Mar 31, 2007

The Early Stage Startup Environment

Last week I had the unusual experience of trying to describe what an early stage startup environment is like - to three different people. Why unusual? Maybe because most of the people I run into in Silicon Valley have experience with, or knowledge of, startups - everyone seems to have a friend or acquaintance who's given them the low-down on the startup world. So, I had to actually stop and think before I replied the first time, and the second time I realized I'd missed something and the third time I realized I was rambling - so I decided to take a stab at writing down my thoughts.
  1. You don't know anything.
    • If it's your first time, this applies to everything from incorporation to insurance to interns. Unless your entire team has worked together before in pretty much the same way, you don't know how the team dynamics will shake out and how that will affect your offerings. And unless you're doing the exact same thing that you've done before (er, why would you?), there are a lot of unknowns on product, market, roadmap etc. But, this doesn't, and shouldn't, stop you. You build your business plan, trying to apply some probability to the unknowns; you bring new people on board mitigating the risk with in-depth communications (or, personality tests per the new trend ); you make innumerable changes to your product design based on continuous analysis and prototypes - in short, you adjust and adapt constantly while moving forward rapidly. And you will someday reach a space where your plans are solid for a week, a month, and then wow, a whole quarter and you can confidently put your mission up on the wall without having to bring it down for tweaking.
  2. You don't have anything.
    • This may not apply to those who're able to land funding (or put in money themselves) right from the get go, but most startups don't have money in the beginning. Which means you don't have enough people, so your architect does competitive analysis, while the CEO's plugging away at QuickBooks and your CTO's ordering coffee as there's no admin. If you do have some money, you don't have full product requirements developed, or your target customer profiled in detail, or the architecture all figured out. In the early stages, your dreams are outpacing your means by many miles.
  3. You are obsessed.
    • The team believes they're all rock stars and what they're working on is going to change the world, and you all get a little weird because you can think of nothing else in a sustained fashion. So when a friend talks about traveling to Peru your mind's wandering off wondering if that could be a future market, and when you're invited for a weekend getaway you don't jump for joy because you'd have to reschedule your Saturday con call. The early stage is fueled by passion, which is a good thing, given #1 an #2 above (it does get more tempered with time).
In short, the early stage startup has few certainties and little structure but lots of gusto. A truly adaptive environment, and not for the faint of heart - or the rigid of spine.

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