The Best Advice for First Time Entrepreneurs
First time entrepreneurs can easily get overwhelmed with the plethora of advice, books, blogs and ideas out there on how they should be, look and feel about their startup.
In this article, we’ve tried to provide the best advice for entrepreneurs available out there. We’re going to focus on different stages through the article, (1) planning, (2) execution, and (3) general. Of course, a lot of these tips can be applied to different stages, rather than just the one they are categorized under.
1. ADVICE FOR PLANNING STAGE
There are many things that are more important while you are planning your startup. Let’s look at some advice that applies at this stage.
IT’S A MARATHON, NOT A SPRINT
Anybody who’s in the startup game to build a real business with staying power must realize that it’s a marathon, not a sprint. Plan accordingly or you’ll fizzle out. Work at a pace that’s sustainable for the long term. – Todd McKinnon
You’ve probably heard this before. What’s the difference? As a runner, I can tell you that a marathon requires extensive planning and forethought, as well as restraint during the actual run. If you give it your all in the first few miles (a marathon has 26.2), you will have nothing left for the rest of the race. In fact, the recommended rule is that the first half of the marathon be run a little slower than the second half.
How does this apply to entrepreneurs? Don’t spend all your money in the first few months, before you have a guaranteed cash flow. Don’t hire too many people at the start, but build a core team initially and add more people as the business starts giving a return. Don’t work 24/7 for the first 3 months and then spend 6 months recuperating.
FIND GREAT MENTORS
If you are looking to make your way in business, try to find a mentor. If you are in a position to share the skills you have learned, give something back by becoming a mentor yourself. – Richard Branson
Mentors are going to be a guiding light for you when things get tough. Whether you’re planning hiring, marketing, product development or looking for the perfect co-founder, having a mentor who can advise you is going to help you make the right decisions. Find a mentor who has experience in this industry, and can help you overcome your weaknesses. Having a mentor who has a great network he can promote your company to is an added benefit.
FIND A GREAT CO-FOUNDER
A co-founder can help you fill the gaps your weaknesses leave in the management team. Don’t be afraid to look for someone who has a different business focus (for example, you could work on product, and they could take care of marketing). However, do look for someone who has the same passion for the product as you do, and who believes in your overall vision for the company.
DO WHAT YOU LOVE
The thing about following your passion is that you can align in with whatever you’re doing. People are always looking for the technology companies that have increased sophistication and that are easily scalable. But, let’s face it: passion is scalable. – Adriana Lopez
If you’ve read this far, you probably have a great idea you are passionate about. That’s one of the most important things. You must be doing something you are passionate about, that you won’t feel like abandoning when the going gets tough. Try and create something that solves a problem you feel passionate about solving. If you’re passionate about the product, it will make it that must easier to sell the vision to investors, customers, and even your team.
HAVE A GREAT ELEVATOR PITCH
You never know when you’ll meet a potential investor, or even potential customer. Be prepared with an elevator pitch. It’s a summary of what your startup does and the problem it solves, but it needs to be short and sweet, about the length of an elevator ride. Think and write out what you’d want to let people know if you only had a minute, and then practice it.
BE PREPARED TO PROVE YOURSELF
First time entrepreneurs tend to be young, but at the minimum, they seem inexperienced. Startups tend to be run by young people, and investors sometimes see this as a disadvantage. Be ready to prove that you’re capable of running the show, and that your team has the expertise it needs to get their job done.
HAVE A CLEAR VISION
Before you can even start planning, you need to have an over-arching vision for your product or company. Once you start planning properly, it might change a bit, but you should be sure of what it is you want to achieve, or the problem your product will solve. Break it down into measurable goals that will help you measure how far you’ve come or how successful you’re being. Whether it is 5 sales in the first quarter or 50, you need to have an idea of how far you’ve come.
SET S.M.A.R.T. GOALS
Slightly connected to the last point, but also different. You need to learn how to set S.M.A.R.T goals. These are Specific, Measurable, Attainable, Relevant, Time-Bound. Once you have these goals, you can increase your focus on reaching them. Set goals for different areas of your company, from HR to sales.
2. ADVICE FOR EXECUTION STAGE
You’re done planning; now you’re ready to start hiring, marketing and selling. Here are some things to keep in mind.
Most first-time entrepreneurs confuse being lean with being cheap. Don’t be cheap. You need to learn how to prioritize spending and spend on the essentials from day one, but company retreats might not be an essential. This will vary for each business model. Remote teams, for instance, need to be brought together at least once a year because it helps boost morale. Company retreats might not be as important if all of your staff sits in one location. Learn how to tell the difference between the important and not-so-important expense for your business model.
HIRE THE RIGHT PEOPLE
People will make or break your company. When you start out, hire the first 50 people yourself. Don’t depend on someone else (an HR manager perhaps) to start hiring independently, because regardless of their capability to take on the job, the company is too small for you to not be involved in each hire. Hire the people who are passionate about the product or company, hire the ones you fit into your company culture, and hire them at the right time. The right team is everything.
One of the first hires you might want to consider is an office manager to take care of day to day tasks like mail management, office bills, catering etc.
DON’T OUTSOURCE YOUR CORE COMPETENCY
Anything Core you should keep in-house, anything Context you should outsource. For example, Porsche (the car manufacturer and a company that seeks perfection) will never outsource designing and manufacturing the engine, however they are happy to outsource tires and mirrors. – Via StartupQ8
If you’re selling software, don’t outsource part of your product development. You will lose control over one of the most important things to your business. Remember not to outsource your core competency. Hire the right people to take care of it in-house.
BUILD A COMPANY CULTURE
Thinking your company culture will evolve over time is a mistake. It might, but it might not end up being what you want. Sit down with your co-founder and figure out the kind of culture you want in your organization. List the ways you can develop it in your hires, or the traits your new hires must have to fit in. Many companies have a culture handbook that new hires will be asked to follow. Focus on this at the outset to have a motivated team in the long run.
“Lots of traditional, widely accepted, and perfectly legal business practices just can’t be trusted by customers, and will soon become extinct, driven to dust by rising levels of transparency, increasing consumer demand for fair treatment, and competitive pressure” – Don Peppers and Martha Rogers in Extreme Trust: Honesty as a Competitive Advantage
Be transparent with your team, consumers and investors. Being transparent builds trust. Your team will feel more involved in the management if you are open with them about your plans and vision. Some companies go as far as to have open discussions about salaries and processes. Buffer recently shared their earnings dashboard with the public. Openness and transparency can be great things in a startup. Embrace them.
KNOW YOUR STRENGTHS AND WEAKNESSES
You may be very comfortable acknowledging your strengths, but what about your weaknesses? It is best to know your weaknesses before you start out, because you will be building a management team that fills those gaps. In fact, your co-founder can be a great yin to your yang.
Don’t take on responsibilities that you know require something you cannot deliver on. For example, if you are not creative, maybe you need someone else working on product design? It’s important to write down all the things you can’t do, and find the right people to do those things for you.
3. GENERAL ADVICE
Some advice applies to you, no matter what stage your startup might be in. Let’s look at some things you should be keeping in mind, no matter what you’re doing.
NETWORK. NETWORK. NETWORK.
You never know who you will meet at a lunch or dinner that could end up being an investor, mentor, or even the perfect new hire. Always opt to meet new people when possible. Attend events in the same industry, log onto webinars, and read other people’s work. Twitter and LinkedIn are great tools to network with likeminded people virtually.
SURROUND YOURSELF WITH POSITIVE PEOPLE
“Many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they look for a place to dump it. And if you let them, they’ll dump it on you.
So when someone wants to dump on you, don’t take it personally. Just smile, wave, wish them well, and move on. Believe me. You’ll be happier.” – David J. Pollay
You’d be surprised by how many people will be negative, just to be negative. Unfortunately, there are many people who have a negative mindset, and it seeps through to other people. Surround yourself with happy, positive people instead. Negative people can be difficult to deal with, and take up too much energy to manage/interact with. People who like to focus on the positives are a better support for you when you start out with a new business.
While this doesn’t just apply to entrepreneurs, first-timers are more likely to work 20 hour days and then face burnout. Focus on your personal growth and fitness along with your professional journey. Take time out every day to exercise, meditate, and eat the right things. Everyone is different, and some people prefer yoga while others feel better after a weight-lifting session, so we won’t be biased. Anything you need to do to stay healthy, and focused, should be a priority.
ASK QUESTIONS. LEARN.
“Live as if you were to die tomorrow. Learn as if you were to live forever.” Mahatma Gandhi
Never stop asking questions. Be they about your product and company, competition, or even personal growth related questions – ask. You can never be too old to learn new things. You can never read too much, or spend too much time on improving yourself. Read every day, follow thought leaders and read their blogs, network with people that interest you, and take part in new and exciting opportunities.
BE OK WITH FAILURES, AND KNOW WHEN TO QUIT.
Sometimes you’ve just had enough. Know when you have reached that point, and quit. Knowing when to give up is just as important is giving it your all at every point before then. Don’t be afraid of failure. Failure will often teach you the hard lessons you need to learn to make your next startup a success.
Let’s hear what advice leading entrepreneurs give to first time entrepreneurs.
In Palo Alto we talked with venture capitalist Alex Taussig about the investment process and …