This is the biggest startup mistake brand new founders make

Once you've been a cofounder for a while you end up getting asked for a lot of advice by newbie startup founders. I know overall sentiment about the startup/VC ecosystem is improving because it's suddenly open season on starting a start up. I'm getting a lot of calls from new founders for advice.

Setting up a business is complicated if you haven't done it before

Here's something I'm seeing again and again: new founders are prioritizing administrative tasks over building their business, and they don't even know it.

I suspect it's because the complexity of starting a business is pretty high if you're not familiar. How do I start a corporation? How do I get a tax EIN? Where do I go to set up e-mail? Do I need a custom coded website? The problem is that while these all need to be done (well, eventually) none of them actually help you figure out whether your startup idea is viable.

 The only thing that matters in an early stage startup is whether you can build a product that you can sell.

 Note that figuring out how to create a Delaware C Corp, finding a payroll provider, and setting up a website are not on the critical path for winning customers or building your product.

 What new founders need to do is create a basic infrastructure as simply as possible and as quickly as possible. Do not overthink - you can change most of these choices in the future once you know what your business needs.

My preferred startup administrative stack 

So here's my personal list of what I would do to get through the administrative stuff quickly:

• For incorporation documents I’d use CooleyGo. Cooley's big law - I would never use them as my startup general counsel given their price point, but their free material is spot on. If I wanted a lawyer to file my docs I would ask other startup founders who they can recommend who's experienced but not big law. Personally, though I’d file the incorporation documents myself with Delaware. The people at the Delaware Division of Corporations are pretty much the nicest people ever, so I’d just pick up the phone if I got confused.
• For an EIN (a tax ID number, I’d go to the IRS website and apply for it, super easy.
• For banking, I wouldn't think too much about it. If my plan was to raise money I’d want two banks anyway just because of what went on with First Republic and Silicon Valley Bank. I’d pick a local credit union or go with a startup-friendly bank like Mercury, Silicon Valley Bank, or First Republic (which is now JP Morgan Chase).
• This is absolutely not legal advice, but I personally would not bother filing for a trademark up front.
• I would not use WordPress for a website in a million years (don't know why this is where first time founders always seem to land?). It's too quirky and I don't need the power at first. I’d figure out whether I need a simple web page, an ecommerce sort, a blog, or a landing page to just get moving. These are my tech picks. There are others in each category. I like these because they are simple to use and pretty inexpensive for a small business.
  • Landing pages – Unbounce
  • E-commerce store – Shopify
  • Blog - Ghost
  • Website - Squarespace or Wix. (Note: do not use these as landing pages for Google Ads – the page load speed is too slow. Use a dedicated landing page builder.)
  • Equity plan, CooleyGo.
  • If I were hiring employees from the start, Gusto as a payment processor
  • QuickBooks or FreshBooks for bookkeeping
  • Brex for a credit card
  • Google Business for e-mail, Google Docs, Google Sheets, Google Drive, etc. Don't go through a reseller just get it directly so you can manage it directly.
  • Google Analytics and Google Search Console for website or blog analytics
  • Amazon for your domain name
  • ChatGPT for a quick logo and some brand colors, and upgrade with a designer later.

And that's it.

I set something like this up for a side project a couple of weekends ago and it was under a day's work. If you're inexperienced it might be 3 days total. If you're spending more time than that you're eating away at your chance of success.

Get moving.

I'm not your lawyer, your therapist, your advisor, or your accountant. We're just internet friends, and these are just my experiences and personal opinions. Consult professionals for advice before you make any sudden moves in your startup.

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