There is a glut of overly optimistic literature giving advice and encouragement on entrepreneurship, innovation, and fearlessness in the face of risk. The advice can be quite misleading due to its authors' success bias, because they represent the tiny percentage of people who have succeeded and are given a voice among the infinitely many more people who have failed. Since chances are against most of us who try, the goal of this article is to offer suggestions on how to build a company and give it a chance to stand on its feet, while spending nothing more than the legal fee to register as a company and a domain name. Hopefully it will afford you more time to try to build your company well.
Bootstrapping: What You Can Expect to Achieve
During the bootstrapping stage, as many as possible of the below milestones have to be accomplished in order to ensure the company is able to survive moving forward:
* A small but solid team has to be gelled and chugging along
* An early version of the product has to be put on the market
* Figure out a way to earn a little bit of revenue in the early stages
* The product has to be gaining some traction
The more of the above a company can accomplish, the better. If none of these are established, there is little chance that the business will become a viable one and the entrepreneur has to take a look at what he or she has accomplished. If, on the other hand, everything falls nicely into place and you are able to accomplish all four of the goals, you may have an incredible new business on your hands that might one day be very successful. If the business is somewhere in the middle, it may be a good candidate for an investment and still have great chances to be successful in the future.
Now we'll go through all the necessary steps, pitfalls and considerations to get on the road to accomplishing the above milestones.
The Beginning: The Value of the Original Idea
You probably had a little laugh at the title of this section. Many first-time entrepreneurs and dreamers live in the hopes of a "million-dollar idea." In reality, it is very rare for an idea to be even remotely close to being that valuable. Only years of top-notch execution, continuous innovation, and very hard work will create value.
No matter your previous background, there are some common pitfalls. Engineers tend to overdo and business people tend to over-plan; not because they are incompetent, but rather because they are hard workers who are excited about the prospects of their ideas and do what they can before the other parts of the business come along. This is often crippling to the company. One of the first tasks is to build a well-rounded partner team and validate your idea. I won't get into specifics of idea-validation here, as Steve Blank does an amazing job of it in his book "Four Steps to Epiphany" which is a must-read for every entrepreneur, but I will discuss how to build a superstar founding team, starting with the differences in approaches in case your background is technical or in business.
What I often hear business people say is, "I am not very technical ..." If this sounds familiar, don't worry, that is understood. Just find a partner who is technical, communicates well, and in whose professionalism you can trust. They will get you up to speed to a level where you need to be.
Engineers tend to jump in and do-do-do. But without a clear vision and direction, they often run themselves in circles, over-building unnecessary or overly-complicated features. For their part, engineers might say something similar to "I don't understand business." I myself have been guilty of such a quote. If I could go back in time, I'd advise myself to listen and learn as much and as fast as I can because after a short while, the business environment becomes second nature, fun and fascinating.
Why You Need Partners
Sometimes engineers who have become confident in the business world can pull
of a start-up by themselves, but most people need partners. Business people always need engineers for the obvious reason that someone has to actually build the product. Engineers need business people and additional engineers because it is just too difficult for one person to write code, go to business meetings, network, deal with legal issues, do marketing, branding, social media, a slew of other tasks, while keeping a clear mind to maintain focus on their entrepreneurial vision.