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[Review] Startup From The Ground Up


Startup founder and consultant Cynthia Kocialski says that in many cases, many entrepreneurs are too in love with their technology and lack an understanding of the technology business. “I love start-ups and all the wonderful gizmos and gadgets they make,” says Kocialski.  “It’s one thing to develop a new gadget or piece of software that does something cool, but entrepreneurs need to ask themselves if it actually solves a problem. Cool doesn’t sell. Meeting the needs of consumers and businesses does. In the final equation, it is the business of technology that determines the ultimate success or failure of the product.”

Kocialski should know: she’s founded three companies – including specialized telecom software provider Vesta Corporation and fabless telecom semiconductor company SLI – and has been involved with over 20 startups in the past 15 years. She also writes the popular Start-up Entrepreneur’s Blog. Kocialski shares much of her hard-earned knowledge in her new book Startup from the Ground Up: Practical Insights for Transforming an Idea into a Business, which provides many practical insights for entrepreneurs to bring their ideas to fruition into a thriving business.

“The spirit of American business is embodied in the start-up,” says Kocialski. “Innovation and guts are the foundation of the start-up, and those qualities also happen to be characteristic of the most successful mega-firms ever to hit the market. Let those qualities form the dynamic of your start-up and you’ll be off to a good start.”

Startup from the Ground Up covers much of the same ideas that have been shared by many other commentators in the same space, but there are also gems in there that pop up and surprise you. Two of the biggest – at least to me – are:

The concept plan.

We’ve all heard about the business plan, but what about the Concept Plan? Kocialski introduces the idea of the concept plan, a more concise and shorter version of a business plan that you can introduce the business to partners, customers and advisors (and media!) with:

This is an advice-only proposal. The intent is to discover. It introduces the various stakeholders into the business process early… The real opportunity in the market will emerge and the successful product will evolve.

I agree. At certain early stages, most people won’t be too interested in your financials, and are unlikely to go through every page of your business plan in any case.

Marketing starts on Day 1.

Too many startup founders don’t quite grasp the fact that marketing should start from the Day 1, and Kocialski emphasizes this point well:

Marketing starts immediately – often before the product is available to the customer… Marketing builds awareness for your product or service. Talking to potential customers early in the development process ensures they are integrated early into a feedback and eventual beta program.

I know of some startup companies whose technical founders either think they – without any marketing background – can do their own marketing, or bring in marketing people so late into the company that there’s little chance of iterating the product into a more successful one.

In fact, Kocialski dedicates a significant portion of the book to address issues about understanding your customer and how to put together an effective marketing strategy, such as pricing.

The book is chockful of good advice, but I’m afraid you’ll have to get it to find out the rest. I’ll just leave you with some of Kocialski’s tips for anyone considering launching or financing a start-up company:

It’s Not About the Product.

Start-ups are not about the technology or product. The product is the heart of the company, but the product no more makes a company than a heart makes a human being. There are many components to a company that all have to work together harmoniously in order to achieve a success outcome.

Don’t Be Afraid to Discover.

The early stage start-up process is a discovery process, not a step-by-step execution process. Many first-time entrepreneurs believe you come up with a great product idea, then they come up with a detailed business plan, and finally they hire the people to execute the steps in the plan. Discovery is simply a starting point from which the product and business with evolve, iterate, and be refined as the concept meets the customers, the market, and the investors.

Retool and Revise.

The first product idea is never the final product that makes the company famous. In reality, the worst work you will ever do is the first work you do. Press forward past the first iteration, and make use of the lessons you learn along the way.

Build Your Team.

You need a team, but not just any team. You need the right team for that stage of a company’s life. You wouldn’t hire a college professor to teach kindergarten. For that, you need to find early elementary teachers. Ditto for start-ups. Find the right people for the right job, as well as the right attitude and stage of their careers to make them a match for working with a start-up.

Think Like an Investor.

Investors know and accept that investing in a start-up is a very high-risk proposition. If investors wanted a moderate return, they’d invest in publicly traded bellwether companies like IBM and Coca-Cola. What entrepreneurs don’t get is that, to an investor, the company itself is THEIR product. Entrepreneurs need to understand the investor’s perspective. Entrepreneurs engage in the deliberate creation of their end-user product, but what they also need to do is engage in the deliberate creation of the company. Investors buy into companies, not end-user products. For an investor, the best case scenario is a tested, proven business with a market that is poised to expand and grow rapidly.

Many thanks to Cynthia Kocialski for the review copy of Startup from the Ground Up.



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