Best & Worst Decisions Starting Companies

markfletcher writes "Today I launched a new site, Startupping, dedicated to helping Internet entrepreneurs. For the launch I asked several successful entrepreneurs about lessons they learned starting and running Internet companies. The first set of replies includes responses from Paul Graham, John Battelle, Chris Pirillo, Ross Mayfield, and Dick Costolo."

Other Startup Sites

[janneH]

A bit off topic maybe, but anyone know of good sites for more general startup help - that includes non-internet companies? A place to discuss contract terms, get recommendations for legal help, advice on whether to go LLC or C-corp - or one of the million other questions that come up.

Re:Sorry but...

[Shadow Wrought]

This is blatant advertising.

Ah, so its the "blatant" part that separates it from the rest of the dot;-) Maybe instead of the Intel section they should just call it Slashmarketing Sponsored by Intel (Until AMD Pays Us More), and then we can throw them all in there.

Right off the bat

[Dystopian Rebel]

Some serious mistakes...

1. Invent a verb.
2. Take the gerund of the verb and register it as a Web domain.
3. Launch a new Web site. There are already too many and yours sucks too.
4. Advertise your site on Slashdot, where opinionated fussbudgets, girlfriendless nerds, and Grammar Nazis (often all the same thing) will gleefully and mercilessly attack your competence and judgement.

Product quality.

[Savage-Rabbit]

Steve Jobs keeps making the stupid mistake of maximizing product quality over all else, when a smart business person understands that product quality is just one of many factors that must be balanced to maximize profits.

I don't buy Macs because of their superior quality. I buy them becasue Apple computers tend to be comparatively well designed (at least the laptops are), the Apple desktop environment has better ergonomics than Windows (in my opinion, your milage may vary), personally I value the fact that OS.X is Unix based and Apple hardware tends to age better than many (but by no means all) PC computer brands, there are PC brands that do just as well as Apple. I don't think that Apple computers or products in general are insanely better quality than other products in the same price bracket. If you can accuse Apple of anything it is that they occasionally over design their products and to fall into the trap of sacrificing practicality and robustness for coolness of design.

Re:And i-bullshit too!

[oliderid]

What truly matters for a start-up is the team behind the business plan.
I can easily hire a good consultant to write the business plan (and I did it once). I will add a nice SWAT chapter, a competition review (based on a Jupiter analysis), 3 years projection (with 3 different projections: pessismitic, break-en, optimistic) and so on...You know that they expect a break even on the first year and a 120% ROI on the second year? Well simply change your Excel sheet.

Investors (at least experienced ones) know that the reality will be different from your business plan. It will just help you to structure your ideas and nothing more.

So what they are truly looking for is a team. Personnalities, experiences, motivation, etc..
And of course the idea.

If you want to be a CEO...You have to prove your leadership and your ability to convince the right people to join your boat, (or at least be ready to join in once there are some money). Otherwise you will remain a brilliant isolated inventor/engineer/salesman...

IMHO 70% for the team, 30% for the idea/product/service/whatever.

This was my biggest mistake. And my biggest success was to recognize it :-)

Olivier

Founders at work

[Neme$y$]

For a in-depth look at some of the secrets for a succesful start-up, Founders at Work: Stories of Startups' Early Days [foundersatwork.com] might serve as an interesting read.

It features interviews with Steve Wozniak (Apple), Caterina Fake (Flickr), Mitch Kapor (Lotus), Max Levchin (PayPal), and Sabeer Bhatia (Hotmail).

I haven't purchased the book myself, but I'm getting one as soon as I can to help me with my own startup initiatives.

Quote: All the best things that I did at Apple came from (a) not having money and (b) not having done it before, ever. Every single thing that we came out with that was really great, I'd never once done that thing in my life. --Steve Wozniak, founder of Apple, page 36

Re:Customers!

[mwvdlee]

I started playing Second Life out of interrest and ended up having a minor business there, selling self-built goods. SL is by far an ideal representation of reality but it did help to drive home a few points.

I built some really good car models, they were truely 3D (as opposed to typical SL cars which are more like textured cubes), was painstakingly textured, had very good scripts to handle the driving; I can safely say they're the best you can get in SL and it took me weeks to get there. So I asked a relatively high price; nobody bought it.

Lesson learned; people will pay what THEY think your product is worth, not what YOU think it's worth.

It's all basic supply & demand ("no demand" means nothing else even matters), but SL was a very quick way to learn that lesson.

FWIW, since SL is such a microcosm, it might be a cheap way to learn about business as a whole. Most things I learned I had already heard from others, but it helped demonstrate these lessons in a quick way.