Investors look for great founders teams.

You heard that many times. But what does it actually mean. What constitutes a great founders team.

  1. Team means team. A team of founders is not a founder with a few people joining him or her somehow but multiple founders with more or less equal equity share in the new company.
  2. Founders who are obsessed, not just passionate about what they do. They make anything humanly possible effort to make their idea come true. If they have to move to a different country, they will. If they have to sell everything they posses they will. If they have to live in a shed and have just barely enough to survive they will.

    Passion is for pussycats – great founders have obsession

  3. Great founders are truly intelligent. Meaning they have the skill to solve a problem by simply thinking through most of its permutations even though neither they nor anybody else ever had a solution for similar problems.
  4. A team of very diverse skills and behavior. Having a generalist working with two specialists (CEO, CTO, CMO). A doer, an analyst and an detailed subject matter expert are best.
  5. Bold thinking. Not just a hypotheses to grow from 1 to a billion users but a constructed ways and a reasoning why and how to get there. The ability to draw the future like a picture
  6. NO respect for anything existing and definitely not any investors – just doing what they want to achieve
  7. Complete independence of capital.  Great founders make things happen with nothing. To the contrary those who need somebody else’ money to start are definitely not great founders
  8. Founders are typically people who can easily attract others: Attract co-founders, attract customers, attract talents, attract investors…
  9. An unbreakable drive to execute and complete the mission – no matter what obstacle is in their way
  10. High sense of urgency. Great founders do things significantly faster that their competitors. They have no time for anything but run.

 

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You have a new business idea. You are so excited that it quickly becomes your best kept secret. You get almost paranoid about somebody stealing this great concept that apparently nobody else figured out yet. Now – one day you have to share the secret, when you hire somebody helping you to build the product or when you ask somebody what they think or when you want the first customers to try it out.
Most of those ideas will never see the day of light – the fear that somebody steals it is greater than the ambition to make it happen.
Hence – the initial value of your  idea is exactly ZERO. Every human has hundreds if not thousands of ideas during the course of their lives. So what – they have zero value if they are not put to action and the people die with their ideas. In other words all its value is created when an idea is turned into reality.

The initial value of an idea is zero

No-one can actually ‘steal’ an idea. All people can do is to make it much better right from the get go. If it is an outstanding and truly new invention, file a patent if that makes you feel better. But consider yourself warned. More often than not are patents the reason for failure. Customers want choice and not yet another technology dictator. The want options and not a monopoly. If Tim Berners-Lee would have received a patent for his HTTP and HTML protocol we simply would either not have an Internet as we know it or none at all. Because the days where somebody pays royalty fees are pretty much gone.

The entire value of an idea is created through execution
. Meaning only when you turn it into reality, work with smart and engaging people, as well as working with your potential customers you will win. And if somebody executes better than you, they will win – no matter what – even with a patent as they will try everything to find an alternative. And they will find one, which makes them even stronger.

Stop worrying start doing

Cowards will never bring an idea to live because they are more fearful their idea will be stolen than the fear to fail. If you feel you are too weak to execute – go back to square one and rationalize that it is all about execution, and look for a partner who can execute while you craft the concept for your idea. If you have nobody you can trust, work on your network. If you have no network, build it.
Every outstanding idea is usually created multiple times at the same time. Did you ever wonder why most break through concepts happen around the same time on different places? Some maybe a blunt copy, but most just happen because the time is right, the base to build a new step in the evolution of something is perfectly prepared and a need from a market is pushing it to reality. It doesn’t matter whether it was copied or the same idea was created multiple times by chance – getting it done is the real value – not having a brain fart ;)

Why Espionage?

You may think, why is espionage such a big deal on a global scale? Keep thinking: This is the worst way to get to leadership. It is well known that many of the largest enterprises and governments try to find out what their competitors do – so they can do it too and hope to be better. That particular behavior obviously results in “follower-ship”. And follower-ship is by definition not leadership. Every leader welcomes followers – why? Because only with followers they can become a leader. As a result companies or governments with huge engagement on espionage are doomed to fail in the long run – and history can prove it over and over again.

Putting it all together

Share your idea with great people who can help you make it happen. Involve potential customers before you even build a prototype. Then build what you the market needs and is willing to eventually pay for. As soon as you can show your first results, be as bold as you can get and invite others to follow your ideas – in order to become the market leader and thought leader. While the followers copy your idea, you already have a new version, an improved process and they will follow again. Yes, you are doomed to never stop innovating – but at one point it is the market that will co-innovate with you if you keep the market on your side. Examples of long term innovators include Mercedes Benz, IBM, Lindt Chocolate, Kellogg’s, Steinway & Sons, … All had one thing in common: They had a great idea, they built their first products quickly, brought it to market, competitors tried to copy them right away, they ignored everybody but their customers, and continued to built on what they had – all remained to be leaders in their field over generations.

This post was inspired by a question on Quora “What are the most common mistakes first time entrepreneurs make?”. If seen these mistakes over and over again:

  1. Trying to be the nice guy – instead selfishly execute your vision because nobody will if not you.
  2. Being fearful, avoiding risks – instead stand up and be bold
  3. Looking what other startups do, investors want, media pushes – instead explore your very own path
  4. Doing everything yourself because it is “faster” – instead share and delegate
  5. Trusting you need money to do what you want to do – instead find other ways to make it happen
  6. Hiding your vision because of you are insecure – instead spread it wide and loud
  7. Believing you know what your customers want because you want it – instead let go and listen
  8. Wasting time by create a plan B – instead make sure you have a single robust plan
  9. Ask your friends what they think – instead ask your target audience
  10. Enjoying being your own boss – instead be the servant of your market

Try to MAKE money before you TAKE money

I was recently asked what ways I’d know how to get money to start a company before you really raise money. Except donations, I successfully tried all of them myself. There is a huge value in getting money from other sources than institutional investors in the first place. One of the biggest advantages is being independent and knowing there are many ways to make money before you take money.

1) Friends and family

always the most important starting point. If you don’t have any, it indicates that nobody is trusting you – not a good start. [Trust Money]

2) Early Customers

Your first customers may actually be a great way to make money as they may even pay for the development if the product gives them the needed extra value. [Smart Money]

3) Crowd Funding

Even more early customers with an additional boost of marketing and new early adopters. [Smart Money]

4) Additional Consulting Services

Providing consulting services in the space your startup provides products to augment your financial side. [Smart Money]

5) Training & Education

Paid education programs (Training and general education) you may offer to help clients better understand the space you are in. [Smart Money]

6) Events

Events with sponsorships – finding sponsors to help you boost events that may end up be profitable for you and help promote your idea. [Smart Money]

7) Advertising Revenue

You may allow others to advertise on your product, your training, your events, in order to get some additional funding. [Just Money]

8) Donations

You may add a “Donate” button to your product or outreach program and get some donations to finance your business. [Friendly Money]

9) Grants

You may look for available grants from your government or universities. They are very difficult to get and mostly takes for ever but certainly a very viable opportunity. [Just Money]

1) Business Angels

While typically the first option startup entrepreneurs think of, yet it should be your last resort. It feels like easy money quickly – but after several startups you will learn it should be your last choice after you considered all the above. [Just Money] [Smart Money only in rare cases]
* note: Smart money means you get a serious extra value – not just hope getting an extra value. Customer money is always smart as you learn from their use, you learn about your sales and marketing process, you learn about improvements and you build the base for institutional investors (VCs)  who will want to know what the market is like. Same goes with events, training and consulting, despite the fact that you won’t continue with it long term you learn a ton from your market.

I was ask what to do to motivate yourself to work harder. I was wondering why on earth you want to work hard. But obviously that is what most people tell others on their quest to success. When I was 28, somebody told me a bout Confucius’ saying:

Seek an activity you wholeheartedly love and you will never work a day in your live“. Confucius

It changed my attitude to work for the rest of my life in two ways:
1) I understood that hard work is only hard if you don’t like what you do which is almost automatically leading to failure.
2) The only thing that is hard – or better said – not easy is to determine what you actually love to do.

If you don’t know WHAT YOU WANT: buy yourself a shovel, get out into a desert and dig a hole as deep and as wide as you can. Make sure you do not do that on property that is owned by anybody and that you are not endangering anybody. You may exhaust yourself over and over again. People may come and watch you doing it. The hole may have a diameter of maybe 500 yard. And you dig deeper and deeper – wider and wider. While you do that you have time to think about what you rally want. More and more people may come by and watch you. You may get interviewed by local television. You may become famous for the man that single-handedly dug the widest and deepest hole ever. You may get advertising contracts and get more interviews. But most likely at that stage you know:
a) you really enjoyed digging this unbelievable hole – or
b) you know what you really want to do instead
c) if none is true, go to the poorest country on earth and help people survive and thrive. Do this until you know how you could create more value for our society. Once you know, you help those who can’t figure it out – where to start and ask them to dig a hole.

In other words make every effort to find out what you really want to do – instead of just doing something because you don’t know.