A First-Time Founder’s Guide: Six Lessons

A First-Time Founder’s Guide: Six Lessons to Improve Your Chances of Success Entrepreneurship is hard. Early on, the challenges can seem endless: balancing strategies, improving execution, building relationships, developing products, serving customers, and considering the opportunity costs of decisions. Coordinate these challenges effectively and you may create life-changing outcomes for customers, family, and yourself. On the other hand, any entrepreneur who has endured immense pressure can show you the emotional difficulties ahead—from mild frustration to overwhelming dejection. Whatever today’s situation, tomorrow remains unknown. Every day offers room to improve. How can you keep improving your product or service, team or company, to achieve lasting success? Here are six valuable lessons that may offer inspiration. 1. Hire People More Knowledgeable or Experienced Than You As an angel investor, I have noticed that many first-time founders prefer hiring people less capable than themselves, putting the founder in a stronger position to train or guide them. That mindset should not be encouraged. We should not strive to be the smartest person in the room, especially at the startup stage. Hire people with greater knowledge and experience. In many respects, they should train and guide you, helping you avoid detours through their experience and move in a clearer direction. This does not mean simply hiring experienced people to supply answers or tell you how to run the company. Hire people who fill gaps in your understanding. 2. Attend to Both the Big Picture and the Details Founders, senior executives, and managers alike can easily become absorbed in daily details. But leaders can guide a company partly because they understand not only today’s priorities but also how today’s decisions and actions affect tomorrow. Leaders fixated on daily minutiae often miss the big picture. Those who remain above it all may lack the execution needed to move the business forward. Building a truly influential enterprise requires both perspectives: the big picture and the details. 3. Assess Every Aspect of the Business Objectively It is easy to confuse “getting many things done” with “getting the important things done.” Recently, for example, we faced a major decision. The initial debate was whether to hire a certain type of salesperson. It then shifted to whether that role was needed at all, and finally to a broader question: “Do we really need this business line?” Operators, leaders, and even executive teams can become so intent on completing a decision that they rarely examine its context. Is the decision necessary? Will it move the company forward? What is the company’s ultimate goal, and does this help achieve it? Or might it merely keep everyone busier? 4. Consider Opportunity Costs in Everything You Do Operators often make decisions in relative isolation. “How much will this cost?” “How much revenue will it generate?” “How much time will it take?” The real issue is that answers can vary enormously when the context changes. An investment that seems more profitable now, for instance, may cost the company more over the long term. Every business decision has an opportunity cost. Whatever the decision, consider both the current cost of doing it and the cost of not doing it—or doing it later. 5. Validate Before Investing In my investment experience, companies repeatedly make the mistake of investing blindly. Startups often spend months or even years, and substantial venture capital, building a product from scratch that is wholly disconnected from actual customer needs. Predictably, they spend time and money on something customers do not care about, then must return to square one and start again. Validate before investing. Gather relevant data, understand customer needs, make small decisions, and advance through repeated testing and iteration. In this age of abundant data, information can be gathered anywhere. Social media can provide user data, for example, and paid advertising on Facebook or Google can also help collect information. 6. Once Validated and Proven Effective, Invest More Small businesses often remain small because their activities are broad but shallow. They try expanding in many directions instead of deeply developing the one or two activities contributing most of their revenue. The Pareto principle offers another explanation: “80% of results come from 20% of causes.” Only a few activities truly drive the business. Identify them and persistently develop them. #36Kr神譯局 (36Kr translation desk)