“A ‘startup’ is a company that is confused about – 1. What its product is, 2. Who its customers are. 3. How to make money.” – Dave McClure of 500 startups
The 12th April 2012 19:29 GMT+1 is an important time-stamp in the history of an Irish startup that would ultimately become known as “ChannelSight“, it’s the day I sent an email to John Beckett and Kieran Dundon (my two co-founders) which started as follows:
In short I want to build a “where to buy” platform which can go head to head with the incumbents but which also has further innovation which would change the game and be disruptive to the existing players.
The plan was simple, convince a customer to buy our solution, then keep repeating that action until we were millionaires, simple! Only one fatal flaw in that plan. We had no company, no staff, no solution and not one line of code written.
“Every problem has a solution. You just have to be creative enough to find it” – Travis Kalanick Uber
Normally this would pose a fairly significant obstacle to starting a company, however, we had a number of things going for us:
- Irish people are inherently optimistic, all three founders Irish.
- We had no idea how hard it would be before we started.
- We were confident in our abilities to build anything.
- We had access to good development resources.
- We had no money so were lean by default.
- We had all failed before and failed big
Let’s start a company!
Before you start your startup, by that I mean formally create a company, you should get outside and try to actually sell your solution. That involves knocking on a lot of physical or virtual doors, leveraging your network, speaking with (assuming you can get a hold of them) prospective customers.
This is critical as you need to find out as fast as humanly possible if anyone is remotely interested in the product or solution that you intend trying to sell. Sounds very obvious in the cold light of day, however, the amount of people who delude themselves and often their friends, family and financial backers until its far too late to turn around is absolutely astounding.
Give me an F ..ailure
First time out, you will likely fail to generate any interest in your product or service but don’t worry that’s completely normal. In fact your solution is likely to be rejected time and time again, that’s right get ready to embrace failure on a regular basis. Having said that, this period is a massive opportunity to gather information, very valuable information, a first read from the very people that you want to buy your product and if you listen to what they have to say you can go away, refine your solution then get back in front of people.
“Don’t worry about failure, you only have to be right once.”- Drew Houston of Dropbox
We all know that Dyson is multi-billion dollar company which constantly churns out innovation after innovation within the vacuum cleaner space. However what few people know, is that Sir James Dyson spent 15 years creating 5,126 prototypes that all failed before he made the one that ultimately worked. Think about that for a moment, he failed 5,126 times, picked himself up, dusted himself off, then tried again and again until test number 5,127 worked!
“I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.” – Jeff Bezos
Which way’s North?
You only need to be right once! Set realistic expectations and track everything from day one otherwise, you’ll never be able to measure progress and course correct when things go wrong, which they invariably will time and time again until you find the product, solution or business model that people will repeatedly hand over money for.
Equally, if you’re not tracking progress then it’s harder to expose opportunities, your wholly dependent on what people tell you directly versus indirectly in the way that they actually interact with, consume, purchase and re-purchase your product or service versus picking up the singles that are all around you every day.
Show me the money
You need money to make all of this happen and there are a number of ways to get it. Either your project is pulling in revenue from day one, you bootstrap it with your co-founders or hit up your friends and family for some help.
Taking on money is a very big deal, do not take it lightly Before you do, ask yourself the following questions:
- Do you actually need the money, can you bootstrap?
- Do you need it now or at some point in the future?
- What specifically will you do with the money?
- What happens if you do get the money?
- What happens if you don’t get the money?
If you do end up taking on money, then make sure it’s smart money!
Smart money brings value above and beyond the money itself. If you only want money then start with the bank. Find people understand and are passionate about your product or solution. Find people who have experience in your sector and are proving entrepreneurs themselves.
Smart money can help you network, find customers, introduce potential partners, help navigate the various growth stages of a startup and help you avoid the many pitfalls related to getting a startup off the ground. Smart money will likely follow their money into other rounds, assuming your performing and they agree with the reasons behind that raise.
The moment you take on someone else’s money you typically hand over a portion of your company, immediately answer to someone else or multiple parties and typically have to drastically up your game before you end up on the outside of your own company. Make sure it’s smart money!
So what happened with our startup?
- ‘They were intrigued to hear about three Irish guys with no company… no product’ by Quinton O’Reilly of thejournal.ie
- Dublin-based ChannelSight raises €3.3m in funding by Pamela Newenham of IrishTimes.com
- [Enter +/- future here]
“Being an entrepreneur is sexy… for those who haven’t done it. In reality it’s gritty, tough work where you will be filled with self doubt. Entrepreneurs are survivors.” – Mark Suster
Careful what you wish for!
A lot of the time being an entrepreneur is a thankless job, dealing with a million problems while trying to herd a hundred cats in the same direction for long enough until you either create a repeatable lifestyle business, get acquired by a partner/competitor, go the IPO route or go down in a big ball of flames.
The struggle continues daily, the challenges never go away, the fear never goes away they simply evolve over time.
So what are you waiting for?
Also by Niall O’Gorman
- Gorillas & unicorns, let’s get ready to fumble on the road to disruption
- Now is the winter of our discontent (or is it…)
- Buy Now button technology firm ChannelSight raises €3.3 million to scale in Europe and US
- Congratulations you’ve failed, now what?