There is nothing like starting a successful business. You have complete control over focus, process, time, initiatives, and direction. The problem is, now you have complete and independent control over focus, process, time, initiatives, and direction! I got what I hoped for, and it’s completely exhausting. It is a fantastic position to be in and I wouldn’t trade it for anything.
Most of my professional years before starting my own company were with Apple during the turnaround years of 1991 to 2003. I was lucky to have worked directly with Apple executives, including Steve Jobs, during these years. I took what learned from that and applied it to turning around AOL (didn’t work out so well), Nortel (really didn’t work out so well) and Skype (worked out pretty well). This put me in my forties (old timer for the High Tech startup world) so I decided it was time to settle down, work less, and have a family. The year was 2008 and the recession was just starting. Great timing, right?
There are some tips I really wish people had told me, or that I had read, about what really goes into starting and running a successful business. Here are the top 9 tips I wish others had told me in advance:
You’ll Need a Longer Runway Than You Think
I knew this! I’m a private pilot and in flight school, I was taught to add 20% to my runway requirements. This is a complex equation where you have to take into account temperature, humidity, and your load weight in order to calculate the amount of runway you need. You should then add 20% to be safe. However, I didn’t do that when I started my company. I found that I needed 20% more runway to get in line with my modeled financials. Then again, it was 2008 and I frankly should have doubled it to be safe. Optimism is a great thing until it doesn’t work.
Don’t Worry So Much About the ‘Fun’ Stuff
So, what’s the fun stuff? It’s doing things like designing your business card, stationary, decorating your office, telling people you’re the CEO (I actually never did that. I called myself VP), and re-designing your logo. All the ancillary stuff that can easily distract you from your real goal – making money. I wish I had spent one hour creating all that (or better yet, buy templates for everything) and focused more on the stuff that mattered: Business development, articles of organization, bank account structures, business credit, business insurance, contract template development, and so much more
Targeting the ‘Big Boys and Girls’ Requires Big Time Commitment
My company sells directly to Fortune 500 companies. The solutions we create are very complex and are bought at the executive level. Do not underestimate what it’s like to go up against: two managers in procurement, an operations manager, a finance manager, and two corporate contracts lawyers all over one MSA and SOW. Large companies have resources you can only dream about. It is the norm that I’m working against five managers on their side for even the smallest contract. Fortune 500 companies can slowly drain all your time and energy. Don’t forget, after the contract is signed, you now have to deliver the solution.
Don’t Be Shy to Ask More Than You Think
If you create a great solution that has above average value, charge for it! You’re adding more value than the average solution and thus, you should charge more. As a startup, we all think we can only compete on price. This is not the only way value is perceived. Think about the “Apple Tax”. We all pay for the value and privilege of being in the Apple ecosystem. You should focus on being more valuable than the competition. Otherwise, it’s a gigantic race to average and this is a very hard place to compete.
Do Not Put Your Family Second!
For me, the single greatest benefits of being the Grand Poobah is control over my time to devote to raising kids with parents around. Now that you are an entrepreneur and have some control over meeting times and such, be around your family as much as possible. This is the important stuff. It always amazes me how work can wait a couple hours. Trust me, work isn’t going anywhere.
Be Frugal, But Don’t Step Over Dollars to Save Pennies
You don’t need a fancy office (unless fancy people will constantly visit you). You don’t need a fancy car. You don’t need a fancy desk with fancy gadgets, and everything else to make yourself feel important. Take pride in a used desk, cheap office space, with a four-year-old computer. As business owners, we are constantly advertised to. There is great temptation in looking the part. My advice: Never let them see you coming. Wear a small hat, but have lots of cattle (keep a large stockpile of cash in the bank). Spend the money on good employees, good lawyers, and good accountants. This will create a business growing machine.
Be Warned: Everyone Will Try to Sell you Everything. Say No and Focus!
Stay focused on your sales, marketing, operations, and management strategy! Steve Jobs used to say, “Focus is about saying no.” You will get a very heavy and steady stream of sales people selling you things that will derail your budget. Stay the course! Say no unless it reduces your cost to get the same results you planned. I’ve seen carnage in my 10+ years of running a business due to people trying to chase the latest trend or the best shortcuts. These deviants always start with a friendly call or email from your friendly virtual sales person.
It is critical that you stay healthy. You will feel like you have no time to eat right or exercise. Taking even 30 minutes a day to exercise and 10 minutes in the morning to make your lunch will return you an hour in productivity. You’ll also feel far better during the day. I know it’s hard, but you really have to just do it. Also, get sleep. You’re definitely going to need it.
Read Good Books
Whatever you think you might be weak in, read a book about it. At the very least, scan the book and pick out the important points. I’ve read a lot of books and I’ve learned that 10% of the book is valuable and then rest is filler. You’ll get good at finding the 10%. When you start a business, having a basic understanding about small business taxes is important, so buy a book. Having a basic understanding about labor law (for your state) is also important, so buy a book. You get the point, but it’s important.
I received my MBA in Entrepreneurship from a highly ranked entrepreneurship program and during my studies, not a single professor mentioned these tips. Typical academics—great focus on theory and business plan development but nothing practical or hands-on. I wish someone had warned me what life in the entrepreneurial trenches would be like. The ironic thing is, I used to do new venture analysis at Apple and I still didn’t get this kind of exposure. It’s proof that you need to actually sit in the captain’s chair before you really know what it’s like to be captain.