Aditya Kothadiya's Blog

I just read very informative and thoughtful article about 7 Great Reasons Not To Take VC Money on Silicon Valley Watcher. It’s one of the best “Why Not To Take VC Money” article I’ve read.

Here are 7 reasons from that article -

- If you start by selling your concept to potential prospects (rather than stock to VCs), you will either end up with initial customers or a conviction that your idea won’t work. Why raise money and then find out which one it will be?

- Raising money takes time away from understanding your market and potential customers. Often more time than it would take to just go sell something to a customer. Let your customers fund your business through product orders.

- Adding VCs to the mix early gives you an additional set of masters you must serve in addition to your customers. It is always hard to serve two masters, especially in a startup.

- With no money you can’t make a fatal mistake. This is a blessing. Without VC money, you are forced to figure out how to extract funds from your customers for value you deliver. Ultimately that is the only thing that really matters.

- Money removes spending discipline. If you have the money you will spend it – whether you have figured out your business model and market or not.

-Raising VC money determines your exit strategy. You will either sell the business or take it public. What if you end up with a very profitable, modest sized business that you want to just run? That is no longer an option once you raise VC money.

- You sell your precious equity very dearly before you have a proven business model. This is the worst time to raise money from a valuation perspective. I know this is a contrarian view. And some of you are saying that might be fine for a small company.

Don’t forget Dell, HP, Microsoft all originally started without VC funding; you can build a big business with bootstrapping and without VC money. At RightNow, we doubled our revenue and employees every 90 days for two years before we took any outside money, and even then the employees retained more than 75% ownership after raising $32m.

Here is the original article: 7 Great Reasons Not To Take VC Money

I read this fascinating article about what defines a great start-up culture?

Author Greg Gottesman has brilliantly explained following thirteen key characteristics of a great startup culture.

1. No politics.
2. It’s not a job, it’s a mission.
3. Intolerance for mediocrity.
4. Watching pennies.
5. Equity-driven.
6. Perfect alignment.
7. Good Communication, Even in Bad Times.
8. Strong leadership.
9. Mutual respect.
10. Customer-obsessed.
11. High energy level.
12. Fun.
13. Integrity.

Read the original article in detail here: 13 key characteristics of a great startup culture.

Tom Preston-Werner, co-founder of GitHub.com mentions great advice about how to find your next co-founder. It’s a must read article.

Some of my favorite quotes are -

Don’t worry about revealing your game-changing secrets; stealth mode is bullshit. Talk to everyone.

A good co-founder should be someone with whom you feel privileged to work. And they should feel privileged to work with you. The two of you should be on very solid ground before you begin your startup adventure, because once you do, the impact of every argument is going to feel like it’s been multiplied by a thousand.

When it’s just you and your thoughts it becomes too easy to pick the first thing that pops into your head. We’re programmed to think all of our ideas are good, but reality tells a different story. Truly good decisions are forged from the furnace of argument, not plucked like daisies from the pasture of a peaceful mind. A good co-founder tells you when your ideas are half-baked and ensures that your good ideas actually get implemented.

Read the complete post here: How to Meet Your Next Co-founder

Note: To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: Whenever I stumble upon any compelling article related to Startup or Entrepreneurship topics, I link those resources in my blog.

Tony Wright, a founder of RescueTime mentions great advice about how to start a startup in the part-time while you are still employed with some other company. It’s a must read post.

One of the points, which I liked the most is –

You need a co-founder and some cheerleaders. If you can’t find two or three friends who are really excited to be beta testers for your product, ponder changing your direction. In a part-time effort, a co-founder is essential to keeping you on-track and working. At some point, you’ll hit a motivation wall… but if you have a partner who is depending on you, you will find a way past that. If you don’t have a partner, you’ll often lose interest and find something else to entertain you. 

Read the complete post here: How to Start your Company and Keep Your Day Job

Note: To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: Whenever I stumble upon any compelling article related to
Startup or Entrepreneurship topics, I link those resources in my blog.

Today’s must read article for any would be young entrepreneur:

Dick Costolo of Ask The Wizard: Business Models

Dick writes in his blog that all startups should think of the long road in front of them in three
phases:

• during phase 1, you need to be passionate about the product (or
  service);
• during phase 2, you need to be passionate about your
  customers (*and* the product);
• during phase 3, you need to be
  passionate about revenue (*and* customers *and* the product).

Read complete article here.

Note: To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: Whenever I stumble upon any compelling article related to
Startup or Entrepreneurship topics, I link those resources in my blog.

Jason Goldberg is writing an interesting series on his blog – Lessons Learned From Startup CEOs. I read few posts from that series, and here are my favorite learning notes.

Jason Goldberg, Founder, ex-CEO of JobSter

The CEO’s job is to create value.  Determine early on what the keys to value creation are in your industry and map a path for value creation for your business.   Return often to measure how you are or are not creating value.  Weigh business decisions based on whether they contribute to value creation or not. Avoid paths that do not contribute to value creation regardless of how sexy or fun they might be.  Narrow the focus as much as possible.  Get one thing right then move on to the next.

Try to ride some powerful existing waves vs. just creating new waves.  Find some big and important industry trends and ride on top of them. It is very very hard to create your own industry trends.  Be careful about getting out too far ahead of any wave.

Technology companies are all about the product. Getting the product right is critical before aggressively going to market. 

Have fun.  Everyone looks to the CEO everyday to set their own moods and expectations.  Being CEO can be lonely — someone once said to me that CEO is the loneliest job in the world as there are days that your board hates you, your employees hate you, your customers hate you, and your family hates you — true.  That’s why you need to make sure to have fun every step along the way.  If you are having fun, people will see that and they will follow your energy.  Remember, behind every wrong turn is a better path.  And remember, that the beauty of startups is that you get to try, try, try again and again and learn a ton along the way.

Jonathan Abrams, Founder, CEO, and Junior Computer Programmer at Socializr

Focus is difficult but crucial. Until your product is complete, your technology solid, your customers or users happy, and your sales or traffic growing and near critical mass, most other things do not matter. A startup CEO can waste a lot of time on premature marketing, business development, partnerships, PR, consultants, board maintenance, etc. before the company is really ready for those things.

Hire based on passion, not resumes. If you attract candidates based on your prestigious investors, be wary. If you lose candidates because you don’t have prestigious investors, they weren’t the people who you needed anyways.

A startup can get more done in the same amount of time than a large company, and needs to, but a startup is still more like a marathon than a sprint. Things will still take longer than you expect to get done, and you will make mistakes. Making mistakes is ok, as long as you get more things right than wrong each week, and correct the things you get wrong. Avoid irreversible mistakes.

Losing control of a startup to investors puts founders and common shareholders in a vulnerable position and may not improve the company’s execution or increase the company’s chances of success. Surrendering the corporate governance of a company to the wrong people is typically an irreversible mistake.

For a software or Internet company, overall execution depends on engineering execution in the first few years — make sure your stuff works! A technical founder should stay involved in the technology until it does.

To read more lessons from more startup CEOs, read Jason Goldberg’s blog – Social Median.

Note: To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read article for any would be young entrepreneur:

Dharmesh Shah (OnStartups.com) : The Dark Side of Startups: 5 Corrosive Co-Founder Conflicts

To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read article for any would be young entrepreneur:

Venture Hacks: Thoughts on raising early stage funding.

To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read article for any would be young entrepreneur: 

Tim Berry: How to Write a Business Plan

To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read articles for any would be young entrepreneur:

Marc Andreessen: When The VCs Say "NO"

To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Have a great weekend!

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read articles for any would be young entrepreneur:

Marc Andreessen: Why not to do a startup.

To read more articles from this series, please visit Startup and Entrepreneurship Resources.

Have a great week!

Targeted Audience: Entrepreneurs

Background: I read a lot. And I try to read as much quality stuff as possible.
Many times I stumble upon very compelling and thoughtful writings. I
learn a lot from those writings, but some of you may miss those
articles in this era of information overload. And I don’t want someone
to miss those compelling articles. 

Henceforth, whenever I stumble upon any compelling reading on
Startup or on Entrepreneurship, I will link those resources in my blog.

Today’s must read articles for any would be young entrepreneur:

Guy Kawasaki: How to Get the Attention of a Venture Capitalist

John Nesheim: The Rule of 2

To read more articles from this series, please visit Startup and Entrepreneurship Resources.