8 Tips for Early-Stage Startups
Justin Kaufenberg was wired for entrepreneurship even before he knew the word. From the time he was a pee wee, his father encouraged him to identify problems, and find solutions. He did just that with SportsEngine, an enterprise software platform for youth sports used monthly by more than 35 million parents and coaches. Now on the other side of the startup world as an investor with Rally Ventures, Kaufenberg offered advice for early-stage founders on a new episode of TCB podcast By All Means. “I get really inspired by those early days moments where people who aren’t supposed to succeed do,” Kaufenberg said. “It’s the ultimate meritocracy.”
1. Just start.
“Just stop doing what you’re currently doing and start. Because the idea is never going to be right; the first direction is definitely not going to be right. The only thing that you know for sure is whatever your idea was on the first day is wrong on the second. But you can’t get to the right idea if you don’t get moving.”
2. You’re never too young.
“If I could encourage young people to start a business even before they’re comfortable trying it, I would just push them to do it. The relative cost of failure is low, and it gives you this interesting perspective. I started looking at every problem like a potential opportunity.”
3. Create a customer advisory council.
Kaufenberg suggested rounding up 25 prospective customers to analyze an idea “before you’ve written a line of code. Have them tear it apart. Then revise and show them again. If you’re not doing that, we’re not interested in investing.”
4. Find paying customers before the product is perfect.
Success almost never comes from the original vision, Kaufenberg said. “It’s because you refined again and again and finally put something out that changed people’s lives. It’s almost impossible to do that without customers giving you constant feedback and they’re not going to do that unless they’re paying.”
5. Get to 100 customers.
“Product/market fit doesn’t mean a couple of people. To 100 customers, it’s got to be magic and life changing.”
“Be great, not good, at one thing in the early days. Even if it means you leave other opportunities on the table.”
7. Keep your investor pitch simple.
“Be concise and use plain language. Entrepreneurs know their idea so well, they often want to explain in great detail with technical language that others don’t understand.”
8. Be fiscally responsible.
“Re-achieve profitability after each funding raise. It makes it that much easier to raise the next round.”
Listen: Kaufenberg’s founder’s story is on By All Means (available wherever you get your podcasts)
More advice: Kaufenberg shared his exit strategy in StartMN