By Alison Johnston (Co-Founder & CEO, InstaEDU)
A year and a half ago, I was on the marketing team at Google and trying to figure out my next step.
I had landed at Google after the Aardvark acquisition, and I knew I wanted to get back to the startup scene. More importantly, I wanted it to be mine.
Despite having worked at several startups, I didn’t have a clue about how to start one. After several twists and turns along the way, we finally have a team of five and a product that we’re starting to put in front of users.
The process of starting a company went nothing like I had expected, so I want to share some advice for anyone looking to get a company off the ground for the first time.
Tip #1 – Start small.
Everybody wants to build a billion dollar business, but you’re probably not going to stumble across one on your first try. In addition to all the standard risks and hazards of entrepreneurship, most first-time entrepreneurs also have to learn how to run a company.
The first “product” that we had at InstaEDU was an in-home tutoring service called Cardinal Scholars. We paid a freelancer in L.A. $600 to build a 1995-esque website and hired 14 tutors from Stanford. My co-founder Dan was still in school and I kept my day job.
Over the next year, Cardinal Scholars grew to 150 tutors at in three markets and almost $200k in sales. Cardinal Scholars was never covered by TechCrunch, but it taught us a lot about our customers, as well as all the nitty gritty details of running a business. We had to learn how to hire, deal with lawyers, set up accounting, and respond to customer issues. By the time we started working on InstaEDU, we were comfortable running a company together and had a great understanding of the space that we were in.
While creating two separate products may not be the best move for every team, I highly recommend giving yourself time to:
- Learn how to run a business before inviting in press, investors, etc. and
- Really get to know your users before building out a huge product.
Tip #2 – Buy lots of drinks.
For other people, that is. I’m quickly learning that the best asset any entrepreneur has is the people that they know. There are tons great resources out there on entrepreneurship, but nothing compares to being able to pick the brains of those who have recently faced your challenges.
I am incredibly fortunate to know a number of very smart and often successful entrepreneurs, all of whom have been generous with their advice when asked. For example, I became far more confident about raising money after finding out why someone chose convertible debt over equity (and vice-versa), hearing actual questions that investors asked in meetings, and having our deck critiqued by numerous industry veterans.
In addition, some of our best investor introductions have come out of meetings where I was originally looking for advice.
I would strongly recommend that anyone starting their first company buy a drink for every entrepreneur, investor and mentor that they have a connection to. (I’m quickly learning that there are very few people in Silicon Valley who will turn down a beer.)
Tip #3 – Make your deck early.
Ready to get started, I put together our pitch deck months before we actually used it in an investor meetings. It wasn’t intentional, but it ended up being incredibly valuable for us.
Most importantly, creating the pitch forced us to think critically about our InstaEDU. When we first started working on the product, we knew that it filled a need, but didn’t have a concept of how big the need actually was or how much money could be made by filling it. In order to convince other people that what we were doing was worthwhile, we had to do market research and put together financial projections.
Taking the time early on to evaluate who our actual users would be and how we would capture them changed how we prioritized several features of our product. Having a draft of our deck early also allowed us to get tons of feedback on what improvements could be made. (Trust me, there were a lot.)
If I were starting another company, I would put together the pitch to vet the idea before writing any code.
Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.
About the guest blogger: Alison Johnston is Co-Founder and CEO of InstaEDU, an online marketplace where students can connect with great tutors on-demand. Prior to InstaEDU, she was an early team member at Aardvark, Box and Nextdoor and on the Google+ marketing team. Alison currently lives in San Francisco, where she enjoys playing kickball, trying new restaurants and heading to Tahoe to snowboard. Follow her on Twitter at @ajalison.