For the past year or so I have slowly been getting my new business off the ground. This time I am taking my time with it doing it solo on the side while maintaining my full-time position at Princeton University. I spend some time every week throwing down code for a couple of clients and in between working on a couple of apps that I plan on releasing eventually.
Entrepreneurship is like a chronic infection – once you get the bug you usually have it for life. I definitely have the bug and have always enjoyed the fun and challenge of growing a business.
Recently while reflecting on past startups I had been involved in I caught myself in one of those would have, could have, should have moments. Fleeting thoughts about all the things we did right or wrong, things I would have done differently with the benefit of hindsight etc.
Even though every startup I was involved in was different, I came up with three simple guiding principles that should apply to every startup. While I can’t guarantee success, these values are some pretty basic cornerstones for an entrepreneur.
Control Your Burn Rate
A common theme at the startups I have worked for is that those that get funded tend to not be as conservative with spending as they should be. Spending too much on things like furniture, computers, phones, etc. Ancillary items that increase your burn rate without necessarily benefiting the core objectives.
When I first started at Inforocket back in 1999 we actually did everything as cheap as we could. Our chairs were simple cheapo chairs – some of them even metal folding chairs. Our development team worked at a big shared table (pictured above) that was made with saw horses and wooden doors bolted to the top. Our office PC’s were assembled by our team from components we bought in bulk. Everything was done as cost efficiently as we could.
As the company grew we eventually closed a second round of funding which we used to bring in some new hires. These folks came from more established businesses and were accustomed to deep pockets and nicer digs. With this we lost our discipline. In came the Herman Miller Aeron chairs, fancier desks etc.
Sure these things are nice to have but when you are an early-stage startup focused on getting the most out of your initial investment capital these things are not worth it as they do not directly benefit the goals of the business.
Save the money for the essentials.
You’d think most people would understand the concept of not over-selling themselves but sometimes the zeal of bringing in the business clouds better judgment.
Want to kill your young business fast? Promise something you can’t deliver to a customer and then string them along with excuses. Watch what happens. In the era of social media you’ll be dead in a matter of days.
This is yet another lesson I have unfortunately learned firsthand. Back in 1998 I was a co-founder for a small web development company called Fourth Degree Media Group. We were four friends with a small startup and we landed our first big client – a business that published continuing medical education (CME) materials for doctors.
We promised the client this full-blown ecommerce site where doctors could order materials, do online quizes, and get CME credits, etc. Problem was none of us had ever implemented an ecommerce site before. While we had a substantial amount of web development experience, we did mostly B2B or product marketing sites. We did not know the nuances of shopping carts, SSL certificates, security, etc.
Needless to say this was a huge failure. We wasted months of the client’s time, months of our time, and in the end we ended up giving them the money back and dissolving the business.
In retrospect the better way to handle the situation would have been to bring in help to meet the client’s needs or to ask the client initially to split the project with another shop who might be more well versed at the ecommerce implementation details.
Simply put, don’t promise the moon unless you can deliver it.
Last but definitely not least, you will probably not be successful in business if you are not passionate about what you are doing. I am sure there are some exceptions but in general your passion for what you do has a great deal of influence over your work.
I find that people with a passion for what they do will work harder at it, produce higher quality work, and don’t burnout as easily.
This is something I have really seen a lot of while working at Princeton University. Some of the scholars I work with love what they do so much that they do work from home on their days off and sometimes work on the weekends despite no pressing deadlines or pressure. They simply love what they do.
This passion for what we do also makes us better at what we do. As a developer I am constantly on blogs, mailing lists, etc. I enjoy reading about what others do, discussing with my peers the best (and worst) practices and sharing our “war stories” – this is all part of bettering myself. And there is an element of competition to in that you don’t want to be the guy among your peers producing the poorest quality work.
The moment you no longer enjoy what you are doing, it’s time to find something new.