The last year I've been working on a business with some partners. Starting a business has been the most challenging, expensive, and time-consuming project I've ever taken on. I've had partnerships and sold products before, but I'm talking about starting a company that requires investment, employees, clients, etc. Not a hobby – a real business.
Part of the last year has been working in circles of entrepreneurs who are running their own businesses or have started their own businesses. I'm lucky enough to have many friends in those circles. I've had heart to heart conversations with most of them – all of them have encouraged me to take the leap.
How do you start a successful business? Raise money? Build a product? Get your business license? Get an office?
Ask each entrepreneur and you'll get a different answer. Some of our advisors pushed us to get a product placement memorandum and to begin a formal round of money raising. This wasn't an inexpensive dive into starting a business! We started the limited liability corporation and the PPM, but the bottom fell out of the market and money raising went on hold.
Since then, we've simply worked extra projects to fund the business ourselves. In hindsight, I'm not sure if the PPM was the right first step. We hit the ground running with a pile of legal bills and no prototype. I think if I could reverse time, we would have pooled our resources and begun development.
It's a lot easier to explain a business surrounding a product with an example of the product. Getting the actual business incorporation was a good idea… if you have more than one owner. If you don't, I'm not sure you need it until that first client hits. As for the PPM (this is a package given to investors), don't worry about that until you actually have an investor.
Business plan? Most of our advisors told us to sit on the business plan and work, instead, on getting a very short presentation together that was targeted towards our investors. Got an investor who likes ROI? Spell the ROI story. Investor who likes to change the world? Talk about how you're going to change the world. Employ a lot of people? Talk about the growth of employment that your company is going to make.
I'm not frustrated with the road that we've taken, I just don't believe it's the best one. Entrepreneurs with a successful company under their belt have quite an easy time starting the next company. Investors practically fawn all over you and the last folks you made wealthy are looking forward to that next opportunity you're starting.
The short answer is that each of the folks I know took a very different path to starting their company. Some built the products and customers came. Some borrowed money from banks. Some borrowed from friends and family. Some received grant money. Some went to investors…
I think the greatest way of starting a successful company is to work down a path that you feel comfortable with… and stick to it. Try not to let outside people (especially investors) influence the direction you take. It's a direction that you have to be successful at taking.
Although none of our mentors agree on how to do it, all of them agree that we should do it… and do it now. So… we are!