The Complete Coward’s Guide to Starting a Company: Part 3

Part 1: here.
Part 2: here.

And now for the finale. Yes, the picture is a penguin with a blade riding a shark bear.

#5: Integrate into the Community

In most places around the world – possibly excluding Silicon Valley, NYC, Boston, and Tel Aviv – the local startup scene is a fairly small and tight-knit community. Even in those locations, with a focused effort you will probably be able to get to know the majority of the people who matter, or are about to, in only a few months.

Online

Meetup.com. Many cities have well represented startup groups you can find on meetup.com. Besides your standard networking meetups, some have useful learning events like pitch practices, or online meetups, which are great for quick connections. This site is where I would start.

LinkedIn. I don’t think I need to say much here. Put the time into a high-quality profile and use it to find people in the startup world you want to connect to.

Twitter. Personally, I find Twitter a complete waste of time. Logically, I understand its purpose – scalability of easily digestible communication – but in general, I personally don’t think the value of what you get out of it is worth the time it sucks out of you.

Having said that, I do believe that in the context of the startup world Twitter can be a very useful tool, for the simple reason that everybody else is doing it. (Yes, Mom, if everybody else went and jumped off a bridge I’d do it too - as long as I got valuable additions to my network out of it.) I’ve used Twitter as a starting point to connect with a number of people, including the famous and powerful. My relationship with my most useful advisor to my current startup started by simply following him on Twitter.

If you already have a personal account, create a separate one for professional purposes. As a general rule, I try to split my account about 80% content (linking to useful information) and 20% engagement (directly commenting on others’ posts). In terms of content, I try to get an even split of interesting startup news, good general startup advice, and content specific to my area of expertise (finance).

If you’ve taken my last two posts to heart, you’ll have a pretty good idea of where I get a good chunk of my content from. (I also find that Twitter itself is a great source of content for these purposes.) You’ll also have a pretty good idea of who to start following. I typically post once or twice a day; don’t let it devolve into a time sucker.

Founder Dating, Cofounders Lab, Gust, and AngelList. Each of these online sources has a different purpose, but if you’re starting out they are all great places to create a profile. You’ll get out of it what you put into it, so I would focus on one at a time, figuring each one out and making it work for your before moving on to the next.

Offline

The Local Accelerator. In many cities, the accelerators are the networking coordinators, hosting informational lectures, networking events, and the like. Sign up to the newsletter, follow them on Twitter, and get to know both the accelerator personnel and the current founders and employees in their portfolio companies.

The Local Angel Organization. Your local angel investor organization may hold lectures, networking events, pitching practices, and other useful events. If your city has one, get plugged in.

Startup Weekend. If you don’t know what Startup Weekend is, see my post here. These events invaluable learning and networking opportunities, and unless you live in Siberia there is probably one close to you. If you do live in Siberia, it’s worth a trip. The crash course in real entrepreneurship will immerse you in how entrepreneurs and investors think, and it will give you the opportunity to learn from people who are better than you at their respective disciplines (PowerPoint graphic design, face-to-face market research, etc.) I'll put together a post on how to win Startup Weekend at some point in the future.

University Organizations. Many colleges have programs or organizations that you can take advantage of if you’re a student. If you’re not a student, you still might be able to use them to make some good connections. Some have programs where you can apply to be an advisor or mentor, which can connect you to other advisors and mentors, and possibly even an exciting university startup. (I’m thinking university spinouts leveraging the college’s proprietary research – your chances of meeting the next software Zuckerberg this way are pretty small.)

#6: Self Discovery

Before you decide to stake your career, relationships, and emotional well-being on a company that will most likely fail, you need to know what you want in life, what you are passionate about, and what things you are willing or not willing to sacrifice. I can’t give you a magic formula for making this happen, but I can say that if you don’t have these answers, do what you have to in order to find them.

I will say that if you do decide to take the leap and become a full-time startup executive, you will probably do a whole lot more self-discovery than you ever have before. Please don’t think that I’m saying you need to have it all figured out before you start. What I am saying is that the startup choice might never make sense to you from a short-term financial point of view, but if during your startup journey you are working on something you are interested in learning about, that learning (and the ability to enjoy what you do every day) may bridge that gap.

#7: Try Getting on the Path You Want Without the Startup Route

Having industry experience in the sector you want to launch a startup is an enormous advantage, so think about whether working for someone else for a few years in the space you want to operate makes sense for you. This only works if you’ve accomplished the self-discovery step above, and have a pretty good idea of what you want to do with your career. It does not work if you already have an idea – if that’s the case, you want to be able to execute as soon as possible. If you don’t quite have an idea yet but know what your passion is, this should be a serious consideration.

This will also serve as a gut check to reveal to yourself why you are considering this career path. Is it simply because you think it will feel glamorous to be a startup CEO? Is it simply because you feel stuck in your career? Answering yes to either of these questions doesn't mean it's a bad idea, but hopefully whatever your answers, they will be revealing. Those answers will come out at some point anyway - might as well be before you take the risks.

#8: What Not to Do

Do not learn to code. You already have a valuable skillset. To become a decent coder you’ll have to put in a significant amount of time that would be better spent networking, selling, and further refining your strengths. Get a technical cofounder – learning to code is a waste of time.

Do not work at a startup first to gain experience. Yes, I know I said in Part 1 of this series that you should get a gig with your local accelerator advising their portfolio companies. Additionally, most of what’s on the internet will tell you it is a great idea to work for a startup before starting your own.

Most of the people saying this are speaking to computer programmers. It does not usually apply to those with a background in business. One thing you will learn early in your startup journey is that your business idea is less than 1% of the value of your company. Everything is in the execution. I guarantee that any business idea you will ever have has already been thought of by at least a hundred other people. Success is a matter of who has the ability to execute, and who does it most quickly.

What that means is that you are completely capable of coming up with ideas that are just as good as the hottest startups out there. Why pay a huge premium to be a part of someone else’s idea?

This premium I’m referring to is the fact that if you found a company, you will probably start with somewhere around 25% - 50% of the equity (which will be diluted, of course, as you take on investment and create an employee option pool). If you join a company, you will probably get no more than 2% equity, which will likely also be further diluted. If you are brought on in the C-suite you might get as much as 10%, but your chances of making that happen are very small as these positions are usually filled by people with a lot of experience. Also keep in mind that any equity you do get is subordinate to everyone else involved in the business.

If you go through all of my recommendations, you will get all the experience you need without taking a huge pay cut to work for someone else. The risk/reward profile for being employed by a startup makes zero sense for anyone who isn’t a programmer. Don’t work for a startup. Be the founder.

Epilogue

If you follow most of what I’ve recommended, you’ll be very familiar with what it means to launch and run a startup. You’ll be informed about the risks and rewards, the patterns of thought, and the requirements for success. My intention is not to show you how to launch a startup, or what to do once you get there – there are plenty of resources that will help you with those questions. I only wanted to help guide you to that point in the most efficient, least risky manner possible.

I am not a coward, and I hope you aren’t either. Hopefully by now you’ve realized that the point of this series’ title is that the romanticized portrayal of startups in the media is not how things usually work. Success comes from setting yourself up for that success by being ready to take an informed, logical, and minimized risk, not blindly make a leap of faith. By being a bit extreme in my title, I hope I have swung the pendulum of your perspective away from the romanticized portrayal, and given you some clarity.

There will be a point in your startup journey where you have to take that leap of faith. If you follow this guide you will be in a much better position when that time comes. When it does, execute with ferocity.

Good luck to all of us.