For every startup, the entire process from ideation to securing funds to achieving stardom is an endless learning curve. Since Kickfurther launched in January of 2015, we have been able to distill vital lessons that I wanted to write about and share with everyone.
1. Be the Last Mover
Peter Thiel, a Co-founder of PayPal and the first outside investor in Facebook, is a huge advocate of the theory of "last mover advantage." The theory is that people overvalue first-to-market strategy in innovation and that the endgame is where the most decisive moves are made.
Although Kickfurther is the first inventory crowdfunding platform, we take advantage of the experiences of our many predecessors in the general crowdfunding market. Other crowdfunding platforms offer either reward or equity-based incentives, which have worked fine. On the other hand, rewards are typically just products (like on Kickstarter) and equity crowdfunding is only accessible to less than 2% of Americans. We decided people would prefer an promised profit over a product and we also wanted to make the ability to contribute available to anyone. Ultimately, first to market advantage is real, but the advantage further goes to the last mover.
2. Make Data Driven Decisions
Former CEO of both AT&T and Netscape, Jim Barksdale, once benignly alleged how "If you don’t have any facts, we’ll just use my opinion." As sound as we would like to think our intuitions are... they are merely assumptions filled with biases. It's okay to make educated assumptions about your startup as long as you can test them through data that you collect.
It's important to establish KPI's (key performance indicators) that encompass your goals as a company. KPI's methodically and analytically track your progress. They can range from weekly active users to number of deals to amount of money raised depending on where you are in the lifecycle of your company. KPI's are still assumptions until proven otherwise. If you have established KPI's and are achieving them, but your goals are not coming to fruition, then you know your KPI's are wrong. Bottom line: anything that is watched and measured, improves.
3. Enable Other People
Many people and even philosophers believe that true altruism does not exist. Both Thomas Hobbes and John Locke agree that the nature of man is rooted in self-interest (i.e. $$$), which is a sad reality. Regardless, you must frame your business in reference to how it helps society and not its ability to make money.
Framing is vital. Here is a random example - lets say you have a logging business where you are a supplier to build homes. The money-oriented description would be: “We log trees in large quantity so we can sell timber wholesale at bargain prices." The society-oriented description would be: "We log trees in a manner to allow anyone who would want to build their own home can." Apply this to your company’s mission statement.
4. Have A Truly Amazing Use-Case
There is a commonly known generalization where all businesses are segmented into two categories - vitamins and antibiotics. Vitamin businesses people like and still utilize. Antibiotic businesses people feel they absolutely need. I used to think of Facebook as a vitamin business, however, it is now the main form of communication in the world - that is a necessity, or for our analogy, an antibiotic.
In 2007, Kickfurther would have been a vitamin: the stock market was still booming and small businesses could get financed. Today, Kickfurther is an antibiotic: people are out of good options to grow their money and financing for businesses is hard to come by. Use this vitamin and antibiotic analogy as a litmus test for your startup.
5. Consider Your Environment
There is no denying that Silicon Valley is the Mecca of technology. On the other hand, startups need to be lean and places like the Bay Area are extremely expensive, making them really hard locations to bootstrap in.
Cities such as Austin, Seattle, and Boulder are charging onto the startup scene as they are full of smart people, comparatively affordable (not for long..) and beautiful. Huge tech companies are catching on and building huge campuses in these locations. Founders are flocking there to find cheaper dev talent. Their local VC firms are becoming nationally recognized. For all of these reasons and more I claim Boulder to be the best startup community in America.
Still have yet to start your own company? Follow the guidelines listed above. Recently started a company? Test your theories with what I have discussed. Your company is in full-stride? I am flattered you gave me the time of day. If you have any questions about Kickfurther or startups or anything at all for that matter, email me at email@example.com