Key Takeaways

Are you looking for those?

Here on one page are the key takeaways from all previous posts on failuresucks.com. This is a single view of my recommendations for all "late first-time entrepreneurs" — like me when I started working on flyiin in 2015.

Big Idea

Expertise vs. Opportunity

Before investing significant time and money in an opportunity, distance yourself from your industry and read it with the highest possible level of objectivity. Reflect on your possible biases: Are you overestimating your own knowledge and expertise? Are you overestimating or misinterpreting signals that the opportunity exists?

Industry Dependencies

Speak with other emerging companies that are already working with your target industry. Ask them about their experience and inquire about the length of the sales cycle and the reasons behind it. Then, decide whether you are ready to enter that industry or not.

Barriers to Entries

Homework is, once again, the key here. Establish the barriers to entry in your industry and evaluate the cost of making your way in. Make sure to understand the internal operations and commercial aspects of your target customers to determine their liabilities towards their established vendors.

Company Naming

Spend the time required to come up with a company or brand name that people will remember. Use any of the GenAI tool to help you with this process. Check a few online resources to learn the basics of brand development and test it extensively with your network. If you realize that people have a tough time referring to your brand correctly, change it immediately.

Founding Team

Founder Profiles

If your venture requires a founding team, seek out individuals who possess a unique combination of domain expertise, communication skills, and organizational abilities. Be demanding in your search. If one of these skills is missing, it is better to pass and look for another individual with a more suitable profile.

Mindset

Do not make anyone a founder until you are completely sure that you can work with them. Reach an agreement with them on all key aspects of the venture before spending the first euros or dollars. If you are unable to do so, it is better to work alone at first. Seriously.

Capital Ownership

When creating a company, it's important to keep, at first, the majority of shares and voting rights for yourself. Don't compromise on this. You need to maintain control of the key decisions that will impact the venture, particularly if you are the driving force behind it and bring the network and domain expertise needed to put the company on the map.

CEO Priorities

During the first few years, it's essential to get your hands dirty by delving into the nitty-gritty of your product and taking ownership of the product roadmap. Spend the remainder of your time building the foundations for growth and the discipline that comes with it.

Company

Country

Don't be fooled by your perceptions of a particular tech hub. It's important to do your homework and evaluate the extent to which the country facilitates entrepreneurship. Understand the cost of building and, more importantly, retaining a team there.

Law Firm

Choosing established, experienced law firms or small shops to set up your business and assist with funding raises may not be the best choice. Instead, search for mid-size firms that have experience with venture capital and international exposure. Seek advice and learn from other early stage companies about their recommendations and experiences.

Taxes

To protect yourself from unexpected tax situations, it is important to set up a legal entity to own your shares in your venture. Depending on your location, this may cost a few hundred euros per year to maintain. However, it will save you headaches and ultimately be key to a successful funding raise.

Funding

Don't feel compelled to jump on the well-publicized, venture capital-driven funding bandwagon if it's not necessary. Fundraising efforts can be a major distraction and often overrated. Instead, consider alternative financing options that will allow you to focus on your business while securing the necessary funds.

Technology

Your technology stack choice significantly impacts your venture's growth, product quality, and team building. Dedicate ample time to this decision with a suitable technical co-founder, as it's one of the most crucial after defining your big idea.

Fundraising

Homework

When it's time for you to negotiate the first term sheet, make sure you allocate enough hours to learn about funding. By doing so, you will be well-prepared to secure the best possible deal as a founder. Additionally, you will save on legal fees that can be invested elsewhere.

Timing

One golden rule is to never, ever rush to seek external funding until the time is right. Instead, focus on building a small product, shipping it, and acquiring your first customers. This approach will provide you with more options and a stronger negotiation position when you're ready to raise your seed round.

Investors

If you are unable to convince multiple investment firms to discuss a term sheet with you, it indicates that your venture is not attractive enough. In such a case, you may want to reconsider your big idea and potentially end the journey. The worst outcome would be to have the wrong investors with unfavorable terms, which will inevitably lead to an even worse situation down the road.

Terms

When reviewing your first term sheet, focus on three critical elements: pre-money valuation, vesting, and liquidation preference clauses. Investor-friendly, standard terms that protect founders suggest you've found the right partner. If the terms are unfavorable, continue your search for a more aligned lead investor.

Amount

When choosing between large or small funding rounds, consider your desired company structure. Do you want a lean team of versatile individuals working under pressure, or a larger, more traditional organization with diverse profiles? Your funding choice will significantly shape your early-stage company culture.

Use of Funds

Office Space

After securing funding, resist splurging on office space. Instead, invest in robust virtual infrastructure and tools for effective remote collaboration. Organize regular in-person meetups to foster team spirit and culture and to collaborate on key design work.

Team

When building your initial team, prioritize the most critical roles that will enable you to go to market quickly and validate your big idea with real customers. Additionally, hire an HR professional right away to avoid costly hiring mistakes in the early stages.

Salaries

With limited funding, prioritize achieving the highest return on investment. Pay your team members at market rate, but clearly communicate that improved compensation hinges on more solid financials (e.g., new funding rounds or large customer contracts). If a team member receives a better, above-market offer elsewhere, don't try to match it at that point.

Perks

Wait to introduce perks until your company's future is more secure. Gradually expand benefits as customer contracts and revenue grow. Make this approach clear to your team from the start. If your finances permit, consider investing in sending your tech team to their annual developer conference—the return on investment tends to be immediate.

Travel

Travel is crucial for building relationships and brand awareness in a startup. Budget wisely and embrace cheaper accommodations to maximize networking opportunities. One well-timed trip can lead to significant business breakthroughs, justifying the investment in travel.

Day-To-Day

Human Resources

Your early investment in HR will set your venture on the right path. By prioritizing a professional recruitment approach and fostering an open, transparent culture from the start, you'll attract better talent and retain them long-term—even when times get tough.

Product & Tech

Lead product definition initially, especially for digital experience-focused products. For API-first products, share responsibility with your technical lead. In both scenarios, strong collaboration is crucial. Maintain product leadership and avoid outsourcing to a CPO or Product Manager too early.

Sales & Marketing

Prioritize product-market fit before hiring sales and marketing people . Focus on building your product, attracting customers, and crafting a compelling story. As the founder, you're the best salesperson to initially drive growth.

Objective Setting

Implement a process for setting, monitoring, and communicating objectives from day one, with OKRs (Objectives and Key Results) being highly recommended. This framework organizes priorities and ensures team alignment, proving invaluable as the company grows.

Customers

Commercial Strategy

A successful commercial strategy often requires taking a contrarian approach, targeting new markets or customers. While the overall strategy should be clear, execution may be chaotic, so remain flexible and open to pivoting based on feedback from select potential customers.

Business Model

A clear business model is crucial even in early stages, as it's essential for onboarding partners, customers, and investors. Develop a clear, understandable business model that aligns with your marketing proposition, but be prepared to offer initial discounts or free trials.

Pilot Customers

Onboarding pilot customers early is key to validate your product vision and shape your roadmap, but securing agreement isn't enough. It's essential to ensure all key stakeholders within the pilot customer's organization are fully on board to avoid potential sabotage. If you have a choice, select those who more closely align with your target market.

Suppliers

Onboarding suppliers is essential for the success of a marketplace venture and resembles the fundraising process. It requires a compelling vision to create a fear of missing out among your target suppliers. Success hinges on demonstrating your marketplace's potential—through prototypes for consumer-facing marketplace or pilot customers for B2B platforms.

Life

Family

Starting a tech venture requires abandoning romantic ideals of entrepreneurship, as it demands heavy financial sacrifices with no guaranteed success. The constant pressure of running the business can severely strain family relationships, making it crucial to prepare your loved ones for this challenging journey.

Hobbies

While being obsessed with your first startup is natural, it's crucial to maintain a healthy work-life balance by protecting time for hobbies and activities away from screens. These moments, especially when shared with family, allow your mind to regenerate and ultimately contribute to both your well-being and your venture's success.

Friends

Close friends are essential companions on the entrepreneurial journey, offering unique value through their unbiased perspectives and emotional support that differs from family involvement. Their distance from the entrepreneurial world allows them to provide fresh insights and create a safe space for expressing doubts without judgment.