5 Startup Lessons From HBO's Silicon Valley

HBO's Silicon Valley has got to be one of my favourite shows on television. If you're not familiar with the series, the premise is simple -- six young tech professionals decide to take a gamble and start their own company (Pied Piper) in Silicon Valley; a place responsible for launching some of the biggest technology titans to this day. As an audience, we get to go along for the ride and experience some of the peaks and "valleys" faced by many young entrepreneurs when they are just starting out.

Not only is the show well-written, co-created by comedy genre genius Mike Judge (Office Space, Beavis and Butt-Head) but there's also a lot of research that has gone into the making of the show to ensure its validity. Sure, the show isn't EXACTLY true to life in all aspects, but there are some real lessons buried beneath all of the dick jokes that are valuable for anyone who has ever considered taking the entrepreneurial plunge.

Here are five startup tips that could make or break your next big idea. SPOILER ALERT: If you haven't seen the show yet, stop reading now and get on that...you can thank me later.

1. Protecting your Ass-ets

If there's anything I've learned in working with and launching companies, it's the power of the NDA (Non-Disclosure Agreement.) These don't protect you from every single loophole out there, but they serve as a general framework to ensure your ideas don't get plagiarized instantaneously. Yet, not once do I see the boys in the show sign an NDA prior to holding meetings with colleagues or potential investors. As a result, they are like chum to a hungry shark, and everyone is after a piece of their product. So please, protect your IP.

2. Don't Burn Bridges

You just might be the next Steve Jobs (or Wozniak) to roll into town, but that doesn't give you the merit to step on people on your way to the top. The Pied Piper crew make this fatal mistake when shopping around their product to various VC's (venture capitalists.) They decided that the best way to get a large investment was to "neg" each firm, to appear as though they didn't need their money. This ends up coming back to bite them later, and they are left with very little options.

3. Setting the Right Valuation

If you're fan of shows like Dragons' Den or Shark Tank then you'll know that one of the things pitchers get criticized most for is coming in with too high of a valuation. In an episode entitled "Sand Hill Shuffle," they address that exact topic.

Richard (Pied Piper's CEO) is approached by Monika (Associate Partner at Raviga Capital) to revise an offer by her boss Laurie, from a $20-million investment at a $100-million valuation down to $10 million at a $50-million valuation. This was done in an effort to not overvalue Pied Piper and decrease the chances of a "down round."

An article by Dennis Keohane examines this topic in greater detail, but essentially, if you value your business too high out of the gate, it may limit the amount of future investments you can receive if you're not able to live up to the hype and deliver a viable product. So, know your business and come in at a reasonable number...if you know what you're capable of, you'll have nothing to fear.

4. The Power of the SWOT

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a great tool to use when weighing the pros and cons of any situation. This is particularly useful when developing a business plan and determining where your product or service lands on the competitive landscape. In the episode "Homicide," a SWOT chart is used for a completely different purpose, but I'll let you find out exactly how for yourself.

5. Everyone is Replaceable (even the CEO)

The saying "the right people into the right seats..." has been used over and over again to describe how certain people are more of a fit for a certain role within an organization. I actually tend to believe that is true myself, and it's one of the main messages behind The CUBE Principle (how to utilize the strengths of yourself and others to achieve your goals.)

Overtime, we learn that Richard may not be the best fit (at least initially) as CEO of Pied Piper, and eventually he's even replaced as CEO with the "demotion" to CTO (Chief Technology Officer) of the company in which he founded. This isn't to say that Richard won't eventually be CEO again, but for the time being, it was decided his skills were best suited elsewhere...so don't get too comfortable.

There, you've got five lessons to send you on your way to being the "next big thing." If I were you, I'd start now, because there's always going to be someone on your heels who's looking to "change the world."