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Comments (35)

Jun 14, 2018 - 4:37am

Made my money starting my own company and bootstrapping it to profitability. Moved into doing PE type deals with my own cash and I love it way more than running any of my companies because now I don't have to deal with stupid people on a regular basis. Happy to help with any questions you have.

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Jun 14, 2018 - 9:25am

Yes, I think about it everyday. Not exactly sure what kind of response you are looking for, but I think a lot of PE folks think about entrepreneurialship because we love understanding business models and trends. Think this is probably even more true for those who are in more "growth" type PE vs. value.

By the way, founder of Capsule was also former PE guy. I'm sure there are many more like him.

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Jun 18, 2018 - 11:46pm

I'm actively looking to collaborate with folks to start one … or join an existing startup.

I don't see much value in becoming an FP&A person at a large startup (the upside seems limited and the role seems a lot like corp dev.) so I have been leaning towards earlier stage startups.

That said, coming from a traditional banking / PE background, I am not very familiar with the space. Would appreciate any advice about how to spot the potential "unicorns" though I know that is no easy task and how to approach the search.

Aug 25, 2018 - 12:40pm

Starting a startup (Originally Posted: 10/28/2012)

Ladies and Gents, I need some help/advice here.

As Eddie (and others) will attest to, one way to make some serious cash (or lose it all hah) is to start your own business. In my life, I try to think of problems I or others might have and then think of the solution to that issue and how I'd monetize on that solution. Well I finally stumbled across an idea that I think might work.

Here's the issue, being on the younger side, I have NO idea what it takes to start a business. And FYI, I am employed, so don't technically have a lot of free time on my hands.

For those out there that have started a business or are in the process of starting a business, what advice do you have for someone in my position?

More importantly, what are the first steps for getting the ball rolling on this idea? Things I've thought of:
- checking market for similar idea
- patent?
- startup costs?
- where to get the seed capital

Would appreciate anything people have to offer. Could be a great post for other users on WSO to reference as well if they are in a similar position.

Aug 25, 2018 - 12:42pm

Brick and mortar, even though I'm not sure exactly what that means. Something physical that people would buy, wouldn't consider it an online business. No tech involved either.

Aug 25, 2018 - 12:43pm

Read this: http://paulgraham.com/growth.html

I wouldn't consider quitting trading for anything that does not fit the above description. Either you put in the effort towards becoming a world-class trader (the kind that gets picked up by a hedge fund for 7-digit base) or you decide that trading is not for you, and quit altogether. You only get one shot at life and those early years flash by very fast. Selling world-changing shoe laces or attempting to open a fast food chain are NOT good use of those years, if you have the potential to do better things. The other thing is that whilst good tech guys are extortionately expensive, and very hard to replace (hint from personal experience: 1 developer for 300k/year >> 20 for 30k/year), the business end is completely interchangeable, especially as the company grows and your job description basically gets rewritten, and especially if you have seasoned investors who value experience over just drive and "being employee no. 1".

To answer your questions briefly:
- checking market: google it. Google different wordings of your product ("ways to tie shoes" "things to tie shoes with" "shoe tying implements" "how do I tighten my shoes"). Google the top 3 companies, check their presence on Google Trends. If after 2 hours you do not have a clear idea, you don't have competition yet (caveat: cf essay above about markets with no competition). Caveat 2: google search results are hopelessly manipulated (I know, I had entire teams do it for our stuff) - search for "cheap flights" and see how far you have to go not to get a commercial link.
- patent: cannot comment, beyond what I observed with strong tech firms: patents are expensive to get, expensive to maintain, and easily worked around. In software especially, where time is crucial and replication costs are almost nil, better set up natural barriers to entry (e.g. write it all in OCaml).
- costs and funding: this stuff is probably some of the most written about on the web. Hard to sum up without knowing more about the business. For funding this was good: http://www.bvca.co.uk/PEVCExplained but haven't checked it in 3 years.

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Aug 25, 2018 - 12:47pm
EURCHF parity:
Read this: http://paulgraham.com/growth.html

I wouldn't consider quitting trading for anything that does not fit the above description. Either you put in the effort towards becoming a world-class trader (the kind that gets picked up by a hedge fund for 7-digit base) or you decide that trading is not for you, and quit altogether. You only get one shot at life and those early years flash by very fast. Selling world-changing shoe laces or attempting to open a fast food chain are NOT good use of those years, if you have the potential to do better things. The other thing is that whilst good tech guys are extortionately expensive, and very hard to replace (hint from personal experience: 1 developer for 300k/year >> 20 for 30k/year), the business end is completely interchangeable, especially as the company grows and your job description basically gets rewritten, and especially if you have seasoned investors who value experience over just drive and "being employee no. 1".

To answer your questions briefly:
- checking market: google it. Google different wordings of your product ("ways to tie shoes" "things to tie shoes with" "shoe tying implements" "how do I tighten my shoes"). Google the top 3 companies, check their presence on Google Trends. If after 2 hours you do not have a clear idea, you don't have competition yet (caveat: cf essay above about markets with no competition). Caveat 2: google search results are hopelessly manipulated (I know, I had entire teams do it for our stuff) - search for "cheap flights" and see how far you have to go not to get a commercial link.
- patent: cannot comment, beyond what I observed with strong tech firms: patents are expensive to get, expensive to maintain, and easily worked around. In software especially, where time is crucial and replication costs are almost nil, better set up natural barriers to entry (e.g. write it all in OCaml).
- costs and funding: this stuff is probably some of the most written about on the web. Hard to sum up without knowing more about the business. For funding this was good: http://www.bvca.co.uk/PEVCExplained but haven't checked it in 3 years.

Great post, SB, thanks. This is not a service product, it solves an issue that I have noticed within (relatively) every day life. I would argue it's very scalable and easy to produce; AKA it is something lots of people could want, and I would be able to reach and serve all those people.

Are all patents expensive or specifically for tech? This is not a tech product by any means, but because relatively easy to produce would be hesitant to start the company without some type of barrier, if that makes sense. Will check that cost link, thanks again.

Aug 25, 2018 - 12:44pm

Here's what I've taken away from the most successful entrepreneurs.

It's not the idea that determines your success, it's the execution of that idea.

(eg: Bose= "Buy Other Sound Equipment," right?) Then why are they so successful?

Aug 25, 2018 - 12:48pm

Here's some advice for you. You need to go out there and do some market research. Go interview people on the street and ask them about the type of product you are making. Ask them bout competitors and who they buy from and what they don't like and do like about the experience. When they tell you what they don't like you need to come up with a solution for it. From there you need to start developing the solution after getting specific advice from experts. I called a few people who sold startups of theirs and asked them questions and advice. It really helps. As for funding you won't be able to get some if you don't show them that your product works. You need to have a mockup or be able to prove you have it. You need to show the value of the product and from there say why you need funding.

If I were to say the most important thing just make sure you have a good idea in the first place that is scaleable. Don't be afraid to do a full 360 and change literally everything if you need to. I'd be worried if you didn't

If you have any questions PM me

Aug 25, 2018 - 12:50pm
kyleyboy:
Here's some advice for you. You need to go out there and do some market research. Go interview people on the street and ask them about the type of product you are making. Ask them bout competitors and who they buy from and what they don't like and do like about the experience. When they tell you what they don't like you need to come up with a solution for it. From there you need to start developing the solution after getting specific advice from experts. I called a few people who sold startups of theirs and asked them questions and advice. It really helps. As for funding you won't be able to get some if you don't show them that your product works. You need to have a mockup or be able to prove you have it. You need to show the value of the product and from there say why you need funding.

If I were to say the most important thing just make sure you have a good idea in the first place that is scaleable. Don't be afraid to do a full 360 and change literally everything if you need to. I'd be worried if you didn't

If you have any questions PM me

Thanks for the response.

I'd be more interviewing people to see if they'd be interested in this product as a whole, because for the most part there is no one that is making what I am suggesting (minus some bootleg alibaba product).

I really think this is a good idea and it is scalable.. but clearly tough to know until you start.

In terms of a mockup/model product, should I try and see where products that are relatively similar to mine are made and see if I can contact those people? I'm unsure where I'd get a mockup otherwise..

Thanks again.

Aug 25, 2018 - 12:49pm

Patents are not THAT expensive - they are expensive on a personal level, perhaps a few thousand per region. I'm skeptical of the protection offered, especially if you don't pay a few thousand more for a good patent lawyer.

E-commerce/e-retail is a real PITA of a business model. I've known both successes (several of my friends selling a few things they got made in China online, clearing enough to finance a decent lifestyle until the next idea) and abysmal failures (usually due to trying to save costs on tech and operations, resulting in poor customer service).

Questions:
- do you have a prototype, that works? can you build it? who can build it?
- where will you make the production version, and what initial production run do you count on? How much will it cost you?
- where is your warehouse (you can outsource that)?

Hardware is more capital intensive than software, and more things can go wrong, so unless first year bonuses were particularly generous, you might need some financing (esp with longer shipping costs when made in Asia). As a rule of thumb budget 6 months full time for the first angel round... it really can take that long!

Aug 25, 2018 - 12:53pm

There is an entire cottage industry dedicated to helping people start an online business or tech company. I did a roundup on my blog last year of the best or the best here: http://melanie.io/2011/03/03/starting-your-first-company-what-to-read-when-you-dont-know-what-you-dont-know/

For most people in tech who have been in the startup world for a while, these things are second nature. However, I was in IBD right out of school and after my 2-year analyst program ended and I wanted to start a business, I really did not know what I did not know. Basically, this is all of the shit I wish someone would have told me before starting a business.

Aug 25, 2018 - 12:55pm

Founding an incubator-backed startup - looks good? (Originally Posted: 07/10/2013)

So I got the opportunity to spend a semester at a local incubator (pretty solid mentorship from VC partners, run by some prominent CEOs but you won't recognize the incubator name outside a couple of states - they've got a pretty decent track record though) and I'm required to take time off school for it.

Startup funding + relocation is paid for so money's not a big issue. I'm just wondering, if this idea crashes and burns after the semester, is it going to look good to top tech companies that I got backed by this particular incubator and say, got 10k users on my product?

I'm going to do this anyway but I'm just wondering what I can expect to get out of it for future jobs in case it doesn't go well.

Aug 25, 2018 - 12:56pm

How well known is the incubator? Is it on the level of YCombinator or something that's recent?

Either way it should set yourself up nicely for product management roles at Amazon, Google, etc. These companies love to see guys who have run their own product. If your startup does well you could probably even network into one of the VCs, they prize having former entreprenuers to work with their portfolio companies' entreprenuers.

Aug 25, 2018 - 12:57pm

It's not even close to YCombinator level. It is in a large metro area run by the CEO of a major corporation, and they provide access to a network of F500 executives and local VC partners for mentorship.

Aug 25, 2018 - 12:59pm

What state is the program in?

I have dreams of being a big shot in a 911 GT...
Aug 25, 2018 - 6:36am

Am working as a private management consultant. Feel free to ask me any questions here.

I can see that a lot of people glorify about the freedom and independence of starting your own business. Yes, it is rewarding, but you'll definitely will be putting in more hours than your current job. It is also risky. But if you do want to create a startup, do not have a backup plan in mind. Put in 110% effort into your new establishment and go all the way while you still are risk-tolerant and time is on your hands.

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Mar 31, 2021 - 10:00am

It is not hard to start a startup. First of all, you need to think a lot about if it is worth it. For example, if you are starting a business that will sell some special products, first of all, you will need to ask your potential buyers if they are interested in your product on not. Now is the best time when you can open your own business, even if you are a freelancer or a solopreneur because there are a lot of agencies that can help you rn your business. All you will have to do is to upload the invoices on time and do your job to earn money. The hardest work is with the documentation

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