Life in a startup incubator
(I wish I had read this blogpost before I’ve got into one;)
Now there are so many chances to travel, form a company and spend a 3-month period somewhere in the world – more than 300 tech-only startup incubators exist at the moment.
We ended up in Estonia and got a seed investment from GameFounders, Europe’s first gaming accelerator.
First of all, it was an experience of a lifetime. Sort of like traveling to India for the first time. Not because Tallinn resembles Delhi or anything like that, but we all had to change our mindset, learn and adapt.
We didn’t know what to expect at all. In early September, we were about to travel to a small country near Russia to participate in the first batch of a new seed incubator – without a contract that could have given us the least amount of security.
We got the acceptance notice 9 days before setting off.
I should have started my UX Design Masters in London in the middle of September.. The whole thing was a big mess!
One month later, we had two prototypes, an Estonian company, a seed investment, advice from 30+ mentors and a lot of opportunities.
In one sentence: it was definitely worth it.
But, there were a lot of really unexpected realizations during the time I spent there and these were the most important ones:
1. Seed incubators have only one goal business-wise: that you will get a second round investment as soon as possible.
You’ll have one person organizing the fund-raising, pitching and networking almost full-time.
This is a must, and you must plan accordingly. If only two of you are developing, designing and promoting the product, it will be really tough to get anything done during that 3 months period.
2. You’re gonna burn the seed money in 3 months and after that you’ll have another 2-3 months to survive – because usually that’s how long it takes to finalize the second round. If you have a completed product and revenue by that time – you’re all set. If not, then you have something to figure out. But you love challenges, right?:)
3. If you average out the advice you get from mentors, you’ll end up with the most generic product imaginable.
There will be a point when you need to start ignoring them and ask why they want you to do – insert whatever advice you got from them -.
They are mostly making assumptions based on their previous experience that has probably no use at all, as the market changed at least twice since they made their first success.
And of course, no one knows how good luck helped them to succeed, there are too many variables. But, as the mentors you’ll meet are highly intelligent, they are the guys who really want to figure it all out. And that could easily result (unintentionally) in bad advice. Your job is to filter those and keep the rest.
4. Going and staying lean is hard – and if you’re like most of us, it goes against your nature.
“If you are not embarrassed by the first version of your product, you’ve launched too late.” Reid Hoffman
Believe me, the last thing you want is being embarrassed by “your baby” that you’ve spent all your time on for months. It requires constant, conscious effort and willpower, something like a diet, or quitting smoking.
But seriously, every minute your product stays in “stealth mode” is a minute wasted. Nothing works as you initially imagined, and the sooner you realize it, the better.
We had to change the name of the application, the icon, the revenue model, and there will be a lot more to go. There’s a chance that the original concept will stay the same – although not much;).
5. Planning for more than two weeks is sometimes necessary – but also, completely useless. So don’t put much effort in it.
Before launching your product, financial forecasts look like this:
You’re multiplying a random number (audience) with a random number (conversion rate) with a random number (the price you initially want to ask for).
It means that you don’t have a faintest clue what the outcomes will be.
6. The toughest decisions are the ones that don’t really matter.
We spent days thinking and discussing “big” decisions we had to make – and at the end, we either had to choose a third option or the whole thing didn’t have any impact at all.
You better set a time limit for each decision and if you can’t make up your mind within that limit, the pros and cons are probably so balanced out that you should just flip a coin.
The biggest problem is that these “big decisions” don’t just waste time but consume a lot of energy, too.
7. As a startup, you can move fast. You can change your entire business model in a really short period of time – and that’s something big organizations can’t do. This is you edge.
Embracing uncertainty is something only startups can do. So, don’t be afraid. Anyway, the whole thing would be far less exciting without it.
If you have an opportunity, seize it. Change whatever you need to change, don’t get attached to your plans, preconceptions or habits.
So we spent 3 months doing – most of the time – things we had not done before. And the beauty of it is that you can’t prepare for it in advance… Problems come up, you have to learn how to solve them in a really short period of time and put your fresh knowledge into action like 5 minutes later. If you like these sort of things, you will be in the right place!
You should also read this thread on Quora, it’s funny as hell.