At Entrepreneurs Unpluggd the other night, three amazing entrepreneurs gave us some very valuable tips and information based on their experience scaling their startups. Talia Mashiach of Eved which recently raised over $9 million dollars to reform the events marketplace emphasized the importance of the entrepreneur being able to fill all roles in the beginning of a startup. Jason Fried spoke from 37signals on the importance of working and building your startup on your own terms, and Shawn Riegsecker of Centro mentioned culture as one of the paramount things to take into consideration when building a startup (he knows...Centro was voted #1 place to work by Crain's last year). Here are some other pearls of wisdom all of the speakers shared:
1) Hire late, hire slowly-This mantra was repeated by multiple speakers multiple times. Talia mentioned that in the beginning of a startup, the entrepreneur should makes a list of all the roles needed to make the company successful, with a blank space next to them. In the beginning, the entrepreneur's name goes into all of the blank spaces, and as the company grows, this list should serve as a guide for who to hire. Jason mentioned that the #1 thing they look for in potential employees at 37signals is culture fit...if you won't fit into the culture, it's not worth examining your skills and past experiences. Shawn talked about creating a company where everyone didn't think of their seniors as "assholes," something he hated at previous jobs. At Centro, they hire slowly but fire very quickly: if someone does the unspeakable, they are fired right away, with no 60 or 90 day notice.
2) Take funding only when you need it- Both Talia and Shawn who have raised significant capital, talked about the importance of bootstrapping until you can no longer afford to do so. Talia said a good sign for when it's time to start searching for investors is if the lack of capital is affecting the business' ability to go after new opportunities which coud potentially drive big business. Shawn told his story of being completely personally leveraged with his credit cards maxed out so he could support Centro before raising money. In Jason's case, he created a company that grew slowly and would never have to take on investment to survive, sticking to this value even when big time investors were knocking on their doors.
3) Build businesses, not ideas- Jason drove this idea home, saying that too many people focus on building cool things without considering business aspects first. Unless what you want to do is build a hobby, entrepreneurs must consider monetization and potential revenue streams before launching any new venture. Talia also qualified her business before she went after solving the event logistics nightmare problem to make sure her business could make money before doing anything else. Shawn already had experience in the advertising industry, so he knew exactly what ad agencies would spend money on before building that set of tools.
For more great ideas on how to build your startup, check out Entrepreneurs Unpluggd. The next event will be in March, and we hope to see all of you there!