Entrepreneur Office Hours - Issue #112
The more you entrepreneur, the more things change...
I feel like “entrepreneur” tends to get described as thought it’s some sort of single, monolithic unchanging work. As-in, once you decide to become an entrepreneur, you’re committing yourself to a specific kind of unchanging work in the same way being a salesperson or a waiter or a chiropractor mostly consists of the same type of work year after year.
Of course, that’s definitely not the case for entrepreneurs. When you’re an entrepreneur, if you’re still doing the same type of work a year from now that you’re doing today, you’re almost certainly doing something wrong.
Personally, I’ve always enjoyed this type of variability. But it’s also one of the less discussed challenges of building startups, though not necessarily for the reasons you might think. You’ll see what I mean in this issue’s first article.
In the second article, I discuss one of the few things that never felt like it changed in all my years building startups, which was fundraising. No matter how much other things changed in my entrepreneurial journey, I was always fundraising. In retrospect, I’m not sure that’s such a good thing, but, well… that’s probably a discussion for another issue.
Once a company reaches a certain level of success, lots of entrepreneurs focus on threats from the outside. But the biggest threat to your successful startup is a lot closer than you think.
Venture capital isn't the cure-all most entrepreneurs think it is. In fact, for as many problems as VC solves, it also creates plenty of new, bigger problems. In this article, I share some of the biggest issues I wish someone had warned me about before I took my first round of VC.
Office Hours Q&A
I am curious if you have any experience with startups merging. My co-founder and I have been working on a startup idea for the past few months and we came across another startup in our city doing something almost identical. They have been working a little longer than us, but not much longer.
We got to talking and it seems like we could do better working together than competing with each other, so we have been talking about merging the two companies.
Do you think doing something like this would be a good idea? Also, do you have any advice for the best and fairest way to join our companies?
I don’t personally have any experience with merging startups. At least, not merging startups at such an early stage. I mention this because I guess I should start by cautioning you to take the following answer as more an example of me “thinking aloud” about the possibility than me actually knowing anything.
My sense is, by considering a merger, you’re on the right track. Startups are hard enough without the added complication of another startup in the same area being at roughly the same stage and trying to accomplish the same things. To be fair, you haven’t shared anything about what the startups actually do. Maybe you’re building games for iPhones, in which case it’s not like you’re targeting the same local customers. But even then I imagine being located so close to each other would create issues for things like fundraising and hiring.
Instead, since it sounds like you’re quite early in the process (and the other startup is, too), why compete for resources? From where I’m sitting, your chances of success seem much better if you combine your efforts and pool your resources (and target resources) together.
At the same time, I suppose the key caution would be whether or not your team and the other team are compatible. How much overlap is there between the different types of skills everyone brings to the table? And are you all willing/able/excited to work with each other?
If you do join forces, make sure everyone’s roles are defined as clearly as possible before the merger happens. If, for example, you’re acting as “CEO” in your company and someone else is acting as “CEO” in the other company, one of you is going to have to cede that title/position. Are you ready to be that person? Is your counterpart ready? These kinds of decisions are necessary, otherwise the merger seems destined for failure.
Again, I haven’t personally dealt with a situation like you’ve described before, nor have I personally coached or knowingly interacted with someone who has (at least, not in a meaningful way). I’m curious to learn how it turns out, so please keep us updated on your progress!
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!