Informative and candid analysis of the lessons learnt in setting up and running a startup business. The points below have been edited from the full post which gives additional context.
Comment: the above site seems to have server problems today, presumably this will be rectified shortly.
1. Get advice from others, and listen to it.
It is easy to see those well-meaning comments and opinions on your venture as distractions, and I know I certainly did a lot of the time. The point is not about right or wrong, but about being able to constantly evaluate and analyse the business, the market, the products and the money and people that you need around you to make it happen.
2. Establish a well-functioning board (of advisors)
It took me a while to admit it to myself, but failing to establish a board of people that can provide strong advice from day one was one of my biggest mistakes. As a matter of fact, having an advisory board can be much more useful than a formal board, as it is much easier to recruit competent people to contribute as an advisor rather than as a director.
3. Investors don’t necessarily agree with how much money you need
Another reason for not having a board dominated by investors is that it may well cloud their judgement when it is time to raise more capital. Particularly if things aren’t going exactly to plan in the early stages, and they rarely do, you may find resistance to getting your board to raise sufficient capital for the next stage at a reasonable valuation.
4. Don’t put a value on your business – the market takes care of that
The investors that “buy” your numbers are in all likelihood not the investors that you want. Any savvy venture capitalist or private investor will make their own assessment regardless of what you say, and valuation (surprisingly for many) is relatively low on their list of investment criteria.
5. Numbers mean nothing until delivered
I am not for a moment advocating that you should not budget, but focus on budgeting for what you need to get the business to break-even, then double the expenses and halve the revenue.
6. Pay attention to the details
Richard Branson is a particular hero of mine who seems to be able to create new businesses through the glint in his eyes. But most of us mere mortals cannot do that. We need to focus on the details of the business to make it happen, otherwise it won’t. And truth be told, Branson’s books tell a story of a man that was obsessed with the minutest detail in his early careers, and probably still is.
7. Know what you don’t know
In retrospect, I also know that I was missing some key skills – or, rather, I was relying too much on learning on the job and flying by the seat of my pants. So make sure you know what you need to make it happen, and be absolutely certain to identify your own shortcomings. Nobody is good at everything.
8. Act early and decisively – admit mistakes and move on
No startup can afford to hesitate before rectifying a mistake. If things don’t work, be it related to the product, the market, your sales process or the people you employ, don’t wait. You are much better off risking a new mistake than trying to persevere with the one you already made.
9. Strive for what is possible – leave perfection to those who can afford it
Striving for perfection is a luxury accorded only to companies with deep pockets in mature and regulated industries. One of my early business mentors, a Norwegian entrepreneur with several very successful startups behind him, used to urge me to decide what was “good enough” to do the job – a state typically obtained long before perfection.
10. And finally… be prepared – leave something in the bank