Wednesday, December 21, 2011

11 Things I Learned in 2011: Part I

2011 was a crazy year. In the last 12 months, I've had three jobs, launched a tutoring service, started an internet company, hired my first employee, learned to snowboard, visited 8 countries and been sky diving twice.

My current company, InstaEDU, is preparing for an Alpha launch in January. As I think about all the crazy things I expect to learn in 2012, I can't help but be stoked about what I got out of 2011.

There are tons of entrepreneurs out there that can offer far better advice than I can, but here are some tidbits I've learned, both from the early stages of entrepreneurship and from life as a 24-year-old. I'm writing for personal reflection more than anything else, but hopefully someone will find one or two of my observations useful.

1. It's okay - even good - to start small.
My brother Dan and I took an unconventional approach to starting InstaEDU - primarily because we had no idea that we wanted to start InstaEDU; we just wanted to start something. Knowing a little bit about the market, we launched a tutoring company called Cardinal Scholars with our free time. (At this point, I was working at Google.) We paid a freelancer in LA $600 to build a 1995-esque website and hired 14 tutors from Stanford.

Nine months later, we'd done six figure sales, expanded to two new cities, and most importantly, learned a shit ton. We never wanted to build a brick and mortar business, but the experience proved invaluable. From a business perspective, we learned many of the nitty gritty details that come with running a business - incorporating, working together, hiring, customer acquisition, salesmanship, financials, etc. From a market perspective, we had exposure to the needs and wants of hundreds of tutoring customers. We noticed huge holes in the current tutoring landscape, and from there, InstaEDU was born.

While starting two separate companies may not be the best path for everyone, I highly recommend (1.) Working on a project with your cofounder(s) before jumping into a full-blown company and (2.) Getting to know people who fit your target customer profile before building anything.

2. It's not about who you know; it's about what they know.
There are tons great resources out there on entrepreneurship, but nothing compares to being able to pick the brains of those who have recently faced your challenges. I am incredibly fortunate to know a number of very smart and often successful entrepreneurs, all of whom have been generous with their advice when asked. I'm far more confident about raising money after finding out why someone chose convertible debt over equity (and vice-versa), hearing actual questions that investors asked in meetings, and having our deck critiqued by numerous investors and entrepreneurs.

I have the added benefit of dating an entrepreneur who has more experience than myself. Besides being a constant source of advice and knowledge, he's someone outside of the company who understands it well and can bounce ideas around with me.

I would strongly recommend that anyone starting their first company buy a drink for every entrepreneur, investor and mentor that they have a connection to. (I'm quickly learning that there are very few people in Silicon Valley who will turn down a beer.)

I'm not going to recommend replacing your doctor girlfriend/boyfriend with a techie, but going to some events and making a few more friends in the industry certainly couldn't hurt.

3. When you can't hire great people, copy great people.
Ideally your company will have all the engineers your heart desires, a stellar marketing team, witty PR, great product managers and inspired designers. Unfortunately no early startup has every resource.

When I first started working at Nextdoor, we needed a landing page but didn't have a designer. One of the cofounders asked me to take a shot at it. I had never designed anything before and my first attempt was horrific. (Art has never been my forte.) She then gave me a great piece of advice: if you don't know how to do something, just copy those that do.

I found a homepage that I liked (Mint) and put together a landing page with very similar elements. It was certainly no masterpiece, but it worked and it went up on the site. (It's since been redone by a kickass designer.)

This can be applied to all sorts of things. Get inspiration from another company's job description. Look up which API's similar websites use. Instead of paying a lawyer, edit a friend's employment contract.

4. A lot of entrepreneurship is tedious.
Every entrepreneur warns that starting a company is the most stressful thing imaginable. But hey, at least it's exciting - you're innovating, doing new things every day, changing the world as we know it...

What people mention far less often is that entrepreneurship is also tedious. When you're a big-shot CEO, you have employees and assistants at your beck and call. When you're two people trying to get a website off the ground, it's far less glamorous. When I was a marketing manager, I got to focus writing compelling copy and strategically acquiring users. Shortly after starting a company, I was in a dark office, alone, reviewing our terms of service and adding line breaks in the HTML.

I have no advice here. Just know that entrepreneurship is not all product vision and launches and be ready to get your hands dirty. Even when everything is going great, you still have contracts, Excel sheets and expenses due.

5. Working alone sucks.
Some people can pull this off. I quickly learned that I cannot. When I finally quit my day job and went to work for myself full-time, I worked out of my apartment for about a month. (At this point, Dan was back at Stanford.) At first, it was kind of fun - I could go to the gym in the middle of the day. But then I slowly started to go crazy from not having anyone else around. I began working all day at coffee shops just to have people near me. I actually broke down into tears one night for no reason at all. (I am generally not a very emotional person.) As soon as we hired our first employee, I snapped out of it and became a normal person again.

Geographically dispersed founding teams cause enough challenges for new companies. If you do find yourself working solo for a while, I strongly recommend coworking spaces. That will also give you another place to bounce ideas off of people. Better yet, find a way to work together more often - for the sake of both your company and your sanity.

6. Building a company is all about learning on the fly.
The first tech startup that I worked for was Box. At the time, Aaron Levie was 21. As a lowly intern, I thought he had it all figured out. Looking back now, I can see that he was just a smart guy who worked hard and had the tenacity to try things until he found something that stuck.

Since starting my own company, I've had more than one freakout. Suddenly, I realize that there is a ton to do and I'm in way over my head. I've worked for several startups, but there are so many things I've never done before. I've never pitched an investor. I've never built out a team. I've never figured out how to scale a product.

I finally calm down when I remember that there's no way that other 20-something entrepreneurs were born knowing which clauses to negotiate in a term sheet and which payment system is best for an online marketplace. When you're an early-stage entrepreneur, one day you're a lawyer and the next day you're a designer. You're not going to be perfect, but hopefully you're going to figure it out. This is why people say investors often care about teams more than products.

Continued in 11 Things I Learned in 2011: Part 2

You can follow me on Twitter at @ajalison