“70% of statistics are misleading.”
I have always loved that line. It’s really apropos when it comes to learning how to build a startup.
Before you read any further, view everything you read below with a skeptical eye. Balanced skepticism is an awesome trait. I am not a brilliant coder, visionary, nor am I in danger of making the world a better place or solving world hunger. I am a 49-year old, former SEAL without a college degree who has been an entrepreneur, 6 x startup founder, investor and VC, but more importantly – someone who has made more mistakes in business than the average person. And I mean costly mistakes. Big, bold, juicy mistakes –lots of them. Just know that we are all flawed human beings. What we humans write on-line, images we post and “the person” we present on sites and in books – is what we want everyone to see us as. I don’t know a single successful entrepreneur who hasn’t had some tremendous flame-out, crash and burn companies in their past. Take advice about how to build your startup with that lens in mind – we are all knuckleheads on some level, flawed humans -not Gurus.
The Internet is an amazing place to learn about everything you would want on technology startups. There are books, blogs, magazines, videos and a treasure-trove of “guru’s” dispensing wisdom on how to successfully build your startup.
Some of it is absolutely awesome. A lot of it sucks and is irrelevant to your startup.
There are hundreds of ways to build a startup and there is no “magic formula” that will guarantee success –it doesn’t exist. By the way, there is nothing wrong with building a profitable services business either – it may not be as sexy as a commercial product technology firm, but hey – it makes more people millionaires everyday in this country than any other type of business combined. Just know your exit multiple is tiny and you are subject to small margins and the whims of the economy. That is not what I do though. So I have no business talking about it. I focus on investing in, and building commercial cyber security, Big Data and Analytics startups. That is what I do. It’s what I chose to do after founding, investing and helping a bunch of companies myself. Don’t get me wrong, I have experience in building services companies as well – I built a large private defense firm over 9 years with over 6000 employees. I learned a lot from it. I made massive mistakes.
Back to the point I am trying to make – I meet founders everyday of the week who are looking for that one magic nugget of advice that will make or break their startup. It doesn’t exist. I always tell them “half of what I tell you will probably be of no value to you, the other half is from my experiences -and that might not be relevant either”. Why? Well the truth is that just because something worked for me in the past or some other startup founder –doesn’t mean its right for you and your startup. There are so many things that need to go right, that it’s easier for me to tell them what I did wrong (although that is a long list as well).
3 out of 5 founders I meet today ask about “Lean Startup Strategies” and think that throwing startup terminology around is somehow what founders are supposed to do. I think Lean Startup has tons of benefits, but so does bank robbery. Both can make you successful with good timing, luck and proper planning. Probably a bad analogy but you get my point. Neither one is a guarantee.
Getting your startup from Seed funding to A round is a proverbial minefield. You don’t know what you don’t know – I have been there. However, gorging your mind on internet startup advice and espousing the latest company-building trend does way more harm than good. Get good mentors. Learn all you can, but ultimately you have to focus on the tasks at hand and stop trying to adopt every new strategy you read about. There just isn’t enough time and time is your enemy.
As my friend, fellow DataTribe co-founder and Allegis Capital founder Bob Ackerman says – “there are two ways to get through the startup Minefield. A – by braille, which I don’t recommend, or B – get a map”. Easier said than done – I know. A map starts with the right advisors and mentors. Who you surround yourself with. People who have done it before. Built technology firms –RECENTLY, not 10 years ago, but in the last few years. Preferably in the market or industry you are going after.
Everyday I see commercial technology startups in DC/VA/MD that have 5-7 retired senior DOD or Intelligence Community members on their advisory or directors Board and a few local prominent lawyers or real estate tycoons as well.
Disaster. A hot mess. A Goat-Rope (a SEAL team term that means all F’ed up). These would be the perfect candidates if your building a Government services business, but dear God, not a commercial startup. That would be akin to asking me to advise a Med-tech or Ed-Tech startup. Bad move. VC’s pay close attention to who you have around you whispering in your ear. It matters more than you think.
As a seed round startup, you have to be real careful about everything you do from day one and that includes whom you are getting advice from. Do not make everyone who gets excited about your startup an advisor. Don’t add Board Members until you need to and resist giving Board seats to early Angel Investors just because they put in $50K. Take your time, ask tons of questions, read all you can –but ultimately, your path will be mostly unique – so the best advice I have is don’t follow the latest startup trend, bro-programming method or new lingo -just jump in the ring and start building. Take all the advice you can, but quantify and qualify the advice.