Tips for the Young Entrepreneur
Partners
There is no particular rule as to how many or what partners to engage in starting up a company, or incorporating into an existing company. If you ask me, the ideal number of partners is one. Avoid partners who are unreliable, dispersive and inconclusive. Avoid those who are not punctual. Such people are generally disrespectful and unprofessional. Avoid partners who have no IP, otherwise you will end up doing all the work. Avoid partners who have no money - you will end up paying for eveything yourself.
Involve in your venture only partners that can do it full-time. People that already have another job, or are very busy, are on the phone all the time, or simply have other very important projects on their mind, will contribute in a marginal way to your company. The more money your partners make with their other jobs, the less time will they contribute to your common goal. In actual fact, partners like that will destroy your start-up. And it will be up to you to pick up the pieces.
Never give shares of your company to people who are not with you on a full-time basis. You will regret it very quickly.
Never involve in your company anyone who is into politics or belongs to a political party. You may be accused of collusion or corruption.
Never involve in your company individuals who already have a job in a large, multinational companies. There is potential for conflict of interest and these companies have large legal departments.
Never involve relatives or close friends. Blood ties and friendship will quickly get in the way. If you really need partners, find strangers.
Never involve individuals who only speak of profit, shares, percentages, royalties, who speculate, who always want more for less, who prefer tricks to honest hard work, who think they are smarter than anyone else and think they have the right for preferential treatment, and who only have one thing on their mind: money. Such people will poison your company. Keep away from them.
Bottom line: if you can, do it yourself.
Lawyers
Make sure you have good legal counsel from day one. Once you get into business you will meet people, sometimes even your clients, who will try to take advantage of you. This gets worse once you start to make money. Money makes good people do bad things.
Remember: a twenty-page NDA does not protect you. The only way to protect your IP - your greatest asset - is to never share any technical details. Ever.
A word of caution: never let lawyers run your business. Never allow a lawyer to become a shareholder of your company.
Protocols
Always be formal and follow protocols. No matter what the circumstances. Especially nowadays, when everything seems to fall apart, it is crucial to follow rules, be ethical and rigorous, punctual, reliable and credible.
Proposals
Writing proposals requires a substantial amount of effort. A good proposal offers a complete recipe as to how to perform a given project or deliver a service. Remember:
Never, ever, ever write a proposal until you are sure who is asking for it has the necessary budget.
Don’t be afraid to ask if they actually have the money.
Never include too many technical details in your proposals. Creating new IP is tremendously expensive, probably the most expensive thing one can ever do. Don’t give it away. Sell it.
Never write a proposal until you get a written request for it.
POCs, or Proofs of Concept
Very often you will be asked to perform a “Proof of Concept”. Avoid it as much as you can. Saying PoC has various implications:
It makes your technology look immature.
It has a connotation of something cheap.
A PoC is always cheaper than a proper “Project”. They know. This is precisely why this dreadful term is used.
A less malignant term is “Pilot Project” but when you can, replace it with “Project”.
Working for Free?
Huge companies often want a risk-free business. By asking you to work for free they are placing all the risk on your shoulders. All you get in return is the honour and glory of working for a huge and prestigious firm. And that is assuming that taking advantage of small companies brings the larger ones prestige.
They will also say: “see this as an investment”. But you have already invested, your own money, time and work, you have already taken a huge risk. Let those with the deep pockets invest.
Remember, anything that is free is worth nothing. If you start working for free you will end up working for free. Risk must be shared, just like benefits. Any risk-free enterprise is not a business – there is a special name for that kind of activity - and cannot lead to a win-win situation.
Bottom line: never, ever, ever work for free.
IP, Technology
You will sometimes be faced with “we’d like to understand your algorithm better, can you provide some details?”. The answer should always be no! You have invested years of work, your savings, your enthusiasm, your best ideas into creating your IP. Don’t give it away!
Presentations and Marketing Material
Never ever ever give technical details in your PowerPoint presentations or your marketing material. If you do, your IP or ideas will be stolen, copied or reverse-engineered, often under the umbrella of a twenty-page NDA.
MoUs
Never sign any MoUs. These are elaborate and sophisticated traps prepared by professional legal tricksters, designed to take advantage of a small company in every possible way.
Where to do it?
Every country has something good to offer when it comes to starting your own company. However, there are places and geographies which a young entrepreneur may want to avoid. If you wish to find out what these are, contact me.
Has your IP been stolen?
There are clear signals which indicate theft of your IP. If you wish to find out what these are, contact me.