startup building principles

Hey there,

Dragos here, from Project Arrow, where we guide founders with what to do and who to talk to in order to get funded and accelerate their startups.

When you’re a first time founder, you deal with chaos and it can be overwhelming, even if you’re super organised. Everything is new, there’s no blueprint to follow and you will run into many time wasters that can be avoided - fact is that any startup needs to build an initial foundation requiring a few basic things to be done no matter what emerging distractions you need to deal with as a founder.

Here’s a few principles you should keep in mind as things are evolving.

Build product and talk to your customers. That’s the loop you live by and what building an early stage startup actually means, the rest is just distraction.

When you start growing, you will also add recruiting to the list. Until you have built a lucrative model backed by a well-organised system, you need to filter out the noise, focus your time and energy on the loop and reap the rewards.

Sales, sales, sales is the #1 job of a CEO - every day you sell something: to customers, to employees, to investors, to your peers. Just because you have a great product or idea doesn't mean that people will know about it and flock to it - au contraire, go to market (GTM) and actively promote your business. Talking about your work as much as possible will give you cred in the street and confidence in yourself - the more you do it, the better you become at it and more people will know about your business.

Don’t forget that it is a two way street as you also collect feedback on how the market perceives you and ultimately how you adjust the business in order to extract as much value from it as possible. And while it’s important to have a solid product plan and execute against it, taking feedback from the market and talking to customers getting them to pay should be a main focus.

Don’t over build your product - this is probably best exemplified by the adage:

First time founders worry about product, second time founders worry about distribution.

Over polishing a product with the hope that launching a perfect one should make a big sales splash is just false hope. No, you won’t get the perfect product in the beginning as you will learn and constantly iterate all the time. Just aim for a decent MVP (minimum viable product) and get as much feedback as possible in order to tweak it - you will tweak it all the time anyways.

That is why the GTM is crucial - it puts the product in front of as many people as possible and gives you feedback and hopefully income, if you got at least something right. The sooner in the market the better - you should show your work to customers from the prototyping stage, rather than waiting to have it in the market. Just some mockups with what you have in the pipeline should be more than enough of validating the work to be publicly released in the market. It’s all about iterating and learning, not waiting for the perfect product.

Don’t underestimate competition - ‘they are so bad, they suck’ attitude. Always respect your competitors and cultivate relations with them, if possible. They contribute to the same ecosystem like you, they have employees and a product in the market customers already pay for so they gotta do something right, right?

Don’t forget that you are the sum of your actions and beliefs, and if you don’t respect the game and its players, it will come back and bite you in the ass. The market will always have emerging opportunities among different actors where you can co-operate or have different plays, and being open and a good reputation will benefit you those. It is a small world, respect the work of others and you will get the respect of the market too.

Burn matters - be scrappy but figure out boosters. Overall you should have a good grip on the fixed and variables costs but you will also run into unexpected situations that will increase your budget - a new office deposit, legal and/or notary fees, drinks with the team etc.

You will also find opportunities whereas money will pay for saving you time and learning stuff quickly. Examples include paying a freelancer to do design work, or a growth guy for advising on your channel acquisition strategy, or an advisor to teach you how to find and talk to investors. Those are applicable for one time gigs but also can do the hiring on fractional basis instead of full time positions - i.e. jobs whereby employees work part-time for several different employers during the week. So for example, instead of hiring a full time CMO, a fractional CMO can help you set up and oversee with the marketing strategy one day a week. Instead of hiring a full time CFO, a fractional financial expert can help you a few hours a week with bookkeeping, cash flow management and tax reporting.advisory. You get the idea, fractional jobs can get you far on affordable basis in the startup world.

Not least important, understand and get the pockets with value for money. While as a founder you tend to have the know-it-all do-it-all attitude, there’s bunnies that can give you super boosts to your efforts and get you to the next level - just like in video games.

Weigh your time vs returns efforts. ‘Just got an email from a high profile name that wants to talk with with me, it can be important’ - they can be suppliers, competitors or even investors. It’s easy to jump on those as they tickle your ego because they implicitly validate your work.

But how will such a meeting benefit your business in a concrete way? Don’t just waste time for vanity - be selective and have a specific objective if you take a meeting. Don’t forget to calibrate to the other side’s objective - why do you reckon they want to talk to you in the first place and what they’re trying to accomplish? Are they maybe fishing out intel about your business? Or just checking boxes as their job is to meet people like you? The trick is to figure out the mutual ground to explore and the specific value you can extract from the meeting.

Community

Startups recently seeded
If you want a full list of interesting startup raises from all over Europe, you can go check Monday CET. Here we have a selection of the coolest ones:

🇩🇪 Urban Ray- air deliveries combining drones with automated landing and storage stations on the ground (Cologne)
🇫🇷 Zeliq - developer of AI-enabled sales tools (Paris)
🇸🇪 Stylee - local platform for social shopping (Stockholm)
🇳🇱 Klearly - P2P mobile payments app (Amsterdam)
🇬🇧 WireMock - platform that enables developers to mock APIs for use in unit, integration development and performance testing (London)

Did you just raise funding for your startup? Hit reply and we’ll feature it here.

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You need three things to create a successful startup

Read
- ​Blitzscaling by Reid Hoffman - the secret to starting and scaling massively valuable companies
- Founding sales by Pete Kazanjy - startup sales for founders and other first-time sales staff

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🇬🇧 Solving Climate Change with Hardware, London - June 14
🇸🇪 Founders/investors meetup, Stockholm - June 15
🇩🇪 The AsiaBerlin Summit, Berlin - June 12-15
🇫🇷 Climate Tech breakfast, Paris - June 15
🇬🇧 Research and Applied AI Summit - Jun 23 

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