How to do a web startup (the second time)

7/6/11

These last 6 weeks have been crazy. As you’ve probably noticed, I’ve been pretty radio-silent on my blog and twitter. I’ve been heads-down writing code. 14-16 hour days, sometimes more.

A lot of people email me asking how I’m starting this company. This is my second startup, the first is all grown up and well past startup stage. So what am I doing differently if anything? What’s my plan? What’s my approach? What’s my strategy?

First off, there are a lot of ways to get a company going. There’s no silver bullet. It’s hard. It’s complex. There a lot of moving pieces. It takes good timing, good luck and and incredible amount of determination to keep getting up when you get knocked down. Despite what “experts” may say, there are no secrets. It’s more about survival at this stage than it is about world domination.

But let me tell you some of my approach for startup #2.

Product

Right now I’m 100% focused on product. I’ve done plenty of customer development and i’ve played the #LeanStartup game. I’m past that. I’m heads-down coding. Nothing else matters right now. A picture is worth a thousand words — so is a functional product. No matter how well I can articulate my vision to potential investors or hires, it comes to life with a real product — something they can use and play with. They see it. They see what I see. A light goes on. It’s a tangible representation of the vision in my head. And that’s powerful. My dreams at night are in Python and Django. Product has been and will continue to be the biggest priority.

People

As the alpha product nears completion, a fraction of my time will move away from product and into recruiting/hiring. This is where the fun begins — the real work. And these decisions keep me up at night.

A lot of people wanna work with me because they know i’m a pretty good entrepreneur. I’ve already interviewed dozens of folks. But so far, i’ve been and will continue to be insanely cautious and patient when it comes to people. I know this might slow me down a bit, which is risky. But i’ll take my chances. There are so many unknowns in a startup. The more unknowns you can minimize, the better your chances are at success. People — especially people i’ve never worked with before — present huge unknowns to a young enterprise. If they are stars, they can make an incredibly huge positive impact. If they are bad, you can lose months and months of precious time and work dealing with their drama, damage and distractions.

These early people decisions are the absolute biggest decisions a founder can make at this stage. My idea will change. My product will morph. But my early people are constant. Startups die because of people, not competitors.

Investors

I plan on raising some seed capital. As I mentioned before, there are a lot of unknowns in a startup. Startups are extremely fragile. If you don’t have extra cash in the bank, with one stroke of misfortune and bad luck, you can be out of the game. Out of money and into the dead pool. Done. Check Mate. I’ve been through near-death experiences before. I don’t wanna flirt anywhere close this time around. Nothing ever goes according to plan. It’s impossible to flawlessly execute. So much is beyond our control. Consumers are fickle. Market conditions change. Competitors come and go. You hire the wrong person. Yadda Yadda Yadda. Crap happens — it always does. So much of starting a company is not what you do but how you react. Not having cash reserves is just a little reckless and irresponsible.

To really hit the ball out of the park, you gotta take a good amount of swings. Sometimes even the best entrepreneurs strike out. It’s to be expected. But the best entrepreneurs make sure they put themselves at bat long enough to connect. It’s a numbers game. Money can buy you more at-bats.

As far as who I take money from… unlike startup #1, I plan on being super selective. Everything I said about hiring/recruiting applies here. I’m looking for investors who are patient and see my longterm vision. And they either need to be top-tier (great brand) or incredibly valuable (proven distribution, product strategy, well-connected, etc). All money is not equal.

Conclusion

I’m going big and aggressive with this startup. This isn’t college admissions anymore. This is a growing market and a massive opportunity. I’ve already created a company that’ll value north of $100mm with startup #1. I’m now working to build one that values north of $1b. That’s practically impossible. All the moving pieces need to fall nicely together. And yes, it’ll take some good luck and great timing. But that’s where my sights are set.

I’m having the time of my life. Every day i’m bouncing off walls and oozing with passion. I love startups. I love creating something out of nothing. It’s hard. It’s challenging. But i’ve been down this path before and I know exactly what to expect. Much of it can be prepared for, but much of it can’t. The unknowns are what make this ride so exhilarating.

I’m still an outsider here in the Valley. I moved here last year and i’m still unknown. Recruiting the best people and getting to know the best investors will be challenging. But I will find a way. I always do.

I’m 100% committed. The boats are burned. There’s no turning back now…

Back to the hustle.

  • Stephenmroy

    Great stuff, Mick.  Wish you all the luck in the world turning this idea into a successful business. – Steve

    • http://www.mickhagen.com/ Mick Hagen

      Thanks Steve! I hope you’re doing well!

  • Ethan

    Yeah, man. $1b is for real. If anyone I know was going to pull this off it’s you.

    • http://www.mickhagen.com/ Mick Hagen

      Thanks Ethan. I appreciate it!

  • Karstenwalker

    mick good luck stud!

  • http://www.logoian.com Business logo design

    These kind of post are always inspiring and I prefer to read quality content so I happy to find many good point here in the post.

  • http://www.facebook.com/stevens.gavin Gavin Stevens

    Right on man, I share that passion, love to create…

  • Ikwo

    Mick, lets talk when you have a minute.  –Ikwo

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