Early on in my process of creating Opulo, I asked myself a series of questions that I've found tremendously useful to have answered throughout my journey. I present three questions as a framework to set yourself up with a good foundation for the company, and the two things I've found it most important to keep in mind while running the company. This document is based on this video.
Before Starting
1. Why
The single most important thing to consider before starting a company (or any type of organization, for that matter) is "why". This question comes twofold:
a. Why do you want to do it?
So why do you want to do this? What's the main motivation and driver for you? Understanding why you want to start and run a company is important for determining if that want will pull you through The Dip. I knew that I got frustrated by inefficient and unintuitive systems that I don't have the power to control, I love to build things, and I want to spend my time doing things that are (and feel) useful. These are my personal "why" that drives me to build my company.
Write your personal "why" below, in the format provided:
I want to start and run a company because...
-- replace the line below --
I like building things, want to be useful, and want to design the systems I use daily.
b. Why should this organization exist?
Many companies call this their mission statement. This is the most important part of the entire process, and there is no correct answer. Based on the personal "why" that you defined above, the point of the company might be to provide delicious food and excellent service to your small town, to reduce the amount of greenhouse gas emissions, or to make manufacturing easier. And this cannot be "to make as much money as possible." Your "why" needs to be the reason you chose this specific avenue to make money, to have a self-sustaining business.
Write your company why below, in the format provided:
My company exists in order to...
-- replace the line below --
make mid-scale manufacturing easier.
2. What
The "what" is what you'll actually be building. Choosing this needs to be directly in line with your "why." There are two huge things to consider when choosing:
a. You're uniquely able to deliver
What you build should be something that fits you as a person. Would you enjoy working on it? Are you good at it? Do you have experience in it? Do you have a unique idea or some competitive advantage that makes you well-suited to tackle this solution?
Try to pick something that you believe you have a competitive shot at accomplishing, and that it will keep your interest and pull you through the process of making it, even when things stop being fun.
b. Product / Market Fit
I'll allow you to research this phrase more in-depth, but it effectively means: do people want what you're building? Asking folks in your target market about their experience using the current market solution, doing beta programs with an MVP to test your assumptions about what is useful for them, etc.
Write your company "what" below, in the format provided:
My company will make...
-- replace the line below --
affordable pick and place machines
...because my company exists in order to...
-- replace the line below with your company's "why" --
make mid-scale manufacturing easier.
3. How
Defining your "how" is a process of taking your "why," and applying it to large, organizational decisions about how you'll run the company.
a. Size and Speed
How big do you want to grow? What size best supports your why? If your why has an emphasis on reach and impact, being a larger organization might be what you should shoot for. Speed is a consideration here as well. If your personal "why" is to have a relaxing, stress-free job, then running a hyper-growth startup is not the best call. Consider what size organization you want to create, and ensure it ties back to your personal and company "why."
I want my company to grow...
-- replace the line below --
large and quick, but stable and considered
...because my company exists in order to...
-- replace the line below with your company's "why" --
make mid-scale manufacturing easier.
b. Legal Entity
LLC, Corporation, Sole Proprietorship, 501c3; there are all kinds of options. I'm not going to go into details here because there's excellent resources out there breaking down the differences between the types of organizations to form.
My one note about this is that you should consider forming a Delaware C Corp if you ever plan on raising money; the structure of it makes it much easier and safer for investors.
I will form a...
-- replace the line below --
Delaware C Corporation
...because it allows me to...
-- replace the line below --
raise money, offer equity to employees, and have more reach
...because my company exists in order to...
-- replace the line below with your company's "why" --
make mid-scale manufacturing easier.
c. Raising Money
In order to accomplish your "why," to build the company at the speed and size that you want, and to build what you've set out to make, how much money is required?
- Are you building hardware, or software (physical goods, or something that can be done from just a computer)?
- How much money is required to start your company?
- How important is equity and control to you?
- Do you want to have other people with a vested interest in your company's profitability?
I will need...
-- replace the line below --
X amount of money
...which I will get by...
-- replace the line below --
bootstrapping, reinvesting profits, and some investment
...because my company exists in order to...
-- replace the line below with your company's "why" --
make mid-scale manufacturing easier.
d. Many, Many others...
There are many other "hows" that you will discover as you build your organization; this is just a small subset!
4. Decisions
From here, it’s a lot of details, and a lot of decisions. Tons. And occasionally, about the weirdest, dumbest stuff.
The most important thing to keep in mind when making decisions is to remove your ego. People will disagree with you often. Accept every challenge as a chance to reconsider and go with a better approach, or to reinforce your confidence in your original decision. If you still think it’s the right choice, do it no matter how many people say it’s wrong. If you’re unsure and can’t defend your choice, consider their approach, thank them and move on, happy to have improved your process. A challenge is a gift.
It is important to also keep your "why" in mind when making every decision. Does the choice you're making bring you closer to accomplishing the purpose of the company? There are always exceptions, but it's important to at least consider it with every decision.
5. Handoff
The other main challenge I've had when running a company is finding ways to automate and remove yourself from the equation.
The Bus Test
Lucian and I frequently discuss if we'd pass the "bus test," where we determine if the company would stay afloat if one of us was hit by a bus, and removed from the equation in an instant. How much of what we do at the company is written down, documented, in someone else's head, and can be performed by someone else? We've settled on the idea that it's best to fail the bus test, but only just.
If anyone could immediately take over for us in our roles, it means we're probably spending too much time writing things down and documenting them instead of acting. But with all things, there's a balance, and there should still be an effort on getting things out of our heads and documented somewhere.
Tool or Project
Most solutions to problems can be broken down into the dichotomy of being either a tool, or a project. Tools are things that you use because they solve a problem, and they just work. You are not required to get into the weeds of how it operates, or understand what’s going on under the hood. A project is something that requires you to understand how it operates, fiddle with it, do deep thinking and troubleshooting with, and not be straightforward to operate.
In order to grow, you'll be forced to shift things over from project, to tool. Doing so means that you spend more and more of your time working on things that you're uniquely good at, and what gives you a competitive advantage. Typically this means either hiring people or paying for tools (in many cases, software), but I've included some free tools below that are incredibly useful for us here at Opulo.
Resources
- Project Management: Trello
- Remote Work + Events: Gather
- Custom Website: Wordpress
- Link Shortener and Tracker: Bitly
- Automation: IFTTT
- On Demand Merch Printing: Printful
- Web Store: Shopify
- Design Collaboration: Github
- Communication and Community: Discord
Disclaimer
Disclaimer: I am not a lawyer, and this is not legal advice. Ask a lawyer before making decisions.