I have known Vesa Suomalainen for many decades, going back to the days where he ran several teams for Microsoft during their go-go years. He and several compatriots left the company around the turn of the century and eventually built another software company called
Webscorer in 2011. (I wrote an article about his startup then for ReadWrite, which amazingly is still online here.
At that time, I called his vision “anti-Microsoft.” It was a successful philosophy. I recently caught up with him to expand on some of the things he learned from running various software startups. “We wanted to stay small and we have the same exact team as we did in 2011. No deaths, no arguments, no retirements. Just as planned,” he said. It is almost as if everyone learned how little they liked the BigCo mentality and have purposely tried to make things small.
Here are some other lessons he has learned over the years to keep to this vision:
- Don’t be optimistic. Plan that you will struggle initially, and this way you won’t end up diluting all (or even much) of your startup capital. It is always better not to take any outside money and pay everything on your own dime.
- Set your sights lower. You don’t want to conquer the world, just make a small adjustment over time. Vesa talks about having an excellent niche product that is highly profitable rather than shooting for the stars and failing and losing your entire company.
- Know what not to do. Learning from your mistakes is just as important as success. Vesa’s failure taught him more about what not to do with his present venture. Watching a startup destroy itself was a very potent teacher. Speaking of which, he said that “There are lots of ways to fail, but only one way to succeed.” Sounds like something Yoda might say to young Luke.
- Don’t make too many promises that you can’t keep. Understand scope creep and keep it under control. Eliminate buttons, reduce functionality, and keep things simple. Resist the temptation to make your product more complex at every turn.
- Don’t be greedy, share your equity with your key founding members. Even if it is a small percentage, you want to retain your key developers and engineering talent. Nothing says loving more than some points of equity. This means being flexible and fair to your employees (we have no fixed office hours and no vacation or sick leave policies), and give everyone some responsibility with that equity. It also reduces the number of team meetings — we get by with one weekly online session.
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Keep your costs down. Everyone works remotely, so there is no office expense. They also don’t have any accountant, corporate lawyer, or a bookkeeper, so they do their own taxes and resist “lawyering up.”
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Ignore your competitors, listen to your customers. Competitors come and go, hopefully your customers remain. Having happy customers is the best marketing strategy, and having viral marketing helps keep marketing costs down.
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Product quality is key. Focus on performance, scalability, usability, availability are core features.Take each and every bug report and feature request seriously, and then provide quick, free and competent support. They use Google Firebase to get automatic crash reports for example.
Q….so how/where do they get the money to get the startup running??