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.


How Squarespace Built a Great Startup

 

Squarespace is the New York City-based startup that allows clients to easily build their own beautiful websites. Founded in 2003, Squarespace has now grown into one of the hottest startups in NYC.

Squarespace Started in a College Dorm Room

Squarespace was founded by Anthony Casalena in his dorm room at the University of Maryland. The original tool was a way to allow Anthony to easily build his own website. After sharing the tool with his friends and family, Anthony was soon able to raise $30,000 to start the company. For the next four years, Casalena was the only employee at the company. By 2007, the company was generating $1 million in annual revenue. 

From Small Beginnings to a $1.7 Billion Valuation

By 2010, Squarespace had raised $38.5 million in Series A funding and had grown to 30 employees. Four years later, the company closed a second round of Series B funding worth another $40 million. The following year in 2015, the company had reached $100 million in annual revenue and had grown to over 550 employees. Then last year in 2017, Squarespace secured an additional $200 million in secondary market funding in a round that saw the company valued at $1.7 billion.

Simplicity is Key

By simply dragging-and-dropping content into pre-arranged templates, Squarespace allows users to easily make their own beautifully designed websites. For more ambitious users, Squarespeace also allows them to create templates which can then be sold to other users who want to purchase the design. Templates come with tutorials on how to optimize for SEO and even include how-to setup guides for e-commerce. As of 2016, the company was hosting more than 1 million pages.

Expanding and Earning Kudos

Since its founding, Squarespace has grown to over 830 employees. The company has also grown from its NYC-based roots to also having offices in Portland, Oregon and Dublin, Ireland as well. As a vote of confidence, Squarespace also hosts its own website on the platform. Since 2012, the company has been voted one of Crain’s Best Places to Work in NYC and last year was named one of Fortune’s 50 Best Workplaces for Parents.

Furthering the Market Share

As of 2016, the company has also started selling domain names. This put the company on an even more head-on trajectory with rivals like GoDaddy. But Squarespace has fared well. Since then, the company has managed to embrace the e-commerce trend and has also found ways to fully integrate both PayPal and Stripe in order to make online transactions across the platform more seamless.

Today, more-and-more Squarespace is making its presence in the web-hosting industry felt. Few would have guessed the company would ever come so far after starting in that university dorm room all those years ago.


Inspirational business advice from Simon Sinek

How great leaders inspire actions

Simon Sinek is a British/American author and motivational speaker. He takes a unique look at the psychology of how and why people work, and what it takes to be a great leader.

Concepts

Opening transcript. 

"How do you explain when things don't go as we assume? Or better, how do you explain when others are able to achieve things that seem to defy all of the assumptions? For example: Why is Apple so innovative? Year after year, after year, they're more innovative than all their competition. And yet, they're just a computer company. They're just like everyone else. They have the same access to the same talent, the same agencies, the same consultants, the same media. Then why is it that they seem to have something different? Why is it that Martin Luther King led the Civil Rights Movement? He wasn't the only man who suffered in pre-civil rights America, and he certainly wasn't the only great orator of the day.Why him? And why is it that the Wright brothers were able to figure out controlled, powered man flight when there were certainly other teams who were better qualified, better funded -- and they didn't achieve powered man flight, and the Wright brothers beat them to it. There's something else at play here."

People care why you do it

"Every single person, every single organization on the planet knows what they do, 100 percent. Some know how they do it, whether you call it your differentiated value proposition or your proprietary process or your USP. But very, very few people or organizations know why they do what they do. And by "why" I don't mean "to make a profit." That's a result. It's always a result. By "why," I mean: What's your purpose? What's your cause? What's your belief? Why does your organization exist? Why do you get out of bed in the morning? And why should anyone care? "

Hire based on passion

"The goal is not just to hire people who need a job; it's to hire people who believe what you believe. I always say that, you know, if you hire people just because they can do a job, they'll work for your money, but if they believe what you believe, they'll work for you with blood and sweat and tears."

Your passion leads to success

"Orville and Wilbur were driven by a cause, by a purpose, by a belief. They believed that if they could figure out this flying machine, it'll change the course of the world. Samuel Pierpont Langley was different. He wanted to be rich, and he wanted to be famous. He was in pursuit of the result. He was in pursuit of the riches. And lo and behold, look what happened. The people who believed in the Wright brothers' dream worked with them with blood and sweat and tears. The others just worked for the paycheck."

 

Why good leaders make you feel safe

Concepts

Origins of good leaders making us feel safe

"If you go back 50,000 years to the Paleolithic era, to the early days of Homo sapiens, what we find is that the world was filled with danger, all of these forces working very, very hard to kill us. Nothing personal. Whether it was the weather, lack of resources, maybe a saber-toothed tiger, all of these things working to reduce our lifespan. And so we evolved into social animals, where we lived together and worked together in what I call a circle of safety, inside the tribe, where we felt like we belonged. And when we felt safe amongst our own, the natural reaction was trust and cooperation. There are inherent benefits to this. It means I can fall asleep at night and trust that someone from within my tribe will watch for danger.

Creating safety allows the group to be greater than the sum of its parts

"You see, if the conditions are wrong, we are forced to expend our own time and energy to protect ourselves from each other, and that inherently weakens the organization. When we feel safe inside the organization, we will naturally combine our talents and our strengths and work tirelessly to face the dangers outside and seize the opportunities."

Authority vs leadership

"Leadership is a choice. It is not a rank. I know many people at the seniormost levels of organizationswho are absolutely not leaders. They are authorities, and we do what they say because they have authority over us, but we would not follow them. And I know many people who are at the bottoms of organizations who have no authority and they are absolutely leaders, and this is because they have chosen to look after the person to the left of them, and they have chosen to look after the person to the right of them. This is what a leader is."

A lesson from marines

"I heard a story of some Marines who were out in theater, and as is the Marine custom, the officer ate last, and he let his men eat first, and when they were done, there was no food left for him. And when they went back out in the field, his men brought him some of their food so that he may eat, because that's what happens. We call them leaders because they go first. We call them leaders because they take the risk before anybody else does. We call them leaders because they will choose to sacrifice so that their people may be safe and protected and so their people may gain, and when we do, the natural response is that our people will sacrifice for us. They will give us their blood and sweat and tears to see that their leader's vision comes to life, and when we ask them, "Why would you do that? Why would you give your blood and sweat and tears for that person?" they all say the same thing: "Because they would have done it for me." And isn't that the organization we would all like to work in?"

 

The videos and transcripts are from Ted Talks an amazing collection of inspirational videos.

 

Josh Bobrowsky- CoFounder & CEO


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.

 

 


5 Brand-Name Companies That Grew out of Coworking Spaces

Coworking spaces can be inspirational spaces for thriving communities to grow and excel.  A number of startups have grown out of coworking spaces to become brand-name and billion dollar companies. (Interestingly enough, a number of large, established companies have also moved some of their teams into coworking facilities to reap some of the benefits that startups enjoy.)

Here are five companies you’ve heard of that started in coworking spaces. May their stories inspire ideas like your own to thrive.

1. UberImage result for uber logo

By now you’ve heard of Uber, the ridesharing startup that’s currently valued at $70 billion. What you might not have heard of was the fact that a big part of Uber grew out of The Yard, a coworking space in New York City, and RocketSpace, a coworking facility in San Francisco.

Today, Uber operates in more than 80 countries and 660 cities across the world. Cofounded by Travis Kalanick and Garrett Camp Uber stands as the largest ride sharing app.

Uber has major focus on self driving vehicles including ride sharing services and the trucking industry. Lately Uber has been the focus of large amounts of publicity both good and bad.

2. InstagramImage result for instagram logo

In April 2012, Instagram cofounders Kevin Systrom and Mike Krieger sold their platform to Facebook for $1 billion. It was a fast exit: The company was only 18-months-old at the time. At the time the world was baffled by Facebook's willingness to buy a company with no revenue for a billion dollars.

Today in retrospect it was one of the best purchases facebook has made. Instagram currently serves as Facebook's weapon of choice to compete with Snapchat.

Instagram grew out of Dogpatch Labs, a former coworking space in San Francisco. Though the company became too big for the coworking facility rather quickly, the energy and excitement that were inherent parts of the Dogpatch community inspired Instagram until it became a Facebook property.

3. ZipRecruiter   ZipRecruiter

In 2014, ZipRecruiter—a platform that connects jobseekers with companies looking to fill positions—announced it had raised $63 million in a Series A round.

ZipRecruiter was built at Coloft, a coworking space in California that closed in 2016. The company has continued to expand at a rapid clip since it moved to its own space in Santa Monica.

4. Timehop   Image result for timehop logo

If you use Facebook, you’ve come across Timehop, the nostalgia app that allows users to share old memories, statuses, pictures and other updates with their networks. Millions of people use the platform every day.

Timehop’s journey began at New Work City, a since-closed coworking space previously located in lower Manhattan.

“Having an awesome home to independent workers and entrepreneurs is crucial to New York City’s goal to become a major technology hub,” CEO Jonathan Wegener says.

5. IndiegogoImage result for indiegogo logo

The popular crowdfunding site Indiegogo is another company that can trace its roots to a coworking facility. In 2014, Indiegogo closed its Series B round, pulling in $40 million.

Today, Indiegogo is one of the largest crowdfunding platforms in the world. Ironically, the site has been used to finance a number of companies that are based in coworking facilities themselves.

Coworking makes sense to many startups that are growing because of the flexibility and community of the spaces. Every coworking space is a bit different. However, its a great option for many companies.

 

Thanks for reading

 

Josh Bobrowsky- CoFounder & CEO