Protect your IP — Many startups in the software space are vulnerable to competitors producing copycat technologies. Filing patents and protecting a company’s intellectual property is often a great investment. Copying a successful software application’s features is often quite easy for big tech companies, if they find that it’s worth their while.
Protecting your IP can position your company favorably for future negotiations about possible acquisitions or exits.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.
Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?
In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.
I had the pleasure of interviewing Nico Hodel.
Nico Hodel is Co-CEO of Start It Up NYC, a digital innovation agency based in New York City that provides content marketing, app development, digital advertising, data analytics, innovation consulting and video production services for startups, and B2B companies.
A full-stack web developer and programmatic marketing specialist, Nico ran development efforts at his former company Valence Digital for over 4 years, overseeing a 12 person marketing and development team, working on projects in the Angular, React, and React Native frameworks.
After working on web development projects in the tech, finance, and legal fields with clients from around the world Nico took on an advisory role at the company to build Start It Up NYC, and its subsidiary, the content writing service Rriter, where he now works full time as Co-CEO.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I grew up in Honolulu, Hawaii and attended college in New York City. I had a passion for technology and entrepreneurship early on which led me to work with a variety of startups before starting my own web development and digital marketing agency with my business partner Adi Patil, an experienced entrepreneur in his own right that was working at Yelp at the time.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
For us, the “aha” moment came when we realized that the startup and innovation ecosystem of NYC sorely lacked options when it came to working with talented and cost-efficient digital agencies. Most of the agencies on offer in the market were bloated and slow-moving, which made it difficult for them to keep pace with fast-growing companies. That’s when we had the vision of building an innovation-focused agency, that was lean, agile, and dynamic. From this realization, Start It Up NYC was born.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
My parents were certainly an inspiration since they carved out their own unique lifestyle and path to happiness. They always encouraged me to think for myself instead and resist the pull of conformity and groupthink. That ability to think critically and objectively about macroscopic trends is a huge advantage for any entrepreneur.
What do you think makes your company stand out? Can you share a story?
Clients have told us that they value our customer service, fast response times, and direct response to feedback. In a world where labor is becoming increasingly commoditized and outsourced, our emphasis on project management, customer service, and communication helps us stand out.
How have you used your success to bring goodness to the world?
Our authentic passion truly isn’t about maximizing profit, but rather to help innovative founders and businesses bring new solutions and disruptive products or services into the world.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
I would say that curiosity, interpersonal communication, and objectivity are character traits that are instrumental for myself and most business leaders. Curiosity empowers you to learn more skills, particularly highly valuable technical skills. Interpersonal skills allow you to build authentic relationships with others. Finally, objectivity allows you to limit cognitive biases and look at your mistakes with self-awareness and honesty.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
It’s a difficult question to answer because I haven’t really followed advice that I’ve received. That’s led to a very unconventional, entrepreneurial life path. Honestly, I’d encourage others to be highly skeptical of advice, particularly advice that comes through a particular cultural or institutional narrative.
Can you tell us a story about the hard times that you faced when you first started your journey?
Landing those few early clients wasn’t easy as a new agency. We got through those difficult periods by limiting our risk by having multiple streams of revenue.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
We always maintained a steadfast emphasis on our passion and vision to help founders and entrepreneurs. Even when we had fewer clients and more free time, we spent that time building the startup ecosystem in New York by hosting events, speaking at conferences, and networking.
The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
I recommend entrepreneurs do their best to maintain a sense of equanimity throughout the highs and lows of running a business. In order to do that, it’s best to stay focused on your daily routine and enjoy the journey moment-by-moment. That’s not to say that entrepreneurs shouldn’t plan for the future, but simply that they should always come back to the present moment instead to getting fixated on the past or future.
Let’s imagine that a young founder comes to you and asks your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
It really depends on the nature of the business. There are certain business models for which achieving scale rapidly is important and venture funding is a necessity. Many B2C software products that rely on an advertising model for revenue fall into this category.
For other companies that can grow more slowly and produce reliable streams of their own cash flow, venture funding can be more of a casualty than a help. If a company can grow at a pace the founders are happy with and turn a profit, I tend to suggest going that route. Doing so can often give founders more leverage should they choose to raise venture funding in the future to keep pace with growth, or to grow more quickly.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
- Activate Top Talent
At bottom, a company is a group of people who gather together to offer a product or service. Almost by definition, the talent of the people involved in a company is what defines its success. This, however, assumes that talented team members are highly motivated and inspired.
If you want to build a successful company, find the most talented people in your niche and inspire them to work towards a common vision.
2. Have a Clear Path to Profit
The classic cliche of a startup that raises millions on the back of a non-existent product with an exotic name or whitepaper, and then using that money to populate an office full of interns so that they can raise an even larger sum their next round is not altogether unearned.
Too many startups become capital-raising machines. The venture-backed funding model incentivizes founders to focus more on raising money to increase their valuation than on actually increasing revenue and turning a profit. You don’t need to look far for case studies on how these perverse incentives manifest themselves. Adam Neuman of WeWork immediately comes to mind.
Profit should not be the core motivation for any founder, but it also shouldn’t be ignored. Vision, impact, and growth are great, but increasing revenue should also be top of mind for a founding team. For many companies, it’s a good idea to bring a Chief Revenue Officer on board that can dedicate their time and attention to the company’s monetization strategy.
3. Find Strategic Investors, Partners and Advisors
Many founders put a lot of thought into how much capital they want to raise, but just as important is who that capital is raised from. Founders should think about finding a strategic investor that can play a continuous role in opening doors, facilitating introductions, and helping the company to grow.
If a founder, isn’t raising capital, they should find strategic partners and advisors that can play a similar role. For most startups, there will be many institutional gatekeepers, moats, and barriers to entry. Founders need the right team of experienced stakeholders to help them overcome those hurdles.
4. Protect your IP
Many startups in the software space are vulnerable to competitors producing copycat technologies. Filing patents and protecting a company’s intellectual property is often a great investment. Copying a successful software application’s features is often quite easy for big tech companies, if they find that it’s worth their while.
Protecting your IP can position your company favorably for future negotiations about possible acquisitions or exits.
5. Explore “Growth Hacking” Strategies
The term “growth hacking” has been somewhat overused and become a bit of a buzzword, but it does represent a fundamental strategy for bypassing gatekeepers and achieving exponential growth. If you don’t like the term growth hacking, go with its predecessor “guerrilla marketing.”
Many startups pour the capital that they work so hard to raise into low-ROI marketing campaigns that simply aren’t sustainable, and both of these terms refer to marketing strategies that can produce fast and sustainable growth with minimal investment.
Successful guerrilla marketing strategies often include aggressive PR campaigns, thoughtful SEO and ASO, targeted influencer (and microinfluencer) marketing, event marketing, and cross-promotional agreements with strategic partners. One of the things we’ve learned from our work writing optimized web content with Rriter is that many startups neglect to publish regular web content which represents a major missed opportunity. We’ve seen remarkable results after startups and larger B2B companies execute on a dependable content marketing strategy.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Common mistakes I’ve seen include raising capital too early at the wrong valuation, investing capital without a clear path to monetization, and working with dishonest or unethical co-founders.
Founders should conduct regular risk analysis to avoid these all-too-common pitfalls.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
I’m a big believer in prioritizing process over results. That means that regardless of if your startup is doing great or struggling, your primary focus should be on optimizing your daily routine to make sure you’re performing as the best leader you can be. Regardless of how your startup is performing, you should be getting adequate sleep, consuming healthy foods, meditating every day, and maintaining quality personal relationships. It’s important that your team share similar values, and I’m lucky that my business partner Adi Patil and I see more or less eye-to-eye on every issue of substance.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would start a movement of entrepreneurship and innovation that creates jobs and allows people to unlock their creative and intellectual potential.
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
I’d welcome a sit down with anyone interested in starting or continuing along the entrepreneurial path that we could help develop an MVP or web/mobile app, generate traction, or write SEO-optimized web content for.
How can our readers further follow your work online?
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!