Whether you're doing it by chance, happenstance, or choice, now seems like an interesting and attractive time to start a new business. Many of the best tech businesses around today were started in tough and lean times, rather than in the rosy and flush days of the recent past. And, unless you're thinking about competing with the five tech companies collectively known as FAANG (or Microsoft), the barriers to entry into thousands of different markets for products and services have never been lower.
As for the prospects for success, that's a different question. The answer there is very much dependent on what talents and skills you have (or can hire) and what you're willing to commit in blood, sweat, and tears to the effort. But, make no mistake--it's never been cheaper or easier to try. Infrastructure is inexpensive and readily available. The cloud (AWS and Azure in particular) has made it possible to build your new business almost "by the bit"--renting virtually everything and bootstrapping your operation until it begins to scale.
Importantly, significant early-stage capital is almost irrelevant in this new world, where code and quickness are king. The old VC gatekeepers who controlled the dollars you previously needed to launch so many ventures, and their often foolish and insurmountable requirements and obstacles, no longer matter in the early startup stages.
In fact, raising too much money too soon at too modest a valuation can mortgage your own financial future and cap your upside in very painful ways. Substantial war chests are certainly nice to have, but the VC-skewed distribution waterfalls usually accompanying them--and which most entrepreneurs neither pay attention to nor frankly understand--are an expensive curse that keeps on taking for years to come. Distribution waterfalls often come as a complete surprise to the management team when payday finally arrives. So, in a sense, money's really no object at the outset.
As far as facilities and real estate go, the WFH (working from home) story is also pretty attractive. While it's difficult to see how Covid-19 did anyone any real favors--other than maybe helping us get rid of the worst president in history--the pandemic has certainly accelerated the waves of digital transformation in major parts of our lives. It has legitimized and basically mandated levels of remote workforces that, while never really super successful in past experiments, are now absolutely an acceptable and long-term part of every business's strategy and future. WFH is here to stay. Having a largely virtual workforce and thereby eliminating the major fixed and relatively expensive costs of maintaining sizable physical offices looks like, and in fact is, a godsend to many established businesses.
But here's where things can get tricky: Working from home simply doesn't work if you're a startup. It's a seductive idea -- and clearly a time and money saver. It's also the best and quickest way to kill your new enterprise. Every startup's success ultimately depends in large part on the entrepreneur's ability to attract and bring together diverse and talented people and to weave them into an effective and viable unit bound by a single compelling vision and a complementary culture that supports and powers the vision. You just can't get close at a distance.
For a startup, as important as clever code and quickness clearly are, nothing is more important than effective interpersonal communication. And the culture of the company is the most essential thing to communicate. We communicate culture through stories, through confrontations and commentary, through rituals that help us translate and transmit otherwise awkward or uncomfortable emotions, and through the development of close individual relationships over time and through repeatedly shared experiences. Every successful startup has its history, war stories, and near-death experiences, which everyone is happy to share. These anecdotes bind the business together.
The best startups develop a compelling culture with a single, and most critical, component: a powerful and contagious work ethic that infects (in a good way) not only the existing team, but every newbie who enters the environment as well. Consistently and continuously communicating the company's culture is the most important job of the founders and it's a non-stop and full-time job, especially in the first few years.
It's really all about authentic passion. Something that's missing in boring, painful, and sterile Zoom calls, which drain every drop of emotion and attachment in the process. Zoom fatigue is real and it's not just a matter of tired eyes and sore butts. We all sense that there's no real communication or connection between the participants, which is what is draining all the interest and energy away. You simply can't phone it in, no matter how good the technology. The best new companies make many things, but the most important product is a palpable and enthusiastic excitement that powers the team. That excitement, driven by tension, desire, and fear, spurs performance and innovation.
Anyone who's ever been there and built an exciting business from scratch will tell you the same things: 1) There's an electricity to a winning startup that you sense the minute you step in the door--you can smell success; 2) there's a tension in the air that's driven by physical proximity, which can't be replicated elsewhere and is shared by everyone in the company; and 3) there's an immediacy and serendipity enabled by unplanned and unstructured collisions of people and thoughts that generate the best ideas and solutions.
None of this energy and passion is present or even possible to communicate in any kind of effective manner in a multiperson, remote videoconference. Zoom conferences simply suck all the life, all the juice, and, most important, all the spontaneity and give-and-take out of any call, conference, presentation, or webinar. There's no cure now or on the horizon for this sense-dulling, painful, and dehumanizing technology, because there's no way to replace, replicate, or restore the emotional resonance that face-to-face communication creates and sustains. To be fair, it's not Zoom's fault. There's no substitute for being there and there never will be.
But it will be your fault, as the founder/CEO, if you're foolish enough to think that you can save money on an office/team space and still get your messages through and build the company's culture remotely or occasionally or with gig workers. It just doesn't work. When you're starting a new venture, everyone in the place needs to be in place. They're looking for immediate leadership and guidance. They need to see the vision being built out, to learn the path forward, and to see how you'll get them to the finish line. It's just not something you can schedule a few times a week or structure in advance.
The opportunity, the technology, the competition, and the customers' expectations and demands are all moving too quickly these days to have serious latency in your ability to react and respond in real-time. The world won't wait for Wednesday's call. And, by the way, just because your coders and other techies have to commit their new code on a regular basis, and have it peer reviewed, doesn't mean that they get to operate in their own little vacuum. Culture is a two-way street -- output without input and direction is an easy way to lose your way.
The early-stage risks to a new business by a failed or piecemeal attempt to infuse and embed a concrete culture are existential. It's great to have a clear view and an aspiration about your culture, but these things don't get built by themselves. If you get the culture wrong at the outset, you don't get a second chance. Culture isn't part of the game -- it is the whole game.
Work from home may be great for other folks, but it won't work for you.