Monday, March 10, 2008

Tips for startups

Reposting this from my original post in VentureWoods

There is an interesting post doing the rounds on the blogsphere which talks about 17 tips for startups.

Most of these tips apply to the US, but some are universal, and the one I like the most: fire employees who are not workaholics. I totally agree with this one and strongly recommend that every startup apply it. You don’t need a big team, you need 2 to 3 people working 18 hours a day, 7 days a week with no vacations. Find them and keep them.

Anyway, that post was followed by a Techcrunch post, which was a startup not too long ago and the founder had his own advice.

If you have any additional advise then do share here in the comments section.

Here are some of my tips:
1. Try and outsource as much as possible. You may not be able to recruit great people because you are a startup, but you will find fantastic entrepreneurs who are available to work on your project in an outsourced capacity.

2. Cash is a very scarce in a startup. Try and do equity deals with outsourced companies, this will bring down your costs. You will be surprised how many are willing to take equity if they like your idea

3. Don’t recruit employees. Recruit co-founders. The best people no longer want to work for companies, they want to own them, so recruit co-founders. You will be amazed at the quality of people you get, far better than if you advertsied for employees. You will need to give them some stock, but that can come from the ESOP pool. Goto www.salary.com to see how much you should set aside for ESPOS

4. Drive the costs down of everything. Don’t be shy of bargaining.

5. Work like crazy, don’t relax, get everything done at 5 times speed. You will run out of money faster than you think. You customers will come later than expected. The only chance you have of beating the system is keeping costs low and working faster than money runs out.

2 comments:

Jawaid said...

Good reading, thanks for sharing. But the number of start-up in Indian is very less as compared to US. The VC market here is at a very nascent stage.

Abid said...

I would add,

I agree with everything said here. The key for success when it comes to a start up is in the planning and the amount of detail. So plan expenses as much as you can and yeah get into a deal with anyone with a space, in kind and not in cash, if possible. For a start up its impossible to pay huge rents so don worry its OK to loose some equity for space, make sure the space is furnished.

Recruit people who are workaholics. Pay them well and get your HR policies right, don't recruit the wrong people, it will cost you more. Spending on good staff is good. Have a retention policy, make sure people who you recruit love know what they are going to do, it saves time and cost and keep the best at any cost, it saves too.

Start ups can't find good staff easily and luckily now is a good time ;)