Starting Your First Company? What to Read When You Don’t Know What You Don’t Know
When I first started my company, ToVieFor, I did not know what I did not know. I came from the finance world and I just thought that you:
1. Find an idea
2. Pick a name
3. Incorporate your business
4. Build a website
5. Sell your company for $1 billion…
So I put together a package of materials below – books, blogs, specific blog posts, and people to follow on Twitter – that I wish I had before I began working on anything at all. So, if you are thinking of starting a company and you *just* need a technical person to build your website for you…STOP, just fucking stop it. Take a few days, read all of the below, take it in, and then go learn how to code. At least then you just might know what you don’t know.
Step 1: Can You Even Hack It As An Entrepreneur?
Step 2: Have an idea for “the Next Big Thing” but want signed NDAs before you tell anyone? OMFG. Just. Fucking. Stop. It.
Want to discover what your “amazing” idea is worth? Read this.
Ok, so maybe your idea is kind of okay. If your idea were to become a successful business, can you see yourself doing it for the rest of your life? No? Then don’t start it. Read The Monk and The Riddle instead (suggestion courtesy of my good friend @jasonlbaptiste) and go back to the drawing board.
Step 2a: No idea? No problem.
Practical solutions for finding an idea from the ever-popular Chris Dixon.
Step 3: Do you know how to code? No?
Do Not Pass Go. Do Not Collect $200. Read this.
Step 4: Got Co-Founders?
Great. People actually want to work with you. Maybe even for free! You get a sticker.
Step 4a: Incorporate.
Debating between an LLC or a Corp? Do not be cheap, hire a good lawyer, and form an S-Corp. If you never plan on taking a dime of money from anyone other than your mother – then you can form an LLC. Explanation here.
Step 5: Get Traction. Find Product-Market Fit.
So this section could be an entire series of detailed blog posts. In fact, this section could be (and is) stacks and stacks of books on the subject. But the point here is just to get you on the right path in the way you think about building a product and getting initial traction. This list is in no way, shape, or form complete or all-inclusive.
Start by reading Steve Blank’s Four Steps to the Epiphany, or better yet, the Entrepreneur’s Guide to Customer Development (which is basically the Four Steps to the Epiphany in fun, bite-sized pieces).
Next, add startuplessonslearned.com to your RSS feed (I heart Eric Ries).
Third, in your quest for world domination, your goal is not to get a million users. Your goal is not even to get 100,000 users. Your goal is to get your first 1,000. Vin has a good post on this here.
Step 6: Raise Seed / VC Financing (notice, this step comes AFTER you build a product).
Raising money from VCs and seed investors is just like dating. I Repeat: raising money from VCs and seed investors is just like dating. All you need to do is remember this whenever you are interacting with any investor and you will pretty much understand how to react to any situation thrown at you.
How to Pitch a VC: Suster has a nice little package of blog posts on this here.
Once you get a term sheet, you will need to familiarize yourself with all of the terminology and financial machinations of VC and Seed investing, read Brad Feld’s seminal Term Sheet Series. This is not optional reading.
And finally, always remember: when you want money, ask for advice!!
Step 7: Sell your company for $1 billion. Rinse. Wash. Repeat.
Yeah – no posts here. Because this is not what you should be focused on or thinking about. If you get an acquisition offer, great. You probably will not – at least not in the foreseeable future. If you do get an offer, just do NOT say anything along the lines of “Sounds great! I just need to run this by my board!” If you do, then you deserve the valuation you get.
And finally, add the following to your bedtime reading.
Paul Graham’s Essays: The guy invented the modern start-up incubator, Y Combinator, is widely considered a godfather of seed investing, and WROTE A NEW FUCKING PROGRAMMING LANGUAGE called Arc. Read them, all of them. And then go read Founders At Work. You’re welcome.
Suster’s blog, bothsidesofthetable.com
melanie.io (come on, I had to…)
Follow these people on Twitter: