To build a successful business, you need more than just a great idea. You also need the right technology, a clear understanding of the problem you are solving, knowledge of the competitive landscape and a team you trust to execute on your vision.
I’ve watched company after company eagerly launch their business, only to realize a few months later that they don’t have a sustainable business model, lack the right resources or have entered an overcrowded market. These companies crumble even before making their first sale.
Okay, so let’s say you already have a great idea, the people to get the work done and a passion to build something great. What do you need to know in order to be successful building a business for the first time?
As the founder of a few start-ups (some successful, some not-so-much), I’ve put together seven key recommendations I’ve learned the hard way:
1. You have to ask for the check. You execute a perfect pitch, get a favorable response and then cross your fingers. Wrong. The reality is that investors won’t wake up the next day and immediately think to send you a check. You have to put them on the spot while you are standing in front of them. Put pressure on the investor to make a decision instead of waiting by the mailbox.
2. Anything other than “yes” is “no.” This is especially true when it comes to requests for money, partners or resources. It’s tough to accept initially, especially when you get encouraging reactions. Once you get the hang of it, you’ll find that this fact will help you be more decisive and move faster. Time is of the essence, so don’t hold on to false hopes.
3. The two things you need for success and funding are the right team and the right opportunity. Notice that a cool app isn’t one of them. It’s much more about the ability to build a great product in a market that is ready for it.
4. When an investor says “no” but it’s “not about the team,” 99 percent of the time it's the team. Take my word for it. You may think it’s the app or product, but it’s most likely your team. The investor isn’t confident your team will get the job done but is just being polite. If you keep hearing “no,” it’s time to seriously re-evaluate your team and make changes ASAP in order to be successful.
5. Don’t be afraid to pivot, but fear the pivot itself. The startup journey is a learning process. We learn what works, what doesn’t and where the real opportunities are as we go. We may even decide to go in a completely different direction.
I’ve been there. Just know that the grass isn’t always greener on the other side. Pivoting may give you more opportunities, but it’s not going to solve all of the problems you experienced prior to the pivot. Not to mention, it’s hard work. Be prepared.
6. Spreadsheets don’t print money. Money doesn’t grow on trees or on rosy projections. The only thing certain about forecasts is that they are always wrong. The sooner you can be okay with this truism, the easier it will be. Focus on the execution, not the spreadsheet.
7. Avoid the trap of hiring someone else to solve your problems. In the early days of your business, you’ll be inundated with contractors who would love to help with development, marketing, fundraising, recruiting, delivering coffee and everything you can possibly imagine. Don’t waste your time, and especially don’t waste time explaining your business. They will deplete your precious cash resources with all-too-often disappointing results.
Starting a company will be on the short list of most challenging things you’ve ever done. To make it, you’ll need to have the right team, the right opportunity and make sure to always move on. Whatever stage your startup is at, hang on tight. It’s a wild ride but you will learn a heck of a lot along the way.
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