Monday, July 29, 2013

5 LESSONS EVERY STARTUP FOUNDER SHOULD LEARN

NO MATTER YOUR EDUCATION, FOUNDING A COMPANY IS GOING TO SCHOOL YOU. TAKE THESE LESSONS TO HEART BEFORE YOU GET HIT WITH THE BOOKS.



There are very few new ideas. Whatever idea you have come up with, someone else is already working on it, because most ideas and companies emerge from the zeitgeist or the climate of ideas we live in. And even the "newest" technologies have been envisioned by artists and writers before they become products and companies. At present, companies are being built based on concepts imagined by science fiction writers fifty years ago, sometimes more. 3-D printing and robots are not new ideas, although each application might be new.
A practical manifestation of this is the refusal of venture capitalists to sign non-disclosure agreements. Although inexperienced entrepreneurs think that's because VCs steal ideas, that isn't the reason. Rather, they don't sign because they see too many similar ideas and would be violating their NDAs all day long if they signed them. In addition, VCs are already in a business they presumably like. They have neither the time nor the inclination to drop what they are already doing for your untested idea.


For this reason, your co-founder should be someone you know well, rather than someone you've met at a Startup Weekend or a networking event. You are going to learn some pretty big lessons about her as you go through the process; it would help to know in advance what her goals are, what her track record is, and what her work habits and ethics are. Companies often flounder because of emergent differences between partners.
At some point, the interests of founders often diverge, and a really good relationship will be the only thing that keeps the company together. Oh, and here's another tidbit: when you start a company, you run a big risk of losing your real significant other, with whom you will spend dramatically reduced amounts of time. Marriages are often sacrificed to the company if the spouses aren't clear on the amount of effort involved in running a startup.


Most people are risk averse. They'd rather do nothing--if that feels familiar--than try something new. If you build it, they won't come, except for a small and passionate group of early adopters. Those people like to try new things--and many of them will try anything if they can be first to try it. Those people are a gift from heaven to you, and you must treat them with the utmost respect. Even if they want to drag you down a rathole with their suggestions, do not piss them off. They can be your evangelists. The other side of this coin is that they'll probably move on to the next shiny object before you have built your market. Because they love anything new, they will not always stick with you.


That's why everyone doesn't lose weight, put solar panels on their homes, and track their fitness with an app. The science of behavior change is new, and we are still not sure what motivates people to change even dangerous and counterproductive behavior. (Though rituals help--Ed.) Think seat belts, which took generations to take hold. You almost have to wait for the old guard to die off and hope they've taught their kids to do what they won't.
Often it takes a real scare to change behavior; some people quit smoking after the heart attack, but others do not. You still see people on the street pulling oxygen tanks behind them and lighting up a cigarette. If you are doing something that involves making people change habits, be prepared for a slow uptake, even though potential customers will admit they need a change. Take electronic medical records, for example. They've been around for more than twenty years, but until President Obama paid physicians to implement them and threatened to stop paying them if they didn't, the percentage of physicians who went electronic was only about 8 percent. And that is despite the fact that doctors knew they were paying rent to store rooms full of paper 
records that could be transferred to the cloud.


When you start to add people beyond the founding team, there's always a big shock. Employees are not motivated by what motivates you. They have their own goals. Sometimes those goals align with yours (helping bring pure water to villages in Africa), but sometimes they don't. Most people who prefer to be employees need structure and motivation. You will have to figure out what motivates them. Sometimes it's money, but not always. Often the motivators can include working from home, flexible hours, long vacations, reimbursement for education, or even being able to bring a dog to work. Don't get angry at them for wanting a life.
Start with these five lessons. When you’ve got them memorized, come back to me. Then I’ll talk about the money.


This is a repost of an article that appeared on http://www.fastcompany.com  on June 24, 2013

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