The vast majority of my friends are business owners. Like them, I’m a bit of a geek about it, and we spend a lot of time talking about our respective businesses.
And thus I hear their issues. What’s going wrong. Minefields they are having to navigate.
The sad part is, many of these issues would have been avoidable by choosing a different business, a different market, different cofounders, or other internal decisions.
Business is hard enough without shooting yourself in the foot before you ever begin.
It’s hard enough without politics between you and your cofounder.
It’s hard enough without hating, or simply having nothing in common with, your customers, the people you will spend a lot of time interacting with.
It’s hard enough when your job in the company is something you’re good at, let alone when you have zero experience at all.
Lots of people start companies and go down the rabbit hole without seriously considering whether it’s the right thing to do.
Done seriously, starting a company is a long term commitment. If you want the best chances for success and to not be miserable along the way, you’ve got to be smart about it.
There are four main things you want to ensure are in place before doubling down on a company:
1. Founder/Market Fit
Product/Market fit gets the most press thanks to the Lean Startup, and that’s next – but getting Product/Market Fit if you don’t have Founder/Market fit is both harder and potentially a waste of time.
Chris Dixon has a strong definition of Founder/Market fit in his article on the topic:
Founder/market fit means the founders have a deep understanding of the market they are entering, and are people who “personify their product, business and ultimately their company.”
You need to understand your market, or else you’ll never reach product/market fit. You need to like your market, because you’ll be spending a lot of time talking to them and solving their problems.
I’d read Dixon’s post for more info here, he does it better justice than I could.
2. Product/Market Fit
The most fundamental principle of business: sell something people want.
This, frankly, is really fucking easy unless you’re a tech entrepreneur trying to “disrupt” or some bullshit like that. People are afraid of doing something people are already doing, whereas that’s the easiest way to get to product/market fit. If people are already buying something, you know there’s a product/market fit there already. Do it better.
My company BaseLang, for instance, had product/market fit from day one. We offer unlimited one-on-one Spanish tutoring for a flat rate.
There is absolutely nothing disruptive or innovative about us, and that’s perfectly fine. We took something that’s been around for ages (tutoring for languages), made sure to do it really well, and then used a unique pricing model. As of late 2019, we have over 250 employees.
Don’t worry about it being sexy, worry about it solving someone’s problem.
Until you have product/market fit, you have an idea, not a company.
3. Business Partner Fit
This is the one people screw up the most.
Seriously, if you pick the wrong person to start your company with, you are in for a LOT of pain, even if the company is successful.
I won the lottery with my business partner for BaseLang. I won the lottery with our core founding team, which had five people in total. I won the lottery of them all showing up at the same time (or more accurately, coming with my cofounder as a package).
But choosing to work with them was a deliberate choice. If you don’t think you’ve won the lottery with your business partner, run away.
There are four main things you want to ensure are true with your cofounder:
- Your commitment level and end vision for the company is the exact same. This way, any conflict is because you disagree on how to get where you both want to go, not you each trying to pull the company in separate directions. It also prevents one founder being pissed because the other isn’t pulling their weight.
- You have unwavering mutual trust and respect. Said another way, they have long-standing relationships in their life. If you haven’t known them personally for a long time, you better check that they didn’t fuck over or flake on former business partners, that they have long standing relationships with other people you respect, or other indicators that they are what they seem. This is what I depended on, as I started BaseLang with Adrian just two months after meeting him. Play long term games with long term people.
- They are good at the things you suck at, and you’re good at the things they suck at. Complementary experience and skill sets are important because there are a million things to do in a company and you’ll suck at most of them, so your cofounder better be able to cover some of those things.
- Bonus, if you want to actually enjoy the process, is to be close friends with your business partner(s), as going through the tough parts with a friend is way easier. You’ll be spending a lot of time with them, so you may as well enjoy it.
If they fail any of those, run away. Especially #1 and #2.
4. Founding Team’s Skills/Business Fit
Lastly, pick a business that plays to the strengths of your business partner and you.
For instance, a friend started an ecommerce company. He knew nothing about the market (strike one), the cofounder wasn’t a fit (strike two), and he had almost no skills related to the type of business they were starting (strike three). The cards were stacked against him from the start.
Don’t Shoot Yourself in the Foot
If your idea or company doesn’t get these all right, I’d stick to a job or freelance work until the right thing comes along.
And when you have all four, double down. That’s what I did with BaseLang. We have founder/market fit. We have product/market fit. We have business partner fit. We have founding team’s skills/business fit. And that’s why we’re not only doing well, but enjoying the process.
Most of the issues I hear friends complaining about are because there’s an issue with one of these four areas. A business partner with different goals. A market they don’t understand. A business that requires skills they don’t have. A product trying to disrupt instead of solving someone’s problem.
Don’t shoot yourself in the foot. Get these right.
