*What it takes to start a company*

Dear readers, future entrepreneurs, fellow founders,

I often get asked why I do what I do - building companies or helping others to build theirs. So I thought to publish my personal beliefs on that topic.

Based on my work being a serial founder who turned investor with https://cavalry.vc and being an advisor to several smaller (e.g. https://intermate.de) and bigger companies or brands (e.g. https://dmexco.com) I constantly chat with people about what it takes to start a company.

My experience shows that almost everyone has ideas but just a small fraction of those folks turn them into businesses. So what exactly does it take to move an idea into a project and eventually start a new company?

I tried to resonate on that point based to my personal situation currently founding a new company, BOBBY - the world's first portable baby bouncer. Check out https://bobby.baby or follow us on Instagram. My situation might be slightly different as I'm doing it parallel to all my other ventures and mostly self-financed but I think that it reflects many of my entrepreneurial lessons learned.

I basically differentiate two buckets of factors, soft ones and hard ones.

First comes the idea which ideally is based on a real problem that you ideally encountered many many times – let’s (for a moment) ignore if it’s a big or small one or any definition of what big actually means.

To me, the most crucial ingredient on that journey is passion. Passion for what you do (as a product, service or idea) and passion for entrepreneurship in general. In my point of view you will need a great amount of dedication and perseverance. Every entrepreneur knows that building and scaling a company is a steady fight with many hard maybe even negative times ahead of you – I've been once told by my very first angel investor "Daniel": everything takes twice as long, costs twice as much and brings half of what you predicted. This passion-bucket also includes one's attitude doing a business out of the believe that it will positively impact other people's lives - so forget to start a company just to make (quick) money. In most cases in won't work.

Next, I believe you need lots of emotional or even psychological support from your close entourage. In an ideal world your family, spouse and closest friends understand your mindset of being an entrepreneur, meaning not spending a lot of time with them, being "stressed" or under "positive yet sometimes negative" pressure for almost the entire time. That also includes sometimes experiencing the worst days of your life. If you don’t have that support "at home" and if you also worry about compensating many negative vibes from your beloved ones, stop thinking about starting a company now. Either your marriage/family or your new business will go bust. The minority of people (maybe some border liners) will succeed - you need your "Unternehmerfrau or -Mann" ;)

Next to those soft factors (Idea, Passion, and Support) comes the hard(er) factors. I personally believe it's actually not too many (in the beginning) but they are essentially the most important ones when it comes to your (personal) risk-return assessment.

First, deeply understand what you are bad in – and I don’t mean ?not good“ - I mean: what are your personal more-or-less obvious weaknesses. I think it is ultra important focusing on those weaknesses very early and very accurately because you need to compensate those to become successful. And it's sort of easier doing that this way instead of focusing on what you are good at - in fact many (unexperienced) entrepreneurs believe they are great in (too) many areas. After that assessment you are able to hire the right people or engage with the right co-founders to have a complimentary dream team.

As ?the“ CEO or ?creator“ or ?visionary“ or however you want to call yourself, make sure that you spend 70% of your time on the big issues or maybe problems to be solved (although I actually don't like the term problems), and 30% of your time on operations. On the other hand I strongly suggest that you have people in your team that do exactly the opposite. Your ?hired“ guns or "co-founders" should follow one (ideally your) vision. You won’t get far by only having big visionaries in the team without getting the shit done. Many projects fail because there is too few executors on board.

Next, make sure you validate initial market demand. Many ideas are very theoretical, some too ahead of their time, some economically unrealistic and others solve problems for too few people out there. So the question is: Is there a product-market-fit? (This might also help pivoting early in the process and not wasting too much time, energy or money).

As a visionary you want to get rid of any personal bias of your idea. Question is: Are you solving your problem or are you creating a solution for something many people suffer from. Make sure your idea falls into the latter category.

The most easy way to accomplish that is: Talk to as many people as possible about your broad idea – remember most of them don’t have those necessary ingredients to start a company (that you already have), so they won’t copy you. So chill, listen, get feedback and incorporate your learnings in your solution. I am mentioning that because I met too many future founders that "hide their ideas, send out too many senseless NDAs, etc."

Based on a minimum of 50-100 (semi) personal feedbacks start ?what I’d call“ an initial product-market-fit campaign on e.g. Facebook, targeting your audience. Create a super simplified survey (e.g. using Typeform) with up to 20 questions regarding your potential customers' awareness and severeness of the problem (you are trying to solve), current alternatives used, their willingness to pay, potential feature requests, etc.) - you just need a short landing page, brief description of your solution and some 1000-3000 € for your ad campaign. The output will be a massive data set of mostly non-biased (yet probably not scientifically objective but still great) feedback.

Last but not least think and ideally make sure you (and your company) posses unfair advantages; and I'm not talking about the USP in your product or service - I'm talking more about something that gives your superior power or exclusivity.

That might be many things like, e.g: having patents, superb and eventually exclusive distribution or production partners, industry leading angels, complementary businesses or even mailing lists, etc. etc. – anything that either lowers your customer-acquisition costs (at the beginning), creates barriers to entry for others or speeds-up your business is great.

Aside of having a positiv impact on your scale-up phase, having those "unfair advantages" stimulates a great amount of self-motivation. So it's a good think building up those early days.

I won't cover too much the details of the too-obvious must-haves but be sure you have a good execution strategy or at least project management and understand the concept of prioritization. A pragmatic tool stack (e.g. slack, asana, confluence, drive/box, etc.) and some own cash (skin-in-the-game) complements everything you need to start your company.

I’ll dive deeper into this subject by illustrating what we did and do for my personal new venture ?BOBBY“, a journey that would be impossible without the great support of many people that complemented my weaknesses.

Grateful and very open for your feedback on those thoughts,

Dominik