Mobile LAVA, one of seven strategic interest groups within the Los Angeles Venture Association, held a panel last week at ROC guiding entrepreneurs through the process of launching startups – specifically, those geared towards mobile applications. The event covered the nuts and bolts of mobile startups, with a focus on the first year in the lifecycle of mobile businesses.
It can be hard to know the right questions to ask in the very early stages of launching a business; unfortunately, the questions you ask and the decisions you make in these stages can affect the entire lifecycle of your company.
The panelists for the night included Hank Leber, founder and CEO of GonnaBe, the social network of the future; Matt Sandler, founder and CEO of Chromatik, an iPad app for professional musicians; TX Zhou, Managing Partner at Karlin Ventures; Mark Sogomian with Ernst & Young; and Louis Wharton, Partner at Stubbs, Alderton & Markiles, LLP.
One common mistake seen with mobile startups is trying to do too much too early, said Leber of GonnaBe. Creating a native coded app specific to one device is the way to go; “if you’re going to build something, you have to build it right,” he said. Remember than on a mobile device, your app may be right next to Instagram or Pinterest in the users phone, so you have to make your app as seamless as the best.
Leber also suggests building out an interactive prototype of your app as a tool to help you recruit team members. It allows people to get an interactive picture of what you’re trying to create, making it easier for them to see your dream and get excited about coming on board.
Most panelists cited finding early developers to join their team as the hardest part of the process. Ultimately, it’s important to remember that hiring your early developer isn’t just a tech hire – it’s your first hire and ultimately, a co-founder. They will be with you and the company through the good and the bad.
For people like early developers (those key to your launch), it’s important to consider equity as part of their package. First, you may have limited capital and not much else to offer. Second, it can be a great way to maintain motivation and commitment. However, Louis Wharton, the panel’s legal expert, cautions against giving out equity too easily. “Equity is the most important asset your company has,” said Wharton. One way to avoid giving equity to early hires is to bring them on as contracted employees; however, if you are hiring a contracted employee they must work as a separate, independent entity, as there are significant penalties under state law for simply putting a “contractor” label on someone essentially functioning as a regular employee.
Another major mistake entrepreneurs make in the early stages of a startup –mobile or not – is failing to document. This means properly papering terms of employment with new hires, documenting product iterations, and adequately documenting your intellectual property ownership. Failing to do these things can lead to legal ramifications down the road.
Finally, when building out your mobile app, it’s important to keep in mind that users are looking at a very small screen and have shorter attention spans than when using a desktop. Thoroughly check out the competing apps and ask yourself questions like, “Where is the user’s finger on the screen?” and “Where are they spending the most time?”
For more great startup advice from industry pros, check out LAVA and don’t miss out on future events at ROC!