7 Must-Do Tasks Before You Start Up

7 Must Do Tasks before you start up

You want to form your own web startup — but your friends or parents don’t understand. I don’t want to get into revenue model or framework discussions with you just yet. I just want to share with you issues I dealt with starting out — and consequences of some I still have to deal with today. This is written with a Metro Manila, Philippines setting in mind but should be easily replicated elsewhere.

1. Unleash the Entrepreneur within

Not everyone is born business-minded. If you weren’t the type to sell chocolate or pad paper to your elementary classmates, you can catch up on the entrepreneur way of thinking by joining meetups of SME groups (e.g. Pinoy Business, Entrepreneurs Society of the Philippines, Entrepreneur magazine events).

Till early 2007, I worked as a management trainee at a multinational and part-time graduate student. Now I dedicate all hours to our company — and I’ve never been happier. If you have a day job right now and can’t let go because you have bills to pay, make time at nights or weekends. Even if it’s just a few hours a week to meet with potential partners or IM them during your coffee break — just get started.

If you’re not quite ready to network yet, get ready with some bedtime reading:

2. Save at least 3 months worth of living expenses…

Then if your ego can take staying in your parents house and living off their good hearts and house help for a while, how about moving back? Then just buy yourself and your dad some golf shares for when you sell off your company in a few years. ;)

Go ahead and go full-time in your new company — if you believe in at least one of: a) yourself, b) your vision for your company, or c) the high risks and rewards of entrepreneurship.

Start learning how to make a budget, stick to it, and see where you can cut corners. I used to buy nice clothes or shoes at least once a month or whenever I eye a sale; since starting our company, I’d buy a nice dress every quarter or so — and no new shoes! But when the stakes are high, you’re willing to forego a lot — to gain a lot.

This personal fund is on top of raising startup and working capital for the company.

3. Find 1 or 2 partners

A web startup is not a web startup without multiple founders. Exceptions exist but, in general, 3 is a good number to spread the risk and the labor.

Honestly, finding a partner in Manila is tough. Pigmata co-founders JP and Mau were college classmates so they understand how each other work. The three of us clash sometimes but that doesn’t change the fact that we’re all committed and still honest with each other.

As I learned from Dr. Saimond Ip from McKinsey at the 2007 HPAIR Business Conference, if you’re the business guy and you have a programmer partner, the programmer’s the star and he gets the bigger cut.

And, please, if you’re just having an informational discussion (a.k.a. getting to know), don’t bring out your NDAs. Don’t be such a fool that you think your business idea is so great that you can’t even share it to friends or prospective partners. Your idea is just that –something not concrete. And it will never become reality if you don’t let go of that fear.

I’m not saying shout about your idea to the whole world, but at least share it with people you trust to get insights and refer you to the right people. Alain Raynaud says it well in one of our Facebook discussions on attracting technical talent:

"You need to find someone that trusts you. That means a friend, or a friend of a friend. It’s highly unlikely that you will find on the Internet a random developer that really means to help you. Recommendations are really important.

Next, you need to pitch your idea and convince that person that it’s worth investing time for what will most likely be no income. Since the likelihood of any early-stage startup to ever get funded or generate any revenue is probably below 1%. The convincing is the most difficult step.

Assuming that person is convinced and excited about the idea, then you need to work out a deal. Stock, future cash compensation, whatever makes sense."

4. Register your company

Both partnerships and corporations have to register with heavy paperwork at the Securities and Exchange Commission. (You can now fill out the documents online and just bring the signed notarized printouts to SEC.) In a general partnership, you need at least 1 general partner and have the others as industrial partners, contributing only labor and not money. The general partner, unlike the industrial partners, is liable even with his personal assets for any loss or liabilities. It might get ugly when you’re discussing what profit sharing is equitable. On the other hand, in a corporation, profit sharing is based on how many shares you’ve paid for.

5. Have a common conducive workplace

Our open-air garages may not quite qualify as office space but living rooms, bedrooms, or guest rooms with A/C could.

If you don’t have available workspace in your house, a virtual office can start you off. After a few months, rent and set up your own office space (. Just use the computers and WIFI router you already have but invest in nice ergonomic chairs, A/C, lighting, and drinking water — you want to be comfortable to code for hours.

6. Raise funds from your own pocket and from family and friends

Easier said than done. Sourcing venture capital funds isn’t that popular yet locally but you can tap family and friends. Filipino startups also usually offer client services to generate revenues while developing their apps or waiting for their product to takeoff.

7. Focus your efforts

Outsource your non-core competencies, like bookkeeping, government filings. Do-it-yourself is okay if it doesn’t take that long or you really just can’t afford it :)

Prepare yourself to live and breathe your company. I gave up my car and comfortable living at my parents’ to stay in a cheap condo so I can be near our office.

Stay together and stay happy. Host a team-building with your partners to align yourselves. We regularly indulge ourselves at good restaurants. Work hard and play hard!


Posted on February 13, 2008 by Marie Casas

|   

RSS feed for comments on this post· TrackBack URI

Comments



Leave a Comment