You don’t want to spend your life obeying the orders of your boss 9 to 5. Most people feel it difficult to withstand a typical contemporary corporate workplace’s monotony and end up being an entrepreneur. The concept of startups has become overwhelmingly fantasized in today’s world. Many fail to understand the entrepreneurial diligence required to establish the right business, specifically in the case of a startup.
According to recent statistics, approximately 50% of startups fail within five years and 25% within just a year of operation. One of the common reasons behind this massive failure is the lack of a laser-focused strategic plan and the necessary context to bolster the startup’s idea. Most people are unable to transform their mental approach from being managerial to a more proactive entrepreneurial orientation.
It is almost impossible to achieve sustainability and scale in a business startup with a conservative managerial approach. Perhaps, a traditional managerial approach is like playing checkers, where each piece moves in the same pattern. In contrast, an entrepreneurial approach is like playing chess. The player is more focused on following the patterns while making profitable use of every piece in chess to win the game.
Similar is the case with business. Various external and internal factors play a crucial role in determining its success. They need to be managed in a tailor-made way to generate the best results. However, leading a startup with such an entrepreneurial acumen might sound strenuous. Many people often fail to manage a sustainable business venture due to the lack of the required skills.
All it takes is a well-thought-out methodical line of action. You must stick to the basics and follow the story that has motivated you to initiate your startup. To guide your further, this article lists six excellent tips that can help you lead a great business startup.
A startup is a tough and challenging activity, but at the same time, it is the biggest drive in life after sex. As an ambitious entrepreneur, I have amassed a history of failure and success. Over the past years, I have formulated 15 rules that allow you to go through this difficult path in an easier way (the order of the tips does not matter).
Check yourself and the investor for compatibility
Money is an important thing, but be careful with it and choose the right source. Since most business angels and funds will take your company shares away from you, we can say that for the entire life of the startup, you will be “married” to them. Therefore, it is better to love your angel or foundation. Check-in advance if you are suitable for each other. If you have any doubts about this, refuse the deal.
Build a prototype with your own money
Do not under any circumstances start attracting investments in a startup (even in the “angelic” period) without building a prototype. Collect money for the team from your own savings or ask family and friends to invest in your project. Selling what you can show is much easier. Plus, this will help you prove that you can bring your startup idea to life. Tip – Follow the guidelines of Eric Ries and his Lean Startups.
The prototype should be as simple and cheap as possible
Minimum means minimum. Don’t try to build an industrial solution on a penny budget. The prototype should demonstrate anyone or at most several functions. It should be simple – both to understand and to use. Invest in UI and usability.
Start testing your prototype immediately
Once the prototype is ready, ask friends, colleagues, anyone in your environment to start using it. Hear all their comments and improve the product. In general, if you ever expect to receive investments from people like Dave McClure, you will have to prove to users that, first, they need your product; secondly, they love him; thirdly, they are ready to tell their friends how cool you are. Don’t worry if there are bugs in the product. If users care, they’ll tell you about them. As a startup, you will be forgiven for a lot.
Never go it alone
Most individual startups fail (I know from experience). You need to have a strong cofounder team. Don’t start a project if you don’t have a design and interface specialist, marketer, techies, and developers. Don’t think of the people in a startup as employees. They are co-founders and partners in your common cause, and this is how you should treat them.
Top managers from large companies are not necessarily good startups
We cannot assume that top managers of large companies are by default, great entrepreneurs or mentors. Big business and startup are completely different things. Also, do not be sure that an advisor from Mail.ru or Yandex will help you easily reach investors or partners.
Perform in public as much as possible
It is your responsibility as a project founder to ensure that people are delighted with your product. You need to be passionate, active and energetic. The more you perform in public, the better and more natural your presentation will look, and the easier it will be for you to convince everyone that you are cool. Always check the result, watch the reaction, listen, get feedback, learn from mistakes, improve the product. You have to inspire people to work with you or for you, to use the product, and to invest in the project.
Look for investments, distribute the rest of the tasks among employees
Share your entire workload while you are busy attracting investments so you don’t run into a turnover. Ideally, you should have a product manager on your team. Surround yourself with talented people. As CEO, you need to focus on finding investments – this will take 90% of the time.
Don’t waste time attending startup events
For the most part, they are more likely to attract the public, rather than raise money. But your time is as valuable as money. And, as with cash, the investment should pay off in full.
Work for a big market and solve big problems
Check if your product has a large enough market. To be truly interesting for an investor, you must either seriously squeeze the existing players in the multi-billion dollar market, or solve a real problem. Small problems only attract small investors with modest investments. Top-tier wealthy investors are interested in big issues.
Get closer to customers, but even closer to investors
If you are raising money for a project from a foundation in Boston, you need to move to Boston. A foundation or an angel is not just a source of funding. Most investors have strong connections and good relationships with other investors, funds, partners, mentors, and so on. They have already been on the market, have achieved certain results, and more than once. You have to find a way to make money from it.
Don’t expect too much from your business angel’s connections and acquaintances
Don’t get too carried away with the previous advice. When choosing which business angel to turn to for investment, do not overestimate his mentoring capabilities and connections in the market. Even if your angel knows, for example, Igor Matsanyuk (Farmers, GameInsight) or Dave McClure (500 Startups). In most cases, he will help the startup to a minimum.
Become a member of a business incubator
If you are in Europe, you should definitely enter the Seedcamp incubator. Or at Startupsauna (they will help you for free, without requiring you to unsubscribe shares or a share in the company). In addition, you should pay attention to Farmers, Techstars, Y-Сombinator, Launchpad, etc.
Make the product quickly or close the shop
Ideas are worthless until they are implemented.
Feel free to say it failed
Set clear goals for yourself from the start. Take multiple approaches, listen to user feedback, release a new version, test it publicly, and continue until you achieve the desired user base metrics, engagement rates, and so on.
Some of you might have a good idea about the importance of proper entrepreneurial skills for managing startups. It is also probable that a few of you might have a natural ability to understand the nitty-gritty of business without formal training. However, the rapidly revamping business environment and increasing competition demand formal training to become effective entrepreneurs.
The rapidly changing business dynamics of the 21st-century demand entrepreneurs with strong interpersonal, leadership, learning, and adaptable skills to remain intact in the market. Hence, being new to the field, you should hone your entrepreneurial skills through proper academic training. What’s stopping you from doing so?
Is it the strictness of traditional brick-and-mortar institutions or the requirement of complex tests? Once you explore, you will realize there are innumerable options that can benefit you. You can either enroll in an online MBA no GMAT requirement or take training sessions from business gurus. Whatever the means are, you should always be open to learn and adopt new skills.
Learn To Make Lemonade
When life gives you lemons, make lemonade. You might already have heard this phrase. It optimally applies to a startup too. The road to mature your startup will pose challenges at every step. Most of the time, things will happen that you neither predict nor are prepared to handle. It is where your entrepreneurial skills come into play to save your startup. Remember, all successful people were once a failure. Most business ventures often fail, as entrepreneurs lack the ability to make strategic decisions during a crisis.
The business experts often recommend learning from your mistakes and turning your hard times into something beneficial. You should look toward the bright side and devise a function that converts that unwarranted constituent into something fruitful. Just remember that your favorite snacks, Doritos, were invented as a solution to deal with unused tortillas.
Value the Bird-in-Hand
A bird in the hand is worth two in the bush—Similarly, the resources in hand are worth more than the ones out of reach. Instead of expanding the current resources, you must first utilize the ones you have at your disposal to the fullest. Five roommates, a dormitory, and a very niche audience are all needed to initiate Facebook. Once a college startup is now making a whopping $720 billion. So stop overthinking about the lack of resources, rather stay persistent on entrepreneurial grounds to churn maximum output.
Don’t Go Beyond the Affordable Loss
Having a background philosophy to drive your startup is a necessary component. However, you should not get overly consumed with that ideology, as it would only fuel you to bet all your resources blindly. It would increase your appetite for risk beyond a controllable limit. The history includes countless excellent examples to teach us how startups failed miserably as they went way beyond the affordable loss.
Faraday Future, the probable Tesla-killer, went bankrupt because they spent resources – mainly financial muscle – relentlessly. Where companies as strong as Faraday Future couldn’t withstand realizing more than their affordable loss, your startup would certainly fail under a similar mistake.
Be the Pilot in the Plane
Teamwork is important, and trust in your employees is pivotal. Still, it is best to keep the reigns in your hand. The key to successful startups is in being the primary controller of it. You have to be the pilot on the plane. Others will lack the motivation and dedication that you contain. It is better to look after all the functional aspects and managerial issues yourself.
It might sound a bit too much when you already have dozens of other responsibilities. Remember that your employees can never match your efforts and motivation to deal with challenges, as it is ‘Your’ business. Once things get going smoothly, you might delegate responsibilities.
Create the Patchwork Quilt
Instead of investing extensive efforts to overturn a NO into a YES, try to add people who share the same vision. Also, it is best to create a patchwork where different designs come together with a common purpose and create a holistic sense. Try to look for people who support your idea and find common ground with your startup. Make a network of such individuals and co-create the business philosophy behind your startup.
Jack Ma had ideas that were quite implausible in the Chinese business environment when he initiated Alibaba. Consequently, there were few people to support him. However, he stayed firm with his ideology and gradually found people with a similar entrepreneurial mindset. Despite spending the first three years without making profits, Jack Ma has finally built a company with over $72 billion in annual revenue.
It is undoubtedly everyone’s right to become wealthy, successful, and have a fulfilled life. However, the current world demands hard work and dedication to earn your dreams by working on practical grounds. Business startups bring radical opportunities to cultivate your dreams, visions, and goals. What you have read above can certainly be the key elements to unravel your business startup’s true potential. Just follow these tips and pave your way to success.