Naval · April 26th, 2010
I recently answered this question on a Q&A site: “What generic first order principles should a new technology project or startup follow?” But I used the politician’s prerogative to give an answer to the question I wish he had asked:
- Move to Silicon Valley.
- Pick a great co-founder with complementary skills.
- Select people with intelligence, energy and integrity.
- Pick a big market.
- Develop the minimum viable product to test your hypothesis about what the market needs. Preferably it’s a product that you’re passionate about since you’ll need to stick with it to an irrational point (the Internet especially is efficiently arbitraged).
- Iterate like crazy until you find product/market fit. If you don’t find it, do not raise money, do not pass go. Start over.
- If you have found product/market fit, raise money from high-quality people that you trust. Keep control.
- Scale. Hang on.
Topics Starting Up
“One way to start a startup” is an extraordinary good title for this post. It even gets better the longer I think about it. Pretty solid advice, we did everything up to step 5. Except step 1 obviously.
I cannot exclaim loudly enough how important the first step is to the technology based start up. Thanks for sharing.
First time entrepreneurs, and here’s the order we went in:
2, 5, 7, 3 (failed), 6… now moving to 1 in the hopes of identifying a partner with a bigger 4 than us, so we can 8 together.
It’s a tough road, especially when you do it all wrong 😉
Love this post… but dont forget about all the magic happening in NYC.
T.
Could be worse. Allow me to explain.
I exited my last company – a biotech manufacturing company (celltrion.com) – for a little over a billion. We built the facility to customer spec (aka “customer development”) resulting in great success. Doesn’t get more bricks and mortar than this folks!
The thing is, I didn’t apply the same “customer development” principles to my internet startup and burned through a million bucks spinning our wheels. Luckily we came across Eric Ries, Sean Ellis, Venture hacks and a bunch of other folks who reminded me how startups should be done. We pivoted and are now well on our way through Step 6.
So chin up, keep at it and best of luck!
One more thought….we also were recently honored an award by Bio-IT World – leading trade pub for life sciences info tech – for Best Practice. Go figure.
I think we’re one of a handful life-science internet companies practicing lean startup, so we must be doing something right! 🙂
add mendeley.com to that small list then. not pure life sciences focus, but its a big part
Naval —
We have a great startup culture here in LA too! Good VCs, great entrepreneurs, and spectacular weather.
Nivi, I know SF is the mecca. Have you guys thought about “cross pollinating” though and flying out next week to Boulder for their Boulder.me event? Should be a concentration of startup types converging for that- I’ll be there.
Iterate like crazy is a great tip but I think a lot of entrepreneurs tend to do what they want vs what the actual users of their site or platform want. Always be listening and when there is a strong demand for a tweak, or a new feature then build it out accordingly. I know I’ve wasted lots of money building out new features only to have them not used while cluttering things up on the UI.
I could never do (1). I’d miss England too much.
We moved to Cambridge, in the so called “Silicon Fen” does that count?
london’s got a silicon roundabout ^^
Great advice – the simple tips are always the best. We were in SV recently to meet with potential investors and customers. I returned home feeling like there’s no place else to do a start-up. The eco-system is just amazing.
We’re doing the steps listed above… #1 is the only piece we’re doing a bit differently. We are incorporated on the Central Coast of CA, with FREQUENT trips to SV and LA. Because of our market, this has been the best way to go on all fronts.
I think, in general, moving to SV for a tech start-up is advisable… but it is definitely not the only place to go. LA (as one mentioned above) has a thriving and growing tech start-up culture… especially in places like Pasadena and Santa Monica where there are decently high concentrations of tech people/companies.
The Central Coast has been good for us because of its proximity to both LA and SV.
Agree with 7 points. Pass on #1.
😉
Hey Naval, you’re getting a lot of push-back on #1, and being a Boston-based startup, I know why… none of us want to think/admit we’re doing something “wrong” against this list!
Your post re: the advantages of being in Silicon Valley is well reasoned, and I think on a statistical basis you’ve got some evidence to support the hypothesis. But for those of us not yet relocated, perhaps we can take some comfort knowing that A) it’s not a universal truth… success can and does happen outside of Silicon Valley, B) not everyone works on consumer internet startups, and C) not every consumer internet play necessarily has a winner-take-all conclusion, especially in the short term.
A winner-take-all situation can take years to play out and the advantages of a brief head-start can quickly become a part of the background noise of all the myriad factors that lead to success. I’m not sure any successful entrepreneur will chalk-up his success to having 3 months’ head-start over the competition!
Does anyone else see some similarities between “which region is best to start a new company…Silicon Valley or NYC/Boston/anywhere else” and the late 90’s when NYC rappers were railing against West Coast LA rappers.
There has got to be an SNL skit in here somewhere.
Out of eight, I made three things right as a first-timer.
Too bad US Government does not want people to move to Silicon Valley or to anywhere in the US. This is called “visa requirements”.