6-minute read
A few weeks back I was discussing with a good friend of mine, he has been working in software development for around 6 years in various companies developing himself across both the frontend and backend. We were having dinner and the topic got to business ideas.
It was clear from how he was speaking that long-term in whatever capacity he would venture out and look to create his ideas.
He then posed an interesting question to me, what advice would I offer him as someone who has started their own company.
As flattered as I was, I believe that our journey at Peritus Partners is still very much formulating but I did share that I will go out and answer the question for him and anyone else in a similar position from someone who has been in their shoes.
This article is an eye-opener.
It breaks through the noise of starting your own company and tackles head-on key elements that many people miss.
The individual responsible for helping me bring this to life is Brian Pontarelli, the founder and CEO of fusionauth (https://fusionauth.io/) and software engineer at heart. Brian and his team have built an authentication and authorisation platform for developers, he has raised financing, grown the team, and gracefully looked back at the beginning of the company with me to provide some of the best advice I have ever been shared – I say this with intention, what we share here is powerful and life-changing to those looking to embark on creating their own company, take every aspect of this article with you on your journey as I know it will help.
Why set out to start your own company in the first place?
Every day, our minds buzz with countless ideas. You might be strolling to work when suddenly; a spark of inspiration strikes. Or, while completing a task, you realise there's a more efficient way to do it. Maybe you are like me, working in an industry where you see potential for superior service to clients and wish to pursue it.
The key takeaway from Brian is this: unless you're entirely devoted to launching your own business and persevering through the challenges, it's wise to wait. When the urge to make independent choices becomes irresistible, that's when you're truly prepared. At that moment, you're ready to face any surprise that comes your way and believe it, many will come unexpectedly.
Embarking on a journey for fame and fortune may yield success in favourable market conditions. However, when challenges arise, such as facing tough times, the allure of stable employment, or the necessity to make difficult choices, that's when you and your venture might face a real test of resilience that could be too much if you enter with the wrong reasons to begin with.
Significant challenges and overcoming them…
Going from an individual contributor with an idea or even a leader of a team and venturing out to build something of your own will bring with it many unknowns. Brian shared that the first that he encounters from many looking to start is Analysis Paralysis.
The fear of actually starting something. The fear of it not being successful. The fear of being judged. The fear of not knowing how to start.
All these factors stop individuals from building something the world might truly need and are the first big challenge you need to overcome. It links back to the former comments about why you should start in the first place. When that feeling overwhelms you, use that fear to drive decisions and get the wheels moving, you will soon realise that the fear holding you back is nothing more than your thoughts.
Once moving however, it is wise to take note of these common challenges that could make or break your idea very quickly.
Understanding the market
Brian explained that nobody will sit down with you to price your product and share who your clients are, consultants will charge but not always get it right, mentors can guide but you need to be aware of your idea, the market in which you are looking to enter and the client base you hope to sell to.
Creating buying personas is a good starting point but there is nothing better than simply going out there, speaking and absorbing what your potential market is sharing. You might find your idea needs iteration, your pricing needs adjusting, or you are on the right track.
Brian also shared that even if you are the CTO of the venture, eventually you will need to sell your products to clients and a good tactic is to learn about framing. Framing is not lying or manipulating a stakeholder rather it is about choosing the best perspective to communicate your value proposition. If you are not aware of framing, this is your chance to dive deeper and explore it outside of this article.
Hiring the right team
Another significant challenge you might face is hiring the right team. This is not a plug to say using a recruiter is the right way or solely hiring by yourself, both will bring advantages, but one thing Brian did stress in the early years is that you build yourself a framework based on what you need to test across every role required to build your company.
It is very easy to be impressed with jargon, especially when hiring for roles outside your expertise. To avoid this, focus on identifying the essential skills for each position and devise questions that test these skills. For instance, when hiring an accountant, you will likely require this individual to be very organised, if you simply ask ‘are you organised’ you will be met with a very basic ‘yes’ but the key question is how do you really know this?
Instead, Brian would ask ‘how do you organise your wardrobe’. This disarms the individual as they are not aware you are testing organisation but instead you can learn about how they organise in their own life which tests the underlying skill.
With a framework in place next it is wise to lean into your friends and network. You know these individuals or someone you trust does and this helps build rapport quicker and can get the project moving in the direction required faster. Focus on looking at individuals you would work with anywhere, no matter it being your company or not, then entice them with stock and a mission.
It doesn’t always work when you hire friends, but it has for many, and it could for you.
Product Market Fit
Although Brian and fusionauth didn’t have this issue directly themselves, they were fortunate to have two products that took to market quickly, he appreciates that this is rare and more often not the case. As a result, you will likely need to adapt your product offering based on your customer base.
This is business building 101, if you do not have a product that is required from the market, it doesn’t matter how much time, money, and energy you invest, it simply won’t work in the long run. Brian highlighted that you should give your customers a way to tell you exactly what is wrong with your product.
Customer interviewers are often designed in a way that shares the positives which strokes your ego but does little to move the needle in the direction of improvements.
To gain real honest feedback adopt the question ‘tell us everything not right with the product’ – this will give you more to work with than everything you did right.
Encountering what nobody previously shared…
Starting a business, as Brian experienced with fusionauth, involves many unanticipated challenges. These aspects often remain undisclosed, not due to a lack of support, but because they are hard to anticipate without personal experience or guidance from a seasoned network. Brian discovered a crucial lesson in valuing money (be it dollars, euros, or pounds). When you're accountable for approving expenses, it becomes evident what's essential and what's expendable.
Brian also highlighted an often-overlooked aspect: customer interaction. This can be a steep learning curve, especially for those not from sales or customer-oriented backgrounds. You'll encounter customers who may treat vendors with varying degrees of respect. Understanding who you're dealing with can shape your approach and help you understand their behaviour. If a customer treats you poorly, it's often better to part ways early, saving energy for more deserving clients.
Moreover, the mantra 'show, don’t tell' is vital. Demonstrating your offerings helps address challenging questions effectively, and your enthusiasm for your product or solution can be contagious, fostering similar excitement in your customers.
Approaching innovation in your own company
As technology evolves rapidly, it becomes increasingly challenging to discern which innovations should be included in your roadmap and which might just be distractions amidst the current hype. Brian shared valuable insights on how his team navigates this terrain, a strategy they continue to use.
Listening to customers is key in maintaining focus. Through well-conducted feedback sessions, customers can highlight necessary bug fixes and desired features, offering clear direction for your roadmap.
However, this doesn't mean you should overlook technological advancements. They demand continuous evaluation and can unveil new business opportunities or enhance your current offerings. But it's important not to pursue every new trend. A tactical approach is essential, and remember, it's the everyday operations where you truly add value.
Advice to get going...
You're probably familiar with the concept of a Minimum Viable Product (MVP), which is essential for testing market demand with a simplified version of your product, allowing for adjustments based on feedback.
Brian advises that you should critically assess your idea, focusing on what aspect you believe will most quickly and easily generate revenue and attract customers. This approach involves setting aside an elaborate roadmap temporarily. Over-planning can lead to under-delivering, and in reality, customer feedback often drives the evolution of your plan, guiding necessary pivots.
However, do not rush to market with a subpar product just to claim you have an MVP. A poorly executed MVP can deter potential customers. Instead, view your MVP as a foundational platform, something you can enhance and build upon as your customer base grows and you secure further investment. It should be a starting point for development, not a disposable prototype.
And to not do when starting your company
Reading this should inspire you to delve into the ideas you've been contemplating. While entrepreneurship isn't for everyone, and success isn't guaranteed, if you feel a strong inclination, it's likely that you'll pursue it eventually. The guidance we've relayed from Brian, particularly about what not to do when starting your own company, is timeless.
Firstly, avoid making fundraising your initial focus. Concentrate on developing a remarkable product and being adaptable in targeting the right market and acquiring customers. If you manage these aspects well, financial success and investor interest will naturally follow.
Secondly, if your business concept is heavily dependent on technology and you lack technical expertise, it's crucial to partner with a tech-savvy co-founder. This collaboration can bridge the gap between your vision and the technological execution required to bring your ideas to life.
I thoroughly enjoyed researching and writing this article. Learning from Brian's vast experience and knowledge was enlightening, and I can only hope I have done the conversation justice.
Embarking on the journey of starting your own company is no small feat, something I can attest to personally. It involves long hours and unexpected stressors, tackling tasks that may be outside your skillset, and financial challenges - transitioning from a steady income to potentially no earnings for a while.
Yet, the drive to create something of value, something that can positively impact the world, makes all these challenges worthwhile. It's about having the right mindset and purpose from the outset, which can make all the difference in your entrepreneurial journey.
Interested in starting your own thing? Reach out to us, we might be able to connect you to Co-Founders, investors and more – eden.whitcomb@perituspartners.co.uk
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