Working at a startup for 12 months and this is what I’ve learnt so far…Written by Nicholas Buge on Tuesday, May 3, 2016
12 months ago I changed my career trajectory and have loved every moment of it.
I was brought up that life involved going university, graduating with good marks and getting a job with a reputable company. About 40 years later you retire, buy a caravan and travel around Australia. The end.
Nonetheless I started going in that direction regardless and ended up working at several small-medium design agencies. But all of that changed when I was offered an opportunity to join a startup. Initially I had my concerns as is a self-funded company, meaning it is funded by its own customers – so I asked Alex Ghiculescu, 1 of the founders all the hard questions I could think of at the time:
- How do you make money?
- Do you have enough money to keep me employed?
- Will I have a job in 12 months?
- What happens if you get acquired?
With my very limited knowledge of how the world of startups works, I thought it was extremely common that most startups get acquired by one of the global leaders. Oh boy, I had that so wrong.
Back then, Tanda had only about 10 employees so my efforts going forward would have to make an impact and help grow the company. After starting, I quickly learnt that everyone was extremely skilled at much more than just their immediate role. Eg. most of our customer support team know how to code! Great skill to have in a software company for quickly identifying bugs and helping the development team to improve the experience.
A few months in and I had already been to my fair share of startup talks, meetups and events in Brisbane, mostly via River City Labs.
Getting your idea funded
I get frustrated that there seems to be this understanding that startups need funding prior to taking the plunge. Investors are more likely to take interest in an idea that has validation through actual users/customers. “OMG that’s a great idea” from your friends or parents never counts. In addition, it boggles my mind how founders pitch their idea to investors without strong validation, a prototype or a sound business model saying that you’ll figure that out later.
Startups should be so much more than just an iPhone app.
In my experience so far, it’s those people who have the mindset to go out and fix a problem as their primary focus instead of founding a startup to sellout for millions within a short time, make the best founders. I personally struggle to fathom what level of self-achievement comes from being part of a startup that doesn’t provide any real value to society. They are poorly misrepresenting startups by not showing proof of having strong, viable potential to create large sustainable companies and grow our economy.
In recent months, the hype around startups in Australia has definitely gained a lot of awareness. Steve Baxter, Australian Investor and Shark Tank judge recently wrote a great piece on why the government’s focus on innovation is missing the point. Personally I think people are still a bit uneducated about them. I’ve met many people that have – what I like to call – a hobby idea and think throwing in the word ‘startup’ into the description makes it a good decision to go aimlessly attempt to be the next Facebook/Uber/etc.
When I was over in Silicon Valley on the Startup Catalyst trip, I can’t remember who said it, but it was brilliant…
“Don’t do a startup to fix a problem that everyone has in common.
Chances are, many before you have tried and failed.”
Take a second to reread that.
Unfortunately I’ve had friends go down this road with ideas similar to Snapchat, coffee ordering apps, order-ahead style apps, etc and it did not end well for them. But nothing ventured, is nothing gained.
Culture is a currency
Everyone talks about the euphorian lifestyle of finding a job that you actually love. Well, the startup world is filled with people who get very excited about their work. It’s very rewarding being part of something where everyone actively contributes.
The amount of culture or the differences between startups becomes a big draw card. It’s more evident in Silicon Valley, but still evident on a smaller scale here in Brisbane that companies openly promote how amazing their culture is, sometimes to the point of too much. I would hate to know exactly how much money is spent on culture at companies like Facebook, Google and Atlassian.
The best culture is organic, not manufactured.
I’d encourage [the right] people to take the plunge and become a founder/employee of one.
Personally I’ve chosen to work at a company where I truly believe we make a huge impact. There’s the immediate impact like ensuring employees are paid right every week, but also the bigger picture stuff like making a difference for businesses all around the world and helping the economy.
Every founder’s worst fear
You hear quite a fair bit of the risks involved in a startup. Everything from wrong timing, poor business model, not enough funding, bad sales/marketing strategy, waiting too long to launch, but there’s something that isn’t mentioned all too often…
Getting funded Traction will be your biggest challenge.
Your startup could have done everything right and you could still close up shop after a couple of years if you fail at getting the traction you need. I truly feel sorry for those people. To rub salt in the wound for them, I’ve read about poorly managed/developed startups that have simply fluked traction.
I’ve had many conversations with founders going something like…
Me: how’s it going?
Them: really good, but having trouble getting users.
There’s no silver bullet for traction but if all else fails, PIVOT!
Pivoting is the notion of realising your startup needs to change course/pivot to something new in order to survive. This could be a completely new idea, different business/pricing model or just changing the method in which the solution is provided.
All startups pivot, so take comfort knowing that to create something great, you may need to let go of your ‘great idea’ for something else to take shape. Did you know that YouTube initially launched as a video dating website? Don’t be too close to your idea and miss the opportunity to pivot.
My favourite 3 letters
MRR… Monthly recurring revenue.
This stuff is awesome. Previously I had worked at small-medium sized design agencies that had their income tied to project milestone dates and once a project was complete, there was often little money that followed.
But having a business model around subscription-styled pricing makes everything so much better. The thought of having done a project to perfection and getting paid, but only to have to do it over and over to maintain that same level of income is draining. There are only so many hours in the day. It’s not coincidence that all the great companies follow the same model of subscriptions like Spotify, Google Apps, digital newspapers and gyms.
To wrap up, I don’t think I’ve had two identical weeks since I started at Tanda. The encouraging atmosphere of the startup community is all about giving it a good crack with failure seen as a form of success. Not trying at all is the true failure. I know people look from the outside and admire startups, but I challenge those people to get involved. Australia needs more people to step outside their comfy dead-end, boring jobs and start a business they’re truly passionate about.
Bring on the next 12 months!