Yesterday I spent some time thinking about the difference between my successful starts and my projects, which I’ll call R&D that never makes it to market.
The start is the most fun, and it can also be the hardest part; it’s certainly the most important:
talk with likely customers and figure out the market, understand the opportunity, develop vision, design the product, figure out the sourcing if it’s a physical product, figure out best methods and user interface if it’s a software product (and both if it’s both hardware and software), refine the product, find early customers, test, refine, improve, iterate all of that while you also develop the brand, the marketing language, figure out the best sales approach, sales system, sales language, customer support, etc.
During that time you’re setting up internal systems of communication, accounting, legal, HR, etc, but mostly you wing it until you have more than a few people.
And, of course, you have to figure out how to pay the bills. You can take an asset-backed loan like I did for the food company, or invest your own money (same), or raise money from investors–likely friends and family or angels at the super early stage, depending on the luck of your birth and path since then.
And you want to partner with the right people–hire the right people, start with the right people…getting that right throughout the life of the company defines the life of the company.
So last night I took an inventory of the companies and projects I’ve started. There’s a difference: projects never make it to the company stage.
A company (my definition–yes there are shell companies ) has customers, revenue, and employees depending on it for income. That could be you, or your first hire, or your co-founder. Otherwise it’s just a full-time R&D effort, likely self funded.
My projects, well. I’ve started a lot. Russ Ryan from ChiliSoft once said to me with some amount of frustration “you never finish anything.” That still bugs me to this day, because he was somewhat right. But that’s not my job; my job is to start things, I say to myself, defiantly. But not exactly. When you’re a founder, your job is to start something and set it up for a safe landing. You don’t have to land the plane, but it should have what it needs to get there, and it sure as hell needs to be flying.
I’ll bet a lot of founders disagree with that. For me, the job is to get it so it’s moving in the right direction: excellent product, broad but specific vision, branding, early customer base with no limit on the horizon, repeatable, growing revenue, a strong early team, and the capital to get it to the next stage, if not to profitability.
So my projects are a source of frustration and I’ve been trying to figure out exactly why I didn’t launch them. Here’s a list:
- Project management. I developed this as an internal tool for Mission Research when we were initially building GiftWorks. It was terrible, but useful. Post a document or photo, make some comments, select who would be notified of the post with a link back to it, and that’s it. That was in 2002, before Basecamp and other PM tools. But it wasn’t our focus, and it just sort of died at some point, likely because it was a good idea but not the purpose of the company.
- Focus. I developed this after leaving GiftWorks in 2008. I have ADD and get distracted by shiny things like the interwebs, so I built something that allowed me to turn parts of it off, track my activity, show me charts of just how much time I spent on FB and other sites, and it worked pretty well. But I didn’t have a model, and it didn’t work well enough that I felt I could release it. And I didn’t have a team–sometimes that sense of obligation to others pulls you through.
- Jawaya. This was the collaborative search engine, and maybe the project that came closest to becoming a company. It surfaced your endorsed results to other people searching for the same stuff so they’d have to work less to find it. It was hard to explain, and I didn’t have a simplified way of showing it because it was complex and investors would ask “but why doesn’t Google just turn this on as a feature”, and of course Google never did, because it’s not their model and not simple.But my job was to convince investors and then users of the value of it. At its peak we had maybe 100 users and it wasn’t their default for very long. So I raised a little capital, used contractors, didn’t have employees, no paying customers, and it petered out. Not a company.
There are a half dozen other startup ideas I pursued. The mobile platform was the most recent, and that got zero traction with investor and was absolutely the kind of thing that needed investment first.
At the moment I have three projects: two are software, one is hardware and software. I am definitely moving the hardware/software project forward, but I’m not sure it will be a formal company (it certainly could).
The software projects are just to help me learn, but I’m not particularly passionate about either of them. They’re useful, and it’s fun to learn.
So what are the missing pieces for me to go from idea to project to startup company?
- clear idea of the product and market (what are you selling, to whom, for how much, how often, etc)
- capital to get it rolling, or high enough sales to get it rolling on its own
- a team to work with. This might be the most important part for me, because it helps remind me of the importance of making things work.
Team + capital + product + market.