I have always maintained that starting a startup is like cooking a dish, whose recipe you do not know. (I have described in greater detail in my posts why the recipe is not known here and here.)
It takes great ingredients to make a great dish. In business, these ingredients come in the form of people, who make up the team. It is therefore impossible to over-emphasise the importance of having a good team in place. This is absolutely non-negotiable. If you compromise on the talent/quality of people who are making up the team, the output is obviously going to be compromised.
While picking a team, the one thing that you must keep in mind is that they should go well together. You may have the best strawberry and highest grade of pepper but together they are not going to create anything palatable. This is what is described as Culture in a business. You need to pick people who can work together well; where the sum of the parts is greater than any of the parts (like strawberry and cream).
Your business is the product of all of these ingredients coming together in the right manner. When you cook, the ingredients needs to combine well, should be cooked well enough to be able to contribute their flavours to the dish and come together cohesively. The product or service is like the dish that is prepared. The ideas from the team members should come together, with each contribution better defining the product/service.
Given good ingredients, it should be possible for you to cook up a good dish irrespective of whether your are preparing to serve one person or 100; similarly it should be possible to make a sensible and profitable business no matter what the scale. (It is okay to be unprofitable due to overhead costs, but not on a unit level)
Money is like the vessel in which the dish is being prepared. It is important, but by itself does not have any value. If there is a problem with the dish, throwing it into a larger vessel rarely solves the problem. Similarly money is rarely the solution to any of the startup problems. It, more often than not, deviates the attention from the real issue. Great ideas contribute to problem solution, not money.
To build a great startup:
Start with an appealing dish : A great idea
Get the right ingredients in place : Build an awesome team (Great ideas often save business and ideas come from people; so get great people for your business)
Get the right vessel : Too little money in a venture can be a pain and so can be too much (Look for people you know, who believe in what you do, who might support you)
If you have a vessel of your own, use it. Don’t try to borrow the neighbors vessel : Try to rely on your own money as long as possible. The moment you become answerable for somebody else’s money, it begins to distract you from your main goal. In addition to that, the person contributing the money will begin to influence the business in many ways, which may not always be positive.
Cook a dish and get people to taste it : Reach your Minimum Viable Product as fast as possible and get consumer validation. Make them use it and tell you what they feel. Ask them if they would be willing to pay for it. If possible sell it.
Serve : If you feel you have a product/service, however basic, which can be sold; Sell it. You need to get the money rolling as soon as possible. It is the only way to start defining your business. It is the only way to grow. It is the only way to improve.
Keep perfecting your recipe.