It’s a great feeling to be able to say that my startup has been in business for 1 year. We launched PE-Nexus on July 7, 2010. It took a lot of hard work, dedication, planning and agility to get to what we are today – a well known M&A platform and professional network.
I have learned a number of lessons along the way, 7 of which I would like to share here.
- Don’t get attached to your original business strategy. Be flexible and adjust quickly or you won’t celebrate your 1st anniversary.
- Don’t rely on your original pricing to do any forward looking projections. This is very important for large ticket items (a few thousand dollars or more). Every customer, small or large, will push as far as they can to get a “special deal”. There is no way to stick to “regular” price unless you’ve been in business for a while or you’re the only game in town.
- Have a detailed set of responsibilities for every partner. Accountability must be a part of every position within a company. Each partner must know exactly what he is responsible and accountable for. This will eliminate confusion and finger pointing.
- Never overlook the importance of marketing. Marketing must be an integral part of any business, especially online business. It is not necessary to have a marketing budget (most startups don’t) in order to implement and follow a marketing plan.
- Make sure your original developer/architect/cto is a co-founder, especially if you run a technology business. Developers are pretty expensive. You’re not going to find anyone who would risk everything and work for free for a long time unless they have significant ownership?
- Invest some time upfront to develop back office functionality (reporting, customer service, payments processing). You don’t want to have one of your developers (sometimes the only one) spend 50% of his time servicing ad-hoc requests from marketing, sales, customer service and executive management.
- Most startups don’t become successful via organic growth. They find investors in order to implement major plans and solidify competitive advantage. There are very few exceptions. Start your capital raise process before you run out of money. This will improve your chances of getting better term sheets or getting capital at all.