This is Part 3 of my thoughts on the things that can go wrong in a startup.
Beware of Idea People Bearing Contracts
Startup weekend style events are numerous. They are a great way to flesh ideas out and
to build a Minimum Viable Product (MVP).
The idea is that a team of people comes together, works together, and at
the end of the event, presents their idea, some market place data, judged by a
group of entrepreneurs that have successful started and either have a running
company or have successfully exited, and hopefully win the event. After the event, it is hoped that the team
will stay together and push their idea forward.
Granted all of this is a tall order, but startups are hard, not easy.
Unfortunately, there is a disconnect between what the hoped
for at startup weekend event, and how people with ideas view them. Many entrepreneurs that are idea people have
a different view. These people view
their idea as the be all and end all.
They don’t want to share that idea with anyone else. However, they are
stuck in that they do not have the technical skills to push their idea
forward. Somehow, the idea entrepreneurs
have decided that these type of events are a good place for them to find “free
labor” for their idea. I have seen
several that have come to these events with contracts that will allow them to
get this “free labor” and leave the developers with nothing. Ultimately, the problem here is that an idea
entrepreneur sees:
·
Anyone could steal my idea. Ideas have little to no value on their
own. Unfortunately, many people think
that the idea is everything. If the idea
is everything, they feel that they are within their rights to attempt to keep
people from stealing their idea.
·
With the view that the labor is free, there is
no differentiator between developers.
One developer is as good, or bad, as any other developer. The problem that entrepreneurs need to
understand is that people do matter.
·
Based on the concept of no differences between
developers, there also tends to be a lack of understanding of the difference
between an offshore and onshore development.
Onshore development tends to work better for a startup. This is due to multiple reasons. For example, the developer having an
intrinsic understanding of the user. I
would expect an Indian developer to understand an Indian consumer. The same is true in the United States, Europe,
China, and everywhere else. Another
issue is timeframes. Startups need quick turnaround. Communication when
everyone is not in the same area is hard.
There are advantages to offshore development, however, that is a
different article.
Most people at startup events are well meaning people. Not everyone comes bearing contracts. Unfortunately,
I have seen several that do. From
experiences, these never tend to work out.
The people tend to have interesting ideas that have potential. Good developers tend to not want to work with
these people. Instead of an idea that can grow, they end up being stuck by
themselves. If success is a function of
the team, they are stuck without a team to move their idea forward.
Who Owns the Code?
Clearly everyone in the startup owns the startup, and they
own the code (or graphics, marketing documents, etc). That’s the popular thinking. Nothing could be further from the truth. Barring a contract that states otherwise, and
no one ever pays attention until it is too late, code is owned by the person
that created it. This is a common
problem in startups. The code for a
startup is not owned by the startup unless it is explicitly handed over to the startup.
Coachable
How coachable are people?
How coachable are you? Can you
stand the critics of your existing idea?
I can guarantee that people get too attached to their ideas. I know I do.
Why? Because it is a product of
my brilliance (not really, but you get the idea). Several instances that I would like to
mention:
·
We were at a Saturday morning meeting of our
startup years ago. We were trying to
explain to the managing partner that his initial idea needed some tweaking and
how to move this forward. He could not
accept that no one wanted his idea that he had crafted 125 pages of
documentation into. While his general
idea had merit, we needed to move it about 20 degrees to be right of his
target. He refused and kept saying “It’s
not my plan, it’s not my plan.” Some key
changes to his plan, and we would have been winners. But we couldn’t get him to change his idea,
so we were all losers. It is quite an
amazing site to see that some people would rather be wrong than to make a
change to their idea and be a big winner.
Ego is an amazing thing.
·
At one startup weekend event, during the
discussion we were having regarding business models, she wanted to give
everything away for free and to mine the data on the backend for income. That can definitely remove the “stop sign”
for users to use the product, but isn’t really a good mechanism to grow
income. I stated my objection to this
and that we needed to have a licensing model to generate income. I left it at that, so we standing up doing
our final presentation on Sunday night, and she goes into the “give it away and
mine the data on the backend business model.”
I could not have looked more disappointed as I am running the demo. When we asked why we only finished third, the
feedback from the judges was “horrible business model.” We wouldn’t have won, but we would have
finished second. Here was someone that
had been specifically told, “don’t do that” and did it anyway.
·
People are not going to automatically buy “your
genius.” You have to go out and sell
it. That could be “buying ads” on
facebook, google, or somewhere else. If
you are in the SAAS world, its probably shoe leather and knocking on
doors. So, let me get this right, you
want to be the “sales” guy, but don’t want to sell? SMH
· I
often think back and look at the post mortem of “99 dresses.” What did this person (Nikki Durkin) do that was so bad? Clearly, she was not a bad person. She had to have a tremendous level of smarts
to get something going. She got accepted
into Y Combinator, which is an accomplishment in and of itself. But, It seemed that there was a problem, and
that problem was that the technical people kept leaving. Finally, down in the blog post describing
their post mortem, it all comes together for me with this paragraph:
I remember one day Marcin joked that I was a control freak, and I was really surprised. I’d never perceived myself that way — I just liked things done a certain way and to a certain standard that matched the vision in my head. When it came to non-99dresses related stuff, I thought I was pretty chill.
I remember one day Marcin joked that I was a control freak, and I was really surprised. I’d never perceived myself that way — I just liked things done a certain way and to a certain standard that matched the vision in my head. When it came to non-99dresses related stuff, I thought I was pretty chill.
This person had several versions of
their product all built by different people.
It all came together for me. She
had replaced multiple technical cofounders.
When you are too controlling, you tend to push people away. Sometimes you have to let go. It doesn’t matter where your buttons go. It doesn’t matter if the buttons are blue,
red, or green. Think about solving the
problem, not the specifics of the buttons.
The stories go on and on and on. You have to be all in on a startup. You have to do things that have worked. You have to understand your situation. You have to do things that you may not agree
with, if for no other reason than to just try something different to see if the
angle has some success. You have to be
coachable, you have to be open to new ideas, and you have to be open to your
ideas not being that good. And yes, that
means that my ideas may not be very good.
Summary
Startups have risk.
They have risk for the developer.
The risk needs to be shared by everyone, not just lumped on a single
person. Hopefully, this article has
brought out some of them. Sometimes you
may need to just walk away. It is up to
you to decide if the scenario is bad enough.
Good luck on your startup.
Resources
99 Dresses Post Mortem - https://medium.com/female-founders/my-startup-failed-and-this-is-what-it-feels-like-c5d64b3ae96b
