How to start a business

5 Things To Consider When You Start Your Business

How to start a business

When you set out to build your business you are looking to build a team of people that all have the same vision or end goal. However, you need diverse skill sets.

Most companies are comprised of some or all of the following

  1. CoFounders
  2. Investors
  3. Board Members
  4. Executive Leadership Team
  5. Auxiliary teams

The importance of each part of your team

1. CoFounders

If you choose to start your business with a partner this will likely be the most important and lasting choice you make for your company.

What to look for- The most important trait in a cofounder is integrity. Without integrity, nothing else matters. You need to be working with someone that you can trust.

To quote Warren Buffett "you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you"

Beyond integrity look for someone who you enjoy being around, is smart, has skills that are highly complementary to your weakness and believes in you and the bigger picture.

Keep in mind you don't need a Cofounder or business partner but most of the time the right person is incredibly helpful to have as a partner.

What to avoid- The most obvious things are poor ethics or character. However, you probably don't want a cofounder who has the exact same skill set as you do. If you are amazing at coding and programming you don't need another coder as a cofounder. You might be better off with a sales/marketing expert.

Think about Steve Jobs and Steve Wozniak. Jobs was master of sales and Wozniak was an amazing builder of computers

2. Investors

Not every company needs investors, but if your company does here are some basic tips.

What to look for- You want an investor group that shares your vision, believes in you and has experience investing in your type of business. Ideally, someone who is a "value add" investor that has connections in your industry that can help you with anything from hiring, to raising capital to important introductions.

Professional investors typically have investment classes that they like to invest in. Each class of investment has different pros, cons and expectations.

Examples: A professional early-stage venture capital investor expects that over 50% of her investments will fail and lose 100% of their value. They make a positive ROI on investing because 10% of their investments will yield extraordinary results of 10-1000x.

Thus, a VC investor is much more likely to be ok with taking high risks.

Inversely, a professional real estate investor typically has a much lower risk tolerance but typically can expect to make money on each deal.

Why this is important- A professional investor who invests in your type of business will typically understand your needs and be far more comfortable with the ups and downs of your business. They may be able to help you with specific problems like contractors for real estate or hiring for VC. You will have many challenges along the way building your company. In an ideal world you want to avoid unnecessary challenges associated with an investor who is not familiar with your style of investment.

However, if someone is open to investing but somewhat new to your class this isn't necessarily fatal. The key is to give them a clear understanding of the risks and not give away too much power.

What to avoid- You want to avoid people who do not share your vision and people who have unrealistic expectations. You want to avoid giving up too much control, equity or power to people who don't have your business's best interests in mind. If you feel like an investor is grinding you down during the investment process, that is not likely to change once they are actually an investor. Remember this is a long term relationship not a one night stand. Choose accordingly.

3. Board Members

Your board will be a group of people who will functionally control your company. Not all businesses have board members or a board of directors. This is typically reserved for businesses that have investors

What to look for- Very similar to investors, look for many of the same things.

Composition of a board- There is no perfect way to build your board of directors, however there are certainly some "wrong" ways to build them. Try to keep your board to a reasonable number of people who are actively engaged in each meeting. Having too many people on your board can make decision making challenging. Typically a board will have an odd number of people for voting purposes, consist of investors, executive staff, and a potential outside party.

What to avoid- Avoid board members who don't come prepared to meetings with valuable insight. Remember, even though the board is a form of a corporate governance, their job is to help your company be successful.

Investor and Board Relationships- Often times each class of investors will want at least one board seat. So your seed round, series A, Series B etc. each will likely want a place at the table to help the company grow and control their interests.

4. Executive leadership team

Your executive leadership team will directly relate to the size of your company. As your company grows you will look to add pieces to your executive team.

When a company first starts out a few people wear many hats. However, as your company grows you will hire more specific people. Additionally, as your company grows, you as the CEO should be more focused on managing your executive team and less focus on performing tasks.

When you look to add someone new to the executive team, typically look for what role can have the most positive impact on the overall business and also look at where the company might have a potential weakness.

Make sure each new person brings a divergent viewpoint and has a skillset that enhances the company while sharing the overall vision for the greater picture.

Let people grow- As a side note make sure that the people in your organization have room to grow if they want to do so and are proving the right value for your team. Don't be overly romantic and put someone in a position that they cannot handle, however you don't always need to hire someone outside of the company.

5. Auxiliary Services

Legal, accounting, design, etc.

Get good work and don't get robbed.

Potentially easier said than done. Your legal team will be incredibly important. You will need to find a balance of a highly competent lawyer or lawyers to look over your documents but someone that isn't going to charge you an unreasonable amount of money as a startup.

What to look for- A good lawyer should give you legal advice and some general good business advice as well. They should know best practices for your venture. Bonus points if they can make introductions to valuable people like investors.

The same holds true for the accountants graphic designers etc.

Remember that you are in charge, you run the company and trust your gut instincts to find people that are helping you achieve your goals. At the end of the day you are employing the services and they work for you.

In an ideal world pick people that you have either gotten as references or that have a great reputation.


Interview with Harper Wilde (Bra Startup) Co-founders: Jenna Kerner and Jane Fisher

Kerner and Fisher are disrupting the bra business and having fun while they’re at it with Harper Wilde.

What inspired you to start a bra company?

Fisher: The idea came about very organically. We asked a simple question: “Why are bras so expensive?” We did a ton of research to figure out why the industry was so antiquated, but we just ran into more questions. We didn’t understand why brands were hyper-sexualized, or why typical models did not resemble the everyday woman. Why did bras come with those odd embellishments that almost no woman wanted, let alone purchased. And we certainly did not understand why bras needed to cost $60-$80 - or more!

When we began running focus groups and surveys with women to better understand what the true pain points were, one thing became crystal clear almost immediately - women hated buying bras. Busy, driven, successful women were so fed up with the process, they were buying bras they didn’t love and keeping them for way longer than they should, just to avoid repeating the process. One woman even told us “buying bras is like a tax on being female.” Needless to say, comments like this further drove our passion to make an overdue change in this industry.

What are a few of the problems that your bras solve?

Kerner: Other companies are innovating on the product. After two years of research, focus groups, and collecting hundreds of bra dressing room horror stories, we realized that the true issues lie not in the products themselves, but rather in the experience of shopping for them. Creating an amazing product was crucial. But we built the simplest, most hassle-free experience possible. We nixed measuring tapes, 17-page surveys, and the hundreds of options. We provide thoughtful designs, fair prices, and free home try-ons, so that a woman can find her fit in the privacy of her home. We call it ra hopping: Bra Shopping, without the B.S.

Image from humorous Harper Wilde promotional video.

It's difficult not to notice the humor on your website, including this video. Was humor something you knew you wanted to incorporate in your business all along?  

Kerner: Humor was something we wanted to incorporate into the fabric of the company from the start. The first two things we invested in were great products and the video, to help communicate our story. We looked around the bra industry and we found brands that were either hypersexualized or overly serious. As we picked apart the process of shopping for a bra, we found so many moments of absurdity of what we have to deal with that we couldn’t help but poke fun at the industry a bit. Buying bras doesn’t have to feel like a TSA screening at airport security. It should be empowering, easy, and if we can really nail it, a little funny too.

While we love to bring humor and life to this hyper-sexualized industry, we also have a very serious mission to Lift Up The Ladies…[through our partnership] with The Girl Project.

Would you tell me more about your partnership with The Girl Project?

Fisher: The Girl Project helps put young girls through school so we can lift up the next generation of leading ladies. We spent nearly as long vetting a social impact partner as we did building this company. When we started this adventure, we were students, fortunate to be in a position to learn, explore and challenge traditional norms. But we knew there were millions of girls without access to education. We set out to find an organization whose values aligned with our own - one who also understood that behind every strong, successful woman is an educated young girl. The Girl Project met so many of the criteria we were looking for in a partner. Jenna and I were inspired by their passion to educate girls on a global level and their ability to have tangible impact in doing so. We couldn’t be more thrilled to work together to achieve our mission of Lifting Up The Ladies.

On your site, you pose the question, "Why is a product that is meant for us, typically marketed toward men?" Can you elaborate more on this a little?

Kerner: Looking at the brands out there, you see women clad in lingerie and angels who look unattainably beautiful. The messaging pushed into the market makes women feel like they should match their bra and underwear everyday, or that the basic, everyday bra is boring and shouldn’t be the go-to. And yet, on average a woman has 16 bras in her drawer, and only wears 2-3 of them. When asked, many women say, almost sheepishly, that they wear an everyday bra nearly every day. Why are women embarrassed by that? We’re all doing it. That’s how we reply. You aren’t alone. We’re all wearing the comfortable, durable, everyday bras, even if marketing from traditional companies tells us we should be wearing the sexy lingerie. So we wanted to flip the messaging and let women know it’s okay - hell, it’s even cool - to love your everyday bra.

Why is your company called Harper Wilde?

Kerner: It took us nearly six months to come up with a name that we felt encompassed the ethos of the brand. We distilled down the most important values of the company, and we kept coming back to empowerment and education. We looked to women educators and authors, and found inspiration from two iconic authors, Harper Lee and Laura Ingalls Wilder. Not only is it a nod to two influential women, but it refers to timeless classics, much like our everyday products.

 

 


Interview with ShareMail Co-founder: Jeff Jackson

There is probably no startup that a lonely, non-digital grandmother will appreciate more than ShareMail (ShareMail.me). That’s because it was designed just for her. ShareMail enables grandchildren and others to select photos and messages from Facebook and have them automatically printed and mailed to their elderly, socially isolated loved ones.

What inspired you to start ShareMail.me?

My 97-year-old grandmother lives in an assisted living facility in Oklahoma, and I'm between NYC and Austin, so I never get the chance to see her. Also, she doesn't hear very well, so talking on the phone with her is difficult. I knew that she is bored and pretty lonely out there, so in early 2016 I committed to mailing her a letter every day at the end of work... I made it two days before stopping. I couldn't believe how much of a pain it was to compose a letter on my laptop, add pictures to it from my phone, and print it onto paper at the office. I wanted a quick, easy solution to send her updates via one of the only communication channels she is on these days - paper mail. I figured that integrating into my already existing social media content would make things even easier for me... So I reached out to Jason Smith, my cofounder, who has done other startups with me, and thus ShareMail was born.

As the next generations of elderly will be increasingly connected to Facebook, do you imagine ways of pivoting?

I think there are a lot of ways that we can grow that is independent of Facebook penetration with older adults, like birthday gifts and other things. That said, the next immediate generation of older adults is less connected to Facebook than you might expect... at least depending on how you define 'older adult'. Of the 43 million adults over 65 in the US, 17.5 million of them are not online at all. Of the remaining 25.5 million that are online, 9.5 million of them are not on Facebook. And I'd imagine there are plenty of people that have accounts Facebook, but never log on. And increasingly, younger people are not using Facebook to post about their lives- so I judge that the mismatch in communication channels between older people and younger people is a big problem that is not going away anytime soon.

I'm connected on social media and I'm not elderly. And I would love an easy way to print out Facebook photos and have them delivered. While the ShareMail concept is to break down the technology wall and reduce isolation for the elderly, do imagine other applications for your concept?  

Sure, we definitely have people that use the service to send photos to themselves or to connected friends and family. The packing is nice, and people love getting gifts in the mail, and having physical reminders of people and things they love. So yeah, there's definitely a broader application than the specific use-case we're marketing to at the moment.

How much does it cost to use ShareMail, and what is your most popular plan?  

Our most popular plan is a monthly letter for $6.99/mo, and there is also a weekly letter plan for $14.99/month. They both come with a no-credit-card-required free trial and you can sign up at sharemail.me.

Where are the orders printed?

We print them right here in NYC.

What are the benefits of being an entrepreneur in NYC?

There's a great ecosystem of other entrepreneurs here, as well as tons of media access and a lot of financing available if you need it. We've really benefited most from meeting other entrepreneurs and journalists in-person through our co-working space in Manhattan.

What were you up to before ShareMail?

My cofounder Jason and I had a project involving mining data about Airbnb and the short-term rental market that we decided to stop pursuing in order to do ShareMail. Prior to that, we had a hosted CouchDB-as-a-service startup [CouchDB is an open source data software] called Iris Couch, which we sold to another company in 2013. Prior to that, I built a company in Austin that does wholesale prepared foods, called The Green Cart, which I still have.

 

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12 Blogs Every Entrepreneur Should Read

The best people in business are lifelong learners of their trade. Below are a few of the best blogs that are organized by category. The numbers are not meant to serve as a ranking of order as they are all great resources for continued education in business.

Large Publications

1. The Wall Street Journal- It’s a pay subscription service but for keeping up with news and business it is some of the best writing on the web for general business and news.

2. Harvard Business Review- HBR is a great blog filled with excellent insight on business and quick reads. A well-known publication that lives up to its namesake.

Startup & VC Advice

3. Y-Combinator Blog Y Combinator is one of the top incubators on the planet. In addition to running one of the top incubators in the world, their blog is top notch. The articles are well written and the bring in amazing guest bloggers who are leaders of industry.

 

a16z topic matrix

 

4. A16Z- Created and run by Andreesen Horowotiz, one of the most prestigious venture capital firms. The site focuses on business and startups and includes excellent organization of blog posts by topics. The website is broken down into 3 categories Advice & How To, Tech Topics, Podcasts.

5. Both Sides of the Table- In their own words: "Perspectives of a 2x entrepreneur turned VC at @UpfrontVC, the largest and most active early-stage fund in Southern California." As the name implies the blog gives perspective from the VC and Entrepreneur side of business, and fundraising.

6. Cruncbase- Crunchbase is one of the best resources to research recent funding deals. While this may not be a blog in a traditional sense of written articles by business leaders it is a great tool to keep up with VC funding.

7. 500 Startups Blog, - Similar to Y-Combinator blog, 500 startups is a company that has invested in over 1600 startups and provides a wide range of advice on business and startups throughout their blog. In their own words about their program

Have your act together? We invest $100-250K on market terms and charge a $25-50k fee depending on geography for participation in the 500 Series A Program.

You’ll get all the perks of being in 500 too – like access to our vast network of investors, partners and founders.

8. Forentrepreneurs.com - Inc Magazine ranks this as the number one blog for entrepreneurs and it ranks as number 2 on Forbes list of best 100 websites for Entrepreneurs. What makes this blog excellent is the in-depth advice from David Skok. David is a lifelong businessman turned VC, who focuses his advice on business, marketing and startups.

Marketing

9. OnStartups- Run by the founder of Hubspot this is an excellent blog focused on marketing and sales online. An excellent resource for marketing, SAAS and business in general.

10. Rand Fishkin's Blog, Rand is one of the top names in marketing and SEO. Part of the MOZ website (formerly SEO MOZ). This is a great resource for learning expert level SEO tactics and keeping up with the constant changes of how algorithms work. I will also say that I would highly recommend Moz.com  itself as well.

11. Canva Design School- Canva Design School is a daily blog that focuses on design. This is a great resource for branding, marketing, and building beuatfiul pitch decks. The Canva product itself is an excellent product to use that makes easy work out of graphic design. Guy Kawasaki currently serves as the company's Chief Evangelist.

 

Inspiration

12. Ted Talks- Some of the most amazing and inspirational presentations. Although many of the presentations are not focused on business, this is an amazing site for great content and inspiration. Video Blog.

 

 


Cofounder's Corner- Put It In Writing

Use email to avoiding disputes and ensure payment for your freelance work.

A videographer friend once found himself in a situation that is unfortunately all too common for freelancers: after agreeing by phone to shoot, edit, and produce a commercial, he laid out $90,000 of his own money and did the job. Then the agency that hired him refused to pay. My friend had virtually nothing in writing to prove that a contract even existed, much less what the agreed-upon terms were. My friend ultimately got paid, but first he had to hire a lawyer, burn his professional relationship with the agency that hired him, and lose a lot more sleep than he should have.

Most people don’t realize that, with certain exceptions, verbal service contracts *are* legally enforceable. The problem is that just because they’re legally enforceable, doesn’t mean they’re practically enforceable: if you have a deal in place to do a small job, the cost of hiring a lawyer and proving the existence of a verbal contract can be more than the job is worth.

Let’s take the story above and turn it into a teachable moment. Here are some practical tips to using email to create written contracts that you’ll be able to collect on (or at least keep your legal fees down if it comes to that.)

Send an immediate follow-up email
When you agree by phone or in person to do a job, the best practice is to send an immediate follow-up email. The email should contain the key components of the deal:

  • The Work: What have you agreed to do?
  • The Money: How much are you getting paid
  • “The Double When”:
    • When are you doing the work
    • When are you getting paid?

The "Double-When" is a crucial point that’s often left out (and was the cause of my friend’s problems in the story above), because people often assume they’ll get paid “when the job is done”. Make sure you lay out when you’re getting paid as precisely as possible, and, if you’re buying a bunch of materials, we suggest getting at least part of the payment in advance.

The Clarification in Closing: you can add a last sentence where the person agrees by not responding. If you were a lawyer, you’d write “if anything stated herein is incorrect, please notify me in writing of the specific point of disagreement.” But a much friendlier version is “let me know if there’s anything I left out.”

Sample Email
Lets take a look at these tricks in practice. The tone of the email can be friendly and informal:

“Hi Bill.

Great talking to you this afternoon. As we discussed, I’ll prepare a 4-course vegan dinner (soup, entrée, salad, and dessert) for 10 people at your house on April 17, with dinner starting at 7:30pm. I’ll be there around 6 to start preparing. My fee is $800 (including groceries), payable half now and half after the dinner. You can send me the deposit via my Venmo account. Let me know if I’ve left anything out. See you on the 17th! ”

A simple 1-paragraph email like this can literally be the difference between getting paid and getting stiffed.

 

Stephen DeRosa

CoFounder & COO