Monday, March 05, 2012

Uberity - Five important lessons for startups

I am in Vienna, about to give a keynote talk tomorrow to share the millions of blunders and mistakes I have personally made over the last fifteen years of high tech startups.  One of our last companies was even acquired by Adobe Systems for a component that made is used today for Consulting Services LiveCycle ES.  The reason I do this is in hopes to share some of the errors I wish I had someone warn me about.  While I won't tell you all of them in advance, here is a list of things that Uberity will do or not do during it's startup phase.

1. We will keep a clean IP trail.  Uberity is developing some very interesting intellectual property we feel will be required by most small to medium sized enterprises as they move to mobile in the next 5 years.  Without divulging the details of what we are building, one thing I can promise is that the entire IP development process will be documented from start to finish.  Every single person who comes into contact with our technology will sign an NDA and/or IP invention agreement (and he fairly compensated for anything they contribute).  This is important if your overall exist strategy is to be bought out by a larger company.  Startups need to realize that larger companies often have very skilled legal business units who know what is required to ensure the company acquiring the startup does not expose themselves to undue risk.  Startups need to document and record every step of IP development and ensure they are thorough.

2. Ensure you understand your fellow startup team's personal desires and goals.  Understanding what motivates them and what they seek out of life is very important to understand how they imagine themselves working for the startup over the next decade.  The people at Uberity are like my brothers and sisters from a different mother. I know them, I know what they like and don't like.  I trust them and would follow them into battle.  They are your company, not the IP.  Treat them with immense respect and it shall be returned.  Set examples and constantly check in with them to see if the startup is matching their expectations.

3. Be ethical.  Just today, I worked with a client and solved a very technical issue in about three hours.  There is a huge implied trust in the professional services relationship that I see violated time after time by unscrupulous companies figuring they can invoice people for extra hours and they will never find out.  I have news for you.  Even if they do not find out, you are really ruining your own reputation.  Uberity under-promises and over-delivers on every contract.  By doing this, we get repeat customers.  If a company is unethical, it will come out in the long term.  We are committed to being ethical in our entire customer relationships.  We have even done some smaller jobs where we did not bill as the time it took us to solve the problem was too minimal to even consider billing.  This does not imply weakness however.  We are ethical, we plan to be in business a long time.  We will not compromise this, no matter how tempting.  We also pay for software that we use to make money with.  We believe that a little honesty goes a long way in business and plan to make it a core part of our existence.

4. Don't be afraid to walk away.  We had an original plan to pursue a business model whereby people could post tasks and others could respond to them, perform them and get paid.  After performing weeks of due diligence, we discovered that these companies are likely not even earning revenue that would cover the interest for the funds VC's invested into them for a year.  After validating, re-validating, we decided to walk away and were prepared to re-assess our core beliefs and mission.  These other companies will probably succeed in the long term, we just feel we can make more revenue for less effort doing other things.  It takes a mature person to admit they had wrong perceptions and be willing to walk away as opposed to being pressured into sticking with a bad idea until it goes into a death spiral.  I am grateful to have partners in Uberity that are wise enough to understand this, powerful enough to embrace this and courageous enough to make changes when others might not have.

5. Build a business plan and answer the tough questions.  A business plan is not just to show investors, it helps put everyone in the company on the same page.  We got together and worked out what was required and what needs to be documented.  We are working on our business plan and it is hard.  It is very tempting to come across a tough question and think "I can just not address this now" however the reality is that the tough questions have to be answered.

Maybe none of this is new to you.  My hope is that someone writing a startup will see this and it will save you time and effort.  Uberity is not just about making money.  We are part of the technology community.  Our contributions are given freely with no warranty or accuracy or value.  Feel free to use or disregard this data however you wish.