Sunday, February 10, 2013

About building a startup

To be honest I do not really identify much with being called an entrepreneur. When I hear the term entrepreneur many great people pop into my head. People from whose great achievements I am still far far away. But I guess its meaning still describes best what my business occupation is. Together with my great partner Reinhard Nowak I am co-founding and building the industrial startup LineMetrics as COO. A lean machine data acquisition service for manufacturing SMEs.

Backstory

A couple of days off around new year 2013 gave me time to take a step back and introspect my business experience in life so far. Writing down stories and anecdotes quickly formed the desire to make a blog post which hopefully will contribute to the learnings of someone else. Now imagine a two page essay boasting about how I worked hard and demeaning summer jobs right from the minimum legal age for work in Austria. A story about internships abroad, my return home to gain experience in different IT jobs, and my insights while founding and running two service companies with focus on IT services. Let's skip all that, leaving all the wondrous details for my memoirs. Instead let us take a closer look at what drives me at my current occupation and what I am afraid of most.

Before we continue please note that the following observations are mostly derived from my own experience during the last fifteen months. I am convinced that to every single statement there will be at least one real world example which backs up the exact opposite point of view. Please accept that my opinions will not hold true in every possible situation. You yourself are responsible to learn and adapt what you think will work for your endeavor best. Please don't blindly follow what others are saying. There is not one single way of doing it to fit them all.

Differences between founding a company and building a startup

To understand what building a startup means is to understand that a startup is not a smaller version of a company in the conventional sense. A startup is a special form of company which is in constant search for a working business model that does not exist yet. Coming from companies who executed on proven business paths this was one of the most important insights to have. At this moment in time luckily there is already a great pool of resources available, online and offline. Especially the contributions of Steve Blank might save you a lot of time when trying to understand how startups work. And it surely does not matter if you are at the beginning or in the middle of your startup journey.


Provided with this knowledge you soon realize that structuring and executing a startup like a traditional company most likely will not work.

Another great insight was the moment when we realized that running a startup as a part-time hobby alongside our other commitments was not going to cut it. There are startups which are built within two weekends. LineMetrics is not one of them. Once this realization kicked in both of us made quite harsh decisions almost overnight. We cut back from almost all our obligations outside LineMetrics and focused on building this startup only.

For me that meant to leave several small side projects and hardest of all to part from my own IT company. Within six months we managed to transition exclusively to this new full-time commitment. I want to apologize to all the people who were affected by our decisions. I know we did not make it easy for many of you. In some cases our absence still is felt. I am truly sorry for that. At the same time I want to thank all of you for being the wonderful understanding people you are. Every single one of you respects our decision and supports us on our way. Everyone understands that this is the way it has to be.

Concerning the affected relationships and businesses the decision was far from easy. Other than that there was not a single moment of doubt. To exchange a stable, convenient life for a life full of uncertainty and risk is often not apprehensible by my surroundings. But you have to understand that it is just about perception. For the entrepreneurs I know building a startup is neither uncertain nor risky. We share a mindset which is aware of obstacles but also allows us to look behind them and envision a goal worth reaching.


One thing I mentioned earlier that is mostly missing in traditional companies but at the same time drives us at LineMetrics is the challenge to identify and implement a perfectly scalable and viable business model.

Another strange thing you experience while building your startup is the infamous startup roller coaster. Starting up literally has its own cycle of ups and downs. Not something we appreciate but what we came to accept and nowadays embrace. Those cycles were also present in all my previous work places. But not with that magnitude that shows in startups.

One important directive at LineMetrics is the practice of bootstrapping. It is our obligation to spend money wisely and not wasteful. To simply life within or below our means. In the last couple of months I have negotiated contracts and fees I would never have thought of negotiating previously. We came to appreciate every single cent saved which gives us one cent more to breathe at a later stage. It is incredible how supportive your environment can be if you are willing to put some effort into it. For us it is crystal clear: LineMetrics will be bootstrapping until sustainable. And then a bit further.

What drives me individually

I guess it is easier to start with what is not driving me. For me personally it never was important to be my own boss. For me it is more about the freedom in execution than freedom of hierarchy. A good boss will give you enough space to unfold your talent.

Another thing I despise is doing it for fame and money only. Of course we are a for-profit organization and we have our financial expectations at some point in life. But building brand recognition around a person seems just like a stupid concept. I do understand that for some enterprises that has worked incredibly well. And also is working after the death of the idolized individual. For me it always was more about building marvelous products and a surrounding brand that can last without prominent public faces.

For me I have discovered two main sources of motivation. One big area of motivation are the constant challenges. To overcome obstacles which seem unconquerable. Externally occurring obstacles and obstacles in your own mind. The constant struggle with your own limitations and finding ways around them is what truly makes me an addict to this lifestyle.

The other big source of motivation was not there from the beginning but got really clear to me in the last months of my journey. It is a desire to create sustainable companies which offer jobs that previously have not existed. I am not on a mission to just create as many jobs as possible. But I like the idea of personally measuring my success for myself in numbers of meaningful and reasonable jobs created.

The most important skill

There are many useful skills when building a startup. Of course it is always nice to have a founder who is good with numbers or technology or has some other field of expertise. But there is one vital skill in building a startup which truly stands apart. A skill needed in addition to one specific field of expertise. The skill to connect with people and to build a strong network supporting your endeavor.

Communication is the key ingredient. Being open and talking to everyone. There is no use in treating your great business idea as classified secret. Networking just is that important. Networking in the sense of "connecting with other people through people you talk to". Everybody knows somebody. Not networking in the sense of "just trying to sell your product to everyone".


Between my co-founder and me it can vary greatly on who is more sociable. It mostly depends on the occasion and circumstances of an event. But in the great scheme I have to admit that I previously was not very sociable around new people. Reinhard does a really great job in it and is my inspiration. It is one of my new years resolutions to further improve my social skills this year.

The biggest fear

One might think an entrepreneur constantly fears business failure. But to be honest this is not a great source of concern, if at all. I have great confidence in our team and there might be one or another pivot on our path but in the end we will be successful.

For me the biggest fear is the fear of failing my family and failing myself. To sacrifice too much of valuable family time. To demand too much from my spouse. To miss too much time of my kids growing up. To never reach our own and mutual goals. Several years ago my goals and ambitions were very vague and very far away from the present. But as I am getting older my goals are getting much clearer and distinct.

This is an area I am currently trying to tackle more seriously. I just have finished to read the free extract of the book Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur at Amazon. I can relate to all of the statements made in the extract. The startup is a very big portion of an entrepreneurs life. But it is not the whole life. I am looking forward to read the stories in the book. Maybe I can tell you more about my learnings some time.

2 comments:

  1. >> For me the biggest fear is the fear of failing my family and failing myself.

    Wolfgang - I am in exactly the same "shoes" - At kWIQly (we are in contact elsewhere), we are trying to change the world a little bit - but I find the biggest challenge is being prepared to change myself !

    Regards the "social skill" - I believe that an Entrepreneur has to have a little "challenge" in them (they may not always be the easiest of people to like) - but I agree that this is the key issue to overcome

    Nice blog will pop by now and then - (if you want you will find me at http://blog.kWIQly.com ) - and when we meet up we will have to practice our social skills over a couple of beers !

    ReplyDelete
  2. Thanks for dropping by James. Reminds me to be more active on my blog.
    As for the post: had a lot of chances to get out of the comfort zone this year. Some cringeworthy but mostly good experiences. Beer seems to be a great way to enhance the experience. Looking forward to our practice :)

    ReplyDelete