Sunday, November 21, 2010

Starting a Startup (part 1)

Being an engineer all my life transition to startup founder is not an easy thing, especially at the initial phase, when you have a good idea and working on a prototype of the product that will become an initial startup technology. I did it on my "moonlight" time - while being crazy loaded at work and having a beautiful growing family.

This is a real challenge and family support is critical - in fact all this work is done on out-of-work time, which is taken from your family - this is a great sacrifice on their behalf.

Initially there is one challenge - to create prototype of technology or web-site, but very quickly this is changing toward many operational and organizational activities.

I can list few and every one of them deserves separate entry in it's due time:

1) Incorporate your company - need to know what is good for taxation,your situation, etc. Many start with LLC and convert it later to S-Corp or C-Corp - I can recommend some good books on this that helped me.

2) Think about IP - need to file patent pending application almost immediately - very important to know what to file - sending bunch of prints is useless and will not protect your invention - again books are your friends here - I'll share my experience separately

3) Get legal help - lawyers like doctors, you need them and they are separate per your need - there are Corporate lawyers, IP lawyers, litigators (hopefully you would not need them right away, but best is to know one as in a life of your company you'll be surely sued)

IMPORTANT - this is a major money burner!!! - you should be very careful with the legals people time and use it appropriately. I'll share my cost-containment tactics later - this is very important how to deal with the lawyers. Lawyers are great (honest), but they love to talk and this will cost you.

4) Create your website - this includes not just a web-site coding, but also getting SEO running, forms coded

5) Start marketing - blogging, links, live marketing, etc

6) Set-up company communication channels - phone-line/PBX, web conference, phone-conference, physical company address, mail communication

7) Start networking, go to entrepreneur meetings (like SVASE and free classes)

8) Decide on your partner (if you'd want to have one) - VERY CAREFULLY - this can make or break your company

9) Test Water / Start thinking who can be potential future beta customers

As you can see, many things can be done on a shoe-string, without VC or angels money.

The main idea is to do as much as you can yourself to raise company valuation as much as possible before you'd start searching for outside investment. Don't be afraid to do new things - this is only helping you to learn more about how to run your own business and how to interact with people.

Also, as soon as you'd involve more people they will consume your time, which you do not have at this phase. Even interaction with Web designer will take more time that it will take it for you to make a web-site fix.

Will continue in a next post...

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