Something nobody wants // Something nobody wants to pay for // Something not enough people want to pay for // Something impossible to deliver // Something you can’t deliver // Something too early
And the most common one is to create something that people don’t want to use or give you money for at the moment (even if it will be worth doing later) // Almost guaranteed to pick a failing approach // tomorrow.. // tonight: better approach to that initial spark
The way a lot of people approach generating ideas... “start with an itch” // not terrible, but often fails because no market
Difference between beginner and more experienced entrepreneurs // look at missing puzzle piece and think “I think I could make some money filling that” // different approach because starts right away from opportunity pov, “how can I make money from this”
Difficult to change people’s mind... mindset comes about with experience! // One way I suggest... look around you... // next thing: analyse // recombine other models //// And this leads you to generate what I call >
It might still be a bad idea // topic for tomorrow - how to explore possible business models and validate them
When we use the “cool idea” approach, we tend to overlook barriers. This is not so bad... // “wouldn’t have started it” // not good for personal // some moderation // only one miracle! // miracle shouldn’t be in just getting the thing started
car startup // architecture // Very often, the gap is money (or it looks like money) >
Given how bad a pitch it is, it’s surprisingly common to hear “I can build this great startup, all I need is $100k”
Very few pro investors will invest on this pitch // friends, family, fools // awful source of funding
If professional investors aren’t going to invest, and... then what to do?
Focus on ideas that are within your reach!
Another thing you can do is keep your great idea that’s outside your reach, but find a way to cut it down so it fits within your capabilities - this will be one of the topics tomorrow.
Another thing you can do is extend your reach...
To me, this is the only good reason to pair up with someone. If you need people to do the work, they’re not cofounders, they’re employees. If they’re extending your reach, enabling you to get to an idea that neither of you could do by yourself (or more badly), then they’re a cofounder
Which brings me nicely into my third topic of the night... >
Uneven relationship - idea reach // as we proved the product was a flop... // as the business disintegrated // Steve started talking about shutting down.. // almost lost my best friend // all the problems were avoidable! // alternative ending (matt mireless)
This is a startup I mentored a few months ago... // John and Tim... // Dropped initial idea... // first hint of trouble was... // months of legal letters going back and forth // They’re now getting close to a solution, but it’s been pretty ugly and a big distraction for them...
Well, the first point to make is about how to find cofounders...
.. Now, if it’s like getting married, how do you go about finding a wife?
People who say “yes” are probably not the right match
Things can end badly // need to be extra careful // Don’t want to lose a friend as well as a business // This is why I put together first an article and now these slides - because no business is worth losing your friends over, and there’s a few simple rules that you can put in practice to dramatically reduce the risk of falling out with your cofounder friend.
When cofounders break up... // typically happens when haven’t discussed how to deal with things in advance. /// kill start-ups. // Once major disagr. is reached, hard to think rationally. // Deal with disagreements before they exist!
Implicit agreements // Especially if starting with someone that you know well // You assume they know what you mean
- the business is successful - the business is unsuccessful - working hard on the startup
Apart from bringing up the points that need to be discussed, there’s more you can do to make the agreements explicit.
Another tool for making agreements explicit is writing things down...
This is a very personal viewpoint evolved over the last half-decade. Many people will violently disagree with this! That’s ok. // You have to make up your own mind about this. This is my viewpoint.
SV model is all about options, share grants, etc. // This is not SV. You don’t have to do the same. // options/etc only really make sense in certain contexts, where you’re going down the VC route, etc. // I have a better suggestion that works in most of the world: >
One commonality between successful, experienced entrepreneurs outside of SV is they are very cautious about giving out shares. // Motivation of owning 0.5%? $1b -> $5m, $100m -> $500k, $10m -> $50k.
Either you’re a co-owner of the business, or you’re not. The bar, psychologically, seems about 20%. Less than that and you don’t really feel it’s your business. // But, you might ask, what about.. >
How do I get employees motivated if they don’t own a share? // other ways to get people motivated. // set a worthwhile and tangible vision/strategy/cathedral
Rather than try to incentivise people with a tiny share of something that might be worthless...
But what if you do end up selling the company? Isn’t it fair that your employees should get something? // Sure... so set aside some money for them in the contract. Doesn’t need shares.
Daniel Tenner - Ideas, cofounders, shares
Ideas and cofounders
The plan• Ideas, good and bad• Idea reach• Cofounder horror stories• Cofounder howto• Some thoughts on shares & employees