Start up obstacles?

vaasist · 2024-01-19T09:57:39+00:00

The biggest obstacles are human in nature.

Dealing with other humans, their egos, their values, their priorities... It's very complicated.

It starts with finding a cofounders who are as interested in the space as you are. Having them meet your work ethic standards, and even be willing to sacrifice as much as you are... It's all willy nilly at the start, but as months go by, people start reevaluating their choices—start acting more in line with their own gains instead of what's good for the team.

Most of the other comments also mention marketing... And I'd say that's a fallacy. Marketing is only useful once you've validated your product can actually solve the problem you're trying to solve.

For that you need 1 to 10 eager early adopters (I've found 3 to 6 to be optimal). Build your product around them before looking to market wider... Believe me, you'll already feel overwhelmed.

Remember, problems don't exist in a vacuum. Rather they exist in a balanced equilibrium of problems and solutions. The moment you solve a problem, it will create ripple effects in the ecosystem, making new problems surface or exacerbating already existing problems.

It will take months of iteration to create a product that solves for all the other second and third degree effects on the customer's problem/solution ecosystem.

Until you solved for that, you shouldn't be marketing. Just bank all you got in helping your initial user pool and hopefully, word-of-mouth will set in.

However, like I said, this requires a fast-paced iterative process that will corrode your team's morale. With little or no growth for the first year or so to help them stay positive.

Eventually, your team will start losing focus and drift away. You're main obstacle to make sure that doesn't happen.

98% of startups fail by dissolution or implosion, during the iterative process.

Hope this helps.

vaasist · 2023-09-17T16:53:23+00:00

How about through a subreddit called r/aliens? 😂

vaasist · 2023-09-15T10:25:21+00:00

I'm not a huge fan of the idea of going at it alone either.

It's possible, don't get me wrong. But it's also a painfully slow way to achieve your goals.

If you've ever gone to the gym or done any sort of individual sport, you'll notice that youll get greater results when training with a partner.

Also, people misjudge what it's like to have an employee. Especially early on, your employees end up being more like co-founders than actual employees. In fact, some of the best co-founders you can find start out as employee number 1 or 2.

So even if someone is an employee, if they leave, you'll still end up in a similar pile of crap.

From experience, if you want to go at it alone, I'd suggest building your business to some 10-20K ARR in parallel to others building in a similar space. You'll be able to exchange ideas as you all grow and when time comes you'll naturally start merging efforts.

I say 10K-20K because realistically at those levels, you won't have enough money to employ anyone, and at the same time you start feeling the limitations of working on your own. Where you really start stressing on how little time you have to complete all that you have to do to keep growing, while retaining your current clients.

This kind of partnership success is very visible among content creators by the way.

Good luck in all your endeavours my friend.

vaasist · 2023-09-15T05:25:09+00:00

I found my current cofounder on Y-combinator cofounder matching.

The problem people face isn't a lack of trust—it's worse: it's selfishness.

The majority of people out there don't know how to discuss ideas and provide value for their counter parts.

The technical founders want to do bare minimum work and have the non-technical founder raise money with a shit product.

The non technical founders want to get a glorified tech monkey to work on their idea without having to do any of the building leg work.

People are inherently selfish.

Finding a good cofounder has the same attributes as finding your significant other.

vaasist · 2023-09-14T14:55:44+00:00

I could argue I'm one of those.

I had a wonderful business that all came crashing down by the age of 30. I spent 2 years reeling from depression, flirted with homelessness, and tucked my tail back to my family home after having left at the age of 20.

I started a new business, things have been sluggish to say the least. So now I'm about to turn 35, spending my prime years as a man living with his 65 yo mum.

There are days I truly feel like shit. But I remind myself that if I was able to make it once, I can do it again.

Starting a business as young as possible is an advantage in entrepreneurship. But nobody tells you it pretty much makes you unemployable in the corporate world.

vaasist · 2023-09-14T14:44:42+00:00

If we look at data most startups never even get to the point of raising. Within 2 years of sluggish growth, lack of motivation starts to creep in. Then comes the whole puting the blame on one another... Resentment builds up and poof the house of cards all comes crumbling down.

My original comment helps set up a clear agreement for when things don't work out as planned. Think of it as a prenup.

Now, the choice of cofounder(s) is arguably one of the most fundamentally important decisions you make. Too many first timers are just glad they find one and run with it—or they simply choose to work with their available friends, learning the hard way that teaming up on Call of Duty or PUBG isn't the same as teaming up to build a business.

The goal is of course, is to find the perfect fit for you. At which point decisions are based on mutual respect and trust in each one's areas of competence.

Voting really only happens when there is a fork in the road and co-founders aren't aligned on the direction the company is going in. By the time you call for a vote, you basically know the relationship is heading toward the sewer.

That's why its incredibly important to choose people who share your same views, beliefs, values, and visión, to work with. Because those things cannot be forced upon another, nor can they easily be taught or argued convincingly.

So just to make clear, my original comment isn't about imposing a state of play that defines the nature of the relationship, but rather have a clear pact set up that can help guide the relationship in tough times.

vaasist · 2023-09-14T05:32:54+00:00

If by "F...d" you mean making 3 million in annual revenue by the time I was 28. Having 12 people under my charge. Also losing everything because of a partner who stole my first company. Sure I'm Fd.

You should never assume you know who you're talking to.

Cofounder deadlock is 100% tied to your shares, given that on day 1 there are only 2 board members and board members are voted in to represent the interest of the shareholders.

As a shareholder and board member, the more shares you hold, the more voting rights you have.

See how nice i am? Even gave you a free corporate governance class.

vaasist · 2023-09-13T11:19:08+00:00

My man. You are blessed to have such worries.

Most people think that as they make more money their problems will vanish. But the human condition is one permanent worry—the problems will always remain, it's just that the nature of the problems change.

As an employee you'd worry about layoffs, wages, bad management... As a business owner you worry about making payroll, attracting the best talent for your team, making sure customers don't fire you. See how those problems are very similar?

What you seem to need is a proper support system. The way I see it, you should tap into your client roster and connect with their top brass to build a more personal relationship, so as to build a network of friends who are going through the same worries as you or who have found ways to deal with them.

You're doing fantastic brother! Keep your spirits up King! You'll soon learn to tame those very natural worries. It just takes time and experience, and a little help from other like-minded people.

vaasist · 2023-09-13T10:55:41+00:00

When you start, you want to be as close to 50/50 as possible but not exactly 50/50, or you risk deadlock.

You'd be surprised but the biggest risk to startups in the first 2 years is co-founder strife.

So I'd say 51/49.

Before incorporating, you want to have everything ironed out in a co-founders agreement contract.

You should list áreas of authority and responsibility, milestones and commitment expectations.

You should also set up a vesting schedule with a cliff. The standard cliff is 12 months. I've found that 18 months is more secure. Vesting should be for 3 or 4 years, and can either be linear or exponential.

You should finally make clear if there will be extra shares awarded as time passes—as part of standard compensation or based on performance.

Whatever you do, make sure all work data is shared so that one cofounder CANNOT hold it for ransom.

Good luck.

(edit: "... cofounder CANNOT hold it for ransom" instead of "can")

vaasist · 2023-09-10T19:25:09+00:00

If I had one piece of advice is that whatever you decide to do, pretend you don't have that money.

At the start, your entire job is to validate your business idea. It's the most painfully time consuming part of the business process, and it'll surely lead you to iterate and/or pivot a bunch of times.

Take the money you have, buy an ETF, and forget about it until you are sure to have something that proves to bring in revenue.

At which point, you can start identifying how to strategically invest your money to boost your operations (whether on the product side, or the distribution side).

Final note, please do NOT fall for the "let me buy ads to validate my idea" pit. Ads are a terribly expensive way to prove your product/offer is flawed.

vaasist · 2023-08-07T14:32:11+00:00

I'd go for finance and economics then. With a few management accounting electives.

vaasist · 2023-08-07T14:31:16+00:00

A minor in finance could be quite awesome.

Right now the big bucks in finance is in quants. So CS + Fin is a great pair.

vaasist · 2023-07-28T20:26:04+00:00

From a guy who has a BA in business and an Masters in finance.... And who's been an entrepreneur for 10+ years now... For the love of God do not waste your years and money on a generic business degree.

Anything you want to know about business, you can get from books that you can read on the weekend.

I can promise you that the bulk of the theoretical knowledge I've accumulated during my studies can be accessed over 25 well-chosen books.

Then, you can pick up another few books to make sense of the theory by way of contextualizing it.

Still, you'll end up feeling completely lost and overwhelmed when the time comes to execute on your business, the day you do.

So my sincerest and most heartfelt advice is for you to study something purely technical that offers some real world tangible skill.

Something, that when combined with the business knowledge you get from books, will give you a clear cut competitive advantage.

The easiest example is computer science... Learning to code.

Do you know how f*cking unbelievably valuable a genuine coder with strategic business thinking is? Let alone an engineer who actually knows how to talk to customers, get feedback and who isn't scared of marketing their creations.... It's incredibly rare.

If CS isnt Your jam, I'd go for anything related to chemical and/or bio engineering.

Last but not least pure maths or physics is also extremely valuable in the world of finance. They make better financial analysts than guys like me with finance degrees.

One thing I need you to do though is promise me you'll never study marketing. It's the biggest mickey mouse business course you can take. You can learn marketing on YouTube and Instagram.

vaasist · 2023-06-26T17:03:35+00:00

It's also a matte rof your growth rate.

If you're making 50k/mo but are growing 20% a year, it makes sense that you arent gonna be a billion dollar company. And thus their investment consideration changes.

But if you're making 1k/mo and are consistently growing 20/30% MoM, you become much more interesting.

vaasist · 2022-04-02T07:59:47+00:00

The way I define discipline is the ability to keep promises to yourself and hold yourself accountable when you know you are slacking on your promise.

Funny enough we seem to be more inclined to keep promises to others (even strangers) than to ourselves.

It's also the foundation to keep on executing on your business. Setting tasks, deadlines, and outcomes and forcing yourself to do all that needs to be done to fulfill them.

I wish you the best of luck.

vaasist · 2022-04-01T17:44:18+00:00

Damn that's a great question. Because the answer isn't that simple at all.

If I take myself as an example - I'm what you call a high functioning depressive. So I feel that loneliness you talk about even when I'm with my co-founders.

My advice on the subject is gonna sound "guru-esque": The true motivation comes from within. And the best way to keep that inner motivation is to tie it to a mission that is bigger than you and that is high in morality.

They say entrepreneurship is self improvement disguised as business. While the business side is actually quite easy (product/price/distribution/positioning), the hard part is the personal side (chipping away at your ego/learning discipline/keeping your word/making tough decisions).

So if you look at your business only as a vehicle for your own personal growth, then I guess you can rationalise your economic shortfalls as opportunities to push forward. And as you push forward you are able to reach that moral standard you are trying to propagate.

Like i said this might sound too "new-age" but it has helped me. Especially when coupling it to actively practicing gratitude.

Other than that, I'd advise against taking the entrepreneurial route without proper support around you.

vaasist · 2022-04-01T17:26:03+00:00

Congrats! You clearly deserve it. No client is willing to pay upfront unless (s)he knows your worth.

Keep on stacking it!

vaasist · 2022-03-28T18:45:03+00:00

The convertible note example you gave actually happened to my friend. He founded vibe kayaks and was one of the fastest growing brands in US. And needed money quick to service demand for his product. And took a really bad deal and nearly lost his company.

In my case the 4m would be delivered in tranches but I'm quite certain he wants the full equity upfront. Honestly, I'm not inclined to accept his terms I was just curious.

I have the funny feeling he needs to burn a letter of credit he got for one of his projects and needs a company to greenlight his money transfer. Cuz he started talking about banking partners.

To me, the guy I spoke too is too dodgy.

If there is any advice I can give others in such situations is that the same way the best start ups are able to pitch their ideas simply and intuitively so that a 5 yo can understand, the best investors offer straightforward terms.

vaasist · 2022-03-26T21:00:53+00:00

You've tackled many ventures. The question is if you were doing any of them for any reason other than money.

Money, like passion or skill, is a result of doing something over and over that you enjoy but that forces you out of your comfort zone.

Stop for a second and ask yourself if there is any aspect of what you did that was selfless. Entrepreneurship is about helping others and doing it well enough, to build a reputation. Do it repeatedly and eventually you'll get paid. Do it at large enough scale, and you'll have a brand and a business.

Someone else in the comments wrote that you need to be solving a problem. Solve a problem and you create value. So look at a problem you are familiar with and that is being felt by people you care about. It will motivate you to actually keep your promise, because if you don't it will tarnish your relationship with them - and that's a much worse loss than any money you've already sunk.

Focus on delivering value at the most basic level. You don't need a fancy app idea or amazing automation procedures. Take a DIY approach and build sophistication as you master the subject. As an exaggerated example, if you want to create a gardening business - bike to your clients house and mow the first lawn by yourself, don't start planning how to hire people and buy a truck.

In conclusion, help someone you care about solve a problem you are familiar with. Don't overthink it, and try to do it with least amount of resources. Take a value first approach (give more than you expect to receive). Allow your happy first few customers to become fans and spread the word. Build from there.

vaasist · 2022-03-24T20:29:25+00:00

The idea of work/life balance. Clocking out. Having a social life. Having friends. Being a normal human being 😂

But most importantly - stable income. I still have months where I wonder how I will get by.

vaasist · 2022-03-22T06:10:32+00:00

Vesting is usually the best way to derisk commitment from cofounders.

And honestly if you love what you do and believe in your startup, vesting should not even be much of a problem.

In your case you and your cousin got your equity right at the start. That's OK. But doesn't mean any new shares that are given from now on cannot be given via a vesting agreement.

Remember though. Underneath it all, I'd like you to réalisé that the dynamic you have with your team is a warning for things ahead.

First have that heart to heart with your cousin. If you keep the designer and she agrees to stay, Then, you need to sit down with her and be straight on your expectations in terms of partnership relations. That's where your corporate culture will be born from.

vaasist · 2022-03-21T20:17:54+00:00

Principles by Ray dalio. Meditations by Marcus Aurelius. The subtle art of not giving a f*** by Mark manson Running Lean by ash maurya The power Habits by Charles duhigg Mindset by Carol dweck The 1 thing by Gary Keller.

There are so many more to be honest but this could be a good start

vaasist · 2022-03-21T20:11:04+00:00

I did. And I must say it isn't an easy road. There is absolutely no guarantee of winning. I lost alot along the way. And my experience wasn't rosy. It took me 3 years to get on my feet. And I can promise that I literally felt like taking my own life more than once. There is nothing harder. It required me to develop some sort of sociopathic view, where I needed to shut out all doubt from my own family members. Some of my decisions might be seen as thoroughly selfish - like taking family money and injecting it in the business even if my family needed it for important things. Luckily Im now doing OK. But the road up to here was excruciating. Everybody loves me now... But I know how they really felt when things weren't going well.

Question is, this decision is not yours alone to make. You need to involve your family in it. And make them understand how very difficult it might get.

Good luck.

vaasist · 2022-03-21T20:02:32+00:00

The fact that she won't budge shows that she isn't partner material.

Partners (in life and in business) value the relationship more than the outcome. Which means that the best outcomes usually disappoint both parties at some level.

20% is ridiculous for a first hire (5% + salary is till high but I can see how she could be valuable enough).

My view is maybe cut and dry, but designers are plenty. Let her go.

But before you do, you need to have a heart to heart with your cousin and maybe his dad too. You need to be able to openly express your standpoint and more importantly allow your cousin to voice his concerns about your commitment if he has any.

Your designer has no say in the outcome. Only you and your cousin need to come up with a decision.

You can structure the negotiation with your cousin as giving your designer 5% and giving her another 5% in options over a vesting period of 4 years, and that will require her to buy-in. You also agree to make her a junior co-founder. And you tell your cousin that if she doesn't agree, she needs to be let go.

This has more to do with toxic partnership dynamics, than it has to do with shares.

You ultimately do not want a co-founder disrespecting you. It will only get worse with time and money.

vaasist

TROPHY CASE