Tuesday, August 14, 2007

Seven Ways to Make a Terrible Startup

(Note: This post is an homage to Jason Kapalka's brilliant "10 Ways to Make a Terrible Casual Game." Jason is the Chief Creative Officer at PopCap games.)

Ever since GXC has started getting a lot of traction, people have tried to pick our brains more than a few times. This is great, but I often see young teams making the same few mistakes. So I've been thinking about how to help entrepreneurs at the earliest of stages... typically, college students with little more than an idea.

So let's do a piss-poor job of starting a business. Here goes:

7. Don't tell anyone! Especially not anyone of any importance. I don't care if Eric Schmidt wants to sit down with us! The CEO of Google is totally going to steal our idea, especially since we have this really sweet demo that they want to test in their office. After all, it's not like top-level executives have anything better to do.

6. Dropdown menus? We don't need no steekin' dropdown menus. See, here's a text box! The user can type whatever they want in. Okay, so maybe there's only five valid inputs, but we use text validation to check it on our end! This is a perfectly good demo to show the investors.

5. Okay, I have an idea. Now let's form a legal entity. Because after all, nothing will be more helpful six months down the road than that half-baked Connecticut LLC we self-submitted. I'm sure it's easy to get rid of if we don't need it, anyway.

4. I can't code very well, but spending a year making a mediocre demo is better than giving up equity to bring on a developer. Equity is precious! I'm either going to make it by myself or it's all going to fail. I can't see how another person could help me out, even if they could code this login page in a twentieth of the time it's taking me.

3. This is really awkward. I can't possibly talk about equity division with my partners. They're my partners, after all! This seems so greedy and corporate. Ah, screw it, let's just split it all equally.

2. We only need $18,075 to reach profitability. You see, this is really simple. Servers are $2,000 apiece, and I'll need nine of them. I think they'll all fit in my RA's room. The other $75? That's how much the State of Delaware's website says it costs to file a C Corp. Now where's my venture funding?

1. I am certain that this idea is going to make me unbelievably rich. The experience I gain doesn't matter. The contacts I make--they're not important. Life is short, and I want my money when I can still live like Mark Wahlberg in Entourage. That's what entrepreneurship is all about, right? Get rich or die tryin'.

The takeaways:

Your idea is not the Manhattan Project. Unless, of course, your business is developing nuclear weapons. In which case you probably have larger issues than someone stealing your idea.

The user is your deity, and you worship Him (or Her) by making a really sweet interface.

Leave legal things to lawyers.

If your team is lacking in a key talent (such as software development), bring on the right person. It's worth it.

You're awkward. You might as well embrace it and talk to your partners about equity.

You will always need more money than you think you will. And unless you are a former Rackspace employee, you will not be able to maintain nine servers in your dorm room. To top it off, you will probably get an angry letter from your university for crashing the network if your project takes off.