I have spent many years building businesses. In that time I have been on the receiving end of some incredible advice. Some of it has changed my businesses and life. Some of it works for other people but not me. When I look back and reflect on the most valuable advice, it’s never the obscure that wins out. Almost always it is the most obvious advice that I knew all along that has helped me the most. Timing (when you receive the advice) is the most important factor when you take on advice.
What follows is the advice that I would give to myself if I were starting a business today.
1. Get healthy
For some idiot reason it has become cool to work yourself into the ground. Let’s put this to bed right now: it is not cool to be unhealthy.
The most paradoxical thing I hear founders say is that they put their company first, before anything else. That is idiotic.
First, get your health sorted out then you’ll be at your best when you are engaging with your team, your customers and your work. If you haven’t slept more than a few hours a night for a month or two then I don’t believe that you are putting your company first. You are actually doing more damage than good. Go to sleep, get some rest and then come back even stronger.
I look at health in a few very specific ways:
If your mind isn’t healthy and you are unprepared to go into a startup then you shouldn’t start a company. If over time your mind begins to take strain, you should stop and get your mind right before continuing to build your company. It’s OK to seek help if you are feeling like you need it. I see a psychologist when I feel strain and it’s the best decision I made for my own wellbeing and that of my company.
I don’t want you to look like The Rock but I do want you to live to reap the benefits of your hard work. Releasing endorphins is a great way to stay motivated and energised. Make time for exercise and your day will be much more productive and you’ll be more effective.
I try to do exercise at least four days a week. Not a lot of exercise, you don’t need to spend 3 hours a day at gym. Go for a run, do a yoga class, lift some weights or do whatever sparks your energetic interest. Just do something.
Read this very carefully: go to sleep.
You don’t need to code that extra 3 hours until 1am and wake up weary and feeling alone. You need to sleep. Without fail when I feel overwhelmed I can trace it back to a bad night sleep or no sleep at all. My stress levels and anxiety are directly tied to the amount of sleep I am getting over an extended period of time.
Yes, there are times when you need to work for a full week on a new project that requires extra effort but your default position cannot be 4 hours of sleep a night.
Sure, Casey Neistat can manage with very little sleep and a 3 hour run every morning but he and his ilk are the exception, not the rule. You and I, we need sleep. Trust me. Get 8 hours of sleep and you’ll feel like a new person.
Stop eating shit. This one’s pretty simple. I don’t advocate for any specific diet that will make you feel like a machine. I do the following:
Skip breakfast. Some call it intermittent fasting, some say they are calorie restricting. I just like to skip breakfast and eat my first meal at near 1pm every day. By skipping breakfast you cut out some calories and you are technically fasting between dinner and lunch.
Eat mostly plants. My partner is vegan and that makes it extremely easy for me to eat a mostly plant-based diet. I eat vegan almost 5 days a week and that really suits me. Then when I feel like red meat, I have some. When I feel like fish, I have some. But mostly, I eat plants and stay away from processed foods and sugary drinks.
Cook more often. When I cook at home from scratch I find myself decompressing. I have a glass of wine, talk with my partner about her day, discuss things I’ve learned that day or read about and then we sit down and eat a healthy, home cooked meal. This is a great way to stay connected to the food you are eating as well as your partner when you cook dinner together. We cook together every night. Cooking dinner every night also helps to save money on lunch the next day as I get to take leftovers to the office. Cook more often, trust me.
I don’t have a lot of friends or relationships that I keep but the ones that I hang on to, I protect and nurture at all costs. The network of people you surround yourself with will be able to support you when you need it and they’ll be able to help you become more of a success (as you will help them) and the cycle then continues. It’s boring to be a successful startup entrepreneur alone. Nurture your relationships even if you have to cut out a few to make the important ones stick.
2. Everyone feels like an imposter
The next time you walk into a pitch, proposal or meeting remind yourself that everyone you are talking to feels like an imposter, just like you do.
We all suffer from that feeling that we don’t belong where we are in spite of external validation. That is, quite literally, the definition of Imposter Syndrome. Acknowledge what you are good at, admit what you are shit at and then remember that everyone feels like you do.
It’s also alright to understand that you are going to feel unworthy sometimes. You’re going to doubt yourself and you are going to question your abilities. Take a breath when this feeling comes on and realise that it shall pass and you will pick yourself up and carry on. It’s OK to have bad days as long as you get over them and move towards the good ones.
3. Ego will destroy you
It’s hard to acknowledge that you feel like an imposter if you are filled with ego. I’ve experienced my share of ego and still do to this day. But I am now painfully aware of the damage that a big ego can inflict.
I used to think that the best way to build the best business was to be the smartest and most competent person in the room. Now I believe that surrounding myself with the smartest people in the world is the only way to be the best version of myself.
Acknowledging that my skills are different to other people’s makes it easier to see their skills and understand mine better.
4. The more you fail, the more you succeed
This feels like the complete opposite of the thing you should be striving for, right?
You should be trying to succeed, not fail. You should be shooting the lights out, not yourself in the foot.
In my experience, the more I have failed, the closer I have moved towards success.
I have learned that failure is the real indicator of success. When you fail you are trying new things, pushing the boundaries of what you think you know and how you think you do things. If you aren’t pushing and trying new things then it’s likely that you’re just doing what someone else has done but probably not as well.
It hurts to fail, I know.
5. Define success
I am often stunned when I talk to people who want to or have started their own businesses because when I ask them why they started this business, they don’t have a clear answer.
When you are starting out you should sit down with your co-founders (or yourself if you’re a sole founder) and aim for something. Do you want to be the biggest company in the world? Have the most employees? Reach $1m in annual profit? Grow your revenue to $1bn? Do you want to be able to work from anywhere in the world?
You have to define success in very clear terms. You can redefine success later once you’ve reached your first successful benchmark but if you aren’t aiming for something very specific then I believe you’re in trouble.
6. Cashflow, cashflow, cashflow
Knowing the difference between cashflow, revenue and profit could save your startup.
In the early phases of a business cashflow is the most important metric that you should be paying attention.
Revenue — money made from sales.
Profit — money left after expenses are deducted.
Cashflow — the amount and timing of payments you receive and need to make. ie: tomorrow you owe $1000 to a supplier. You have $100 in the bank but you are being paid $2000 in 7 days time. You do not have the flow of cash to pay your supplier tomorrow before you are paid in 7 days. Even though in 6 days time you’ll be profitable, today you are technically insolvent.
7. Profit is better than funding
Do you know when it is the best time to raise funding from outside investors? When you are profitable.
Profitable businesses have leverage. Profitable businesses can survive indefinitely without funding if they manage their growth well. Profitable businesses raise money from a position of power. Profitable businesses can invest further in their product, team, growth and well being. Profitable businesses are sexy, smart and sensible.
Growth for the sake of growth is stupid. Growth to achieve profitability makes sense. The best kind of funding I can think of comes straight out of your profit.
8. Sell more, raise less
Before you start raising funding ask yourself if you can increase your sales in any way. It’s going to take you at least 6 months to really hit your stride when raising funding. It’s likely that your first round will take 12 months to fully close and the funding to clear.
So instead of going out and raising funding, ask yourself if you could spend 6 months selling harder than you’ve ever sold before and keeping 100% of the business that you started. Sell more, raise less.
9. A “maybe” is actually “no”
When you’re selling a product or feature it’s important to pay attention to the answer you get from the potential customer. If they give you a resounding “yes” then you’re on to something. This is extremely unlikely at the beginning. You’re still figuring out how to pitch and position your product or service. You’re still trying to understand your target audience and you’re still trying to find your feet.
It’s much more likely that your first few sales calls come back with a soft “maybe”.
Maybe is a killer. Maybe keeps you interested in the prospect of selling to this person. Maybe drains your time and attention and saps your focus from the new customers who might be a resounding “yes”.
When someone answers with “maybe” you need to close them hard and get them to a “yes” or a hard “no” response. If you can’t get them to a yes or no answer then I suggest you move on. This prospect is not your last so better to move on to the next one. There are lots of potential customers out there.
10. Bigger does not mean better
It’s hard to believe that this still needs to be said out loud but; a business with more staff, bigger offices and higher expenses is not always the best business.
Sure, in some instances having these things looks good and feels good but for most businesses out there, having 4000 staff members in 20 countries is never going to happen. I’m serious. It’s very, very unlikely that the business you are building right now is going to be be a billion dollar behemoth. The thing that we need to realise is that bigger is not always better.
Profitable is better (see point 7 above). Define what success looks like for you and inch towards it (see point 5 above). You don’t need to keep a “headcount” (wow I hate that word) and you don’t need to expand offices, countries, continents, planets, universes. You just need to work out what success looks like for you and work towards it. It’s also OK if your definition of success is to list a company and employ thousands of people. Go for it.
11. Only work with the best people
At a startup you are constantly battling between budget to hire the best people and urgency to bring these people on board.
As a founder (or the person recruiting) you are going to have to figure out how to attract the best people to your business. To start with, the best people are attracted by the best people. No A-player wants to work in a company filled with B and C players. If you start out hiring average people you’re only always going to attract average people.
Even if you can offer the best people the most money and equity to join, eventually they are going to be frustrated with the team that surrounds them and they’re going to leave.
As an extra bit of advice to do with the best people — when you find them and bring them on board, if they really are the best and you believe that to be true, leave them to do their work. Let them be the best people in your organisation. Don’t micro-manage them.
12. Burn. It. Down.
A question I am asked a lot is when you should walk away from your startup and do something else.
There is no clear cut answer to this question unfortunately. The boundaries are different for everyone and context varies greatly from startup to startup and founder to founder.
However, I do have a few questions that help my thinking:
Do you have fun more often than not?
Do you still want to work with the people you see every day at work?
Do you still believe that your idea can be a profitable and sustainable business?
Is this still what you want to spend the next five years building?
If you answer “No” to majority of the questions above then you should consider doing something else. Recognise that failure is a path to success, it’s the start of something new and not only the end of something old (see point 4 above).
13. Startups aren’t for everyone
Over the past 30 years it has become painfully cool to be a startup founder. Unfortunately this cool factor attracts a lot of entrepreneurs who are actually more suited to being employee number 5 or 10 at a startup. Being a founder is not for everyone.
Taking this a step further, working at a startup is also not for everyone. You are constantly in fight or flight mode and hunting for the next deal to get you to break-even or profitable. For many people this is a hugely motivating factor in the most positive way but for a very large part of the population this constant pushing and anxiety is not sustainable, even at an employment level.
It’s OK to want a stable job at a big company that does good work. You don’t have to fight the startup fight, there is no shame in that.
As long as you are making a conscious choice to be where you are do the thing you are doing then you’re going to be OK. If you fell into your situation and are suffering for it then you need to rethink your choices, consult the unsolicited advice above and perhaps make some new choices.
If you liked the article above, you may also want to buy my book DO. FAIL. LEARN. REPEAT — https://amzn.to/2MlDSwt.