by Mariel Alison L. Aguinaldo
Laying the foundation for a startup is just as important as the actual process of building it.
Cherry Murillon, founder of CAWIL.AI, an industry-agnostic artificial intelligence (AI) platform with extensive experience in machine learning projects, shared four steps to take before launching your startup in a recent webinar organized by IdeaSpace Foundation, an incubator and accelerator program that supports technological entrepreneurship in the Philippines.
1. Clarify your reason for being.
A lot of great businesses are built on the desire to fulfill a specific purpose or effectively solve a problem. If you’re able to define yours, then you’re establishing a clear mission for your startup.
Ms. Murillon started CAWIL.AI because she saw the demand for computer vision-based AI. “When I was in Singapore last year, I saw that it had a lot of applications. So I said, ‘It’s worth the risk. I need to move now or else I miss the chance of really creating a company that will solve this problem,’” she shared at a recent webinar titled “Grit & Grind – Building Your Team: How to Find the Right Co-Founder and Employees.”
In the process of defining your purpose or problem, don’t base it on earning a certain status or valuation. Focus instead on creating business value, advised Dr. Donald Lim, CEO of Dentsu Aegis Network Philippines, in a separate forum.
2. Assess your vision and skills as a founder.
As the startup founder, you are the proverbial captain steering the ship. And just like any good captain, you need to be equipped with the right navigational tools—in this case, your vision for the startup—to set you on the right course.
Begin by asking yourself the following questions:
• What targets do I want to accomplish with the company? Do I want to scale it up immediately? Or do I want to build it at a slower pace?
• Am I part of growing the company? Or will I sell it at some point?
• What are my financial goals? At what amount of profit will I be satisfied?
• What’s my implementation timeline? Around what point do I plan to exit?
You must also take the time to assess your skills. Identify your strengths and weaknesses and figure out your limitations. Ms. Murillon, for example, realized that she was good at business development and marketing but not at computer vision-based AI itself (it’s a field that trains computers to interpret and understand the visual world)
3. Find a co-founder that will complement you.
While it’s possible for founders to run a company on their own, there are several reasons finding a co-founder will be beneficial to both you and your startup. If you do decide to get one, make sure that it’s someone who has complementary skills.
Since Ms. Murillon identified that she wasn’t good with the technological side of the business, she decided to get a co-founder who would be the chief technology officer. “I operate like a lean startup. So, for me I am just satisfying that we can be operational for the next five years with this setup.”
However, the need to complement goes beyond the skills level. Think of the following aspects:
• Do they have passion for ideas? Are they someone I can rely on while brainstorming and validating?
• Do they have the same work ethic that I do?
• Will they work for the same salary that I’m getting paid?
4. Draft a founders’ agreement.
So you’ve found a co-founder that you can work well with. It’s time to seal the deal, literally, through a founders’ agreement.
According to the University of Pennsylvania Carey Law School, a founders’ agreement is the “product of conversations that should take place among a company’s founders at the early stages of formation.” These conversations should include the attitudes, fears, and aspirations of the founders in order to “minimize the likelihood of debilitating surprises” during the startup’s growth.
For Ms. Murillon, this is necessary no matter how close you may be to your co-founder. “Regardless that you’ve been friends for twenty years… the agreement needs to be clear,” she said.
These are some questions that you and co-founder should ask each other while drafting your agreement:
• What type of company culture do you want to build? How do you value your people?
• How much cash are you putting into the company? Do you need to take cash out?
• How long of a runway do you have until you need to go get a paycheck?
• How passionate are you about the startup? How long do you plan on staying?
• Who’s leaving their day job?