Early Startup Advice: Make The Right Decisions
At some point, founders and the team are going to have to delve wholeheartedly into their startup. Of course, this isn’t an easy decision. It doesn’t matter whether you are starting a family, or are constantly working your day job – a startup is a 24/7 effort that constantly requires strategizing, pivoting, and innovating. Of course, this doesn’t even take into account the other requirements, such as developing relationships with the investment community, finding the right people to hire, or examining the competition to make sure that you are ahead of the curve. It simply isn’t possible to get a startup off the ground while devoting all your time to other resources. Often times, it is in these situations where people realize that while they are passionate about their company, their life simply cannot handle the time required for family, friends, AND a startup – and they have to step back and make the right decisions for themselves. Luckily, for Box, all of the founders were young and in college, so they had a bit more freedom in that they weren’t bogged down with day jobs and had yet to start families. You can say that their youth was an advantage, as they had the kind of time to devote to this new budding company.
The amount of growth also convinced them that this was a full-time situation. As a result, they made the important leap of dropping out of school. Of course, this isn’t an instant decision, either. These were clearly smart and capable young men who understood the value of an education. However, they were all able to sit down and determine that this company had the capability of changing all of their lives for the better if they were able to execute their ideas and strategies correctly. This is important to any startup, as it takes much more than belief and passion to simply start diverting your path. Box was actually growing user-wise, so it was clear that their service was needed by many people. This is much different than someone spending all of their money on an app that no one is using, but becomes so convinced that it will be successful that they start borrowing and going into debt. The Box team had the foresight to wait until their ideas started to see some kind of reaction in the user community, and THEN decide to make the important life shift of dropping out.
The four founders ended up living and working in a garage together, where they focused on the business the entire time. This was crucial, as it allowed all four of them to constantly bounce ideas off of each other and brainstorm about their approach. Many people may view brainstorming as a peripheral “creative” exercise, but the truth is that this team was able to identify the exact issues with the marketplace that they wanted to address.
The truth is that the Box team realized one huge flaw with the enterprise software business model: it wasn’t democratized, at all. There was complicated software and hardware, and the distribution channel consisted of sales reps, that had to install the program for you. Furthermore, the technology was only available to the biggest companies. It is obvious that there is a huge problem with this.
- How are businesses supposed to compete in the marketplace when only a percentage of them have access to this technology?
- On top of that, how are they supposed to master the technology when it is so complex that it has to be explained? They can’t even really access it themselves.
It was an antiquated model that catered to larger corporations. The Box team had the foresight to understand that this would have to change, especially because of the trends they had identified earlier: that mobile would become more widespread, and that cloud computing would only get cheaper.
This model was also perfect for the vendors, because it was all proprietary technology. Companies would pay to use this software that was essentially “closed”, and couldn’t even translate to other platforms as well. There is this terrible cost inefficiency where companies are spending money on software that they don’t even use anymore, which is great for the vendor, but terrible for the company – who believes that they have just made a smart investment in future technology, but really just wasted money on a system they might not ever use!
One of the great perks about the Box team being so young is that they understood the issues because of their perspective. The truth is that they were in their early 20s and trying to start an enterprise software company. This is often an age where young adults are still chasing their dreams, whether it is to be a model or musician. Instead, they brought a new and fresh perspective to enterprise software, and were able to see its antiquated flaws in a way that many companies probably couldn’t have seen it.
They started asking the right questions.
- What if you could access information anywhere?
- What if information wasn’t limited to certain staff?
- Why not have open systems?
- Doesn’t it seem like that’s the direction things are going in, anyway?
Why not make it so that the consumer didn’t have to pay for all of this new technology, so you saved all of these companies millions of dollars? The Box team ended up coming up with a whole different core set of beliefs, that set the landscape for a new kind of approach to the entire industry. They could have given up, or decided to drop out to work for a “sexier” startup – but instead, they chose to stick together and solve the problem.
It’s safe to say that it paid off. Box now has over 70,000 customers and services over 50% of the Fortune 500. It is hard to believe that four college dropouts working in a garage came up with the ideas that would transform the enterprise software industry forever, yet here we are. They were able to see where things were going, and what was wrong with the current landscape, and form a company that truly makes their entire industry more democratic and seamless.