I did the opening presentation at MIT's Underground 2008 event yesterday for student entrepreneurs. My hat's off to Albert Park and his colleagues for organizing a great event. We need more of this kind of stuff in the Boston/Cambridge area to bring student entrepreneurs together with others.
Here are some quick notes and points that I made from my presentation. My favorite part about it was the fact that there were no PowerPoint presentations allowed. When the organizers told me that, it made my day. [For reasons, see "Why I Hate PowerPoint"].
Note: If you were at the event, please note that I didn't get to all of these points during my talk (just wasn't enough time), but this is all the stuff I wanted to say.
Some Ideas for Student Entrepreneurs
1. It's alright if your idea is sort of crappy: Most startup ideas start out kind of crappy. The good news is that once you get started, you'll start learning more and your ideas will get better. But you have to get into the game and start doing things in order for your idea/startup to get better. Don't sit on the sidelines waiting for the perfect idea. Get started early and improve the idea.
2. Don't try to raise VC funding too early: Most student entrepreneurs (or recent grads) with early stage companies should not try and raise venture capital. The odds of succeeding are low and for most, it'll be a waste of time and energy. Instead, work on the product/offering and work on finding some great people you'd love to do something spectacular with.
3. If you do hit the VC circuit...remember that there are two possible outcomes: One. You spend months being miserable and depressed instead of doing what you love (working on the company). Or two, you spend months being miserable and depressed and you get some cash.
4. Modest goals are just fine. Too many folks think that startups are all about buying your ticket in the $1 billion outcome lottery (and be the next Facebook or YouTube). You don't have to do that. I think it's sub-optimal for a first-time entrepreneur. Look for successive wins -- even if they're modest. The only people that tell you that you have to build a huge company are VC investors. The reason is that they need all of their entrepreneurs building gigantic businesses (so that at least one or two will actually do that and give them the gains they need). The example I used: If this is your first company (you haven't had a "liquidity event" yet), then shooting for a 10% chance at a $50 million outcome (E.V. = $5 million) is much better than a 1% chance at a $1 billion outcome (E.V. = $10 million). The reason is that for you personally, the value of the extra millions above a certain point diminishes quickly. Trust me.
5. Find Your Co-Founders: Student entrepreneurs are in a unique position in their careers where not only are they starry-eyed optimists (we all should be), they're around other starry-eyed optimists. Find the best and brightest of these folks and start something. Join up!
6. You don't need a business plan: Nobody cares about business plans. Investors won't read them. They take a lot of time. Just work on the idea, work on the team and work on getting customers (or understanding why you're not getting customers).
7. Don't overestimate the risk: If you're just about to graduate (or have recently graduated), you might tend to overestimate the actual risk in a startup. Sure, it's not going to pay you what you'd get at a big company, but the odds of you being able to find some job later, if things just go horribly are pretty high.
8. GET STARTED NOW: It doesn't take much effort to get a company started (though granted, actually growing one successfully is non-trivial). But, the first step is really, really easy and there's no reason not to take it. Your best lessons, ideas and opportunities will start showing up after you've started a company. So go do it.
That's it. If you made the event, thanks for coming. If not, hopefully the above notes helped. In either case, I encourage you to join the two startup communities I (loosely) manage online and connect with other folks (you might find your co-founder there):
LinkedIn: http://linkedin.onstartups.com (7,000+ members)
Facebook: http://facebook.OnStartups.com (900+ members, but more features)
Looking forward to connect with you folks. And Albert, if you're reading this, hit me up to be one of the sponsors next time. It's a good cause that I'm passionate about.