My recent post mentioned that I spoke to a class of aspiring high school entrepreneurs, via a program called Startup Afterschool, earlier this month. Phin Barnes, Principal at First Round Capital, also spoke to the students to give them a perspective on his experience as an entrepreneur and now on the other side of the table as an investor.
Phin talked about a number of topics, including what it was like to be one of the early employees at AND1 and how his video game startup, responDESIGN, was able to do a deal with McDonalds. One of his comments really stood out.
Phin talked about the founding of responDESIGN, the successes and challenges that they had, and the three decisions that every entrepreneur needs to get right to be successful. Those are:
That is, it’s really hard to be successful if you’re missing one of the key legs to the stool.
When you think about it, it’s really an elegant way of looking at things. Sure there are lots of other things that need to go well for a company to make the long transformation from concept to sustainable venture. However, if you don’t have these three things in place, that transformation is nearly impossible. Furthermore, once you have these three things in place, they’re also extremely difficult to change. The general idea is more or less locked in, though it will evolve. You can make changes to your team, but having too much instability among the founders and early employees is certainly not a good sign. As for investors, there’s no undo button for your funding deal.
So, the lesson was, choose wisely. Good words of wisdom. Thanks, Phin!
(I’d argue that advisors or mentors are really quite critical, too, as utilized correctly, they can keep you from stumbling into walls you didn’t see were there and they can help open doors that are otherwise shut to you. However, in Phin’s model, we can lump those into team – three key points sounds better than four. )