It is easy to say this now, but when I started in 2008 many of the articles and suggestions I could find on the internet for fundraising and getting investors interested were based on startups in USA. In hindsight, and in my experience many of them proved to be an ABSOLUTE WASTE OF MONEY. I could have used that money for so many better things. However what I found most amazing is that in the past 7 years as I started helping other entrepreneurs in their journey, brainstorming and evaluating strategies, looking at the funds required to get different projects off the ground, I found that they were also infected by those suggestions and ideas. Each time I heard someone suggest spending their hard-earned cash on one of those useless things I would SCREAM, but I guess experience is the name we give to our mistakes and some will never accept it and of course, my experience does not have to be yours.
Nevertheless, I will share with you what I think is an utter waste of money.
In no particular order:
- Domain names. In today’s world, your domain name no longer affects your Google ranking. Don’t waste your money on buying premium domain names or registering all the possible extensions of your unique domain name. Instead use the money for marketing.
- Functionality over looks. I have seen so many websites that scream when it comes to design, yet they are functional. Craigslist, Mil Anuncios, including most of the banks I have had an account with are some simple examples. For years these websites were just basic squares and buttons with no design element. Yet they were functional.
- PR Firms. “You have been selected by our editor to be on our front page. The cost is only €2000”. Really, if you were selected and you were that important they wouldn’t be charged, they would have to pay you. Concentrate on keeping your clients happy and helping them get what they need from your software / service. They will be your best and cheapest PR.
- Expensive Accountants. Do you really need it? At the beginning your accounting is simple. Don’t complicate it. Take a 1 day crash course in understanding the basics of accounting now. It will help you when you really start managing your company and you can always hire a CFO when you have the cash. For now, keep it simple and spend the money on making sure you learn the most at this early stage.
- Specialized Lawyers and elaborated founders agreements. Do you really have time and money to waste? The accountants and the lawyers were two items where I wasted more money than anything else. Money that was abosultely good for nothing. Keep it simple. There are plenty of simple founders agreements out there. Pick the simplest one and agree on the most basic subjects: Who puts in what effort, time and money. Keep it to just one or two pages. Keep it simple. If your startup project works and you all put in the effort, you will all earn a good living.
All in all, I think the advise out there on getting a good accountant, PR firm and specialized lawyers is too overrated or better said and ABSOLUTE WASTE OF YOUR MONEY. It is ALL GLORY and if you fall for the trap, you fall for following GLORY rather than your PASSION. Use your time and money wisely on getting to market and getting the product out there. Focus on sales, Focus on sales, Focus on sales (Should I repeat it one more time? Yes, Focus on sales) and focus on keeping the clients you have happy. They are your best bet.
Struggling to see what is important and not? I would love to help. Just drop me a note and we can talk.