What You as a Startup Founder Must Know Before Starting a Business
Aspiring entrepreneurs often ask me what’s it like to be a startup founder and what must they know before starting a business?
The short answer is GREAT and a whole lot but we’ll get to it shortly…
It’s no secret that we live and work in the world where most people, especially among Millennials and Generation Z who are soon to enter the workforce, think and dream of starting their own business.
Freelancers, solopreneurs and entrepreneurs are terms being used by millions worldwide to describe themselves. Many don’t even realize the true meaning of those terms, yet use them on a regular basis and with much bravado.
Because it’s cool…entrepreneurship, freelancing, gig economy, co-working spaces and all the new and fancy schmancy terms and ways of making living nowadays are just cool and best of all, there’s really not much to it, is there?
Well, hate to tell you but there’s much more to it than meets the eye…much more than what the mainstream media report on and wants you to believe.
There’s no glamour or fame, instead there’s so much misery and pain. Entrepreneurship is the way of life not something you just become over night.
Entrepreneurship is the way you think, breath, eat, sleep, live and everything in between. I believe that you either have it in you or you don’t. I say this from experience having worked with and known so many interesting people over the course of my personal and professional life.
Many were exceptional and wildly successful, others not so much but often times the one thing they had in common was the entrepreneurial DNA.
You reading this, tells me that you too might be an aspiring entrepreneur who dreams of becoming a successful startup founder and serial entrepreneur or perhaps you already are a serial entrepreneur who simply wanted to read my take on entrepreneurship and what I believe aspiring entrepreneurs and startup founders ought to know before taking the leap of faith.
So, here goes…
1. NEVER start a business with intention to get rich
Let this one settle in before you continue reading further.
You and I both know that people start businesses for various reasons and statistics tell us that more than 80% of them fail within the first two years of operation.
Without debating the accuracy of this statement, the truth is startups fail more than they succeed and the right question to ask is why?
I will tell you boldly, because of the absence of a true and meaningful WHY?
You see, if you start a business to get rich, make money, achieve fame and live a glamorous life, I guarantee that you will fail, no doubt about it. You will fail not because you aren’t smart, capable or driven but because your business was based and built on a hollow foundation…in fact, there was no foundation to speak of.
Entrepreneurship is not for fainthearted, it’s much tougher than you might think once you truly get to it. Your journey as a startup founder will undoubtedly be filled with seemingly insurmountable obstacles, risks, temporary defeats, pain and suffering.
All of this could and more often than not would make you throw in the towel and quit, UNLESS you have a strong and meaningful why…something that you are deeply passionate about and would do whatever necessary to make or achieve it.
This meaningful why will give you much needed STAYING POWER when the going gets tough and help you get through it and ultimately achieve your coveted goal. So, before you embark on an entrepreneurial journey, do yourself a favor and make sure you have the BIG and meaningful why.
2. Success is elusive and doesn’t happen overnight
We all know people who are quick to judge or condemn others who appear to have achieved enviable success. You can often hear such people say things like, ‘it’s easy for her, she’s driving the latest Bentley’ or ‘he’s so rich, he doesn’t even know what to do with all the money’.
However, for the record, those people who have acquired enviable success – whatever it may be – have done so over a long period of time. They have put in a ton of hard work, dedication, conviction and perseverance on a consistent basis.
Discipline, consistency and hard work are just some of the traits which define such exceptional individuals. Their unyielding resolve to see it through until the end, no matter how tough, painful or hopeless it may have seemed at times was made possible by the big and meaningful why they all have.
So, as you come up with your definition of success, create supporting and relevant KPOs and KPIs, do keep in mind that the road to your coveted goal is long and painful. Be mentally prepared and pace yourself.
Stay focused and keep an eye on the big picture, at all times.
3. Partnerships are beneficial and detrimental at the same time
Due to high complexity associated with starting a business and countless skillset required to get it off ground and ultimately achieve success, often times you won’t be able to go it alone and would need help.
For example, if you were to build a super sexy mobile app call Rent-a-Space Shuttles for space travelers and you as a technical guru could develop it yourself, chances are – certainty in fact – you would need someone to help you on the business side of things.
Ideally, you would need a business savvy partner or a Co-Founder to help you create the need for your app, build winning go-to-market (GTM) strategy and help promote, run and grow it year on year.
While partnerships are truly beneficial and more often than not essential for business success, they can also be detrimental to a business. This is something I know full well having built, managed and lead strategic partnerships for many years.
Partnership is much like marriage, if you get the right partner you’re on a fast track to success. By the same token, if you fail in your partner selection, you and your startup are doomed.
Therefore, knowing that partner can either make or break you, approach partner or a Co-Founder selection very prudently. Make sure you find a partner who’s trustworthy, reliable, shares your values, ethics and ultimately buys into your grand vision, for after all you need someone who believes in you and your dream.
4. Your GTM is more important than your mother
What good is your startup if your target audience – the very people you aim to serve and whose needs, wants, desires and pains you want to address better than anyone else – don’t even know you exist, let alone your products and or services?
Building the winning go-to-market (GTM) strategy is therefore, imperative if you are to have a shot at a business success. No, I am not implying that having the winning GTM will guarantee you success but that will set the foundation from which to build on.
The GTM should ideally describe how you and your startup intend to roll out services or products into the marketplace. In essence, GTM is your sales strategy comprising the key elements of your startup i.e., why, who, what, how, where and when.
- Why – refers to your main objective or the very reason for being and driving force behind your business
- Who – refers to your target audience
- What – refers to your services or products (service/product portfolio)
- How – refers to the ‘meat’ of your GTM strategy e.g. how do you intend to roll out services/products
- Where and When – refer to the place and time of your GTM
5. Know what funding options you have at your disposal
Old adage says “it takes money to make money” and that more often than not stands true, especially in the life of an entrepreneur.
Sure, you can start a business without money but that’s not always the case. If your business is based entirely on professional services e.g. business consulting, outsourcing, architectural or technical solution designing etc. perhaps you could pull it off without the funding otherwise, chances are you will have to come up with sufficient funds to give yourself 18-24 months runway.
Why 18-24 months?
Because that’s perceived to be a sufficient period of time for any good business to become self-sustainable. Don’t let this discourage you if you and your business need more time, Amazon, Facebook, Twitter and many more have been in business many years before they became self-sustainable.
Self-sustainable, put simply means that a business makes enough money to cover all of its expenses and ideally grow via reinvesting its profits back in business.
Assuming you need funds to run and grow your startup, such funds can come from different sources e.g., founders or bootstrapping, family, friends, investors etc. As a startup founder you absolutely must know your funding options if you are to have a shot at business success.
Without going in depth, these are the most common funding options you have at your disposal as a startup founder:
- Bootstrapping – you as a startup founder or entrepreneur fund business without external funds
- Family and Friends – you take a loan from family and or friends to fund your business
- Accelerators and Incubators – you part way with 3%-20% equity in exchange for mentoring, support and funds from specialized organizations run buy savvy investors and businessmen
- Angel Investors – you give up considerable percentage of equity in your business to individual investors in exchange for funds, usually between $25K-$250K
- Venture Capitalist – you give away the lion share of your business to savvy investors in exchange for funds north of $500K
To truly grasp the funding options available to you as a startup founder, I urge you read ‘How to fund and grow your startup: Bootstrapping v External Capital‘
6. Traction, traction, traction
Yes, you read it right, TRACTION aka growth.
No matter how good your business idea, product or a service may be, if you aren’t able to articulate your unique selling proposition (USP) to your target audience in the right way and achieve massive traction, you’re dead in the water.
All the hard work, dedication, sleepless nights, strategy and funding are futile if you aren’t able to grow your startup.
Luckily for you as a startup founder, there are many different traction channels or vehicles you can employ to help you achieve the traction you need to get your startup to the point of self-sufficiency and continuous growth, thereafter.
Again, without going into detail, here’s the list of most widely used traction channels:
- Search Engine Optimization (SEO) – online content optimization process aimed at driving relevant and targeted traffic to your website via search engines like Google, Yahoo and Bing
- Social Media – process of leveraging your Social Media Hub e.g. Facebook, LinkedIn, Twitter etc.
- Content Marketing and Inbound Marketing – marketing process of creating truly valuable, relevant and actionable content via blogs, videos, podcasts etc. to ‘draw’ and capture your target audience
- Blog and Blogging – create a no-bullshit, truly valuable, relevant and actionable content for your target audience on your blog(s) and other relevant blogs via guest blogging
Wrapping it up
Being an entrepreneur or a startup founder who runs her own business and ideally, answers to no one sure seems very liberating. Such freedom however, is very expensive and only a very few are able and willing to work for it and ultimately achieve it.
If you truly possess winning traits of a successful entrepreneur and have resolved to take the leap of faith, good for you!
As you embark on your entrepreneurial journey, remember to always try to learn from the mistakes of others but don’t ever shy away from making your own mistakes, as long as you learn from them.
If others could do it so can you.
Author: Dzenan Skulj, a Co-Founder and CEO at Parttimerz. He’s a serial entrepreneur and student of life. Utterly passionate about and strong proponent of entrepreneurship, startups, freelancing and self-development, which he regularly blogs about on his personal blog dzenanskulj.com. Dzenan also actively mentors entrepreneurs on their entrepreneurial journey.