5 Dos And 5 Don'ts Of Entrepreneurship Every Startup Needs To Implement
Entrepreneurs are the new rockstars.
From "The Social Network" to HBO’s "Silicon Valley," entrepreneurs have never been hotter in popular culture.
It all looks so glamorous from afar: drawing fancy equations on whiteboards, crushing through a carton of Red Bull during all-night coding sessions and ringing the bells on the NYSE trading floor after you’ve taken your company public and made a billion dollars overnight. Best of all, you get to build something; you get to disrupt the status quo and change the world.
What these daydreams don’t include are the countless sleepless nights, the steady decline of your health and relationships and the constant stress of being responsible for your employees, customers and investors all at the same time.
The entrepreneurial journey can crush the spirit of even the most dogged optimist and the start-up landscape is equal parts garden and cemetery, filled with promise and littered with failures.
This is not to say that entrepreneurship isn’t rewarding; it definitely is. However, the road to glory offers many pitfalls. How you deal with those challenges will determine whether or not you soar like Google or crash and burn like Pets.com. These are the 10 dos and don'ts of entrepreneurship:
10. Expect success overnight
Entrepreneurship is a marathon, not a sprint. Even if all of your stars are aligned and you have the vision, the team and the capital all in place from day one, there will always be unexpected challenges along the way.
Your customer acquisition rate might be slower than you anticipated and you might have underestimated how much time and manpower you have to dedicate to customer support. Despite what late-night infomercials may have promised you, starting your own business is actually a terrible way to “get rich quick.”
Whatever the case, the key is to stay focused on the long-term vision and do not waver in your determination. Believe in your product, believe in your team, believe in yourself and don’t rely on instant gratification or quick wins to keep you motivated.
9. Ignore history
While every entrepreneur would like to believe that he’s a beautiful and unique snowflake, chances are somebody has attempted your idea before and failed.
Instead of dismissing these companies, you should strive to learn everything you can about them. Where did they go wrong? Did they do a poor job of explaining the benefits of their products? Did they not have enough venture money? Was the management team too inexperienced?
More importantly, ask yourself, “How will I be different?” In case you were wondering, “Because I’m smarter than they are” is not a good answer.
There are plenty of folks with Ivy League degrees and genius-level IQs who have started businesses that have failed. If you’re serious about succeeding as an entrepreneur, you need to take other entrepreneurs’ failures seriously, as well.
8. Assume money solves all problems
There’s an unfortunate belief in start-up circles — particularly amongst red-hot technology startups — that money will solve all of your company’s problems. Such is not the case and this kind of thinking is responsible for many of the spectacular startup flameouts of the past decade.
Of course, capital is important for any venture, but it needs to be used in the right way. The best use of investment funds is to take a model that’s been proven to work and scale it.
You’ve built an engine that’s small and efficient and delivers results; now, you’re pouring rocket fuel into it to help take it to the next level. If you pour rocket fuel into a faulty engine, however, it will exacerbate whatever problems your company already had, but on a bigger scale and with much higher stakes.
7. Let investors dictate your company’s strategy
Most seasoned entrepreneurs are likely to have a love-hate relationship with investors and venture capitalists. On one hand, you need their money to help bring your vision to life.
On the other hand, what’s good for investors is not necessarily what’s in the best interest of your company, which is the problem.
From the investors’ point of view, it’s all about getting as big of a return on an investment as possible, and as quickly as possible. This means they want their portfolio companies to spend money rapidly so they can speed along to a quick and profitable exit.
If you’re looking to build a company that lasts, this isn’t necessarily the right approach.
Building a lasting company requires deliberate growth; taking the time to understand your customer and applying their thoughts to your product; establishing a strong brand and company culture and hiring people who are aligned with it; and building an organizational structure that is both efficient and scalable.
So, if you’re truly in it for the long haul, beware of the moneymen and their unquenchable thirst for short-term gains. It’s your company; grow it on your terms.
6. Operate inside of a bubble
The English poet John Donne famously said, “No man is an island, entire of itself; every man is a piece of the continent, a part of the main,” and the same holds true for startups.
It’s all too easy to become engrossed in the day-to-day of your company and ignore the outside world, but that would be a serious mistake.
The best entrepreneurs are constantly soliciting feedback from their employees, peers, other entrepreneurs, investors and advisors, friends and family, and from customers. They stay connected with their community and make an effort to support other startups, as well.
These entrepreneurs are the ones who have the feedback loops and support networks that allow them to weather bear markets, negative publicity and the general ups and downs of start-up life.
Don’t be deceived by the lone-wolf image of the entrepreneur you see in the media; it definitely takes a village to succeed.
5. Do what you know
There are too many entrepreneurs out there who get involved in industries about which they know absolutely nothing. It doesn’t matter if you’re brilliant or a quick learner; sometimes, there’s no substitute for experience.
There are several advantages to starting a business in an industry with which you’re already familiar: You’ll have a better understanding of your customers’ real needs (instead of their imagined needs); you’ll be more familiar with the competitive landscape (and opportunities for disruption within it), and you’ll be able to speak more intelligently about your vision to your employees, customers, investors and other key stakeholders.
4. Ask for help
At its heart, entrepreneurship is a leap into the unknown, particularly if you’ve never started a business before. In other words, there will be a lot you won’t know.
The same holds true for every entrepreneur, ever. The difference between somebody who is overwhelmed by this lack of knowledge and somebody who manages to succeed despite his ignorance is the willingness to ask for help when it’s necessary.
Whether you seek help internally or externally, people will respect the fact that you’re aware of the limits of your knowledge and are actively seeking to enhance your understanding of a problem.
The best entrepreneurs are the people who take this lesson to heart and maintain an improvement-oriented, humble mindset throughout their careers, even after they’ve “made it big.”
3. Know your purpose
Entrepreneurship can be an exhausting endeavor, full of setbacks and disappointments. The best defense against discouragement is to have a strong sense of purpose — a “why” that can help you endure any “what.” This is a question that needs to be answered before you start your venture, not after.
Marketing talking points aside, why are you really starting your company? Are you genuinely passionate about the problem you’re trying to solve, or do you just think it’s a lucrative opportunity?
It’s perfectly okay if the answer is the latter; not everybody has to “change the world” with his or her startup and there are too many founders who trick themselves into thinking their frivolous Instagram-for-Hamsters mobile app is actually making the world a better place.
Whatever your reasons are for starting a business, make sure you’re absolutely clear about them, both to yourself and to others, and that they provide the meaning and motivation you need to get your business off the ground.
2. Recognize your mistakes
Nobody likes to admit that he or she made a mistake, especially entrepreneurs who rely on optimism to get through the hard times. However, ignoring a mistake and allowing it to fester can be tremendously costly to your company, so have the courage to admit when you’re wrong and when it’s time to change course.
Beware of the sunk-cost fallacy: the bias that leads people to send good money after the bad and to continue to invest precious energy into a doomed endeavor. Like a good poker player, an entrepreneur must know when to hold’em and when to fold’em.
1. Savor the journey
You’ve identified a major need and you have a huge vision for how to satisfy it. You have limited resources and time is not on your side. This means you need to be firing on all 12 cylinders, 24 hours a day, 7 days a week, right?
Not necessarily. A lot of entrepreneurs are so focused on the destination that they forget to enjoy the ride. Of course, it’s natural to be determined and motivated to do well, but this shouldn’t come at the expense of enjoying the present moment.
Ask any entrepreneur that has successfully scaled a business what his favorite memories of his company are, and nine times out of 10, he’ll tell you it was the early days, when everybody was working side-by-side in a cramped office littered with Nerf darts and empty pizza boxes and nobody quite knew what they were doing.
At the time, that phase may have seemed like a mere stepping stone to greater things, but in retrospect, those were magical times that you may never get to experience again and would do anything to relive.
Be driven, be motivated and be ambitious, but remember to stop and smell the roses along the way.
Photo via HBO