daily articles for founders

Here are 10 quality posts from the Founder's Library:

Mocked and misunderstood  

Fred Wilson:

When your company and services gets mocked and is misunderstood by most everyone, particularly the mainstream press and media, just smile and keep doing what you are doing. You are on to something big.

Or, in Paul Graham's words:

Don't be discouraged if what you produce initially is something other people dismiss as a toy. In fact, that's a good sign. That's probably why everyone else has been overlooking the idea. The first microcomputers were dismissed as toys. And the first planes, and the first cars. At this point, when someone comes to us with something that users like but that we could envision forum trolls dismissing as a toy, it makes us especially likely to invest.

Of course, that's only true if you are actually seeing traction - although I suppose the mainstream press would not bother mocking you unless you've done something right to catch their attention.

The obligatory counter-example would be Color, which was mocked right off the bat, for good reasons, and now seems to be using its insanely high $41m pile of cash to pivot into something that perhaps will still be mocked, but will actually be used (and hopefully they'll achieve that before all the founders bail out).

Build businesses, not apps  

A point that bears repeating, by Bryan Doll:

I'm not suggesting anyone stop building prototypes. I'm not suggesting we don't explore the idea of an application through its development. However, the next time you have that "aha" moment, think first of the value you can create and the app will follow. The app, it turns out, really is the easy part.

A startup is not a web application. A startup is first and foremost a business, and to be a successful business it needs to fulfill some important function for its customers, so that they will be willing to pay for it.

Of course, this doesn't mean that every startup needs to follow this approach, but Twitters and Facebooks are few and far between.

Why it's hard to find technical cofounders  

Much of the reason why it's insanely hard to find a really good technical cofounder is that the best ones really don't need you. Or at least they don't think they need you.


They are not the code monkey. You are the biz monkey.

Another point: you probably want some assurance (in the form of past achievements) that your technical cofounder will be able to deliver the technology. Technically gifted people will want the same assurance with respect to your business skills. "I sold my previous business for $5m after 2 years" will get even the most independent geek's attention.

Andrew Chen provides a number of other tips for non-technical founders, such as, for example, building a less technological business first to prove your mettle, and understanding and communicating what you will bring to the table.

Make money from your web apps by starting with the market  

Here's another interesting article by Paras Chopra, proposing that building a cool application and then trying to make some money from it is not the best approach to making money. Instead:

If making money is the objective, I suggest going with the market-first approach (as opposed to idea-first approach).

Paras then provides some steps for this market-first approach:

  1. Pick and industry where people are making money
  2. Find a differentiator which will allow you to wedge in
  3. Make a web app, market, refine, monetise
  4. Slowly build up to being a market leader

As I proposed in this earlier article about how to evaluate startup ideas, if you're honest about your areas of uncertainty, as a builder/developer, market uncertainty will be at the top of your "hypotheses to resolve".

Another point, though: even better than starting with a market is starting with the set of markets which you have some access to. If you have some delivery channels already, building a startup around those is the path of least resistance.

Terrifying uncertainty  

Jason Cohen:

So how do you tell the difference between the chaos that leads to unthinkable success and that which leads nowhere at all?

I'm not sure you can.


The fact that you're in over your head, that you almost cannot will yourself to continue, that you're completely in the dark, that you're working yourself to an early grave, that you seem to slide two steps back for every one forward, that nothing's ever good enough, that that your friends and family can't understand why you're turning yourself inside out with no apparent progress, that you yourself doubt whether you're even capable of this…

These things don't mean you're failing. It's always like this, until it isn't.

This is one of the concerns that Eric Ries tries to address with his principles of Innovation Accounting and Validated Learning, which make the learning more tangible so that even if the graph is flat, you have some way to measure progress. That said, it's true that there will always be strong elements of terrifying uncertainty in any startup.

Being able to sleep at night despite all this uncertainty is one of the founder characteristics that is very hard to train up. Either you're comfortable operating with minimal information, or it drives you nuts. If it's the latter, stick to a job.

Three years to build a business?  

Jacques Mattheij explains that it takes three years to build a successful business, so new entrepreneurs shouldn't be surprised that the first couple of years are really tough:

Typically it goes like this: - in the first year you lose money. Earlier on more than later in the year - somewhere during the second year you break even. - in the third year you finally make back all the money that you had to add in the first

The reason why it works this way is simple enough (even if that doesn't explain the timing). Customer acquisition is a time consuming process and a new business does not have several things that help a lot in gaining new customers:

  • a reputation
  • a network
  • existing customers

I have a slightly different viewpoint on this, based on my own experience and observations. Since we work with quite a few tech businesses at GrantTree, and I've been part of the startup community for some years now, I think I've got a reasonably wide cross-section of sample businesses and entrepreneurs.

Here, then, are my observations:

  • A lot of new entrepreneurs (myself included), do take several years (2, 3, 4, it depends) before their business starts taking off (as in, making enough money to pay the bills from sales rather than funding). Some people never get through that initial process, and that's not always because of lack of perseverance.
  • Once that first period is out of the way, though, the time it takes for them to build a functioning business seems to change dramatically. I know people who regularly build functioning, highly profitable businesses in a span of months. GrantTree itself has had a highly profitable first year (though the first few months were ... interesting.
  • The only shortcut for that process seems to be either tremendous luck, or an existing client base before the company is founded. Some of our clients jumped straight from corporate job into running a profitable business - but the previous employer was the main source of income at the beginning.

My conclusion, then, is that it doesn't take three years to build a business, it takes three (or some number higher than 2 in most cases) years to build an entrepreneur.

Being a successful entrepreneur takes more than a client base, a network and existing customers. It takes experience, sales/hustling skills, the ability to focus on what matters to the business and drive it forwards despite a million distractions and no one to tell you what you should be doing, to make mostly correct entrepreneurial decisions quickly, the ability to make do with extremely limited means. It also requires a network (something most new entrepreneurs don't have) and a personal reputation, very often, but those are far from sufficient.

So, my way to look at this is that what's being built over the first three years is not a business. It's a person, with personal assets like a reputation, a personal network, experience and knowledge, and so on.

Once the entrepreneur has been successfully constructed against all odds, businesses can and do get built much, much faster - even services-based businesses like GrantTree.

VisualMess guide to design  

Being able to design your way out of a wet paper bag is one of those skills that is immensely useful as an entrepreneur. Not everyone has an awesome designer as a cofounder and, let's face it, a great many people who are technology wizards or business experts suck at producing something that looks even half-decent.

And yet, decent design is not magic. Great design might be out of the reach of those who don't have a knack for it (though it's worth mentioning that this knack tends to be acquired through decades of practice, not magic), but decent design is within everyone's reach.

Here, then, is an excellent guide to the basics of design. Enjoy.

Who owns the rights to the stuff you do in your spare time?  

An interesting discussion over at the OnStartups stack-exchange:

I was interviewed by a lady from Zynga and she told me that Zynga doesn't allow developers to have side projects. Is this true for companies in general, or just a minority that Zynga is a part of? Is this sort of restriction legally enforceable? I'm in California, for what it's worth.

The HN discussion is interesting, particularly this brief comment thread by startup lawyer George Grellas. If you are working for one company while starting up on the side, this is critical information.

Build relationships, don't send PR releases  

This is almost common knowledge in the startup world, and yet, even I (who don't cover any startup releases on swombat.com) still get emails from people looking to get some coverage for their startup's new product.

Nicholas Holmes:

Clearly showing that you understand that a journalist doesn't just exist to publicize you is one of the fastest routes to his or her heart. It's literally the difference between drunkenly hitting on someone in a club and taking him/her on multiple dates to the restaurant you can't afford. Hell, you'd be unlikely to start a sales pitch without knowing your customer, or begin discussions with an investor without finding out exactly what they were interested in -- so why treat the media differently?

The closest relationships journalists build are with people who can provide long-term value to them by offering something that isn't just self-promotion. Conversely, these tend to be the names you see cropping up again and again in the media.

The age of the one-way exchange with journalists is over. Even Apple cultivates strong, two-way relationships with journalists and bloggers.

Every bit of (worthwhile) news coverage I've had for my startups has come out of a valid, two-way exchange. Sure, there are "news organisations" that will republish press releases without thinking twice - but nobody reads those anymore.

Building iPhone Apps with HTML, CSS, and JavaScript  

You can write iPhone apps with HTML/CSS/JS, and this book teaches how.

There are a lot of downsides to skipping the AppStore, from performance issues (Javascript is a hell of a lot slower than ObjC) to monetisation issues (people are unlikely to enter their credit card numbers into an iPhone web app, because they're not used to it). Still, it can certainly be used for prototyping and/or trying some app ideas out more quickly than the App Store would allow.