I had a comfortable job at Microsoft for 5 years before I left to start my own company Highlight Hunter. My motivation was simple -- I wanted to do what I wanted, when I wanted. I knew this would be easier said than done, but I was determined to give it a shot. I had dabbled in entrepreneurship before but the stakes were much higher this time. These are some of the hard lessons learned along the way.
1. Messaging is more important than the product
You may have the best product in the world, but if you can't communicate its value in a simple way that gets people excited, you won't have many customers (or reporters wanting to talk to you). Web visitors will leave your site within seconds if they don't understand what you're offering them. Crafting your messaging is an iterative process. Take breaks of several days to distance yourself before jumping back in. Get feedback from potential customers early and often.
2. Acquiring customers is way harder than it seems
Scott Porad, CTO of the Cheezburger, once said, "The hardest thing about building a startup isn't figuring out what to build or how to build it. The hardest thing is getting people to use it in a way that's profitable." Most tech startups are started by engineers (like myself) and we often think deep about the technology long before we think about how we'll actually get people to use it. An article in TechCrunch is awesome but the traffic spike only lasts for so long. Think hard about how you'll acquire customers in a way that's affordable, scalable and repeatable (e.g. growth hacking). Simply running a Twitter account won't cut it.
3. Until you have product/market fit, learning is more important than revenue
When we first launched our product, we asked people for their email address to start a trial. Our thinking was if we have their email address, we can follow up with them and drive sales. The problem was we had few users at this point and we couldn't afford to turn people away. Usage can oftentimes be more valuable than revenue because it demonstrates traction and it provides a bigger source of feedback. Co-create your product with your customers -- they love to be part of innovation.
4. Excellent design is worth every penny
We originally launched our website with a $35 WordPress theme and our demo video was a piece of crap. We thought this would be "good enough." Instead, conversion rates were super low and people didn't give us much respect. I finally hired my buddy Ben, who whipped us into shape. Conversion rates almost doubled and response rates to calls and emails are higher than ever. Consumers often use production values as a proxy for the quality / value they can expect. If you don't respect your own presentation (web site, demo videos, etc) why should they expect you to respect them with a quality product?
5. Timing a product launch is far from trivial
We grossly underestimated how long it would take to build relationships with reporters. Some people got back to us right away while others took weeks. As a result, we didn't have everyone aligned for our v1 launch. Some weren't even interested in writing about us because we were "old news." As soon as you have something to share, start reaching out to people and build those relationships. At least you'll have them waiting for your call when you're ready to launch. If you have the funds, consider hiring a PR firm that is already established in your space.
6. Informal agreements can kill friendships and your company
My buddy and I came up with the concept for Highlight Hunter over beers long before there was an operating agreement in place. Figuring out how much we each owned was a painful process that caused significant stress for both of us. Although we both made it out relatively unscathed, I have several other friends who haven't been so lucky.
7. Protect equity like it's your first born child
I don't believe good ideas are a dime a dozen. But I do believe execution is 99 percent of the work. Once you give out equity, you can't get it back. Reserve it for investors or top-notch employees that are working hard towards your vision. You don't owe equity to your buddy that had a good idea at the bar last night. Don't swing too far towards the selfish side of the spectrum though -- 100 percent of nothing is nothing.
8. Spend the money for a lawyer to craft your operating agreement
Being the stingy bootstrappers that we were, we wrote our first operating agreement ourselves. We quickly realized we had created an overly complex Frankenstein agreement that had all sorts of holes. Fortunately we realized this mistake within a few weeks and replaced it with something more standard. The money spent on legal fees was well worth the comfort of knowing we did things right. Operating agreements are the foundation of your company and without a solid one, things will implode. Keep your day job until you have the money to afford a lawyer.