An idea that stayed an idea

This is an analysis of my failings in a startup that started but never went “up”. Let them serve as a “here be dragons” warning to others that may follow and as a map to those already partaking in such a quest.

An idea is just that. It’s worth nothing. An idea with a business plan is still worth nothing. Actually you are now worth less than nothing because you’ve spent the last 3 weeks locked away in a library, disconnected from the internet slaving away while your friends are in the beer garden. So assume that you are still worth nothing – unless you are the founder of Hotmail who did get $10M just for his idea. Also make sure your idea solves a personal problem or one of your close friends personal problems. Developing for an imaginary group of people will never work.

So how is it that an idea germinates into a flourishing business? I still don’t have the answer to that but here are a couple of poisons that will kill off any germinating idea:

Group-think

Group-think is not an organisational psychology term reserved for larger companies. Don’t let a bad idea kill a company before it even gets to the first funding round. The idea should be spot on and analysed by those in the industry. Sure there is a case for naïvety breeding new ideas but as I mentioned, ideas are not worth very much. So make sure that your idea is an order of magnitude better than what has come before. And make it simple. I sat through someone taking 30 minutes just to explain his idea. 3 sentences should be enough.

Competition is already out there

Since ideas are cheap and easy to come by, assume there are at least 5 competitors already working on them. And assume they have a 6 month start on you. Depressing eh?

Flawless execution

So you have a fabulous idea and loads of other people are (probably) also working on it. So how do you out-manoeuvre them? You execute flawlessly for at least 10 hours a day. 10 hours a day because you believe in your idea and because there’s a hell of a lot of work to be done if you are going to gain the first mover advantage. If you have reservations about working 10 hours a day, they are probably symptomatic of your reservations about the idea.

How do you execute flawlessly? For a start, by beginning at 9am every day. This is real work and every hour you delay is an hour lost – forever. If you are working with a partner or team, then you all start at that time. And starting means working on the business idea, answering emails, not chitter chatter. If this seems harsh, start with something easy like talking about what you want to get out of the day.

Good teams

Teams are great. Being in one gives you a chance to bounce ideas around. But what do we remember about ideas – they are cheap. Real work has to be done turning the idea into something you can show to investors. So separate your duties – Sure you are a new company and there are commonalities to be discussed, but give each person responsibility. One may be better at writing, another coding a demo. A third at making the tea.

Evolution provides us with a great example of how many small incremental improvements results in a complex system. Don’t be a creationist. Start producing from day one. Everything you produce takes you further up the value chain and away from the crowd that just likes to wave their ideas around. We’re trying to move up the value chain. If you were an Angel investor, would you rather invest in a team with really good power point presentations of their idea or a team with a working demo?

This all sounds like hard work. It is. But it can be made easier but working effectively and efficiently. There’s work and and then there’s getting stuff done. Here’s a trick I use: Think of someone else from your industry whose work you admire – how would they be using their time? Would they be browsing or would they be making the difficult phone call and searching for honest criticism.

Sure your friends will get pissed off at you not coming out every evening for a beer, but explain to them that you will be there 100% on Saturday evening. Likewise tell yourself that you will work for the next 2 weeks and then take a long weekend somewhere and come back to the project with a clear head.

Let’s talk more about one of the other success factors: The team.

Make sure you are all committed. All quit your soul destroying day jobs. Don’t worry, you’re smart and can get another one. There’s nothing like knowing that “this is it” to focus the mind. Having some of the team working full time and other’s part time is a recipe for mixed commitment levels. It does not work.

Also ensure that your team knows what’s expected of them. 9am starts, good communication and deliverables should be first on the list. Address these if they are not being met and help each other out.

Communication:

It’s as much a failing of the listener for not enticing out the message as the messenger for not stating their case. Some people are not comfortable speaking and it’s the role of the listener to make them feel able to contribute. Work with them. Likewise, if you are putting you message across, remember to over-communicate. People need repetition. It’s only by hammering away at a message that people finally get your point – why do you think brand managers arrange more than one billboard for their campaign?

How do you choose you team? You take whatever you can get. Sure there’s someone brighter and smarter who promises to work for you soon. Take whoever starts contributing to the project soonest and promise them stock from day 1 (based on time contributed) and promise them a job when you get funding. The “I’d love to be involved but…” crowd are the same people who float ideas around. Avoid them.

So you are working hard as a team. But it’s also a lonely world when your are stuck working from home. But remember beer is free at most industry events. Go there, drink the free beer and network. Tell people your idea and chances are they will say “Oh like company xyz is doing” Adjust your focus and move on.

Don’t go writing that business plan until 2 weeks before you need to start looking for cash and have something to demo. Your strategy will probably change many times before you write the business plan. So save yourself time by modelling everything on a spreadsheet. Make the bottom-line justify your business rather than the other way around. And if you’ve really thought through your spreadsheet, writing the business plan will be a doddle. You don’t need internet access to write it either so save yourself the distractions and disconnect. You’ll be amazed at how quickly it gets done. Also, use templates or an existing plan to see how to structure each section.

Caveat: A good business plan doesn’t make a good business. Say what needs to be said and get on with turning the idea into something with value. Likewise, good tools don’t make a good business. Don’t get side-tracked with computer tools and business cards.

Execute well and you won’t need any good luck.

S.

About Simon Tennant
I've lived on 3 continents and worked for a broad swathe of companies ranging from banking, IT startups to plain bureaucracy and finally my own startup in the mobile space - Buddycloud. I have sills gained from different roles in each of these companies that I would like to expand on (and others that I rather forget). Buddycloud is a mobile 2.0 social network. It shows users where their friends are in a city and allows cheap communication between users. It is developed to prototype stage and is currently in the search for funding. My role in this is as one of two founders and as a full time leader of the team of 5 who are working part time on the project.

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