It's definitely not easy to build a company. For the last 5 years I've been trying to launch companies full-time and on the side. Here are some lessons I've learned throughout that process.
It's Not All Fun And Games
Startups are glamorized in the media. The movies and TV shows that portray these films often highlight the highs of startup life. The Initial Public Offerings, fund raising parties, the success of creating multi-billion dollar corporations. The truth is very very few startups reach any form of success. Most die before a series A. What the viewers at home don't see are the brutal lonely nights coding in your bedroom, the hundreds of venture capital rejections, customer churn, employee politics, and the myriad of problems along the way. To build a successful business takes years, if not decades.
In my sophomore year of college at Northeastern, a friend of mine and I decided to create a web development business. We would build WordPress websites for small businesses. We were so excited about starting a company that we created a business bank account, phone service provider, payment provider, etc., to get our company going. What we didn't realize was that the fees started to eat up our profits. Even worse, we began to realize that malicious customers would perform chargebacks on our service, creating problems with our payment provider (we didn't have a high enough credit score back then to get a reputable payment provider), and killing our business. In months, we realized that our business would collapse.
Looking back we made a lot of mistakes that could have been prevented, but we were so wrapped up in the excitement of creating a company that we didn't analyze the basic necessities of starting a business.
Optimize For Customers, Not For Funding
A lot of founders fall into this trap. They optimize for fund raising instead of creating an actual product that people want to use. In a contradictory way they allude themselves into believing that raising money from venture capitalists equals actual profit. I'm not saying that VC doesn't have its merit. Venture capitalists have seen hundreds of different startups and their opinion can be a good indicator of how viable your idea is. That being said, you shouldn't raise VC money if you don't have to (i.e. you need to scale). Personally, I believe that the majority of businesses don't ever require funding to get started. If it requires major capital to get started, maybe it's time to rethink your business plan. The broad expansive missions like space exploration and electric cars aren't for the faint of heart and definitely not a viable business for first time founders. First time founders shouldn't focus on a big broad mission, they should capture a small market first.
Don't be captured by the narratives that are pushed around every few months in Silicon Valley. And most of all you shouldn't build a company to capture a narrative. Shape your company around your own vision, even if it doesn't align with the current narratives of the industry. What I'm not advocating is arrogantly following an idea that clearly doesn't work. Venture is a pretty good thermometer for vetting your ideas. If people are not likely to fund your idea, it doesn't mean that you should give up, but it does mean that you should re-evaluate. What you should care about is what your customers think. If your customers hate your product, that's the end of the story.
Don't Build Billion Dollar Businesses (at least in the beginning)
My opinions here might be really controversial, so I'll give a few examples. When people think modern entrepreneur, they think Elon Musk, Mark Zuckerberg, and Steve Jobs, the most iconic entrepreneurs of our time. But the companies that they're known for Tesla, SpaceX, Microsoft, Apple, aren't their first companies. Before space faring, Elon had already built two successful abiet less well known companies: Zip2 and X.com (now PayPal). Before Tesla and SpaceX, Elon had already built and exited two successful companies for millions of dollars. He would use this money to fund his later ventures.
Even before Mark Zuckerberg created Facebook, he had years of experience building products: music sharing applications, Facemash, etc. . And the iconoclastic story of Jobs and Wozniak's venture into blue boxes is just one of the examples of the pair's salesmanship even before Apple.
The aim of a startup (if it's your first one) shouldn't be to build a unicorn. Very few ever become billion dollar companies, and you may be severely disappointed. Find a niche and determine what the customers really really need and will come back to use.
Take The Jump
After I graduated, I had two options: take a high paying stable job in the middle of nowhere or join an startup. A lot of times people are afraid to take the plunge because they're afraid that it might be the wrong choice and mess up their future. Very few times is that, actually the case. There is a really good video by Y Combinator called What to focus on in your twenties that really resonates with me. Think about what the worst case outcome for each option would be. If the startup doesn't work out, what happens? You have to get a job? Oh no (sarcasm)! At worst you'll have gained valuable experience at a startup, most of the time taking on responsibility you wouldn't have been able to at a larger company. On the other hand what will happen if you take the corporate job? Stable income, you might further your career a bit more. Ultimately, the benefits are marginal compared to joining a startup.
That being said, definitely don't join a startup if you have liabilities (student loans, family, etc.). I'm not saying a startup is the solution to all your problems, but if you can tolerate the risk the upside is unimaginable.