I have chased lot of my well-meant advisors in my early days and thinking back I am thankful for their time and patience with me. Do we need to meet new advisors after early stage money?
The singlemost success factor of a startup I believe is the ability of the founder to discern the good people from the rest - be it team, investors, advisors, customers. Who is really good for your business, and how to take what they can offer to really build your business?
I come across several new entreprenuers, with passionate ideas. I see a typical cycle for this early entreprenuer, that I was in once. They network like crazy and clean up their pitch and raise their first angel money in the range of $250 to $500K. The angels mean well and offer a bunch of contacts. The entreprenuer visits all of them. They offer more contacts and he meets more of them. Every meeting is about planning and strategizing and enjoying how great this idea is. Some teams build some validation of their technology in this time, but stop short of productizing or contacting particular customers.
It scares me to see the cozy comfort nest the entreprenuer operates inside the network of these advisors which blind sights them from seeing the real market.
Most entreprenuers think money is the most valuable component needed to build their business. Thats not true! Its time. You will have passion for only so long if you do not build to the next stage. The market will wait only for so long even if you are way ahead of competition.
This spinning wheel comes from lack of execution focus. They collect advice and more advice. What makes an entrepreneur is their passion, which I would like to define as the ability to take risk with a smile. So, don't forget who you were before your raised that money. Your risk appetite is more than that of your angel, thats why you are the one building the company.
In my early days, I knew how to build out a web division inside a company, but did not know how it was done as a stand-alone business. I went networking but maintained a list called "what I know that I don't know". The famous management cliche "what you cannot manage you cannot measure" holds good for entreprenuers in early years more than anyone else. One piece of advice from my advisor Piyush Patel, then chairman and CEO of Cabletron was "stay paranoid" and "keep a tentative timeline with milestones for yourself".
So, when you meet advisors or their contacts, heres what you can do:
1. Check their background and see where they can help and ask for it.
2. Respect your time. Make sure your meeting gets you something. In the web world, I found fellow web company entreprenuers met often and did partnership deals with each other. But in the end it didn't get anything for either parties, except some garnish for their web sites, partners section. It mislead the team to work towards some integration and referrals that did not get customers.
3. Make a list of all that your business needs - people to fill certain positions, money, contact into customers, processes to scale business, etc. and update this list often. Make sure you take some action item out of each new person you meet.
4. Learn to say 'No" to well-meant people who would like to meet you and just chat about your business when you think its not the right time or because they came from your angels or best friend's referral.
5. Most entreprenuers say they want to start on their own to be their own bosses. "Be your own boss!". It takes clear conviction. Do not go about meeting people or trying all ideas to prove your capabilties to your investors. Do it only when you believe it will build your business.
6. Don't be afraid to fail. You hear a great idea, say a new channel for your business. Validate it by calling up some potentials. Or better still see if you can get this advisor to help you validate it. Then decide if it makes business sense or drop it.
Making new people work for you is an aquired skill and this maybe the best time to practise building it. People will work for you, meaning do stuff to help you if you motivate them by sheer excitement (sometimes) or sell whats in it for them.
It truly pains me to see entreprenuers change their pitch and expand their dreams into more markets without executing on a single product with focus, or signing a single vertical of customers, just talking and dreaming more and more.
7. Lead your team to focus. Focus clearly on your goals, centered on your customers and let all your actions speak towards it.
In both my startups I started with a consumer focus and soon found business customers up the food chain. At Coola, we had a typical startup office with a LED sign showing the number of users we signedup. That was exciting for the team to track and communicated to them that was the most important metric. We got close to 1Million Palm users, who did not pay us. It took me time to realize that I was not communicating the urgency of number of customers launched, as the key metric for success.
I've written about how the early days are unstructured. Its beautiful chaos like random walk, with lot of room for creativity to build what you want, like a puzzle, but if you don't focus your time and energy towards one short-term goal at a time, it will disintegrate into real disorder.
So, next time you decide to meet someone for advice, make a list, and come back from the meeting and build one more block towards building your customer base and execute on it.
I think was gerat post. It help me to put some ideas in perspective. Its hard sometimes not to want to meet with all the people possible. It is important to meet with people that you can take useful advice from.
I found your blog by googling "how to launch a startup" and was very
happy to have found exactly the kind of advice I was looking for. I had
a feeling I needed advisors, but wasn't sure on how or who to approach!
Your practical advice really nailed it for me. I'm at the very beginning
of discussing with users before building a prototype for a web
application. I figured I needed a sounding board to discuss solutions,
which simply can't be done with users because they don't care about how
it works as long as it's easy to use.
Mike, valid point about how users cannot be your sounding board.
They can serve as market validation and help tune your product to their needs. First you need to identify your real customers and where you can build your business based on where you heart is and what you skills you bring.
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