I had a discussion the other day about how start-ups can increase their odds of success. Since I do a lot of work with start-ups, in legal and consulting roles, I offered three tidbits of advice:
1. Business Idea. Do not pick an idea simply because you think it is cool or you will get rich. For example, the start-up graveyard is littered with music industry apps created by people who believed it was their entry into a “cool” industry.
Find a problem that you think you may share with many people and build a solution. This is what good businesses do. They induce customers to pay them to make the customers’ lives easier in some way. Yes, this includes the Facebooks and Twitters of the world who are good at aggregating and identifying users to make advertisers’ jobs easier in targeting an audience.
2. Pick the Right Team. It is important that founders surround themselves with people they trust to be committed to the venture and, most importantly, to produce quality results. The start-up world is populated with many “flakes,” but the founders need to be able to trust that their associates will do what they commit to do. I have seen this over and over. People show up with visions of options and IPOs and foosball tables, but when it comes to actually working and producing results, enthusiasm and attendance fade.
3. Know When to Step Aside. Very often, the skills necessary to start a business are different from the skills needed to grow a business. For example, founders often underestimate the importance of a skilled and talented sales person. This is a skill set just as computer programming is a skill set, and they does not necessarily overlap. In addition, managing an ongoing enterprise is much different than managing the birth of an enterprise. A skilled manager can often be the difference between a hobby with some potential and a successful, growing business.