Realities of building a business: Expert advice from a Founder
I hope these reflections will be relevant not just for start-up founders and scaleup executives, but also for independent consultants and freelancers. As we often say, being independent is very much like running a business.
Make no mistake, building a business is a hard slog and requires resilience, belief and an understanding family. You have more setbacks than successes. Many more. Things take three times longer than you think. If not four. Everything cost twice as much to build as you have budgeted. At least. You have frequent near-death experiences (cash, tech bugs, team issues – you name it). You take each ‘no thank you’ from prospect clients as a personal insult.
10% of building a business is exciting stuff, and 90% is execution, attention to detail, and other seemingly mundane things – just like in any other company. Only without a decent salary or any job security, at least in the early days
Below are some thoughts based on my experiences in terms of what I have learned over these past years. It might not be anything new or revolutionary, but here it goes (by the way I can recommend “The hard thing about hard things” by Ben Horowitz if you want more insights about what it’s really like to build businesses; beyond the glossy success stories).
- Find a great co-founder and a small initial team. Starting a business is hard, and it’s nigh on impossible on your own or if your team isn’t quite right
- Test your idea with trusted connections in relevant positions and ask for ways to make the proposition even better
- However, and slightly contradicting the above (who said building a business was straightforward?!) – trust your instincts if you get conflicting advice or feedback. You as founders actually do know best and have been thinking about it for a long time (I’m coming from our experience as older founders). Listen carefully to everyone, but also challenge what you hear. But of course, if every one you speak to tells you it’s a terrible idea, maybe there’s something in that
- Go for the low-hanging fruit first. Take your offering to your existing relationships in the market – they trust you, and they are the ones most willing to give you the first opportunity. This will provide you with essential case studies to take to the rest of the market.
- Ask for introductions, leads and recommendations from your network. Asking for help can be difficult if you’re not used to it, but trust me, it becomes easier each time. I’d lie if I said everyone you think would help actually comes through, even if it’s a simple ask – and that is painful (yes I’m looking at you ‘so and so’). But the point is that many if not most do. And you will need every help you can get.
- Give young graduates a chance – we have had great success recruiting stellar team members straight out of university
- Pay attention to culture and team development opportunities – realise that your team members are not founders and have options to go elsewhere. Make sure that you keep the culture that attracted them (best done by being careful about who you recruit and leading by example), and give them opportunities to grow as your company does.
- Being afraid of making hard decisions – if you know there is an issue, it will only get worse if you leave it for later and end up costing more (time or effort or both). It’s okay to be afraid to make the hard decisions, that’s probably good, but you still need to make them
- Delaying parting ways with team members who don’t fit; either because of cultural fit, skills, or in terms of what you need at that particular time in the business. Trust your gut feeling – if you have doubts about someone a month in or so, it’s unlikely going to become better. Analyse and learn from why the hire didn’t work out, but in the startup and scale-up phase you cannot afford anyone that’s not a great addition to the team
- Giving away your product or service for free. This is written in pretty much every startup book out there; the reason being that unless you charge for your services you don’t know if it’s a commercially viable idea. Easy, right? Well, not so much when you’re in front of a big brand customer who wants to ‘try you out’ for free and you can see the treasure at the end of the rainbow if only you this one project for free… In my experience, those who don’t want to pay anything will never become good clients later on, so stay firm and see it as a way to weed out time-wasters/ bad fit clients
- Burning bridges, whether when leaving your previous employer, or when a potential client doesn’t convert the first, second, or even third time, or in any other situation. As the saying goes, you always meet twice, and you never know who might be of help directly or indirectly down the line. When people are challenging/ unreasonable/ idiots – be the better person and realise you can’t change them and leave it at that
- Taking on funding until you know what to do with it. The chances are that your product or proposition will change quite a bit, especially in the first 6-12 months as your plans hit reality. Thus, it makes little sense to invest heavily in technology or team until you know what you need
- Raising money just because you can – there might come a time when you must or should raise ‘proper’ money to maximise your growth and value creation, but if you raise too soon at unattractive valuations you have significantly reduced your room for manoeuvre going forward due to dilution
Building a new business is in many ways no different to starting out as a full-time, career freelancer or independent consultant. The balance between sitting on the beach, counting the money, and the hard slog of nurturing leads, dealing with the admin side of things, and delivering work to tight deadlines for not-always easy-to-deal-with clients is tilted firmly in one way. But if you know what you are getting into and have realistic expectations, it is an amazing and rewarding experience. If I could go back, there are many things I would do differently, but taking the plunge and embarking on the entrepreneurial journey, is not one of them.