The founder and CEO of SpaceX did not have it easy and some years back was struggling with his professional and personal life. However, he overcame these difficulties and currently is the 83rd richest person in the world.
Elon Musk is a popular name in the field of entrepreneurship. The founder and CEO of SpaceX did not have it easy and some years back was struggling with his professional and personal life. However, he overcame these difficulties and currently is the 83rd richest person in the world.
Through his journey, budding entrepreneurs can derive a lot of lessons such as:
1. Be dedicated to your idea
Musk’s first start-up was related to web listing back in time when the internet usage wasn’t a common phenomena. No one was convinced about this idea and shopkeepers refused to register online. In the end, because the idea incurred losses, he sold it off to Compaq for $407 million.
What we can learn from it is his dedication to the idea which was so intense that he often slept on his desk while trying to work upon it.
2. Grab first-mover advantages
What Musk teaches us through his ventures is to start early and work on opportunities as they come. He came up with the idea of internet banking when internet was very newly introduced. He came up with the idea of X.com which would serve as an online bank. Later, he joined hands with professionals in the same sphere who had more knowledge about the same. X.com later transformed into PayPal.
Musk is one of the very few entrepreneurs who has knowledge about different industries and sectors. He was associated with diverse applications like Zip2, PayPal, Telsa and SpaceX. Even when he was looked down upon when he entered the space and aeronautical industry, he managed to redefine standards because of his thorough research and unwavering focus on goals.
4. Build a team
Musk managed to get fresh talent for SpaceX and Tesla. It is a common belief that freshers are not very professional or proficient with their work. Musk changed the misconception and poached young and talented engineers himself and built a dedicated team who worked for over 20 hours a day and the results were beyond his expectations.
The only reason SpaceX worked was because they dared to be different and work unconventionally. SpaceX faced tough competition from Boeing, but, came up with the brilliant idea of reusable rockets and the successful landing was a great success. Their cost-cutting strategies are unique and now, SpaceX is looking to introduce low-cost passenger flights in space.
6. Don’t forget to enjoy life
Even though he’s a workaholic, Musk has always found time and ways to enjoy the fruits of his hard work. He bought a plush 1800 sq feet condo after the sale of his first start-up. Always fascinated by sports cars, he even bought a McLaren supercar. Musk also attended the Burning man festival in 2004 which shows how much he enjoys life.
There are certain things an entrepreneur needs to learn early to avoid making basic mistakes early on.
Building a company isn’t an easy task. But, once you see the gains and happy people benefitting from your venture, you are assured that your efforts were worth it. However, there are certain things an entrepreneur needs to learn early to avoid making basic mistakes.
1. Building a team to work with is an initial task
Spending money on hiring the correct people to work for you is probably the best investment ever. One can hope to save up all the cash and grow as a one man team but sometime in the future, s/he will definitely need a loyal and hardworking team. All efforts and money spent into creating a team will reap higher dividends in the future.
2. Aim big and believe in yourself
When you’re starting out, why not start out big? Don’t let your power to rationalise become your foe. Dream and strive to achieve the bigger goals in life and watch how easily the smaller ones are won over. Also, to successfully achieve the bigger aim, you will need to put in more effort but the end result will definitely be worth everything.
In an itinerary of an entrepreneur, there might be an array of tasks one might not like to do. You might have the option of delegating these tasks, but someday you will face something you hate, which absolutely needs to be done. Do not put these tasks off and try to get the important yet much hated tasks done as soon as possible for a fruitful outcome.
4. Do not focus on things that aren’t important
A basic mistake a lot of entrepreneurs make is that they devote too much time in doing things that aren’t absolutely crucial. Have a basic to-do list and eliminate the activities you believe aren’t necessary and are being done only for the sake of it. Also, refusing to focus of unimportant tasks leaves you with enough time to focus on the necessary ones.
5. Receive information only from the credible sources
We live in an era in which we are bombarded with all kinds of information, half of which isn’t true. Trust only the sources you believe are credible and do not get lost in a kaleidoscope of unnecessary data which can hamper your current thought process.
You need to have a very strong reason and belief sorted already regarding why you’re doing this beyond financial gains. This reason becomes your sole motivating factor on days when nothing’s going right and on days when you realise exactly how hard it is to build a company.
7. Let go of inhibitions
Initially, everyone has certain inhibitions regarding what approach s/he should take and certain decisions. Let go of your inhibitions and do what you thing is correct and important for your venture. It may be a wrong decision, but it’ll definitely be a great lesson.
8. Measure the pros and cons
Whilst struggling to keep up with the competition, it is also important to weigh your pros and cons because having a fair understanding and idea of what is happening will give you more clarity in your thought and next plan of action.
While starting out, it’s good to dream big. But, it is also very important to remain realistic. As a budding entrepreneur, do not make the mistake of venturing into 10 different categories. Have a single idea, work towards it and work on expansion plans when the correct time arrives.
Example: Ola started as a cab-service app. After it grew big in the cab-service sector, Ola then branched out to offer other services like Ola Share and Ola Shuttle services.
10. Make and maintain contacts
Treat everyone you meet during your job as an important asset as you never know when you might require them. Be cordial and pleasant with the people you meet. An occasional e-mail or a phone call can help to secure a long-lasting relationship.
These tasks will take your business from “good enough” to “ready to go” in no time at all.
You’ve most likely spent weeks, months, or perhaps years on planning the launch of your small business. Finally, your product or service is just about ready to enter the world, and you’re excited enough to think that maybe you should go ahead and push the big red “Launch” button on your startup. After all, the bulk of your business is good to go, so the rest of it must be too, right?
Wrong. What you’re selling may be the next big thing, but it won’t matter until you’ve solidified your brand’s values, rallied a culture around your company, educated people about your industry, and gained a decent amount of credibility. These seven to-do tasks will take your business from “good enough” to “ready to go” in no time at all.
1. Delegate the busywork.
The monotonous part of starting a business can be tiresome enough to deter any entrepreneur from getting the work done–especially when there are much more important and exciting startup tasks to focus on instead. Rather than concentrating your time and energy on the dull and dreary, free up some of your resources by letting someone take care of the busywork for you. Freelancer allows business owners to find administrative, customer service, IT, and artistic freelancers and assign them tasks on an as-needed basis, reducing the stress and responsibility that comes with finding an employee.
2. Solidify your brand’s values.
What does your business stand for? Simply put, what does it aim to do? Business owners should be capable of concisely conveying their companies’ spirit and responsibilities to the public; doing so strengthens their companies’ presence in the community. The startup story you share with others should not only provide solid takeaways but also inspire people to believe in your central mission. You should comprehensively brand your business online.
If you’re struggling to engage others when you talk about your business, you may want to sharpen your storytelling skills and grow familiar with your brand’s core values. According to Chris Smith of The Campfire Effect, it’s “crucial that you know your brand story, because it will definitely help you increase revenue and build credibility by helping you develop powerful storytelling skills.” Solidifying your brand’s core values helps you easily explain what your business stands for (or what your role is within it) to anyone, from the entrepreneurial expert to the average layman. This type of skilled storytelling plays an important role in leaving behind a good impression of your brand, which generates trust and word of mouth later on.
3. Rally an online following.
An entrepreneur simply can’t maximize his or her success without having a virtual landing spot and an online following. Maintaining a highly involved, almost tribe-like following online persuades people new to your business to hop on the hip new bandwagon–plus, it offers them a community in which to do so. Looking for content for your blog or landing page? Do you need to provide your following with irresistible e-books or comprehensive guides? Companies like Growth Geeks provide profiles for a number of content writers who can be hired at a simple flat rate. Though they offer diverse services, or “gigs,” they specialize in those that optimize effective digital marketing.
Implementing captivating content, whether in the form of a blog, webinar, e-book, or other medium, drastically improves your company’s ability to reach its target audience. Effective content marketing also helps drive traffic through your purchasing funnel. Generating powerful content on a regular basis, however, is next to impossible when a hundred other tasks are demanding your attention.
Even if your product or service hasn’t officially been released yet, it’s important to rally a considerable following to give your business clout and credibility once it’s up and running.
4. Boost the excitement around your upcoming launch.
Social media marketing is a great way to hype your business, but it isn’t the only way. Build up the buzz through captivating giveaways, competitions, coupons, and other campaigns that will give your company context in hundreds (or hopefully thousands) of potential patrons’ lives. You no longer have to be a design or coding genius to create high-quality campaigns–with a service like Gleam, you can create responsive, user-driven media galleries, colorful pop-ups, and eye-catching elective coupons for your company’s website.
Additions like these help give your product or service a sense of urgency and scarcity before it’s even released, which encourages more people to be on your email list, enter your sweepstakes, download your free virtual product, and participate in your contests. The more people you have to celebrate your business’s commencement, the higher your initial sales will spike upon opening.
5. Create a pre-launch page.
Pre-launch webpages play multiple roles: a point of reference before your website is ready; a place to explain your product or service without overwhelming depth; and a spot for people to get on your email list. If your startup’s website is already up and running, consider making the homepage a place where visitors can learn about your company (so they can share the information with their friends) and find you on social media and email (so they can stay up-to-date on your product or service).
Without a pre-launch or official landing page, web visitors will get the impression that your company is underdeveloped or not available to the general public. Remember: A convincing landing page not only informs, but also makes visitors feel personally involved in your company’s central purpose.
6. Run beta tests and quizzes.
Beta testing your product or service is a great way to gradually introduce it to the public while receiving helpful hints on how to improve it for official launch. Though this often occurs in the early stages of starting a business, it can be helpful to beta test closer to launch to make final touches on your product or service and learn how to most efficiently market it. If your product or service is physically tangible and mainly available in real space, you can benefit from taking samples of your target demographic and testing the product through focus groups (but make sure you offer a small incentive, like cash, a gift card, or a free product or service session).
If your product or service has already been released to the public, consider collecting honest feedback through consumer quizzes. Integrating quizzes into your company’s website (or even its social media pages) helps you get to know your visitors and situate your business in their personal and professional lives. With the right platform, your business can expand its email list, promote or receive feedback on products, and examine clients’ opinions on customer service in just a few clicks.
7. Build up credibility.
A great way to get your foot in the entrepreneurial door before your startup launches is by guest-writing for niche blogs, e-magazines, newsletters, and other publications. This is a free (and occasionally paid) route to publicly claiming your expertise while spotlighting your brand and explaining what you do differently from the rest in your industry. Not only will you appear to be more of an expert in your field, but your work will provide backlinks to your company’s website and generate awareness about what you do. Here are some good tips for becoming a writer for a major publication. This has helped me build credibility and get the word out about my business.
Try reaching out to popular niche blogs or e-mags you’ve shown a bit of love to in the past and offering to write a guest article on a relevant topic (offer a few choices).
Launching your startup will be exhilarating, but it’s a good idea to work on pre-launch buzz, testing, and excitement (you’ll be glad you did). What extra steps did you take before launching your startup? What do you wish you had done pre-launch?
Even though it’s trendy in startups to say that ideas mean nothing and execution means everything, the reality is much less binary and much more nuanced.
Even though it’s trendy in startups to say that ideas mean nothing and execution means everything, the reality is much less binary and much more nuanced. For example, even the world’s best entrepreneur with incredible execution will fail if their idea is fundamentally flawed, or if their market is too small.
What we have found is that if an early-stage founder can check off the ten items below, they have a solid foundation by which to start a company. You are absolutely not assured success if you can check off these items (nor are you assured failure if you can’t), but your chances of success are much, much higher if you can.
See the infographic below, and scroll down further for a full explanation:
Money is no substitute for passion, so every entrepreneurial journey should start with a passion. In fact, every aspiring founder who comes into the Founder Institute with a goal to “flip” their company is advised to drop out during the first week for a full refund.
There are two reasons for this;
In order to power through the hard times of being an entrepreneur, founders need to be working on ideas that they can see themselves still working on in 5, 10, or even 20 years. As Elon Musk famously said, “Being an entrepreneur is like eating glass and staring into the abyss of death.” If you don’t have the requisite passion, your chances of seeing a project through are minimal.
Other people will easily be able to see through your lack of passion, like customers, investors, and press. For example, investors are typically concerned more about the “why you”, then they are about the “why” of your idea.
2. It’s Simple
“Think big” is a common mantra for entrepreneurs. And it is true – every entrepreneur should think big, because in most cases, starting a company with small ambitions can be just as much work as one with big ambitions. However, most people confuse the “think big” mentality into meaning they have to try and “boil the ocean” from the outset.
Big ideas are raised, not born, and they are most often raised by simple pain points. For example, Mark Zuckerberg didn’t wake up one morning and say, “I’m am going to create the social graph.” Instead, he set out to build a simple utility for Harvard students to see who was in their classes.
All the great businesses of our time have started with an incredibly simple idea, and then expanded upon that. If you can start by solving one problem, with one product, for one customer, you will be sufficiently focused and can have a great foundation for success.
3. One Revenue Stream
For some reason, the majority of early-stage entrepreneurs think that the more revenue streams their idea can support, the better. In the early stage, you need to be laser-focused on one revenue stream, and your idea needs to have a clear, singular revenue stream that can conceivably be large enough to support the entire business. If not, then its time to go back to the drawing board.
Also Read: Geometry of startup ecosystem
Also, it’s a common misconception that companies who focused on early user growth (ex. Google) didn’t have a revenue model in mind when they started. In reality, these businesses saw incredible early traction, and then the founders made a tactical decision to shift their focus to growth.
Can someone build a great company with a zero revenue mentality from the outset? Sure. But building a business with no revenue stream in the hopes of becoming the next Instagram is like buying a lottery ticket – except that lottery ticket costs a lot more time and effort than $3.
The more steps there are to revenue, the more complex an idea is to build out and execute.
This is a very important step during the ideation process: what are the things that need to happen before you make a dollar? If you have to provide a service in order to collect data that will then be sold to advertisers, for example, you have a very complex business. That would be 5+ steps to revenue. Try to limit the number of steps to revenue to around three from the beginning.
5. You Know the Customer
You need to understand very clearly who you are helping, what exactly they need, why they need it, how they would be willing to solve their problem, what they spend their money on, what goals they have in life… in other words, you need to have a very specific archetype.
A common mistake we encounter is that people don’t go nearly deep enough in their customer definition, or customer development. For example, many people will stop at “I am helping large companies hire.” In reality, they need to be able to say something like; “I am helping senior hiring managers at enterprise software companies in the United States with 400-800 employees. They are typically female, age 29-34, making an average of $58,000 per year. They report to the company HR lead, and their KPIs are X, Y, and Z, measured quarterly. They spend the majority of their day doing A, B, and C, and the biggest impediments to them hitting their KPIs include X, Y, and Z. Currently they are using products from companies A, B, and C, but those products don’t allow them to do these three critical things…”
Also, there’s nobody you know more intimately than yourself. That is why so many great businesses have been formed from personal need.
6. You know the market
In almost all cases, there are several people already devoting their lives to your idea. In order to win, you need to engulf yourself into your market in order to have the requisite insight and vision needed to win. Chris Dixon (Andreessen Horowitz) has said that you need to devote at least 10,000 hours on your market to get this insight – whether by working in the market, living the problem (ex. being a social media addict who then starts a social media company), and/or devoting that time towards research.
If you are not an expert on your market, then it’s time to get to work. There are no shortcuts here.
Large and fast growing markets have the power to pull mediocre companies into greatness, and conversely, dying markets can pull otherwise solid companies into the ground. If you are going to devote your life to an idea, the market where you operate better be big enough (or growing at such a fast rate) to support a meaningful and enduring company.
Any market with less than 10 million people or multiple billions in annual revenue that is not growing at a very fast rate will be very hard to address, and is probably not worth your time. For example, even if you were lucky enough to be moderately successful in a $500 million market, you would likely still only have around a $50 million business.
You will die winning a small market, so be smart and don’t start your company in a graveyard.
8. Original secret sauce
Every great business has a secret sauce. Given, not every company starts out with that secret sauce, but building a company without a plan for how you will differentiate and win from the outset is simply foolish.
Also, your secret sauce needs to be original. If it’s obvious, that is almost always a bad sign. The best ideas have a secret sauce that is transformational, not incremental.
What secret do you know that will help you win? For example, Tony Hsieh started Zappos with a very distinct insight and secret sauce – customer service. His transformational insight was that buying shoes online was really a customer service problem, and not a retail problem.
It is very easy to fall in love with your idea – after all, it’s your baby, and almost nobody will tell you your baby is ugly. Positive reinforcements are very easy to find.
Your job in the idea stage is to find the things that make your idea bad. Try to kill your idea, and then, one-by-one, iterate and eliminate the negative aspects of the idea. The result will be a much more defensible foundation by which to start.
10. You are sharing your idea!
Nobody is going to steal your idea. Think about it – do you really think your idea is so great, so original, that somebody who hears it is going to go home, quit their job, and devote their entire lives to it? And be successful? The chances are near zero.
You need to be pitching your idea all day long to anybody who will listen, and incorporating all the feedback you receive into improving the idea. Feedback is an entrepreneur’s best friend, and Silicon Valley entrepreneurs understand this better than anybody else. For example, on any given night, you can find 20 different events in Silicon Valley where people are openly sharing their ideas, and it is this collaborative, teamwork-oriented culture that leads to innovation.
Here are the 10 success lessons from Reid Hoffman – “Co-Founder of LinkedIn” for the entrepreneurs.
Microsoft acquired LinkedIn for $26.2 Billion, making it by far the biggest acquisition in its history and making a strong move in enterprise social media.
Since co-founder and Executive Chairman Reid Hoffman initiated LinkedIn 13 years ago by inviting 350 of his contacts to join, the company has grown to claim 433 million members, including 105 million active monthly users. It has become a central place online for professionals to network and learn about job opportunities, making it enormously valuable for executive recruiters and giving it a trove of data that few other companies have.
Here are the 10 success lessons from Reid Hoffman – “Co-Founder of LinkedIn” for the entrepreneurs:
1. Aim big
Regardless of whether a startup is targeting a big idea or a small one, it will still require the same amount of blood, sweat and tears—so aim big! What is “big?” It is a new product or service that creates or dominates a significant market.
2. Try to create “disruptive change”
If you’re about to start on a new venture, ask yourself: What is becoming possible or necessary that wasn’t possible before? Is a new product or service able to take over an existing market or create a new market? When Hoffman co-founded LinkedIn the tech industry was in a deep depression. He looked at all the opportunities created by the Internet and had the idea that eventually everyone would need a professional profile online. The disruption was that people were able to directly reach the best candidates rather than hoping for responses from a listing in the paper or an ad on a Web site.
People tend to think that behind every great startup is a single entrepreneur with a whiz-bang idea. The reality is great companies are built by a number of people with talent who are surrounded by amplifying networks. The most successful entrepreneurs bring in advisors, investors, collaborators and early customer relationships.
4. Plan for better or worse
Sometimes entrepreneurs are surprised when something good happens, and they must take advantage of it by changing their plans. Build as much intelligence around you and your company as you can. Part of planning is that you might come across something you weren’t expecting and you pivot. And if something doesn’t work, you must ask yourself: “What is my Plan B?”
5. Maintain flexible persistence
Very often entrepreneurs are given conflicting advice: “Be persistent! Stay committed to your vision!” or “Pivot on key data! Know when to change!” The challenge is to follow them both, but know which advice is most appropriate for which situation. You must know how to maintain flexible persistence.
According to Hoffman, “unless you’re Steve Jobs,” entrepreneurs are probably at least partially wrong about their product, and they won’t find out what they’re wrong about until people are using it. He added that when he launched LinkedIn, his co-founders wanted to wait until they launched the “contact finder” feature, but it turns out that wasn’t necessary — LinkedIn still hasn’t added that feature eight years later.
7. Aspire, but don’t drink your own Kool-Aid
Target excellence, but be very careful about blind trust or belief in your theories. It is important to launch as early as you can in order to learn how your customers use your product or service. It is equally important to identify metrics that tell you if your aspirations and vision are on target. You should also get feedback from your network in order to iterate or pivot on the target, the product and/or the service. In other words, maintain your aspiration but always look for good perspective on how you are doing. It is very easy for creative innovators to get caught up in their own story rather than learning where they should be headed.
8. Having a great product is important, but having a great idea for product distribution is more important
Hoffman says, you can build a kick ass product, but if nobody discovers it … it’s basically irrelevant. Build distribution into the “DNA” of your product.
9. Pay close attention to culture and hires from the very beginning
According to Hoffman, your first hires set your culture, so make them good ones. These first people hire the next people and so on. The old wisdom was that you needed people with a decade more of experience in your startup. The things a smart person learned a decade ago won’t help you now – you’re doing things that have never been done before, and the world and the competitive landscape are changing at hyper speeds. What you really need are people who can learn fast.
10. Rules of entrepreneurship are guidelines, not laws of nature
Do not pay too much attention to rules set by other people. Entrepreneurs are inventors. They are successful when they make something work for the very first time. Sometimes in order to make something work, you will drive over the guardrail of one of these rules. Entrepreneurs sometimes just make new rules.
There is never a shortage of people willing to give you the benefit of their wisdom, especially when it comes to running a successful business.
Life is about opinions. There is never a shortage of people willing to give you the benefit of their wisdom, especially when it comes to running a successful business. With this in mind, here are a few pointers that we hope you will find helpful.
Leadership
As Frank Carson used to say “it’s the way I tell ’em”. This famous punch line can apply to running a business. Statistics show that most successful businesses have a clear leadership. Whether this comprises one or a few determined individuals is a moot point, but focus and direction are key ingredients to success. Your goal is to try to make the business take on the unique personality of the decision makers, who should instill their ethos into the management, employees and product range it offers. The business should merely be an extension of the characters of the owner managers.
Product or customer led?
It is often quoted that every profitable, successful business needs to have a tried and tested world beating product; a magical good or service that is sought after by its current and potential customers. Obviously this is a simple basic requirement although is it really that important? A business that relies solely on its products to the detriment of what its customers want is a business that is destined to fail in the long run. The business must always recognise that it is the customer and not its management that knows best. “The customer is always right”. Ask your customers what they want and don’t go on wild goose chases developing what you regard as an award winning product, only to later find out that it’s not what your customers or the market desires. Changing your customers to suit your needs is usually a recipe for disaster. You have to adapt to them!
Little steps
Don’t be putting all of your eggs into one basket. Don’t be developing infrastructure, systems and products or spending loads of money on promotion before knowing that you can sell them. Little steps become big steps very quickly. Keep your eyes and ears wide open and always be receptive to new ideas. Times change quickly now days – to stay successful, always stay fresh and alert.
Over trading
A common mistake is to try to take on too much trade without adequate support and finance. It’s one thing to bring home an order, knowing that you can fulfill it with hard work and a friendly banker or family, but it’s another coming home with, what looks to be on paper, a phenomenal order, only to know, in your heart of hearts that it’s something above and beyond your capability, financial or otherwise. There are many companies that fail because they are underfunded. Management will find themselves spending valuable time doing all the wrong things, daily budgets, phone calls to bank managers, fending off creditors and losing out on valuable discounts for early settlement, and offering unnecessary inducements to customers to pay their bills early. The cumulative effects of these can destroy your company.
Emotional
By all means fall in love with your business, but be aware that love is sometimes blind. If falling in love still lets you see the wood from the trees, then it can be a love story that endures. If however, it means you going off on a wild goose chase, then it will be a love that destroys. Be emotional, but at the same time objective and “usually” let your mind rule your heart.
Wild goose chase
Keep direction. If you start at point A and need to get to point Z, then you usually have to go through twenty four points before you reach your destination. If you decide at point E to deviate very slightly from your aformentioned plan, you could end up very far away from Z and probably not make it at all. That’s not to say that you cannot keep an open mind. Far from it, you must be fully aware what you are doing at all crucial times, but always pinch yourself – remind yourself of what you originally wanted to accomplish and ask yourself am I going in the right direction?
Over planning
Every business needs a general business plan. It needs to know where it is going. But spending time compiling inordinately complex financial forecasts with enormously complicated and fanciful assumptions is usually a waste of time. You will spend unnecessary time and probably take your eyes off the big picture. To be successful, keep it simple and don’t confuse yourself.
Be a company salesman
Everything in business, and life for that matter, involves an element of sales. Whether it be a product or service you offer, or simply selling yourself, every business interaction you are engaged in will constitute a sale. If you are a salesman, and demonstrate this mentality, then so will your staff.
Hiring too quickly
Quite often you may find that you can do the job quicker and better than others. Hire only when there is either a skillset you are lacking, or time elements and volume of work necessitate additional resource.
Don’t think you are perfect!
No one is and it will cost you! Listen and learn but don’t always act on advice. You know your baby better than anyone else. He’s yours and only yours!
Here are seven reasons for budding entrepreneurs to give up the hunt for venture capital and angel investors.
Every year, about millions of new businesses are started, and fewer than one percent successfully raise venture capital (VC).
Whether it’s the feeling of acceptance into this elite club, or the misconception that it’s impossible to start a new business without millions in capital, many startup founders find themselves hypnotized by the pursuit of VCs and angel investors.
Perhaps the adage is true: We want what we can’t have. And yet it can be argued that your chances of success are greater if you stop looking for VC money and focus your energy on bootstrapping your business and attracting customers.
Here are seven reasons for budding entrepreneurs to give up the hunt for venture capital and angel investors:
1. You haven’t proven your market need
Sure, you’ve put together a pitch deck, business plan and financial projections, but those are all just that — projections. You’re basing the future success of your company solely on hypotheticals.
Before looking for VCs, prove that there are customers out there who want what you’re selling. Spend time talking to your users, and focus on giving them what they want. Invest your time in finding a place in the market before trying to convince investors to give you their money.
2. You lose control
Once you secure VCs, you’re at their mercy. Even if you maintain a majority stake, you’re giving up a percentage of equity, profits and control to a board that may have a different vision for your company than you do.
In most cases, your VCs will ask for one or more board seats giving them the right to vote on or veto key decisions that will directly affect the future of your company. These same people also have the right to fire you or members of your team, which means you could be ejected from the company you started.
3. You’re focused on the investor – not on your customer
Giving up control means you have a new responsibility. Your first priority is no longer to your customer, because your investors expect to come first. Among other conditions that are negotiated in a deal, venture capitalists can ask for anti-dilution protection, dividends, liquidation preferences, mandatory redemption and other perks that the founding partners may not even get the rights to.
In some extreme cases, VCs have the right to sue you for everything you own in the case you forget to tell them “bad news,” according to Bloomberg Business.
4. Instead of trying to make money, you’re trying to raise it
The irony of trying to raise venture capital is how much time you waste chasing down investors – when you could be chasing down customers. There are only so many hours in a day and only so much work you and your team members can take on. Every minute you spend chasing down a flippant VC is a minute you’re not working on creating a great business.
That’s all to say you’re putting a lot of your eggs into a basket that the statistics say you’ll never obtain.
5. Your burn rate is higher than if you were to bootstrap
What’s a burn rate? It’s the amount at which a company spends money, especially venture capital, in excess of income.
You may know the now viral story of CEO Maren Kate and the downfall of her company, Zirtual. She abruptly shut down all operations due to a glitch in the books that was overlooked. Basically, the company did not have a handle on its burn rate – and it ran out of money. This also supports the next point that…
6. You lose the hustle required in running a lean business
When playing with someone else’s money, many startup founders admit that it becomes less real. It’s harder to stay lean and savvy with the false impression that you’re rolling in the dough.
Investor and entrepreneur Gary Vaynerchuk writes: “Twenty-five to 50 percent of all the businesses I have ever looked at were more than capable of being a little scrappier.”
7. Your end goal is focused on an exit rather than building a company that will last
If your end game is growth over profit, then you are forever stuck in a cycle of having to raise more money. As soon as you’re no longer able to secure more from VCs, then your company will likely implode.
You’re relying on other people’s belief in you – based on hypothetical projections – rather than relying on a solid business model that turns profits and creates happy customers.
Author: Shannon Whitehead
Shannon Whitehead is the founder of Factory45, an online accelerator program that takes sustainable apparel companies from idea to launch — without raising venture capital. Committed to improving the fashion industry, Whitehead launched what was at the time the most successful fashion project on Kickstarter and now helps other fashion entrepreneurs bring their ideas to market.
How do you ensure success? Who stands out from the crowd? What separates the pros from the amateurs?
How do you ensure success? Who stands out from the crowd? What separates the pros from the amateurs?
There aren’t any definitive answers. And I’m not even going to begin to try and analyze them. What I will say, is that over the years, I’ve been observing. Working with startups and entrepreneurs on a regular basis has provided rare insight into what makes one person get ahead of the rest.
Here are five way to set yourself up for success that go beyond conventional wisdom:
1. Make it easy to help you
Most people are excited and willing to help out new entrepreneurs. But the likelihood of connecting with someone who is more seasoned in the industry is largely dependent on how you make the “ask.”
The first and most obvious way to sabotage yourself is by writing an inquiry email that scrolls on for block paragraph after endless block paragraph. In most cases if you’re looking for advice, the person you’re seeking out is busy.
Keep your email to no more than two to three short paragraphs. Your chances of getting a response are incrementally higher and you’ll come across as more professional – and more effective.
Bonus tip: Ask a specific question. Avoid using phrases like, “Can I pick your brain?” Instead, ask the exact questions you want to know the answers to. Once you have your foot in the door and get a response, you can follow up from there.
2. Write thank you notes
They don’t have to be handwritten and shipped via snail mail, but if someone takes the time to jump on a call on your behalf, follow up with them.
Regardless if the advice was good or not, it’s common courtesy to express gratitude to someone who gave their time to you.
This is especially applicable when a contact goes out on a limb to introduce you to someone. It makes that person and yourself look bad if you don’t take the time to follow up afterwards.
Good things come from gratitude. And the most successful entrepreneurs show how much they value the people who helped them along the way.
3. Start before you’re ready
Should I launch now? Should I get more real world experience first? Should I go back to school? Only you know the answer that’s right for you, but my recommendation to most aspiring entrepreneurs is to start before you’re ready.
Building a business requires a long runway. It’s not only about the amount of hours in the day that you spend on your business, but the months and years that you take building up to it. As I tell my entrepreneurs (on repeat), launching a successful company is a marathon not a sprint.
The sooner you can start fleshing out your ideas, seeking out mentorship, connecting with industry peers and educating yourself, the better off you are in the long run. The old cliche usually holds true: Tomorrow you’ll wish you had started today.
4. Be consistent
The entrepreneurs who get ahead are calm and collected. They’re methodical, they’re strategic and they don’t get easily frazzled.
When you’re first starting out, your attitude and the way you handle challenges are going to dictate how you respond in the months or years of your business to come. The entrepreneurs who get ahead know there is a solution for everything. And sometimes the solution falls under the guise of a better option.
Building a business is not an overnight endeavor. It requires consistency of action, which means not giving up if something doesn’t work the first time.
5. Ask for help
Nobody builds a successful business by doing it on their own. That’s right, nobody.
The entrepreneurs and mentors you see are all getting help, seeking out mentors of their own, building advisory boards and seeking out further education.
Solopreneurship is a farce. If you want to get ahead, then you have to seek out help from others and continue to invest in yourself. That’s what separates the amateurs from the pros.
Author: Shannon Whitehead
Shannon Whitehead is the founder of Factory45, an online accelerator program that takes sustainable apparel companies from idea to launch — without raising venture capital. Committed to improving the fashion industry, Whitehead launched what was at the time the most successful fashion project on Kickstarter and now helps other fashion entrepreneurs bring their ideas to market.
Building a startup, you love and making it future-proof is an essential ingredient to your startup recipe. But wondering how would you ensure it?
Whether you want to start a shoe store business or want to step into the retail industry. Building a startup, you love and making it future-proof is an essential ingredient to your startup recipe. But wondering how would you ensure it? Here is what we mean for a strong start to your own startup:
1. Offer what people want and not what you want to sell. Consider this as a crash course but offer the product or service what the end user or customer is looking for. Become a solution provider.
2. Liquidity or regular cash flow is a lifeline of any startup. More so, if you want a kickass beginning to your business then it is absolutely essential to fuel the daily operation with immediate cash flows. Whether you decide to come up with private labels, loyalty programs for customers or insure same day delivery. Feeding constantly is the key to a head start of your startup.
3. Alternatives to keep the cost low – Too often, starting up is a journey that is done on a shoestring budget. In such cases, keeping the cost to bare minimum becomes imperative. So even if you are required to keep the cash flow intact, reducing the cost per item becomes equally important. Used items to furnish your office, freelancers to do you content and negotiating skills for better pricing are some of the ways you can achieve this target.
4. Sales before Branding – Several times entrepreneurs get into a branding exercise for their business without realizing the dire need to get leads and converting those leads into sales. Ideally, to run a business strongly, one must focus on marketing of one’s product/service and creating enough word-of-mouth that creates a buzz about the product in the market. Once consist sales are ensured, it will be easy for you to survive and sustain.
5. Regular monitoring – Abide by two principles. Experiment and Evaluate. It is utmost to keep a track about your tests and experiments. Throwing away money blindly over marketing campaigns or new product line will not ensure profits. While a clear vision helps you a long way, faithfully monitoring your investments is a scientific tool that helps many entrepreneurs.
6. Keep adding value to your business. Value addition to your product or service never ends. Whether you are starting up from scratch or taking over a multibillion dollar business. Rather than offering a discounted product to your customers, a product with some or greater value addition would be highly appreciated. It is also a way to build up loyalty amongst users.
7. Get a Mentor – The starting up avenue boasts the availability of multiple channels through which entrepreneurs can get help at every step of their entrepreneurial pursuit. Call them angel investors, venture capitalists or industry experts, all of these are disguise for an advisor. This outsider is the one who will help you with understanding the tricks of the trade besides being a guiding force.
Today’s courageous youngsters have ideas that waits to be launched in a business soon. However, success if not dependent on your idea but the ways you adopt to launch your business and run it successfully. Grow the business step by step and make a name by building a strong customer base.
A business owner doesn’t have to be a financial expert to be successful. However, it is important to know the basic financial terms that will come up in conversations with colleagues, potential clients and investors.
Entrepreneurs go into business with a variety of built-in skills. Some are natural salespeople, while others have the ability to come up with ideas that sell themselves. But while there may be a handful of entrepreneurs who are truly financially savvy, the majority cringe at the thought of preparing financial statements and managing their books.
Business owners who struggle with finances should definitely hire an accountant or utilize accounting software to make things easier, but there are some basic financial terms every entrepreneur should know as their business grows. These terms may come up in meetings with potential investors, partners and clients, so it’s important to be aware of them and to understand how they might affect your business.
Here are 15 essential finance terms every entrepreneur needs to know.
1. Assets
These are the economic resources a business has, including the products it has in inventory, the office furniture and supplies purchased for use, and any trademarks or copyrights it owns. These assets count toward the value of a business, since they could be sold if the business experienced difficult times.
2. Liabilities
This includes any debt accrued by a business in the course of starting, growing and maintaining its operations, including bank loans, credit card debts, tax debt, and monies owed to vendors and product manufacturers. Liabilities can be divided into two major types: current, which refers to immediate debts (e.g. money owed to suppliers), and long-term debt, which refers to liabilities (e.g. loans and accounts payable).
3. Expenses
Business expenses are the costs the company incurs each month in order to operate, including rent, utilities, legal costs, employee salaries, contractor pay, and marketing and advertising costs. To remain financially solid, businesses are often encouraged to keep expenses as low as possible.
4. Cash Flow
Your cash flow is the overall movement of funds through your business each month, including income and expenses. Businesses track general cash flow to determine long-term solvency. A business’ cash flow can be determined by comparing its available cash balance at the beginning and end of a specified period.
5. Bottom Line
This is the total amount a business has earned or lost at the end of the month. The bottom line is the last financial figure on a ledger. The term can also be used in the context of a business’ earnings either increasing or decreasing.
6. Financial Report
A financial report is a comprehensive account of a business’ transactions and expenses, created to give a business oversight of its financial matters. A financial report may be prepared for internal use or external sources, such as potential investors.
7. Financial Statement
Similar to a financial report, a financial statement lists all of a business’s financial activities. However, a financial statement is generally a more formal document, often issued by a lending institution.
8. Cash Flow Statement
A cash flow statement shows the money that entered and exited a business during a specific period of time. It generally covers four main categories: operating activities, investing activities, financing activities and supplemental information.
9. Income Statement
Also known as a “profit and loss statement,” an income statement shows the profitability of a business during a period of time. The income statement looks at a business’ revenues and expenses through all of its activities.
10. Balance Sheet
A business’ balance sheet gives a snapshot of the company’s financial situation at a given moment. This includes the cash it has on hand, the notes payable it has outstanding and owner(s) equity in the business.
11. Profit and Loss
To remain financially healthy, a business must have a regular profit that exceeds its losses. Profits and losses are usually itemized on a profit and loss statement, also known as the income statement defined above.
12. Capital
In business finance terms, the money a business has in its accounts, assets and investments is known as capital. In business, there are two major types of capital: debt and equity.
13. Accounts Receivable
Accounts receivable (A/R) is the amount a business is owed by its clients. Usually the client is notified by invoice of the amount owed, and if not paid, the debt is legally enforceable. On a business’ balance sheet, accounts receivable is often logged as an asset.
14. Depreciation
Over time, a business’ assets decrease in value due to the time that has passed since it was purchased. For tax purposes, a business can recover the cost of that depreciation through a deduction.
15. Valuation
When a business seeks funding from investors, those investors want to know the overall worth of that business. This is accomplished through a valuation, which is an estimate of the overall worth of the business.
A business owner doesn’t have to be a financial expert to be successful. However, it is important to know the basic financial terms that will come up in conversations with colleagues, potential clients and investors. By maintaining oversight of operations through financial reports and budget maintenance, a business can increase its chances of success.
Give yourself an edge with these 25 gems of sage advice that most people ignore.
It’s easy to find someone to tell you what you want to hear, but your true ally is one who tells you what you need to learn.
Give yourself an edge with these 25 gems of sage advice that most people ignore.
1. Take time to know yourself. “Know thyself” said Aristotle. When you know who you are, you can be wise about your goals, your dreams, your standards, your convictions. Knowing who you are allows you to live your life with purpose and meaning.
2. A narrow focus brings big results. The number one reason people give up so fast is because they tend to look at how far they still have to go instead of how far they have come. But it’s a series of small wins that can give us the most significant success.
3. Show up fully. Don’t dwell on the past, and don’t daydream about the future, but concentrate on showing up fully in the present moment.
4. Don’t make assumptions. If you don’t know the situation fully, you can’t offer an informed opinion.
5. Be patient and persistent. Life is not so much what you accomplish as what you overcome.
6. In order to get, you have to give. If you support, guide, and lead others, if you make contributions to their lives, you will reap the best rewards.
7. Luck comes from hard work. Luck happens when hard work and timing and talent intersect.
8. Be your best at all times. You never know what the future will bring, so always make the best use of the present.
9. Don’t try to impress everyone. The unhappiest people are those who care the most about what other people think.
10. Don’t be afraid of being afraid. Sometimes the one thing you need for growth is the one thing you are most afraid to do.
11. Listen to learn. Learn how to listen. You can’t learn anything when you’re talking.
12. Life’s good, but it’s not fair. The delusion that life’s supposed to be fair is the source of much unhappiness.
13. No task is beneath you. Don’t put yourself above anyone or anything; work hard in silence and let success make the noise.
14. You can’t always get what you want. But, as the song says, if you try you may find you get what you need.
15. Don’t make decisions when you are angry or ecstatic. The best decisions are made with a clear conscious mind, not in the throes of any emotion–positive or negative.
16. Don’t worry what other people think. Personality begins where comparison leaves off. Be unique. Be memorable. Be confident. Be proud.
17. Use adversity as an opportunity. Every loss leads to an opportunity, and every adversity leads to new possibilities.
18. Do what is right, not what is easy. Strength of character leads us to do the right thing, even when there are easier options.
19. Dreams remain dreams until you take action. Without action, an idea is just a dream.
20. Treat others the way you want to be treated. Do right. Do your best. Treat others as you would want them to treat you.
21. When you quit, you fail. The surest way to lose at any endeavor is to quit. But fatigue, discomfort, and discouragement are merely symptoms of effort.
22. Trust your instincts. What good is intuition if you let second-guessing drown it out? The worst enemy of success is self-doubt.
23. Learn something new every day. Have the mindset of a student. Never think you are too old to ask questions or know too much to learn something new.
24. Make what is valuable important. Instead of thinking about what is profitable, think about what is valuable. Invest in others and you will grow your portfolio.
25. Believe in yourself. The way you see yourself is the way you will treat yourself, and the way you treat yourself is what you become.
Sometimes we get excellent advice but we forget to take it in. Take it in and pass it on.
For entrepreneurs there is so much to learn from Sachin Tendulkar. It is not just about having talent but having the ability to nurture it to achieve greatness.
The man, the GOD, the run-scoring machine and more have been the words used to describe the man Sachin Ramesh Tendulkar. It is a brilliant achievement indeed and is today an inspiring example for a lot of us young Indians and for that matter, youngsters all over the world!
Sachin Tendulkar reminds us of a saga of true sportsmanship, humility and innumerable number of records in the world of cricket. After a brief period of uncertainty, Indian cricket has moved on. In a country that has a habit of finding heroes, it has not taken long to find new ones. But then, like they say, there are sportsmen and then there is Sachin.
For entrepreneurs there is so much to learn from Sachin Tendulkar. It is not just about having talent but having the ability to nurture it to achieve greatness. He has had to be a mentor, a student, a team player, a tough opponent, a patient and yet an aggressive person, among other things to get to where he is today. He is a classic example of the things one needs to do beyond possessing basic talent.
We all adore Sachin Tendulkar and now its time we should learn some entrepreneurship lessons from our hero:
1) Get Hit, Fall Down, Keep Going.
Fourth Test, Sialkot, Pakistan, 1989: India had saved three tests against the great bowling attack of Pakistan. They were now in the green pitch of Sialkot. Waqar was breathing fire with India tottering at 38 for 4. A bouncer hits Sachin on the nose leaving him on the floor with blood spurting out. A sixteen year old Sachin playing his first ever series was not someone to give up so easily. He battled on with a bloodied nose scoring an unbeaten half century.
Start ups are a lot like this. The initial stages are not easy and success takes a long time in coming. There are going to be occasions when you will be clouded with doubt, when it will be hard to find those short wins and at all those times, it is just important to persist and believe.
2) Step Out Of Your Comfort Zone
Hero Cup Semi Final, Ind vs South Africa, 1994.
The Azhar-led Indian squad was on the verge of exit from the Hero Cup. After putting up a paltry score, Indian bowlers responded fairly well leaving South Africa needing just six runs off the final over. Tough times call for tough guys. Azhar handed the ball to Sachin who had not bowled a single over in the game till then. He bravely took up the opportunity and bowled a brilliant final over to hand India the match and subsequently the tournament.
3) Even At Your Peak, Do The Basics.
World Cup 1996- World Cup 2003
It is during the period from 1996 to 2003 that Sachin Tendulkar achieved the status of ‘GOD’. Bowling line ups around the World shook at the sight of 5 foot 3 inches lad walking on to the pitch. Tendulkar smashed centuries after centuries tearing apart oppositions with relative ease. To add to this, the burden on him was constantly increasing with the retirement of key players. He went on to become the highest run scorer in all formats of the game and surpassed multiple records on the way. All through, there was one nothing that never changed – the practice regime. Sachin remained the one person who’d hit more balls in the nets than everybody else even a decade into the game.
4) Play To Your Strengths, Especially During Your Tough Times.
Fourth Test, Border-Gavaskar Trophy, 2004
Post the 2003 World Cup during when he led India into the finals, Sachin entered probably the most difficult phase of his career yet. After a string of failures in the first three tests, Sachin’s place in the team was under scrutiny. He was dismissed attempting cover drives on the off side through the entire series. During the final test, Sachin taught us probably the most valuable lesson of all. Giving up entirely on his cover drives, Sachin scored a slow and painful 241* restricting to his shots purely to the leg side.
5) Train For Marathons, Not Sprints.
Ton of Tons, 1990-2012
24 years. That’s a long period for any man in any sport. One can count the number of such sportsmen on their fingertips. Longevity is not about luck but about the attitude towards your work. Sachin had a knack of converting his starts into big scores. One could almost sense within a few balls that he might just score a century this day. During every innings and across his entire career, Sachin lasted the distance. He could battle on without losing focus at any stage. He was a marathoner not a sprinter and his success largely owes to the same.
6) Build Trust.
World Cup 2011 – March 2012
The most beautiful aspect about Sachin is probably the trust he built among the Indians. Be it children or grand parents, everyone believed in Sachin, everyone felt like nothing could go wrong as long as Sachin was there. Like Amla famously said ‘Nothing bad can happen to us if we’re on a plane in India with Sachin Tendulkar on it’. Having carried the burden of expectations on his shoulders for so long, Sachin never failed to deliver and even when he did occasionally, everyone knew it was just an off day.
7) Uphold Your Values At All Times – It Defines You.
Since 1989.
If we had to choose one thing that differentiates Sachin from other greats of the game, most of us would say – his character. Sachin was as much a gem of a character outside the field as he was on the field. Across a career spanning three decades, Sachin has not been entangled in any controversies. His farewell speech pretty much sums up the man that he is. In a twenty minute long speech, probably his final act on a Cricket ground, there was not one person he left out. Right from the curators to his family, he was thankful to everyone who made him who he was. That is the mark of true greatness – to remain grounded even when you have achieved almost everything you possibly could.
Following are the 10 rules of wisdom that no one will give you but are of extreme importance. Here goes.
Many of us are running a rat race that we don’t even understand. Agreed – everyone thrives to be successful and content with their lives, but the question is how the hell do we get there? No one wants to look back ten years from now and wish someone gave them valuable advice that would have made them successful. We hear you. Following are the 10 rules of wisdom that no one will give you but are of extreme importance. Here goes.
1. Never reveal 100% of anything to anyone
Never ever tell all the details of your plans to anyone. If you’ve a great idea to become a millionaire or start up your own company, don’t give out the entire plan. Reveal only, say, 70-80% of the plan. This will ensure your idea stays your own.
2. Nothing lasts forever
This one is self-explanatory. Whether its love, or success, good fortune, your looks or your great head of hair, nothing will last forever. So, it’s always better not to get attached to things that are temporary.
3. When in doubt, follow your gut
When nothing in the decision-making progress seems clear to you, always use your instincts. They were given to us for a reason. Follow your gut, it’ll save you more often than it’ll hurt you.
4. Never make a decision when you’re angry
A clear head is a must when taking an important decision of your life. When you’re angry it’s your raging hormones and boiling blood that will make the decision, and not your logic. So, learn to keep a check on your emotions.
5. If you don’t have anything smart to say, don’t say anything at all
This is given. Even if you have something to say, don’t say it, you’ll end up revealing more than you can bargain for. If you have to lie, keep it short and simple. Remember, a simple lie is always easier to defend than a complex truth.
6. Always know how to distinguish between want and need
You want to be successful but you need to be a good man. You want a luxurious lifestyle but you need a happy life. You get the drift? Learn the difference between what you want and need, and the battle is half won.
7. Behind every great man is a great woman
Call it a cliché, but you need the stability of a great woman backing you up. After all they say being a family man completes you for a reason. A mediocre woman will always stop you from fulfilling in life.
8. Always under-promise and over-deliver
Over promise and under deliver is dangerous for your company, not to forget for your image. In order to do business, credibility is paramount. And that can only be achieved if you surpass everyone’s expectations and over deliver.
9. A man is nothing without his word
The only thing common in men from all walks of life is their word. Your word should never be broken. Always keep your promises because the moment you break it, you lose someone’s trust and that means losing the person consequently.
Sharing with you infographics to help entrepreneurs to succeed in their life.
Guy Kawasaki is the chief evangelist of Canva, an online graphic design tool. He is on the board of trustees of the Wikimedia Foundation, a brand ambassador for Mercedes Benz USA, and an executive fellow of the Haas School of Business (UC Berkeley).
He was also the chief evangelist of Apple. He is also the author of The Art of the Start 2.0, The Art of Social Media, Enchantment, and nine other books.
Kawasaki has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.
Sharing with you infographics to help entrepreneurs to succeed in their life.
Here’s a game of startup 20 questions that could get you a big payoff.
If you run a business or are just starting one, there are few questions to answer that are worth thinking about. If you have well researched answers to those questions, you will have an easier time attracting critical resources – like capital and talent.
Here are the 20 questions to answer about your business.
1. What is your business’s overt benefit, dramatic difference, and real reason to believe?
Unless it is really obvious why your product is better than anything else on the market and that you can deliver on your promises, you may not want to bother with the other 19 questions.
2. How will your business help society, the environment, and any other affected stakeholders?
Your business ought to make the world better off. You should make it clear how you’ll do that.
3. What is the mission of your business and what overarching goals is it striving to achieve?
If you want to inspire talented people to join your company, your company should have an emotionally compelling reason for being.
4. What have you learned from systematically talking with potential customers?
If you want to convince someone that people will pay for your product or service, ask 100 potential customers. If most of them ask how soon you can get them your product, you may be on to something.
5. How has customer feedback changed your view of the business opportunity?
Use customer feedback to make your company better.
6. Which groups of people are likely to be your best customers?
You’ll have more luck getting customers if you focus on the ones who are most likely to buy your product. Know the traits those potential customers share.
7. What are the revenues in the market you’re targeting?
To calculate this number, multiply the number of people in your target market by how frequently they buy each year by the price you’ll charge them for each unit they buy.
8. What product features and benefits do your customers seek?
You will be competing with other products – know which factors that potential customers compare in picking yours over theirs.
9. What evidence convinces you that customers would buy your product?
I’d be encouraged if you talked to 100 customers and many of them said that your product outperformed rivals on those factors.
10. Who are your company’s competitors and what are its competitive advantages and disadvantages?
You ought to figure out the capabilities – e.g., product development, sales, purchasing – that your competitors are using to gain market share and then take an objective look at how well you perform those capabilities compared to rivals.
11. If you sell a product, how will you distribute it? If a service, how will it be delivered?
Mostly entrepreneurs think distribution is an after-thought – customers consider it hugely important. So you should deliver quickly and correctly.
12. How much will you charge customers for your product?
Have a clear pricing strategy that will help you gain market share.
13. How much does each unit of product cost your company?
Know how much it costs your company to build, deliver and service each unit you sell.
14. Which companies will supply your raw materials or key services and what are the terms of those partnerships?
Find suppliers who will provide the raw materials you need to run your business, Make sure the suppliers deliver quality products or services, on time and at a reasonable price.
15. Are your suppliers socially and environmentally responsible?
Pick suppliers that share your sense of social and environmental responsibility.
16. How will you advertise your business and promote your product or service?
Develop a marketing strategy that gets you the maximum amount of attention among potential customers without spending too much money.
17. How much capital will you need to start your business?
Estimate all the costs you’ll incur to get your business off the ground — then double your estimate.
18. What will your income statement look like over the next three years?
Make reasonable and well-sourced assumptions to project your future income. Investors will question every assumption.
19. How long will it take your company to break even?
To find the number of units you need to sell to break even. divide the profit from selling each unit of your company’s product by its fixed costs.
20. What are the risks of this business?
Be sure you have thought of everything that could go wrong and try to run your business in a way that keeps those risks under control.
With good answers to these 20 questions, you have a shot at getting investors’ cash.
You may think that you are absolutely prepared to launch your startup, but the truth is that you are not.
Entrepreneurship is a path of constant learning and many startup founders learn the hard way that their expectations have almost nothing to do with the reality. You may think that you are absolutely prepared to launch your startup, but the truth is that you are not. First time entrepreneurs may know a lot, but the true teacher of business is the experience.
During his TEDxLSE Talk, Tak Lo, who has angel invested, founded and mentored over 50 early stage startups, shared with the audience the top three predictors of startup success. Find out what are these three predictors from the video below and don’t hesitate to share your thoughts on the subject in the comment section.
There no better and enticing idea than one that hints at the possibility of being your own boss! Entrepreneurship is a mindset and requires quite a bit of clarity before being embraced.
There no better and enticing idea than one that hints at the possibility of being your own boss! But it pays to run some checks unless you want the startup startling you!
Being an entrepreneur is not just about being a business owner, it’s about knowing life as you knew it… and turning it 180 degrees on its head! Entrepreneurship is a mindset and requires quite a bit of clarity before being embraced.
Come to think of it, unless one is prepared it can be quite scary:
1. You no longer are in the comfort zone of a definite salary figure.
2. Days-off can no longer be arbitrary. Along with valuable time loss, it sends wrong message to your employees or partners.
3. There is so much more responsibility when you become vital for keeping kitchen fires going in several other homes.
5. You will now have to make decisions, sometimes split second ones – this is the boogeyman of grown up world.
6. Money coming in needs to move in a cycle; nothing can be achieved unless you are comfortable with the idea.
7. With technology and global audience, the concept of work-hours and leisure may need to be reworked in the head.
8. Hiring, motivating, firing will be on your plate! Tough conversations are something you need to brace up for.
9. Make time for something you haven’t done before – you will need to make sure you are SEEN and HEARD. Welcome to the game of eyeball grabbing! All this doesn’t matter in a salaried life… Now life will depend on it.
10. Inspiring others is an art. Your motivation led to the startup. Don’t let your or your employees steam fizzle out.
11. New disciplines await you – laws, regulations, accounts, taxation … You will necessarily need to wrap your head around them!
Here are six things you can do in the pre-launch phase to make sure your startup actually sees the light of day and winds up succeeding.
Entrepreneurs may come up with a winning startup idea overnight, but putting it into action takes much more time and plenty of mistakes. Each misstep can be a learning opportunity as long as it isn’t your nascent company’s downfall. Here are six things you can do in the pre-launch phase to make sure your startup actually sees the light of day and winds up succeeding.
1. Decide what’s useful, discard the rest
There are thousands of great startup ideas out there, but not every entrepreneur has the confidence to put them into action, and some of them get shot down by naysayers. There’s no startup founder who doesn’t encounter self-doubt or skeptics, but if you can overcome these obstacles, you’re on the right path.
Don’t waste time. Disregard nonconstructive criticism, and stay focused on your idea. One way to do that is to be meticulous about planning: Put together a strategic road map for your first steps, and outline all the possible situations where things might go wrong. You won’t anticipate all of them, but it’s an important exercise in those early days.
2. Know what works for your competitors
It goes without saying that you’ll need to thoroughly research the market sector you’re trying to enter. But don’t just look for your competitors’ blind spots—figure out what’s working for them, too. Once you do, you can begin thinking of ways to improve on what’s already working for customers in that space, even if the idea originally came from a competitor. Sometimes real disruption is just about doing things better, not dramatically differently.
3. Simplify your ideas
Make sure your ideas are clear—then make sure again. Muddled thoughts lead to muddled business plans, and that lack of clarity can be a huge stumbling block. There are already plenty of unknowns to navigate in the pre-launch period, so you’ll want to do everything you can to minimize them. Simplify your central business idea to its core components, then build upon it so that every feature serves that main mission.
4. Self-educate
Seek advice from other successful entrepreneurs. Through networking, I’ve built relationships with friends and mentors who’ve overcome some of the same startup challenges I’ve faced. Whenever I had a question, I had someone reliable to reach out to. You should also spend your pre-launch phase brushing up on the art of entrepreneurship itself. Even if you only gain a little insight and it still feels pretty abstract until you actually dive in, that’s still knowledge you didn’t have before.
5. Outsource work right away
Funding is usually minimal in the early stages of startups, so hiring full-time staffers is nearly impossible—it’s hard to get dedicated talent without offering a salary you can’t afford. Save that for later, and outsource the work as you take off. This is also a great way to find talent as your business grows.
6. Look past the money
Don’t focus on turning a fast profit, because chances are that you won’t. This actually goes hand in hand with the importance of clarifying your ideas: How can you possibly make sound decisions when all your energy is tied up in the financials? Of course, that doesn’t mean throwing those considerations to the wind. It just means that the stages before you launch should be devoted first and foremost to developing a sound business model and following it with a strategic plan for growth. Once you get those things right, the money will be there.
As entrepreneurs, we all make mistakes, but it’s those who learn from them that ultimately make it. You need to do that right from the get-go, otherwise your startup may not have a chance to launch at all.
This article was originally published in Fast Company
Here you can find 10 of the most important things that entrepreneurs must know before they launch their first startup.
Entrepreneurship is a path of constant learning and many startup founders learn the hard way that their expectations have almost nothing to do with the reality.You may think that you are absolutely prepared to launch your startup, but the truth is that you are not. First time entrepreneurs may know a lot, but the true teacher of business is the experience. Here you can find 10 of the most important things that entrepreneurs must know before they launch their first startup.
Execution is everything. No matter how great your idea is if you don’t have clear vision of the way it will be executed, you are most likely to fail at building successful startup.
Build your audience before your product. To create something great you need to know that there are people who need this product. Know your audience and create for them.
Finding good employees is hard… Venture capitalists invest not only in ideas, but in teams as well. In order to create strong company you need to hire skilled people and finding professionals is really, really hard.
…so don’t be afraid to hire people who are better than you. Don’t compromise with your hiring because you are afraid that somebody else will take your place as a leader. You should be happy if you can find better people for your team and try to keep them as long as you can.
Raising money is not easy and don’t happen overnight. You will hear “No!” more than you can actually imagine.
Details are really important and you will learn to pay the right amount of attention to them. You will learn to look at the big picture but never to forget the small parts of it.
Your understanding of success will change… many times. So will your perception of failure. Success comes after many failures and you need to be prepared for both of them. Failure is hard, but success is not easy either.
Stress will be unbearable. You expect that, but nobody is ever ready when it comes to working under so much pressure.
And your personal life may suffer. The clear line between your personal and professional life will get so blurry. Your time will be never enough and there will be always something that needs to be done.
You will think about quitting many times, but you will never actually do it. Natural born entrepreneurs never stop following their passion, no matter what happens and how rocky the way gets.
