Tough Love Advice for Startups
In honor of Valentine’s Day, I’ve compiled a list of advice most commonly ignored by startup founders:
1. Your friends will lie to you. If you’re taking the Lean approach to building your startup and you’re actively conducting customer discovery interviews, don’t interview people you know. Why? Because people you know will lie to you. Not because they want to, but because they don’t want to hurt your feelings or the friendship. Or both.
Interview strangers who are representative of your potential target market. They will tell you the truth and save you development cycles.
2. Discuss with your significant other BEFORE pursuing a startup. Startup founders have the loneliest jobs and not having the support of their significant other can put a strain on the relationship and the business. Startups can also put a strain on the family financials. An honest discussion about the risks and setting time frames is key to maintaining harmony on the home front.
3. Choose your co-founder carefully. Choose a co-founder with complementary skills and world view. Too often, startups are co-founded by college friends or room-mates and little thought is given to compatibility in skills, management philosophy, life goals, etc. The size of the variances in these areas can make or break a startup’s chances for success. There have been more than a handful of promising startups that flamed out because of founder disputes and in-fighting.
4. Choose your investor(s) carefully. The closing of a round of funding is just one step in a five to seven year relationship in the best case scenario. You and your management team will be married to your investors until the company finds an exit or you are asked to exit. If you are in the position to choose, here are some criteria by which to evaluate potential investors: industry contacts and expertise, domain expertise in your product category or business model and reputation among your peers.
Notwithstanding, those on your board are there to protect their investment and hold you and your team accountable for the company’s performance. Selecting the right investors will enable you more flexibility in finding the path to viability.
5. Don’t hire family. I have seen very rare cases where this has worked out. Hiring family members carry with it the taint of nepotism; even when the family member is well qualified. It could affects overall morale in an already high stress environment. If you have to engage a family member to conserve cash flow, let it be the last resort and only for as long as it is necessary. The potential blow back among team members can be more damaging.
What else? What are other pieces of advice that startups need to heed but don’t?