
Mistakes business students make when founding a startup - louisswiss
https://medium.com/@Mondable/top-10-mistakes-business-students-make-when-founding-a-startup-7f4845315035#.h5f640h5o
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elcapitan
Is there a similar post on the developer side? I could imagine that you could
already start with the equivalent version of point 1:

"I have a great service/app/whatever, where can I find a business person to
get it to the market for X% equity?"

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nedwin
Or worse still - "if I build a great product people will love it and tell
their friends, I don't need anyone in product/marketing/sales"

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swalsh
Yeah, that's kind of the thing a lot of developers skip. I've done it. When I
have an idea, I assume the market exists, and just start driving.

Now, when I have an idea I do an exhaustive search for keywords. I look for
any data I can find that will tell me what the market would look like if I
could get to the top. Almost every time I've done that, i've realized that
there's very little people actually searching for the thneed I was going to
build.

I've started to learn more about SEO, and marketing, but there's just SO MUCH
I don't know, that I never considered, that having the right guy would help
with. They really are an equal founder in my opinion. Building a product no
one wants is a worthless activity.

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zekevermillion
Non-technical people can make excellent business people, though there is some
truth to the vapid MBA stereotype. However, if you're an MBA lacking the
experience and wiring of a Jeff Bezos, then the "convince other people to
paint my fence approach" is highly probable to result in failure. I would
agree with one point from this post, which is that non-technical first-time
founders should select ideas that they can learn to prototype working alone.
This has numerous advantages, including:

1) learn the real-world problems of your idea through trial and error

2) if the idea does not become a profitable business, you reduce the risk that
you will disappoint others and lose a lot of money that doesn't belong to you

3) develop technical skills that will be useful no matter the business outcome

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gtpasqual
Wouldn't call Bezos non-technical.

From wikipedia:

>After graduating from Princeton in 1986, Bezos worked on Wall Street in the
computer science field.[20] Then he worked on building a network for
international trade for a company known as Fitel.[21] He next worked at
Bankers Trust.[22] Later on he also worked on Internet-enabled business
opportunities at D. E. Shaw & Co.[23]

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zekevermillion
I could be wrong, but my understanding is he was working in a business role
and not programming computers in those jobs.

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mkaroumi
Love No. 4.

Me and my friend (both business students) tried to start a business with
having the Business Plan as our first step. It went to hell.

Now we started with validating the idea - selling! It worked soooo much
better. More people should try that instead!

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simonswords82
Don't get sucked in to the all business plans aren't worth the paper they're
written on parade.

Sure, a 200 page document that takes you six months to write that you work on
to the exclusion of everything else? Yeah that's bad.

However a short few pages on the idea, the target market, some guesstimates on
sales targets, expenditure and so on is a small piece of work that in my
experience can be very useful.

It gives you a document to go back to as a bad line for progress. What is
measured can be improved and all that jazz. Also, just taking the time to
scope out your business, even at a high level, will make you think about areas
of work that a founder might not otherwise consider until it's too late.

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mkaroumi
True. But what about a BMC instead of a 200 page business plan? Sure, it takes
time to create a good BMC but man, they've helped me so much!

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nairboon
No. 1 should be mandatory reading for HSG students.

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pbreit
What's "HSG"?

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nairboon
University of St.Gallen (Business school in CH)

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Simorgh
After graduating with an Economics degree, I was keen to create a start-up.
Unfortunately, the rigidly logical approach I initially took wasn't helpful.
Perhaps it was symptomatic of studying economics.

I began to 'think on my feet' more as I got good at networking and listening.
As I began to suss out demand, I realised that I would always be hampered by
my limited coding ability. I had a friend who was doing the coding for our
team, and as he went for a PhD, he encouraged me to go for a MSc. So I did!

Long story short. I'm studying CompSci and got in largely because of the late-
night coding I was doing on the side of my regular job.

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nathannecro
A couple of comments here:

1\. I don't agree with the general premise of the author.

a) I'm of the opinion that successful people are successful. Regardless of
their background, if they have an idea, a goal, a desire, they'll make it
happen. They make the leap from, "Want to go skydiving tomorrow?" to, "We're
going skydiving tomorrow. Obviously this can't be true for _everything_ they
do, but they always demand success from themselves.

b) I can speak from personal experience going in the opposite direction. I
started out technical, ended up biased towards the business side of the work
when we sold. Business is tricky because the knowledge required (and applied)
runs the full gamut of being so boringly easy (payroll and accounting) to
mind-numbingly tricky (payroll and accounting). Jokes aside, the author seems
to be herding all business students into the "marketing and sales role".
There, you can only be good at your job if you have the guts to go out and get
experience. For those who don't have the guts, networking is the alternative.
It's much easier to pitch an idea to a group of friends than it is to pitch to
an audience of strangers. As such, an MBA from Stanford makes perfect sense.
Half of your friends from B-school are already VCs or Angels, why would you
have to cold-sell to anyone else? (The converse is true also, an MBA from
Stanford lets you get in on tech deals earlier.)

2\. "The almost obligatory ‘I have a great idea, where can I find a developer
to build it for me for X% equity?’ Facebook post."

The fourth option, not listed, is convincing the technical side that the idea
is wonderful and that _both_ sides are willing to sacrifice to get the job
done. If the non-technical side is any good, that should be one of their primo
skills. I've interacted with lots of amazing salespeople and by-golly they are
amazing at making _anything_ sound fun.

3\. Writing a business plan.

Oh god. Please do it. There is nothing worse than seeing a promising company
wander around in circles with no idea what's going on.

Not having a business plan may work out if:

a) You already have a secure source of funding and you don't care how long
it's going to take to get to market.

b) Working on your idea has no opportunity cost (instead of playing video
games, you're working on your idea).

4\. Applying to startup competitions

I actually agree with the sentiment by the author here. I think that applying
(or just working on an application) to a single, established
competition/incubator is really useful (see business plan) because it _forces_
the team to know their stuff. Applying to 50 just for publicity's sake is
useless.

5\. Hiring too quickly.

This may be different in Europe because laws there are very biased against the
business when it comes to employment, but in the United States, debt is not a
bad thing at all. In fact, using debt correctly allows for a win-win-win
(business - investment - customer) situation. The business wins because it can
bring product "x" to market 1 year earlier. It then uses revenue generated by
"x" to fund "y". Repeat. The bank wins because interest collection is a thing.
The customer wins because product "x" \-- something which helps their life --
makes it to market a year earlier.

So yes, hiring _too_ quickly is bad. Hiring quickly is really, really
important. What's the difference between the two? I have no clue.

6\. Your wage.

Most founders I know don't really care what they're being paid. They just want
to see their idea take root. This applies to both technical and non-technical.
You don't need school to teach you that: "Me need money to get food to eat".
There are people from both sides who value a $400,000 luxury car over the
success of the company, but those folks don't make it too far.

7\. Lack of perseverance.

This applies to _everyone_.

The author's example of "scientists working for 3 years on research...without
feedback" is certainly wrong. Along the way, their RA moderates their
thinking, they publish papers and grants, they present at conferences. If
that's not constant feedback, I have no idea what counts.

I didn't respond to all the points, but I didn't agree with most of them, the
ones I named were just the _most_ wrong in my opinion.

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lubujackson
Having run through a few startups (and dealt with some business school grads),
I agree with the general premise because it is how most business schools train
students to think. There's two types of business schools in general - ones
that focus on forging middle managers (working with spreadsheets, managing
employees, etc.) and some that focus on entrepreneurship (writing business
plans, dealing with contracts, etc.) Both are not very helpful in the early
going, because the reality is that EARLY STAGE startups are only about one
thing: validating a business. A lot of the "lean startup" movement lessons
apply: test your assumptions as quickly and cheaply as possible, spend as
little money as possible, don't work on things that don't forward those goals.

My first business my partner and I felt like impostors the whole time because
we weren't raising millions of funding, we weren't renting huge offices or
blitzing marketing, we simply were working to make our business better and
make money faster. It's the most obvious thing, but it tends to be forgotten
when dreaming too big too fast, and having all these business school lessons
to lean on tend to make things even worse because they only confuse the
situation at the earliest stages.

I'm not saying these aren't useful things to know, but first-time founders
tend to lack awareness of where their company is in reality. The best person
to work on a startup is the guy who knows how to make a buck from nothing, the
guy who fixed computers when he was 12 or paid kids to make things he sold on
Etsy when he was in high school or whatever. "Doing" gets harder and harder
the more time you spend on "how to do things right."

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graycat
The remark on selling, suggesting that selling can't be taught, was not right:

E.g., I have an uncle who taught his sons selling, right, not for, say, P&G,
GE, GF, UGE, IBM, but for his own business.

The son's business? Private label industrial floor cleaning supplies, major
supplier for all of on US state. Why _private label_? Because the basic
supplies are from a stable, old industry. The main issue is the one on one
selling of those supplies to actual customers who actually use the supplies.
So, the old industry that makes the supplies to fill some train of railroad
tank cars is plenty eager to put the supplies in 55 gallon barrels or just 10
gallon buckets for the selling, with private label, my cousin did.

I have a childhood friend whose father taught him about selling. The father's
business? Leading wholesale supplier of beer for about 1/4 of a US state. The
son got an engineering degree, but he found that by far his best career
opportunity was to take over the family business and use what his father
taught him about selling, e.g., to small grocery stores, bars, restaurants,
vendors at sporting events, etc.

I have a friend whose father taught him about selling. The father's business?
Killed about 5000 hogs a day, chilled them overnight, cut them into pieces,
put the pieces in boxes, put the boxes in 18 wheel refrigerated trucks, drove
the trucks from the US Midwest to the US east coast. The selling? The father
sat in his office in the Midwest with a head set and a spiral bound notebook
and did the final selling. How to teach the son? For a start, when the son was
16, gave him the keys to a nice car and a credit card and sent him, alone, on
a _selling_ trip to each of the customers. Later the son started a business
and was really good at selling.

Again, we're not talking _marketing and sales_ for some business worth $100
billion but selling for some _life style_ , family business.

Is there something to teach that is teachable and valuable? Darned right.
E.g., in the first case, the son came home and told his dad that he had the
order signed but, still, lost it. Why? Once he did get the order, trying for
good customer relations, he stayed around the customer's office for a few
minutes making small talk. Suddenly the guy who signed the order had some
second thoughts. Lesson: When have the signed order, go away, go away nicely,
but definitely go away, essentially ASAP.

Another lesson? When selling, emphasize your really good customer service. So,
for the first order, have something wrong with it, say, some missing parts.
When the customer calls, make a heroic effort, maybe drive all night and get
there at start of business the next day, and hand deliver the missing parts
with apologies. It worked.

There's lots of this stuff. If the father is really good at such selling, then
there's lots of stuff he can pass down to his son that will work, well enough
to be a big help in having the son have a nice standard of living and, e.g.,
pay full tuition for his children at some B-school where the professors
circumvented the challenges of selling by being professors of marketing and
sales at a B-school, and I used to be a B-school prof!

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andyana
That layout is pretty wasteful. The title of article isn't even shown until
somewhere into the second page.

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mkaroumi
That's how it is if you use full size "hero image" on Medium. I wish Medium
would allow its users to add the title in the foreground of the image.

