Tips for running a tech startup

  1. Do not forget that your most important task is to focus on creating a great product. No amount of marketing spend will make up for a crap product that no one really wants to use. 
  2. Make what you know — not what you think will make money. Running focus groups to “discover what is needed” is something best left to large corporations with money to burn and little or no vision or decision making capabilities remaining. Your chances of success  are greatly increased if you create your startup to answer a need that you yourself have. In doing this this, you will not have to constantly ask if you are doing the right thing. You also guarantee that you will have at least one user: yourself.
  3. Choose one or two things you want to do really well and then set out to do them really well. Do not allow yourself or those who work for you to lose to lose identity and focus. Do not create a homer.
  4. Do not forget to create a strong company culture.  Do not expect it to create it itself — especially if you are the founder. Think about what your company’s goals are and then think about the people you will require to accomplish those goals. For example, if your product is a software product then do not deny that you are a technology company. If you’re a technology company then create a culture that will attract technology people. Engineers like casual dress, free coffee, free soda, free snacks, fast computers, big monitors, comfy chairs and a quiet working environment. Providing these things will be one of your most cost effective spends and your investors will thank you for it.
  5. Do not forget to create a strong brand. A brand is not just about a logo and colours. A brand projects your company’s culture and values. Like your company culture, the brand will not create itself. The brand needs to be lucid and unified. Don’t forget that the brand is for everyone; most especially your employees. A strong brand will reduce conflict in decision making. (Think of the question: “Is this constitutional?”).
  6. Do not focus on small problems whilst ignoring the large problems. For example, do not stress over the cost of a coffee machine for your developers whilst ignoring overrunning third-party consultancy costs (such as SEO consultants).
  7. Do not hire SEO consultants.
  8. Do not outsource your core competency. If you’re a game company, you can outsource your web design but don’t outsource your game design and development!
  9. Avoid anyone who regularly uses the terms viral or game changing as if it’s a solution.
  10. Avoid anyone who thinks that the key to success is the silver bullet of the week (for example: changing the color of your buy button from grey to blue is not creative thinking nor will it magically double your user count).
  11. Look for the best engineers and pay them accordingly. Simple.
  12. Except for sensitive financial information, do not create a cloak and dagger culture. If you’re a tech startup, your employees will (if you’re doing your job properly) be above average intelligence. Respect that.
  13. If you’re an engineer yourself, you probably can’t wait to get your hands dirty in the code.  Encourage rather than discourage your team to code. Managers at Google and Facebook are encouraged to code. Software engineers like to follow managers who can code just like soldiers like following orders of generals who can fire a gun.
  14. Software scales very well economically. Do not skimp on the initial development costs. Invest upfront to create a great product because the cost of distributing a great product to 10 million users is going to cost about the same as distributing it to 10 users. If you don’t create a great product, you won’t have 10 million users. Someone else will.
  15. In the physical world, a premium product has to have a premium price tag to cover the costs of materials and production. In the software world, a premium product does NOT necessarily have to have a premium price tag. If you try to compete purely on price (rather than on quality or execution) then someone else will get your users.
  16. Limit your product functionality for up-sell if required but don’t think that deliberately creating a poor user experience in the hopes that people will upgrade is a good strategy. What is most likely to happen is that the user will not pay at all and use an competing product instead. A good example is coffee shops. I once heard it argued that coffee shops should have uncomfortable chairs to encourage faster throughput of paying customers. This sounds reasonable but it does not take into account competition. You may be able to get away with this if you are the only coffee shop in town but in reality your customers will quickly find better, more comfortable places to drink and socialise. You may get customers once but they won’t come back. People don’t put up with bad user experiences unless they have to. If you’re building software, think about creating the equivalent of comfy chairs for your users. As mentioned in the previous point, the amortised cost is minimal. Frustratingly, my co-founder believed in making chairs as uncomfortable as possible and this was the cause of disagreement for some time.
  17. At some point you will need some marketing but don’t idiotically spend all your money on marketing. An advertising blitzkrieg will not save you from failure.
  18. Have fun 🙂

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