Today I had the opportunity to meet with two people who have been entrepreneurs. One was with my manager at Microsoft, Justin Smith, and the other was Nikhil George of MobiSante (also a former officemate at MS). I asked both of them for advice, just as I have been with every other person I’ve been meeting who’s had experience as an entrepreneur. Since I met with Justin and Nikhil today, I’d like to share some of the wisdom those guys shared with me.
I’m summarizing only a few key points which are immediately relevant; some will be more relevant in later stages of the company. In the process of these meetings I also observed the alignment with Pitching Hacks and The 4 Steps to the Epiphany. If you haven’t read those, I highly recommend both.
- Move from Details to People: As a technical founder you can really get deep into the details of the business. In running a business it is equally (if not more) important to consider the people and your relationships with them and their interests.
- Cultivate advisors: You will need help and that help can come from advisors. Find people with expertise in areas relevant to your business. For example, if you are building a caffeinated peanut butter get and advisor who knows the peanut butter industry, or someone who is in the supply chain, etc.
- Cash flow is king: Cash flow (in flow in particular) gives life to your company. You need incoming cash flow either from customers or from investors to build the value for customers. This reminds of an interesting point Eugene Osovetsky of WebServious pointed out, he said that 1/3 of his time is spent on building product, 1/3 on building customers, and 1/3 on getting funding.
- Do due diligence: Get a good lawyer to protect your intellectual property (IP), setup your corporation, etc. Get an accountant, tell them about your business needs, ask them how to setup bookkeeping, and setup the process.
- Prepare for an emotional roller-coaster: One day you’ll be sailing the Cayman Islands with six strippers on a private yacht and on another day you’ll be realizing that the business you have poured your soul into is a failure.
- Expect more from lawyers and investors: While a lawyer can provide legal counseling and investors can provide funding, they should bring a whole lot more to the table. Lawyers have great connections to investors and they have data they only get. VCs should provide advice, connections, leads, etc. not just the funding.
