How To Start A Startup

The odds of going from idea to IPO are 6,000,000 to 1. Your job as an entrepreneur is to eliminate as many of those zeroes as possible.

Writing a business plan alone increases your chance of success 1,000 fold.

What is the definition of a good business plan? One that gets the money!

How do you know if your business plan is good or not? If it gets the money!

Should I share my secret ideas with anybody other than my dog? Yes! The only thing worse than a paranoid entrepreneur is a paranoid entrepreneur who talks to his dog.

Before you can solicit interest in your product, there are two things that you need to do. The first step is to obtain a provisional patent for your invention. The best resource for this is the Patent Pro Se book on Amazon. Not only does it teach you everything you need to know to file your first patent, but it even includes all of the necessary forms included a pre-addressed envelope to the patent office!

After you finish writing up your provisional patent I would recommend getting a real intellectual property lawyer to check over it. You should be able to get a competent IP lawyer for about $350 an hour, and you are probably looking at two to four hours of legal work. Be sure to come to an agreement upfront so if there is something drastically wrong you don't end up with a $10,000 bill! For technology products, lawyers in Silicon Valley tend to be much less expensive than those in New York City. Some will even help you with your provisional patent for free, with the expectation that you will use them to file the real patent when it comes time.

Once you submit your provisional patent you have one year to file for a real patent. This can easily run $10,000 to $15,000. This is why you want to spend the year a provisional patent gives you looking for customers, to see if you will make enough revenue to offset the costs of proceeding further with your idea. Note: A provisional patent only secures an earlier filing date. If you don't file a real patent within a year then you can still file one later, but you lose the earlier file date. This means that if someone submits a similar patent after the provisional expires but before you file a real patent then you may lose patent rights.

Once you have your provisional patent you should talk to as many people as will listen about your idea. Once you get some good feedback it is time to write the business plan. This is what you will need to show investors before you can get money. It is best to give your pitch a few times before writing the business plan, because it is much easier to the pitch than it is to change a full business plan.

"Today we will talk about what you want to be when you grow up." The preschool teacher spots the child, silent, apart from the others, deep in thought. "Jonny, why dont you start?" Jonny looks around, collects himself, and stares at the teacher with a steady eye. "I want to code demos," his words becoming stronger, more confidant, as he speaks. "I want to write something that will change peoples perception of reality. I want them to walk away from the computer dazed, unsure of their footing and eyesight. I want to write something that will reach out of the screen and grab them, making heartbeats and breathing slow to a halt. I want to write something that they are reluctant to leave, knowing that nothing they experience that day will be quite as real, as insightful, as good." Silence. Jonny blushes, feeling that something more is required. "That or I want to be a fireman." - Grant Smith

View stage two as an opportunity, because done correctly you can bring enormous value to the table.

The books below will teach you how to create the kinds of products and brands that people fall in love with.

Stage three is a Herculean challenge. Less than 1 in 100 startups which reach phase three will receive the venture capital to actually create and market their products. And of those that do, less than 1 in 10 make it to IPO. You maximize your chances by successfully completely stages one and two, and by learning as much as you possibly can. Even if you read every book mentioned on this lens you still won't have any idea what you're doing, but at least you'll have a fighting chance. Hopefully you have your personal network of advisors in place by this point so that you have plenty of people to ask for help and advice.

Remember, when submitting business plans to venture capitalists you should always reach out to them through their network. A trusted referral won't get you the money, but it will at least get your plan read. Reading the blogs of VCs you plan on talking to is also advisable, since each VC has a different set of things they are looking for in both the candidate and the pitch.