From Idea to Startup to Company: Experience and Tips
If you have an idea to start a tech company, kudos to being on the right path. I have walked it too. Many young people with a background or interest in technology, computer science or even business often dream of starting a business that would solve an existing need and grow into a profitable venture.
As a matter of fact the average age of tech startup founders is normally between 20-30 years. Among these young founders are ones that created global tech giants like Microsoft, Google and Facebook, and your company can be next.
I sincerely believe that for every successful tech company there are many more that started and failed. However, the greatest percentage are the ideas that were dreamt and plans that were made but never saw the light of the day.
Are you working on a startup? You have taken a courageous step. A failed startup is many times better than an idea that was never tried.
Do you have an idea, and a big dream? Go ahead act, start small and do it now!
When Sam and I started Cardplanet Solutions two years ago, we were navigating a rather unbeaten path. The tech startup scene in Kenya is just taking shape so we did not have many people to talk to who had walk this path in our country and had succeeded.
Indeed, in running a startup in this part of the world, we had our fair share of pitfalls. Two years since Cardplanet Solutions was created, we are still growing and have successfully received some investment and also are making revenue from clients. From our experience, I’ve learned a number of lessons that may help new startup founders:
Start a company not a product
Having had experience working at a tech hub, a key observation I had was that not all founders created their startups because they are dedicated to entrepreneurship. Some created their company as a way of staying busy before finding a better work opportunity. My two cents would be, once you have taken the first leap, hang in there. Stay focused, eat, drink and sleep your startup. Success is on your way.
Another common thing with some startups is focusing more on building the product and not the company. From my experience, during the growth of your startup, the products will evolve, so working on the company makes its possible to adjust the products accordingly.
Also, be aware of what you name your company. Oftentimes, the product changes in iterations, and if the company was named too early based on the product, the name may have no relation to the product later on.
Practice your elevator pitch
So what are you working on? This is a question you should have a precise and convincing answer to. An elevator pitch is what you would give with the hopes of landing a customer or an investor in a minute. During our earlier days at the Nailab incubation lab, we would take sessions in pitching our startups to each other every other Friday. At first it was dreadful for many of us, especially for me, who then was quite introverted. After doing this a couple of times I discovered that if I could refine my pitch so that I could get someone interested in what I am working on as fast as possible, it could open up opportunities to both customers and investors. One Saturday morning after hours of working, Sam and I were walking out of the building for a break when we ran into Mbwana Alliy, the Managing Partner of Savannah Fund.We had attended the Savannah Fund’s launch at the iHub the previous day and having known the kind of startups they were interested in, I was confident to start talking to Mbwana.
“We have what you are looking for!” was our first statement as we began to talk. Savannah Fund had opened applications for their first class and we had applied. Long story short, we were able to have a conversation with him for almost an hour and demo our product for him. We were not selected for the first accelerator class but we were in touch with Mbwana and I am sure it is this first conversation that led to our relationship with him now, and subsequently having conversations that led to being selected for the second cohort.
Every startup will at one time want to raise funding. I will talk about raising money form venture capitalists because that’s what I am familiar with. If there is one term that I know investors love, it’s “traction”. Most investors will pay keen attention to where you were, where you are and how you are growing. While you might have limited funds for a tech startup in web, game or mobile application, you can nonetheless have early users try it. This not only gives you a chance to test your product but it’s a good indicator that your product is needed. If you can have early paying users, that is even better because this sends very positive signals to your potential investors.
Be willing to let go
Yes, you are working on that cool idea, and have the conviction it is viable. Talk about it freely to people who could be of help to you. By doing this, you could get very valuable insights from people with more experience and even more material and intellectual resources. Some founders may require potential investors to sign Non Disclosure Agreements (NDAs) before sharing their ideas. True be told, many investors are discouraged by the over-emphasis on Intellectual Property by startups.
So be willing to let go your idea and you will grow.
Don’t be alone
As the old saying goes, a cord of two strands is better than that of one. Similarly, when attempting to build a startup, don’t go alone. A startup is like a ship on the high seas, so when you have a team, the chances of survival are higher. A team consisting of at least one person with strong technical skills and another with strong business skills is a recipe for success. Investors also pay attention to the team. Working with someone you know well has many advantages apart from understanding each other’s strength and weaknesses. Sam and I have been friends for close to a decade and through thick or thin, we will still be friends. We balance each other out well: he rarely does presentations to clients and I seldom code!
Listen, Listen and Listen
If you have raised money through an accelerator like we did, chances are there will be mentors available to you. Accelerators will always get professionals who can provide mentorship through their years of experience. Some of them may provide very valuable feedback that can grow your startup, so always stay open-minded and listen to them. Although the decisions for your startup will ultimately depend on you, their advice could propel you to the next level.
As you go about looking for funds for your startup, it is important to note that investors are also looking for startups in the right places. So create your profiles on AngelList, F6S, VC4Africa among the other fora. Also, take part in business pitch competitions. Pivot East organized by m:Lab in East Africa is one such competition.
You are a salesman
Being the CEO sounds like you just parked an Aston Martin next door! There is a joke I like saying about my journey with a Cardplanet: I started as a co-founder, became a CEO, graduated into a coder and am currently a salesman. Your success is as good as how you sell, especially if you are the CEO. Learn to sell.
Never Give Up
The journey to running a successful business comes with ups and downs. Disappointment and frustration may come in many forms ranging from desertion of team members, product failing during demos, investors turning you down, running broke and many more. These may be discouraging but never give up too quick and stay in a little longer. A small tweak in the product may be all it takes to turn fortunes around.