The things first time founders do…
klinger.io
klinger.io
I think a better way to do it would be to make the item itself a link with alt text "Tweet this".
On it.
https://twitter.com/#!/serenestudios/status/1613829145321840...
They desperately try to increase their social media footprint. (Agree? Vote this!)*
* Irony
Done.
I got this idea sent on twitter. I quickly did it and ran off to a meeting. I will change it now. It wasn't meant as a socialmedia hack but as a cool way to interact.
On it. Tell me in a sec if you think it's better.
Thanks for the honest feedback though :)
Some, like "They plan details about sh*t that never sees the light of day" are quite self-sufficient, but some of the others are pretty vague or even come across as contradictory. "They seek too much advice from too many sources with too many conflicting views" but also "They do mental incest by bouncing ideas off the same people every time"? I know that different founders make different mistakes, but I'm still in the dark on how to find the happy middle.
For ones like that, or "They have no clue about their market", I want to hear what happened! What's the story behind the advice?
I know that this is beyond the scope of a list like this, but maybe it could be fodder for some future blog posts.
I started a new thread just last night for this - http://news.ycombinator.com/item?id=3498421 - Bootstrapped Consumer Web Startup Stories? #Win and #Fail.
I am not sure how to get this conversation started, but I really would love to hear from the community on HN.
I agree that it's difficult to generalise but the utility of a list this comes from the introspection it can provoke. "Am I talking to too many people?" "Am I following vanity metrics?" "Am I planning details that matter?"
Awesome. I am happy to share details on single warstories and how to avoid them. I just wanted to get this bulk of my chest first :)
If people want to invest in your company, its legal form is of little importance.
Changing the legal structure for a small company isn't a problem and any serious VC can even help you with that.
I never heard of someone not investing in a company because it didn't have the proper legal form.
If, at the moment, your startup consists of the proverbial two guys in a garage, it's highly unlikely that you need to spend $10,000+ on a lawyer's counsel and advice. Build your product first. You're not even on the radar yet, so it's not as if Google or Facebook even know who you are, let alone want to steal your idea. And chances are, someone's doing your idea anyhow. Chances are, ten people are doing your idea right now. Your best defense isn't legal action; it's product traction.
There's a time and a place for lawyers, but right up front is usually not it. Unless you've got some sort of truly innovative, groundbreaking technological innovation on your hands.
The bigger problem I see is that many people actually think they've got something innovative, unique, groundbreaking or patentable. A "social network for dog lovers" is probably not patentable, certainly not that unique or groundbreaking, and none of it matters without execution and a userbase (ideally of paying customers). But I run in to many people who fret way too much over "how can I protect my (one and only) idea?!!"
We need have a "Founder's Daily Prayer":
"God grant me the wisdom to execute on the mundane aspects of my business, legal protection for the truly innovative and patentable aspects of my business, and the wisdom to discern between the two".
Investors will talk to you - but how much effort would you put in if your goal is to invest let's say 50k-100k as a seedround. You are rather worried about the upcoming series of investment therefore you push into a LTD or similar entities. If you invest only 50-100k how much will you really bother holding hands while the founders change their entity
Btw… Changing a legal entity is a very cost intense procedure.
I might be wrong but i experienced exactly that first hand.
In France changing from SARL (not VC friendly) to SAS (VC friendly) hardly exceeds 10 000 €.
For a business angel, you might even stick to SARL which has got some advantages regarding partner's compensation (less taxes, more flexibility).
They do mental incest by bouncing ideas off the same people every time.
They have no clue about their market.
They confuse certain customer assumptions with facts.
They turn their sleep cycle into crap due to poor planning and for arbitrary deadlines
Another point of contention was:
We have been working on our Startup for 3 years now and there were more reasons that it should have collapsed than I can think of.
Is it possible that actually making these mistakes is how you get better? I'm all for primers and advice, but something is missing here.
Regarding your point about making mistakes: I assume the truth is inbetween.
As said it's harder for me to give advice "what works" because stuff that works is usually more specific. But i will try in future to rather focus on actionable stuff that works instead of warning signs
Social Startups are the hardest to do because they usually rely on the critical mass of interaction and network density within the community. Basicially you are relying on other people to do your job of creating content.
The only thing that is harder is doing an marketplace, because in a market place you not only need network density you also rely on them selling the content.
They usually have a high upside if they work. The problem is to get them to work. And for some reason they are highly attractive to first time founders - like me back then.
Here is one of the best posts about it: http://blog.asmartbear.com/marketplace-business-model.html (thx to @lfittl)
I am also doing a marketplace startup. I have validated the need but well We will never know till I launch.
There is something about marketplaces that actually make them seem attractive.
...but it is Monday morning, so I haven't woken up properly yet!
(i)They are arrogant and ignorant to any feedback they don’t want to hear.
(ii) They seek too much advice from too many sources with too many conflicting views.
Seeking advice is the opposite of being arrogant, and if seeking advice is a mistake it's only because you listen to too much of it, thus making you too responsive to other people's thoughts, not ignorant towards them.
The second was added by suggestions.
But to be honest. Although contradicting. Both happend to me.
I've seen this with people I've consulted with. They'll get advice from 12 people, and ignore the advice from 9 of them because they don't agree with it, then go ask another 5-10 people for more advice to confirm the original 3.
They underestimate everything apart of one thing: Themselves. They don’t get that a low burnrate and being prelaunch doesn’t mean you have more time to waste.
You can also save that local entity by moving the UK Ltd into your country and registering it in the local company registry (EU only) - great article on how to do this: http://www.internetszene.at/2009/03/31/checkliste-limited-od... (German, unfortunately)
We've registered an Austrian GmbH couple of years ago and haven't had any issues with that so far. The break-down of voting rights and shares are directly bound to how the common stock (usually 35k€ in AT) is being split. When it comes to investment rounds, the investors either increase the common stocks or buy it from the other shareholders for the nominal price (the percentage of the common stock value). The whole process is strictly bound to a formal process (a notarial act), which can get quite expensive, which is the only down-side in the long run.
On the other hand, Ltds still have some shady smack for some reasons over here (one is that you're seen as being cheap), so when you're an Austrian or German company, I bet you gonna need to explain as a small startup why you have gone the Ltd path when talking to big potential customers, and I think this is something you want to avoid at that stage ("act like how you want to be seen, not like who you are", and each serious company here is a GmbH). I understand that it's a big turn-off for young founders to put in 17.5k€ in cash from the start (which is the minimum amount to be provided when founding), but it pays off when it comes to reputation, at least when acting in the B2B business.
Also things like stock options, reverse vesting, convertible notes turn into overly complex issues when trying to re-create them in GmbH law.
And besides the additional bookkeeping/accounting burden, I have not encountered any issues with our current setup.
In regard to why Ltd+GmbH: We found the move-the-Ltd-to-Austria process a bit complicated, and also encountered the issue you mention, that people think of Ltds being shady/not trustworthy.
I do see problems for investments with GbR, KG or Gmbh & KG, though.
Note: I am not sure what the right translaion for "Stammkapital" is, I just used "capital", it might be "authorized capital" or "original share capital" or "corpus" according to my dictionary. Can someone enlighten me?