You're about to start your company. You've heard all the basic advice on how to fundraise and hire talent. Yet it seems like everywhere you turn, there are potholes of mistakes waiting for you to fall into.
When that feels like it's about to happen, some entrepreneurs turn to Scott Kurnit, who is himself the founder of About.com and Keep.com. He's made his share of mistakes, which is why he's often called upon by numerous entrepreneurs for advice, including yours truly. Catch him on a good day and he'll regale you with some nightmare stories that will turn almost everyone off from starting a company, except for only the most crazed and dedicated entrepreneur.
Scott recently sat down for one of our first-ever Radiate online classes, called ProGuides, to give his salty take on what entrepreneurs need to know. If you want pretty, go somewhere else. Below is reality:
1. Pay people little. However, compensate them well. In other words, Scott recommends giving co-founders and first employees-he prefers the term "members"-generous compensation packages in the form of equity but in terms of cold, hard cash, keep that at a minimum. Startups have very little cash to begin with and preserving that is like preserving oxygen in a submarine - once you run out, you're dead.
2. Keep boards small. Startups think they ought to populate their boards with big, fancy names to attract attention. The problem is big boards mean big management problems. It's almost guaranteed that one day, a CEO founder will run into problems with his or her board. There's too many different interests at stake. Keeping boards small will be one less thing you'll have to worry about.
3. Offices matter. In the beginning, your startup office is likely a desk at a co-sharing space. But in due time, offices turn into important recruiting tools and they even help, as Scott notes, with an exit. Having a nice office means you're attracting the best talent. You got your place in order, it's beautiful and it's organized. Scott recounts the difference he saw between the office space of two early dot.com companies-Infoseek and Excite-and how that helped determine who was likely to succeed and who wasn't. Guess which one did well-and which didn't.
4. Culture is critical. Some founders have long debates about this: do you establish your culture early on or do you let it grow organically? Scott is in the former camp: he established About.com's culture very early in the game, a reason why he says the company is still around today. "You would love to be able to cut the interview short by saying `by the way, we work Saturdays and Sundays and midnight or whatever' and they go `I don't want to work here.' That's one of the things that early cultural imperatives can do. There's nothing better than someone self-selecting out."
5. Having a founder is important. Building a startup is a team exercise. Usually at least two people are in partnership when they begin a venture, and that number quickly expands out as the business grows. But just because startups is a team sport doesn't mean everything is shared. Entrepreneurs who have run successful businesses all say at the end of the day, you need one decision maker who has veto power and that is the CEO/founder. Companies that have co-CEOs or two or more decision makers run into the "collaboration death" spiral-everything is so collaborated that very little gets done. "You have co-founders. You need people around you who are supporting you, but I think that anything needs the crispness of a single decision maker. When the book is written thirty years from now, it would be nice to say Steve Jobs was the founder of Apple."