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Was talking with my oldest over coffee. She& #39;s taking business classes at University.
Summarizing the principles for success we designed in our startup business that we launched 20 years ago.
Doesn& #39;t seem that long ago....but it was 1/?
Summarizing the principles for success we designed in our startup business that we launched 20 years ago.
Doesn& #39;t seem that long ago....but it was 1/?
First principle was to pick a rapidly growing market. Following @pmarca ideas that the most important thing is a rapidly growing market that has legs of sustainability. Important to have a good team and product also, but pick a good market. 2/
Next is to make sure the founding organization has what I call the tripod of success. A technical person that can implement a solution, a salesperson to get business, and a finance person to manage the money.
It& #39;s amazingly hard to hire a good and experienced business development person who understands sales process, marketing, and can face to face move the deal along and close it.
Good sales people won& #39;t work for a startup. A founder has to have business development experience.
Good sales people won& #39;t work for a startup. A founder has to have business development experience.
It is possible to find a good salesperson if you look in an adjacent industry that sells to the same customer base and you can find a junior salesperson with about two years of experience that is unable to get the bigger customers because of senior sales people.
We built a business with a combination of product and service sales. To me that& #39;s the best combination, cuz it moves away from time and materials based consulting and toward fixed price for results.
Do the same thing repeatedly effective dollar/he price can get pretty high
Do the same thing repeatedly effective dollar/he price can get pretty high
Need to have a technical person who can learn and implement the technology in the way that it& #39;s needed at the customer. Doesn& #39;t have to know anything, but needs to be able to learn and get really good at the solution the start up the selling.
When talking to customers, don& #39;t ever say anything that they ask to do is easy. Nothing is easy. Tell them that you can provide a solution because you& #39;re very experienced at it, it is straightforward because of that experience, and that& #39;s what they get when they buy from you
We made so many mistakes when we started. Fortunately we were in a rapidly growing market, so those mistakes didn& #39;t sink us.
For the first couple years we didn& #39;t ask for customers to pay 50% up front. The more successful we became, the less cash we had!
For the first couple years we didn& #39;t ask for customers to pay 50% up front. The more successful we became, the less cash we had!
When we were successful in one area of solutions, the customers would ask us to do other areas. Naively, we said yes. Don& #39;t do that. Stick in the one focused area and become really good at that. Cuz every time we strayed from that we lost money
Don& #39;t chase growth for growth sake. When we got to 15 people we needed to add a layer of management. We lost money the next year and had to work to grow past that. Would have been better to stay below 15 people and build up retained earnings for a while
Started the business in a new market where we knew nobody. That was really dumb.
Figured out later the best way to do it is to leave the existing company you& #39;re at in the same market so you immediately have all sorts of customers available that you already know
Figured out later the best way to do it is to leave the existing company you& #39;re at in the same market so you immediately have all sorts of customers available that you already know
We picked an s curve market at the very beginning of the rapid straight line growth. Held on while the s curve market was tailing off, and noticed we were becoming a lot less profitable.
Cut costs, focused, worked for a while, but couldn& #39;t fight the s curve
Cut costs, focused, worked for a while, but couldn& #39;t fight the s curve
One big thing we did right was to realize the situation we were in, and prep the company for sale. Sold to a larger organization in the same market who took the best of what we did and integrated into their operations.
Told my daughter if she wanted to write a book that my former business partner and I would be happy to sit down for interviews and tell stories., But it would take a lot of interview sessions to get all the information in :-)
Growing the company from two people to 60 over the course of 14 years was a lot of hard work. Tough days and nights, while at the same time my wife and I were raising four kids. For six years straight we had two children in diapers.
Five years ago we sold the company. The memories of the experience fade and I remember all the good things about starting growing and owning our own business. There was a lot of good things
One of the things that was most fun was hiring inexperienced people and showing them how to be successful.
Another was being able to build an organization in our image with our values.
Another was being able to build an organization in our image with our values.
Would I do this again? Yes I would, but only in the right market space. That was the biggest lesson I learned: pick a market that is getting ready to explode and has legs.
