If every entrepreneur thought of himself as a startup founder, there would be a lot more successful startups and a lot fewer failed entrepreneurs.
The problem is they don’t.
For some reason I can’t understand, many would-be entrepreneurs have a sort of utopian belief that the rules of business, finance, and competitive markets don’t apply to them. They think they’re special.
Sadly, they’re wrong.
I don’t care what product or service you have in mind, what market you plan to address, or what type of customer you think you’re going to sell to. It makes no difference. The rules are always the same.
The good news is it isn’t rocket science, but if you don’t do certain things and do them right, you’ll never get your startup off the ground.
Focus on doing just one thing.
Initially, they focus on demonstrating a concept. Then they move on to developing a product, followed by getting initial customer traction, then phased production. A laser focus on one phase at a time enables the highest probability of success at the lowest burn rate.
Raise capital all the time.
Most companies that contact me for advice have no chance of making it because they tried to bootstrap it, are already short on cash and have no time to raise capital. Businesses have to grow and that can’t happen unless you’re constantly raising capital for the next phase.
Solve a big customer problem.
One of the biggest mistakes entrepreneurs make is that they come up with something they want to do that doesn’t solve a big customer problem better than anyone else. If you can’t come up with that, keep looking. That’s the key to making it. First figure out the problem. Then solve it.
Come up with a differentiated strategy.
You probably won’t nail it right out of the gate – few startups do – but sooner or later you’ll have to come up with a unique strategy that nobody’s thought of and customers can’t resist. Every startup either figures it out eventually or fails along the way. It’s one or the other.
Know their market.
Most entrepreneurs are good at something and they want to turn it into a business. Unfortunately, they don’t know the business side. They just think that, if they do it, it will sell. Unfortunately, that’s not how competitive markets work. You have to understand your market, your competitors and your unique customer value proposition.
Have a strong leader with a solid team.
There are basics of project management and building and motivating a team that every founder has to learn to successfully run a venture. I see startups with founders that have no idea how to manage an enormous gaping hole where key capabilities need to be all the time. Sad but true.
Work 24×7 and wear lots of hats.
If you think you have what it takes to run a startup, get ready to work 24×7 and wear all sorts of hats. And everyone you hire should be motivated to do the same. It comes with the territory. If that workaholic energy level isn’t there, chances are you’re not going to make it.
A recent, albeit limited, the survey found that the vast majority of Millennials think entrepreneurship is a mindset that has nothing to do with starting or running a business. Um … no. It has everything to do with starting and running a company. And if you think it doesn’t, you never will.