A blog by Erica Virtue.
By Arel English.
One of the best things that you can do as a first-time startup founder is to go out and seek advice from others who have done it before. But, how can you tell if the advice you’re getting is any good?
Since starting Vitogo, I’ve talked to investors, entrepreneurs, and developers about business, entrepreneurship, raising money, and pretty much anything else you can think of related to starting/building/running a business. Most people are eager to give advice (even me apparently), especially former company founders. The only problem is that there is a lot of bad advice out there that can send you down the wrong path and even ruin professional relationships you’ve developed. Below is some of the worst advice I’ve gotten:
Bad Advice #1: Quit Your Job, Quit Everything – You Have to Work Full Time on Your Startup
I hear all the time: “No one will take you seriously if you aren’t working full time” or “You won’t get anything done if you aren’t full time.” The bottom line is that whatever you’re working on is likely going to take you way longer than you want it to and may never turn in to anything. Your chance of hitting a wall because money runs out is pretty high unless you have a ton of money saved up. The startup world is a game of attrition to a certain degree, so if you can’t afford to last a long time, you likely won’t succeed. Find a job (or keep your job) so you can pay your bills. Then, work hard to build your dream project. You’ll know when it’s time to go full time.
Since starting Vitogo, I’ve worked a bunch of jobs, including teaching sailing lessons, construction, and working as an extra in TV shows and movies. You probably aren’t going to be in a position to raise money for a long time anyway, so you shouldn’t care what an investor may think about how you’re paying the bills while you start your startup.
Bad Advice #2: Raise Money Pre-Launch, Otherwise You Won’t be able to Raise Money
This is easily the worst advice I’ve had in the past year, and it came from a trusted and successful entrepreneur. The advice was to focus hard on raising money pre-launch, because you only get two chances to raise money (pre-launch or after gaining significant traction), and that since I didn’t have much money, I needed to raise right away.
The problem is, NO ONE who isn’t either family, friend, or a fool will invest in your idea if you haven’t built a successful company before. Even then, it’s typically hard to raise money for an idea. Investors don’t like to lose money (just like most other people), so they want to see some assurance that their investment will give them a return. Not just a return in fact, a really good return.
If you want to raise money for your startup, build a company that fills the requirements investors always say they are looking for: something magical that will make them a billion dollars and make them famous. Seriously though, if this is your first go at things, you’ll have to demonstrate some pretty solid results and potential before anyone will start to take you seriously.
Bad Advice #3: Don’t Start Anything Until You Find the Perfect Team
If you wait for conditions to be perfect, you’ll never start anything. If you have a great idea for a company or product, start working on it today. If it’s really that awesome, you’ll attract awesome people to come work with you as you build it.
If you aren’t a developer and need to be to build your company, you can still make wireframes and other planning documents to show around, and prepare for when you find that developer. Also, once you’re ready to build your product, you have two choices:
The biggest fallacy about waiting for the perfect team is that even if you think you have the perfect team, chances are it’s not perfect, and the makeup of your team is going to change as you progress.
So just start.
Bad Advice #4: You need to work 24/7 365 on your start-up! Everyone else is Working that much!
There is this idea out there that you need to work on your startup constantly. That you should be working all day and night and never take time off. Well, let’s be serious, that doesn’t make sense. You aren’t productive after a certain point, you need a social life, and you have to take days off. You’re going to be smarter, more productive, and get more done if you limit the number of hours a day you work. Also, take at least one day off a week to go do something fun and cool. It’ll make the rest of your week far more productive and fun.
Now, there is an exception here. You don’t want to be the critical path in your own business, so make sure that no one is waiting on you before they can move on with whatever they’re working on. Sometimes, that does mean crazy hours and long stretches without a day off, but seriously, find the time to take a break.
So, yeah. Take some time off. Enjoy yourself.
Bad Advice #5: Apply for Accelerators, you Gotta Apply!!
Ok, hear me out. There are a lot of accelerators out there these days and applying to them takes a huge amount of time, especially if you make it far along in the process. It can also be a huge distraction for your company and team. You should be focused on building a great company, and part of that is pushing forward quickly and making big decisions. You wouldn’t want to hold off on signing a lease on office space because you might get into an accelerator, or count on money that likely won’t come. You also wouldn’t want to build a great network in say New York City, then move your company to Philadelphia to join some accelerator that let you in.
The other big consideration is, what are you going to get out of the accelerator? Is it worth the 6% – 10% you’re going to give up in order to get three months of office space and $16,000 – $20,000? Remember, 20K isn’t actually very much money. You can make that on the side. Is the connection to ‘mentors’ you may be able to just call or email yourself worth the equity?
I’m not saying that being in an accelerator isn’t valuable. I’ve never been though one, so I don’t know. I’m just saying that you need to weigh the opportunity cost of applying, considering that you most likely will not get in.
Bad Advice #6: Don’t Bother Incorporating or Worrying About Legal Stuff
So What Now? I Shouldn’t Talk to Anyone?
You should talk to lots of people and get tons of advice, just take it all with a grain of salt, and really think about what’s going to be best for you and your business. There are a lot of smart people out there with a lot of great experience to share. Just remember that everyone’s experience is different, and what worked for one person won’t necessarily work for you. Also, remember that things change really quickly, so someone who hit it huge a few years ago may not have the best advice for today.
Finally, remember that I’m just another jerk who could be giving you really bad advice. So, keep that in mind.