It’s not easy building a business – and do notice that we say ‘building a business’, ’rather than ‘starting a company.’ Anyone can start a company. Not everyone can build a business. To help you to get to the latter, we thought we’d offer some handy do’s and don’ts. They’re obvious enough. One would hope, although we are admittedly the consummate optimist.
There are two popular misconceptions of which founders need to be disabused (ok, there are many, but we’ll break it down as we go):
- You don’t know what you don’t know, so important to bring on advisors who are experts in their fields, as well as consultants, who are experts in their fields
- Experts, consultants and advisors will not necessarily give you their time and expertise out of the goodness of their hearts; there’s no freemium model when it comes to these people, and not everyone will work for equity.
In other words, if you’re bootstrapping, it’s not always a good idea to give up your day job. Unless you have savings or a benefactor or two (in many cases, aka, ‘parents/family members’) who are willing to help you out with the bills. And the invoices.
There are many articles, programs and platforms out there to help fledgling and not so fledgling entrepreneurs. One of them is LinkedIn. Use it wisely.
- If you’re reaching out to someone on LinkedIn whom you don’t know and have no connection to, you probably shouldn’t be reaching out to that person at all. Warm introductions are always best. Go ahead. Use the inmail. If you don’t have a paid account, indulge yourself while you need it and use it wisely. If you’re truly scrappy, you should be cutting down on a few of those grande chai lattes anyway.
- Use LinkedIn to find advisors and consultants, too. DO NOT USE LINKEDIN to reach out to an investor whom you do not know, or to ask that investor to recommend/introduce you to people who might be appropriate for your advisory board. That does happen. Seriously. Finding the right advisors is part of your And you should not have three times as many advisors as you have team members. We’ve seen it.
We know that many of you apply to accelerators. We do list deadlines for reputable accelerators – always. ‘Accelerator’ has become an umbrella term for – we don’t even know what to call it. There are programs out there masquerading as accelerators – one claimed to have a quite famous unicorn alum whom we happen to know personally, and knew for a fact that he had never been through an accelerator, much less that one. They refused to remove that information, until we mentioned that we were going to send their promotional material, which mentioned his name, to the now very well-known founder. Always be honest. You may not know what you don’t know, but you never know whom someone else might know.
Reputable accelerators offer various perks: funding, a network of advisors, mentors and subject matter or startup experts, and sometimes office space, and help with the various and sundries, such as legal documents, accounting and insurance. Back of the napkin reputable very early stage programs might now offer all of the above, but they will help you shape your business, often introduce you to potential investors, and/or act as a feeder to next-stage programs.
You might also want to contact a few of the mentors and/or former participants. Find out how legitimate the program is. In other words, are the mentors et al truly involved, or is this program more a startup community rather than a true accelerator? Be especially caution if and when there is an application fee (for the record, Founder Institute is completely legitimate). Another consideration: does the program offer post-graduation support? Entrepreneurship is hard. Having a community who is going through the same thing or has been there, done that, is important.
Do’s and don’t when applying to accelerators:
- Talk to cohorts who’ve been through the program. Many accelerators offer open houses so that you can meet the team, and some former cohorts.
- When doing your video pitch, careful about canned/one-size-fits all pitches. We were judging for a particular accelerator – and, in their video, the applicants mentioned a different accelerator to which they had applied. Oops.
- When making your video, make sure to shoot it in a quiet space. Ambient noise is distracting – and makes it difficult to hear the pitch. The other members wandering around the coworking space who made it into the video really adds nothing. Nor is not a testament to your attention to detail or professionalism.
- When applying to an English language accelerator, do not submit your presentation in your native language. Chances are that the reviewers will not be able to understand it. Always submit your video in the language appropriate to that accelerator.
The Startup Checklist
Bootstrapping or not, when it comes certain things, you do have to shell out the money. In fact, in the long run, it’s more costly to cut corners:
- Get a real attorney or law firm that has done VC/investor work before, or has worked with tech startups.
- Get a real accounting firm that can support your company when it’s time to financing the business.
- Hire an experienced marketing person to do the heavy lifting
- Hire a real salesperson. It shouldn’t be something that the CEO does in his or her spare time
- You do need a CFO – someone internally needs to keep an eye on the numbers. A CFO isn’t necessarily a nice to have. Howard Morgan even mentioned this when he spoke at our Investor Breakfast.
- Make sure your company presence is polished. Remember that placeholder called a website that you put up when you were first starting out? You have updated – and polished – it since, right? And have kept all of your paperwork up to date as well?
- Focus on building a customer base – preferably one with recurring revenue.
- BUILD A REAL BUSINESS
- Learn to scale
- Check references. Not only when it comes to potential employees, but law firms, accounting firms, advisors and consultants as well. Recommendations are always best – from trusted sources, of course.
Above all, delegate. Ask for help. Learn to let go of the reins a bit. And always ask a lot of questions. Don’t be shy. Doesn’t matter whom the person is and that you’re not the one with the Wikipedia listing. It’s your company. There’s a lot to be wary of – that’s a whole other column – so always be sure to trust but verify. We do promise you that success will absolutely not come overnight. Then again, the journey of a thousand miles starts with a single step. But you don’t get to the finish line unless you stay the course. Onward and forward.