like I am winning the race because my paycheck from day job comes in every 2weeks and I am making money from my side projects.
Its all about your own individual situation. Some people need to quit their day jobs and go entreprenuer full time, some dont. Maybe you can be the project manager and team up with someone else who is a prgrammer.
have a great day!
Ron, I actually agree on both points. I think the toughest thing is to successfully transition from the prototype or alpha into a fully commercial product and business that will pay the bills and allow one to shift 100% to the new venture.
All is not without risk… but yes, this hurdle is one of the most challenging.
great points. thanks for your comment and robert provided a good follow up also. i think what seth has written is a pretty good and standard starting point. i wasn’t aware he was selling us a fairytale. i don’t think the people reading this are unaware or need a severe reality check on what it takes to start out or go in it by yourself or with a team. it can go up, ahead, or down. life isn’t all smooth planes as you point out.
NO PAIN NO GAIN
Thanks for taking the time to share. And to TechCrunch for providing the platform. Looking forward to the series.
Great stuff Seth, please keep it coming…!
Oh and another factor to bring reality to the table –
Sometimes you find out your cofounders suck.
Its really rare that you can find a group of two or more people who are evenly motivated to work on the same dream with no pay with an equal amount of effort. You can find that “great team” but if the other team members realize they aren’t prepared for the long-haul they will start to lose enthusiasm or even duck out when they are tested by not having a paycheck after 6 months. This happens a lot.
There are only a tiny fraction of people who hit on all the right circumstances to go from prototype to hit in a straight trajectory. Its very rarely a sweet ride to the top
How did you make sure that Elaine and Sandy weren’t going to rip off your idea?
Jeff
this part is important. how do i make sure i keep myself from killing the team i put together to help me make my idea concrete?
hey jeff – you *really* need to partner up with people that you trust. get to know each other first, etc. it also helps a lot if you’ve been introduced to your co-founders through people you trust. in my case, friends of mine introduced me to elaine and sandy.
also, like i said, pre-launch, the business guy doesn’t provide much value. after launch, however, having a good business guy becomes very important. so it’s not in anyone’s interest to rip off anyone’s idea from anyone else. i’ll go into this is later posts.
also, just to clarify, the first idea we worked on that we called “meebo” back in 2003 was my idea. we trashed it 8 months later – we just didn’t think we were doing a great job on it. the meebo that launched in 2005 was a group effort – the idea primarily came from sandy being a huge IMer and having trouble getting on IM when we were working on earlier ideas in elaine’s apartment!
Seth, great article.
Amazing to read the responses. So many are excuses for not even trying…
“I’m not in Silicon Valley”
“I can’t find a good partner”
“I have a mortgage”
“I can’t find a developer”
“I can’t find a business guy”
“I don’t have the pile of cash”
“I don’t have the contacts”
These are nothing but EXCUSES. JUST DO IT!
MANY of us are outside of Silicon Valley, have mortgages, don’t have all the skills necessary, don’t have the pile of cash, don’t have the contacts, and STILL pulled it off.
Pardon the crudeness, but:
Excuses are like assholes – everybody has one.
Brilliant post in the process of trying to find people to team up with on my startup, but not being of technical mind am finding it difficult in getting the right people on board. How do you know which designer/developer to choose?. I look forward to your next update!
Like Seth said, you have to find people you trust. And in my opinion, you have to have a solid idea or something to show. Maybe put some ads in the local paper expressing an interest in working with others on a business idea. Lead them to a site that gives a bit more info on you and what you are trying to accomplish. I also think the right people will come along when the time is right, and not trying to force anything. While you’re “waiting”, you can always work on your idea or some aspect of it-specifically your area of strength.
Interesting article. Don’t know if I agree totally though. Yep its great to have a team of people starting up. Not everybody can, especially if they need to run with the idea to get to market. Yep, build yr prototype – if you can code or convince some out of work or college level codehead to work for dirt. Not all of us have that luxury. Most codeheads, myself included, like to and need to (read the comment above about feeding a family!) Get paid for their work. Not ‘maybe’ not ‘if this makes $’ not even ‘when we make $ – see how many companies went bust with all the codeheads accepting part ownership or ‘options’ but cash in the hand. Options and future value are great ‘add ons’ but not for a welfare check salary until ‘this great idea makes it.’
Maybe this article is a little too simplistic, a fairy tale. Maybe I’m wrong or just know all the wrong people.
Who knows. I know I will keep banging my head against the code wall and business walls until I don’t have to work for the man anymore. Until then, midnight oil alone.
I will continue to read as I am sure some good ideas will come from a successful startup that I too can utilize.
Those thing can kind of limit you
Great Article!, pretty much sums everything up well, but – let’s be honest here – if you live outside Silicon Valley, you are going to be at odds, because the rest of the world hasn’t yet caught up with this tech start-up thing. ya know? It really does suck around here. hint: MD
“you just can’t do it all”. sometimes when i hit a wall, i want to find a bucket a puke. and when i have noone to turn to for answers…noone said this would be easy. great read, well worth the break i needed on the path to just getting it up. and great point on seeking vc backing, i don’t think there’s a point to trying unless you graduated Stanford or have a working product to pitch. thanks to advice like yours, people like me spent that time developing rather than begging for money. look forward to the next one! back to work =)
When I point out that they’re all business people, and wonder who’s going to build the product… I spent years learning that lesson the hard way. Thanks for the post.
I finally get it, it’s really simple:
1) Go to a prep school somewhere in Connecticut
End up writing a guest article for Techcrunch about your tumultuous journey to the top
2) Work your way into Yale
3) Grab an MBA from Stanford
4) Pick up an easy job doing M&A
5) Come up with a brilliant idea to combine IM services onto a website
6) Convince a few folks to build you a prototype
7) Simply raise $37m from VCs
9) …
10) Profit?
I’m stuck on step 4, any advice?
lol. funny, but the fact is your post points out how much one has to have going for oneself in the right place and the right time to make it.
every bit helps. Having great people around can always add value and input. I look forward to the day I’m in that position. I enjoy working on my idea, but trying to learn everything oneself is a bit daunting…especially programming. The books say its easy to learn/do, but there are so many variables, and they all (prog. lang.) seem to be able to do the same thing to some degree, I get lost trying to figure out which one to focus on? Until I have that team, I’m piecing it together as best I can. (hopefully I’ll have something to launch this winter?)
Dude you are so on the money. The sad thing for me was I was not able to find any programmers willing to join my vision. Thus had to spend hard cash building a half way completed demo outsourced to India. The project was so low cost they did not even want to bother with it. As such leaving me with some codes that locals wish not to touch.
Worst yet wasted 2-3 years in the process. In my neck of the woods programmers are hired guns at first year in college. By third year they think they are gods. Thank god for Trollim and odesk. Lost massive cash via elance contacts.
Also if one has a portal that is massive in ideas such as Yahoo, Facebook, Google, Twitter, and YouTube combined like my own without third party back ends it cost a pretty penny to build a custom one if one did not know about clones etc.
Thus engineers who have the know how would be an asset. All what you said is so true. Pitching to investors before building is a waste of time especially if they do not understand the timing to enter the market. By now it is useless except bragging rights as traction and market disruption have been lost. neat site none the less once completed. I have seen all my concepts that were 3 years old make its way to FB, Twitter, Yahoo, and Google bit by bit.
If had released 2-3 years ago it would have made them all look like shit. Google being the only exception.
Thus that is why I decided to prior to reading this post to find a team. The hardest part in this neck of the woods. programmers with god complex, Jesus/sinner complex, rich man poor man complex, capitalist issues, ego and power issues, ghetto youth versus uptown youth issues.
They are pretty much screwed up around these parts. Thus cash talks if you cannot find the gems.
None the less I build for me and me alone. So at the end of the day I will use it. if others want to good for them.
Here is how to get the programmers:
1. Living expense money
2. No lying
3 Pitch the technical puzzles attempting to solve
99.9999% of non-technical founders/co-founders get 2 out of 3 of these points wrong..
here is how it works in this neck of the woods
(1) Both parties agree to terms and conditions
(2) programmers stick you up later mid way through for more money.
(3) I never lie, thus lay everything out prior to agreement and expect you to stick to your word.
(4) Technical puzzled solved by my research and your job is to assemble product via third party apps and little API within market rate agreed on.
(5) Problem these programmers see you need them so they make it harder for you with a load of BS. When other programmers inform you that the programmer on the job is simply trying to milk you.
(6) the locals will charge US$500 to US$1,000 to gut a Joomla template and say they built you a website.
Trust me dude, the ones I have met are real losers. The ones I have met but are good are always busy unless you are willing to pay them 5 to ten times the market rate for their time.
so become a programmer, who’s stopping you?
FU
1. Living expense money
What part of that sentence you don’t understand? You got what you paid for. If you want to lowball a programmer, expect garbage back.
There is catch I think. Startups that are aiming to enterprises would do right raising VC to improve their network and therefore have a greater chance to get customers.
An early prototype is always a must though.
Excellent advice Seth. Looking forward to your next post. Thanks for sharing.
I like seeing how many of the comments in here are from burned-out post-2.0 entrepreneurs like myself.
There’s an uglier side to all this business that is making it hard for a lot of folks to get psyched by articles like this anymore, even though its right on the money…
I know how you feel. Whenever you read something like this from a one-time successful Silicon Valley person, you feel like there wasn’t anything here that you didn’t know. You expect to find the key to success and become disappointed that you find it. How come they succeeded and you didn’t?
The truth is that you could follow all this advice and you’re most likely to STILL fail. Secondly, I’d humbly say that the majority of these one-hit-wonders were successful largely because of luck and not skill. I don’t want to put down their efforts but recognize the efforts of those who have tried and failed.
The difference between success and failure for any 2 startups that have smart people and try really hard and are doing this for the first time is luck IMHO.
With that said, these columns are still worth reading to make sure you’re doing the basics right.
I take it you read that Malcolm Gladwell book too…
Is software the only kind of startup that is interesting to anyone anymore?
How much of this advice applies to someone trying to make hardware yet alone something that is not even primarily computer related, like cleantech?
I have the same thoughts about Paul Graham’s essays by the way.
Joe J.
actually i’m not in tech at all and i just take all this information with a grain of salt and try to figure out how i can best apply it to my main field of interest and how i can go about creating my own start up. i think the processes aren’t that different.
I would say much of cleantech can be software related, maybe in the design process? But a couple ideas I’ll throw out there…a solar powered leaf blower and a lazer cutting lawn mower powered by solar.
That’s pretty much what we’re doing at http://popscreen.com. Overall, we’re definitely in the prototyping/private beta stage and improving the service is a key priority for us. Looking forward to more posts.
Reading this article simply reinforced my belief that I will make it.
really?
what makes you so sure?
or are you being sarcastic?
Excellent post Seth! Thanks for the clear and concise insight into starting up. Definitely looking forward to your next post.
>There’s an uglier side to all this business that is making it hard for a lot of folks to get psyched by articles like this anymore
Can you elaborate?
Lets just say its possible to have a web startup prototype put you into crushing poverty. A story that is rarely if ever told.
And that the truth to success behind many startups comes from non-formulaic advantages such as undisclosed sources of early financial backing or having an advantageous connections to the right people at the right time…
Also a lot of startup “successes” are not so. So frequently embarrassing failures are masked by spinning PR or fudging numbers to give the illusion of success.
As they say “behind every great fortune lies a great crime”…
Seems a bit over simplified. Get your product out fast because 10 other people had the same idea. So you go to work on your idea with no funds to bring on more people to speed up the process despite the fact that you are in a race. What if you are working on a messaging system and having your friends and family help you test it. Meanwhile, another group gets some VC cash together and pays Oprah to hawk it. Your technology is really cool and working great but no one knows you exist. You are on your way to nowhere and Twitter is now the talk of the world. Good job, you avoided the VC’s, got your product completed and out to be tested…and you are done. Stop saying Twitter is a stupid fad and your product is technologically superior…you are over. Seth is certainly worth listening to but listen to others as well and be true to yourself.
Sounds like a rant from an American Idol wannabe.
I don’t have a web company or startup per se but being in the advertising business I can say good ideas are a dime a dozen — execution is everything.
When I work with clients who have a product (website) they want to create I tell them to make something and see what the response is. Don’t use all your resources (time, energy and money) only to find that the product is a dud.
lol. total coincidence but i’ve been reading on a lot of design blogs that it’s not about the product but actually in the exectution. like if the product is good and the execution sucks, you might not get that second chance to revamp and create another execution. the established designers have been blogging that the timing is everything because if you miss the ippertunity you might not get it back. some of the other blogs like techdirt talk about creating a good product that your consumer/customer/fan needs and how to market it as a reason to buy or a reason to view, read etc…all this stuff is good advice because it just basically gets added to your information bank and you can then decide which approach you want to take. i never used to understand why people talked about execution but i understand now. it’s all in tandem really. maybe one takes more time than the other, but i agree with your last point the most. this is why it’s always just good to put yourself out there, start small with a big idea and just improve it as you go. yeah people are impatient but you have to maybe be in control of your product and the rollout instead of letting users dictate what you do. i think another recent guest author pointed out the same thing about just starting and building your web idea.
So true. Thus why I decided to wait until the market allowed for low cost investment. Why spend US$2,000 to US$5000 in a recession on a product that you do not know anyone will use? When you can get it built for US$500 or for FREE.
slightly risky tho if someone decides not to wait.
I dont understand, what do you mean by “get it built for US$500 or for FREE”. whos gonna build a web app for free?