First day at Techstars: Where do you start?
I’m a new mentor this year at Techstars, a program in its third or fourth year in Boulder (and this year also in Boston for the first time) that provides a couple dozen companies with seed capital, advice and mentorship, and summer “incubation” services in a really well conceived for-profit venture started by David Cohen in Colorado.
Yesterday was my first day up there with my colleague George Bilbrey, and we met with three different companies, two of which we will tag team mentor through the summer. I won’t get into who they are at the moment, mostly because I’m not sure what the confidentiality issues are offhand, but I’ll make the first of a series of posts here about observations I make from doing this work.
Yesterday’s thought was: Where do you start?
It was so interesting to meet with in some cases pretty raw companies. They weren’t exactly “a guy with an idea,” but for the most part they were <5 person teams with a working code base and some theories about who would buy the product.
So where do you start on the question of business planning. Do you dive into the deep end of details? (What should we charge? How do I get my first 5 beta customers? What about this new feature?) Or do you wade into the shallow end of methodical planning? (Who is our target market? What problem are we solving? How much is it worth to the prospect? What will it cost us to produce, sell, and support the product?) We heard both of those approaches yesterday across the three companies.
My conclusion isn’t that there’s a single correct answer. For most mortals, it’s probably the case that while it’s good to have a product and an inspiration behind it, there’s a long road between that and a successful company that requires careful articulation of the basics and a good grip on potential economics before incremental investments of time or money.
But there are the occasional companies whose ideas are so perfectly timed for such a large market or user base that some of the method can be ditched up front in the name of getting to market (think Twitter or eBay) — provided that the company circles back to those basics down the road in order to grow smartly over time.
Anyway, it was a thought-provoking day and great to see new entrepreneurs and ideas take root. George and I have a series of six sessions set up with these companies as well as the full Techstars Demo Day in early August. I’ll try to blog some thoughts after each session.