I don’t think of myself as a serial entrepreneur since the terminology is most commonly used to describe someone who has had multiple successes (which I haven’t). But I also cannot pretend to be a first-timer — without having to explain the tread marks on my forehead.
So I am a hybrid. As such, I do have a few lessons that I can share which I have been writing up as a book, entitled “Survival Guide for Bootstrapping Entrepreneurs”. I have finished five of the planned ten chapters and I have posted them online on my blog, StartupForLess.org.
Given that Tuesday was the deadline for applying YCombinator summer funding, I imagine right now there must be at least a few hundred aspiring entrepreneurs (founders and cofounders) waiting to jump in with both feet. At the risk of being presumptuous, I’ve distilled my lessons-learned into the following three points and offer them to the contestants of the YC contest with my best wishes.
Remember: There are no losers in entrepreneurship except those who stop trying.
A. Entrepreneurship is a Responsibility
Entrepreneurs have a responsibility to focus on making money.
Entrepreneurship is about the “new” violently overthrowing the “old” and it is not an abstract exercise. In doing what we do and asking others to follow, entrepreneurs affect people’s life and the life of their families. And we affect them profoundly.
I have learned that building a successful startup requires the perfect alignment of many people’s diverse interests and desires. To succeed, we must figure out what rocks our hearts, our minds and our souls, providing our constituents with what they need and what they want.
People are driven by many things: money, fame, power and destiny.
But as the company grows and as more and more people are brought together, I have learned that the only thing that everyone has in common would be money. So my experience is that from the beginning, as an entrepreneur, we must focus entirely on making money. Doing otherwise would be irresponsible.
Being an entrepreneur means you don’t give up which also means that you are bound to try to solve the same problem over and over again, albeit with more experience, and expect different results.
So the one thing that you have to keep in mind is that in time everything changes and it could change even between the time you put together the team and the time you receive initial funding (from YC or anyone else), or between the time you execute and the time you ship products.
My experience is that peripheral vision is as important as vision and you have to learn to make adjustment as reality presents itself.
In other words, to be successful as an entrepreneur, you need both a compass (which reacts to external stimulus) and an inertia guidance system (which is inside your heart but very important in guiding you through the dark clouds).
In my last startup, it turns out that being our own “surrogate” customer was the most important ingredient for our success.
My fellow co-Founders had worked in the network monitoring side of the networking business for many years. They knew about their customers’ pain first hand because as a monitoring tool vendor, they knew how hard it was to deploy their own products. So in a sense, they were frustrated that their ecosystem was disjointed and the product that they invented had been their dream tool.
Had they not been long-time veterans of their own industry (which they help built in the past 20 years), they couldn’t have gotten that important insight by just talking to our customers. Customers know what to object when you present them with an imperfect product but not when you present them with a perfect PowerPoint.
Henry Ford had said that if he were to listen to his customers, he would have built a faster horse because that was what his customers wanted.
To put it in more modern context, it is sort of like Steve Jobs and his iPod (and iPhone). It is hard to imagine how things could have become what they are had Steve not been a music fanatic (not just a fanatic). Steve didn’t rely solely on his customers neither to define his dream toy. Instead he listened to his heart because he believes he was the perfect surrogate customer.
And that was what we did. We listened to our hearts (even though we were just a bunch of engineers).
In a way, this explains why the demographics of YC’er tend to be younger (at least much younger than me). Part of that is self-selection but part of that is by design. I believe time is a-changin’ and we are in the midst of a great intergenerational transfer of wealth. My kids clearly have much more resources than I did when I was a college student, not just because of the resources that I can provide but also from their grandparents.
This combines with the dramatic improvement in channel efficiency (for information, as opposed to for hard goods which was for the last twenty years) really change the consumer pattern of the younger generation. So my generation of entrepreneurs would be a far less optimal “surrogate” customer of the new era.
It is now your turn … having miss the opportunity to invent Ethernet and desktop computing, you can start inventing the next Facebook or the next YouTube.
But being young often means being inexperience.
C. Inexperience is not a Sin
Experience really matters in a startup.
However, as it turns out, experience is important but judgment is too, and everyone can be a victim of his/her experience (which ironically could often cloud their judgment). Much of a startup’s success and much of the difference that an entrepreneur can bring to a startup have to do with his/her ability to make the right decision (at the right time).
In a startup, it is actually not about making the right decision but about making the decision right. So being a successful entrepreneur requires experience but it also requires good judgment.
And good judgment has to do with when and how to build up creditability with the team and the shareholders, and when and how to cash in your political “earned” capital to mobilize the company behind an unpopular decision that you have made based on imperfect data.
In summary, experience is necessary for a startup but not sufficient. On the other hand, paradoxically, as I have learned the hard way, as an entrepreneur, having a strong will to succeed and the tenacity to follow through on difficult decision is sufficient but not enough.
You need a little of both (and a whole lot of luck, with the definition of luck being the complete absence of bad luck).
Good luck to all you First-Timers and Serial First-Timers!
Denny Miu is a cofounder and former CEO of Gigamon Systems. Denny has extensive experience in developing technology, products and business relationships. He has been a Professor, an engineer, an entrepreneur, a team leader as well as an individual contributor.