Entrepreneur Geek

Naval Ravikant writes an insightful post on Venture Hacks on picking up a co-founder for your startup.

The best combination: One person who can build the product, and another that can sell. With a history of working together and common motives.

Now that may sound like common sense, but picking a co-founder is not as easy as it seems. Making wrong choices is fatal. Naval’s observations are right on spot.

Here are some of my favorites:

• If one founder wants to build a cool product, another one wants to make money, and yet another wants to be famous, it won’t work.
• Pay close attention — true motivations are revealed, not declared.
• If it doesn’t feel right, keep looking. If you’re compromising, keep looking.
• Avoid overly rational short-term thinkers.
• Business founders who don’t code use bad proxies for picking technical co-founders (“10 years with Java!”). Technical founders who don’t sell also use bad proxies (“Harvard MBA!”).
• If you’re going to fall out with your co-founder, do it early.

Anyone interested in starting on their own, must read this.

Are you feeling the heat of times? There aren’t sufficient interesting & rewarding web projects out there. Everyone either wants to copy some social network / iPhone app or just wants to get it done at weekly grocery cost.

It’s not easy to find projects, so you may tend to pick up anything that comes your way. But beware!

Greg Hoy (on A List Apart) talks about five warning signs you should watch for. He recommends avoiding such customers. They will create problems later. And with my 11 years in web design / development business, I couldn’t agree more. I’ll even share couple of my own warning signs! Plus I have a list of positive signs from customers at the end.

Let’s start with Greg’s list of 5 red flags to Getting To No:

1. The never-ending contract revisionist: clients who can’t settle on the terms, keep asking for material / mocks upfront before taking decision
2. The giant project team: more than 3 people on client’s team is harmful. My experience says more than 2 is deadly as well.
3. Mr. or Mrs. Vague: All of us have them. Ask them plenty of questions.
4. The prospect with ants in their pants: clients who want it done yesterday. Sure shot problem creator. Charge rush rates.
5. The vanishing boss: Now he’s here, now he’s not. He’ll be present in the first “vision” meeting, and vanish until you deliver on the second milestone. And then claim “you’ve got it all wrong”. Solution: keep him in loop – email, phone, text – whatever works.

And here are my additions to the list:

1. Wannabe web millionaire with no commitment: someone who wants to make tons of money with this project, but has no time, money and background. He probably got an idea and his friends told him it’ll tick. But a good idea doesn’t make a business success. A project needs higher commitment from the client to succeed – higher than your own commitment.
2. Mountain of molehill’er: They give you one line requirement, like, “I want a Facebook clone”. Another version is “I want Facebook + Google Analytics + the next big Web 4.0 startup”. All your alarms should ring when you hear something like that. The spec will grow faster than mushrooms.
3. The Window Shopper: They ask for price / time estimates first. Have a long list of suppliers they are evaluating, but don’t have clear parameters for evaluation. May not have the time to answer your questions or may answer generically. Such guys will either go with the vendor who bid at 60% of the highest bidder or scrap the project.

Here are 3 signs of good prospects – do whatever it takes to win them

1. The Lake Water Guy: Such prospects give you clear specifications, are calm and understanding. You can sense their calmness even when you speak to them. They have clear vision of what they want – may not know the technical details – and passionate about it.
2. Suggestions Welcomed type: a prospect who’s willing to listen to your ideas is grounded and open. They will respect your skills and the discussions will make the project better.
3. Been There, Done That, But Not Boasting It: These are people who’ve seen the ups and downs, have failed a few times and have seen successes too. They understand there will be challenges and are ready to give you the time and space to handle them.

What kind of customers have you seen? What’s your list of positive / warning signs?

(Image courtesy dev null)

Read Jeremy Chone’s post about “Are You a Seesmic or Balsamiq Entrepreneur?” today. I love Balsamiq Mockups and have been using it for more than 6 months now. Peldi – the entrepreneur behind Balsamiq, his blog and ideas were also an inspiration behind us starting AppsMagnet.

The question Jeremy’s asking is whether you are a “scale-first” entrepreneur or “monetize-first”. With scale-first, you would go capture a big market share and then think about monetization. With “monetize-first” you will ensure your venture is cash flow positive from early days. Your plans will focus on getting more money.

I prefer the money-first approach. Guy Kawasaki suggested it in the Art of the Start, and I have experienced that cash flows are one of the most important factors for a business. When you focus on getting cash every month, instead of raising external / venture funding, you are much more relaxed, have faster (instant?) gratification and are on solid ground.

This has been the driving factor for AppsMagnet too. We have sold 32 copies of our Reports module for activeCollab in about a month, and PlannerX has received very good reviews so far. As a matter of fact, we have many people looking forward to the activeCollab version of PlannerX!

What type of entrepreneur are you?