Wednesday, July 11, 2007

Crowcroft's 10 Laws of Startups

1. Start with two founders, both technical. One must be prepared to move to management (e.g. do MBA) - they can then decide on equal but different footing. Three (unlike stools) is unstable.

2. You need to realize that your first idea is not going to make money. Nor is the bigger, better system you build after you get money. Something very dull and boring based on lots of perl scripts and mysql that you write to make ideas 1 and 2 work may very well turn out to be the winner. If you can GPL the first idea, give away the second, then make money o nthe third, you are probably in good shape.

3. you need to have either very small or very large first round funding - otherwise 2nd round will result in an unsable stock split, and endless arguments, and probably a new CEO

4. Hire a CEO who understands technology, not one who relies on secretaries to read their email and work their voicemail.

5, Do not split over more than 4 hours of timezone differences between sites.

6. Do not waste time and money on IPR (patent,copyright) - write that code faster so the competition are getting further behind.

7. You have 3 exit strategies that are good, one that is ok, one soso, and one that is bad
i) get acquired
ii) IPO
iii) stay a profitable business, but never big
iv) pay off the seed money and go dormant
v) fail to pay back the VC.

8. laugh at your first marketeering and white papers when talking to technical customers about them.

9. eat your own dog and cat food.

10. Computer scientists start lists with zero.

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misery me, there is a floccipaucinihilipilification (*) of chronsynclastic infundibuli in these parts and I must therefore refer you to frank zappa instead, and go home