Building a startup — what to keep in mind?

I’ve been a VC at Accel Partners, India — now for 4.5 years, and have seen some 70+ companies funded by my team. There are certain axioms, which I have come to believe for a startup to be successful. (These are just my personal observations and my opinion)

1. Founders need to have lot of ideas — some of the best founders I have met are the ones buzzing with ideas. They simply can fill a room with hundreds of ideas in an hour. I think of this as an essential trait — companies pivot, ideals fail, things don’t go according to plan. A founder with a lot of ideas can at least generate options to try out.
2. It takes 3 years — Most startups take at least 3 years to figure out what they are really doing. 1st year to adjust to startup life — launch your MVP, hire your first team, learn how to fire people, learn how to manage investor expectation, the frustrating fundraise process, learn that the deal is not done till the money hits the bank (business or investment or even until a hire actually shows up to your office). Another year for pivots, getting some processes in place, learning Series A fundraise is even harder, fighting off your competition etc. Finally, the year where you find your rhythm, customers start pouring in, you find the magical product-market fit.
3. You can’t brute force a company with money — lot of money breeds bad habits — over dependence on marketing, bad culture, overpaying on salaries, etc etc. Frugality makes you grounded and innovative. This is a very hard one to follow — the moment your funding news comes out media treats you like God, and employees want salary raises etc. I’ve seen so many Indian startups raise just obscene amounts of funding — and then wither away. Too much money is bad — don’t let it go to your head.
4. If you don’t innovate, you are dead — And by innovation I mean technology innovation — not business innovation. It is technology innovation that really gives you the edge — at that too for maybe 6–7 months if you are under the radar. Business innovation is something I have never seen persist — it is just too easy to copy. And the hardest thing to break — the best barrier to entry — I have seen is “network effects”. Specially in consumer companies — the only thing that makes the difference between a $100M company and a $1,000M company is “network effects” — because I’ve never seen a consumer company that has technology so great that it can’t be beat — any technology innovation you do is good enough for 3–6 months — and you hope enough for your user community to hit a critical inflection point to kickstart “network effects”

Best of luck!