I was contacted by the daughter of an entrepreneur who worked with me in the 1980’s. The last time I saw her she was just about to graduate from the University of Georgia. She is now married with two kids and, this past January, started a new business called Swatchpop. Swatchpop helps consumers solve decorating dilemmas. The dilemmas can be anything from a fireplace mantle needing a special touch to an entire bedroom in need of replacement.
Jessica and her partner, Kristin, have known each other since high school. In seven months they built a website and attracted fans who pay for their services. They have revenue. They have a unique methodology of matching homeowners’ tastes with professional decorators, all through the web. All communication between the parties is anonymous, and I was told that’s how the decorators like it. It also has the potential for capturing the consumer purchases through the site. This makes it really interesting.
As partners, they are nicely matched. They are both working moms with deep sales experience—one in healthcare and the other in internet advertising. Both are successful at what they do. They are professional, poised and present well. And when you meet them, you can tell they love what they do and the people they do it for.
Neither of them has ever started or run a company. Their first step, before spending any real money, included talking about their idea with their target market. They had lots of discussions in person and over Facebook. They were convinced there was a need. They then invested in a prototype website and promoted it via Facebook. It took off. They have recently launched version 1.0 the website, and they are doing business.
I was particularly impressed with how careful they were in getting started as well as their concerns for expansion. They learned this methodology from taking courses online through Udemy. This included Lean Startup methodologies and an understanding of customer acquisition costs.
Looking Past Now
Now they want to know their next step. They weren’t sure if they should hire a full-time developer, raise money from angels or apply to present at this year’s Venture Atlanta. They had lots of questions because they have a business with early traction. As you can imagine, they are getting lots of advice. But whose advice should they trust?
I recommended they begin building a vision for what they believe this company might look like in a couple of years. They are currently only focused on increasing site visits and capturing new customers. And they are doing a great job as they are growing 30% month on month. With all that is going right, they are faced with the nagging feeling all entrepreneurs have, “What don’t I see that is going to hurt me or, worse yet, kill me?”
In our conversation we discussed the importance of a technical cofounder. In addition, I believe they need someone who knows the B2C internet business and has the network to bring the right early stage money and partnerships. That person also needs to authentically care enough to stick with them and help them grow and succeed.
After they left my office, I started to think like them. What can kill this company? My answer is the people they will associate with in the next 12 to 18 months. These people will either complement their culture or kill it.
Making Choices Carefully
I called the founder the next day and said, “Choose these next cofounders and investors carefully. Just like you were very careful in choosing a husband, be that careful in choosing these people. Take the time to know what you are looking for and don’t settle. You are getting married all over again. Just like you asked yourself the question at one point in your life: Do I want this man to be the father of my children? You should similarly ask if these people you partner with next are the kind of people you want in your life for the next 10 years.”
Startups are about more than founders. Startups grow, stagnate or die based in large part on the next set of people who join the company to work, invest and advise. Just like a good marriage makes for a good family, the early core group of the startup can make for a great company.