New Entrepreneurs

Recently I received a request for advice from a young professional who connected via LinkedIn. She said that she was contemplating starting a company, but wasn’t sure if she was ready. She said that she felt as if she had a good product and was certain that there was a market for it, but she was at a point where she didn’t know the next steps. 

I offered her the following advice, and thought I’d share more broadly.

“Make Yourself Uncomfortable”

We often consider anxiety as something to be avoided, but anxiety is normal, and essential to be successful. Think of the major milestones in your life – deciding to marry your spouse, making a move to another city, the day you took your first child home from the hospital. Odds are that each of these were exciting, exhilarating, but also accompanied by anxiety and self-doubt. Am I good enough, can I handle this, what if it all goes wrong?

Yes, there’s a fine line between the kind of anxiety that is overwhelming and paralyzing, and that which causes one to move. It’s important to break down the parts of the strategy into pieces that still make you queasy, but that you think you can handle and put yourself in a position where you’ve got to make ‘it’ happen.

“Actually, It Is Rocket Science”

I’ve seen a number of entrepreneurs spend way too much time striving for perfection in the business model prior to launch. The logic seems sound – they worry about disappointing their first customers – but in the early days there is precious, limited time and typically even less money. If you want to build a business that is in a stable orbit, then you must achieve escape velocity. You do that by getting the minimally viable product to market and pricing it relative to the value that it creates. Spend more time on the relationships with new clients, meet their needs, and reward the early adopters with high touch customer service.

“Avoid Fixed Costs, At All Costs”

In most industries, there are established companies that do part of what you want to do. They do it at scale and for a lot less than you can. Virtually every company has excess capacity that you can access on a variable cost basis – meaning that you pay the direct costs of production rather than a large capital investment into a factory, equipment, and a staff of production people. Even if you have an intangible product, i.e., you might feel you need a call center, a receptionist, or accounting services (and you may). However, in the start-up phase, you can outsource all of this easily while using your precious time and money to focus on developing the product, creating pricing models, and building the promotional capabilities.

“Plan your Work, and Work Your Plan”

This was a constant refrain from my late mom. Now I’m not talking about business plans in the traditional sense of the word. Frankly, I’ve never seen a several hundred paged, three ring bound document create much value (except for the printing company). Instead, I’m talking about a brief document that serves less as a playbook for the business and more as a concise way to explain the business to stakeholders – which could be early staffing recruits, potential investors, or outsourced partners. It’s a business development document that speaks to your vision for the company as well as the ways that you will build and grow the sales of the organization and manage the risks to the business. 

Supplementing the business development document are the tactical plans. These are very specific initiatives to do in short increments of time – days, weeks, maybe months – but not years. Multi-year plans are rarely useful (remember the five year plans of the former Soviet Union?). Multi-year plans are much more suitable to large, mature, and capital intensive companies – not innovative, opportunistic start-ups.

“Learn From Another’s Mistakes”

One of my favorite quotes from a movie (the title of which I’ve long forgotten) is “Wisdom comes from experience, and experience usually comes from bad judgment”. Ah, so true. If only you could learn from someone else’s foibles. In this sense, mentors are invaluable. You can make these formal relationships or just grab coffee from time to time. The best mentors are the ones who have the scars and wounds of carving their own path, but succeeded despite that.  They can provide you the wisdom without as much of the bad judgment part.

“Create Positive Feedback Loops”

As a CEO of a small start-up, you’ll have one thing in abundance: people who worry about this crazy thing you’re doing, and who wish you’d just give in to the inevitable failure you will face. Stay away from these people, or at least establish boundaries. You will usually have so much self-doubt that you won’t need additional negativity. I’m not suggesting that you ignore counsel from trusted advisers, because that would be foolish. However, what you will find helpful is finding the one or two people that believe in you more than you believe in yourself; there will absolutely be days when you will need to tap these resources.

“The Top Line Should be Top of Mind”

Every income statement begins with sales and revenue. From that, everything else flows. The surest way to success is growth in sales and revenue. There are obvious dangers with unmanaged growth, or failing to price properly, and other missteps, but the point is that as the CEO/Founder you must spend a sizable part of each day finding the ways to grow the company. That may seem obvious or even easy, but it can be one of the hardest things to do and the easiest to avoid. Too many CEOs get wound around the operational issues, when a better focus of the CEO’s time is in the finding ways to boost sales (oh, and of course finding a great COO).

“Success Happens When Teams Work for Each Other, Not for the Boss”

This is a tough one to learn, because it requires trust in dynamics outside of your direct control. When you build a team, you have to find people who fit wel

l together – the first few hires are incredibly critical. Hire the absolute best people for their character first and their skills second. That may seem odd to some. What I mean is that you can train talented people with character to improve their skills, but you cannot train a person – no matter how skilled – on items like ethics, honesty, empathy, initiative, drive and similar qualities. The reason that I advocate for this model of team building, is because these qualities will define the culture and the environment in which your team will exist and grow, and as a leader you’ve got to get the culture right; when you do get it right employees care for one another, they respect one another and they tend to want to work together, solve problems together and succeed together. As the boss, your job is to make this probable in your company. 

Finally

I’ve accumulated lots of wisdom from so many smart and wonderful people over the years, and I did that by trying to find the smartest people in my sphere, and nurturing those relationships. I’ve shared some of what I’ve learned from my mentors and some I picked up through experience (yep, and bad judgment). If you have some of your own that you’re willing to share, drop a comment.

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