We never have all the answers in life. When entrepreneurs start off on their entrepreneurial journeys, even they don’t have all the answers. Every journey is unique. They learn their lessons in real time. The best that they can do is to learn from the experiences of others. They can then apply the learnings and steer their ships to the desired destination with the help of the wisdom gained. The journey is long and arduous. It is always good to stop by and hear the stories and viewpoints of other entrepreneurs. Let’s find out what this select group of entrepreneurs has to teach us about the start-up journey.
#1 Make Your Customers Your First Priority
Jon Beekman, founder and CEO of Man Crates insists on being maniacally focused on your customers. One of his companies failed because they did not keep the customer’s view in the loop.
“We had a great idea and the smartest tech team, but we fell in love with our technology and our concept of what the customer wanted, rather than actually talking to consumers to hear their feedback directly. When we did finally hear customer feedback, we were too far down the road to change our idea and the company failed,” he said.
At Man Crates, his new company, customer feedback loop is a core part of the company DNA.
Robin Chase, Co-Founder of Zipcar echoes the sentiments. “With my second company GoLoco – social online ridesharing-we built the website first before engaging with our customers. We spent too much money on the website and software. After talking to our customers we had to undo quite a few of our first guesses,” Robin says.
#2 If You Have A Co-Founder, Have A Buy-Sell Agreement In Place
We are humans. Your relationship with your Co-Founder can change. Even though you and your partners are all for the company today and have no plans to sell it, you must have an exit strategy. If you have partners on board it becomes more important to have a mutually beneficial buy-sell agreement in place from the start.
Arizona Beverage Company, the makers of very successful Arizona Iced Tea, were embroiled in a messy court battle that involved the co-founders Domenick Vultaggio and John Ferolito. There was no exit policy in place. There was no documentation of any buy-sell agreement for the founders to depend upon when the relationship soured.
The matter reached the court which hurt the interests of both the founders. Finally somehow a settlement was reached and Domenick Voltaggio was allowed to buy out 50% stake of John Ferolito for an undisclosed amount of sum with court’s approval.
Ensure that your business never finds itself in a position where its future depends on courts. A well prepared buy-sell agreement which is a written document that governs the dissolution process or buyout of one or more partner can help you avoid such situations. Your buy sell agreement should address at least three critical concerns: Valuation, management and funding.
#3 Be Flexible And Adaptable
Getting a company up and running is not easy. Even the best laid plans can go haywire. You need a lot of patience. According to Carrie Kerpen, CEO and Co-Founder of Social Media agency Likeable Media being adaptable is the real test.
“The best-laid plans don’t always work out as you’d expect. The real test is how adaptable you are when things don’t go the way you’d planned. It’s how you adjust after failure that demonstrates your strength in leadership. Did you take what you learned and did you use it to better your plan for the next time? That’s the key,” she says.
Flexibility is possibly the most important quality an entrepreneur can have. Other traits like ingenuity, intelligence and determination are important as you need all of them to see your idea through but for long term success you need to be flexible and adaptable. Plans and conditions keep on changing. Your intelligence should spot the shift and your trait of flexibility and adaptability must ensure you keep your start-up on track by tweaking your plans as and when the need arises. You must explore your options. Most of the times the entrepreneurial pot of gold is found on the road diversion you did not originally plan to go on and probably had no idea of its existence when you started the journey.
#4 Entrepreneurship Is Challenging – Be Prepared
Before you throw caution to the winds and embark on your entrepreneurial journey you must realise that the job is incredibly challenging. There are many aspects to entrepreneurship. There can be several steep learning curves, several trials and tribulations.
Diane Jooris was a therapist at a cancer center. She wanted to help patients deal with the stress of invasive medical procedures by using Virtual reality. She founded Oncomfort with the right idea but found the journey exhausting.
“There were many aspects that I never imagined about running a company. I didn’t know about legal, regulation, finances, CPAs, taxes – all the aspects that a first time entrepreneur has to deal with,” she says. “You need to learn to deal with everyone-a book keeper, a lawyer, an IP lawyer. You need to be clear with your priorities and do what you need to do to survive,” she adds.
#5 Hire Experts – Learn About All the Nuts and Bolts
Entrepreneurship is a tough journey and it pays to have to have the right people in your team. You cannot know everything. You are not supposed to. That is why you have advisors and experts. When you have the right people handling their jobs well, you don’t have to spread yourself thin and you in turn can do your job in a very efficient way too.
Zoe Mesnik – Greene founder of Lasting Smiles, a social enterprise that provides cleft repair surgery funds to the needy through the sale of personal care products thought she could manage accounting details on her own. She couldn’t.
“As my business grew the first year, I discovered that the system I set up for accounting purposes had to be completely redone. To save yourself a big headache down the road, bring in the right consultants to take care of the small yet critically important details, so you can focus on the big picture,” she says.
It is also very important to understand financial statements and budgeting. You need to know the answers to the tough questions. You have to be ready for your very own “Shark Tank” scenarios with the Mark Cubans of the industry.
What are your sales figures? How much equity and debt has the company raised? What is the capitalization structure? When will the company be profitable? What are your unit economics? What are the factors that limit your faster growth? Sit down with your team and get the right answers.
You need to spend your time in understanding all the nuts and bolts that run your business. Staying informed will help you make the right decisions. By spending your time with different teams routinely you will know the exact state your start-up is in. By sharing the correct picture you will be able to attract right kind of talent and investors as and when you need them. It is very important for you to be on the top of your business.
#6 Protect The Downside – Limit The Losses
Richard Branson is adventurous but his most popular advice to entrepreneurs is to always protect the downside. According to him you must always have a plan to cut or limit your losses before starting any new business venture. Branson learnt a lot from his father. The best lesson his father taught him was to always try to predict and limit possible losses before moving forward and investing in new business.
Branson followed his father’s advice when he daringly expanded from music business into airline business and launched Virgin Atlantic. He bought one 747 jet from Boeing on the condition that Boeing would take back the jet after a year if Virgin Atlantic venture did not go as planned. This was the condition which convinced his apprehensive business partners at Virgin Records and they agreed to support him in his new airline business. They were sure they wouldn’t lose much if Virgin Atlantic went down. They had prepared in advance to limit the losses. They knew that with the Boeing agreement in place, instead of risking millions of dollars in their new venture they would only be risking a few thousand dollars.
These stories are from different verticals, different industries but the lessons shared can prove to be useful for our tech industry too. These lessons in themselves carry pointers for entrepreneurs everywhere. Sometimes things magically fall into place and at other times the journey is challenging. It pays to learn from each other. If you want to share your experience or have advice for fellow entrepreneurs who are on their challenging journeys, we would love to hear from you. We welcome your comments.
And that will be all from my desk for now. Until next time, Adios.