12 Lessons For Entrepreneurs To Carry Into 2018
These 12 lessons come from notes I’ve made each week in 2017 and I suspect they will be just as valuable in 2018.
by Phil Hayes-St. Clair. Published first on Startup Grind.
The other 40 observations are interesting but these 12 have shaped my thinking on family, inkl, mentoring, my social performance in supporting veterans and women founders and being an entrepreneur with more windups than exits.
1: Thinking publicly is no longer optional
As I wrote last week, to think publicly means you place your ideas into the hands of others. The underlying motive is to learn as quickly as possible and then move an idea forward or to kill it and move one.
I do this by writing this blog each week. The precision of thought that writing provides me is immense.
And writing is just one example. Many of my colleagues and mentees have found the courage in 2017 to share big issues with their team in order to increase solution surface area. And the results have surprised them (in a good way).
Find a method that works for you. The crowd’s wisdom has never been more abundant and you have nothing to lose.
2: Investor expectations on traction are very different to two years ago
The funding cycle for consumer technology ventures is maturing. Capital is available but it’s increasingly expensive in the face of soft traction. Two years ago $30K in monthly recurring revenue (MRR) would start a conversation with Series A investors, today $100K MRR is where the conversation begins.
Seed investors also require a lot more than a 10-slide vapourware pitch deck to get excited. And those investors who once specialised in Series A investments, for the most part, have moved further upstream and now invest in Series B and C.
The reality for entrepreneurs is that the rate at which a business can capture monetizable value for its customers is the main game.
3: Scenario planning is your best friend (in all circumstances)
It’s dangerous to assume people think about scenarios the same way. No matter the situation, be it a major decision or tactical campaign, there is always a best-case, worst-case and a few mid-case scenarios that could reasonably eventuate.
Spend time working through and agreeing the three actions that apply to each scenario with your team. It will reveal blind spots, establish a consistent level of awareness across the team and minimise stress caused by knee-jerk reactions to scenarios you could have foreseen.
4: Cherish life. It ends unexpectedly.
When you think about someone close to you, someone who brings value to your life, express your gratitude in that moment. Don’t wait. You might not get another opportunity.
5: Being ‘venture-backed’ isn’t a business model
On four separate occasions this year I was stunned to learn that a product that I expected to be paid (and I was ready to pay for) was free because the company was ‘venture-backed’. In each case, this message came from a front-line salesperson (?).
This turn of phrase means that a company has raised money from investors and is focused on growing the number of people who use their service and considers generating revenue a secondary priority. This can make sense when building a marketplace business model where you monetise people’s engagement (like Facebook does with advertisers).
If this isn’t the case, one of two bigger problems is lurking below the surface.
The first problem may be that the company doesn’t know how or lacks the confidence to price its product. The second problem is that the company may have become reliant on raising capital from investors in order to survive. Either way, neither one is conducive to survival so why buy from them?
6: Understanding incentives is 80% of forging great partnerships.
In other words, if you don’t have an intimate understanding of what’s in it for the other party you’re trying to forge a partnership with, there will be no partnership. You might establish a transactional relationship but the value to be limited to that relationship and it probably won’t grow.
The key is to find ways to make your partners shine.
7: Growth changes everything but it’s rarely linear.
The reason that growth isn’t (often) linear is that it requires a venture to undertake continuous experimentation. Each experiment is designed to edge a product closer to its ‘fit’ with a target market. More experiments fail than succeed until one day the unrelenting focus on optimising a collection of processes or features hits the mark and a ten-year-in-the-making-overnight-success is born.
Growth changes everything but thinking it will just happen with the current version of a product is a mistake.
8: “In the spirit of radical candour….” was the most productive sentence-starter of the year.
Radical Candour was published by Kim Scott earlier this year and it was a game changer. It means to challenge directly while showing you care personally. It’s a simple construct and one I’ve used it at least twice a week this year. I also introduced it to our team at inkl.
Radical Candour has helped me deliver and receive difficult feedback in 2017. And in 100% of cases, the outcome was better than I could have expected. If this book is new to you, get it here or listen to it here.
9: Trust is a competitive advantage.
There is only one way to develop trust between a product and the person using it: Continuously deliver on the expectation you set with them.
Achieve trust and people will talk about it. Break trust and people will talk about it. It’s your call.
10: Beware the shadow cast by disrupters.
Every leader creates a shadow within their organisation. Like children taking cues from their parents, employees take cues from their leaders, in most cases more than leaders realise.
Leaders who seek to change the status quo create a ‘disrupters shadow’. There are those leaders who espouse a do-whatever-it-takes attitude and those who consider every option but act after considering risk. The latter may still proceed with an ‘if it won’t break the organisation, then just do it’ approach but the difference is they are sufficiently self-aware to make that call.
Uber is an easy target for the do-whatever-takes camp. To be fair, they had to fracture deeply entrenched, multigenerational taxi cartels in order to change personal transport as we know it. But a lack of self-awareness has introduced dire risk into its business which could have been avoided.
If you’re looking to join a high-growth venture, look for evidence of self-aware leaders. They will flex their style according to the situation, admit mistakes and consistently practice a growth mindset.
11: The soul of a product is as important as its function.
A new feature might magically unveil a previously unavailable convenience.
A personal touch that a founder makes to thank you for joining their movement might surprise you.
Or it might be an elegant effect that helps express your reaction or makes you say, “that’s cool”.
Each of these is examples of how the soul of a product captures a person’s imagination. In 2017 it was interesting but not enough to simply save people time. This trend will no doubt continue in 2018 as product managers fight for people’s attention.
12: History doesn’t repeat itself but it often rhymes.
This quote, often attributed to Mark Twain, says it all. Somewhere in our history, there is evidence of an idea or an outcome that can accelerate learning and decision making. There is immense value in examining history. If you genuinely believe an idea is novel, there’s a better than average chance you haven’t used Google properly.
At this time last year we began winding up AirShr. As each member of that team underwent their version of reinvention, I committed to doubling down on learning and optimising for time as my two core priorities for 2017. That decision has paid off in spades and I plan to continue that pursuit in 2018.
So before I get into my 10 objectives for next year, what are your key lessons from 2017?
— published first on www.startupgrind.com