People often ask me to advise them how to achieve success. What is to be done is a perennial question. But one has to face so many ways to nowhere that it becomes even more important to understand what is not to be done.
I broke my advice into several sets, such as team, concentration, money and investors, product and growth. If you want to kill your project as quickly and effectively as possible, use this advice.
Don’t think what you do, and whom you are doing it for
Begin to build a startup, because this is what everybody else is doing. Don’t ponder on what you are going to launch and what for. Just watch The Social Network, quickly understand how to become a millionaire and go for it! You will figure out later whether your product is useful to the customers or not. It’s obligatory to make as much noise as possible, and when it’s evident that nothing came out of it, just go around and take offence at clients, partners and investors.
This is a very pervasive problem: come to any event for startup founders, and you will meet a bunch of people who are infected by the idea that something needs to be done, whatever it is.
Copy other people’s projects
When you are looking for an idea, just go online and replicate a popular product or service.
Unfortunately, only a few super-professionals can successfully copy, and even they don’t have a very good hit ratio. And there’s no point in doing so for startupers anyway.
Listen only to yourself
When creating a startup, rely solely on your competence. Don’t think about what the market needs right now and what it will need tomorrow. If you know PHP programming, launch whatever you’re able to write, and figure out later what to do with it. Next morning you will have a B2B product, the night after that you will have a B2C and the next day you will have a B2B2C.
One should start from business needs. Obviously, the technology is very important, but it is always an integral part of the business. There are only two ways of successful development: become stronger than the competition or make something absolutely new. But anyway, you should understand the needs of the market and be able to get across to the users the idea that they need your product.
Believe that you are unique
Fall in love with your product, because it’s the one and only. Carry it around and argue with anyone who tries to criticize it. Take offence at clients and investors. Your goal is to morph into an unrecognized genius, and then become a Facebook troll, whom nobody wants in real life.
The world is arranged in such a way that any thought could occur to many people at once. That’s why products bearing close resemblance to yours are probably being developed by scores of new teams. Young entrepreneurs who come to me for money often claim that they have no competitors. It’s always fun to hear, because anybody who wants the money and time of your potential client is a competitor. And if you truly have no competitors, remember the old [Russian] joke about Uncatchable Joe: nobody has ever managed to catch him, because nobody needs him.
Kick off as many startups as you can simultaneously
Don’t focus on one project – what if it doesn’t take off? Work on three or five projects at once, eight better still. Go around the market and tell stories about how you like them all and how exciting they all are.
No project will be successful, however. There are some exceptions to the rule, but not for the startupers. Yes, there are idea factories, where corporate innovation is streamlined. But even there, there is a designated person responsible for each project. Even successful serial entrepreneurs do not manage several companies at once, only in turns, one after another.
Every day I receive several emails asking me to look into “one of my three projects”. A popular joke comes to mind: Could one drive, drink beer and embrace a girl – all three at the same time? Yes, it’s theoretically possible, but you will be very bad at all three activities. At least such a parallel entrepreneur would have a hard time convincing me that I should give him money. If I do, that would only be because I forgot to re-read my own advice.
Ask for it all, now
Don’t bother too much. Write three lines of text, draw a hockey stick chart and go straight to the investors. Don’t nickel-and-dime asking friends and acquaintances, angels or seed funds for money. Go straight to the largest venture capital funds, or even better to direct investment funds. Just tell them you need some money to make the world happy.
Don’t ever take interest in the investor you are going to. Just bluntly send your proposal to everybody and their dog. Try to seem faceless. Don’t be polite.
Such carpet-bombing, of course, sends your emails straight to people’s spam folders. You need to investigate your potential investor, to understand whether the phase of your project is suitable for him, to train yourself for communication, to write an explicit personalized proposal. Go for the money only if you can show your product or its prototype with confidence. And if you want to receive financing from somebody you don’t know personally, try to spend some of your own money and time first.
Hire somebody who will do the work for you
In order to prepare a proposal, hire a big consulting company, preferably a multinational one.
Creators of one such startup recently came to me. They had spent 200 thousand rubles to have their business plan written for them. They were astonished when I refused to read it. But why would I study the work made by somebody unrelated to the project?
As an early stage investor, I need simple and concise information, which startup creators should possess. We offer them to put together a short description of their project, including its team, its market, its launch plan, a business plan and so on. Those are simple but important issues. If financial modeling is needed, it could be very simple as well, but you should be able to explain every number in it.
Don’t bring smart people on board
Don’t hire smart employees. They will argue with you. You need somebody who will look up to you and agree with everything you say. Better distribute leading roles among your siblings, lovers and best friends. Usually in such a case a startup initiator claims that those people were with him from the beginning, that they are family, and so on.
There’s nothing bad about loyalty. But if a project grows, and the team is now reporting to customers, investors, and shareholders, this is a serious issue. It’s clear that, as the business grows, somebody would no longer be up to his job. Fire them. They are great, but you already paid them back with interest, using shares or options. And now, if you want to develop your business further, you will need higher-level professionals. Yes, such professionals would be less accommodating, and you will need to constantly prove your competence, but this is the role of a leader of a growing startup.
Seek the limelight instead of creating product
Don’t be too preoccupied by the product. Instead, seek publicity and spend all your free time on it. Conferences, newspapers and magazines are more important than the product.
A startup recently asked me for money, bragging about having won a prestigious competition in 2010. They would be better off keeping silent about it. As an investor, I immediately asked why such an up-and-coming project didn’t show any progress for four years.
Learn how to receive money, but not how to earn it
You should become a professional fundraiser.
In the market, there is already a fully formed social class of people who know how to speak eloquently and how to look investors in the eye in order to receive money. But even those of them, who are not actually just fraudsters, would not be able to lift their startups off the ground. They just don’t have time for it. They spend all their time looking for money. In the end they will blame the team, the market or the customer, but not themselves, because they had good talking points and got financing from prominent people. Ostap Bender, [a fictional con man from the novel The Twelve Chairs,] comes to mind with his four hundred “relatively honest ways of money-extraction”.
Don’t make life easy for the investor
Don’t think about how to prepare a pitch or what to tell your investor. Just make several dozens presentation screens loaded with technical terms and unclear definitions. Let the investor grapple with it. He will surely understand how smart and hardworking you are.
When conducting master-classes for startupers, I talk a lot about communication with investors. Every single time I try a simple experiment. In the end of my lecture I intentionally mention some general (and very simple) rules for preparing an efficient pitch. I know for sure that after the class, there will be a line of people waiting to tell me about their startups. But no one ever used the advice he or she had received just ten minutes before.
The rule is quite simple. You have only a couple of minutes to sell your project to a total stranger, who sees scores of people just like you every day. You should think of how to get him interested and make him want not to let you go.
Investment is the main goal
Having received investment, relax and just be a star. Stop trying to lift your project off the ground; this is investor’s problem now. You can now spend money on advertising, office space and equipment, and everything else will be sorted out somehow.
The investor will surely help you, but this help will come in form of mentoring and financing. He won’t be growing your business for you. You just got a more demanding job, because your company got a chance for fast growth.
Giving this advice, I am absolutely sure it’s unlikely for anybody to follow it. I myself didn’t follow the advice of Steve Jobs, who, having seen my project, said that it was five years ahead of its time. (Jobs was mistaken: it turned out it was more of a decade). Jobs added that being even six months ahead of the market could be devastating for a project. Should I have listened to him, I would save a lot of time and money. But, just like most entrepreneurs, I preferred to learn from my own mistakes. This is only natural. The difference between a bad entrepreneur and a good one is only that the latter comes to understand his mistakes and recall the old advice a bit earlier than the former, when the problem still can be fixed.