THREE LESSONS OF STARTING YOUR COMPANY, OR JOINING A NEWLY FOUNDED ONE
– from GetListed founder Linda Sevelius
I have been involved in a couple of startups before founding GetListed, a global market research service. These experiences have taught me valuable lessons that should be heard by others thinking of starting their own companies or joining newly founded ones.
Lesson 1: Do your research and collect first leads. Get out of the building!
The minimal thing to do is to actually talk to people – this is called customer discovery. First start by defining educated hypothesis for your possible solution, who are the customers, their buying behaviour, what kind of the market demand, etc. Use possible resources to figure out some key facts, there might be research done already – or then not.
Second, go for those people, find them and ask to talk with them. Ask them about their pains, gains and everyday life so you can understand for what are you offering them solutions for.
Third, If they find your solution interesting and are willing to buy it, you might have your first customers there. These first early adopter contacts are important when you start to test your idea with web shop or what ever solution you are developing.
Customer discovery is pretty tough work and should be done always when entering a new market or launching a new product. Moreover, the key is to connect with customers and understand them. GetListed can help your company with this internationally.
Lesson 2. Don’t build anything yourself before you have the first paying customers (and maybe not even then)
This is a well-known fact, but it still happens. At GetListed we made the mistake that we spent many months building a platform for our service – even though we had not really validated 1) who were our customers 2) what they really needed. However, you probably in this phase have some idea of who your customers are, so you can test the demand.
- Create a landing page to collect leads. Spend a little money on AdWords, Facebook, Instagram or wherever to test if your idea could be interesting for the possible target market.
- Before building anything, here is a list of services to use to test if some ideas work. For market place ideas: Sharetribe platform. For selling anything, service, product – almost whatever: web shop services like Holvi (you can easily combine banking and web shop), Shopify or Etsy.
- Mockups that almost work – delivers the easiest fixed solution.
- Search for possible facebook groups for niche service – and ask if you can manually test your idea.
Lesson 3. Ideas are pretty much worth nothing, it is all about execution.This topic is repeated in almost everywhere in startup literature, but it is quite common that in practise founders and first joiners tend to forget to keep it cool while dividing the shares. For example, I started GetListed with my dear friend and a couple of external people joined in a few months later. My co-founder and I thought that we had tested the service enough to prove that it is working and so we divided shares in a manner that we, both original founders, got right away vested 10% of the company. Well, the truth was that we were at the very beginning of everything, and we put a way too much weight on those early achievements. As you might guess, things fell apart only a couple of months later. The other co-founder was offered a full-time job, left the company and there were 10 % of shares somewhere else.As a result, this kind of situation could really pull down team’s motivation and it is extremely risky. Possible solutions and things to make sure:
- Shareholders Agreement – making right from the beginning.
- Remember restrained vesting, different leaver conditions and cliffs.
- Founding or joining – make sure that the only having the idea or having donevery early phase work isn’t the reason to get vested a big bunch of shares from the beginning. Be fair for your partners and for yourself. If you own a bunch of vested shares and leave the company, it isn’t most probably going to bloom anyway – better to have a little if you have to leave and still you can benefit from the little ownership something.
- If you missed these lessons and you have a situation like described above, here are other solutions: you can increase the number of total shares (so the percentage of the leaver’s shares will drop) or found a new company and leave the old one.
Read more about GetListed, and meet Linda and her team at CBS Entrepreneurial Day 2017!