The techstars program is famous and so are Brad Feld and David Cohen. They talked to lots of members and mentors of the techstars program and let them write small articles on different subjects. How did it work out?
What can I learn?
Concentrate on doing one thing good: So you work on your product and want to compete with some big company. What will you do? Provide more features than their product? Nice try, you already lost the battle. Mature products, like Microsoft Office or Matlab are crowded with features. If you want to compete then you should focus on doing one thing unexceptionally great. You don’t have to resources to implement millions of features and you won’t stand out.
Decide and execute fast: What is the huge advantage of startups / small companies against big corps? Agility. If you can decide and execute fast, you should. I saw small companies which had structures like big corps. This lead to slow deciding and executing and killed them, at last. Don’t waste time on bureaucracy and execute now.
You don’t need VC: Some people think that you aren’t a real tech company if you don’t get any VC money. That’s not true. Firstly, you have to understand if you need money and what the implications are. No outside money means more freedom later on. You may start faster at the beginning but it can happen that you build your product, get lots of customers and then get kicked by your VCs and get $100k for three years work.
I’m frankly disappointed by this book. It got great names on and in it but it doesn’t reach my expectations. It’s hasn’t much substance, most tips are superficial. The format isn’t the problem here, other books like Joel’s Best of Software Writing I did a great job in collecting articles and publishing them. No recommendation.
What is it about? Mike Butcher, TechCrunch Europe Editor, writes about lame startup thinking (in Europe). In my experience there is so much truth in this article, it’s a must read.
What can I learn?
Learn about money: Firstly, do you really need outside money? If you don’t want to put most of your money into the idea don’t bother asking other people. If you will need money you should know how much. Furthermore, if you look for angels, look for angels who can help you build your network. Before pitching these investors ideally you should have build some mock-ups or better a product or ideally a product with customers and revenue.
Your company is your product: Don’t outsource your core competency. Do not do it. If you aren’t a product person look for a person how is and make them CEO or learn the stuff for yourself. You should iterate your product and test it often. What do your customer think? How is the user experience?
If you want to start a business, you need an idea and a business model and money. Elizabeth Edwards focuses about the latter. She shows you how to cut your personal expenses, how to calculate your financial numbers and why venture capital isn’t always the best option.
What can I learn?
Is your business profitable? Before starting your business, you should check if your business model can generate enough profit. How high is your initial investment and how much does it cost you monthly to operate your business? The next step is to calculate your profit on this basis. How long does it take you to break even, i.e. you aren’t losing money anymore? You should reject your idea if it will take longer than two years.
Capital can be expensive: Before you are going to look for venture capitalists, you should think about your need of outside capital. If you can do it alone, go for it. If you can’t do it without outside money, she recommends you to thoughtfully calculate your costs. Don’t forget to include your opportunity costs for searching investors.
Know your metrics: A business runs on numbers. You should monitor your industry key metrics (e.g. page impressions for social sites) and of cause your ordinary indicators like sales, costs and profit. Even if you aren’t a numbers person, learn how to read your key numbers.
This book is an accumulation of tips but lacks the explanation of why you should do they. This is a bit of a downer. The good parts of Startup were clearly the financial and legal knowledge. If you start your business in the US this information is possible pretty valuable. Lastly, besides of the financial and legal advice most advice is out of other books like Made to Stick or Business Model Generation. I would recommend reading those, if you want to deepen your knowledge.
I read The Art of the Start about two years ago and this lecture is a really good refreshment. It is funny how things changed. Two years ago I thought that engineering is the hardest part and didn’t understand that selling fixes everything.