By: David Moeller, CEO of CodeGuard
The functions. They swirl, like a symphony, crescendoing and decrescendoing, approaching the foreground memory and important slots of focus and then retreating/vanishing the background.
The functions change. They ebb & flow, and do not lend themselves neatly to a 1-yr plan or forecast.
Fundraising is almost all-consuming and it transitions into investor management, which can take multiple forms, and often falls under board management. How are you going to update your investors? How much time? What should you present or compose, knowing that the time you use to update them is almost worthless in driving progress in your business, but knowing simultaneously that they are entitled to know how their money is being invested.
Marketing and Public Relations, flowing through the neighborhoods of sales and business development, or sales, passing through the region of marketing or business development or PR – is a wonderful maze of complexity. Impacted by MUCH more than the product itself, the messaging and segmentation is key. But how do you know what to target? What to highlight from your product or service? You don’t. You simply don’t. So you will have to try MANY things VERY rapidly, and see what works. What if nothing works? Then you will need to see your family less and the office or customers more, until something does start to work.
Who are your partners? Distribution channels? Channel strategy? How will you meet them? What proofs do they want/need to see? How can you produce that proof? Who is your most likely early adopter? Is that early adopter respected? Can you trust they will implement your service?
Human Relations. HR. Hiring. Firing. Teambuilding.
No one cares who you just hired. Superstars fail. Heroes disappoint. Product does not lie, and until your superstar produces usable product, no one cares. They don’t care how hard it is to hire or what you had to do. It just doesn’t matter to them. But it is everything to you. You and your startup are as good as the summation of your team, advisors, and investors. That’s it. Your idea is worthless, unless you have I.P. And if you have I.P., I hope you have bankroll to prosecute it in court; if you don’t, it again is worthless. Your team is everything, and you know this. Your team will determine how high you fly.
When is the product or service good enough? How much failure on the part of the product is too much? Are the failures preventing you from growing or causing users to leave? Why are users/customers leaving? Do you know? It takes time and energy to know. It takes time and energy and effort to know anything – the number of users you have, what they are doing, if your product or service is working – information has a price. All of the acronyms on the VC blogs – ARPU, CAC, MRR – knowing them comes with a price, and it is high. My recommendation – go with your gut until you absolutely have to know the blogger VC acronyms.
Product development gets harder. When you have no customers, you can just crank out buggy software and not know it. You may think it is great software because it was built agile and in a scrum environment. If it is web, it doesn’t matter. Once it gets into the open, things will not perform as expected, especially if you are integrating with other system APIs, etc. Each point of integration will increase by an order of magnitude the difficulty, if not exponentially increase the difficulty. Why? Because any changes you make that impact external systems will ripple through your infrastructure. Let’s say you change your pricing plan, which you will. When you change it, either legacy pricing will exist on the interwebs, or you will need to update pricing to make it consistent. And if you update design, the same will be true.
Product development gets even harder. Produce features for new users. While eliminating the bugs for old users. Estimate how long it will take to eliminate a bug. You cannot. Estimate how long it will take you to do anything you have never done before. You simply cannot accurately predict this. Anyone who says you can is wrong. Of course you can estimate a range of time, but you cannot bound bug resolution like new feature building can be bounded; they are fundamentally different problems.
Culture is your employees. There is no magic around culture. At an early stage startup, the culture is a manifestation of the priorities held by the team putting in the work. Don’t make the wrong hires. And if you do, let them go as fast as you can.
You must determine if your product is working the way that you intended it to. And you must do this without relying upon customers, at some point. At the point you rely upon yourself, you can probably stop calling your users “testers” and anoint them true “customers”. Closed loop control is not something that computer science values, but I think if you want to build an incredible product/service, it is essential.
While you are having fun hiring, fundraising, producing product, partnering, selling or marketing directly, and building a culture, you have to make sure your costs don’t kill you. The cost that I think is the most important is the cost of providing the service or product itself, not necessarily salaries for the employees, other than those needed to make the service work for the customers. There are builders and maintainers. I focus on the costs of the maintainers – though it is hard to distinguish between the two, since breakeven is breakeven is breakeven. If you are focusing on a scalable web play, you better make sure that your cost-to-serve on a per user basis is reasonable for your business model. I’m not sure what the blogger VC term is for this, but it is deadly important. Should you get a lucky break and not have this properly aligned, you will find illiquidity fast as your costs balloon beyond what you can control.
Even when you face incredible victories, you cannot accept them as truly meaningful. Celebrate the successes, but do not accept them as meaningful until you can replicate them, and prove, at least to yourself, that they weren’t aberrations. Aberrations occur. And they may happen to you – for the good and bad. Don’t share great news with investors until you are confident it is true. When the check clears, you can share that, but not when the check arrives or is promised.