Slashdot Mirror

← Back to Stories (view on slashdot.org)

Best & Worst Decisions Starting Companies

Posted by kdawson on from the if-i-had-it-to-do-over-again dept.

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."

37 of 127 comments (clear)

  1. What are the rates for a slashvertisement? by Harmonious+Botch · · Score: 5, Insightful

    I wanna buy space too.

    1. Re:What are the rates for a slashvertisement? by Anonymous Coward · · Score: 4, Funny

      Ah, but the NonSense always belongs to /.

    2. Re:What are the rates for a slashvertisement? by tooyoung · · Score: 5, Funny

      What are the rates for a slashvertisement?
      Luckily for you, today I launched a new site http://www.slashvertisement.com/, dedicated to helping Internet entrepreneurs obtain stories on slashdot. My first interview is with Mark Fletcher.
  2. Get link on /. by anagama · · Score: 2, Funny

    1. Get linked from slashdot.
    2. Pay bandwidth overages.
    3. ???
    4. Profit

    --
    What changed under Obama? Nothing Good
  3. Sorry but... by js92647 · · Score: 3, Insightful

    this isn't even news. This is blatant advertising.

    1. Re:Sorry but... by Shadow+Wrought · · Score: 2, Interesting
      This is blatant advertising.

      Ah, so its the "blatant" part that separates it from the rest of the dot;-) Maybe instead of the Intel section they should just call it Slashmarketing Sponsored by Intel (Until AMD Pays Us More), and then we can throw them all in there.

      --
      If brevity is the soul of wit, then how does one explain Twitter?
    2. Re:Sorry but... by bogjobber · · Score: 2, Insightful

      The difference is that this is presented as legitimate news. The Intel page and banner ads are obviously advertisements. Guerilla marketing sucks.

  4. Other Startup Sites by janneH · · Score: 4, Interesting

    A bit off topic maybe, but anyone know of good sites for more general startup help - that includes non-internet companies? A place to discuss contract terms, get recommendations for legal help, advice on whether to go LLC or C-corp - or one of the million other questions that come up.

    1. Re:Other Startup Sites by Swanktastic · · Score: 2, Insightful

      The responses you'll get to this question are well intentioned, but I can tell you definitively the answer to this question. The internet should not be your primary source for answers to these questions. Human beings will.

      I've got a successful startup under my belt- almost 100 employees, throws off a lot of cash, happy customers, etc. Get in the habit of talking to people to find answers to questions rather than running to the internet. Need legal help? Contact the bar association. Talk to a couple lawyers. See if you can develop a friendship with them. Same goes for accounting issues. Need entrepreneurship help? Join your local e'ship club and have lunch with 10 of them. Ask them for advice. People love to talk about their businesses. Milk them for info. See if you can share costs on something or other. Potential customer ideas, whatever.

      Entrepreneurship (not a product design) is about talking with contacts to do whatever it takes to get the business off the ground.

    2. Re:Other Startup Sites by adickerson0 · · Score: 2, Informative

      http://www.angelcapitalassociation.org/
      http://www.nolo.com/
      http://www.sba.gov/smallbusinessplanner/index.html

  5. Customers! by seanadams.com · · Score: 5, Insightful

    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.

    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! ...trite, I know.

    (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.)

    1. Re:Customers! by c0d3h4x0r · · Score: 4, Insightful

      The first thing you say when somebody asks you what your idea is should be to describe who will buy it and why.

      Note the phrase "who will buy it", because it's important.

      A business can make a perfect product that people love because it overwhelmingly satisfies their needs, but if those people aren't willing to pay for it (or pay *enough* for it that the business can make some profit), then it doesn't matter and the business is screwed. Therefore it is not always in a business's best interest to bend over backward to please consumers at the expense of other factors. A product's quality will reach a "good enough" point, beyond which additional improvement just increases costs without making people willing to pay more for it.

      You see great examples everywhere of major businesses consistently making this mistake. Look at Apple -- great PCs with strong user satisfaction, great image relative to Microsoft -- yet very few people are willing to pay the price Apple needs to ask to turn a profit per unit, so in the end it's not a very smart business strategy. Steve Jobs keeps making the stupid mistake of maximizing product quality over all else, when a smart business person understands that product quality is just one of many factors that must be balanced to maximize profits.

      --
      Moderator hint: a comment is neither "Flamebait" nor "Troll" if it is true.
    2. Re:Customers! by mwvdlee · · Score: 2, Interesting

      I started playing Second Life out of interrest and ended up having a minor business there, selling self-built goods. SL is by far an ideal representation of reality but it did help to drive home a few points.

      I built some really good car models, they were truely 3D (as opposed to typical SL cars which are more like textured cubes), was painstakingly textured, had very good scripts to handle the driving; I can safely say they're the best you can get in SL and it took me weeks to get there. So I asked a relatively high price; nobody bought it.

      Lesson learned; people will pay what THEY think your product is worth, not what YOU think it's worth.

      It's all basic supply & demand ("no demand" means nothing else even matters), but SL was a very quick way to learn that lesson.

      FWIW, since SL is such a microcosm, it might be a cheap way to learn about business as a whole. Most things I learned I had already heard from others, but it helped demonstrate these lessons in a quick way.

      --
      Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
  6. I'm about to launch a site too by Anonymous Coward · · Score: 5, Funny

    My partner and I are about to launch a new site, how much for a link from the front page?

    We can guarantee:

    • Bias against Microsoft.
    • Bias for Linux.
    • Sensational headlines.
    • A willingness to bend the truth in order to write those headlines.

    aPaddedCell.com for a sneak preview, see we've even got an Internet Explorer hate piece on the front page!

    1. Re:I'm about to launch a site too by datafr0g · · Score: 2, Funny

      Ok but what's your differentiator? I mean, I can get all that right here at Slashdot!

      :)

      --
      "Who says nothing is impossible? Some people do it every day!" - Alfred E. Neuman
  7. And i-bullshit too! by EmbeddedJanitor · · Score: 4, Insightful
    There is nothing really magic about internet start ups vs any other start ups. Ultimately all businesses share some common traits. If you don't have a solid business plan, then you only have a dream. This is the same if you're in i-business, selling hardware or if you're a hooker.

    To have a business, you need to understand cash flow (current & projected), customers, your product and how the hell you're going to get the product in front of the customer.

    --
    Engineering is the art of compromise.
    1. Re:And i-bullshit too! by frisket · · Score: 2, Insightful

      A business plan is only any good if you have a saleable product, unless you're just aiming to milk some VCs. I've seen (and done DD on) startups with good business plans, people who understood cash flow and customers and marketing -- but the product was crap, or already obsolete, or simply a non-starter (didn't stop some of them getting the cash, of course, but it sure as hell stopped the business dead in its tracks when the funding ran out).

    2. Re:And i-bullshit too! by oliderid · · Score: 4, Interesting


      What truly matters for a start-up is the team behind the business plan.
      I can easily hire a good consultant to write the business plan (and I did it once). I will add a nice SWAT chapter, a competition review (based on a Jupiter analysis), 3 years projection (with 3 different projections: pessismitic, break-en, optimistic) and so on...You know that they expect a break even on the first year and a 120% ROI on the second year? Well simply change your Excel sheet.

      Investors (at least experienced ones) know that the reality will be different from your business plan. It will just help you to structure your ideas and nothing more.

      So what they are truly looking for is a team. Personnalities, experiences, motivation, etc..
      And of course the idea.

      If you want to be a CEO...You have to prove your leadership and your ability to convince the right people to join your boat, (or at least be ready to join in once there are some money). Otherwise you will remain a brilliant isolated inventor/engineer/salesman...

      IMHO 70% for the team, 30% for the idea/product/service/whatever.

      This was my biggest mistake. And my biggest success was to recognize it :-)

      Olivier

    3. Re:And i-bullshit too! by mgblst · · Score: 2, Insightful

      but the product was crap, or already obsolete, or simply a non-starter
       
      Yes, but this is more an opinion of your, than anything else. Somebody who has a business head, that can be told by asking a few questions. But the value of the product, that can me debated endlessly. I am sure you expert vision of the future would have turned down such products as google (we already have search engines), myspace (we already have geocities), 8086 (nobody will want a computer of their own).

    4. Re:And i-bullshit too! by the_womble · · Score: 4, Informative

      In the case of Startupping, the wiki has been written byy someone who does not know what a business plan is - it gives a list of potential revenue streams as business plans. I assume he has written stuff that he knows FA about, in the hope that someone competent will come along and write some sense.

      The rest of the wiki is equally useless.

      The forums are not exactly active.

      The blog aggregators might be useful.

      The Startupping blog itself consists of the one article linked to. That post itself has nothing earthshaking. Old advice like "do something you love", "hire good people", "stick to core competencies" and "don't be afraid to take risks".

      Why exactly would anyone want to visit this site?

  8. Worst idea ever by antifoidulus · · Score: 4, Funny

    thinking that people would pay for a site totally devoted to Cowboy Neal porn....WHAT WAS I THINKING? I'M RUINED!

    --
    Monstar L
  9. Worst Decision by sane? · · Score: 4, Funny

    Coming up with a domain name that can be read as "Star Tupping"

    Tales from the pen of the latest boyband member, maybe?

  10. Observation by necro351 · · Score: 4, Insightful

    Notice that almost all of the posts highlighted the "best decision" as hiring the right people, or finding co-founders that stuck with them. From what I've seen in the past, picking the right people is vital, its one of those things that is expected of you, and so we almost take it for granted, but if you don't do it right, you will mess the whole thing up.

    --
    --"You are your own God"--
  11. 1st bad decision - domain name by The+Dark · · Score: 4, Funny

    startupping.com sounds like celebrities having fun with sheep (http://www.thefreedictionary.com/Tupping)

    --
    sig's not here
    1. Re:1st bad decision - domain name by thatJoshGuy · · Score: 5, Funny

      When ExpertSexChange.com can become successful, I don't think StarTupping really has to be worried about some little known definition of 'tupping'...

  12. Right off the bat by Dystopian+Rebel · · Score: 2, Interesting

    Some serious mistakes...

    1. Invent a verb.
    2. Take the gerund of the verb and register it as a Web domain.
    3. Launch a new Web site. There are already too many and yours sucks too.
    4. Advertise your site on Slashdot, where opinionated fussbudgets, girlfriendless nerds, and Grammar Nazis (often all the same thing) will gleefully and mercilessly attack your competence and judgement.

    --
    Rich And Stupid is not so bad as Working For Rich And Stupid.
    1. Re:Right off the bat by value_added · · Score: 3, Funny

      1. ...
      2. Take the gerund of the verb and register it as a Web domain.
      3. ...
      4. Advertise your site on Slashdot, where opinionated fussbudgets, girlfriendless nerds, and Grammar Nazis (often all the same thing) will gleefully and mercilessly attack your competence and judgement.

      A post lamenting "grammar nazis" from someone can spell, writes in full sentences, and knows WTF a gerund is?

  13. Product quality. by Savage-Rabbit · · Score: 2, Interesting

    Steve Jobs keeps making the stupid mistake of maximizing product quality over all else, when a smart business person understands that product quality is just one of many factors that must be balanced to maximize profits. I don't buy Macs because of their superior quality. I buy them becasue Apple computers tend to be comparatively well designed (at least the laptops are), the Apple desktop environment has better ergonomics than Windows (in my opinion, your milage may vary), personally I value the fact that OS.X is Unix based and Apple hardware tends to age better than many (but by no means all) PC computer brands, there are PC brands that do just as well as Apple. I don't think that Apple computers or products in general are insanely better quality than other products in the same price bracket. If you can accuse Apple of anything it is that they occasionally over design their products and to fall into the trap of sacrificing practicality and robustness for coolness of design.
    --
    Only to idiots, are orders laws.
    -- Henning von Tresckow
    1. Re:Product quality. by JavaRob · · Score: 4, Insightful

      I don't buy Macs because of their superior quality. I buy them becasue Apple computers tend to be comparatively well designed (at least the laptops are), the Apple desktop environment has better ergonomics than Windows (in my opinion, your milage may vary), personally I value the fact that OS.X is Unix based and Apple hardware tends to age better than many (but by no means all) PC computer brands, there are PC brands that do just as well as Apple. ...i.e., you do buy Macs because of their superior quality.
  14. My 9 step plan for success by Aqua+OS+X · · Score: 4, Funny

    1) Synergize
    2) Think Outside The Box
    3) Harness The Internet
    4) Get A Boat
    5) Ask yourself, "is this good for the company?"
    6) Attend Donald Trump Wealth Seminars
    7) Have a Can-Do Upwardly Mobile Attitude
    8) Actualize Your Dreams
    9) Have Wealthy Parents

    --
    "Things are more moderner than before- bigger, and yet smaller- it's computers-- San Dimas High School football RULES!"
    1. Re:My 9 step plan for success by Rob+the+Bold · · Score: 2

      If you can do step 9, aren't steps 1-8 kinda pointless?

      It's sarcasm, man. Steps 1-8 are pointless whether or not you can do step 9. Excuse me, I've got to go embrace my core competencies, now. Those world-class synergies don't benchmark themselves.

      --
      I am not a crackpot.
  15. Re:MOD PARENT DOWN ! by jeevesbond · · Score: 2, Informative

    Nope, they have rel="nofollow" on the links. Really, I am going to get naff-all benefits from posting that link. :)

    --
    I'm going to transform myself into a mighty hawk. Either that or I'll just go and work at Dixons, haven't decided yet.
  16. Founders at work by Neme$y$ · · Score: 5, Interesting

    For a in-depth look at some of the secrets for a succesful start-up, Founders at Work: Stories of Startups' Early Days might serve as an interesting read.

    It features interviews with Steve Wozniak (Apple), Caterina Fake (Flickr), Mitch Kapor (Lotus), Max Levchin (PayPal), and Sabeer Bhatia (Hotmail).

    I haven't purchased the book myself, but I'm getting one as soon as I can to help me with my own startup initiatives.

    Quote: All the best things that I did at Apple came from (a) not having money and (b) not having done it before, ever. Every single thing that we came out with that was really great, I'd never once done that thing in my life. --Steve Wozniak, founder of Apple, page 36

    --
    "I've got a plan so cunning you could put a tail on it and call it a weasel"
  17. Worst. Decision. Ever. by Fear+the+Clam · · Score: 3, Funny

    Having a name that sounds like someone throwing up, startupping. Excuse me, I have to go startup. Whew. Sorry, my stomach's been a bit off.

    Anyway, you really have to wonder what strange chain of events happened to make someone think that verbing that particular noun sounded good. Roll it aound on the tongue. Startupping. StartUpping. Hmmm. Maybe another hit of Jack. Yes, that's it. Startupping. Hmm. Still sounds lame. Maybe if we change the emphasis. STARTuping. startUPing. startupING. Yeah, that's it. Suave. Respectable. Instant recognition.

    I can't imagine how this domain was available.

  18. Slashdot... by saddino · · Score: 2, Funny

    Ads for nerds. Stuff that maddens.

  19. nolo.com by Brian+Stretch · · Score: 3, Informative

    Nolo. No contest. They have quite a bit of free information and you can buy their eBooks in DRM-free .pdf format in addition to the usual dead trees versions.

    BTW, you almost certainly want to go LLC.

  20. Robert A. Cooke by mosel-saar-ruwer · · Score: 3, Informative

    A place to discuss contract terms, get recommendations for legal help, advice on whether to go LLC or C-corp - or one of the million other questions that come up.

    A fellow named "Robert A. Cooke" has written several easy-reading tax law/accountancy books, very much in the mould of what you might call "The Idiot's Guide[s] to Teaching Yourself Corporate Tax Law in About 24 Minutes Flat":

    How to Start Your Own 'S' Corporation, Second Edition
    Mar 2, 2001
    http://www.amazon.com/dp/0471398128/

    Doing Business Tax-Free: Perfectly Legal Techniques to Reduce or Eliminate Your Federal Business Taxes, 2nd Edition
    April 23, 2001
    http://www.amazon.com/dp/0471418218/

    The McGraw-Hill 36-Hour Course In Finance for Non-Financial Managers
    Feb 4, 2004
    http://www.amazon.com/dp/0071425462/

    Buy Your Own Business With Other People's Money
    April 25, 2005
    http://www.amazon.com/dp/0471694983/

    etc etc etc
    Be aware, though, that Congress has a bad habit of changing the "laws" about every five minutes [and dittoes as regards the IRS & the "regulations"], so at any one point in time, no single person on the entire planet is entirely certain of the precise state of all the laws and all the regulations at that very moment.

    But I'd recommend Cooke as a good place to start to get an overview of the big picture.