- Founders in the Cloud
- 35 things startups do not need
35 things startups do not need
Founders say avoid spending money or time on these things
I used to say that when I had my startup, we made every mistake in the book. I am not sure that I can say that anymore though given the many startup tragedies over the past decade. What I can say with absolutely certainty however is that making mistakes is part of the journey as an entrepreneur.
One of the driving factors for the work we do as Startup Advocates is that as former founders, we have the heart to want to help others along that journey. That also means sharing the traps entrepreneurs commonly fall into on the path to realizing their big vision.
Lots of pitfalls and distractions on the way to startup glory
Therefore, here are 35 things that early-stage startups (think ten or fewer people) should avoid based on feedback from many founders we spoke with. Of course as your startup grows, you will need some of these things like an office or a board of directors. Most of these are serious, but some are a bit tongue-in-cheek, so enjoy 😅
Business cards – Biggest waste of paper, I have an entire draw full of them that I never handed out. It’s a digital age, so go digital.
Office space – COVID taught us we can build amazing things as a fully remote team. Save your capital, and avoid the office expense.
Branded swag – Like business cards, a lot of swag goes unused and ends up at shelters. Save the swag run for when you have actual traction.
Cold brew – OK, I’m not a coffee drinker, but the point is buying beverages and snacks for the team is not the best use of funds early on.
Branding – Picking colors schemes, logos & fonts feels like work, but contribute nothing to product-market fit. Brand is for when you scale.
The ideal name – Meta started as “The Facebook”. Your name should be good enough to get started, then adjust when you have traction.
Fancy website – Also feels porductive, but unless it is part of the user experience, like digital media startups, don’t spend too much time here.
Paid fund raisers – Good investors don’t invest in startups that outsource fund raising. So you pay money to get the worst investors.
Formal advisors – Advisors can be helpful for highly technical fields (biotech, deep tech), but mostly just work & headaches for founders.
Startup consultants – There has been a rise in these types of advisory services, and I am not exactly sure what these folks actually do
NDA's – The only time NDA’s are relevant is when signing up big companies as customers, otherwise never use these in fund raising
Big logos – Signing notable companies as customers get you too consumed by their needs without considering the wider market.
Partnerships – A few startups were successful using partners as a go-to-market strategy. For the other 99% of startups, it’s the wrong path.
Public relations – The time for PR is when you have product-market fit. Before that point, PR is just burning a hole in your bank account.
Press releases –Your potential customers & investors do not read press releases. But you will definitely attract lots of startup consultants.
Personal brand – Unless you are a celebrity, your best way to build a personal brand is by building a great product and company.
Speaking gigs – Your time is better spent on product. Unless it’s a high visibility opportunity, avoid these invites until the point you need PR.
Big tradeshows – Most the of big shows are a lot of noise. Focus on smaller, niche events for customer discovery.
Booths at events – Use the sneaker booth method instead, by walking the show & meeting people. You cover more ground than at a booth.
Chief of Staff – Having help is important when you scale. However, you should be hiring people that make the product better at this stage.
Interns – Can be a great source of talent. However onboarding takes time and is a productivity hit that you create for temporary resources.
Brilliant jerks – Building a culture of collaborating together from the start is critical, but having jerks on the team blows that all up.
Nepotism – Some successful startups had founding teams with family or spouses. When you hire family though, beware of the culture dynamics.
Inflated egos – There is no room for egos in startups. Stay humble, focus on building great product, don’t let success go to your head.
Not my job attitudes – You need teammates that willingly roll up their sleeves and do. Saying it’s “not my job” is an attitude killer.
Politics – Lots of news about talking politics in the office. It is just better to focus on customers & product, save politics for outside work time.
More features – You are building an MVP, so keep it minimal to win over early customers that have a “hair on fire” problem.
Product managers – In the early days, the founders must lead product. Later on, you absolutely need experienced PM’s to help scale.
DevOps – The focus is getting product out the door quickly. There is no need to spend extra engineering work to optimize code pipelines.
Kubernetes – There are few startup use cases where K8s makes sense. This is unnecessary engineering that a managed service can handle.
Pitch competitions – Much like speaking, there are a few good ones, but most suck up time without the benefit of actual investor interest.
Board members – Building a board is totally unnecessary at the early stage. Wait till your Series A when a board is generally required.
Obsessing on competitors – The biggest competitor for startups is most often themselves. Focus on obsessing on customers instead.
Pretty pitch decks – Much like branding, it feels productive but this is a time vortex. Just stick with the facts and a compelling story.
Brown M&M's – Just checking if you are still reading 😉
The most prolific angel investor in Latin America is a South Asian startup growth marketing guy by the name Ali Jamal, and he recently shared how he came upon his vision for investing in LatAm startups.
Besides the fascinating personal story of his own family’s journey of struggle, and entrepreneurship, his views on the future of Latin America were compelling:
LatAm has the same GDP per Capita as China - w/ 50% of the people but < 3% of VC dollars
Over the last 5 years, LatAm has seen the number of unicorns grow from 5 to 50
What does the data show about the potential of the LatAm startup ecosystem? Greg Mitchell of AVP Ventures shared this chart of VC activity across some key LatAm markets:
The case Greg was making is that Peru has the potential to be another breakout startup ecosystem much in the way Mexico and Colombia. The broader implication is that the upside of Latin America as a market for startup creation exists today and there are many success stories such as Kavak, Rappi, Loggi, NotCo, and many others. Now it is time to see where the investor market matures to catch up to help many of the nascent seed stage startup to scale.
We are in Peru for the first time and kicked it off with an awesome breakfast hosted by AVP Ventures for startup founders and then a talk later in the day at UTEC Ventures sharing about the opportunities and challenges startups are facing right now, and how Generative AI is a step change in startup creation, and how AWS is helping startup to innovate with AI 🚀
There is still a lot we are learning about the Peru startup ecosystem. While Peru is a relative newcomer as a startup hub, there are universities, investors, and providers like AWS have been actively involved to support founders on their journey. We will have more to share in future newsletters on Peru startups!
Next week is a huge week for big AWS events across the globe from Hong Kong to Indonesia to Saudi Arabia to Johannesburg. If you are in any of these places, do join us! As for the Startup Advocates, we are speaking in Hong Kong and Johannesburg, so stop by and say hello if you see us!
Global AWS events happening on September 26th