April 24, 2015

Should you start a tech company?

I occasionally get very hands-on in accelerating a raw start-up. Typically this is when an engineer comes to me with an unquestionably clever idea and asks me — sometimes in very broken English ๐Ÿ™‚ — whether and how he can get rich from it. So let’s collect some thoughts on the subject.

This post can be construed as fitting into my “not-very-organized series” about the keys to success. In particular, it draws on my July, 2014 post about judging opportunities.

The product plan

A start-up product idea needs to satisfy multiple criteria. Awkwardly, they’re rather contradictory to each other.

That usually means that the idea:

Criticisms I’ve made repeatedly of specific ideas include:ย 

In essence, what’s needed is favorable-seeming answers on my strategic worksheet even for your 1st release, plus confidence that there will be 2nd, 3rd, 4th and further acts shortly thereafter. A product idea that can be regarded as meeting that test generally has the characteristics:

Getting to a good plan

Entrepreneurs with interesting ideas can be overoptimistic about how the market will react. Market watchers like me stock ample supplies of chilled water in response. Pivoting to a more sensible plan can be aided by the same folks who trashed your first one, but beyond that you need direct interaction with potential users.

But please don’t fall iton the trap of, having abandoned your overoptimism about what a simplistic product will accomplish, becoming equally overoptimistic about how easily you can build out the more sophisticated new product concept you pivot to.

Gathering resources

The toughest thing about starting a company is neither good ideas nor good general execution. Rather, it’s gathering scarce resources of sufficient quality, in areas such as:

If you can’t recruit and lead a team of great engineers, you probably shouldn’t be starting a company, so let’s move on to “business” and financial concerns. Deadly yet common mistakes include:

The latter has two sub-categories, by the way:

As for the former, I outlined what kinds of experience may be most relevant in the post linked up top, when I wrote:

  • High-end engineering skills (architecture, management, etc.) often draw on accumulated experience with similar technologies.
  • Strategic marketing skills often draw on accumulated experience in similar markets.
  • Sales skills often draw on accumulated experience with products at a similar level of maturity and customer impact.
  • General entrepreneurial flair often transfers well from one kind of business to another.

Finally, my thoughts on design partners start:

With that, I’m conveniently out of space, so I’ll duck the subject of just how these essential resources might actually be gathered. ๐Ÿ™‚ But please stay tuned.

Comments

24 Responses to “Should you start a tech company?”

  1. Judging opportunities | Strategic Messaging on April 24th, 2015 4:06 am

    […] Should you start a tech company? Categories: Technology marketing  Subscribe to our complete feed! […]

  2. Robert Hodges on April 25th, 2015 12:55 am

    Starting with a market large enough to support a real company seems to be the tough nut to crack for a lot of tech firms.

    You can only reach a small fraction of the full market, only a fraction of that addressable market will actually buy from you and only a fraction of buyers are large and/or truly profitable. The end revenue numbers get small very quickly. I personally look for products where 1% of the market ends up a really big number since the intervening fractions tend to be guesses when you start out.

  3. Vladimir Rodionov on May 14th, 2015 9:34 pm

    >> If you canโ€™t recruit and lead a team of great engineers

    Are they supposed to work for free? To recruit team of engineers one must have already some cache in the bank account?

  4. Curt Monash on May 16th, 2015 2:23 pm

    Even recruiting ones who’ll join you when you have money is hard. At least, it’s hard for most people.

  5. Your first customers | Strategic Messaging on May 16th, 2015 4:30 pm

    […] for product feedback and advice, I actually wrote about that in a post about startups last month. So in conclusion I’ll just quote myself […]

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