How To Start A Company In A Recession


Matt MirelesEditor’s Note: Check out our video interview with Matt, and click here to sign up and get $5 worth of free SpeakerText transcription credits added to your account (promotion valid for the first 100 people).

I founded SpeakerText during the financial apocalypse of October 2008. We launched the company in January 2010, burning through just $4k in meantime, the bulk of which was a loan from my dad. Along the way, I learned a few things that I hope other founders and proto-founders will find useful.

  • Fake it ’till you make it. No one is interested in the company you’re going to start. Starting is a declarative act. Just go for it. People won’t follow unless you lead.
  • Stealth mode’ is a disease. Rid yourself of it. The difference between your initial idea and your ultimate product is the difference between a slab of rock and the David. There’s a thousand problems you need to solve, and the only way you learn about them––much less solve them––is to pitch, pitch, pitch and pitch again to every smart person you meet. Listen to what they have to say and regardless of how jumbled and contradictory their suggestions or complaints are, try to look for patterns and distill the deeper underlying pain points or problems with your model. Think of it as crowdsourcing. The masses have much to teach you, if you let them.
  • Advisors, they’re easier to find than you think. This goes along with my above point about pitching everyone you meet. Most people with big ideas are afraid of embarrassing themselves, so they keep quiet, especially around successful, important people. Don’t. I landed my first advisor, Joe Kennedy, the CEO of Pandora, when I pitched him after he gave a talk at Stanford. He gave me his card; I followed up. I never wasted his time, but I was persistent and, most importantly, I listened and kept him updated on my progress.
  • You need a Co-Founder, not just a CTO. Lots of business-y, idea-type people who say they’re looking for a co-founder are, in reality, looking for an “engineering bitch.” Here’s how the pitch sounds from the engineer’s perspective: ‘For ten whole percent of equity, you will slave away to build a prototype of my bad idea, not have any say in the decision-making process…and oh yeah, you could be fired at any point.’ This does not make for a happy long term relationship. Instead, find someone you know and trust––I called up an old college friend––who will call you out on your bullshit and push back when you overreach. And split the equity equally. It just makes like easier down the road.
  • Recruit college students. They’re young, hungry and don’t need of a living wage. Experienced, talented software engineers have lots of options in life, and most of them involve getting paid. College students, on the other hand, have fewer options, and probably have their living expenses covered by financial aid. Thus, your startup is more like a resume-enhancing ‘extra-curricular’ than a regular job. The right person will love the responsibility you’re handing them. Win-win.
  • Go to job fairs. You’ll be the only startup there. I went to the Columbia Engineering Career Fair in October 2009 and left with ~150 resumes. We hired three guys from that batch and paid them in iPhones. Doubtful we’d have access to such a rich employee pool any other way.

Matt Mireles is the CEO and Founder of SpeakerText. This post was originally published at his blog. We’ll publish Part Two tomorrow.

I came across this article and found it worth sharing. Good fundamental start-up advice for “boot-strapping” during your first year. I launched my strategy consulting firm (more at developnewproducts.com) in a similar manner; focusing only on the essentials that generated revenue, seeking advice from others who’ve been there and speaking to my target audience (what a novel concept) to hear what they’d like to see in a strategy consulting firm. By doing this, much of my first year was self-funded by my first customers, which I then re-invested in building the business.

Posted via web from FASTInnovators

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