If you look at the failed startups it is amazing to see how many of them, having a great idea and hard-working founders investing a great deal of effort into building their product, however omit the very basics of building a business, such as, for example, paying attention to your numbers and understanding your client, which leads naturally to failing to earn enough money or failing to raise funding. How would technical founders compensate for lack of the business mindset to strengthen that part of their venture?
This is pretty easy. Find a person very experienced in this aspect of your business- preferably a technology business. They do not need to know how to write code, they just need to know the proceSS and have operations leadership, strategy, product launch and management skill, among other talents.
Actually would be great to hear some thoughts from the technical talent people on the subject. In any case, thanks to everyone for the contribution so far.
The first order priority is to be sure you, the technical founder, understand what you mean by "business". Often technical people tend to lump everything not technical under the label of "business". Understand the differences between and the interrelations with sales and marketing and business development and accounting and finance and legal and operations and customer support and inside sales and HR, etc, etc. and set your priorities accordingly. Your MVC (minimum viable company) requires product and sales. Not much else matters in the early stages if you build a product but can't close customers or you can close customers, but can't get a product built. If you want to learn a skill other than 'technical' I would recommend it be sales if you think your customer is businesses or marketing if you think your customer is consumers. These skills are neither quick or easy to learn so finding a partner with these skills is clearly the best short-term option. These skills are not easy to evaluate so find people who can help you vet candidates. NOTE: when you partner with someone with complementary skills (sales for example) take every possible opportunity to learn from them. spend time with them, watch them in action, sit in on their meetings, etc. They should do the same.
In this new MVP society the biggest obstacle is lack of business sophistication. Great product or idea (no business model), lack of defined value proposition, lack of understanding the space they should be in. I.e. IoT, Ambient Technology, Wearables, etc. Technical founders should first decide if they want to be a business or an R&D company that can create multiple products. Two entirely different pathways. If a business, bring in business experts, CoFounder specialist to define their business. If they want to be an R&D company, bring in consultants that can validate the product, help decipher quickest way to revenue, develop an execution plan and allo w the technical founders to devote their energies on the next product. Altima has been able to achieve these results for many clients, granting management freedom to enjoy the lifestyle they want and not get overwhelmed in a business they don't.
Gustavo Rodriguez-Aparicio - The challenge is that VCs are interested in later-stage established businesses with verified business models and significant traction. So, you have to "get there" first ... and that takes the ability to build, sell, and distribute the product/service.
Need a 'hustler'.
Someone who knows how to go after the other stuff you'll need. This is the type of person that will grab an unfinished and buggy version of your product and go show it to random people to find out if any of them are interested. Then they dig deep into the people they talk to and find out the 'why' behind their interest. It takes a deep understanding of people and a little bit of psychology to be able to effectively do this.
The hardest part is not doing the hustling...it's finding the hustler. You need to find someone you trust, but they also need to be excited about your product. Customers and investors can tell when the person sitting in front of them is not excited about the product...and it shows.
The best suggestion I can give to anyone who doesn't have a hustler on their team is to look at all the people who love your project already and see if there is one in there. You need someone with LOTS of customer service background and a history of being successful in industries like hospitality and retail. Those people, while not technical and maybe not that business-savvy, know a great deal about talking with people and making them happy...which is the end result of getting a sale. Then sales bring investors/partners.
Do things in that order: 1) MVP 2) Learn from Customers and Pivot 3) THEN go for investments/partners...pretty hard to fail that way.
Having this person also helps because if you go after fund-raising...it takes up a TON of time. The technical founders could keep focusing on the product/customers while the hustler hustles the VC's.
You've landed on one of the key differences between having a job and starting a business.
Every business needs a variety of talents and capabilities: typically things like technical, business, marketing, sales, and HR skills (and probably more). Your primary choices are: learn the skills yourself, select co-founders with complementary skills, hire employees with those skills, or engage consultants, advisors, and other professionals.
Any way you look at it--whether you bootstrap or are looking for investors-- launching a successful business requires covering all your bases.
VCs usually bring part of these skills to the table. Nevertheless, VCs have their own goals, not necessary aligned with the founders' goals. If founders have a promising technology, working with market oriented partners before chasing VCs, saves money and time.
Hi Ruslan. I'm a firm believer in creating teams where everyone has different, but complementary, strengths. For example, if you are a brilliant developer, odds are you need the sage advice of a marketer to help define your target audience / selling features and someone strong in finance if you want to impress investors. I know it can be hard to bring outsider's into the equation as an entrepreneur, but, as you noted, tunnel vision in one area usually leads to failure in another. I recommend you challenge your founders to start cultivating a diverse network of experts who bring different strengths to the table and a good place to start is network groups and websites like this.
If you are interested in learning more about identifying strengths, check out Clifton StrengthsFinder (http://www.strengthsfinder.com/home.aspx). I had the luck of hearing someone speak about this concept at a business event and I've been a fan ever since. Good luck!
This is a great question as it touches on a very big issue (in my experience anyway)
I guess the obvious answer is for the techie to find a business-minded partner or co-founder. But this is easier said than done.
Just as there are a lot of business and marketing people out there looking for CTOs and the like, I suspect there is an equally large number of techies developing ideas and looking for business and marketing input!