Starting a company
A student told me: “I have attended a “startup training,” it was exciting with a lot of motivation and emotion. However, I am confused about the startup training that encourages us to build a product and sell it for a profit, the more profit, the better… What do you think? Please advise.
I answered: Everybody knows the logic of doing business such as provide a product or a service and if the revenue is higher than the cost then you make a profit. However, do not confuse doing business with starting a technology company. As a technology entrepreneur, you do not start with a product, but you must begin with an idea or a problem that can be solved by technology.
The most common mistake is to focus on building a product then the product will become a solution that is looking for a problem to solve. An entrepreneur should focus on understanding the problem that many people need to solve. The best way is to talk to as many customers as you can, to understand their need before starting to build anything. A successful entrepreneur knows how to listen to customers to learn more about their needs. If you already have ideas or product in mind, then you will be biased and may not listen well. Only when knowing a problem that many people want to solve then you may focus on a technology solution that could solve the problem.
The success of any startup begins with understanding the need of the customers. If there is no need, there is no customer, and there is no reason to start a company. It is important to understand this simple logic: If you can solve the problem for many customers and they are willing to pay for it, then you have a good foundation to start your company.
The next challenge is to find people who share your vision and who have the technical skills to build the product. When the company is small, a few people who are motivated to work together toward a common goal is easy to manage. However, when the company grows bigger to 10 or 20 people, then you need strong management skills to ensure that your newly created startup is strong enough to overcome any obstacles. Technical skills are only good enough to start, but you also need management skills to grow the company. (i.e., Do not make the same mistake as Steve Jobs did when hiring management for Apple in the early days,)
As the company continues to grow, you need to develop strong processes to share information, avoid conflicts and make sure people will continue to work in harmony to build the company. Make sure everything is written clearly and legally to avoid later problems (i.e., Do not make the same mistake as Mark Zuckerberg made when having many friends working together without legal document when he started Facebook.)
Starting a company sound simple and easy with a lot of exciting and emotion in training classes. However, in fact, it is NOT that simple. You need to have strong technical skills and management skills AND proceed carefully because it is your time, your efforts and your money.
- Blogs of Prof. John Vu, Carnegie Mellon University