Meebo CEO Seth Sternberg says don’t take venture capital money
This summer I was part of a project that, in my opinion, made many mistakes. The entrepreneur and his project manager felt they could build web software even though they had no programmer as part of their core team. They felt the technical work could be handled by a team in India. The 2 of them spent most of their time trying to raise venture money. They spent a lot of time honing their VC pitch – many hours were spent polishing the slides they used in their PowerPoint presentation.
Last time I checked in with them, they project had fallen several months late, they had mostly used up their initial money, and they were having trouble fundraising.
My own theory of the right way to go is “Form an awesome founding team and get your product out the door ASAP. Then, forget everything else, VCs included, and just build.”
So I was really glad to see Meebo CEO Seth Sternberg giving exactly that advice.
These 2 paragraphs, in particular, speak to the mistakes that I just saw on that last project:
At the exact moment you had your idea, ten other people had the exact same idea. There was just something in the environment that made it the right time for folks to think that one up. The race has already begun! Who’s going to execute first? Who’s going to execute best? If you want to waste nine months trying to raise VC money for that idea, great. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door. Now.
…First and foremost, find a great founding team. One person is almost never enough. You just can’t do it all. Rather, team up with one or two other people who have skills synergistic – not overlapping – with your own, but with similar goals and passions. I can’t tell you how frequently teams of three business school students tell me they’re going to start the next great consumer Internet company. When I point out that they’re all business people, and wonder who’s going to build the product, they almost always fall back on “we’ll get a couple of undergrads to do it,” or, “we’ll outsource it.” If I hear either one of those, I know the startup’s already dead. Sorry, folks. Harsh, but probably true.