When we launched Tatango, an SMS marketing platform for small businesses, we thought we knew everything.
Man, were we wrong!
We quickly learned that being a tech entrepreneur is not just about having a big idea; it’s also about the execution of that idea.
Looking back on all I’ve learned since launching Tatango in 2007, there are three lessons that I believe are necessary for any entrepreneur to understand before embarking upon their next big idea.
1. Raising capital isn’t for the faint of heart.
When I launched my company, we needed to raise capital.
In retrospect, I wish I had known how complicated and costly raising capital would be. I’ll admit, I was a little jaded after reading article, after article on TechCrunch about startups closing million-dollar rounds with no revenue, no users, and an idea on the back of a napkin.
What I found out very quickly was this: That’s not how things work in the real world.
What these stories failed to mention was that raising capital took months of presentations to different investors, follow-up meetings, due diligence, negotiations and headaches.
We also found was that raising capital wasn’t cheap.
Everyone was getting paid while we raised capital, except us. Our attorneys were getting paid for the ridiculous amount of paperwork, the airlines, gas stations and hotels were getting paid for the numerous trips to pitch investors, and Kinko’s was getting paid for all the documents, presentations, and handouts that we needed to “woo” potential investors.
If I could do it all over again, what would I do differently?
I would have figured out a way to start Tatango raising venture capital. This would have allowed us to focus on our product, rather than focusing on raising capital during those first few critical months of a startup.
2. Don’t reinvent the wheel (infrastructure).
When we launched our SMS marketing software, it seemed like we built every piece of our business from scratch.
We built our servers, our billing system, our support ticket system, our email servers, our CRM system. Everything we needed — we built ourselves, from scratch.
This was a huge mistake.