An essay by John Melonakos
Simple Ground Rules for Startups
Create something people want. Don’t run out of money doing it. The rest is just noise-ish.
— Mick Hagen (@mickhagen) January 24, 2014
When starting a company, there are so many unknowns that it is impossible to be sure about most things. I think it is helpful to have a few ground rules for navigating early startup waters.
Here are some ground rules we followed as an early startup, with the first two encapsulated in Mick’s tweet above:
- Create something people want
- Don’t run out of money doing it
- Seek for equality among founders in cash and equity, on the basis of contributions (primarily of time and cash contributions)
- Defend equity from falling into the hands of non-contributors; be generous with equity for key contributors
- Don’t pay yourself more than your employees when employees are paid less than market rate
- Find ways to reward early employees for sacrificing lower early salaries and sticking with you through thick and thin
These ground rules help provide an anchor framework that keeps some stability in the picture for an early startup.
What other simple ground rules can provide a nice mooring for early startups?