By Samantha Walravens & Heather Cabot
Think 2017 is your year to finally share that amazing business idea in your head and introduce it to the world? Buckle up. In the words of Sallie Krawcheck, founder and CEO of Ellevest, “Being an entrepreneur is harder than running Merrill Lynch, and I’m not just saying that. I ran Merrill Lynch.” We know starting and running a tech company is not for the faint of heart, but if you are ready to take the plunge this year, here are some key insights from top female founders of early stage ventures who’ve been there done that. We spoke with them at the 2016 Tech Inclusion Conference in San Francisco (Check out the panel here). They dished on everything from finding the right investors to hiring a good team to staying the course in the rough and tumble world of starting a business. Here are the takeaways:
1. “Great business ideas are a dime a dozen. Choose one you’re excited to work on for the next five, ten, twenty years.” – Sarah Kunst, founder and CEO, Proday
According to Proday CEO Sarah Kunst, lots of people have ideas. But how you execute on them is what really matters. When starting out, Kunst recommends following the advice of entrepreneur and author James Altucher and writing down 10 business brainstorms every day. As Altucher says, “Just get in the habit of finding ideas and figuring out if they could be viable and eventually one will stick and you’ll realize you can make money from it and you’ll love it.”
2. “Before you hire a team, build a prototype and make sure there is interest in your product.” – Shanna Tellerman, founder and CEO, Modsy
Entrepreneurs can get wedded to an idea they think will be “the next big thing,” when in fact, nobody else cares about it. The first thing founders need to do is make sure their product has what is called “product market fit.” Simply put, this means you should make things people want. Shanna Tellerman, founder and CEO of Modsy, suggests building a prototype and testing it with customers to confirm that they will use and buy your product. Maci Peterson, founder and CEO of On Second Thought, adds that your business should solve a problem. She should know. She built her messaging recall app after she texted an old boyfriend telling him that she missed his “balls,” when she meant to write “calls.” Oops!
3. “Be careful whose money you take.” – Maci Peterson, founder and CEO, On Second Thought
“Someone recently told me that it’s easier to get a divorce than to fire an investor ,” says Peterson, “so you have to be very cognizant of whose money you’re taking.” She talks about a meeting she had with potential investors where the VC’s directed all of their questions to a male colleague she had just hired. She calls these incidences “great litmus tests” to gauge whom you want to work with, be it investors or colleagues. “When I see behaviors like this, I know you’re not the right business partner for me,” she underlines.
Modsy CEO Tellerman adds, “ Venture capital is a pain. Don’t take it if you don’t need it .” It’s a decision she’s experienced first hand. She has raised $12 million for her current business, Modsy, and successfully sold her first startup, Wild Pockets, to Autodesk. Although it may seem like standard protocol for Silicon Valley startups to raise venture capital, in truth, most businesses do not. Historically, fewer than 1% of U.S. companies have raised capital from VCs.
“To raise venture capital, you need to be working on something that is scalable and has the potential to be a hundreds of million or even billion dollar business,” Tellerman explains. “If you’re not going down that path, don’t bother raising venture capital.” Having a venture capitalist on your board means you have another partner in your business you need to answer to. As a founder, you need to decide whether the benefits outweigh the costs.
4. Find your “tribe.” – Jean Miller Truelson, CEO of Dogpatch Technology, creators of FlowerApp.com
Jean Truelson, CEO of Dogpatch Technology, creators of FlowerApp.com, emphasizes the importance of finding people you respect and want to work with. “I didn’t walk into Silicon Valley with a set of connections or background in tech, but I was able to build those connections through people I already knew. It required a lot of hustling,” she says.
While building connections is critical to succeeding as a tech entrepreneur, Modsy’s Tellerman admits she hates the word “networking” because it sounds superficial and intimidating. She cautions founders to seek out relationships “strategically.” “Network with the people you want to work with, who will lead you to the right investors and people you want to know, ” advises Tellerman. “Most entrepreneurs start with no network, no connections, no experience. You have to build your way up to it, but you usually start with nothing.”