10 Startup Commandments
“I’ve been in this game for years, it made me a animal. There’s rules to this shit, I wrote me a manual” Notorious B.I.G, 10 crack commandments
This article is dedicated to Ben Horowitz whose book, “Hard things about hard things” has helped me and countless other founders, and whose love for rap music makes him the real O.G.
High-tech startups are complex and unpredictable. There are no recipes for success. A high-tech startup is hard to build, harder to grow and almost impossible to succeed. However, every entrepreneur once they have been in business a few years sees enough problems and patterns to create certain rules to live by. The ones listed below are mine.
Full disclosure before I begin, these rules are in no way complete. They are not binding and for every rule a counter-rule exists. I am at best a semi-successful, middling entrepreneur with no exits under my belt. But these rules are based on my own personal experience in bringing a high- tech startup into existence; in selling to, hiring and raising money from some of the smartest individuals I have ever known.
- Always keep death in mind. Startups are fickle and are powered by the will of the founders. They can unravel quickly and sometimes unexpectedly. Look out for issues that can ultimately kill your startup including new technology, failure to execute, not being able to raise another round, or departure of key customers/employees. Always be paranoid your company’s future and be ruthless in pursuing and solving issues before they kill your company.
- Spread the stakes: Enlist as many stakeholders and well-wishers to the mission as possible. You want to develop a firm base of customers that love you, employees with generous equity who have a strong commitment to the company’s success and advisors who want to help you realize your vision. The more stakeholders there are, the more people there are rooting for your success.
- Raise more money (than you need): The number one cause of startup failure is running out of money. If you have decided to go the venture route and have a choice of raising less or more, raise a bit more than you need and get some peace of mind. Always be fundraising. Know and understand where and how the next round of funding is going to come from.
- Cash rules: Keep a sharp eye on financials and be sure that you are working with up-to-the-minute information. Understand and dive deep into your financials. Trust your CFO but verify the numbers.
- Hire aggressively, fire with speed and empathy: Be aggressive when hiring. Tell the candidate how much you love them. Sell them hard on the company and the opportunity. Be generous in equity. A single great hire can change the course of the company and working for one great company can change people’s careers. Once you have found your golden child leave no stone unturned to hire them.When firing: If you sense that an employee might not work out, fire with speed and empathy. You want to work with people who are not only good for the company but also good for your mental health and that of other employees. If they are causing you extra stress, more often than not they need to go. Be generous in your severance and help them land on their feet if possible.
- Keep control: Keep as much control over your startup for as long as possible. This could mean negotiating an extra board seat during fundraising or giving up less ownership. Remember YOU started the company, YOU are the spiritual leader of the company. Make sure you own as much of its destiny as possible.
- Negotiate with conviction: You always have more leverage than you think. So, whether you’re negotiating with a customer, your investors or a partner, the fact that the other party is at the negotiating table means you have at least some leverage in the situation. Don’t hesitate to use it.
- Be generous and empathetic: A founder has more convictions about their business than anyone else. Sometimes this conviction comes across as a lack of understanding of a contrarian viewpoint. It’s important that you remain flexible and fair in your dealings with customers, employees, investors and partners.Be generous in your relationships. Building a company is a marathon and you will need as much goodwill as you can get. Capitalize on long-term goodwill over short- term wins. Be ready to meet people more than half way when needed.
- Don’t underestimate the value of experience: Founders, especially young ones, might underestimate the value that experienced employees bring to the table. Experience teaches you what can go wrong and what patterns to look out for. In the unpredictable world of startups, recognizing trends early could mean the difference between success and failure.
- Don’t get intimidated by names or reputation: Don’t be afraid to go after that big company or that big name investor. Don’t get intimidated by the big names, big personalities or big bureaucracy. No doors are locked to a person with conviction of beliefs. When you speak with conviction and passion, even the most ardent cynics will listen to you.
Above all, have fun. It’s an absolute blessing to be given an opportunity to bring your vision to life. Despite all the stress and hard work, it is a joyful occupation that very few people get to experience.
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