notes on founding a company
September 2, 2010 | By Peter Bihr |
As I mentioned before, I’m in the process of founding a company. By ways of documentation, and because it might help others in the future, here’s a few of the bits & pieces I’ve learned so far, in no particular order:
There is no right timing. Move. Move now. When you’re ready to go, you go. There’s always something in the way, at any time: a conference, something you organize, a pitch, a client project, a move. Do it anyway, now, because otherwise you’ll just keep postponing.
For example, between my two co-founders and me we have on our list: organizing a conference (two, really), two moves to Berlin, potentially another one within Berlin, work, vacation. Just to name a few.
When the time is right, it’s right. You’ll know it. Do it.
Parallel processing is key Sounds awkward, what I mean is this: Setting up a company (at least in Germany) means having to do all kinds of paperwork and organizational stuff. There’s the founding contracts, Terms of Services, work contracts to draft. You have to choose the type of company. Branding and website. Client acquisition. Your regular work. Maybe funding to find. Also, while all of this is going on, you need to get into your workflows, so it’s a constant negotiation with your partners about who’s doing what and how. This is the practice period. Use it to learn about each other, to get to know each others’ workflows. Establish the best communication channels, particularly if you don’t work in one spot at the beginning. At times it will feel like juggling with a few too many balls. Then one by one, the pieces start falling into place. When they do, it’s incredibly rewarding.
Inform yourself I can’t over-stress just how important this is. Before you embark on a business journey with others, inform yourself about the implications of what you’re doing. Learn about pros and cons of different types of company. Learn about your duties and rights within these types of company. Learn about insurances. Make damn sure you know about your strengths and weaknesses, and your partners’. (Also make sure they know about yours!) If you fumble later because you didn’t inform yourself, don’t come cryin’, it’s your responsibility, and yours only.
Stick to your plans. Screw your plans. Uh, right. Here’s the thing. You’re moving fast, because you have to. That means you won’t always have the time to really explore all the options you’d like in-depth. Sometimes you have to make a call with limited information. That’s fine, it’s how it works. Don’t let yourself get too distracted or intimidated by others’ horror stories. You made your decision, you stick with it. Chances are it’s a good call. But every now and then you’ll learn something new, either because the circumstances changed or because something just slipped by unnoticed before. In that case, don’t be stubborn: re-evaluate, make a new decision. Your plans are guidelines. Adapt them as you learn new things. (We went full circle on the type of company we are setting up, yet now we’re ready to go and I wouldn’t want to miss out on the thought process that lead here.)
Plan ahead, then improvise. The better you plan, the more steps you can anticipate and lock in, the easier and smoother the process will be. There are plenty of touch points with folks and organizations outside your company. Make sure there’s enough time buffer for them to do their job. This is especially important for those who are helping you! (Don’t stress them out, they deserve all the respect you can give them.) You’ll find it’s a lot of touch-and-go.
Example? Before reaching certain milestones (signing a contract, opening a bank account etc) you can’t do certain things. Before the process of registering your company is kicked off – which happens surprisingly late in the game – you can’t really sign any important paperwork or contracts without getting into serious legal grey area. That’s something you want to avoid, right? Well, yes. On the other hand, you can’t sign any client contracts either, as your company doesn’t legally exist yet. Again, it’s touch-and-go: you talk to those clients, you explain the situation. You sign letters of intent. As soon as you’re good to go, you sign the contract. Not having these contracts signed and sitting on your desk can be somewhat stressful; don’t sweat it, there’s nothing you can do at that point. Relax and make sure to work only with great clients.
Don’t demand support. Accept and embrace it. One thing is incredibly important to remember: during the founding period there’s a certain chance that you’ll annoy the hell out of your social environment. You might be nervous, or stressed out, or constantly focused on your own business and not realize that others have stuff on their minds, too.
What does that mean? First, try to go easy on your friends and family.
Second, don’t demand support. There’s absolutely no god-given right to receive support from others, mental or other. Asking others support is one thing; demanding is a different thing altogether.
Third, if someone offers help of any kind, treat the folks helping you with the respect they deserve. Someone just went out of their way to help you, just because they decided you’re important to them. Show them all the love they deserve. Thank them, and make sure you don’t forget it. We’ve been incredibly lucky that way, getting so much support from so many people in a whole lot of ways. I hope I can make up for all of it someday. Until then, I’ll try to just stay grateful. Thanks, guys!
Oh, there’s one more thing. The probably most important of all, a mantra to get back to if things are getting too hectic (I stumbled over it on Alexander Ljung’s tumblr):