5 Lessons That Can Make or Break Start-ups
Updated: Jul 15
I have been mentoring start-ups for years, from Cambodia to Finland.
I ha ve always enjoyed the passion, energy and creative mindset start-up founders possess. I’m truly amazed by some of the innovative ideas they can come up with.
Creating a company requires much courage and faith. It’s a jump into the unknown.
The chance of success is minimal, and yet the global pandemic has boosted the entrepreneurial spirit. The number of people who have decided to start the adventure has been increasing over the last few years.
I find it both fascinating and scary. Fascinating, because being an entrepreneur is the toughest job ever. New business owners have yet to realize it. Scary, because I see the same mistakes being reproduced over and again.
Let me share 5 lessons I have learned throughout the years.
Lesson #1 – Prepare For The Long Run
Entrepreneurs usually start from something that does not exist and build it up piece by piece.
The construction never ends though. There is always an extra piece to add.
That is why it is important you first understand entrepreneurship is a journey.
It is like watering a plant. First, you do not see too much progress, but if you continue to do it properly, feed it, and take proper measures to make sure it is growing strong, eventually, the plant will blossom, and you will yield results.
It can begin as a part-time hobby while you are testing your idea, but at one point it will demand that you go all out.
You are in for the long term. It will become your life.
You may or may not be successful, but expecting quick returns will lead to desolation and frustration.
Instead, learn to cultivate patience and resilience. That is how you build an entrepreneurial mindset.
Lesson #2 - Don’t Worship Money
I do not know if you realize we have reached a point where VCs have turned start-ups into commodities for their own benefit.
A commodity is a raw material that can be bought and sold, like coffee or copper.
Is your start-up a commodity?
Well, that is what most start-ups have become though, and most founders do not see it.
VCs glorify money because their job is to get high returns on investments fast. And return on investment is their measure of success.
So they talk about it a lot. Then, start-up founders follow their lead with eyes full of stars. They start worshiping money as the solution to all their problems. All of that is amplified by TV reality shows and social media where being a millionaire seems to be the only criterion to live a successful life.
Are Jeff Bezos and Bill Gates happier than you because they are worth hundreds of billions of US Dollars? Both got divorced by the way.
VCs and other start-up incubators or accelerators have created a system to push start-ups to constantly seek funding. For them, it is a giant supermarket, where they shop start-ups instead of groceries.
They even invented terms for it like unicorns. And the race is on to discover the next one.
For founders, it can turn into a big slap in the face because while they are dreaming about being the next unicorn and focusing all their energy on that elevator pitch they think will change their life forever, they forget one thing: everything else!
Your primary source of funding will always be your customers, never VCs. Instead of preparing for one round of investments after the other, you should focus on building your start-up's foundations.
Otherwise, it is like building a house without foundations. You are doomed to collapse even before starting.
Money is always a means to an end, never the end.
Lesson #3 - You Will Fail And That Is OK
Being an entrepreneur is the toughest job ever.
You have got to wear many hats, acquire many skills, and make many decisions – fast. All whilst under extreme pressure to deliver quality work to your clients, take care of your employees, and maintain a healthy cash flow.
It is a constant roller-coaster of emotions. Some days are filled with joy, others are simply discouraging. Sometimes, it can happen within the same hour.
Two things are certain while you’re navigating your entrepreneurship journey: uncertainty and failure.
You already know what failure tastes like. You’ve been there before. I’m afraid it won’t stop just because you became an entrepreneur.
On the contrary, it may well accelerate!
Failure is part of the game. The problem is many start-up founders (as well as more experienced entrepreneurs by the way) don’t accept it. They refuse to talk about it and can become scared of it.
Those entrepreneurs end up being stuck because the risk of failure is too high in their eyes to try anything.
When you’re stuck, your business is stuck.
So accept that failure is part of the game.
“Who determines when I fail? How can I fail if I always get up? There will be bumps but if you’re doing something that gives you a good feeling, something that makes an impact, who cares if there’re some setbacks, who cares if there’s failure?”
Lesson #4 - Be Crystal Clear About Who Your Customers Are
Here’s a question I ask mentoring session after mentoring session: Who are your ideal clients?
There are 2 types of answers:
Confusion between the customer, the person who pays for the product or service, and the end-user, the person who uses the product or service. Sometimes, the end-user is not the customer.
No ideal client profile, or a very limited one. Worst case scenario, the answer is we target everyone.
Your start-up is best suited to serve a specific type of client: your most viable market.
If you’re busy looking for customers who aren't part of this market, you’re losing opportunities to work with the ones who are.
Everyone is not your customer.
Although reaching out to everyone and hoping for the best is easy (after all there must be someone out there interested in my brand), it lacks efficiency, and will adversely impact your business long-term.
So don’t waste your time and energy chasing the wrong people. Instead, define who the right clients are and focus on them only.
Lesson #5 - Surround Yourself With The Right People
You won’t succeed without the help of others.
By others, I mean people within your organization, like your co-founders and employees, as well as people outside your start-up such as advisors, mentors, or coaches like myself.
People are more resilient than technology. When technology breaks down, you need people to fix it.
Having said that, don’t recruit people who are built on your profile. Cloning yourself means multiplying your strengths as well as your weaknesses.
There’s only one you and that’s you.
Instead, get the best people for your business, starting with your co-founders. By best, I don’t mean being the best in their field of expertise. I mean having a combination of the right attitude and technical skills.
In addition, remember that the difficulties you may face have certainly been tackled by others. Sometimes, there’s no need to re-invent the wheel. Learn from people who have walked the walk before you. They can help you save significant time and achieve more.
The biggest risk you face is to become the main bottleneck of your own business because everything is tied around you.
Don’t be that founder.
Surround yourself with people who can support you and with whom you can share the load.