Building Codiga: Getting Started

This post is part of a series on building my first startup Codina. Get all the posts here.

There is no magic to start your company: the earlier, the better. In big-tech world, a ton of people will tell you they have an idea to start a business, and they will do it later. Too often, later means never. Such people are too comfortable being overpaid for the job they do. They think they can do it but they really can’t. I did not want to be such a person.

Nobody wants to leave their $500,000 corporate job where everybody praises them with glaring annual reviews to start a company to work 10+ hours a day and have a 90% likelihood to go to zero. Places like San Francisco are full of tech bros with ideas but no execution ability and a fear of losing their social status given by their high-paying job.

I am a strong believer that in life, execution is everything. There are plenty of talkers and thinkers but very few doers.

When you execute, you will make mistakes. A ton of them. But you will go further than someone not doing anything. Making mistakes is normal and part of the process. Mistakes are acceptable as long as they are not fatal (e.g., giving too much control to a hostile shareholder, committing fraud, etc.). What matters is how fast you recognize and fix your mistakes. In a startup, your agility matters more than anything else. Make yourself a favor: accept now you will make mistakes, and promise yourself you will recognize and fix them as quickly as possible.

While building Codiga, I made countless mistakes. The majority of my decisions were mistakes. But the company executed very fast. In two years of existence, I hired 12 people, fired 5 of them and launched 4 products. It’s only after having a solid core team of 5 people that we launched our last product, which led to an exit.

Have a plan

If you go hiking for a month, you establish a plan (e.g., start at a given time, how long and how far you go, when you leave your car, etc.) for a reason. It’s the same with a startup. If you don’t have a plan, you will get lost.

Have a master plan for the next two to three years. Write it down. Like when you go hiking: review it periodically to check if you are on track and assess how accurate or delusional you were.

All great entrepreneurs have plans. Take Musk and Tesla. He executed his master plan: first, an expensive sports car, then, an expensive sedan and an expensive SUV. And only then a mass-market car. Take Bezos and Amazon: first sell books, then sell music, and then expand to more products. They followed the master plan.

Having a plan makes you accountable and shows you if you are going in the right direction. It will show you how much progress you make over time. As with hiking, you can refine and adapt if the environment changes or if you make huge mistakes (e.g., if one path seems terrible, take another).

When I started Codiga, I planned to have revenue above $500,000 within a year, leave my comfortable job, and bootstrap. I was dead wrong (as usual) and adapted my plan over time to attack a specific market, look for co-founders, apply to an accelerator, etc. My initial destination (build a company with a great product that generates revenue) was correct. The initial path was wrong and required to change as I made progress.

But at least, I had a plan that helped me follow my progress.

Start a Delaware C Corp

From a legal perspective, start a Delaware C Corp. If you make a startup and plan to raise Venture Capital funds, a Delaware C Corp is a hard requirement. Do not start an LLC: you will need to transfer it as a C Corp, which costs you time (a week) and money ($5,000+).

Do not submit incorporation documents yourself, and do not pay a lawyer to start your C Corp now. Many services let you create your C Corp in a few clicks. Stripe Atlas costs $500 and handles all the legal aspects to start your business (if you do not like Stripe, some alternatives, such as Clerky, provide similar services).

Have a clear separation between business and personal

Separate your personal and business assets as soon as you start:

• Have an email for your business (john.doe@awesomebusiness.com is better than john.doe69420@gmail.com): buy a domain and pay for Google Workspace right away.

• Separate expenses/revenue in a specific business account for the company (e.g. have a separate business bank account)

• Separate documents and never mix personal and business: have a specific cloud drive for all the company documents (dropbox, google drive, etc.).

Having this healthy separation between business and personal will help you later. You are starting a new professional business and should position your company accordingly. It will make your life easier with taxes, operations, and all administrative matters (e.g., what belongs to you vs. what belongs to the company).

Do not leave your job until you have something

You now have a plan and a legal structure. It’s time to start operating. Build your product, work on marketing, and find customers. In other words: make things happen.

I recommend not leaving your day job until you have something:

• enough sales to bootstrap (you are profitable and can grow slowly)

• venture capital money (you can take a salary even if your company is not profitable)

• being accepted into an accelerator (your company is likely to receive investment)

Going solo without having sales and a way to sustain yourself (e.g., paying your rent, etc.) is like jumping off a cliff without having a safety net. It’s irresponsible, especially if you support a family and kids. Unless you have enough savings to sustain yourself for 12+ months, ensure you have one (or more) safety nets in case things go south or sour.

It took me two years before I got accepted to Techstars. Before this, I stayed employed as a Staff engineer at Twitter and a faculty member at Northeastern University. I was looking for investments for a year and applied to many accelerators. I applied for government grants, pitched investors. It failed, and I applied to 7 accelerators, got rejected by 6, and was accepted into Techstars Boulder. I left my job only after having accumulated enough savings for living 12+ months and being accepted to Techstars Boulder.

Like Batman, early-stage startup founders have two lives. During the day, they work a traditional 9 to 5 job. At night, they show their real selves: passionate entrepreneurs spending hours crafting their products and marketing plans.

Be safe and disclose your entrepreneurial activities to your employer if necessary. Some companies require you to disclose it and may have some specific clauses. Not doing it may expose you to legal issues (for example, the company may claim your company is theirs for IP reasons).