I’m working for a mid-size startup and have been gathering insight into successful startups for a couple of years. Here is what I think is important.
Create value. Make sure your idea actually creates value in the world. Lots of value. It should conceivably be useful to many of people, and it should conceivably be of significant value to them. Value means your product would be important enough that, if forced to, they would give up other things in exchange for it.
Don’t focus on monetization. Startups are subject to all sorts of counter-intuitive economics; it’s unrealistic to plan exactly how you will make money. Make sure you’re creating value, and check that there’s nothing that would prevent you from ever collecting any of that value. Then go back to creating value.
Iteration beats brilliance. The speed at which you iterate is more important that the brilliance of the initial idea. Trying out a product in the real market is an experiment: the feedback your receive entangles your startup with other players in the market. Each experiment steers you towards a local optimum. To win you need (1) to start in the general vicinity of a good local optima and (2) rapid convergence to that optima.
The quality of the team is key. Early stage investors invest largely in the perceived quality of a team, and so should you invest your time alongside great people. An early stage startup should never hire consultants (wrong incentives), should never live in different cities (bad communication). Entering into a startup is like a marriage: it’s very hard to get out.
Choose investors cautiously. You’re also “married” to your investors on the day you sign a term sheet. Pick ones that you trust, that share your goals, and that can help you in ways other than by providing capital.
I’m working for a mid-size startup and have been gathering insight into successful startups for a couple of years. Here is what I think is important.
Create value. Make sure your idea actually creates value in the world. Lots of value. It should conceivably be useful to many of people, and it should conceivably be of significant value to them. Value means your product would be important enough that, if forced to, they would give up other things in exchange for it.
Don’t focus on monetization. Startups are subject to all sorts of counter-intuitive economics; it’s unrealistic to plan exactly how you will make money. Make sure you’re creating value, and check that there’s nothing that would prevent you from ever collecting any of that value. Then go back to creating value.
Iteration beats brilliance. The speed at which you iterate is more important that the brilliance of the initial idea. Trying out a product in the real market is an experiment: the feedback your receive entangles your startup with other players in the market. Each experiment steers you towards a local optimum. To win you need (1) to start in the general vicinity of a good local optima and (2) rapid convergence to that optima.
The quality of the team is key. Early stage investors invest largely in the perceived quality of a team, and so should you invest your time alongside great people. An early stage startup should never hire consultants (wrong incentives), should never live in different cities (bad communication). Entering into a startup is like a marriage: it’s very hard to get out.
Choose investors cautiously. You’re also “married” to your investors on the day you sign a term sheet. Pick ones that you trust, that share your goals, and that can help you in ways other than by providing capital.