October 1, 2015

The Beginner's Reference Guide to Startups

I was asked by a close friend earlier this week about whether or not I have any references, books, or recommended reading for anyone wanting to get into startups. I don’t have a single source that I can point to, so I thought I’d write one!

Let’s start from the beginning.

Starting... something

Image courtesy of Gratisography

Getting Acquainted with Startups

Before you get into trying to do your own business, it’s a great idea to see what all of the other entrepreneurs are up to across the world. Learn from their experiences, successes and failures both.

Start with Paul Graham’s essays. Paul’s one of the founders of Y Combinator, one of the most successful early stage startup investment vehicles on the planet. He’s worked closely with hundreds of startups, met thousands of founders, and seen deals of all shapes, sizes, and trajectories.

His essays are pure gold - a culmination of dozens of man-years worth of experience. They’re not really for learning tactical, detail-oriented parts of startup life (such as how to hire a developer) as much as they are for the higher-order strategies, trends, and put simply: ways of being in startup life.

While you’re at it, consider adding Hacker News, Y Combinator’s user-driven news website, to your list of regular reads. You’ll discover a lot of great opportunities early if you check the site regularly and you’ll also learn a lot by osmosis.

The next person worth reading is Ben Horowitz, a famous entrepreneur with an amazing story in his own right and one of the founders of the wildly successfully Andreessen Horowitz venture fund. His stories are much more personal and gritty than Graham’s, and if you find his blog compelling then you should definitely read his book The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers; I’ve finished it and absolutely loved the anecdotes.

Picking Something to Work On

Over the past 6 years an area of entrepreneurship that’s received a tremendous amount of attention is the concept of idea and business validation - an empirical method for determining whether or not a specific business concept is worth pursuing into various stages and at what scale.

The book that really blazed the trail in this area is Eric Ries’s The Lean Startup, which defined many of the key concepts and methodologies even the most widely successful entrepreneurs in Silicon Valley employ to validate a business idea before investing heavily into it.

Mastering the Lean Startup methodology will save you tremendous amounts of wasted effort, dollars, and energy. And if you master the process of being able to simply validate an idea, you’ll have breakthroughs in areas like talking to customers, product design, analytics, marketing, sales, and other key business areas where entrepreneurs generally struggle.

Thus the next resource I suggest you checkout is the Lean Startup Machine - a 3-day workshop that will help you employ all of these techniques on a business idea over the course of three days. And if you can’t attend one of their courses, then at least try their validation board software and use that as a framework for employing the lean methodology.

Lastly, here are some other books in this area that are worth a read:

These are both in my personal Kindle collection and I’ve found them to be helpful.

Fund-raising

One area of running a startup that can be pretty intimidating is the prospect of pitching investors and raising venture capital - I know it certainly was for me the first time I raised.

A really simple introduction to venture capital fund raising that I’ve kept on my favorites bar for years is this 2012 TechCrunch article “How To Raise A $1M Seed Round” - I actually used this advice when I ended up raising in 2013 for MarkedUp, so speaking from personal experience there’s real value to this.

However, if you’re looking for a more general guide that explains how the entire fund-raising process works across all of the various funding sources such as accelerators, angel investors, micro VCs, growth funds, etc… Then I strongly recommend Paul Graham’s “Startup Funding” essay.

And in general, if you want to hear the thoughts of someone who’s crossed the divide from being a software entrepreneur to an investor then make sure you read Mark Suster’s Both Sides of the Table. It’s a popular blog and for good reason: Mark offers a unique perspective on the ecosystem and is both personal and authentic in sharing what he sees as trends in startups seeking to raise capital and where many founders misspend their time. Truly a great read.

Lastly, when it comes down to the tactics of actually pitching an investor - then you should read “Eleven Compelling Startup Pitch Archetypes”; it provides a great overview of the different ways to structure a pitch narrative for investors, using real examples from Y Combinator companies.

When it comes to finding good legal and accounting advice for startups online the resources are somewhat scarce… Honestly the best article I can find on determining which legal structure you should pick for your company is this one from Entrepreneur magazine. I’ll probably end up having to write one of my own here unless someone suggests a good one in the comments.

In terms of accounting, this list of “8 Accounting Pitfalls That Start-up Businesses Can Avoid” is worth its weight in gold.

Marketing and Sales

A book I’ve recently fallen in love with and given away copies of is Traction: How Any Startup Can Achieve Explosive Customer Growth by by Gabriel Weinberg and Justin Mares. I’ve linked to the new hardback print which isn’t out yet, but I’ve had this book on my Kindle for the past year. In Traction the authors really offer a concrete framework (the “bullseye”) for being able to test and quantify which marketing channels are and aren’t working for your startup, and gives you some guidance on how to focus your resources on a small number of successful channels versus spreading yourself thin trying to be good at everything.

Beyond that though, the advice Traction offers on how to work with individual marketing channels like email marketing, search engine optimization, social media, and so on are tactically sound. You’ll get lots of good ideas from this book.

On the sales side of the equation, you have go with Predictable Revenue by Aaron Ross and Marylou Tyler. It’s an instant classic and a must-read for any startup that’ll have a direct sales component built into it.

Founders, Co-Founders, and Early Employees

One of the tricky areas of startups and the most important to get right early is managing your expectations on what the experience of running a startup will actually be like. I’ve written about this ad nauseam (1, 2, 3, 4, 5,) but I have some personal favorites in this area:

The only thing more critical and more complicated than managing your own expectations, life, and time as a startup founder is when you bring a co-founder or early employee into the mix. Here are some of the resources I’ve found helpful when I was first starting out:

Most of the good advice I’ve actually used in this area was delivered to me verbally by some great advisers. I’ll codify this into some new posts in the not-too-distant-future.

Conclusion

I may expand this list over time with new references and sections (product development comes to mind) but for the time being this is a great list for anyone who’s really interested in learning the ropes of tech startups.

Let me know if there’s anything else you’d like to see in the comments!

Discussion, links, and tweets

I'm the CTO and founder of Petabridge, where I'm making distributed programming for .NET developers easy by working on Akka.NET, Phobos, and more..