SXSW Interactive 2009 Day Four Takeways: Entrepreneurship
With one exception, the sessions I attended on day four all had to do with starting up and, generally, lessons learned from entrepreneurs.
I started off by attending one of the Microsoft BizSpark Accelerator sessions–essentially an American Idol for startups pitching their ideas to a panel of experts, including tech journalist Brad King and serial entrepreneur Guy Kawasaki. Two minute pitch, then about ten minutes of defending. The panel didn't hold any punches. I won't get into details on the four pitches I saw, but I will say those four presenters had guts. I guess you need that when pitching ideas to investors.
Later in the day I attended two sessions: Quitters: How to Leave Your Perfectly Good Day Job and Building a Web Business After Hours. There was quite a bit of overlap in these two sessions. Here are some collective takeaways:
When quitting, make sure you go through the formal channels and resign properly. Nixon did it; so can you. Basically, don't burn your bridges. Keep a positive relationship with your former company, and leave everybody happy despite the circumstances. Get copies of any agreements you signed along the way, and grab your stuff in advance (contacts, stuff from your cubicle, whatever). You may get escorted to the door the moment you turn in that resignation letter, so be prepared.
Finish strong: Don't leave mid-project, or on a generally down note.
Don't use your day job equipment, e-mail, or time when working on a side project or preparing to strike out on your own–in almost all circumstances, that gives ownership of your work to your employer.
Go on offense. Decide what makes you happy, and what you want to do with your time. Don't let outsiders define success to you–you need to define it for yourself.
Have a plan in place–savings, backup plans, etc. Maximize your fluidity in decision-making by reducing your burdens. If you don't need your car, sell it. If you can downsize your home, do it.
People tend to spend too much time thinking about vision, and not enough about what it takes to get to that vision, when preparing business plans and mission statements. There's a price to inaction–too much talking, not enough doing. Don't write a document; write your code. An advisory board can help you focus on goals. Listen to your user community, and write a business model around what they say.
Creating an entity for your work isn't completely necessary, but positively affects the way in which people interact with you. It can also protect you in legal and tax situations. Patent issues for web-based projects aren't the same as physical products. If a patent dispute comes down to who had the idea versus who put in the sweat, the sweat equity wins. Check out Nolo for a series of useful legal books for startups and small businesses.
You, your friends, and your family need to know that this will be hard work, and will take great time and energy. Make sure to separate work time from personal time. Treat yourself as a client and take time for yourself–you're not earning money, but you are paying yourself back. Don't forget, if you're starting out while keeping a day job–your side project will be a full-time job, too.
Find a partner. Look for people with complementary skills to yours. This also gives you someone with whom to commiserate, and helps carve up lengthy task lists. Partners should have similar goals from the project in terms of career and income.
Be careful about accepting money from investors. The second you accept money, your side project becomes full-time. Your investors will expect you to put in more effort than you may have to get a return on their investment. If you can bootstrap, do it, and stretch it as long as possible. This can relieve pressure to reach a critical point too soon. (Personally, I think some of the presentations I saw in Accelerator could have used this advice.) There are certain types of business that lend themselves to bootstrapping more than others–web-based projects are perfect. Tap into your network to get as much help as possible, and do as much as you can yourself. Get your hands dirty! You may need to develop your network and skills before starting your project. Use existing tools as much as possible to reduce overhead work.. Questions or comments? Let me know what you think.