There are plenty of articles out there that will try to teach you what it takes to start up a company. Please excuse any lack of instructions here as it's all from the heart. If you learn at least one thing new, or even question the current way you're running a startup, I consider this article a success.
There are many phases, as I would like to call them, that you need to go through for a startup. The number of phases is entirely dependent on starting capital and ability to execute. Each phase might be slightly different depending on the industry, experience, starting capital, etc. Our experience was fairly straightforward:
Phase 1: Be scared.
If I had to name the singlemost important skill, something that keeps everyone else from doing this crazy thing, it has to be courage. Or, the contra to that, would obviously be fear. Fear of no paycheck, fear of rock bottom, fear of the poor house, fear that my kids will starve. All of those need to go through your mind before you can move onto phase 2. If those ideas never popped into your mind, you aren't ready. Or worse... you're a VC. In either case, please stop reading. If you are a VC, jokes on us, please direct emails to love_funding (at) lolay (dot) com.
You need to have the courage to get past whatever it is that's stopping you, and jump off that proverbial entrepreneurial cliff so you can learn about yourself as a person. This phase is a lot easier when you have an awesome partner to go through it with you. By awesome I mean: Someone at your skill level or better, someone who is willing to put the same amount of time or more, and someone who can deal with your crap. That last part's critical, because it's very similar to a marriage; you get to keep half, and the kids [the idea] ultimately stay with one of you when you separate.
Phase 2: The idea.
Ok, so the idea was really there before Phase 1. I'm proud that you're catching on, but of course, there was some big idea that filled your empty time, that's what has gotten you through some tough days at work. However, prior to this moment, the idea was merely as a stretch goal. Something you could see yourself doing. It was never tempting enough to quit a job, or even take that less demanding job so you can really focus on the idea. This is the part where your addiction takes on a new shape.
The idea isn't the hero, you are. What do I mean by that? If you're stubborn and unwilling to see the idea morph and change based on needs, capital and demand, you're wasting your time. You sort of feel your idea taking over your every day thought process. When you speak with friends, you are only trying to learn more about how you can refine your idea so it has less holes. When you talk with family, all you can do is tell them about your idea...again.
Case and point: We started off with the idea of creating a social monetization platform that learns how consumers behave and helps them make the best choices depending on the time of day, previous tastes and ads they have really enjoyed (clicked on). Been there, done that (call us for more info). We soon realized it was the amount of time, energy and convincing (ourselves) we had put into this platform that made it important intellectual property.
It was incredible learning from it, but what we are doing now is 180 degrees different. Let's just say we are building the coolest mobile experiences for the greatest companies in Los Angeles. Being dynamic is critical to your livelihood and your sanity. If you are stubborn, you will fail. If you embrace change, it might make you a better person (as Gary puts it).
Phase 3: No sleep.
This is your time to shine. Can you look your wife in the eyes if you didn't give today 100%? In startup mode, you can't even look yourself in the mirror without giving 120%. We were working 100+ hours a week on slow weeks. My longest day ever was probably 24 hours straight of no sleep. I tried to sleep, but kept thinking of the big idea.
One major lesson learned: If the idea doesn't keep you awake at night, you either don't have a good idea or you don't believe in the idea. You better question your decision-making skills on Phase 1! Yah yah, you might have had a pushy partner that shoved you through phase 1, but why did you listen?
I remember having a meeting one morning at 9:30 AM in Malibu. We were typically working until 3 AM most days. Gary and I looked at eachother with our week-old beards and said: "Coffee?"
Mental note: Those are the fun days. After years of employment, management, analysis, and top-down pressure, we realized that creating is still the most attractive piece of this entire puzzle.
Phase 4: Go to market
Your baby is launched. It's live! You've made it, right? Think again. You need to acquire users, credibility, exposure and set your brand apart so journalists don't ask: "Oh, it's like that other app that does X, Y, Z?"
You will spend a lot of time following tweets, analyzing metrics and taking customer feedback. You will tweak your idea, refine, redeploy and have meetings to discuss the next iterations. You may even get lucky like we did and have some dough to spend on advertising. Great idea, let's blow thousands of dollars on banner ads each day... definitely lack of sleep.
Your family will likely stop answering your questions, and your wife will still completely support your intentions (oddly). All the meanwhile, the clock is ticking and you need to get past Beta so everyone in the world can enjoy your big idea.
Phase 5: Wait, we ran out of money? s*#@!
Oh no, the big idea took too much time to build. This happens, ALL THE TIME. The greatest ideas take time to execute correctly. It's all about your reaction and ultimate decision that will make or break you as an entrepreneur. In our case, we decided to bootstrap. We really believed, and still do, that we can run on lean cash flow and make something without the extra investment that would dilute our ownership. Every story is different, and I'm sure I can write an entire article on that decision alone.
Getting back to the topic at hand, what do bootstrappers do when they run low on capital investment (from their own checkbooks)? They help friends and colleagues achieve their goals for a little extra cash. We decided to commit some time to consulting so we could generate revenues that could be piped to our internal projects.
The decision was very simple: Take funding or consult and still retain 100% ownership. We decided we were very passionate about helping our colleagues in the same space, while also building our own confidence, and show that we can really kick ass when we aren't figuring out how to feed our families (Maslow's hierarchy of needs).
Phase 4.5: Getting back on track. Yes, this is phase 4.5, especially since phase 5 wasn't supposed to happen.
If you took investment money, you may pass go. Please don't read this next section as this phase is for the boostrapper-minded.
We got a little off track helping others succeed in the mobile game. I think the best way to illustrate this point would be through some Q&A:
- Do we regret anything? No, we learned more than we expected.
- Are we excited still? Yes, the market is still hot and ready for disruption.
- What are we waiting for? Downtime, mostly. We spend 95% of our time on customer service and delivery.
Gary and I are entrepreneurs, no doubt about it. Since day one, we have sacrificed family, our significant others, kids, dogs, career path, finishing grad school, and many opportunities that would have been great learning experiences. We have battled house floods, Grave's disease, Gout, and created poor credit scores. I wouldn't change any of it for the world.
Someone asked me the other day: How do you know you've made it as an entrepreneur? Quite simply, the day you believe you've made it is when you stop being an entrepreneur. Keep running, improving, changing and creating...