Ask HN: How Do I Start a Startup?
20 comments
Sounds less like a startup and more like a dev agency or consultancy. Those are worthy pursuits. I run one myself, doing very high 6-figures with very little overhead (15% maybe). It’s a great lifestyle, very little risk.
My advice would be to scale fast. Hire subcontractors and productize your offering as quickly as you can. Never do hourly work, retainers only. Come up with a subscription product you can offer. Hire a tax accountant immediately and press them on ways you can lower your taxable income. Have a plan for when your income greatly exceeds what you ever thought it would be.
You’re on track to true independence. You never have to work for somebody ever again. You got this.
My advice would be to scale fast. Hire subcontractors and productize your offering as quickly as you can. Never do hourly work, retainers only. Come up with a subscription product you can offer. Hire a tax accountant immediately and press them on ways you can lower your taxable income. Have a plan for when your income greatly exceeds what you ever thought it would be.
You’re on track to true independence. You never have to work for somebody ever again. You got this.
> My advice would be to scale fast. Hire subcontractors and productize your offering as quickly as you can.
So.. then you are back to the startup idea? I don‘t think that works for a lot of consultancies, does it?
So.. then you are back to the startup idea? I don‘t think that works for a lot of consultancies, does it?
I’d suggest considering why you think scaling fast is a “startup” idea and not just a profitable business tactic.
In my case scaling fast meant bringing on 3-4 subs who could knock out a standardized set of deliverables that I created and trained them on. I did that within a year. I’m sure there are exceptions but I think most consultancies could do this.
In my case scaling fast meant bringing on 3-4 subs who could knock out a standardized set of deliverables that I created and trained them on. I did that within a year. I’m sure there are exceptions but I think most consultancies could do this.
Do you have a blog or anywhere you share your story on this? I’d be curious to learn more about your experiences.
I’m on the way to doing what you do. Would love to connect to learn more about your path and get some advice. Would you mind?
The good things:
1) You have industry connections which can be very valuable in the right scenario. Your best bet is to be a business cofounder. But, I wouldn’t give 50% for a business cofounder until they can demonstrate their value in $$ terms by signing contracts with customer.
The bad things:
1) You don’t know what you want to build
2) Doing grunt work is a very different reality from executive leadership. You might be in for a real wake up if to decide to do this.
3) Product market fit doesn’t care about how much money your startup has. Getting there is the hard part. Everything else is useless until you get there.
4) You don’t have a product or idea, why register a company? To seem legit or raise money?
5) Will SWE join your startup in this hot market? It’s going to be a tough sell. Money talks at the end of the day.
You are not a product or engineering guy. You are a business guy. That might not be enough. Just my 2 cents.
1) You have industry connections which can be very valuable in the right scenario. Your best bet is to be a business cofounder. But, I wouldn’t give 50% for a business cofounder until they can demonstrate their value in $$ terms by signing contracts with customer.
The bad things:
1) You don’t know what you want to build
2) Doing grunt work is a very different reality from executive leadership. You might be in for a real wake up if to decide to do this.
3) Product market fit doesn’t care about how much money your startup has. Getting there is the hard part. Everything else is useless until you get there.
4) You don’t have a product or idea, why register a company? To seem legit or raise money?
5) Will SWE join your startup in this hot market? It’s going to be a tough sell. Money talks at the end of the day.
You are not a product or engineering guy. You are a business guy. That might not be enough. Just my 2 cents.
It sounds like a consultancy? I think you'll have a tough time raising capital as consultancies rarely sell for the sort of multiples that VC investors want to see. They want a compelling story that's going to yield a 100x return.
Definitely go the c-corp route. You'll have an easier time closing deals since your customers don't have to issue 1099s and can just pay your invoices. And if you ever do find someone willing to invest, the stock issuance is so much easier than dealing with LLC operating agreements.
Definitely go the c-corp route. You'll have an easier time closing deals since your customers don't have to issue 1099s and can just pay your invoices. And if you ever do find someone willing to invest, the stock issuance is so much easier than dealing with LLC operating agreements.
S-Corp customers also don't have to worry about 1099s. They also tend to offer substantial tax savings vs a C Corp. They are less attractive to VC investors, but should work fine if the author plans on scaling by introducing partners instead of passive investors.
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The difference between an agency/consultancy (selling services) and a product company is enormous. There are other advocates here for product, but since the $100k you mentioned is probably for a services engagement (you don't have a product yet), I'll share a warning about that model for a startup. When your business sells services, you essentially become a broker between people who need a type of work (your customers), and people who can do a type of work (your employees and sub-contractors). The health of the business, then, is tightly dependent on the relationship between the demand from your customers, and the availability and cost of the people with the right skills to execute the work. Assuming you're already in a good place to gauge the customer demand, my warning is about staffing to execute the work. It's easy to imagine that legions of the experts you've worked with previously will be inspired to join you, but you'd be surprised how untrue that can be (or possible but more expensive, due to the risks of a smaller company). Yes, it's possible to create a great, sustainable services business, but it's important to be aware of the challenges you can face with staffing, retention, keeping customers happy, and doing it all within a commercially viable margin.
Sounds like you are doing consultancy. You seem contradictory.
Everything is smooth and easy for you but you are lost too?
Here is my road map:
- Hire people
- Give them work
- Get paid and pay
- Change whatever you see is not working well
Good luck and I wish you luck.
Everything is smooth and easy for you but you are lost too?
Here is my road map:
- Hire people
- Give them work
- Get paid and pay
- Change whatever you see is not working well
Good luck and I wish you luck.
For creating an optimal Delaware Corp I highly recommend using Stripe Atlas which greatly simplifies the process to create an optimal structure for receiving future investments:
https://stripe.com/atlas
Otherwise IMO the biggest challenges for Startups is raising awareness, getting sales and creating USPs that customers are willing to pay for, which is where I'd recommend the primary focus of Startups should be in their preliminary years. After you're able to establish a pattern of increasing revenue is a good place for the next step whether it's seeking funding or hiring to accelerate product development & sales.
https://stripe.com/atlas
Otherwise IMO the biggest challenges for Startups is raising awareness, getting sales and creating USPs that customers are willing to pay for, which is where I'd recommend the primary focus of Startups should be in their preliminary years. After you're able to establish a pattern of increasing revenue is a good place for the next step whether it's seeking funding or hiring to accelerate product development & sales.
i agree with the other commenters that it sounds like perhaps you're looking at a string of consulting / contract engagements, but perhaps don't have a product.
consulting could be a way to explore the space and start to get ideas for a product or repeatable offering.
maybe also of interest:
https://commoncog.com/blog/the-consulting-business-model/
consulting could be a way to explore the space and start to get ideas for a product or repeatable offering.
maybe also of interest:
https://commoncog.com/blog/the-consulting-business-model/
Talk to an accountant and a lawyer. Register something, probably a simple LLC would do but no generic advice is possible on exactly what and where to register - it depends on your personal situation.
Do some business for a year. There is nothing like learning by doing, none of us have any idea what your skillset is and how you're making money to give you advice.
Why do you think you need investors at this stage if you're already profitable?
Do some business for a year. There is nothing like learning by doing, none of us have any idea what your skillset is and how you're making money to give you advice.
Why do you think you need investors at this stage if you're already profitable?
> can snowball into lots and lots of “small” B2B contracts
Presumably you left to do your own thing for a reason. They could snowball, but is pursuing those contracts what you want to do?
Pick something you want to build and build it. I've learned that you don't need to be an engineer, but you do need to really want to build it, otherwise someone who actually wants to will come and build it better.
Presumably you left to do your own thing for a reason. They could snowball, but is pursuing those contracts what you want to do?
Pick something you want to build and build it. I've learned that you don't need to be an engineer, but you do need to really want to build it, otherwise someone who actually wants to will come and build it better.
Woah, your post sounds like it could have been written by me. Trippy. Anywho, I look forward to reading responses. In my case, there is not the drive yet, and I feel like that is among the hardest parts. Hopefully in your case all good and just in need of legal/finance related next steps.
1. Minimum Viable story - get a provocative idea
2. Minimum Viable Social Group - A group of people who are excited about the minimum viable story.
3. Minimum Viable Product - A working prototype that solves a pain point.
Echoing the others, sounds like you're trying to starting a consulting agency (the difference being a startup focuses on solving a specific problem).
Either way, incorporation can be done using services such as Stripe Atlas.
Either way, incorporation can be done using services such as Stripe Atlas.
Build something practical with real target. It's the start.
The rest is of course, history.
The rest is of course, history.
follow what you love...the rest will come
So I decided to Start My Own Thing. Kind of. I feel like I have good intuition here, maybe not, but much of that was within confines of existing entities and more importantly structures. So, started my own thing. Under my name pitched something under software and got a $100k contract, very easily, based on my personal capability alone.
I do not care about $100k, and it is almost not noteworthy. Except I feel like based on my industry knowledge I can turn this small contract into goodwill that can snowball into lots and lots of “small” B2B contracts of similar sizes and maybe be a real thing. I have a lot of talented SWEs in my rolodex I could call. But, assuming maybe I’m right, and I can turn this small thing into a big thing, I really don’t know what to do here. I am used to fast growing things. I am thinking come up with a company name and start a Delaware c corp, and then the for contract #2 and then maybe start pinging outside contacts at various SV firms for some seed capital to expand to similar deals 3-10? I really don’t know.
Overall: I feel like I have the skills, have some market fit (?), have the personal history, and could theoretically build a well-heeled team. But I have never actually started a startup myself and am totally lost. Can someone suggest a roadmap to the practical aspects of Starting a Startup?