Reflections on founding a company

Team at UniteLabs before the Corona-Times

Don’t start

If you need inspiring words, don’t do it — Elon Musk

There are many inspiring articles out there to encourage founding a company and why you should start one even if you don’t feel capable (a gem from Paul Graham). While I agree that it can be an excellent choice for some people, I think it helps to be aware of the potential downsides — and if these discourage you, great: Then maybe you shouldn’t start a company at this point. I don’t think that fairytales and wishful thinking help anyone; embrace reality and deal with it.

Are you ready?

Whatever problem you are trying to solve, I think you should be passionate enough about it to work on solutions for the next 5–10 years at least! Many people, including me, were not aware of the time needed to get a company off the ground — so think hard about what will make you stay for such a big part (or even most of) of your life.

  • You are a customer of a solution, or you could be one in the near future
  • You had a job and worked in the customer environment
  • You work on projects with potential customers where you learn about the problems

The Work

Source: Paul Graham via andrewchen.co

Fundraising

As mentioned in the first article, I don’t have too much experience in looking for investors — but of course, it’s a topic that will come up eventually for every entrepreneur, even if they decide against it.

Photo by Austin Distel on Unsplash

Lean Startups

The best minds of my generation are thinking about how to make people click ads. That sucks. — Jeff Hammerbacher

I have a bone to pick. The concepts of the lean startup movement about producing quickly testable hypotheses and validating them with quickly built and cheap Minimal Viable Products (MVPs) are undoubtedly valuable. But I feel they lead many people to focus too much on pleasing customers as quickly as possible without thinking if their business makes “fundamental” sense such that it actually makes the world a better place and brings something novel to society.

“Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. — Steve Jobs

Another problem I see is the missing focus on the market dynamics of the industry you are entering. Will you be able to focus on a niche market and build a monopoly? (The Zero to One approach) Is the innovation an incremental improvement with incumbent competitors, or does it have disruptive potential? (Understand innovation dynamics from the innovator’s solution) You should have a hypothesis about the customer’s needs and the market involving potential solutions — and this hypothesis should run deeper than just a list of competitors on a lean canvas.

Closing

Many people I know have a pretty deep personal identification with the business they are running — if something fails, it feels like you are the one failing. This is probably natural and fine up to a point. Still, I also advise you to regularly think about what the company represents and how it works as an organizational organism without you.

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