I’m an entrepreneur which means I find gaps and fill them with new ideas. Being an entrepreneur is probably the most exciting, challenging, frustrating, poverty inducing, wealth creating, risky and remarkable career you can choose. It’s full of peril, and it’s an insanely tough path – certainly not for the faint of heart.
Entrepreneurs change things; we fight convention to create the new. Entrepreneurs use the skills of synthesis to take large domains of divergent information and bring them together to find new possibilities. We don’t run burger joints; we invent the burger and convince everyone to eat it.
It has been said that an entrepreneur without funding is like a musician without an instrument. As the late great Robin Williams once said: “You can’t make butter with a toothpick” and don’t expect to make a great company without money to get it going. Peter Drucker said, “the purpose of business is to create a customer.” and in my experience that always needs cash.
If the cash you have is not enough to create customers, then you better find some. Businesses run on money and starve to death without it. You must have enough cash to get into the market and start selling. Contrary to the popular belief getting funded is not the goal of a start-up, making money is, watch your pennies and spend every dime to effect. Many start-ups secure cash and spend like drunken sailors with disastrous results. Think like your Scottish uncle and spend only on what is necessary and nothing more. Money is the tool that transforms brilliance into more money.
Entrepreneurs need brothers and sisters in arms. It’s ferociously hard to make it on your own so find comrades. Yes, comrades as this as much about shared ideology as it is a commercial purpose at the start. At times the challenges will be brutal, and you will feel like you are smashing into walls – keep pushing because breaking down walls is the job description. Make sure you get everyone’s commitment on paper because knowing why you started helps clear the air when the fog rolls in – and it will.
Hold on to your shares. In the world of raising capital, there are no angels only devils. Everyone will want to maximize their take. If a deal is too good to be true be suspect that danger is lurking. Family and friends are among the kindest investors, but if things go south, the guilt will haunt. Make sure the deals you cut don’t leave you with regret. Get professional advice and honest perspective before you sign anything. If you are desperate for cash, then be wary of making desperately bad deals.
The more equity you retain, the more you can sell later. As companies grow, they raise money by diluting their holdings dilute too much, and your passion for your business may also dilute. If you’re counting on a billion dollar IPO think again because raising money in public markets is a serious endeavor, and most start-ups don’t have the skills to play in that dangerous jungle. Be warned young Mowgli everyone will have their hands out wanting a piece of your action, and you will be lucky if you survive with the shirt on your back.
Which of course takes us to where we should always be – focus on creating customers. A positive cash flow with adoring customers will go a long way to helping you cut a better deal when and if you need to raise money. Get cash flow positive as fast as you can; it may take a while but run as fast as you dare. It’s a strange fantasy land where companies consistently lose hundreds of millions of dollars. Some high-tech valuations resemble games on a Vegas gambling floor more than they do businesses in the real world. Don’t get lured by the theater of the absurd we see so often in the high-tech sector and the clueless gush of media love.
Cash-strapped Enterprises tend to share their shares way too fast. Be wary of dividing up the farm before you are firing on all cylinders. Many start-ups can cycle through team members in the early days as the new company learns to find its feet. Best not to start sharing the equity until you know who will stick around in both body and spirit. Nothing angers people more than an equity holding deadbeat getting rich off their backs.
Learn to sell your game. Don’t tell people what you do, say why you do what you do. Tell a story that makes people want to hear more. Confidence comes with clarity of mission. Begin your adventure by starting strong, different and exciting. If you can’t talk your game, then you have no game.
Be omnipresent. Get out there and tell your story far and wide. Don’t give away the entire plot or empower a competitor to eat your lunch. Leave people intrigued. There is margin in mystery.
People are at the core of all human endeavors and the more people you know. The better you connect the cosmic dots in your favor. As they say, luck favors the bold. Be bold. Those who aren’t bold are invisible and in business invisible is as synonymous with dead. Stealth and invisible are two different things.
Behave like a pro. People don’t like doing deals with amateurs. There are no half measures. Be all in or get out. Make sure everything that represents your company screams resilience and presence, make people know that you are playing for keeps. If you want to be known and respected, then present with impact.
Entrepreneurism can be a strange game. The most important part of winning the game is knowing what winning is. The ultimate purpose of the game is always to win the customer, and everything else exists to support that goal. Know this as fact: Getting to success will take much longer and be significantly harder than you imagine. Be prepared for that. There is a Hollywood and media version of success in business which glosses over the truth that success is very tough to craft.
Be nice but don’t be a pushover. Develop a thick skin. People will disappoint. People will lie, people will oppose, people will misrepresent, and some people may even try to cheat. Understand that on all roads you will find bandits and under every bridge a troll. It’s just life don’t take it personally. As an Entrepreneur, you will meet all kinds of people and 90% of the people you meet on your journey will not add value to your mission but they most certainly will delay and distract you from where you need to be. Most of those people have no malice but putting them in the rear-view mirror as quickly and nicely as possible without being a jerk is essential. Don’t burn bridges unless it lights the way ahead. Knowing how to find and build opportunity with the other 10% is crucial.
The closing wisdom is this: There will be things that scare you. It may be making cold calls, it may be reporting bad news, or it may be firing someone. Truthfully, it may be one of a million things that make you uncomfortable. Buck up because being an entrepreneur means you are at some point going to need to do all the things that scare you – just accept it and get on with it. It’s not all rainbows and butterflies because every so often you are going to need to churn out a ton of license plates. If that turns you off, then get out now before you implode.
There is no time to waste. Find your brilliance and find your comrades because together you will become the masters of your destinies. The road will be anything but predictable, yet you must keep moving with compass in hand to remain headed in the right direction. Be mindful of those you travel with making certain that nobody gets lost along the way. Run from the bandits and avoid the trolls. Your job is to defy gravity so start pushing that water up that hill.
Good luck world changer. It’s a brutally tough but noble road you follow.