After some years in this business and two companies Sports Business Simulations and Zennie62Media (as well as involvement in another tech startup called Bartabber and another called MyPartnerInCrime.com), I realized I have more than a little advice to share. Those who may not know me would ask “Why should I pay attention to you?” Well, you don’t have to. That’s your choice. But I recommend you read what I have to share, then determine what you’re going to do with it.
On Launching A Startup
First, have the product or product idea before the company name and mission. This may seem like the obvious, but there are some people who have companies without a purpose. If you have the product or product idea first, the mission of the company and its business plan and monetization efforts will become crystal clear. On the other hand, you may see where the product can’t make money – in either case, it’s product and not marketing first.
Second, don’t learn someone’s new, esoteric programming language, or even just esoteric. and then build an app with it. What will happen is more than likely that person also serves as your service provider. If their business, or your relationship, goes negative you can’t easily transfer the files to another service provider.
To provide an example, this blog is hosted by HostGator, and I swear by their service. Good people, who’ve put up with me at my worst. But let’s say the relationship soured and they weren’t so understanding, or tried to jack up prices on me? I could find another blog hosting service, or try and do it myself. In either case, I have a fast out. But if the blog was a website with a game that could only run with the server provided by the people who have the weird programming language you learned, you would be down for a while, or until you translated the language and made a usable file set.
Third, when starting a legal entity, go with the tried and true C-Corporation, not an S-Corporation. Why? Because you’re a shareholder in the business, but also making money from it. You will be directly taxed in an S-Corporation, whereas in a C-Corporation, you have some chance to at least try and avoid double taxation. Make sure you get a good tax accountant who’s familiar with this, and is willing to work with you as you grow. If you’re in college, get to know accounting students who want to be involved in tech and are in a position to grow with you. The last thing you want is a huge accounting bill when you’re just starting out and are bootstrapping your efforts, which lead to my other advice.
Fourth, don’t fear to take money or to ask for money. Get used to being rejected, but also talk to as many people as you can and don’t wait to grow your business until you get funded – bootstrap your way up, and at least you will have shown the work of building the product and the firm yourself. That’s what I’ve done with Zennie62Media and also with Sports Business Simulations. I think Zennie62Media stands to be a bigger success, but I could be wrong – SBS was my first company and the foundation for the errors I’ve made. Zennie62Media’s the second go at it, but it came out of my blog work.
My self-esteem has grown via these efforts, although I still have a great problem with rejection and that has to do with growing up under the cloud of race discrimination. My advice for anyone of color or female is to just not worry about it – there are far too many people who don’t have problems of racism or sexism and the list is growing daily. But the good news is that I’m much better at compartmentalizing my problem. Video-blogging helped me a lot as did growing up around a bunch of what we now call nerds, but then called “Trekkers,” and also just getting out and getting to know people.
Fifth, get out and get to meet people at tech events in your area. Don’t be a wallflower and don’t concern yourself with what other people think about you; eat, drink, talk, and be merry. I’ll let you in on a secret: everyone hates something about themselves, and there’s no one who’s exempt from that statement. But learn to love who you are, warts and all, and just deal with that. The very minute you worry about what others think, especially in a large crowd, you open yourself up to the unknown insecurities of many other people – it will take lifetime to sort through them, and you don’t have that kind of time. (I was about to add that living in the San Francisco Bay Area, where I grew up, really helps, but the ‘Bay Area tech ethic’ has spread to many metro areas, so it’s not quite as necessary as it used to be. If you need startup money, the Bay Area’s the best place to be.)
And if you meet someone famous, acknowledge what they’ve done; don’t be one of these insufferable jerks who pretends like they’ve never heard of , say, Mark Zuckerberg. I use the Founder and President of Facebook as an example because I met him in a weird way at the 2009 Crunchies, the annual Startup awards event that was created by Michael Arrington when he formed his blog TechCrunch (which is now AOL’s blog, but whatever).
I had just cleared the security screening, and happened to turn slightly to the right – and tripped over Mr. Zuckerberg as we didn’t see each other. I quickly righted both of us from falling, shook his hand and introduced myself, congratulated him on the success of Facebook, and said “Say, do you have time for a quick interview.” Mark actually didn’t say no, but paused and then said “I really need to find my sister.” To which I said “I understand. It was nice to meet you.”
It doesn’t matter how much money the person has at all. Don’t focus on that. And if you meet someone who insists on testing your knowledge about something that you’re not very knowledgeable about, just ask them to explain and tell them you don’t know. Let them talk. Draw them out. And if they say something insulting about what your doing without your asking for their opinion, don’t respond back – just excuse yourself and seek a brighter sun to stand with and talk to.
See, that insulting person thinks they can convince you that you need them by being mean to you. More often than not, that kind of relationship can go bad early on, because I’ve been in one of them. The case was a person who presented themselves as our Sports Business Simulations “in pocket CFO,” but turned out to be a total nightmare to deal with, and we had not even launched our product yet and that person had not invested a freaking dime in what we did.
Understand, I was intimidated by the idea that he was going to invest in us and let him get too close too early. My first action should have been a fee: pay to help us. Then I would know he was committed to SBS. I was introduced to this man via something called The Keiretsu Forum, which asks you to pay upwards of $6,000 to present, or “pitch” your company to investors. I thought he was our ticket to investors, and I was wrong. What I learned was that if he really believes in what we’re doing and in me, he’ll cough up money as an angel investor – and get others to follow him. We had one angel at the time, there was room for another…and another.
The better way to go is with someone you like, who likes you. That’s the best foundation for growth. Don’t be intimidated by names or attitudes – go with your gut.