5 Lessons That Can Make or Break Start-ups
I’ve been mentoring start-ups for years, from Cambodia to Finland.
I’ve always enjoyed the passion, energy and creative mindset start-up founders possess. I’m truly amazed by some of the innovative ideas they can come up with.
Creating a company requires much courage and faith. It’s a jump into the unknown.
The chance of success is minimal, and yet the global pandemic has boosted the entrepreneurial spirit. The number of people who’ve decided to start the adventure has been increasing over the last year.
I find it both fascinating and scary. Fascinating, because being an entrepreneur is the toughest job ever. New business owners have yet to realize it.
Scary, because I see the same mistakes being reproduced over and again.
Let me share 5 lessons I’ve learned throughout the years.
Lesson #1 — Prepare for the long run
Entrepreneurs usually start from something that doesn’t exist and build it up piece by piece.
The construction never ends though. There’s always an extra piece to add.
That’s why it’s important you first understand entrepreneurship is a journey.
It’s like watering a plant. First, you don’t see too much progress, but if you continue to do it properly, feed it, take proper measures to make sure it’s growing strong, eventually, the plant will blossom, and you will yield results.
It can begin as a part-time hobby while you’re testing your idea, but at one point it will demand that you go all out.
You’re in for the long-term. It will become your life.
You may or may not be successful, but expecting quick returns will lead to desolation and frustration.
Instead, learn to cultivate patience and resilience. That’s how you build an entrepreneurial mindset.
Lesson #2 — Don’t worship money
VCs glorify money because their job is to get high returns on investments fast. And return on investment is their measure of success. They and start-up incubators or accelerators have created a system to push start-ups forward with financial incentives.
But then, start-up founders start worshipping money and focus on it as the ultimate solution to all their problems. All of that is amplified by TV reality shows and social media where being a millionaire seems to be the only criteria to live a successful life.
Are Jeff Bezos and Bill Gates happier than you because they’re worth hundreds of billions of US Dollars? Both got divorced by the way.
For founders, it can turn into a big slap in the face because while they’re dreaming about being the next unicorn and focusing all their energy onto that elevator pitch to get funding, they forget one thing: everything else!
Your primary source of fundings will always be your customers, never VCs.
Instead of preparing for one round of investments after the other, you should focus on building your start-up’s foundations.
Otherwise, it’s like building a house without foundations. You are doomed to collapse even before starting.
Money is always a means to an end, never the end.
Lesson #3 — You will fail and that’s OK
Being an entrepreneur is the toughest job ever.
You’ve got to wear many hats, acquire many skills, and make many decisions — fast. All whilst under extreme pressure to deliver quality work to your clients, take care of your employees, and maintain a healthy cash flow.
It’s a constant roller-coaster of emotions. Some days are filled with joy, others are simply discouraging. Sometimes, it can happen within the same hour.
Two things are certain while you’re navigating your entrepreneurship journey: uncertainty and failure.
You already know what failure tastes like. You’ve been there before. I’m afraid it won’t stop just because you became an entrepreneur.
On the contrary, it may well accelerate!
Failure is part of the game. The problem is that many start-up founders (as well as more experienced entrepreneurs) don’t accept it. They refuse to talk about it and can become scared of it.
Those entrepreneurs end up being stuck because the risk of failure is too high in their eyes to try anything.
When you’re stuck, your business is stuck.
So accept that failure is part of the game.
Let me ponder this section with the following quote from Anna Juusela, the founder of We Encourage (an extract from Inter: views, Cracking The Entrepreneurship Code):
“Who determines when I fail? How can I fail if I always get up? There will be bumps but if you’re doing something that gives you a good feeling, something that makes an impact, who cares if there’re some setbacks, who cares if there’s failure?”
Lesson #4 — Be crystal clear about who your customers are
Here’s a question I ask founders in all my mentoring sessions: Who are your ideal clients?
There are 2 types of answers:
- A confusion between the customer, the person who pays for the product or service, and the end-user, the person who uses the product or service. Sometimes, the end-user is not the customer.
- No ideal client profile, or a very limited one. Worst case scenario, the answer is “we target everyone”.
Your start-up is best suited to serve a specific type of client: your most viable market.
If you’re busy looking for customers who aren’t part of this market, you’re losing opportunities to work with the ones who are.
Everyone is not your customer.
Although reaching out to everyone and hoping for the best is easy (after all there must be someone out there interested in my brand), it lacks efficiency, and will adversely impact your business long-term.
So don’t waste your time and energy chasing the wrong people. Instead, define who the right clients are and focus on them only.
Lesson #5 — Surround yourself with the right people
You won’t succeed without the help of others.
By others, I mean people within your organization, like your co-founders and employees, as well as people outside your start-up such as advisors, mentors, or coaches like myself.
People are more resilient than technology. When technology breaks down, you need people to fix it.
Having said that, don’t recruit people who are built on your profile. Cloning yourself means multiplying your strengths as well as your weaknesses.
There’s only one you and that’s you.
Instead, get the best people for your business, starting with your co-founders. By best, I don’t mean being the best in their field of expertise. I mean having a combination of the right attitude and technical skills.
In addition, remember that the difficulties you may face have certainly been tackled by others. Sometimes, there’s no need to re-invent the wheel. Learn from people who have walked the walk before you. They can help you save significant time and achieve more.
The biggest risk you face is to become the main bottleneck of your own business because everything is tied around you.
Don’t be that founder.
Surround yourself with people who can support you and with whom you can share the load.
Get my eBook ‘5 Cracks To Do Entrepreneurship The Right Way
