A lot of startup founders today are launching companies fresh out of college (if not earlier). That’s what I did a little more than three years ago when I launched Glassmap, a mobile, location-based social network. I subsequently saw the full lifecycle of incorporating, going through Y Combinator and raising some capital, launching product, and eventually negotiating the sale of my company.
Here, I want to discuss the biggest pitfalls and cognitive dissonances that a student founder will likely face. My goal is to give people who might be in my situation a sense of what the environment is like, and help current and future young founders navigate their new ventures.
Mindset: Don’t get schooled
The default of deferring to the wisdom and knowledge of a teacher is drilled into a student’s head for the first two decades of life. Deferent is pretty much the exact opposite of what a founder should be. You, theoretically, are a world expert and have some unique insight into why the status quo is not good enough in whatever domain you’re building a company. I still remember making the first few pitches to investors in the middle of my senior year and walking out feeling schooled. After a couple tough questions, I’d start instinctually reverting back to being a student seeking advice.
Instead of thinking of investors as world experts in your specific domain, think of them as sharp laymen with finely tuned BS detectors. Remember, their job is to listen to the best storytellers and hustlers in the world, day in and day out. Obviously, you won’t have all the answers about the space, but you should have an educated and defensible opinion about it. And one of those defensible opinions is what you bet your company on: “Yes, people want to share disappearing photos.” “Yes, people want to crash on other people’s couches instead of a hotel room.” “Yes, companies want to store proprietary, sensitive data on the cloud instead of in their in-house data room.”
Going into our Y Combinator interview a few weeks after those initial pitches, I told my co-founders to put on war helmets and likened it to trench warfare: nothing is crossing the trench (the table between us and the YC partners) without us firing something back.
Focus on the gritty details
Partial credit — the practice of getting some credit for showing some understanding of an exam question — has saved more than a few college students’ grades.
Our first instinct at Glassmap, as a team of engineers, was to code more and build more and more features – partial credit by spamming features. This usually makes the product worse. It’s better to either have a strong thesis of how the future should be, and be super focused on that singular use-case (fat startup), or try a bunch of independent products and see what sticks (lean startup).
Searching for ever-faster user growth on Glassmap, we started kludging on random social features. It took a lot of time and a lot of code to realize that we were just spinning our own wheels. Our edge was developing best-in-class, battery-efficient location tracking software and algorithms. From there, we realized we could help local businesses target location-based ads – a much crisper mission than trying to manufacture virality on our social network by adding more social features.
Furthermore, I’ve found that given a team with solid engineering pedigrees, investors will assume that product execution will get there. They’ll give you credit for that. The biggest sticking point I’ve seen in pitches from young technical founders is that they lack mastery over the gritty details for a distribution strategy to grind up customers, users and/or sales.
That’s because, for the vast majority of startups today, the real challenge is fundamentally a sales and distribution one. For example, Uber the app isn’t hard to make (in fact, the first version was outsourced to a mobile development shop). Building out the operations side of a double-sided market of drivers and passengers is.
With the rise of more commodity APIs and infrastructure services like Parse, Firebase and Meteor, it’s easier than ever to build a reasonable product offering. So instead of focusing on which incremental feature to build, focus on the channels you have to foster and develop to sell one more unit or acquire one more user. When the user growth and sales channels start working themselves (true product–market fit), you’ll know you’re on track to “full credit.”
Using investors and advisers
Help comes in two main categories:
- Operational — how to design a product or how to best structure some mechanism in your business.
- Social — connecting you to the right people.
It’s bad if an investor or adviser is able to blow your mind on operational topics like fixing your user interface flow or restructuring your sales collateral. Yes, they’re smart and have seen a lot, but if they’re constantly coming up with ideas for you, you’re not doing a good job of being at the forefront of your space.
Instead, use your investors and advisers as connectors. Have them connect you to people who can give you money – other investors, new customers and new sales channels. That’s where investors have the biggest advantage over you. They’re older, they have more developed reputations, and they have had more years to network and make friends and acquaintances. This is where you really want to be leveraging your investors.
Ironically enough, the people who I’m writing this for are the sorts of people who will discount experience and venture out to do it and see for themselves. I know that the 21 year-old version of me wouldn’t have taken the 25-year old version of me too seriously. That’s okay. Just accelerate the learning process: life – and your startup’s seed round runway – are too short to make all the mistakes yourself.
Geoffrey Woo is co-founder and CEO of Nootrobox, an ecommerce nootropics “smart drugs” company. He’s also an entrepreneur-in-residence at Foundation Capital. He was formerly co-founder and CEO of Glassmap, a member of Y Combinator’s summer 2011 class that was acquired by Groupon in 2013.