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Sunday, April 24, 2011

Lessons From The First Attempt At Entrepreneurship

We are living in very exciting times. The wireless technologies are  just beginning to change how we live. A great opportunity lies ahead in connecting the physical world with the virtual world using wireless technologies. 

Two years ago, having that insight, I made an attempt at changing how the physical retail industry operates by launching a company- Mjedi. I started with focusing on the Fashion/Apparel industry. The embedded presentation will give you an idea what the company was about. 

Mjedi was an interesting ride-we launched a product & a service, won a reputable award (CTIA-top 5 innovative startups 2009- to see the video, click here), and made inroads into major retailers. The main reason that Mjedi service is not running today is my lack of perseverance at the time. Other companies with similar concepts (GroupOn, Foursquare, Livingsocial, etc.) started around the same time frame are gaining ground. Following is the random log of learnings I kept while I was running Mjedi: 

  1. Raising series A costs ~$50k in legal fees

  1. Investors need to have at least $1M in net worth to invest in a company

  1. LLC can not take investor money

  1. Investors prefer Delware C-corp for investments

  1. Re product development, get an end-to-end product working in the market asap. Worry about covering all the user-case scenarios later

  1. Most companies don't know how to utilize social media-Facebook/twitter

  1. Having a team is critical

  1. Entrepreneurship is hard

  1. I need structure to work

  1. REI has one-price policy across all channels

  1. I met really smart people in the entrepreneurship world

  1. Don't start with a fixed idea of how the customers will use your service/product.

  1. Investors should not have power over you. Look at any successful company, the founders were in control.

  1. In the entrepreneurship world, the amount of money you make equals respect. You should care, how much money you will make.

  1. Reduce as much dependency as possible on big companies

  1. Take out all the product/service features which are not core to your value proposition

  1. Anything you think is immutable makes you risk averse

  1. Don't lock yourself into where you want to be. Start offering value keeping the end goal in mind

  1. In the investor pitch, clearly state the bet you want them to make

  1. Every business has competition. Don't define what you are doing too narrowly

  1. Domain expertise is important because it helps you understand what customers want and how they buy

  1. Make investors aware of the risks

  1. Make a list of all risks and show how you will overcome each of them

  1. Investors like things which are hard to do

  1. Jeff Bezos force ranked all the items he could sell online. Books came out as number 1. That is how Amazon started with books

  1. In B2B space, look for companies/people who have history of buying new stuff

  1. Look out for players who are adjacent to what you are doing.

  1. If you are in an industry where the leaders understand that startups can kill you then focus on creating barriers. In industries where the leaders don't understand the role of startups, focus on gaining customers.

  1. Always ask for more than you need

  1. You should give the startup at least 18 months to see if you are getting any traction or not

  1. Time is as valuable as money. Keep track of it every day

  1. Execution is the single most important factor for startup success

  1. VCs don't usually reserve money for the second round for all companies in their portfolio

  1. Understand the real cost of raising money i.e. what does the lender want

  1. Follow rituals on daily, weekly, quarterly basis. Discipline is critical

  1. Startup teaches you self-awareness. Evaluate the skills you are missing and get someone else to do those things

  1. Communication is as important in a startup as in a big company

  1. Don't loose personal credibility when pitching

  1. Understand the business levers and not the revenue forecast

  1. Understand unit cost economics

I am grateful for the success of Mjedi to my CTO, Andy, and to everyone else who shared his/her time and knowledge with me. If you have not created a company, try it. Creation is thrilling!