How to Start a Start-Up

I recently read a very interesting article about how to start a startup. The essay was written all the way back in 2005 by Paul Graham, the creator of a number of successful web applications including the back bone for the ‘Yahoo Store’ application, Yahoo’s answer to e-Bay.

Although he writes the essay from the point of view of a web programmer, a lot of what he says has relevance no matter what field of business you are in.

The original essay can be found here.

He breaks it down into 3 key points.

1) The Idea

He states that you need to MAKE SOMETHING PEOPLE ACTUALLY WANT.

He points out that you need not have a brilliant idea to start a business, just offer people something better than they have now. This may be in the form of technology or just offering a better service.

In his words, more often than not, what is available sucks and all YOU have to do is provide something to them which doesn’t suck. Overly simplistic perhaps, but true.

And adding my 2 cents worth, if you make something based wholly on the amount of money you can make from it, more often than not you’ll probably lose focus and stop listening to what your customers are saying. So focus on your customers, in the end they’re the ones paying for your product/ service anyway.

Keep working hard at it and the money will surely come.

2) The people

He has quite a good rule for choosing the best people for his company. His rule is, could you describe a person as an animal? Like for example, if you really need to get a web page designed fast and of the highest quality, would this guy work like an animal to get it done?

Would he stay till 4a.m every night of the last week making sure the website works? If so, you’ve found your man/ woman.

From my point of view, I’ve realized that I don’t think I’ll be able to design and run my website all by myself (although I’ve tried) and I’ve finally decided that I need help. The best help comes from your friends, so I’m gonna see if 1 of my friends this weekend wants to come on board.

Although most people (including myself) has the greatest urge to keep something they’ve created to themselves, in reality that doesn’t happen.

I remember when I went to the YouthMalaysia.com conference, one of the speakers was talking about how reluctant people are about sharing their business with a VC. But he makes a good point in saying,

“There’s no point in having a business all to yourself if it doesn’t see the light of day.”

3) Spending As Little As Possible

In his article, Paul describes that he had to raise funds to develop his software. When you actually get these funds, there’s a perverse thought that you are actually rich. But you’re not.

If you started off poor and ask for money to develop something, that money has a purpose. Which means you are still poor.

He explains that in the 1997 internet bubble burst, what happened was that alot of startups were given loads of money when they were floated on the stock market. At this point, it seemed like the companies were rich and what do big rich companies do? They hire people.

And that’s what they did. Hire and spend and hire and spend forgetting that the money was raised to develop a product in the first place.

So if you do manage to raise some VC or angel funds for your business, keep in mind that you’re still poor but have a chance to make something of your business with the money you’ve been lent.

Boot strap as much as possible, that’s what I’ve been trying to do this whole time.

Hence designing my site myself and trying to do as many things as possible at the lowest cost.

Even my home office was as cheap as I could make it.

I suggest you give the original article a read through as it is quite enlightening. It enlightened me that I can’t do everything myself no matter how hard I try. Be inspired from it, learn something new and who knows? You may even want to start your own business.

On a side note, the process for registering my business name is slowly slowly coming along. Will post a really long post on how I did it soon. (I hope.)

Cheers!