Start-up is catching the imaginations of people more than ever. Unfortunately the cool vibe and little experience catches many first generation-first venture start-uppers (I've purposefully not used the term entrepreneur) the on a wrong foot. Learning from others is difficult and reading thoughts like these could very well be like learning to swim through a guide or like internalizing mistakes of others. But the exercise does give an idea of perceived risk and potholes to the start-upper, apart from the obvious satisfaction to me. Some of these might seem like stating the obvious since 1919 but as one finds out not so much so.
Most are lessons for life and have helped me personally to pin down bit vague realities. No matter if you are just starting out, struggling or running a successful venture. I hope to continuously evolve at Newdigm (www.newdigm.com) and in other interests and share more.
In this series i would cover People, Product, Business model, Exploring out, Funding & Humility.
PEOPLE, PEOPLE & PEOPLE
Right from team members to your customers and in between. Here is a discussion on team-
Rule of the thumb for taking people on board: If zombies suddenly sprung from the earth, could you trust the prospective team member to cover your back? Would they tell you if they got bit? Most importantly would you give them the team's only gun if you knew they have the better shot? If the answer is no to any of those questions you need to let them get eaten by the cubicle wasteland of corporate culture, because they aren't ready for this kind of work.
Take the zombie call with a pinch of salt - There are exceptions and you do make some compromises on the way – but just bear the thought in mind and evaluate the risk therein.
For founders and partners:
Vesting: the practical way of dealing with zombies is to take a long, long vesting period for all major sweat equity founders. Let everybody earn their sweat equity on a yearly basis with a cap on maximum.
PS: You can hire employees anytime, but you only get to pick your partners once.
Also if you can find a guy or appoint among yourself “the buck stops here” leader until too late, you could save yourself lot of time to market. When there are partners – there are opinions. If all have an equal say – opinions just maintain the status quo or raise conflicts. A startup has to be decisive – fail-learn-succeed is better than conflict-nothing-fail-RIP.
Dysfunctional Family aka soap-opera: The problem of a start-up with Product development, Project Management and Business Development at uncompromising loggerheads. Although all are doing what they feel best, here the collective of all efforts if not in sync only leads to major pitfalls. An important thing to realize is product component of business should not exist as independent entity to business and should never just become purely technical, scientific or R&D. Market side issues - customer demand, perception, maturity, potential tie-ups and strategy should be given respective weight. Building something that the business side is not happy with would invariably make selling it difficult.
Here is the importance of project management of the company as the advocate for the customer and the product evangelist. Leaving technology or Product development running the show in a vacuum would leave the overall end product like a deer caught in headlights. Making decisions only on short-term business gains could be equally detrimental. The larger challenge is to have trust and faith in abilities of others and build on the out of domain decisions taken by others.
Just be selective with hiring: When you've quit your job, put in your own money and grabbed loans from your parents, you simply cannot afford otherwise. In terms of employees, Hire Slow, Fire Fast.
Related posts: Next parts in the series:
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