Ah, the invigorating life of the fearless entrepreneur. A warrior of capitalism, armed with nothing more than a dream and a laptop, risking all in hopes of changing the world.
But how do they do it?
Careful analysis of successful Silicon Valley startups has revealed a heretofore secret list of 140 steps outlining what really happens in a technology startup. Want to know the real story? Buckle your seat belt, here it is:
1) Figure out what you want to sell.
2) Find out if it’s already out there.
3) If not, shout “We gonna be rich!”
4) Choose a name
5) Incorporate
6) Write a business plan
7) Calculate your market size
8) Build financial projections
9) Adjust financials – downward. Then call them “conservative”.
10) Notice that your financials show magical profits in year 2.
11) Stare wondrously at those magical profits in year 2.
12) Shout “We gonna be rich!”
13) Search for co-founders.
14) Show them your financial projections
15) Then say, “these financials are conservative”
16) Recruit potential cofounders with this phrase, “We gonna be rich!”
17) Add co-founders to your team.
18) Discuss how to share equity.
19) Realize that conversation sucks
20) Replace co-founder you just pissed off
21) Spec the initial product
22) Set a launch date
23) Talk to customers
24) Assume the customers who “don’t get it” must be stupid
25) Add features from your customer meetings
26) Work on the product
27) Discover its taking longer than you thought
28) Move the launch date
29) Work on the product
30) Discover its taking longer than you thought
31) Move the launch date
32) Work on the product
33) Drink stronger coffee
34) Determine which features are closest to complete
35) Push the rest into the “the next release”
36) Work on the product
37) Figure out which features actually work
38) Push the rest into “the next release”
39) Launch the product Oops, find a major bug
40) Call the fix “non-trivial” (a term derived from the ancient greek, meaning “impossible”)
41) Somehow fix it anyway
42) Feel lucky
43) Launch the product, but call it “beta” (a term derived from the ancient greek, meaning “this might suck”)
44) Tell your Board it’s a “soft launch”
45) Experience new emotional highs, and new emotional lows – all in the same day.
46) Look for a way to reach customers
47) Discover your “way to reach customers” costs more than what you sell them.
48) Look for a new way to reach customers before the next investor meeting.
49) Realize a startup is very different from having “a job”
50) Prioritize the bug list
51) Prioritize the new feature requests
52) Create an investor pitch deck
53) Get investors to meet with you
54) Feel euphoric as they praise you, smile and say thanks as you leave
55) High five your cofounders in the parking lot
56) Get in the car and say “We killed it!”
57) Shout “We gonna be rich!”
58) Wait for the investors to follow up
59) Wonder why the investors don’t follow up
60) Email them
61) Text them
62) Call them
63) Wonder why the investors don’t follow up
64) Tell your co-founders, “Those VC’s must be knuckleheads”
65) Actually get an interested customer
66) Totally cave on the price
67) Somehow close the deal
68) Feel lucky
69) Go to a friend’s party to unwind
70) Discover everyone at the party thinks Googlers are cool, but…..
71) No one’s impressed with “Founder/CEO of random startup”
72) Meet with more investors
73) Revise your presentation
74) Again
75) And again
76) Tell yourself the investors “who don’t get it” must be stupid
77) Discover investor silence means “probably not”
78) Learn “probably not” means “no”
79) Promise yourself to remember a startup is very different from having “a job”
80) Meet with more investors
81) Receive a term sheet
82) Learn what “participating preferred with a 3x multiple” means (a term derived from the ancient Greek, meaning “indentured servitude”)
83) Negotiate with investors
84) Discover VC’s are very good at negotiating
85) Somehow close the round
86) Feel lucky
87) Get the money in the bank
88) Shout “We gonna be rich!”
89) Receive the legal bill and recite out loud, “Wow we’re in the wrong business”
90) Start trying to hire
91) Realize it’s hard to hire the right people
92) Discover it’s harder to fire the wrong people
93) Realize the firing conversations suck.
94) Promise yourself to remember that a startup is very different from having “a job.”
95) Start holding weekly sales meetings
96) Again
97) And again
98) Wonder how customers all say the same polite excuses for not buying, but….
99) Have completely different feature requests
100) Discover customer silence means “not this fiscal year”
101) Learn “not this fiscal year” means “no”
102) Somehow close a few more deals
103) Feel lucky
104) Hire a few more people
105) Wonder if you are paying too much salary and equity
106) Wonder if you are paying too little salary and equity
107) Feel like you didn’t get anything done today
108) Hold an all-hands meeting. Use the metaphor “it’s a marathon, not a sprint”
109) Secretly hope everyone still sprints
110) Notice one of your cofounders doesn’t seem as capable as he/she used to be
111) Notice everyone else is noticing too
112) Realize you need someone else doing his job
113) Realize that conversation sucks
114) Feel like you’re getting good at conversations that suck
115) Realize most of what’s new in Version 2.0 is really bug fixes from Version 1.0
116) Look back at your original business plan
117) Laugh
118) Look back at your original investor slides
119) Laugh
120) Look back at your “conservative” financial projections
121) Stare wondrously at all that magical profit in year 2
122) Laugh
123) Add up your monthly burn rate
124) Cry
125) Realize you need a business model, not a business plan
126) Feel like you didn’t get anything done this week
127) Spend 4 solid days preparing for a board meeting
128) Announce a change of strategy
129) Call it a pivot
130) Receive a call from your lead investor because she wants to “help” with your “pivot”
131) Begin weekly updates with your lead investor about progress with said “pivot”
132) Try to sound intrigued as lead investor suggests bringing in a new exec to help get you to “the next level”
133) Wonder what she really means by “the next level”
134) Receive an unexpectedly friendly voice message from CEO of a pseudo-competitor
135) Have a remarkably friendly lunch with CEO of pseudo-competitor
136) Be charmed by remarkably friendly CEO as he suggests “working together”
137) Call your lead investor from the car.
138) While you are still driving back to the office, agree to be acquired.
139) Negotiate the title “Chief Business Segment Strategy Development Officer”
140) Promise yourself to remember a startup is very different from having “a job”
But wait, you say – this list is crazy because I already know better than to do a lot of this stuff. Indeed, if you are listening to startup wisdom from people like Eric Reis, Steve Blank, Sean Ellis, Brant Cooper, Brad Feld, Fred Wilson, Nathan Furr, and many others, you hopefully saw numerous mistakes in the above list, and already have ideas on how to avoid them. Nonetheless, just about everyone who has been in a startup, even one enlightened by startup wisdom, still identifies with at least some of the above steps.
The good news is there are numerous battle-tested methods for dealing with each of the situations described in the above list. And that is what I hope to deliver in the smartfunstartup.com.
The first step is to change the way many of us think about startups. That’s what this next post is all about…..”The Real Secret to Startup Success“.
This list is funny because it’s true.
painfully so.