In order to avoid being stamped with the label of ‘wantrepreneur’, follow my three top tips for founders:
- Stop ‘looking for a technical co-founder’ and go get technical.
If you can’t code, or at least have the initiative to go out and learn the basics, then you shouldn’t be starting a technical business. You also probably shouldn’t have quit your corporate consulting job because you had one too many pints and watched The Social Network one Thursday evening last summer and you figured you have great ideas and who wouldn’t want to build them for you…for free…despite the fact that software engineering and development are incredibly difficult skills that you yourself have failed to master and are thus worth a premium as they are currently in short supply. But forget all that, your idea is so incredible that developers will be begging you to let them build it for you for free right? Wrong.
You don’t need to be a coding genius to start a company, but you should at least understand the intricacies of how your product works and be able to knowledgeably communicate and manage teams of developers to deliver that product. It’s hard to be taken seriously as a founder if you don’t know how your product works, and believe me developers are often the smartest people in the room and will see through you immediately if you try to bluff it to recruit them.
- Ideas are worthless, execution is everything
Nobody cares that you’re in ‘stealth mode’ and no I won’t sign your friggin ‘NDA to meet you for a coffee’! I could literally go and shout your idea on the lawn of Google HQ in Mountain View and nobody would give a flying proverbial. Everyone has ideas, they are worthless. What really matters is how you execute on that idea so stop talking and start building, shipping, marketing, acquiring customers and iterating – everything else is just fluff and hyperbole and most people will automatically write you off as a ‘wantrepreneur’ anyway.
- Venture Capital & funding: Let’s review the basics
When did raising money become the goal over making money? Venture Capitalists are business people and, as such, they are only interested in investing money if it is highly likely that they will make a 10x, 100x or 1000x return on the money they have invested, which is how they – in turn – justify their existence to their investors to raise bigger and bigger funds every five years or so. This is how the start-up ‘Circle of Life’ that we call ‘a start-up ecosystem’ continues to grow over time and doesn’t happen overnight (in so much as VC investment is just one of many metrics to define the success of an ecosystem, however it is far from the only one – just seems to be the one people always harp on about so felt apt to include here).
So, before you even think about approaching any investors, ask yourself – ‘if this was my money, could I prove that this idea is already making money because I’ve built a product people actually want and I can show that people are using it?’ 9 time out of 10, Europe’s best VCs are smarter than you so if the answer is no, don’t bother. If your idea is not designed to make money right away then you need to be able to demonstrate it is a product users want by showing substantial user acquisition prior to seeking out external funding.
Nobody on this side of the pond ever raised serious VC investment without first doing the hard yards getting their product into the hands of their intended users, using whatever means they could afford, and then convincing them to either tell their friends or pay for the service. This idea that someone will write you a cheque for having an idea is a myth. VC is business not fantasy, make sure
By Bryce Keane, Founder and Managing Partner of Albion Drive