14 Reasons Why You Need To Start A Startup
//This article originally appeared at OnStartups, where all my writing appears exclusively.
This post has been ruminating with me for a while. It’s not a sudden “a-ha” moment that made it form, but a collective group of “a-has!” over the past few months. Consider this the uplifting post to counter last week’s “The 11 Harsh Realities Of Entrepreneurship”. Just because it’s a harsh reality, doesn’t mean you shouldn’t be an entrepreneur. The best time to start a startup is not tomorrow, not next week, and certainly not next year. The time is right now, at this very second. Here’s why:
You Will Have The Time Of Your Life
I put this first, because it’s the reason that will motivate you the most to start a startup. Doing this may be hell at times, but boy is it fun. It’s an adventure that you will remember for the rest of your life whether things go very well or things go poorly. They used to say that everyone should try to be a rockstar at least once in their lifetime. I’m going to add to that and say that in-between being a rockstar and something else, you should be an entrepreneur at some point just for the adventure. Writing this article makes me realize how much I truly love doing this – the uncertainty, the victory, the failure, the connections with customers, the press,etc. I couldn’t see myself doing anything else and if this is truly for you, you will eventually feel the same.
You Have The Power To Create Something From Nothing
Few professions have the power to create something from absolutely nothing whatsoever. Right now, you may have some crazy idea in your head to bring into the world. It exists on some napkins, photoshop files, etc. right now, but eventually it will become reality. There’s a good chance it’s something that will have an impact on a large number of people… millions of people around the world. That wasn’t something many could achieve, even 20 years ago. Now, it’s possible for anyone, anywhere. I rarely use absolutes, since I know what that means, but I truly believe the ability to start a startup can happen anywhere. It’s certainly more difficult in poor countries, but it’s still possible. Look at Kiva.org or posts like this on HN.
A World Of Knowledge Is Available
It used to be a very old boys club or dark art, when it came to entrepreneurship. It used to cost a ton of money to go to seminars and buy books full of snake oil. It still exists, but people are starting to learn better. The experiences of previously successful and/or failed entrepreneurs are everywhere. They are on this very site, they are posted hourly on hacker news, daily on Mixergy, and found through smart people on Twitter. The blueprint to go from zero to paying customers and all the knowledge in between to guide you is out there in the open… for free.
Cloud Computing And Web Apps Make It Cheap To Start
Ten years ago it used to cost a lot to get started in terms of software+hardware. If you planned on doing anything with scale, you needed what equated to a front loaded CapEX of 500k to buy the equipment YOU might need. Software for internal collaboration costed a lot, with very few choices available. Software for actual development was even more costly. Now we have mature open source frameworks/databases and cloud apps. Startup Weekends occur every weekend and are possible due to this advancement in software. I almost feel weird writing this because we’ve taken what’s in front of us for granted. Amazon EC2 scales well, but now it’s even free to test out initially for your project. Of course, your time isn’t free, but even that is reduced with libraries+frameworks like JQuery and Ruby On Rails. Odds are, if there is something you need, it’s out there and available for free. If it’s not, there is probably someone to talk to.
Location Isn’t Important At First
I still think certain geographical areas have their place once you reach certain scale along with what type of business you are building (lifestyle vs. venture backed). In today’s day and age, you can START your company anywhere in the world and get great visibility. I’m seeing more and more companies come from random spots in the US along with international waters. Take a look at Balsamiq, WooThemes, or where Backupify originted (Kentucky!). The ability to access customers is available globally and you can run a distributed team due to the previous point listed above (cloud apps). Face to face time is always a good thing, but it’s a whole lot easier to book a flight once every 8 weeks than to pick up and move to 94306 right out the gate. If location is a worry for you, then don’t worry anymore. Don’t be pressured to race to the valley right away. If another geography makes sense, you will know in due time. You can start getting the most important thing right now, where you are… NOT funding… CUSTOMERS.
You Can Get Press And Attention Overnight
Getting press used to require an overpriced PR firm to the tune of $10,000 a month when getting started. Now a great product with a well crafted story can blow up overnight and get the attention of mainstream media+the tech elite. Take a look at Chat Roulette. Though it’s not a shining example of a great business, it is a shining example of the attention that a company can get press overnight.
There Are More Customer Acquisition Channels Than Ever Before
Getting customers used to be a really hard thing. It used to take a lot of money to make money. At scale, it certainly takes a lot of money to optimize an efficient sales machine with CAC, LTV,etc., but to get started, you can use a variety of customer acquisition channels. Public relations, inbound marketing, search engine marketing, in person events, platform distribution, direct sales, affiliate programs, and a ton more currently exist. They can be strategically used with little capital. Why does this matter? It’s like having more lives in a video game. Many of the channels won’t work out, that’s just life. If there are more channels, then you have more opportunities for success.
It’s Possible To Make A Living From A Startup Fairly Fast
It used to be that businesses would take years and years of losses to get to the point of making enough money to pay for you to live. If you wanted to do one, you had to raise a significant amount of capital up front, usually in the form of credit cards + savings from your job. In today’s day and age, it’s just completely different. You can start charging for software, increase your customers with a certain level of profitable scale, and get to the point that your barebones living is paid for. We also live in a subscription economy, where revenues are recurring. With things like churn aside, customers are now that gift that keep on giving. It won’t bring you riches right away, but it’s fairly reasonable for a team to create software and make a living within a 6 months period. Building a venture backed company is usually different, but lifestyle ISVs can sometimes morph into one. 37 Signals chose to stay independent, but if they wanted to do the raise money + grow fast show, they could have quite a while ago.
The Capital To Grow Is Widely Available If You Need It
The capital raising world is going through an interesting transitionary period. Since entrepreneurs need less to get to certain milestones, a new class of investors have sprung up, leading smaller and smaller deals. It used to be do a larger angel round or Series A, after having a lot of traction to get started. Deals took a while and the terms varied a lot. Now the spectrum varies heavily. You can get funding from YCombinator or TechStars at a ~18k level for just the idea+being a smart team, a $250-500k seed round in multiple flavors, a traditional larger angel round of $1,000,000, or the full Series A. I actually haven’t seen the full Series A as the first round of financing in a while, now that I come to think of it. A word of caution: many people think they should raise money, just because they see it in the press. That’s the wrong way to go about. You should raise money for a specific reason. In the case of the small ~18k YC round, it usually entails getting the first working version of the product out to get initial customer validation. Anything above that should be strategic to hit certain customer + traction milestones. If you don’t know what those are, don’t raise money yet.