Don’t make mistakes before you even start — some tips for new Founders
I recently met an early stage first time Founder, she had a great idea that solves a problem, she had done some testing and was very driven and passionate. She needed to turn it into an MVP, get some traction before going out to raise some Angel/Seed capital to scale.
Her business is a consumer facing tech business that will require clever social acquisition. So what she needs is a basic product and some marketing to get it out there. Both of which she has some ability in but not enough.
We had a chat and what was clear to me was that she was being given so much conflicting advice and attracting some pretty unsavoury people. She was a risk of a) going crazy, b) not executing and c) ultimately failing to realise the potential opportunity.
While every situation is different, there were some very common themes in what she was saying and what I hear from many in her position.
Some thoughts for new Founders:
- Define your short term goal — what are you trying to achieve in the next few months? Focus only on that. Don’t waste time thinking about what may happen in 3 years, what your product may need to be one day etc..
- Only worry about this goal— what is the minimum you need to get it into the hands of real customers. There is nothing valuable than customer feedback. Do this, get it out, take feedback and make changes. Be relentless about this at the start. Don’t cut corners.
- Avoid “advisors” — any one that offers to “help” but wants shares should be avoided. You will think about your startup 24/7 and they will not. Your expectations will not align and will lead to frustrations and the wasting of valuable equity that you need later on.
- You do not need a Board — no matter what anyone says at the start of a startup you do not need external Board members. It’s just more distraction and frankly a waste of time. Even is someone was the SVP at GlobalMega Corp they will have no idea about the practicalities of where you are today but they think they will. At the start you and your co-founders are the Board. Resist external members as long as possible.
- Avoid tech agencies — if you need an MVP then don’t go to swanky London based offices, they will charge you way more than you need to pay as they have massive overheads to cover. I recently met someone who was quoted £30k for a few landing ages and a very basic members area. She could get this done for under £3k. Spend time on Upwork or other platforms, ask some other Founders, and find someone who can help you. Pay them in cash. Make sure the ownership is yours.
- Equity is not free — the normal funding sequence is this, you will start with 100%, raise an Angel round, a seed round and a Series A. Each round will dilute you by 20–30%. Post Series A you need 20% shares available for employees. DO NOT go offering shares to people at the start, you will regret it. Even if they are a mate that helped you create a model or a deck in the pub, or they know about social media. You will regret it. Equity is for employees and investors only.
- Pay for things — you cant expect people to work for free. If you believe in something then find the funds to pay people. If you are not willing to spend £5–10k on proving your concept then how can you expect someone to part with potentially millions in the future.
As a Founder you will need to hustle and get help from people. If you can pay them then do. It’s much cleaner. If you find someone that you think could be part of the team then be upfront and explain the situation. If they still want to help then great but make no promises. If money comes in the reward people fairly. Don’t be a jerk, you know what is the right thing to do.
The birth of a new startup is an exciting time. You need to be incredibly focused on delivery, don’t get distracted and do not sign up to anything you will come to regret.
The best people to be able to advise you are other founders. If you want to connect with like-minded ones for free, then sign up to founderspayforward.com
Good luck!
