37signals used the unconventional Getting Real process to launch five successful web-based applications (Basecamp, Campfire, Backpack, Writeboard, Ta-da List), and Ruby on Rails, an open-source web application framework, in just two years with no funding, no debt, and only 7 people.

Read it free online at http://gettingreal.37signals.com/toc.php, or get a hard copy or download at http://gettingreal.37signals.com/.

Warning: This book will challenge a lot of what you thought you knew about startups!

http://startupdigest.com/videos/

http://www.youtube.com/watch?v=P1SKBlIBnOI&feature=player_embedded

Your First Iteration of an Idea Will Be Wrong

The first iteration or implementation of your idea will often be wrong. That’s not because you’re not smart, not doing the right things, or some other reason to come down hard on yourself. As it turns out, this is actually a good sign. No idea survives its first interactions with its customers and requires you to synthesize feedback to adapt to the customer. You could be prideful, not listen to what your customers are telling you, and keep things the way they were. In the end, that just leaves you with no customers and a product you may not even use yourself. It’s okay if things change up a bit when it comes to your idea and its implementation.

Your Friends And Family Won’t Understand What You Do

“You’re an entrepreneur, so that means you’re un-employed?” or “Oh that’s nice.” are some of the many reactions you will get from close friends, family members, and others over the course of starting your company. Even if you achieve milestones that are worthy of praise (customers, fundraising, new traffic levels, press,etc.) and denote success in the entrepreneurial world, people still won’t understand what you do. Unless you build one of the few consumer success stories that come around every few years, things probably won’t change here. The b2b space is even more difficult to explain as most people aren’t your customer, especially if it’s a niche workflow. This is okay and sometimes even a relief to know there is more outside in the world than just techies and entrepreneurs. Just because they don’t understand it, doesn’t mean you’re doing something wrong or unacceptable. I doubt Larry Ellison can have most of his family understand Oracle (that database company that stores information), but things turned out pretty well for him at the end of the day.

You Will Make Less Than Normal Wages For A While

If you got into entrepreneurship first and foremost for the money, then you are in the wrong business. Sure you may one day sell your company, but that day is probably far far away. Even then, there are usually earn out clauses, vesting still in tact, and a whole lot more. Even if you raise a good chunk of cash, your money is better spent on hiring the best talent than paying yourself a higher wage. There’s nothing wrong wanting to make money, but in the beginning it’s going to be rough. You will make less than most of your friends, especially the ones doing the “normal” paths of things like finance. It’s a litmus test in its finest form though. If you truly love what you’re doing, the capacity to have a large bank account takes a back burner to completing your mission. Sure you need some basic creature comforts, but luxury items almost seem silly as you will not have the time to truly enjoy them.

Everything Takes Twice As Long…If It Even Happens

Multiply everything by two, including the things inside of your control. When things take longer, you sometimes think that you’re doing it wrong or no one really cares. In reality, everyone else has multiple deals and responsibilities on the table. By factoring this into the expectations of your startup, it makes a lot easier to prepare for launching products, closing deals, and more. Also, be persistent and get the other party what they need as soon as possible. On the flipside, most deals just never work out. It may be an acquisition all the way down to a simple business development deal. There are always many moving parts and excitement that can just fade. That’s okay though. If you’re building your company upon one deal or a silver bullet (more on that below), then you need to re-evaluate things. Don’t be depressed when a deal falls through as that is just the nature of the beast.

Titles Mean Nothing. You Will Be a Janitor

Hey there Mr. CEO, Chairman, and Co-Founder! As a co-founder of a < 10 person company with a product that doesn’t have customers, titles really don’t mean much. Everyone will be doing a little bit of everything, including cleaning the toilets. Don’t try to mask the grind of being an entrepreneur with some superficial title. In reality, you should love and embrace the nitty gritty of those first days. Business cards are nice to hand out, but they really shouldn’t say more than co-founder or something else. Maybe someone inside the company plays more of the CEO role (speaking and being the face of the company), but that doesn’t really matter in the early days. You have to be humble and you have to be willing to do whatever it takes. You don’t have a staff of 50 to throw the task on to either. If you don’t do it, it won’t get done. Sure you could also try to optimize for efficiency, but that’s almost counter productive as the early days of a startup requiring doing so much, that it’s hard to just cut something out.

There Is No Silver Bullet

There shouldn’t be and usually never is a single deal that can make your company. Certain deals or customers can take you to another rung on the ladder, but there are still many more rungs to climb along the way. You shouldn’t look at a deal as the end game to the startup, but a means to a specific milestone that is in the near future. A deal can be taken away far faster than it can be given to you. By training yourself to diversify your risk and the milestones that advance your company, you control the destiny of your company, NOT one single partner. The success of a startup is the compilation of luck infused with many little wins along the way.

Customers Will Frustrate You

Having customers is a great thing, but dealing with support is a whole other ball game. If you’re in the consumer world, expect to deal with customers that don’t notice the obvious even with your fancy pants UI/UX in place. You will also get an influx of feedback that is often contradictory. One customer wants it in red, another wants it in blue, and a third wants it combined to become purple. The key to dealing with customers is to respond to everyone, but have a strong rule of authority. If you succumb to customers frustrating you and do everything you say, you quickly end up in a far worse position.

You Can’t Do It All Yourself

Some entrepreneurs have a superhero complex that they feel they can do everything themselves or with just one co-founder. They think that it’s possible to scale the company with just two to three people. This just results in being overworked and unfocused. Know when to let go of your pride and bring in people that are often smarter than you are. By bringing in others to work with you, there’s also an ability for each team member to be laser focused on what they’re best at.

There Is No Such Thing As An Overnight Success

In some cases you may be able to find out that your idea just won’t work or that you are one of the lucky few that get acquired early on. Other than that, be prepared to work on your startup for many many years. The press often makes it seem as if success happened overnight, but the entrepreneurs themselves spent a lot of time with the company over the course of many years. Startups aren’t a 5k, but an all out iron man competition.

Building A Team Is Hard

Finding co-founders by themselves is very hard just by itself. Finding a group of individuals smarter than yourself across a broad range of skill takes up way more time than you would ever think. In the early days, you may be super excited about your company, but it’s often hard to get a large group of others equally excited. They may have their own ideas they want to work on, be comfortable with a cushy salary, or generally just not interested in what you’re doing. Just because you’re excited does not mean others will be excited. If you’re lucky enough, you will hit a certain period of growth explosion that requires you to hire rapidly and be a great judge of character on the fly. This is a dangerous period for a startup as the company is still small enough that the wrong DNA can make things take a turn for the worse, but you cannot be as granular with hiring these employees as your first 10.

There Are Forces Outside Your Control

Last, but not least, you have to understand that you cannot control everything in the universe. Markets collapse, the government intervenes, tragedy strikes, and other unforseen circumstances. You don’t let this make you quit. It’s like a roadblock on the way to a concert, sports game, or party you want to get to. You may have to sit in traffic or take an alternate route, but as long as you are determined to get there, you will end up at the event. In the words of the late Randy Pausch “Brick walls are there to show you how bad you want something.” Once again, this isn’t a deterrent to becoming an entrepreneur, but just a reality check to make sure you’re prepared. Many companies die because people just give up . Hopefully this article does some small bit in helping preventing this. Life as an entrepreneur is hard, but if you really love what you’re doing and have the determination, you WILL do it.

http://onstartups.com/tabid/3339/bid/17741/The-11-Harsh-Realities-Of-Being-An-Entrepreneur.aspx

1. Why do you want to do this, and how does it fit with your overall goals?
2. What’s the market problem you think you’re solving, and what’s your evidence it really exists?
3. Is the market opportunity likely to be large enough to justify your effort and risk?
4. What substitutes or competition exist to tap into this opportunity or solve this market problem?
5. Are you the right person to be starting it?

Most startups apply a Ready, Fire, Fire, Fire, Aim approach to starting their business. They launch a product they’ve developed hoping they’ve targeted it to the right market – realise they’ve missed the mark, fire again and again – until hopefully they hit the target. Most startups run out of ammunition (time and money) before they hit the target.

If you’ve got a business idea and want to test whether it’s likely to fly or die you can do it with almost no money or risk. In fact, by investing about 20 hours of your time up front to explore some of the fundamentals – you can

• SAVE yourself months, or even years of wasted effort, and
• SAVE yourself from the agony and strain of flushing your valuable financial resources down the drain.

Upstart now offers a “Sprint” Programme. The goal of this “Sprint” is to take a Ready, Aim, Fire approach… to use your time and money much more effectively. If you’re prepared to invest 20 hours of your time over 7 days at times suitable to you, then we can help you answer these 5 questions, and more.

We’ll help you with this for “ “, as long as you’re committed to doing the work. Contact us now to express your interest, and so we can answer whatever questions you have.

 The visit has been organised in response to the need identified by New Zealand’s top business incubators for New Zealand startups to pay more attention to market validation, and intelligence around execution as opposed to an obsession with the uniqueness of an idea. As Dr Adams says in his book “A Good Hard Kick in The Ass” – ideas are a dime a dozen, it’s the execution and team that matters.

Lisa McCarthy, of Upstart Business Incubator who recently attended the Incubator New Zealand meeting and National Business Incubator Association Conference in San Jose, said “the kiwi obsession with the idea is an achilles heel. It’s more possible now than ever before to get a feel quickly and relatively cheaply whether a business has a good chance of success or not before a product is even built, or service delivered. Starting a business has its risks, but it doesn’t need to be a gamble. Too often people come to us for help after they’ve exhausted their cash and time doing the wrong things. It’s such an unnecessary waste.”

 In an effort to change the situation Upstart is launching it’s own market validation programme in August this year based on the principles of Dr Adams, and Steve Blank of Stanford University who created the Customer Development Process, and sold his latest business for in excess of USD$300m.

 Dr Adams has founded or financed more than 40 companies which have launched more than 100 products, and raised more than a billion dollars of capital. He is visiting NZ for 2 weeks as part of the International Entrepreneur in Residence Program organised by the ICE House Business Incubator, and sponsored by New Zealand Venture Investment Fund, New Zealand Trade and Enterprise, Air New Zealand, Giltrap Group, and Millennium Hotels.

 The Queenstown workshop is from 9am-11.30am on July 11^th , and is free due to NZVIF sponsorship. Anybody interested in attending can contact venture@nzvif.co.nz or phone (09) 951 0179 for more information. Information on Dr Adams can be found at http://www.drrobadams.com/.

1. Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.

2. Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.

3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.

4. Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)

5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.

6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.

7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.

8. Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.

9. Most successful founders are driven by impact rather than experience or money.

10. Founders overestimate the value of IP before product market fit by 255%.

11. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.

12. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.

13. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.

14. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team. —

This report just covers very early stage web startups, and the methodology is still shaky – but this is a landmark study. I think these guys have gone a long way to turn hypotheses about early-stage Internet startups into facts. And they’re just getting started.

Download full report here

TracPlus Global Ltd was awarded top honours in the prized First Responder category of the Most Innovative Security Products & Services.

The award was judged by a panel of highly regarded experts from executive levels of American and Canadian government agencies. The judging criteria centred on the uniqueness of the technology, its importance in terms of what it does, its game-changing capabilities, and its timeliness in terms of not only being ready (developed), but able to be used immediately (deployable).

TracPlus CEO Stuart Campbell says the Summit is an opportunity for technology companies like his to not only compete with the best the world has to offer, but also to showcase their latest innovations to key potential international buyers.

“The result is an ability to get best-of-breed technologies like ours into the hands of first responders and war-fighters as well as the commercial security field quickly and as inexpensively as possible,” he says.

Two aspects of TracPlus’s operations were key to the win. First, how it has solved the GPS tracking interoperability issue between and across disparate hardware, systems and agencies. (TracPlus’s platform allows sharing and “instant collaborative networks” to be formed freely and without cost.)

Second, how the company’s business model allows “capability without up-front cost” by emulating the most successful sharing technologies like the internet and mobile phone networks; whereby every business pays for its own little piece of the puzzle but the sharing and collaboration is free.

Campbell says, “Because the Security Network’s partners stretch across the globe, there have already been many success stories of companies like ours finding partners and channels selling not only into the core U.S. markets, but other partner countries as well.”

“We have already benefited from the relationships developed by the Security Network and NZTE (having made second place two years ago), in terms of both the validation and revenue generation that we have achieved in the first responder, DoD and private infrastructure markets.”

With New Zealand now an established part of the global village, TracPlus is able to take advantage of growing relationships with an increasing number of U.S. and international partners.

The Security Network organises events at which innovative technology companies meet potential channel, financial and strategic partners; with participants from government, military and systems integrators that are looking for innovative technologies.

TracPlus Global has been delivering mission critical aviation, maritime and terrestrial tracking and messaging services to private and commercial operators, companies, government agencies, and emergency services around the world since 2007. Its technology has been used in countless life-saving situations, and Stuart Campbell says this award confirms its place as the best in the world.