When building a startup for the first time, entrepreneurs may be unsure of what steps to take first and how to avoid making mistakes in the process. In this post, Gur Dotan shares the lessons he learned during the first three months of creating his startup, in turn other entrepreneurs can learn to better navigate the world of entrepreneurship.
Gur Dotan is the Co-Founder of Soomla, the first open source Free-to-Play initiative for indie game developers.
I recently remembered that once upon a time I was a young (OK not that young), restless and “foolish” employee with a vision to solve bigger problems. 3 years ago I decided to abandon the safe harbour of a day job and cast away into the exhilarating startup journey. Reflecting back on it, I’d like to share some of the highs and lows of being a first-time entrepreneur, in the form of 20 lessons I’ve learned. Though these learning experiences were accumulated during the first three months, they’ve stayed in the back of my mind along the way and have helped us shape SOOMLA into the unique gaming data platform it is today. So here’s counting 20:
1. Forget about raising any money
If you were dreaming about raising substantial funds, stop doing it because – you won’t get any. Getting investments doesn’t always have to do with your product or your team – both could be amazing. It’s just that investors are wary of new products and would like to see you get some traction first before jumping onto the bandwagon. It might sound ironic getting funded when you’re already on your feet, but that’s just the way it goes.
2. Create a strategy for raising funds
Going up to someone saying “I need money, help me”, won’t get you any investment. It might get you 10 bucks for a cup of coffee, but that’s about it. If you are serious about raising decent money for your startup, you need a plan. That plan must include how much money you actually need, what you plan on spending it on, how will the funds reduce risk and build a profitable business, and what the terms are. Make sure you get a second opinion on your plan, just so you don’t show off as a complete lunatic.
3. Focus on your product
Seriously. Distractions, pointless meetings, Facebook and StumbleUpon, they only slow production down, and you really don’t need anything getting in your way. Your coding/development time is sacred and the opportunity cost is just too big to waste it slacking off online, watching cat videos on social networks. As an exception though, don’t consider helping other people as “wasted time”, because it’s not. It’s good Karma and that’s something you’ll definitely need, especially when kickstarting a new company. @Stammy blogged about this on Techcrunch. Read this article, and that should definitely be your last article before turning the distractions off.
4. Don’t overdo it
Sure, working hard and working a lot will help you, but testing your endurance limits will get you nowhere. You might think you’re getting a lot by working that extra 2AM to 4AM, but instead, you’re losing a lot the next day.
5. Question everything
Ask people for opinions. Ask everyone, about everything. Talk to hundreds of people. Most of them will be worthless, some will have wise advice, but if you’ll eventually hit one good piece of advice that’ll change your perception.
6. There’s no such thing as easy money
If it’s too good to be true, it probably is. Once you begin working, you’ll start getting offers from various investors, who will ask for unnerving terms. They will basically want to own you and completely lock you out of any future rounds. Don’t rush it, don’t run into the first offer that comes around.
7. Equity over cash
If you want your stakeholders, from employees to advisors to investors, to take part in your company and actually help you out, give them ownership. Otherwise they’ll just act like contractors or paycheck collectors.
8. Administration is a pain in the a**
It’s important, but it won’t advance your product. Make sure you get bank accounts, bookkeeping, lawyers, stuff like that, out of the way as fast as possible!
9. Risk reduction is key for progress
Being a tech-oriented individual, this one was hard for me to wrap my head around. What you need to do is constantly ask yourself what can you do to mitigate your risks as a company and make sure you tackle such activities.
10. Conferences are a double-edged sword
Think long and hard if the conference you want to participate in is a real value booster. If it’s not, then it’s most likely a focus killer. You’re better off working on development, anyway. As a small startup, you’re at inherent disadvantage in conferences, since you’re competing with high-volume companies with unmatchable marketing budgets, and you won’t climb above the noise they create. Avoid most conferences and competitions unless you are invited without applying.
11. Tunnel-vision
Pick one thing and do it better than everyone else. Focus is the most important thing to moving fast and creating something no one else can. Being spread over a number of ideas usually means you’ll get none of them right, so pick one and stick to it, like you have tunnel vision. Though we’ve pivoted away from our initial product that after a few months, in the early days it was clear that we were doing what we did better than anyone else.
12. Keep both feet on the ground
Nobody likes people full of themselves, who can’t seem to shut their mouth about how awesome they are. You need people on your side, and if you present yourself as a self-centred prick, you won’t have many friends. There’s a very small chance you’ll build something out of this world, so STAY HUMBLE.
13. Keep the faith
If Bon Jovi said it, it must be true, right? Always believe in yourself and in your product. There will be times when you (or your co-founders) will have one of those days (another music pun, I’m on fire), start questioning everything. In times like these (and they will definitely happen), you must remember that having faith in yourself and your product is one of the first steps towards success.
14. Don’t outsource your core technology
You must start with a team that has the core competency of building the inital prototype and launch it. If you outsource this you will lose twice. Once for not knowing the innards of your product, which will lead to less agility in future changes. Second - and more important - by outsourcing core product development, you’re exempting yourself from your main responsibility which is to show the work-in-progress, get feedback and to gain learnings about your target audience.
15. User Interface and Experience are a priority
You can always optimize the backend parts of your product. It’s the user interface (UI) and user experience (UX) that will be the bottleneck of development. Make sure you focus your efforts on the part of the product which the user will actually see.
16. Don’t ignore your cofounders
Just because you don’t have any employees to boss over, it doesn’t mean no one is measuring your work, its quality and speed of delivery. Your cofounders are most definitely doing that, and you should be doing it to them as well. It’s completely normal and rational to keep a close eye on them, they are, after all, your choice of partners. I have been lucky enough to have two partners who would, most definitely, jump in a fire for me, and I would do the same for them, but it took some time to build this level of trust.
17. Ask your friends for help
They would do the same if they were you, so don’t be shy. Ask your friends to leverage your social footprint. We’ve received help in the form of product feedback, initial testing, social media love, word-of-mouth, and even office space. This works especially well if you have entrepreneur friends. Entrepreneurs are for the most cases very inclined to help other fellow entrepreneurs more than the average joe.
18. Tel Aviv is a great place to start your company
This isn’t just me promoting business and tourism for my city. Tel Aviv is a great place for a start-up. It has great weather, lots of events, a large IT community and a vivid nightlife to drown your stage fright. The traditional guys will say Tel Aviv is no match for Silicon Valley, but I recommend reading a post by the guys at Buffer who were very content with the time they spent here.
19. Don’t forget to workout
Hey, you’re your own boss now, you make your own schedule. Make sure to place at least two or three workouts in your week. It will help you relax, focus and keep on track. It is also known that physical activity can boost your creativity.
20. Acknowledge the experience
Building a company is a once in a lifetime experience. Enjoy every moment of it, because no matter what you do later, nothing compares to kickstarting your own first business.
For more infomation about SOOMLA's mobile data platform, check out their website here.
