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Best & Worst Decisions Starting Companies
markfletcher writes "Today I launched a new site, Startupping, dedicated to helping Internet entrepreneurs. For the launch I asked several successful entrepreneurs about lessons they learned starting and running Internet companies. The first set of replies includes responses from Paul Graham, John Battelle, Chris Pirillo, Ross Mayfield, and Dick Costolo."
I wanna buy space too.
The number one thing that people screw up is to start a business around an idea because it's interesting to work on, it can get funded, it's been done successfully before, the sector is hot, exit valuations are good, etc.
...trite, I know.
The ONLY successful ideas I have ever seen start with a _customer_. The first thing you say when somebody asks you what your idea is should be to describe who will buy it and why. Not what it is. I can't tell you how many entrepreneurs I've heard touting their latest venture with a pitch such as: "Think of it as a cross between grid computing and a web of trust, and it uses these applets that run on your back-end server... etc etc". This drivel often comes from seemingly smart people who have had impressive successes in the past. But who the fsck is the customer?
What is really astonishing is that it's the worst of these ideas, which happen to have just the right buzzwords du jour, which get funded by VCs. And it just gets more out of control from there. Even today, 7 years after the dot bomb, I know of several companies which have grown to 100+ employees and are on their fifth round of venture money without a profit in sight.
If your customer is not the #1 thing on your mind at all times, don't even bother!
(BTW dot coms DID have customers - it's just that the customer was not the guy buying you non-existent product, but rather the "bigger fool" who would buy your company. They eventually failed for the EXACT same reason - people kept starting companies even after they could no longer identify that customer.)