Thursday, July 22, 2010

Startup Advice

I got an email the other day from a Web entrepreneur who wanted me to write about his startup.

I had to tell him it's too early for me to get involved. I don't like writing about what people say they're going to do - I like writing about it after they have earned the ink, by producing tangible results (money, market share, disruption, creative recognition, etc.)

He wrote back and said he understood - but did I have any tips for him, especially about raising seed money? I didn't have time to say anything brilliant, but here's the advice I offered:

What can I tell you? Take a breath. Take your time. See if you can generate some income before you go seeking investors; the more self-reliant you are, the more they will pay to get in on it.

* Surround yourself with people who like what you're doing and want to contribute. Pay them in promises - that at some point, if you see a return, they will too. But try not to give up equity until you really have to. For some people, the adventure and the experience will be enough.

* Clean up your website. Make it as professional-looking as possible. I see lots of grammar mistakes, mis-spellings, and room for improvement.

* You're doing the right thing in terms of reaching out to media, bloggers, etc. But remember - your site isn't news. It's how you help people that creates a story.

* And check out Zilch, the book I reviewed in my Post column this week. Lots of great advice for getting things done on a zero budget.

1 comment:

Mark Mawhinney said...

Hi Rick,

I think too many entrepreneurs think the holy grail is to raise outside money. (I also think many investors mislead newbie entrepreneurs to think along these lines too.

From my perspective there are four sources of cash. In order of importance:

(1) Customer
(2) Debt
(3) Equity
(4) Government

I encourage entrepreneurs spending time raising money to think hard about whether that time is better spent finding customer money.

Great post - again! Thanks.