When I was working on my PhD in Austin I got involved with a group called 3 Day Startup (3DS). The idea is simple: get 40 bright, motivated, and entrepreneurial students in a room for 3 days, and have them build something. 3DS has grown since I attended their first 3 day event, and they now hold these events world wide. They'll be holding their first 3DS in NYC on April 20, and I'll be helping out (as an advisor this time and a sponsor through Etsy). Luke Carrière is organizing the event, and he sent me a list of questions about my startup experience, answered here.
What is your advice to future entrepreneurs?
Do what you love, and start a company if that’s your passion. Entrepreneurship is about value creation, disruption of current standards, and ownership.
How did you recognize the opportunity/research the feasibility of the idea?
A successful startup has 99% due with execution: there are bad ideas that of course will never go anywhere, but “good” ideas hold very little weight on their own, IMO.
My previous startup came about through a project I had been previously working on. I was trying to monetize a search engine I’d built and saw a market gap in online retail ads.
Recognizing a successful opportunity also involves understanding the strengths of the people who will be working on it (i.e. the founding team).
How did you finance your business?
Mostly boot strapped. The internet is a unique place in that production costs are primarily just development time: if you don’t pay yourself, your production costs are zero. We built our initial system on a few machines on Amazon Web Services then scaled up to dozens as we brought on customers.
What was your growth strategy and why?
We were primarily a B2B service provider, so our growth strategy ultimately centered around sales.
What are you willing to give up?
Ownership was one of my three reasons for being an entrepreneur. Company ownership comes in the form of equity and control, and I would sooner give up equity than control.
What is your favorite aspect of being an entrepreneur?
Building cool stuff, re-thinking the way things work, and not having a boss. Basically a restatement of my reasons for being an entrepreneur.What is your least favorite aspect of being an entrepreneur? Stress. With ownership and control comes responsibility. If shit hits the fan, you have no one to blame but yourself.
What have you sacrificed?
Nothing.What is the number of companies you have started?
I’ve worked on several large and substantial projects of my own, but have only started one company with employees, investors, cash flow, etc.
What are lessons that you have learned from starting these companies?
As your company grows, it’s important to stay focused on the core problems you’re trying to solve. Functions like raising money, HR, business operations, etc. require attention, but must be a second priority.
What are the challenges/obstacles you have faced?
We were presented with an awesome early stage acquisition opportunity 9 months after our series A round. We ended up taking it. I now lead the search and data team at Etsy.com where I’m very happy and work with a great team on interesting problems. I still think there are huge opportunities in the market we were tackling.
What are some regrets? Biggest mistakes?
No regrets.What is you’re background information? (Education, previous job experience, etc.)
Ph.D. in data mining. Ex-Google. Lots of hacking on various projects and consulting.
What is your business structure?
S-Corp, I think. Whatever my lawyers recommended.
What resources did you use when starting your company?
Good advisors are critical, especially for first time entrepreneurs. We had a great advisor.
How long did it take your initial idea to actually launch it?
I worked on some of the technology for quite some time. It took maybe 6 weeks to build our first functional system prototype.
Where do original investors stand now, if at all in your company?
Everyone was happy with our acquisition, including our investors.
How do you manage your time?
These days I manage a fairly large team (much bigger than my entire startup). I wake up early and try to get all “real work” done before 11am.What did you do with initial profits? Left in the bank, paid for server bills.How long did it take for your company to become profitable? I think we were profitable for a brief period of time right before we raised our series A. Then we hired some awesome people and were no longer profitable :-).How did your idea change throughout the process?
The core idea stayed in tact, but we learned about how to position it, package it, sell it.
Did you ever think of giving up? If so why?
What was your initial role? What is your current role in the company now?
I was the first founder and CEO.
What is the worst advice you have ever received and why?
Lawyers generally give very bad advice. They’re generally very smart people, but they don’t understand business relationships behind the contracts and deals they work on. Business starts with people first and contracts second: legal advice only concerns the latter.Which part of your job is actual work opposed to passion?
I’m an engineering director now at a 300 person company. I try to spend as much time as possible working on things that are my passion, and I try to impress my entrepreneurial way of working on my team and larger company culture.How is the economy effecting your business?
A bad economy is a great opportunity for disruption. We closed our series A during March of 2008 when the Dow was at it’s lowest point in 10 years.