Pro Tips When Starting Up
I finalized my notes for the ODX Accelerator program, the early stage accelerator I am building at On Deck, and I wanted to summarize here. I love the start of programs, when teams are excited – all at the earliest stages of company creation. Running accelerator programs, investing in startups, and working directly with founders is exactly what I want to be doing with my time. Below is my list of “pro tips” that I have found useful throughout these kickoffs. My best caveat is that I am an N of 1. Please go get 9 other opinions, and make the best decision for your company. This is not an exhaustive list, but rather what I surface at the “beginning” and spend some time on. The best part is that I have had countless follow up conversations and DMs getting to know founders.
#GBTB – Get Back to Building (seriously)
This one has come directly out of building the accelerator at On Deck for the past few months. It’s a call to arms to literally get back to building your startup. Everything and anything can be a distraction, and so this is front and center. If you are about to go, or already walking down a path that is taking time and energ,y a helpful question can be “does this get me back to building?“
Build the muscle memory of saying “no”. Its not easy for nice people who want to share their time (trust me I am one of them). Communities abound, slack groups and discords everywhere, and everyone wanting to always “catch up” this is a way of getting back to work. There will ALWAYS be more people pontificating on Twitter, it’s time to get back to building.
Get in the habit of sending out a note to your investors and supporters. If you are in an accelerator, weekly is the right cadence. Get organized for the week. Say what you are going to do, then do what you say. It’s just that easy (and that hard).
“Did you see this?” Buckle up for all kinds of people sending you articles and links about what else is happening out there. Competitor fundraises, product launches, similar businesses (totally DIFFERENT businesses!). My suggestion here is simple; create a new google spreadsheet called “Competitors” and cut and paste the links and notes in there. This is a way to get things out of your head and into the sheet, and allow you to say “yes, thank you” and move on. I don’t know of anyone that benefited from spending time on what a competitor was doing vs. what they need to be doing. Competition is great – for consumers. The best place to see competitors is in the rear view mirror.
Here is a link to a competitor spreadsheet you can make a copy of.
Did I just make a google doc with 3 columns named Company, Link, and Notes? You are absolutely right I did. Now make a copy and #GBTB.
Create a simple lightweight email list system – like MailChimp – and let people know “I am excited to keep you informed about our progress.” Then add them to the list. This is a great place to send material updates, keep people apprised of what is going on, and stay top of mind.
This is a great way to keep yourself top of mind. Investors, friends, family and similar conversations can be kept in the loop by a simple email list. If people unsubscribe that is on them. Founding a company is a lonely game – bring some people along for the ride.
Form a Kitchen Cabinet of advisors
I have written about this before. This is a group of people you would “break bread” with in your kitchen. Think about the people you could have over at 10pm and help you work through a gnarly problem. If the president has a cabinet, you should too. Lean on these people and make sure they know their role in your world – people appreciate it. Things get tough – who is there for you when they do?
I have been writing about advisors a lot. I starting thinking about advisors in 2009 publicly. Then I published what I was sharing with people privately in 2016 about early stage advisors for startups. Understanding someones impact today, tomorrow, and in the years to come is critical. What equity you give early stage advisors matters. In both articles I articulate that you should have them, what you should give them, and how to think about them.
The net/net is that early advisors who can 10X your business should formally be involved, usually with equity and sometimes with investment. I do not have a hard and fast rule about advisors investing in a startup but its nice when there is alignment. Having advisors invest in your company and vesting into early stage equity is a powerful combination.
Get a pulse of what is going on, and who the people are. I know that in 2021 (and for some time) that things are moving extremely quickly. I don’t know how I feel about some of these shotgun weddings and how fast fundings are going. I am perhaps guilty of this myself (after all I run an accelerator that makes decisions fast) but I think relationships matter. BOD members matter. When things are going well you learn a lot about people – when things are going poorly you learn a lot about people. Starting a relationship is always a good idea.
Hiring takes longer than you think. Similar to fundraising, you never know how, when, or where a candidate can come from. I love to look at founder calendars to calibrate how important hiring is to them. Working with people you trust and respect is everything. Coming across someone at an event, recently in a new job, or something else can yield a long lasting relationship – you may end up hiring them 2 years later. Start a candidate pipeline now. I love kickoff a brainstorming exercise which is to figure out who you need to hire in 3, 6, 9, and 12 months because it always takes longer than you think.
Cashflow + Bookkeeping
I like to look for competency of modeling vs. accuracy of prediction when I look at early stage forecasts. I wrote about my thoughts on early stage financial modeling in great detail. My favorite tool to point people too is https://foresight.is/ and help people figure out their books early. Its not a fun task for some, but the brainstorming and thought process behind it is well worth the time. Human brains are not wired for exponential thinking (see: COVID) and thinking about cash burn, and cash earn is an exercise in training your brain to understand hyper growth. This isn’t about spending money, its about having money to spend.
“If you have money, you spend money”
I have heard this quote from many, and I think I first heard it from Fred Wilson at USV. He used to show examples of this time and again. This is my version of Parkinsons Law which says “work expands so as to fill the time available for its completion.” – which means if you setup a 2 hours meeting, its going to take 2 hours. I think the same is true for funds raised – perhaps this is one of Friedmans Laws – Funding will be spent based on the funds that were raised. I saw this first hand when I was running the early stage program – some companies raised double the amount of others, and they all spent at the same rate.
Get bookkeeping sorted out sooner rather than later
I have been on the other side of cleaning up a bookkeeping situation as a fractional COO too many times. Its great as a paid mercenary and terrible from a CEO perspective. Its a distraction to cleanup a tax, payments, or reconciliation issue. Get this figured out early and go faster.
Since this can’t be said enough, I will say it again here, go out and talk to customers. Buy them lunch. Give them a gift card. A/B test this method against giving them nothing. Ask for intros. Talk to friends. Battle test your assumptions until you think are done. That usually means you are about 1% of the way there. Talk to more customers!