10 Critical Lessons I Learned from My First Start-Up

Starting a new company is always exciting but doesn’t fall into these avoidable traps which will make your journey even bumpier.

Photo by Austin Distel on Unsplash

1. Get business mentors. As a young entrepreneur, it is important to surround yourself with people who have had different experiences to you and are at a different stage of their career. My university had great resources including mentors and through the Imperial Venture Mentoring Service (IVMS) I was partnered with knowledgeable and experienced mentors. Not only do the mentors give you a fresh perspective on your ideas, or give you insights on your business models, they also keep you accountable by setting deadlines and goals before your next weekly/monthly meeting. It is hard to always motivate yourself as a founder since you are the master of your schedule but having another person who has an interest in your business and is not your co-founder is great to ensure that you combine accountability with your creativity.
2. Don’t be afraid to share your ideas. I was always surprised by the number of other founders who only gave minimal info as to what they were doing. Some even went as far as to ask me to sign an NDA before they would want to talk. Admittedly, it is scary to think that someone could run off with your idea but the probability of that happening is incredibly slim. Besides, if your idea is that easy to replicate then that may be a sign that you need to ensure whatever you are doing is more defensible against competitors. Alternatively, by being willing to speak with people, you will open yourself up to new ideas. Some of the best suggestions will likely come from people who do not know a whole lot about the industry you are in.
3. Get a partnership agreement. Creating a start-up is a really exciting moment, especially when your co-founders are your friends. There is a sense of invincibility that together you can achieve anything. Regardless of how close your friendship is, it is critical to ensure everyone knows the facts from the get-go: How much ownership does everyone get; what happens if an investor or new shareholder comes in; what if a co-founder leaves? It is easy to think your friendship will overcome any challenge but things change when money and ownership are at stake.
4. Preparing for divorce is more important than marriage. When negotiating a shareholder agreement, it is arguably more critical to get your terms of leaving the company right, than the shares or salary you will get. Ensure you are happy with any clauses that relate to non-compete, intellectual property, devesting of shares, and the solicitation of clients and employees. It may not be pretty to talk about the worst-case scenarios at the beginning of the venture but it will save you a lot of headaches (and maybe even lawyer fees) if you get that right from the get-go.
5. Sunk cost fallacy. As entrepreneurs, we hate the thought of quitting, in part because we believe we can innovate our way out of any situation. The belief that you have to keep going or see something through to the end just because you have already invested a large amount of time and energy is false. Not all ideas will be a success and when you begin to get the gut feeling of bowing out, take a minute to be objective before you blindly convince yourself that you have to keep going. Fail fast. Fail Often. Fail Forward.
6. Learn to let go. Making your first hire is an exciting but also nerve-wracking moment. It’s easy to micro-manage your new employee because it feels like you’re leaving your (start-up) baby at day-care for the first time. By letting go, not only do you empower them but you allow them to confidently express their ideas in ways you may not otherwise have thought of. In addition, forming a team that believes in the idea you have set out to create is key. It is the people, not the idea that builds great companies.
7. Be open with your staff. Shared consciousness within your organisation is critical to your success. All too often employees are left without all the information they need to make practical decisions. If a lack of clarity becomes a common thread, they will begin to find their tasks narrow and mundane. General Stanley McChrystal, former commander of the U.S. Joint Special Operations Command, used to tell his troops: “If conditions on the ground are different from what was originally planned for and the order that was originally issued was wrong, execute the order that should have been issued.” This can only happen if your team has an understanding of the overarching goals and a clear definition of success so they can adjust appropriately on the fly.
8. The obstacle is the way (also a great book). You cannot plan for every scenario. In my first startup, we had just built an online platform and conducted beta testing with potential clients when the COVID-19 pandemic hit. As a result, all our carefully calculated pricing models were thrown out of the window as budgets were frozen. We ultimately decided to move to a free trial model in exchange for more feedback and research for the duration of the pandemic which allowed us to fine-tune our offering. The team ultimately pivoted to focusing on a different type of customer first. Challenges will always arise but with them, new opportunities also open up.
9. Indecision is the worst decision and follow the 80/20 rule! I am a fervent believer in the 80/20 rule. Trying to be 100% sure before making a decision is one of the worst things you can do as an entrepreneur. There is too much uncertainty regardless of which option you decide to settle on and the time you spend trying to move from 80% confidence to 100% is not worth it and could be better served on the many other tasks and challenges you need to address. Have confidence in your decisions and if you realise you have made the wrong one, that’s fine. At least you would have learned something and you now know how to better steer yourself in the right direction.
10. Read, read, and read some more. I was never an avid reader until I began my first company. Many people would love to have an opportunity to meet with Bill Gates, Richard Branson, or Reid Hoffman but the chances are if that ever happened you may only get a matter of seconds to interact. In books, you have access to the person’s deepest thoughts and analysis where you could learn far more than you could from a conversation. It’s a way to learn from 40 years of experience in 40 hours. Some books I would recommend, Exponential Organisations, So Good They Can’t Ignore You and Start-Up Nation.

P.s If you are not into books, read articles. If you’re not a fan of articles, listen to podcasts. And if you don't dig a podcast, watch talks online. The point is that you have to constantly learn at every opportunity.