Last week I attended Google For Entrepreneurs event in Wroclaw where I had a fireside chat on stage with Asier Rios about my career as an entrepreneur. I think I let Asier down as instead of bragging about how great Filmaster.TV is doing now, I focused on my (multiple) early mistakes in running a startup, the biggest one being: not going through an incubator. The conversation inspired this post.
I did not even consider starting my first company in an incubator. Giving away some 5-10% of the firm for some ridiculous(ly small) amount of money seemed foolish to me. I chose the bootstrap path. That was the single worst decision I made and here is why.
Startups are different than other companies
When I founded Filmaster.com I was still working as a technical consultant in London’s Rule Financial helping City-based investment banks with their IT. I had 7+ years of experience as a programmer, and tech lead in small software houses and big companies in Poland, Germany and the UK. I thought I knew it all. But I knew shit. Sure I understood the process of creating software. But what I didn’t understand is that coding for a corpo is a totally different thing than coding for a startup. Startups don’t write lengthy software architecture documents. They don’t plan for more than a month in advance. The goal is not to come up with a perfect and complex product. The goal is to come up with a product that does one thing and does it right.
It sounds super simple but it’s in fact super hard. I read a lot about lean startups but I still thought I knew better. We’ve worked with my co-founder for 6 months and developed an IMDB clone with a personalized recommendations feature as a bonus. Why no one told us we were working on a wrong product? Becuase no one had a chance! We were developing the code in secrecy, without telling anyone what we’re doing! This would have never happened if we were in an incubator.
Smart money is smart
And then came the funding. We took the opposite of smart money. We applied for an European Union grant for innovative e-businesses and received 100k EUR to keep working on our startups. So we kept working, i.e. we started adding new features. We understood we did not have enough traction because we did not have enough features. What someone should have told us back then was: “Stop adding features! Start removing features and focus on this one feature that people will love your product for.” We’ve struggled like this for a year and burnt all the EU money.
This was a great lesson of entrepreneurship for me. I basically learned all the stuff that you learn over the three months of accelerating at ycombinator or one of its copies, i.e.:
- focus on MVP,
- iterate until you get traction,
but it took me 1.5 years and lots of frustration to learn it. Call me an idiot, but that’s my story.
Talk to mentors, get advisors!
I totally undervalued the importance of having mentors and advisors. I haven’t talked to people who knew this startup business much better than I did. I wasted so much time on trying to figure it all out by myself and what I should have done was simply outsource it to an incubator! The turning point for me was a meeting with Chris Kowalczyk, who later became our advisor. Of many other things, he contacted us with HackFwd, a seed fund which eventually invested in Filmaster in 2011. This was the smart money we needed from the very beginning and it changed a lot of things in how we work and how we see our products. It actually requires a separate blog post.
First-time entrepreneur? Choose an incubator!
My advice is clear. If you are a first-time entrepreneur, choose an incubator. There are many good ones, even in Europe. In Poland we have GammaRebels (they are currently accepting applications!) and Huge Thing. The latter had its demo day in London only a few days ago. I met most of their startups while mentoring in Startup Sprint and they made an amazing progress during of the programme. This shows the true value of such programmes. Good incubators turn startup amateurs into professionals in only 3 months. I think it’s worth the 10% of the company.
I’m not saying incubators are good for everyone. I probably would not choose to attend one if I was to start another venture right now as I think I’ve learnt it all the hard way. But if you are young, want to have your own company and don’t exactly know how to get started, incubators are the way to go.
- If you are still not sure whether or not to participate in an incubator / accelerator, read this Forbes post by Erica Swallow: Should Your Startup Apply To An Accelerator?.
- You can also read about the available Startup Incubators and Seed Programs on Quora. It’s the best resource on the Internet to learn about startup-related stuff. Use it!
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