You need to understand the problem. The solution needs to be competent against alternatives and you need to know bad and good about them. Moreover, if you aim high, you want to follow the path that has long term prospects. The unique solutions would bring you there. Bringing yet another hardly different product to competitive market, harms your ability to differentiate and sustain customer. You need to standout and it is especially good if you can create something for the future. Map giga trends, go to the growing market and you will be more safe to make mistakes.

In theory this work fine.  In practice, it is probably too much for you to grasp. Thus, you end up searching for a balance between research and product creation, and hopefully sales. First money, be it investment or sales, are very hard. Moreover, it is hard to believe that you can process this overwhelming amount of information, needed to answer the question of sustainable and competitive advantage – the differentiating angle and position that would eventually earn you a place in the market.

So far, our answer was: not to stop building the product. Not to stop researching and reading everything about the area we are attacking. Not to stop making lists of prospective customers, contacting and talking to them. Not to run out of resources along the way.

Of course, when you already on the road, hunger and fear of failure can help to become all-in and to work your way forward with great momentum. If you are hungry, you will fight. If the future is not pleasant, you will work your head down 16/7. Being all-in, enables to do archive impressive results and makes you proud of yourself. Being all-in and having achieved something, brings confidence in your ways of doing things.

Of course, it depend on how strong is your gut, however, hunger and fear can also constrain you a lot. Dreaming big, while bootstrapping and working your way through failures and small ventures requires some heavy self-confidence. Great example comes from famous role model – Steve Jobs, who was building his dreams while collecting bottles on campus and going for free food from Krishnas. My experience is that fear may make you more practical than you should be.

Probably, there are only two things that can sustain your ambition endlessly. You either believe in yourself and build up that heavy armor of self-confidence, or you carry a vision of better future in your heart . Riding the emotional roller-coaster, being tired after a hard work, family members and friends will test you many times with hard questions, but one of these two components will allow to keep going.

Just yesterday hard week brought some doubt in my head. However, it took me just a short while to remember what we are working on and that totally calmed me down. There is nothing better than understanding that you are working on something valuable.

Happily, through sleepless nights and a lot of hustling and multi-tasking, I am now happy to share that I feel safe again. Future is clear and bright. First of all, a company from The Valley has agreed to accept me as intern for the summer. Secondly, we agreed that maybe I will able to do it in the winter, as it became obvious that  this summer with Claudio we are going to launch something. As we got accepted into Summer of Startups, we are getting into it fast. Finally, university would be happy to have me for the summer, which means that I will have money for holidays this year. Overall, still a lot of work, but it is the personal development I really appreciate and funds for living have been secured.

Feeling safe is strange. For around of 10 months, I steadily was running out of cash. I needn’t reasons why to do things: I wanted to have money for basic things and to return to the comfort level, I have been used to. Now, as future is brighter, the worries have been gone. So did the need to hustle. Probably, here lies the difference between neccessity entrepreneurship and growth entrepreneurship. When hunger is gone, only most wild ones continue on and get rich. Average middle class man, after he reaches “wealth saturation point”, he no longer seeks net growth, as the marginal effort needed to significantly increase prosperity is quite high. As you get happy with what you have, you slow down.

However, comming back to my values, I want to improve living for my family and society. There too many things that are wrong now: diseases, inequality, deaths, struggles.  No time to sit down if you care. I realised that I need to go outside my comfort zone, kick myself in the but and start building something that would have impact.

Just to remind myself of the teenage riot I had in my heart only  few years ago:

Diskusijoje tarp visų kitų paminėtos tokios problemos:

1. kvalifikuotų darbuotojų trukumas;
2. maža studentų kvalifikacija;
3. didelė darbuotojų auginimo rizika ir kaštai;
4. pernelyg didelės mažai patirtį turinčių žmonių ambicijos dėl atlyginimo.

Galima laukti kol šias problemas už darbdavius išspręs kažkas kitas, o galima imtis aktyvios pozicijos ir užtikrinti sau geresnes darbuotojų paieškos sąlygas kelių metų laikotarpiu.

Manau, kiekviena kompanija planuojanti Lietuvoje veikti ilgesnį laikotarpį turėtų pagalvoti apie “ėjimą į universitetus”: apie dėstymą, pratybų vedimą, apie paramą universitetų programoms, studentų konkursams ir iniciatyvoms.

Pirmiausiai tai reikia daryti, vardan savo vardo viešinimo – būdamas studentas, apie įdarbinimo galimybes pirmiausiai sužinodavau iš dėstytojų ir kursiokų. Nenuostabu, kad dėstant 4 dėstytojams iš Sintagmos, 10% mano kurso karjerą pradėjo ten.

Taip pat, kaip kitaip studentui sužinoti kokios technologijos dabar aktualios? Iš mokslininkų-dėstytuvų klano, kurie jei ir dirba, tai visi vienoje kompanijoje (čia jau ne apie Sintagmą). Juo labiau, būtina kad verslas dalyvautų sudarant ir peržiūrint specialybių programas. Atrodo, kad Barclays, Bluebridge ir Sintagma tai supranta, o dauguma LT kompanijų – ne.

Toliau, kodėl studentas galėtų programuoti laisvalaikiu? Tik dėl 3 priežasčių: a) galima užsidirbti b) tai įdomu c) investuoja į savo ateitį.

Jei studentui galima užsidirbti tik programuojant primityvias svetaines, jis tik tai ir darys su PHP ar Ruby, bet ne su .NET, Java ar Python (su retomis išimtimis). Retas studentas programuos, nes tai įdomu – būti programuotojų jau senai neberomantiška. Dėkui Bitei ir IBMui bei jų partneriams, kurie prieš krizę darė programavimo konkursus – tokios iniciatyvos leidžia studentams tapti labiau konkurencingiems ir kelia motyvaciją.

Darbuotojo auginimas, kaip minėjote, tai brangus dalykas, skaičiuojamas tikriausiai tūkstančiais litų žmogui. Vieną kartą per metus skirdamos tūkstantį, kitą dėstymui, konkursų/iniciatyvų finansavimui, kompanijos investuotų ne į vieną studentą, bet į dešimtys ar šimtus bei gautų naudą iš viešinimo. Suma sumarum, manau, kad bent 20% rinkos dalyvių pastangomis galima būtų pakeisti situaciją.

Kaip padaryti kad studentai/nekvalifikuoti darbuotojai investuotų į ateitį ir nevadovautųsi iliuzijomis dėl atlyginimo? Manau, lengviausia tai pasiekti parodant koks atlyginimo skirtumas tarp SAP ar Websphere “konsultanto” ir PHP programuotojo. Jei pakeltumėte sudėtingesnių technologijų žinių suvokiamą naudą ir atskleisite realius rinkos atlyginimus, suteiksite motyvacijos ir sudaužysite iliuzijas. Horray, Adform!

Pre-seed stage

It always starts either with a great idea or with bunch of cool people and of course having high expectations.  I stipulate that to close this stage you are to have at least two of the following:

• An idea or a market chosen;
• Bunch of people you could work with;

What is more I believe that you should have answered yourself several important questions. Such as:

• Why are we going to succeed?
• What are our strength and weaknesses?
• What threats should we mitigate and what opportunities to take?

It may be the time for raising money from FFF: friends, family and fools. Being lean and agile, you may start with no money. Nonetheless, each of the teammates or just you, if working alone, has to decide and commit to the minimum number of hours and money he will spend on the project.

Seed stage

As you already have something to work on or someone to work with, it is time for some more material results.

Personally, I would argue that this is the time to test your product/service and market assumptions:

• Do you do what people want?
• Will they pay for the services you are providing?
• Are there as many potential customers, as you expected to be?

Some recipes to answer these questions could be:

• build the prototype;
• come up with the business plan;
• make enough sales.

Besides, as the struggle to get funded is long and hard, you may start raising some money from Business Angels. This not only could help you get something to eat, but also help with verification of your assumptions and development of pitching skills.

On the seed investment stage, not only you can raise money from angels, but from VCs that do early stage/seeds as well. Participating in different “seed camps” can be a good opportunity to show your idea/product to potential investors. In Europe, the London Seed Camp is the best.

To my mind, first requirement to close this stage is to have the prototype build or the business plan verified (with users, experts or sales). Secondly, either impressive growth of usage indicators has to be achieved, or company has to secure sufficient money flow, or you’ve got an investment and can work on growth.

Startup

You must have confessed big guys into believing you and now finding ways to become really big is your daily job.  All the received money is invested to make your services or product even better: team grows, experienced and cool guys join the company.  I think no matter are you a first class web superstar or only a middle-size but prospective startup, you always test business model and monetization opportunities. However, as people say, if company really hits the roof with number of users, it doesn’t matter at all. Well, someday I will be able to tell you more.

Distinctive characteristics of startup:

• rapid usage indicators growth;
• big growth investments;

Although colleagues argue that startup has to be an independent company, I think it isn’t as important. Moreover, a VC would always put his people in the board and Angels are keen on joining. You will want them to so that they could help developing business. Also colleagues say if your investor is a company, you gain some kind of undesirable dependence. Put it another way, when rising large external funding, expect no longer be the one who takes decisions alone and I believe it to be fair.

The other option is to bootstrap your company on internal cash flow. However it seems more like having a lifestyle company with lower growth expectations. As Saul Klein pointed out, some may choose this (like Boxed Ice and 37signals)way to learn doing business. Even though, according to Saul, they still seek for attracting experienced guys like Jeff Bezos.

Startup usually raise millions from VC as GetJar or hits the roof with revenue growth as Unity.

It is typical for a startup to do multiple fundraising rounds. First investment is typically called “Series A”, then you could have “B”, “C” or even “D”. Uprounds (when company’s value increases from round to round, each new investment is greater than the previous) is a common thing, they indicate the company is growing and investors believe it will continue doing so. E.g. “Admob” had 4 rounds, totaling close to $60m, before it was sold to google for $750m. Downrounds are a nasty thing, company value actually decreases, each new investment is less than the previous, money is needed to survive, founders and previous investors experience great dilusion.

Growth company

This is simple: growing its employee or revenue numbers by 20% and more a year for at least 2 years. May have raised millions from VC. Growth companies are also called gazelles.

This is my summary of our discussion with startups.lt organizers based on several sources, talking to people, Connect Estonia public information, GetJar’s CEO Ilja Laurs presentations and “common sense”. The main goal of this post was to sort out thing and invite you for a discussion.

Updated:  2010-02-05 with Ilja Laurs comments.

“Continued program with mentorship from more experienced developer or entrepreneurs. A study and reward program that would help developers, who have won the challenge to develop their application further. Perhaps, that program also should help developers to start their own business based on the software solution they have come up with.”

Survey on Intel Atom developer challenge.

What do you think?

Applications are open till April 11
They will host face to face meeting starting March.
Camp is scheduled to start in June and last 3 months.

I updated my list of startup seed camps [In lithuanian].

ArcticStartups article