This is the second part of the two part series of Practices for Software Startup Pluralsight Course. Please read the first part of this series over here. The course is written by Stephen Forte (Blog | Twitter). Stephen Forte is the Chief Strategy Officer of the venture backed company, Telerik.
After these three sessions it was 6:30 am and time to do my own blog. But for the rest of the day, I kept thinking about the course, and wanted to go back and finish. I was wishing that I had woken up at 3 am so I could finish all at one go. All day long I was digesting what I had learned. At 10 pm, after my daughter had gone to bed, I sighed on again. I was not disappointed by the long wait. As I mentioned before, Stephen has started four to six companies, and all of them are very successful today.
Here is the video I promised yesterday – it discusses the importance of Right Sizing Your Startup.
Stephen has combined all technology knowledge into one 30 minute session. He discussed how to start your project, how to deal with opinions, and how to deal with multiple ideas – every start up has multiple directions it can go. He spent a lot of time emphasized deciding which direction to go and how to decide which will be the best for you. He called it a continuous development cycle.
One of the biggest hazards for a start-up company is one person deciding the direction the company will go, until down the road another team member announces that there is a glitch in their part of the work and that everyone will have to start over. Even though a team of two or five people can move quickly, often the decision has gone too long and cannot be easily fixed. Stephen used an example from his own life: he was biased for one type of technology, and his teammate for another. In the end they opted for his teammate’s choice , and in the end it was a good decision, even though he was unfamiliar with that particular program. He argues that technology should not be a barrier to progress, that you cannot rely on your experience only. This really spoke to me because I am a big fan of SQL, but I know there is more out there, and I should be more open to it. I give my thanks to Stephen, I learned something in this module besides startups.
The longest, but most interesting, the module was funding your start-up. You need to fund the start-up right at the very beginning, if not done right you will run into trouble. The good news is that a few years ago start-ups required a lot more money – think millions of dollars – but now start-ups can get off the ground for thousands. Stephen used an example of a company that years ago would have needed a million dollars, but today could be started for $600. It is true that things have changed, but you still need money. For $600 you can start small and add dynamically, as needed. But the truth is that if you have $600, $6000, or $6 million, it will be spent. Don’t think of it as trying to save money, think of it as investing in your future. You will need money, and you will need to (quickly) decide what you do with the money: shares, stakeholders, investing in a team, hiring a CEO. This is so important because once you have money and start the company, the company IS your money. It is your biggest currency – having a percentage of ownership in the company. Investors will want percentages as repayment for their investment, and they will want a say in the business as well. You will have to decide how far you will dilute your shares, and how the company will be divided, if at all. If you don’t plan in advance, you will find that after gaining three or four investors, suddenly you are the minority owner in your own dream. You need to understand funding carefully. This single module is worth all the money you would have spent on the whole course alone. I encourage everyone to listen to this single module even if they don’t watch any of the others.
The final module is exit strategies. You did all this work, dealt with all political and legal issues. What are you going to get out of it? The answer is simple: money. Maybe you want your company to be bought out, for you talent to bring you a profit. You can sell the company to someone and still head it. Many options are available. You could sell and still work as an employee but no longer own the company. There are many exit strategies. This is where all your hard work comes into play. It is important not to feel fooled at any step. There are so many good ideas that end up in the garbage because of poor planning, so that if you find yourself successful, you don’t want to blow it at this step! The exit is important. I thought that this aspect of the course was completely unique, and I loved Stephen’s point of view. I was lost deep in thought after this module ended. I actually took two hours worth of notes on this section alone – and it was only a three hour course. I am planning on attending this course one more time next week, just to catch up on all the small bits of wisdom I’m sure I missed.
Thank you Stephen for bringing your real world experience with us! I recommend that everyone attends this course, even if they don’t want to begin their own start-up company.
It was indeed a long day for me. Do not forget to read part 1 of this story and attend course Practices for Software Startup Pluralsight Course.
Reference: Pinal Dave (http://blog.sqlauthority.com)