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3 Things Every Founder Should Know Before Starting a Company

 

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Starting a business seems like it should follow a logical progression: build a product and sell it for a profit. In reality, the early days for the most successful companies are exactly the opposite.

The experience of founding Abacus three years ago has taught me that the conventional approach to launching a business is frequently not the best.  In fact, what the fastest growing companies focus on is somewhat counterintuitive. It’s typically not building products or counting profits, but rather obsessing over a problem, doing things that don’t scale and being deliberate about culture.

Here are the top three things I wish I had known before founding Abacus:

Don’t start with the solution, start with the problem

It’s easy for founders to become so enamored with what they’re building that the product becomes a solution in search of a problem. Understanding your customer’s pain points are everything. The best way to build in-depth knowledge is to go speak with as many prospective customers as you can, perhaps even before starting to build your product. Keep your ears open and your mouth shut – leading questions may get you what you want to hear to convince yourself this project is worth working on now, but it won’t get the customer to sign on the dotted line.

If after speaking with 20 prospects that you thought had this major problem they would pay to solve, half of them don’t immediately understand and confirm that it’s a top-three priority for them this year, then process what you learned, revise and repeat. The secret sauce of most successful companies is born in this phase – the place where you discover a particular insight that you know to be true, while others working in your space believe it to be false. It’s hard to stand out from the crowd, and this early insight will help you understand what one thing you can do 10x better than the next best alternative.

Do things that don’t scale

In the early days of starting a company, your job is not to prove that the business can scale. It’s to show that the problem you are solving is a major pain point to someone who is willing to pay for it. This applies to everything from meeting every early customer in person to providing unbelievably personalized customer service.

Even though your price point may not justify in-person sales, it’s well worth the visit. You will gain the kind of valuable product feedback that can only be shared in a face-to-face meeting and build a relationship with someone who could be a happy customer reference for you down the line. This customer is taking a risk on you in the early days, so to counterbalance that concern, show up at their office, shake their hand and let them get to know you, because it’s you they’re buying at that stage, not the product.

Customer service is another great area to go above and beyond in the early days. Surprise and delight customers with a handwritten note and a box of cupcakes just because you know they have a sweet tooth. Respond to their question within five minutes at 11 p.m. on a Saturday night. At the earliest stages, doing the things that don’t scale is your competitive advantage over the 800-pound gorilla that views your customer as just another number. You won’t be able to do it forever, but do it for as long as you can so that both you and your customers benefit.

Be deliberate about culture

As a founder and employer, the work never ends and time is never on your side. It is easy to get caught up in the daily shuffle and forget that you’re all working towards a common mission. In the earliest days, at five employees, the culture of the company is the combined personalities of everyone in the room – it’s clear what everyone is working on and how motivated the team is. Once you double to 10 employees, a big part of your job becomes curating and reinforcing that culture. Cultivating the values, rituals, shared work style and physical environment of your team will ensure that the roots of your organization are strong enough to support the impending chaos.
Doubling again to 20 employees, you begin to do things like hone your shared hiring philosophy and seed the types of team off-sites and events that will bring everyone closer together. Currently at Abacus, everyone on the team is working together to create a process for how we intend to share information and feedback with one another. However, at each of these stages, you have to know who you are as an organization, what you’re aiming to do and why you’re doing it, and continue to remind the team. There’s always going to be a lot happening, but this is the only way to keep the company pointed true north.

 


 

Image Credit: CC by: hslo

About the author: Omar Qari

Omar Qari is the cofounder of NYC-based Abacus, an automated and intelligent expense management platform that allows companies to gain real-time insight into corporate spend. Omar founded Abacus in 2013 with a simple idea: when employees at your company incur expenses, you should be able to pay them back quickly. Abacus has been designed from the ground up to keep pace with the speed at which business now moves.

Prior to founding Abacus, Omar worked both in the states and internationally for financial institutions Wachovia Bank and Abraaj Capital. Capitalizing on his financial background and Wharton MBA, he joined Foursquare, where he worked in payment partnerships and mobile distribution, before leaving to found Abacus and fill a void in the industry, intelligent expense management. Qari holds a bachelor’s degree from Wake Forest University.

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