The world’s economy has always been dependent on startups and innovative business ideas, but what does the current landscape look like and who are the driving forces behind today’s entrepreneurial race?
The data from 38 trusted sources uncovered interesting facts about dynamics of today’s entrepreneurial activities around the world. While the United States keep a top position in number of startups (4.8 million), a huge growth is being observed in emerging countries like India and Brazil where the number of startups has currently reached 2 million or 584,000, respectively. The most interestingly, Uganda has been ranked as the most entrepreneurial country in the world considering that 28.1% of its adult population is involved in the entrepreneurial activities.
What about a government support for startup initiatives? To mention some, Israel hopes to make their country more viable by pumping $450 million in to seed funding and research & development and startups in Chile can apply for a $40,000 equity free grant. Besides domestic citizens, the governments try to attract foreigners with entrepreneurial intentions by issuing lucrative grant schemes and startup visas.
Check out this infographic for more interesting facts!
Let me preface everything by saying I used to be very much in the same mindset that most men and many women are still in. That of, “Women don’t have that much of a disadvantage; they should just work a little harder. It’s not worth worrying about.” After diving into the workforce and coming to understand the startup landscape in a deep and comprehensive way, I couldn’t be more wrong.
There are a lot of things I could write about women in technology and startups. I would love to tell stories, share candid thoughts and opinions, and allow you to disagree wholeheartedly with me. But that’s a different blog post. Here are three real problems that women, including myself, experience when moving through a career in the startup world.
1) “Let’s grab beers and discuss further.”
If you’re an entrepreneur, there have probably been times where you’ve tried this tactic. Maybe I can get closer to this investor/mentor/partner/customer/advisor by offering to take them to drinks. Makes sense. Unfortunately, it’s not that simple for women.
If you’ve read Lean In, you know Sheryl talks about facing this herself. As a young (unmarried) person, it’s assumed that if you’re seen at a bar with a member of the opposite sex, you’re likely on a date. Because of that stigma, women are less likely to offer to take a man to drinks, and men, in turn, are less likely to accept.
Personally, there have been countless times where this would have been a good business move and I didn’t ask. There have been times where I haven’t been invited to drinks even though it made sense. Both sides are at fault here. While it seems petty, a lot of business is done over beers. Being able to tap into that familiar “boys club” activity without being judged or suspected or wrongdoing will be a big step for women.
In an industry where guys in hoodies and startup shirts are revered, somehow women haven’t managed to have get cut any slack yet. Men are in jeans, shorts and t-shirts every day. Women are still wearing, although not as corporate, business-esque “startup clothing.” The Tech.co article that highlighted 70 women and what they actually wear to their startup jobs revealed that MOST of the women still look like they could walk into any corporate office and people wouldn’t flinch. I’m not suggesting a different dress code for men or women at any workplace (corporate or startup), simply pointing out a significant difference.
The double-edged sword of having to look nice but not looking too nice is a challenging one. Too nice means you look either slutty or stuffy. Too informal means you aren’t taken seriously. Just to even have to put that much thought into what you’re wearing each morning is too much energy exerted on the wrong thing.
3) The Chicken and the Egg
Investors often base their deals on investments that have proven successful in the past. That makes sense. Invested in 10 Android apps and all of them failed in 12 months? You probably won’t be investing in many Android apps any time soon. Never invested in an adtech company? You probably aren’t going to go out and throw down $2MM on an adtech company tomorrow.
Same goes for types of founders. Subconsciously, investors associate successful founders with a certain persona. As we know, that persona is young, white, and male. Again, subconsciously (I refuse to say most investors are sexist, because I don’t believe they are at all), female founders coming in to pitch a business just don’t fit into the archetype the investor has in his head– based on history. This makes them less likely to invest.
So… Women are less likely to be invested in, but investors need to associate venture-backed female founders with success before they invest in them. Which comes first?
Similarly, people oftentimes build businesses based on a problem they have personally faced. In other words, businesses that solve problems for women are unlikely to be understood by the average investor, who is older, white, and male. For example, if I am building a really badass crafting company, investors who understand that space and the mission of empowering women are far more sparse.
If you’re a woman in the startup space, I’m curious if you’ve come across these issues and how. Any other major ones pop to mind?
For many founders in startup land, startup accelerators are the best way to take their idea to the next level. Funding, mentorship, community value, potential clients and VCs introduction are just some of the advantages that one could enjoy. There are thousands of startup accelerators worldwide. Perhaps if you leave in a reasonably populated area you might have more than one option around you.
Although there are (too) many alternatives in the market, your startup might end up competing with other thousands of others out there trying to get that spot! You need to be sharp, focused and choose wisely.
There is no easy way to get accepted in a startup accelerator program. There is no shortcut. It just depends on too many factors. There are some steps, however, that you can take to increase chances to impress those in front of you and also, if accepted, make the most out of it.
These are 10 actionable steps for every startup founders to increase their odds to be accepted in a startup accelerator.
The first, and perhaps, the most important thing you have to do to find the right accelerator program is research. You can’t be successful if you don’t know what you are applying for. Research carefully the following:
a) How many accelerators there are in your area or the area of interest
b) What is their focus (category specific or generic)
c) What past alumni or other people say about these programs
There are different platforms that allows you to get information on accelerator programs and what they have to offer. The best, most likely, is AngelList. You can also have a look at our section on startup accelerators to find out past alumni reviews.
2. Get involved
This is a must-do for those looking to apply to startup accelerators nearby where they live. Get involved. Now! Most of accelerator programs organize either meet-up or office hours. Drop by and talk with people working there.
Getting involved before applying is the best way you have to understand what kind of people are behind the program and what experiences they have. It’s also interesting to meet current alumni and mentors, this might be an advantage when applying. If you get referred, as Parker Thompson from 500 Startups says, you have more opportunities to succeed. On top of that, knowing the mentors will also allow you to critically asses its quality.
3. Work on your application
All startup accelerators require you to apply online. Each accelerator program will ask you similar things: team members, background, traction, market, elevator pitch, and sometimes a video.
I find this last one to be quite challenging. Are you supposed to be serious about it or catch their attention? You need to find a good balance. Get help and ask around. Get feedback. However, don’t overlook on this simple step. Accelerator programs in the top league regards this as a very important part of their application process and might be used to just cut down poor applicants. You don’t obviously have to produce a professional video; but you can work on its content.
It’s important to start the application in early days and dedicate to it some time. Before submitting it, check it again and again, make sure everything is perfect, no typos or inconsistencies. Don’t apply the last day!
4. Be prepared
As obvious as it might seem, it’s important to be prepared for an eventual call. Don’t wait for it to start preparing. You will have limited amount of time, between 15 – 30 minutes depending on the accelerator program. The pitch time is usually 10 – 15 minutes and you need to tell who you are, what you do, how you want to do it and strategies. There’s a lot of things to say and just 15 minutes.
Once you finish pitching, you will be asked questions. Remember that you are the only one that knows your product. You might find in front of you several expert mentors and founders that might have an overview or insights in the industry, but not on your product. You are the expert, it’s time to show it.
5. Keep it simple
Don’t use jargon that no one understand. Keep it simple and make sure that everyone around understands your idea.
Not every startup is trying to be the “Uber for something”, I know. I get it, your startup is trying to save lives by analysing stellar interconnection while taking in consideration nuclear power generated by Mars… but still, keep it simple, in front of you there are people that not necessarily understand your complex idea. Find a problem, give a solution. Tell a story.
I have seen technical people struggling in explaining simply their idea. Usually those with a business background are able to focus on problem and solution. Techies tend to describe in details their baby. If your product is heavily on the tech side, try to find a way in the middle. By not saying everything and just hinting at some points, you might actually be able to stimulate interest and get asked more questions. Remember you have at most 15 minutes, you want them to be intrigued by your startup idea not confused.
6. Pitch it, nail it!
The pitch is the trickiest and most exciting thing you will work on in the early days. You are telling a story about your dream. You are trying to convince strangers to buy in your dream. Go over your presentation tons of time. Don’t read, learn it by hearth. Find someone who is willing to listen and ask for feedback.
As your startup progress, it will get more complicated. You will have more things to say and always less time. Once for a competition I had to pitch my startup in 3 minutes. How can you decide what is important? Everything is important!
The idea behind the pitch is to give enough information to trigger interest from the other party. Don’t just talk about general stuff, be specific, but at the same time don’t overcomplicate things.
6. Find supporters
Accelerator programs have different approaches to the magic day. Some will ask you to come a day earlier and present in front of mentors who will give you tips on how to improve. Some others will let you talk with them after the presentation. Nevertheless, you need to understand who is your stronger supporter. Once you find him or her, you need to convince them that your startup is the right choice. If they buy it, they will strongly support you in the application process. Usually a strong supporter overcome any negative feedback or doubt.
7. Team, team and team
If your startup isn’t showing already great traction, your team will be scrutinized. Is your team able to do build a great product? Are you able to grow your dream into a real company? Team is most likely the most important factor considered by startup accelerators when evaluating an early stage startup.
As a founders, you will also be “judged” on the type of teammates you are able to bring on. Think about it in this way. If you are not able to attract the right team members, why would you be able to convince customers to buy from you?
Find the right people, the one you respect and like. You are going to spend a lot of time with them. Your startup is about to go through a lot of things; change of directions will be happening quite often. Build a strong team that can make it.
8. Start building your brand
Take the time to work on your startup image. Obviously no one expects you to spend big money on this. However, having a nice landing page or a well-designed website is a good start. Are your social profiles well maintained? Does it look like people are already looking at your product with some kind of interest?
It’s always a good idea to keep a good external image, even in the early days. Invest time (and some money if you can) in creating something that can attract external interest. The best thing is to find a designer (a friend possibly) that can help you out.
9. Prototype or MVP
This is something you will be ashamed of after 3 weeks. So, don’t worry about it. However, a prototype (or MVP) is something that will give your listeners an idea of what you are working on. When I firstly pitched my startup, we had an awesome design, a killer powerpoint presentation and a shitty prototype. It had nothing of our great design. It was just an idea, a representation of where we wanted to go. Our listeners knew that and appreciated the fact that we put some effort in preparing something that was more than a simple presentation.
10. Show some traction (if you can)
Having traction, whatever that might be, is always better that presenting slides with ideas. Accelerator programs get excited when they see a startup which is already showing users interest or (ideally) making some money.
Whatever your traction is, make sure that they understand what it is. Don’t overcomplicate things, keep it simple, like you are telling it to a kid. Remember though that not all accelerators are looking for traction. Accelerators are not created equally. There are some that are willing to take your idea to a finish product. There are others that are looking for a finish product and are willing to take it to the next level.
These are some practical steps that you can take to increase the odds of getting into a startup accelerator. Consider that each program is looking at something particular in each application that might not be so obvious.
Startup accelerators can be a great resource for your startup dream. If you want to get in one, make sure to do your homework and be focused. If you want it, you are going to take it.
I am a geek (or developer if you like) with entrepreneurial drive. I founded 3 startups, one of them which went through an international accelerator. This experience allowed me to personally observe roughly 40 young startups in their life cycle. Observing the good and bad things they did. Most of them are zombies by now but some did a great job. Mine being the former.
In this post I have made a reflection on the last 12 months in one of my startups where I was CEO/CTO. The sum of that flashback would be:
1. I screwed up
2. I screwed up
3. I’m an idiot
These are 3 common points in any failed startup leaders ego. At least the one in touch with reality. I will try to convey my experience to future startup founders in early stages of their venture.
I extremely enjoy metaphors for easier conveyance of ideas. Let’s imagine your new startup as a ship about to set sail in search of vast treasures. Like Columbus, Marco Polo or Cook did before you.
This trade is as old as man, although many try to reinvent the wheel and present startups as something new and fresh…
Your startup, being a boat with crew and all, would greatly benefit in having a map of underwater rocks that can destroy it on its course. I will try to map out “underwater rocks” as I encountered them during my journey. In this way, you will be able to avoid them. And if you find new ones… well, welcome to the startup life.
The only thing you will read here is what NOT to do in your startup. Those points are certified to be bad (as experienced in the before mentioned accelerator). If you need advice on what to do, go read Cosmopolitan.
No founder with self-respect will have the balls to tell you what to do.
The reason is that those founders realize that no one can tell you what to do to succeed. If they did, they would be all-knowing God.
To cut it short, here you can find the X’s on the map and the description of what is probable to happen when you hit one of these:
1. Don’t pick the wrong crew
There is nothing easier than making a mistake with crew selection. Both founders and first employees. Good, skilled and motivated people who think like you and will follow your plan are more rare than a valid invoice in Greece!
It is understandable why you would want to rush and pick anyone who qualifies. But seriously, DON’T!
If you pick the first decent candidates out of frustration, you will waste few years of your life, learn a hard lesson and have a sunken ship. Don’t rush. Research and verify skills of your coworkers before they become coworkers. Ask for references and past experiences and projects you can see. Be sure that you can count on them and their skills before your ship sets of. After that moment, you are most definitely stuck with them.
Last thing to keep in mind is to have a contract that protects you. This must guarantee that you can throw anyone overboard and take back shares, in case of troubles. If you don’t, this will almost guarantee you serious core issues in your business.
2. Don’t fail to assemble a band of brothers
Having an all star crew means nothing if they don’t have enough mental fuel. Will they stick around and travel with you through rough seas?
You should ask them about future plans. Will they promise you loyalty? If not, don’t be surprised if one day some of them will leave your ship for a nicer one with a fat paycheque which you wont be able to match. Make no mistake, if the crew does not have assurances of treasure ahead, they will leave. It’s only logical, captain. The same applies if they feel like they have no input in the decision making.
Startups are hard, exhausting and unrewarding 90% of the time you are working on them. Be sure the crew knows what they are getting themselves into.
Have in mind that they might have personal or family issues. Don’t be a prick. Offer a helping hand and let them know you understand and will help them. Let them know you will also wait for them to return after they settle any issue. Create family members, not employees.
3. Avoid spineless or shady navigators
Blurry goals, frequent shifts in course and no checkpoints reached will create a fertile ground for distrust and doubts. Hesitances about navigators’ capabilities (or C level guys). Everyone in the ship needs to know what they are doing at all times.
Your employees are not idiots. They are smart and pick up on slightest hints of bullshit as bullshit tends to be very noticeable in closed quarters. If someone needs help, at any time, this should be your responsibility, captain.
All C level guys need to speak the same voice. Otherwise, the ship will stop and travel only lead by currents. And this will eventually lead it to the shallow waters.
4. Picking the wrong partner
As any expedition, yours needs money if treasures are far and take years to reach. Taking a wrong financier can end your voyage rather soon.
Well, once you take the money, you are signed up for something. This means that there is no going back, no slowing down and NO excuses.
If you are not ready, if your crew is not ready or your ship is not ready you will sink. The same moment you sign that VC contract, you have cut the lines and your ship has no place being in safe harbour anymore. It is not expected to return empty. The seas don’t forgive mistakes. Neither do the VCs.
If they think you are headed the wrong way, they WILL try to influence you. Sometimes even bully you to go the path they think is right (even though they don’t know the route)
This can only mean that they have lost the confidence in you as a captain. Their interference can break the cohesion your startup has. Be wary of this and don’t allow it if you believe in your path.
Keep in mind that there is a high chance that your VC is full of s@#t! From my experience, most of them have no clue of what they are doing. If you are lucky they read other superstar VC’s blogs and are using your startup as a showcase to build a name for themselves. If they put accent mostly on their “network of contacts”, tell them you are not looking for yellow pages… It’s not worth it.
Not researching your VC with same rigor as you do for your founders and employees, it is pretty much sure you will end up as fish food..
5. Don’t fall for the sirens
Aaah, the shiny and all alluring startup competitions! Pitch contests, business plan contests, demo days, conferences, summits, hangouts, chillouts, startup days, startup lives, anything else?!
What a bunch of bullshit!
I have been to almost dozen of those and in those we pitched we were almost exclusively among top 3 or winners.
Wow! Bravo to us!
It pains me now to think about the time wasted doing this. Except siting and picking your nose, there is no bigger waste of time you can burden your company with. At least picking your nose costs you nothing.
In retrospect, I cannot name a single positive thing we received from these events. On the contrary, we just got more spam in our inboxes.
I was thinking for some time that we “did not take advantage” of these in the right way. However, talking with and seeing other winners later convinced me that all this is a waste of time on epic proportions.
6. No life rafts
Being self confident is nice. It’s even a must have in this line of business.
Being so self confident you don’t make a back up plan in case the ship sinks is just plain stupid and lazy.
Have a clear path out so you can restart as another startup soon maybe even with the same crew.
Don’t be struggling to find job to repay debts for years to come (and be sure, you will have personal debts). You will have learned so much that not applying that knowledge to something useful ASAP is the true tragedy. Your startup is dead, who else is crying than yourself?
7. Learning nothing
If you closed this startup, it’s cool. It’s a necessary step for you to become a serial entrepreneur and finally an established businessman.
But if you do close your startup and start another one doing the same mistakes, you should rethink your dogmas. Being dogmatic is the single most damaging character quality you can posses as an entrepreneur. Get over yourself and have an open mind. Listen to smart people and apply what you learn
Having startups is fun and it can only bring good things in your life. Just don’t make mistakes that can affect you greatly. Be smart, trust yourself and your instincts and ability to learn along the way. Startups are a gamble, and a smart gambler never bets all on one hand.
Remember, success is also about luck, so don’t beat yourself down when things start going the wrong way. There is always the next big thing, and you might be the one making it.
Sadly looking at each other, my co-founder and I tidied up our desks and left the co-working space that hosted us for three months. After one year and a half trying, we were moving on, slowly, but we were. We didn’t say it out loud. We were sad. I still thought we might have had some luck in the last sprint and raise some funds. I still believed we could have made it, but I was scared. Scared to withdraw from the battle too early. Scared to go back to a normal job. Scared to tell people I failed. Scared about what others might have thought. I was terrified, telling the truth. We were going to work from home. We terminated all external collaborations. We needed some money to start paying off the bills, so we also started looking for jobs. That was it, the end of the dream.
It took me another year and half to collect my thoughts after that moment. The first 3-6 months I was angry. The other 6-9 months I lived in a denial state, trying to focus on other things. Finally, I accepted the fact that if we failed, it was mainly because of me. I shouldn’t be that hard on myself, I know. Of course it was not only because of me. Still, I was the “captain” and when the boat sinks, someone has to take the responsibility. But I didn’t. I should have done this long ago.
It’s not that easy and I am definitely not at the end of that road. I still have to learn a lot about myself. I had to take a hard look inside myself and don’t be ashamed of the mistakes I have made. We all make mistakes after all. My mistakes caused me to have some financial problems, lose more hair (although if you know me you wouldn’t see that much difference), sleep way less than what I was used to, prefer the couch to anything else, eat randomly and not necessarily well. Thanks God I am not that old. All these things didn’t affect me in a dramatic way. Now I am in a better position, physically and mentally.
My experience is not special or different from any other startup founder who failed. It’s not that exciting either. We didn’t raise millions, grew exponentially and then fired everyone. My story is simple. It’s an experience that taught me something valuable about myself and something to share with other startup founders.
Why Are You Chasing The Dream?
I have been thinking about starting my own business for long time. Different ideas popped up in my head at different time. I was reading and researching for hours several topics of interest. Talking with friends and testing these ideas to understand what made sense.
Then frustration kicked in. I found myself in a job I didn’t like anymore. I was “wasting” my time doing something that was not relevant to me with people I didn’t necessarily think were better than me. It was time to move on.
My girlfriend, companion of different adventures, was probably more worried than what I was at the time. One day I called her up in the middle of the day and told her “I quit! I am out of here!” I can only guess what she might have thought, but I was sure that my decision was right. I had a co-founder. I had a quite interesting idea. I saw the pieces of the puzzle coming together. What I didn’t see (or perhaps I didn’t want to see) was the reason behind my decision: frustration.
Frustration was motivating one of the biggest step in my life. Funnily enough, my co-founder was as well in a similar situation. We were both moved by a sense of dissatisfaction with the working environment. We wanted to try something different.
Understand Your Driving Motivation Before Making The Jump!
Did we want to necessarily build a business for life or did we simply want to have different environment to work in? Looking back, I am still unsure about the reason that drove us in building our startup dream. I only know that at the time we felt we could make it and if we didn’t, well f@$k it, at least we tried!
Focusing On The Wrong Things
It was on. We were playing the game. I was excited to be on the boat and ride the wild waves of entrepreneurship. I literally had no idea of what to do though. Did we need a product before raising money? Did we need a website before chasing users? Did we have to validate the idea before quitting our jobs? No one gave me an “entrepreneurship manual”. I tried. I made mistakes. I learnt.
The first few weeks were chaotic. We had to choose a name (quite important thing at the time and we lost abut 2 weeks on it). We had to structure how we wanted the website and the user flow. We needed a design, a cool design. We needed some money. I was talking with our primary target users, telling them what we were envisioning. What our startup dream was and why we were doing it. I was pitching my product and users were reacting positively.
Would they use it? Yes!
Did they like the killer (and expensive) design we had? Yes!
Did they see our dream? Yes!
Should have I wasted so much time talking with them? No!
Our primary target users were musicians. One thing I didn’t take in consideration was that musicians need money. Always, no matter what! Of course they liked our idea and they believed in our dream. We wanted to change the way they were notgetting paid for gigs. Hell they liked us. Looking back now, I shouldn’t have talked with the supply side of the business we were building. I should have talked with the average Joe who was going to buy our supply.
Identify the correct target user and understand their needs, before feeding them with your solution!
Another thing I also regret of doing at the time was to look desperately for money.
We literally applied to every single accelerator program had an application window open at the time. We had no real connections in the VC world. I had no “user manual” to follow. That seemed the most plausible thing to do. Instead of building a product, we were waiting for the money to flow in.
Once we sealed the deal with one accelerator, we decided to take the next step and start building a product.
If You Are Worried About The Money, Startups Are Not For You!
Money is important, of course. It would be silly for me to say that money shouldn’t have been our focus or at least one of the focuses. However, we were worried to finish the money before even starting. This situation created a lot of initial friction with my co-founder that took us away from our primary goal. Get shit done quickly.
Listening To The Noise
In startup land there’s so much noise that it’s not that difficult to understand why so many startups fail. Obviously, noise it’s not the only reason for failure. But as acoustic noise, figurative noise can be quite distractive. Everyone around had a word for me. All of a sudden, I found myself surrounded by experts and I fell for it.
I listened to everyone because I was scared to miss out on some important advice. Meeting up for coffee with other founders became a routine. Attending events (of all kind) became a necessity. Showing my face to every possible person around was a must. Asking for advice to “important” people was a need. I didn’t know where help could come from. I had to keep the door open. One thing I found out during my startup days is that literally everyone is ready to comment on your activities as if they are saying the ultimate true. Well, that’s bullshit! Among hundreds of people I met with during these days, I believe one or two were worth listening and I am grateful I met them. All the others were just noise.
Noise comes in all forms, be careful not to get distracted!
The most common noise is the useless one. This is the noise that annoys you because it’s distracting. It distracts you pretty much in every moment of the day. This can take the form of people and events, of course, but also blogs and books. Then there’s the destructive noise. This one is the noise that aims at hurting you. I am talking about those feedbacks or comments that have the only aim of destroying. I welcome all type of feedback, just to be clear. I don’t think it’s a good idea to tell someone “Try and you will see if it works”. No, there’s should be some kind of “moderation” as how people decide to start a startup. But this destructive noise is the one that goes like “This will never work” and that’s it. No explanation. No further (meaningful) comment. Nothing.
I have had a couple of these during my days by (let me be honest here) pretentious pricks. For whatever reasons they thought they were in the right position to destroy my idea and me because they were on the other side of the table. Still, I kept trying to meet them because I hoped to get some money out of them. I know, that’s completely fu@#ked up. Don’t ask me why I did that.
If You Come Across Destructive Noise, Stand Up And Walk Away!
Startup competitions are also noise. Not sure in which category they fall though. It is surely useless most of the times. Startup competitions are kind of pointless, unless we are talking maybe about Techcrunch Disrupt. Most likely though this one as well is pointless per se, but at least you get decent coverage, if you manage to win. I thought that attending competitions as well as getting a badge under my belt would increase chances to get funding. In a way, these give your startup some exposure. But the time and effort you put in these events is substantial and should not be taken out of creating a product and get shit done.
Once, I forced my co-founder to develop an app for our startup, just to take part in one competition. Did we need an app for our business? No, not at all if you are wondering.
Decide Wisely Which Competition To Attend, Especially In The Early Stage!
Startup competitions can also be destructive though. You seat in a room full of people ready to judge you with no real background in your industry. Be ready to meet some pricks.
Partnering With The Wrong People
This a recurring point in my blog posts because I believe this to be the easiest mistake a startup founder can do. You need money, you need a co-founder, you need employees. You just need someone and rarely you are in the position to choose. I love to read about the bullshit of choosing “A players” only for your startup. “A players” most likely want to get paid. Can you afford them?
Wrong partners can break teams. They can give you wrong directions and don’t give you what you actually need. Partnerships, be it with investors, suppliers or employees (yes, these are also partnerships) are crucial to early stage startups. If you partner with the wrong one, particularly investors, then you just married someone you can’t divorce with.
Partnerships Are Like Marriages, Be Careful Before You Commit!
Employees are also partners. In the early days, each employee will need to be committed to your startup beyond the obvious. You don’t need an employee in the early days, you need another co-founder. You need someone who is ready to take responsibility and is not afraid of doing something that it’s not written in the job description. The reality though is that most of early stage startups have limited funds and time to find the right employee. This leads to wrong decisions most of the time. You don’t need someone experienced. You need someone who gets the shit done and work on your side as if they were there from day one!
Startup founders should question continuously the role of their early stage employees. If they are just doing what they are supposed to do, fire them. Once again, most likely this was not an “A Player” anyways. It shouldn’t be that difficult to replace him or her.
Keep Your Shit Real
My startup experience was not the best, but not even the worst. Despite being in rough waters for the majority of the time, there’s one thing that I am always happy about. You can read about how startup founders clash and (figuratively) kill each other. Well, I am glad to say that this experience help my ex co-founder and me become even better friend. We went through some tough shit together and came out of it quite clean.
Don’t lose touch with reality!
When you realise that you startup is about to go down, keep it real. There’s no need to push beyond the boundaries. Before getting into debts, find a solution. Your startup doesn’t necessarily need to close down; you can work on it part-time. Hustling doesn’t mean finding yourself in shit loads of debts. This means to work your ass off even when in bad waters. Finding a job to support your startup dream is not that bad, unless you don’t keep your startup running just for the sake of it.
Keeping in touch with reality will be the best way for you to avoid many mistakes. I wish I could have done that earlier.
I sometimes get asked what is the best way to approach certain situations when starting a startup. A few days ago, I was talking with a good friend of mine whose brother has been thinking of forming his own startup. The conversation naturally turned around to my own experiences in starting a business.
One of the questions was “is it better to start with a tech co-founder or outsource the initial development?”. A simple doubt perhaps, but one that troubled me, as do all questions about the ‘best’ way to do something in a startup.
The fact is, there is no right answer. I’m sure there have been as many success stories as failures for both approaches. You could start working with a partner with brilliant credentials and clash 6 months down the line. You may find an inexpensive, but qualified developer that fails you when the time comes to move on to a new round of work, because he just committed to a new client.
I am not trying to tell you how to do development works. I am interested in telling you more about embracing uncertainty.
There is no ‘right’ way to do things.
Starting a business can be a daunting task. All you have is an idea, no contacts, and little experience in how to run a startup.
I sometimes like to contrast entrepreneurship with how you build a bridge. Building a bridge is a complex task, but it’s one that can be planned precisely. You examine the geography between two points. You create architectural plans based on the laws of physics and mechanics. You get precise measurements on the amount of material you will need. Finally you start building according to strict construction rules and best practices. Well, this is nothing like how starting a business feels.
Starting a business is like taking a journey into the unknown.
You kind of know where you want to end up, but you have no idea how to get there.
You set off in one direction for a while. Then talk to few people and change to a different plan . Re-evaluate your next moves at the end of each day, figuring out different ways to get to your next launch. Until you’re either where you were planning to be or have decided along the way to reach a completely different end-point. This journey will not be the same for everybody.
What the right decision is at each point will depend on you, the environment around you and the business you are trying to build.
One of the things that annoys me, is this new tendency of turning entrepreneurship into an ‘industry’. Structured ‘programs’, ‘models’, and an entire new genre of ‘entrepreneurship literature’ to help founders. Most of these are sponsored or created by people who’ve never built a successful business in their lives.
I’ve talked with people who religiously read books by successful entrepreneurs. They believe these will help them figure out common characteristics of success to emulate.
In reality each of these successful entrepreneurs are completely different to each other. They became successful in completely different contexts than what the reader finds himself in. We may ‘read’ about the life of Richard Branson. Yet each one of us has a different personality, network, skill-set, and live in different areas. So why should we expect to become successful in the same way?
The journey of a successful startup based in California with an ex-Googler as a co-founder will not be the same as of a startup founded in Poland by somebody who just quit their job in an accounting firm.
My advice is to constantly look for business and technical knowledge needed for your industry. Expose yourself to new experiences and always try to expand your network of contacts. Don’t try to find templates of success. Discover means to build the ability to make the right decisions for welcoming changes.
Realise that you may need to change course ‘a lot of times’. Embrace changes. Especially at the start of your journey, don’t commit yourself to a specific long term path.
In entrepreneurship, you move from point A to point B, but your path is anything but a straight line.
You will often need to change the ways you work. Change the product you’re trying to build. Change your team. And sometimes also just change everything. You may find out that you fail many times and have to completely rethink how you work. If you are willing to change and gain the knowledge to realise when a change is needed, then you will go ‘somewhere’ if you stick to it long enough.
There’s a common case study taught in business schools around the world about the entry of Honda motorcycles into the US market.
When Honda entered the US market, it initially focused on marketing their large motorcycles. However, they could not find the hoped popularity. What they found instead was that the scooters with which their salesmen travelled around the country attracted a lot of positive reactions. It was eventually with these that they managed to penetrate the market.
Whether the truth or an urban myth, the story points to a valuable lesson. It’s often not how good your plans are that will make you successful, but random and unexpected events, and your ability to change.
Flexibility is the one key advantage that early stage startups have over larger companies.
Changing directions for a massive corporation can sometimes cost millions. When it’s you and your co-founder, change can happen in a single afternoon, with little or no cost. So why would you ever want to ignore the one huge advantage you have over larger and more established competitors?
What’s my advice then to whether start with a technical co-founder or to outsource development work? It’s that it doesn’t really matter!
The best thing is finding someone who is able to do an initial round of development work. Agree to no more than a couple of weeks initially. Just go for it. See what you learn from the experience. At the end of this period, see where you are and what you want to do next.
Maybe you’ll realise that the technical side of things is just too complicated for you, and you need to move to a different industry. Maybe everything works fine. You’ll like the person you’ve worked with, they like you, you do a few more rounds of work, and a few successful months down the line you ask them to join in as a partner. Maybe that never happens, and you go through 5 different developers before you find the one that best works for you. Maybe a few months down the line, you need to get a part time job to earn some extra money to get in the business. Maybe while working part-time, you come up with a new way to pivot and enter a completely new market which is the one that will turn you into a millionaire.
Who knows? Whatever way you thought you would be successful with when you started, will have changed completely a few weeks, a few months, a few years down the line. You just need to be able to adapt to the change when it comes.
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Startup accelerators are created almost at the same pace as new startups come on to the market. We are flooded with accelerator programs.
According to f6s.com, there are about 5000 startup accelerators around the world. 755 open for application at the time of this article. A number that gives everyone, everywhere, an opportunity to access capital to build their dream.
At the beginning there were accelerator programs without specific category focus. As the industry evolved, vertical specific startup accelerators (healthcare, hardware, gaming, etc…) have appeared in the market. These gave entrepreneurs with specific needs a better way to reach connections, clients and VCs.
Startup Accelerators have the ultimate goal to “accelerate” the startup to either an MVP stage or to a more defined product in a short amount of time, usually 90 days. Depending on the accelerator program, there might be different “targets” to reach. It is a “rush” to create, pivot, iterate and reach eventually as fast as one can product-market fit.
What To Look In Startup Accelerators?
With 5000 options in the market it can be quite complicated to find the right option. The first (and most obvious choice) is to look at the location.
Try aiming at startup accelerators having a presence in a market you want to enter or are in a market where it’s relatively easy for your startup to enter. If location is not important for your startup, check access to potential clients or investments.
Location is something important to take in consideration. “money is all that matters“is not the right mentality.
Do not focus only on money. Look behind the obvious. Considering purely the monetary aspect could make you look like a fool. Most of startup accelerators deals are not “great deals”.
2. Industry Focus
Industry specific accelerator programs are becoming more relevant for startup founders. Knowledge and connections in the industry become crucial in the early days of a startup. If your startup is tackling the healthcare industry, trying to get a place in a healthcare accelerator program, it’s a wise choice.
In industry specific accelerator programs, startup founders enjoy experienced mentors and potential clients introduction. DreamIt Ventures, an healthcare accelerator in U.S., gives startup founders exactly what they need.
These startup accelerators give startup founders the possibility to easily share experiences, challenges and findings with other startup founders operating in the same industry. Here’s when the community becomes incredibly relevant and useful to learn from others.
What if your startup doesn’t fit in any vertical-specific accelerators? Look at the type of startups the accelerator has funded. Is there a focus on B2B or B2C companies? Which focus seems to be more successful?
Understand Your Needs and Target Accordingly!
3. Program Structure
Each accelerator program has a different focus. Some will give basic workshops on marketing, product and sales for example. Some will have weekly meetings among founders or events with external clients. The aim is to create real and immediate value for startup founders.
Depending on the accelerator program, one can actually enjoy external visitors’ workshop. These are extremely useful when tackling specific topics. The accelerator I attended gave particular relevance to customer interviews. As a result, they invited Rob Fitzpatrick, author of “The Mom Test“, to tell us more about his findings.
Although difficult to check beforehand, make sure to critically assess the value of each meeting or workshop. These can become a waste of time, especially when 90 days is all you have to deliver a functioning product. Talking with other founders or alumni will help you out in this sense.
4. Investments & Success Rate
Yes, money. It’s good to have a look at this and understand what the terms of the deal are.
Startup accelerators, usually, work on standard terms with standard clauses. However, it’s a good idea to become familiar with the terminology beforehand. I found particularly useful Venture Deals by Feld and Meldenson to get my head around some topics.
Considering the number of investments made and how many startups are either successful or alive is a good idea. However, don’t be fooled. All that glitters is not gold.
It is surely something remarkable. Investments help founders build their dreams and create jobs in specific geographical areas. However, more than that, I would recommend to look at the track record of these accelerators. Be careful though. Do not necessarily look for exits, the “survival-rate” should be a good indicator of success.
Make sure to compare apples with apples and not with oranges. Don’t expect smaller (or generally local) startup accelerators to have similar results as YCombinator or 500 Startups. Make this comparison, only if you are looking at accelerators in the top league.
You could also look at how many graduated companies managed to raise additional funds from external investors.
I have already touched base on what mentorship should be about and what in reality sometimes this is.
When checking different accelerator programs have a deep look at the mentors list. Are they all coming from local businesses? Is there anyone relevant for your industry (in case of a general startup accelerator)? What type of people are listed as mentors? What experience with startups do they have?
Mentors are very important when building a startup. If this is your first time, you will need someone that helps and gives you some opinions on your action plan. Ideally mentors are experienced business people and/or entrepreneurs. Sometimes, however, mentors are simply people who like to have that title on their LinkedIn profile. How to spot them? Check their experience.
The last thing that you need to check is the network. Attending startup accelerators has the ultimate goal to expand your current connections.
Why? Because the network of people you get in contact with will be the starting point of extra connections once graduated.
Check what type of people are around the accelerator program. This include, of course mentors as well. You can also have a look at advisors or past alumni. Who are they? What could they add to your current network? Once you clarify these aspects, make sure to become friend with anyone relevant for you.
There are surely different factors playing a central role in your decision. Thinking about the value and impact startup accelerators can have on your startup, it’s crucial. It is important to have a full understanding of what you can achieve.
Have a plan. Think clearly before even applying. Make sure to do your homework. Talk with people who might be involved in either that particular accelerator or in the local community.
This is the future of your startup. You better play it well.
Anything else that you would look at? Share your thoughts with us!
Negotiation is at the basis of every successful sales situation.
You can negotiate pretty much everything in life. There are some exceptions, of course. However, most of the time, you might be able to negotiate somehow something. It doesn’t necessarily have to be money, it can also be time or commitment from someone else.
Learning the basics of sales negotiation is crucial in both sales and life. If you are running a startup and you are not reading about sales negotiation, then you will find yourself in troubles.
I don’t believe negotiation can be taught through a blog post or a book. You cannot read and automatically expect to learn how to negotiate. You need to apply time and resources to eventually master this skill.
As a soft skill, it actually requires longer time than any other hard skill you might want to learn. The application of such skill is not so easy and you carefully need to evaluate what to and when to negotiate.
Although I won’t try to teach you how to negotiate, I think it’s important to for every startup founders to understand the basics of sales negotiation.
Sales Negotiation is a dance
Yes, expect to dance. Sales negotiation is a dance in a sense that you cannot expect to be doing the whole time the talk or be in the lead. Negotiation takes time and it’s a 2-way process.
Sometimes you are in the lead, sometimes your partner has the lead. You better understand this from the very beginning.
It doesn’t matter who and when is leading the process. The important is that you dance and keep moving with it.
A common sales negotiation process can take from few hours up to few weeks (if not months) depending on what you are negotiating about.
Fail to dance and you will fail at negotiating.
Sales Negotiation varies according to culture
I have been lucky enough to live in 3 different continents long enough to understand well at least 6 different cultures (3 eastern and 3 western cultures).
Every culture has an approach to life (and negotiation) very different. For example, Japanese people will take an incredible amount of time (at least to European standards) to make a final decision. People who are not familiar with their culture, might think that they are not interested or that they are “slow”. An interesting fact, just to underlying this point, about Japan, is that it is impolite to say “No”. They will, however, tell you “Yes, but…”
Depending on the focus of your sales, start understanding your prospect culture. Needless to say that your prospect is not expecting that from you, but if you do understand his/her culture, then you will have an advantage. I have met so many skilled salesmen in my life that failed at understand this basic point.
In every sales negotiation you want to make sure to listen carefully what your prospect is saying. Not only because you will have opportunities to ask more questions, but also because by listening you will understand his/her real pain point.
Listening is such a simple thing to do, yet so many people fail at it, and your prospect knows it!
How many times have you found yourself in situations where you prospect was giving you unclear reasons for not closing a deal with you? How many times have you faced a prospect shifting the conversation focus on smaller points that didn’t really matter?
Your prospect assumes you are not paying full attention; therefore he/she will try to give you as many as unrelated inputs to the topic, in order to confuse you and keep you away. On the other hand, a good sales person will do the same just at his own advantage.
Listening during a sales negotiation is extremely important as it will let you keep the lead in the dance.
You are not going to sell now
You will hardly close the negotiation in your first phone call. Many people who are new to the world of sales make this mistake. They think that in a call and in a 20 minutes negotiation process they will be able to close the deal.
NO! You won’t!
Stop thinking that. In every business related sales negotiation process, there will be several steps and several interactions before the last decision.
Sales negotiation is a (long) process that can happen in a meeting, via phone or emails.
Be very careful when at the end of your first call you hear a “yes!”, you might have just scared away your prospect. I have convinced more people to work with me that at first were skeptical than the opposite.
Sales Negotiation starts when the prospect has a need
You might be thinking you are negotiating already, from the very first interaction. However, does your prospect have a need for your offering or is it just fishing for information?
Until he/she is not open to talk business, you are not negotiating. You are just dancing alone with no partner.
Remember that timing is important. Usually, if you are selling something you have the urge to close the deal. Your prospect, unless specific situations, has all the time in the world to delay or find some excuses. It’s your job to create urge for your prospect.
A typical “secret” to influence your counter-part is to create scarcity in what your are selling.
Don’t make that offer! (and don’t take the first one)
Although very tempting, just don’t do it. In a sales negotiation the first one saying the price, usually loses. This is true in every situation, even a job interview (just a different negotiation type). The moment you say a price, you have either pushed away your prospect (too high) or given him an advantage (too low).
I have done this mistake too many times. It’s just so easy to put that number on the table and get it off your chest. However, those times I didn’t, I gained much more. Let your prospect talk, he will give you gold.
Create value before you start negotiating
Once again, if you are the only one dancing, no one else will join you while you are riding.
The reason why you need to create value in the head of your prospect is that otherwise he/she will not see the reason to even start a negotiation.
Value creation is obviously something strictly related to your product or service. However, it’s also up to you to make your prospect understand the value of your offering.
It’s OK to say NO!
Sometimes, it’s OK to just walk away and say no. You cannot win all the fights and don’t expect to do so.
If you walk in every sales negotiation with the expectation of winning, you are going to get depressed very soon.
There are times in which you won’t be able to convince your prospect to pay what you are suggesting. There other times in which you won’t be able to accept the terms of the sales. You don’t have to accept everything, just because you are selling something. It’s better not close a deal, than closing a bad deal.
The moment you realise that it’s OK to say NO, you will understand its power.
Do you have any other suggestions to take in consideration when thinking about sales negotiation?
I have been doing sales for most part of my life. I started “selling” when I was a kid, exchanging football cards with friends and trying winning the best deals for myself. I wasn’t getting money, of course, but I was training myself in understanding what a good deal was. Sometimes I won, sometimes I lost. Most importantly, I learnt.
I lived big part of my life next to best salesman I have ever met. My mom!
Yes, I know, you might be thinking I am biased, but I am serious, she was good. Damn if she was good (and still is by the way)! Obviously we are talking about simple sales situations, but she always managed to get the best deal out of any circumstances she was faced with. She taught me negotiation without actually telling me anything about it and also a basic fact in life:
Everything is negotiable. If you don’t try to negotiate, you lose.
As easy as that!
Sales is part of everyone’s life and yet most of the people who aren’t directly involved with sales at work, fail at understanding this.
You sell all the time.
You sell when you try convincing your partner that you are very tired tonight and it would be awesome if she/he cooks.
You sell when you try convincing your boss appointing you to that particular project.
You sell when you try convincing your employees doing redundant and boring tasks, that you don’t want do.
You also sell when you interview for a job.
So, please, stop saying you don’t know how to sell or that you would never sell. You do it, live with it and live with the fact that there are other (bright) people doing that for a profession.
Even though you sell every single day without noticing, it doesn’t mean that it’s easy. Sales is damn hard and it requires a particular set of skills that not everyone has (yet learnt) and that’s the reason why you think you can’t sell. Here’s a list of the most common misconceptions about sales and salespeople I came across during these years.
Salespeople are born with it.
You can learn anything in life and also about sales. The only thing you need is willingness to get out of your comfort zone. Sales pushes you out of that quite zone every moment of the day and you might not be comfortable with that. That’s why you think you are not born with it. If you learn the product and understand few basic rules of sales, you can get your hands dirty from the day after. There is no limit to what you can learn in life and sales is part of it.
Sales is about lying
You don’t lie in sales, despite what everybody thinks. The moment you make a sales and you have lied to your prospect, you are doomed to fail. You will often hear salespeople overselling or over-promising, but that’s not lying. Lying is saying something that you or your company, for sure, cannot deliver. Selling is convincing that you or your company can do something better than anyone else out there. There will always be a grey area, there will always be “white-lies”, but you are not fooling your prospect, you are just packaging the information in a better and more attractive way.
Sales is a shark tank
I had the same exact feeling before starting a career in sales. After living in Japan for a while, I came back to Europe, and more precisely to UK and was looking for job. I told myself, never a career in sales. I had this impression forged by movies of crazy sales reps trying in all ways to get on top of each others without any interest for their clients.
How would I want to have anything to do with that??
I would lie to you if I would tell you that sales is not competitive. It is and if you don’t like competition, perhaps a career in sales is not for you. However, competition is synonym of ambition and passion, not ruthless world domination. In most of sales departments you would step in, you will find salespeople understanding each others, because they know how complicated it is this job (needless to say that managers have a big role in creating the right environment).
In Sales You Make Big Bucks
Now this is a lie. In sales you can have a big bonus only when you perform, if you don’t, your bonus contribution will be quite low.
When I first started looking for jobs in sales, it was in the real-estate market (I was still unsure of what to do with my life). I remember that for an entry level job, they would pay somewhere around 800$ base with uncapped bonus. As I was new to this world, I thought that they were completely crazy. How would I have ever survived with 800$ per month? However, I was looking at the sales world with the eye of a non-salesperson.
Bonus is a big part of every sales job and can be huge as well as zero (depending on the type of sales you do).
Don’t think that salespeople are always enjoying life making big money. They are the one that suffer the most seasonality and laziness, while other people can just “relax” for a week or two in their role and still get the same pay-check.
Sales is about travelling and partying
Yes and no.
First of all, not all sales jobs have these two components. You can have an inbound sales job, which basically gets you on the phone all day and that’s it. On the other hands, some other sales jobs do allow you to travel and going to events. However, travelling and partying for work, is not the same as doing it for pleasure.
Travelling, after a while you do it, can get tiring, especially if you are on the way 2 weeks out 4 in a month and you have someone waiting for you at home.
Partying (or going to events) is definitely more difficult to make it sound harder than what it is, I have to admit, so I know I won’t get your compassion for this one. However, a salesperson will always be selling also when chilling on a couch with a random person met at an event.
Sales is about technique and experience
In another post, I have highlighted how important it is to have a technique, a process to be successful. However, something that people often misunderstood is that technique or experience without product knowledge is nothing. You can have years of experiences selling shoes in a store face to face with a client; you might be great at establishing first contact with clients and be likeable; you could also be very friendly after all these years on the front line; however, if you start selling in a b2b environment, all this experience will be nothing without product knowledge.
Everyone can learn techniques and gain experience, so there is no real advantage if you have worked as a sales rep in a supermarket or at Walmart and are selling airplane engines. This is a common mistake also some salespeople do.
It’s important to take the time to talk about common misconceptions about sales and salespeople. Your life is made of sales situations and you better start recognizing them and mastering those skills and knowledge needed to be successful. Remember, everything can be learnt, it just needs the right attitude.
Have you encountered any other misconception about sales? Leave a comment and let us know.
In a world of startups, serial entrepreneurs and crazy funding rounds, startup culture is just another buzzword, as much as disruption and innovation. It has lost completely its original meaning becoming a “must-do” thing, rather than an inspirational guide for success.
Organizational culture encompasses values and behaviours that contribute to the unique social and psychological environment of an organization (or a startup).
Although fairly simple to understand, many startups founders fail at creating the right startup culture, simply because very few really care what drives the culture of their company or lose sight of it while building a business.
“Organizational culture encompasses values and behaviours…”
Values and behaviours are two important words and one thing that is often overlooked, especially in the early stage, is that these are not mutually exclusive.
Values are tightly bound to behaviours, and viceversa.
It’s important for startup founders to define a set of values to follow and believe in. However, it is just as important to understand that values are not abstract words, but something startup founders must believe in.
Believing in those values, however, is not enough. Founders need to live, breath and eat those values every single day. If you, as a startup founder, are not the living representation of those “words”, your employees will feel it, and as a consequence ignore your values and destroy your culture.
How can founders live, breath and eat these values fuelling their startup culture?
Startup founders needs to believe in these values, obviously. Quite simple, still, not seen so often around.
The media has led startup founders to believe that creating a startup culture is all about kicker table, ping pong, xbox and some free beers and pizza over a late night stay at the office. These things are not part of the culture, these are just things. Things that might come with a culture, but are not the culture itself.
Whatever your vision and values are, make sure that your employees see them firstly in yourself. All the rest will follow.
“[these]…contribute to the unique social and psychological environment of an organization”
Once you have established what values should drive your startup to success now and in the next 30 years, be fully aware that these will have a direct impact on the wellbeing of your startup and your people.
Your employees, those who care about your company, will evaluate you, as the founder, continuously against these values.
Perhaps I am generalizing when I think that startup founders often fail at crafting the right vision and values for their company, because they don’t want to necessarily build something for the next 30 years. Startup founders (not all of them obviously) build a startup with the dream of… cashing out and retire somewhere in [insert-exotic-country] on a beach.
Been there! Dreamt that!
It would be too easy to seat here and just complain about what doesn’t work in our startup land and leave you with the burden of making considerations by yourself. However, I want to go a step further.
Once you, as a startup founder, have identified those values that are part of your culture, you need to make sure that everyone of your team members embrace them fully.
This can sound ridiculous or naive and most of us, when faced by the decision of hiring someone, will look at capabilities and company fit.
Company fit is something that gets close enough to startup culture; however it’s not quite the same. It’s generally difficult to identify where the difference lies, but it’s important as a startup founders to go a level deeper especially with those that will represent you within the company. Your managers or early employees should be “evaluated” continuously against your startup culture. Company fit is easy to check, company culture fit is not something you will find out the first day when they come to work.
When a company grows up to 500 people, no one will expect the founder to check every single employee and how well they do with company culture (although it wouldn’t necessarily harm to meet in person with each one of them). However, a startup founder should make sure that every manager understands and lives by the values that drive the startup culture. If that doesn’t happen, the “social and psychological” balance within your startup will break and become toxic.
Your employees are those that work every day in and out building your dream, without leaving the dream. Creating a successful startup culture is crucial for having happy employees for the long run.
People joining a startup, don’t do it because of the money (most of the time), they do it because of the environment, the challenge and the unique vibe that nowhere else in a big corporation one can experience. Making sure that the values you choose to drive your startup culture are backed up by your (and your managers’) behaviours, it’s crucial! In this way you will create a successful and rewarding environment to work in.
As much as you focus on creating the right culture, those people that will join your team at the early stage will be the messenger of your values. Surround yourself with capable, yet, similar-minded people, who understand your idea of culture and can help you building a sustainable business over a long period of time.
[This post is part of the series “Sales For Your Startup”. This time we talk about free CRM tools]
Sales is all about lead generation and the ability to manage these leads through the sales funnel, i.e. your pipeline. To properly manage leads and make sure these convert into a closed deal, tracking activities is crucial.
Regardless of how complicated sales is and how most people think about it, organization is key to successful sales people. If you are running a startup, you will be doing sales, my friend, so better get organized and start closing some deals.
When you start doing sales, there is nothing more important than keeping track of your pipeline. If you do sales and you don’t track your deals and how they develop over time, you better be lucky or you will fail.
Successful sales people have developed over years not only a huge network of contacts, but most importantly a methodology. I have never sold industrial machines, for example, but I am quite sure that I could apply the same methodology learnt and used in my industry to be successful.
I won’t get tired of saying that organization is key to success. No matter what you do. In sales, it matters even more, because its’ a number game. If you ever see the sales pipeline of a common sales-person, you will find that he/she is working constantly on at least 300-400 leads, and the whole pipeline can be more than 1000 leads.
CRM sales tools are the best investment you can make in terms of resources and results.
If you want to spend some (or a lot of) money, there are numerous CRM tools that you can use and benefit from. In startup land, however, we need to find quick fix to problems (possibly without spending money).
Here below a list of free CRM alternatives in the market for sales activities (Yes! All these have a free version for your pleasure!)
Note: We consciously left out of this list all those CRM tools that have a free trial, as we don’t consider these to be free for real. The suggestions you will find here have all a free version!
Yes, Google can be your friend. Does your company use Gmail? Then you might not need to look that far away. Google gives you the ability to use Google Contacts as a CRM tool. It does look similar to an address book; however some of the features are very powerful and can be used as a basic CRM tool.
What do we need to make the most out of Google Contacts? Well, a little bit of patience (like any other CRM). When we enter a new contact, with Google Contacts we can also add company names, nicknames and any other custom fields needed. You can also add notes to the account and connect that to their Google+ profile, of course.
This is not the end of the story. Google Contacts can also be used as a collaborative tool. You can organize contacts in multiple lists, and then share these with any of your team member.
Positive: Easy to use as it’s part of Gmail and it requires very little “maintenance”, considering most of the matching is done automatically by Google.
Negative: If you are not using Gmail, you can’t use it.
It does look familiar because it has a design that is very similar to a Gdrive spreadsheet; but it’s a little bit smarter than a simple spreadsheet. At the moment, you can join their private beta and start taking advantage of the familiar design.
You can add columns to help you track different fields for each contact, from company names to addresses, passing by notes, revenues and number of employees.
An additional interesting point to state is that Spreadsheet CRM is thought to work together with ToutApp, a tool that can track and add analytics to your email (starting from $30/month).
Positive: Easy to use and familiar interface, integration with ToutApp
Negative: Limited functionalities
CapsuleCRM could be a good solution if you are just starting up, because it has for free only 2 accounts, with 10MG and 250 contacts, unlimited opportunities and notes.
CapsuleCRM supports also integration with tools like Mailchimp and Freshbooks and other 33 services and apparently this is the best feature that this tool offers to its users.
Positive: Integration with 33 services (Mailchimp & Freshbooks)
Negative: Limited storage
Really Simple System
Really Simple System wants to make CRM… simple! The tool is designed especially for small to medium size businesses. The cloud CRM software needs no tech stuff and it seems to be very easy to set up and use.
There are different interesting features that users can benefit from, such as integration with email marketing module, allowing users to send email marketing campaign without leaving the platform. On top of the integrations, its blog gives a ton of useful insights to small biz owners.
In the free version, you can have 2 accounts for free (forever) and 100 accounts. To this they add unlimited contacts, opportunities, activities and notes.
Positive: Easy to use and set-up
Negative: Limited functionalities that could not suffice if your startup grows
Insightly is another CRM tool targeted to small businesses. Their offer is quite interesting and definitely better than many other freemium CRM tools on the market.
It is free for up to 2 users, and it has 2500 records (defined as anything you save), 200 Megabyte of storage, and the ability to add 10 custom fields. To these, lately they have added 5 email template and the possibility to send mass emails (up to 10/day).
Positive: More storage than other CRM tools
Negative: Only email support
FreeCRM seems to offer a very interesting plan for free users.
If you sign up for their software, you will have 100 “licenses” for free, 100.000 contacts, 30 minutes voice CRM. However, this little dream is free for only 1 year, after that you need to choose one of the two premium plans.
Positive: Interesting plan for 1 year and it’s web-based
Negative: Free option is only available for 1 year.
Zoho is a pure cloud-based tool, which means no installation required. It is quite interesting as it has useful features. However, the free version is limited, obviously, and it offers 10 licenses for free, basic leads, contact, notes and opportunities as well as email templates. It offers 1Gb of storage (quite interesting compared to others CRM tools). It seems to be one of the most complete CRM tools with a free version.
Positive: Cloud-based no installation, big storage and 10 licenses
Negative: No mass email feature
Raynet states to be an easy-to-use-does-it-all CRM tool. The free version offers 2 user licenses, 150 accounts, 50MB storage, and full customer support.
The design is more user friendly and it kind of remind me of SalesForce design (perhaps that’s why I find it friendly). Raynet offers also customizable accounts and contact lists as well as giving its users the ability to export everything at any time.
Positive: Friendly interface
Negatives: Limited functionalities in the free version
SalesBox is one of the few CRM tools that is only mobile, designed for those companies where sales people are always on their way. At the moment it’s only on iOS, but hopefully soon it will be available on Android (and perhaps also desktop).
It’s free for 2 users and in terms of functionalities the free version is fully featured.
Positive: Fully featured free version
Negative: Only iOS
Odoo is much more than a simple CRM tool. It can help you and your company track pretty much all activities needed.
For the CRM side, it’s an open source tool and it helps you set up contacts (with social info as well) and convert them into leads when the sales process starts. The interesting approach in Odoo is the use of the Kanban board to keep track of the sales process. It also helps you keeping track of team performance through graphs.
Having additional functionalities outside of the CRM tool alone, if you decide to keep track of other activities with Odoo, you can actually see how prospects come in touch with your company from different points and how quickly you close them.
Positive: Fully customizable (code is available as being an open source tool)
Negative: It can result complicated due to its wider coverage
No, I am not kidding. Sometimes the best tool for you is the easiest one to create and use. BYOCRM (Build Your Own CRM) is simply getting all your work on a spreadsheet, create some rules and keep track of everything. You can either use GDrive (recommended as it can be shared with more team members) or even Excel.
I have used GDrive several times, when I had my own startup to track potential leads, or even when working in proper companies to start sorting out certain contacts that I still didn’t want to put in the CRM.
Positive: Super easy to easy and accessible by multiple people
Negative: Can be complicated to use once the pipeline grow
Do you find this list to be complete? Do you have any other suggestions?
Sales is probably the most hated activity among startups.
You have built a product and now you need to find customers (paying ones as well). Founders, usually shy away from sales, because they are scared. Scared of being rejected. Scared of receiving a no. Scared of being perceived as one of those incredibly annoying door-to-door salesmen. So they opt for other activities, such as Facebook or Google advertising. They do everything possible to stay away from people and catch that sales virtually.
“If they click, but they don’t buy, it means that they might be interested…”
I am guilty as well of this behaviour. Although I have been in sales for quite few years, in my previous startup I was scared of being rejected and therefore thought that advertising would be the solution.
Advertising is definitely a great mean to reach more people, to get some buzz perhaps, but Sales is without doubt the most efficient and sustainable activity that you can do for your business, at any stage.
Talk with people, understand what they want and what’s their problem, and sell them your solution. Bear in mind that doing customer interviews is not selling!
If you skip this step and jump to advertising, you are assuming that you have the right solution to that particular target user problem. Are you 100% sure about this?
Nowadays, there are different ways to do sales. You are not required anymore to grab the phone book and cold-call prospects. Social selling is the new trend and cold-emails have replaced cold-calls, with great pleasure of shy people. However, don’t think that you can win new clients without talking with them. In 5 years doing sales, I rarely closed someone without a real “face-to-face” interaction, the times I did, the relationship didn’t last long.
Being proficient in sales is a long and tough road. There are many aspects to consider and sometimes we need to accept the fact that there are some people that are better at others in sales. After closing hundreds of clients in specific industries, listening to many no’s and experiencing different sales methodologies, I decided to group here below my 5 must-understand sales activities.
1. Don’t sell!
I know, you are thinking I am completely out of my mind. After 300 words of introduction on why you should do sales, the first point I bring up is “Don’t sell!”.
Everyone like to buy stuff, but nobody likes to be sold.
Picture this: you are in a shop and you want to buy a shirt (or whatever else for that matter). You really went out today with the idea of buying something, but you are not 100% sure that this is the shop for you. Then, a shop assistant gets you from the back and smiling at you, say: “Can I help you with something?”. Your alarm system goes off, you jump, scared and say “No, thanks, just watching”, and walk away.
For whatever reason, we are adverse to sales. The moment we realise someone is trying to sell us a product, we think they want to trick us into something that we don’t need. I guess this is coming from the traditional sales image that everyone has, selling enciclopedia or bibles door-to-door. I mean, seriously, how many of our parents really needed an enciclopedia… but still every house in Italy (where I come from) has at least one-set of enciclopedia (never used).
So how do we solve this problem? We still have to sell our product…
The first approach is the most important step in the sales process. If you make a mistake here, your chances to close go down considerably.
Let’s assume you have identified the right prospect. The first contact point with your potential client is crucial and is all about his/her problems, nothing about you.
Your job at this stage is to shortly present yourself and assess that your assumption that he/she is the right prospect is correct. That’s it!
The best way to understand this is by asking open questions. There might be a couple of yes/no questions, of course, but what you really want is to establish a conversation, you don’t want to interview your prospect, you want to let them talk.
Remember: People love to talk and if you ask the right questions, you will get valuable information.
2. Attitude is everything.
If you show that you need the sale, you will not sell.
Why did our shop assistant fail in approaching us in the standard way? Because we understood he wanted to sell us something. What if he/she would have approached us telling us more about the product or making some random comment about the color? We might have been aware of the sale, but we would have been more open for a conversation.
Good sales people won’t sell you anything, but you will walk away with $100 less in your pocket.
Most salesmen fail in negotiation, because they show the prospect that they need to sell. Most salesmen have targets and when it comes that period of the month, they get stressed and need to push more for a close. Their attitude changes and their closing rate goes down.
When you sell, you don’t need to sell.
If you show your prospect that you are selling something, they will run away. In the same way, if you show your prospect that you desperately need to close him/her, they will have the bargaining power and you are doomed to fail. The moment at the table when is clear that one of the two has the power to choose, the other one has lost. You don’t want your prospect to be in that position, otherwise you will either close a bad deal or lose it.
Be bold and be firm. Don’t beg for a sale.
Remember: The attitude that you need to transmit to your prospect is that there are other 10 prospects waiting for you. He is just one of them.This state-of-mind is not so easy to achieve as sometimes you might be in desperate need to close some new clients. The important thing is that you know and act consciously about it.
3. Be in the driver seat.
Negotiation is all about how successful you can manage clients’ expectations without harming your company’s bottom line.
You are the driver in the communication and negotiation, don’t forget!
I have found myself in different situations where it required an extra effort to keep driving the conversation. For example, you have the prospect that doesn’t want to talk or the aggressive type who wants to be the only one asking questions. There are simple techniques that you can use to overcome such situations, but the reality is that you need to practice and be able to recognise when you are in these, rather than thinking after hanging up the phone “Oh s#$t! He got all information and I got nothing!”
The simple answer to this situation is: questions!
Remember: Ask, ask and ask. Never stop asking questions. If you get the quite type, be prepared (you should be in advance anyways) and make sure you engage him in a conversation. Questions like “How do you do xyz?” are killer. You force the prospect to give you information. If you get the aggressive type, take it all. Answer his questions, don’t be scared. Step back but don’t fall. Once the prospect asks you a question, answers and get back to him with another question. Keep the balance.
4. Follow up!
This is really a basic one, but still it’s probably the most important and yet so many people fail at it (myself included sometimes).
All the points stated above are in case you got the prospect on the phone or in a meeting. What if he doesn’t reply to you? As easy as it may sound, you need to follow up.
Create rules for your pipeline (hopefully you have one) and make sure that you or your sales reps stick to it. There is this image going around on LinkedIn every now and then that states the importance of following up with clients.
On average if a person doesn’t reply to you after 3-4 emails, she/he is probably not interested. Don’t harass them, but move on with another prospect and come back to them after few weeks. If you are targeting a big corporation, on the other hand, most likely there is another person with a similar role to your prospect. Try to get them instead.
In case you had a phone call or a meeting with them, you sent a proposal and they don’t get back to you, it’s time for you to be creative with emails and bold with the phone. Pick up that phone and contact them, maybe they are just busy or they need more information to proceed.
Remember: After the first contact, if you “cold-call”them, you are not intruding their privacy. They decided to share with you their phone number once, you are entitled to get in contact with them now.
5. Keep track of everything.
Sales is a people job. You talk, you go out, events, meeting and sometimes also drinks with prospects. Nevertheless, if you are not organised you will not succeed in the long-term.
Sales is about persistency and organisation. It’s about being hungry, but consultative.
Keeping track of your prospect’s activities and yourself is a must. No excuses. The best way to do this is to get a CRM software. There are many out there that you can choose from. The best one is most likely Salesforce; however, it might be expensive depending on the functionalities you add. There are quite few that are free and you could use. Worst case scenario, the old excel sheet would make its dirty job.
Remember: Until you are alone or very few people in your team, you can rely on free softwares or excel sheet. However, the moment you start growing, you need a centralised tool, where you are able to track all team’s activities as well as making sure that if one of your team member leaves, you have all the information there.
I have seen so many times (even in decently big companies) mistakes of this type. Having perhaps a Gdrive doc shared among people that no one updated or letting reps use private notes. Then someone left.. and no one knew what was going on with some existing clients or new prospect.
Organisation is at the basis of a successful sales team. Don’t let your wild startup spirit take over this, it could be harmful.
What do you think? Do you have any other tips that you would like to add to this list?
Is a startup what you really need? Here below 10 most important signs that you have to look for in yourself to understand that a startup is not for you!
Inspiration and motivation are things we usually look for when unsatisfied. We read articles, blogs or whatever else to find the power to just make the jump and do what we always liked or feel inspired with.
The Internet offers tons of material for people who are not sure, who are afraid, who need a word of wisdom to make the change in their life. We should look for friends’ advices, perhaps also the beloved ones’, but most of the time, they don’t get it. They won’t be able to help us make the right choice.
Inspirational quotes, blog posts and articles on well known websites help us understanding whether entrepreneurship or “the startup life” is what we need.
While it’s important to find inspiration, I believe that it might take just one sign, one wrong attitude, one bad habit to make your dream fall apart. That’s why I would like to think about it from the opposite side of the table.
In a recent article posted on a well known website, I read about the “50 signs you might be an entrepreneur“. FIFTHY! Among which we find: “You are passionate”; “You dropped out of college” or “You surround yourself with quality people”… seriously?
Now, I am sure we are all smart here (more or less) and we don’t consider the fact that passion or a smart couple of friends will help us a lot in being successful. I rather believe that we might need to check for those signs that don’t make us ready for a startup or entrepreneurship at all.
Here are my thoughts (and yes, I am either personally guilty of or experienced these in my startup):
1. You value your free time. You believe that spending a day out in the bush, looking at birds and fishing is fundamental to your mental health. Fact: When you have a startup, you will not stop thinking about it. Ever! If you want to rest, keep your job, and enjoy the weekend.
2. You take it personally. While having a startup, you will meet a lot of people who will be ready to give you advices and critic your idea/product without any knowledge. You will also argue (a lot) with your co-founder. This is the reality and you don’t have to take it personally. Fact: If you go home and get upset about it, you will not survive the stress of this journey.
3. You know it all. Regardless of what you are talking about, you can’t have this approach. You don’t know it all, and even when you do, just be humble and explain yourself or how things are done. Sometimes listening to somebody else’s point of view, even if he is not an expert in that area, he might be able to help. Fact: If you ever say “You are not a [insert job category here], you don’t understand how this is done”, then you are doing it all wrong (I guess this is true also if you don’t have a startup).
4. You need structure to operate. Everything that happens in a startup has a structure. A chaotic structure. The plans are made for investors. The reality is you know what is today. Tomorrow could be different. There is no structure in a startup (especially in early days), if you expect to have one, keep working for a normal company.
5. You can’t find the easiest way. It’s not always possible to find the easiest/shortest way to solve a problem, but there is always a way to optimize time. Do you usually see a quick way to overcome a problem (no matter what we are talking about)? If you don’t, then think twice before making the jump. Fact: Startup is also about making the easiest/shortest decision, even if it’s not the best one.
6. You are afraid to sell. This goes a little bit beyond the simple product sales. Are you ready to pitch any living thing that comes in front of you with your idea/product (even if they are not your customers)? Or will you rely on the sales/business guy? Fact: Startup is all about pitching. All!
7. You are shy. When you have a startup, you can’t be shy. You will attend events or networking meet-ups, sometimes also alone. You will need to talk with random people just to “network” or simply because it feels awkward to be alone all day. This is the hardest thing ever. I have a background in sales, networking is not a problem for me, but I used to hate approaching random people at events. What should I say to them? What if we start talking and then nothing follow? You will need to take into account all these things. Move on, don’t be shy, go to the next one and hand your business card. Fact:Most of the people you meet at events won’t be your best friends. Think business, think smart!
8. You find excuses. This is tough, because we don’t realise when we find excuses to do or not do something. However, this can be a terrible problem. Excuses can destroy your work. “I will do that tomorrow, cause now this is more important” or “I can’t do that, cause I am not comfortable with this thing”. Excuses. Fact: Do It! Now!
9. If your baby won’t learn how to walk, you wouldn’t say “Well I tried”. OK, maybe I went a little bit too far. However, “I tried” in the startup world doesn’t exist. However, “I didn’t try hard enough” could be the sentence you are looking for. I heard people telling me “If my startup doesn’t work, I can’t do much, I tried”. Yes, you are right! But how can you accept defeat like this!? Before giving up on my startup I cried. YES, I cried because perhaps I didn’t try hard enough. Fact: You are in it 300%, there is no “I tried“, only “I will make my best to succeed“
10. You are reading all this shit on the Internet. You don’t need anybody to tell you what you can do or achieve in life. Sometimes we might need a little extra push, sure, but we are the only ones who know what we want to do. Fact: you know deep inside you what is right for you. If you want to jump, just jump, don’t think at the consequences.
Starting a business is complicated. Challenges pile up as we go ahead in this journey. Perhaps one of the toughest one, especially in the early stage, is to find the right co-founder for your startup.
You are motivated, and that’s why you decided to leave everything behind (a well paid job, security, stability in life) for something unsure. Now, however, you need the help of someone else. You simply can’t expect to jump on this boat and be the only one in the thunderstorm. You need a person next to you to help out. But who? And where to find her?
Usually when searching for a co-founder, the first thing that we might do is to look within our friends circle. After all, you need a person who you can trust and you know very well. However, there is a (not so) hidden threat in calling out a friend to become co-founder of your startup. Startup life is tough. It requires tough decisions on a daily basis. It forces you to be a dick and it stresses you out. So, are you sure you want to risk your friendship for this?
Another problem in looking for a co-founder is that you need to find someone who shares your vision, passion and long-term commitment. This is probably the most complicated part of the story. How can you be sure that the person next to you is motivated in the same way as you are? Are you ready to give out a piece of your dream to someone who might be in it for the wrong reasons?
Let’s say you overcame these initial questions, now you are on the look for a co-founder. What to do?
Write down what skills complete your profile.
In the same way as if you would write a Job Description, try to find out what skills you lacking and look for a partner who completes you. You cannot have a co-founder with the same exact background as you and expect to bring on the business like this. You will need to find a person who has skills and knowledge that you don’t have.
Network, Network and Network!
The startup life requires you to do one thing mainly over all the others, networking. You need to network to find clients, investors and advisors. Networking is at the basis of your initial success. Finding a co-founder requires you to do the same. Go out and network at events, meetups and so on. You can also look at online groups on LinkedIn, Facebook or Twitter. Your personal network will be the key to your success.
Once we make the jump, our pre-startup life will look like a prison. Working in a company, for someone you don’t necessarily like in a job where you don’t necessarily fit. However, working in a company gives you the opportunity to meet new people and perhaps also become friends with some. Now that you need desperately a co-founders, looking back at the peeps you met during your work life could be a good option. You should have come across colleagues from different backgrounds, skill-set, that could be the perfect fit for your new business.
Move where it matters!
One of the dream I had before starting my company was to be free and move wherever I liked. I am a sea and sun lover. I thought once I have my business, I am going to go somewhere warm and work from there. Well, that never happened. Why? Because you are also in the networking business and you don’t want to miss it. Despite, not having fulfilled my dream, I made a mistake and took my startup to a smaller city, because we found investments in that particular area. The decision of moving where there’s no action, at the time, didn’t seem so crazy. However, once I decided to move back to my city, Berlin, I found out that I missed few months of the so important networking. I knew nobody and had to start from zero! Make sure to be where it matters, you will meet the right people and perhaps the best co-founder.
Don’t look for a friend. Look for a friend!
You don’t have to be friend with your co-founder. You don’t have to know him since you are 10 years old to be sure that it will be a success. However, it’s important to share some common interest with the person you are going to start a business. Why? You will spend with this person a lot of time working together or travelling. Startup life is intense and it will require you to work day and night. However, there will still be some time off and you want to be sure to have next to you someone with whom you can actually share some interest.
Align with your Co-founder.
Let’s say you finally find the right match for you. However, you have been working on the idea for a while and this person has just joined. What’s next? Revisit your plans, milestones and target with your new partner. Make her part of the plan. You are now one team!
Who’s the boss?
Probably the less comfortable topic to touch after creating a new relationship is contract. People get uncomfortable with contracts and you don’t necessarily want to ruin this new idyllic relationship talking about who’s what in the company. As difficult as it might look, this step is very important. Make it easy and painless, but go through it. You don’t want to someone joining your dream, taking a piece of it and then leave with no consequence with a piece of it, just because you didn’t feel comfortable with contracts. It’s easy, really. You can find standard co-founder contracts online, edit it at your will, print it out, discuss with your new partners, agree and sign it, both of you.
Finding the right co-founder is very complicated, almost as complicated as finding success with your new company. However, you can do it, it just requires effort and structure. The above mentioned points should give you some direction on where to start.
Many startup ideas fail to ever be launched and many, many fail within the first year or two. In most cases, the failure has nothing to do with the business idea, but how the business side is handled. The business of entrepreneurship is business first, then operations (what your business actually does). The Top Ten startup mistakes that lead to ultimate failure are:
1. Insufficient Startup Idea Development — Most startups do not fail because the business idea is bad. The problem is that many first-time entrepreneurs fail to actually plan the business before sinking cash into the startup. No matter how great a business idea is, it can’t succeed without detailed planning. Take the time to work through every angle of your business idea. Not only will you have a better grasp of how far your business can go, you will also reduce your risk and prepare yourself to make the best decisions as you go.
2. Failure to Understand and Comply with Legal Obligations — An unbelievable number of entrepreneurs leave the legal aspects of business startup to someone else or, worse, ignore them altogether. Eventually this failure to comply with legal obligations will come back to bite you…and the outcome can be devastating. Every entrepreneur must understand and secure all necessary licenses and permits, and set up compliance systems for taxes and fees due the local, state, and federal government.
3. Poor (or no) Marketing Planning — Marketing is the lifeblood of every business startup, and it is more than business cards and a yellow pages ad. A significant portion of your time and expense budget should be dedicated to marketing. Poor or no marketing equals no sales…equals business failure. Do your homework before you launch to identify your target markets, figure out how to best reach them, and establish clear objectives and evaluations to ensure your marketing efforts are paying off.
4. Poor (or no) Financial Management — Success in business is all about the bottom line — no profit, no business. Keeping the books correctly is half the battle. Too many first-time entrepreneurs are willing to turn over complete responsibility for the books to someone else — a dangerous decision that very often leads to business failure. Reviewing and analyzing the financial reports is the other half. It is critical for every business owner to understand what the financial reports mean and how a change in one area affects all the others. Cash flow issues are also major financial management problem for many startups in the earliest stages. Good planning before launching a startup will clarify how much cash on hand your business idea will need to succeed. Whether you consider yourself a numbers person or not, as a business owner it is critical that you take responsibility for learning and applying basic financial management skills if you want to succeed.
5. Sales Forecast Errors: Establishing your initial sales forecast can be difficult, but there are procedures you can follow to make it as realistic and accurate as possible. All too often would-be entrepreneurs build a sales forecast around what they would like to sell, rather than what they are likely to sell. While optimism is an excellent entrepreneurial trait, an overly optimistic sales forecast will leave you with serious cash flow problems and even greater difficulty in securing financing.
For example, one business plan we recently reviewed appeared well-written and professionally laid out. However, the sales forecast reflected sales that required every member of the staff to bill out 19 hours per day, 300 days per year. Another retail business showed average total purchases at $230 each, even though the average price of their products is only $12. Assuming that each customer will purchase an average of 19 items each time they visit is unrealistic. Any competent investor will look for these errors.
6. Under-Capitalization: Not starting with enough capital to support the business through the initial stages is a common error. By thoroughly planning your idea, you will know how much capital you need to cover while you build your customer base, including working capital to keep yourself in ramen noodles until your business takes off. Good planning will also increase the chance of securing investors, whether public (banks) or private (family and friends).
7. Poor Web Presence: An effective web presence is an absolute must for any modern business. Simply posting a website is not enough. In fact, uploading a website without marketing it is like posting ad copy only in your own living room — if your target market doesn’t see it, it might as well not exist. Many recent startups have crashed and burned because the entrepreneur thought that simply posting a website to the internet would drive sales. It won’t.
8. Leaving Critical Tasks “To the Professionals”: Many entrepreneurs believe that a good idea and solid operations are enough to build a successful business, so they opt to turn over critical startup tasks, like marketing and accounting, to outsourced professionals. For some, the business side of business just doesn’t interest them, so they choose to forgo learning the details of financial and marketing management. Eventually, these choices backfire. If you don’t know how the money works, you can’t make the best decisions for your business. If you are not aware of the outcomes of your marketing efforts, you can’t accurately forecast sales and thus can’t plan for the future. It’s your business, you need to know and understand every facet from the beginning, or you might as well be working for someone else.
9. No Ongoing Planning & Review: As the actual operations of a startup take up more and more of an entrepreneur’s time, it is very easy to overlook the critical tasks of reviewing and planning. Every aspect of a company should be reviewed periodically, particularly the financial statements and marketing plan. If you don’t know where you are or where you have been, it’s impossible to know where you are going.
10. Lack of Patience – Pit of Despair: Every startup experiences a period of time between being ready to sell and actually building the sales. We call this gap the Pit of Despair because the entrepreneur is left wondering if they have made the right decisions and whether the business is ever going to work. Many startups hit this point and the entrepreneur quits in frustration. Startups don’t generally succeed overnight. The Pit of Despair should be used to refine internal systems, work through free internet marketing techniques (participate in relevant forums, write and publish articles, build website content), and plan for the future of the business. Don’t let the inevitable delay destroy your chances of success — plan for it, expect it, and use the time wisely.
For the most part, a strong focus on the three keys of startup success (planning, marketing, and financial management) will overcome most of the common reasons for business failure. Pay attention to the details from the beginning, learn all you can about running your own business, and don’t let anything get in the way of building your business into the thriving company it can be.
About the author: K. MacKillop, a serial entrepreneur with a J.D. from Duke University, is co-founder of LaunchX LLC. The LaunchX System, a five Unit series of step-by-step startup procedures, key business software, and marketing reference books, is designed to assist entrepreneurs in developing a business idea into a successful company. Take the free Business Readiness Assessment and get on the road to business startup today.
Entrepreneurship is a difficult path, full of tough decisions and doubts. We often think about launching a startup as a dream coming true; the realisation of our hidden secret; the chance to finally combine what you really like with your everyday job.
The reality is that if this is your first time, you have good chances to fail. Yes, I know, you have probably read this very often. Obviously, you are not looking for another blog post telling you that perhaps the corporate world doesn’t suck that much, considering the stable income it provides you with.
You are already thinking about launching your startup, which means you are already a step ahead of everyone else. It takes a lot of courage to even start thinking about leaving everything that is sure, for an ocean of uncertainty. You have now prepared everything, right? You have done your research and have a business model in mind (perhaps even a revenue model).
However, you are not ready! You think you are, but you are not. When I launched my startup, I thought I had most of the things sorted out. After less than 2 months and without a product I had already some investors on board. Of course, everything was prepared. Well, not really…
There are an infinite amount of things to take in consideration when launching a startup, here below you can find those I believe you really need to get yourself prepared 50% to start with. Why only 50%? Because the rest is in yourself, and no one else can help you getting prepared for that.
1. Your idea has zero value. You might think that having a great idea is what will take you to the next level, helping you raising funds or clients. That’s wrong! Execution is everything. If you don’t execute, no one will follow you. Rocket Internet is the proof of this. Low creativity, great execution!
2. Build audience before you launch. This is a tough one, because you have an idea, but you still not sure what shape it will take. How can you build your audience? Start a blog. Start writing about your idea and product. Use social network. Facebook, Twitter and LinkedIn are great platforms to start building awareness. I have found that Reddit is also quite useful in terms of feedback.
3. MVP to prove, product to kill. This is an ongoing problem in the startup world. When is the right moment to launch? How basic should your MVP to prove your idea? Time to market is fundamental nowadays. If you think you can solve a problem, build the basic beta you need and go out to talk with customers. They are the one that will help you in the next phase, not another product feature.
4. Be stressed, but don’t break. Stress is part of the journey. You won’t sleep at night. You will suffer at days. However, you need to live with it, and be able to turn that stress into powerful energy to keep going the extra-mile. Don’t break your body over the stress, make sure to relax sometimes and take also time off. Taking time off is good to refresh your ideas and start again even harder than before.
5. Life-work balance. Nurture your private life. Your startup will suck you into a vortex of activities and events that you might forget you have a private life. Keeping your private life separated from your startup will make sure that you won’t break down.
6. There’s only one Silicon Valley. Sorry to tell you, but you are either there or not. If you live somewhere else (outside US), well, expect a different type of opportunities, expect a different type of interest from investors.
7. Hiring is hard, very hard! Finding people to join your startup is going to be very difficult, because you are still no one. Unless you have raised millions, you will be competing with big corporations or other successful startups to get some of the best work force out there. However, you don’t always need experienced employees. The early stage phase requires hungry people willing to follow you in the thunderstorm. Look for that in their eyes, don’t necessarily look only their CV.
8. But you need to fire faster. There is an old saying “Hire Slowly, Fire Faster“. The decision in taking someone on board is always tough. You need to make sure they are the right ones. Sometimes, however, you might be making mistakes. When you do so, don’t despair, but act immediately. The burden of having the wrong person in your team can be deadly.
9. Listen to everything, but decide carefully. Incredibly enough, once you launch a startup, you will find a bunch of people ready to give you advices or critics. When in this journey, it is always good to listen to everything people tell you, but this can easily lead you to think, you might actually need to follow these indications. You don’t! Listen carefully, but make up for your own mind. You are in the driving seat!
10. You might be thinking of quitting. As said at the beginning of this blog post, entrepreneurship is a tough street to walk on. Lots of difficult decisions and critical moments will make the most of your experience. Most of the time, you might be thinking that quitting is the easiest decision. You won’t, however, you won’t quit because this is your dream. But be careful, don’t fall in one of the most subtle trap of entrepreneurship, sad stubbornness.
[This blog post originally appeared on SurePayroll. The article aims at helping startup founders in increasing their odds in running a successful Kickstarter Campaign.]
Since Kickstarter launched just over five years ago, investors have pledged more than $1 billion dollars to help fund the thousands of creative projects featured on the crowdfunding platform. While these projects range in scale and success, entrepreneurs and small businesses are turning to Kickstarter to grow their brand and tap into the fast-paced, modern approach to fundraising.
To run a successful Kickstarter campaign, there are a number of tried and true tips and guidelines to follow. Planning and funding before launching a campaign as well as following Kickstarters’ rules are just a few smart ways to accomplish your fundraising goal. Read for more details about Kickstarter as well as pro tips for your startup campaign.
It is quite common to read how startup entrepreneurs fall in easy to avoid mistakes, but why is that so? Is there really a way to avoid making these? We grouped the most common ones and shared some thoughts on these.
Startup entrepreneurs face tough decisions and challenges about their business activities constantly. They are required to be both structured and creative at the same time to overcome everyday problems and find the best solution to take their business to the next phase. However, one of the most important thing when looking at the development of a startup is “thinking ahead”. Don’t just stop and look at what happens today, but rather plan for future developments. Planning is everything and as such with small efforts, we can try to avoid common pitfalls in our adventure.
One of the most common saying in the startup world is “Fail fast, fail often“. Although I completely agree that startup entrepreneurs need to fail to learn useful lessons, it is also true that we can try to plan and avoid common mistakes that will make our startup certainly fail. After all, we are in the game to win!
1. Making things complicated
Young startup entrepreneurs tend to forgo simplicity to show how sustainable their business is. Keep things easy to make sure you don’t lose sight of what is important for your startup. Thinking about partnerships, agreements, product developments and so on, usually drag unexperienced startup entrepreneurs into a vortex of confusion and endless paperwork. Keep it simple and focus on what matters!
Start planning, write everything down. Then go over it again, and delete half of what you think is useless at the stage you are right now. Complexity can destroy success.
2. Loosing sight of your idea
Pivoting is perhaps one of the most useful concept in the startup world. Startup entrepreneurs start with an idea and quite often launch something completely different. Why? Because in the “idea planning” stage, we often miss to identify problems that arise only once we start.
Startup entrepreneurs who decide to pivot should always keep in mind the underling main idea that pushed them into starting their startup. Nowadays, pivoting has become such a “must-do” for early stage startups, that sometimes entrepreneurs are more focused on the pivot itself, rather than the end result. I have often seen startups wandering in “pivot land” without a clear idea of what they were doing, changing path so often that led to startup death.
Don’t focus your effort on changing paths. Keep in mind the main idea that started all and work towards achieving that. Pivot with focus!
3. Partners, oh dear partners
As highlighted in another post about startup accelerators, partners play a very important role in the startup life. These can be accelerators, investors or simply co-founders. Startup entrepreneurs need to be extremely careful in bringing in new partners because in a way or in another, they will have something to say about your business and its directions. Scrutinise well new potential partners. Try to understand what is their role and why they want to join. Are they driven by the same values as yours? Are they looking to achieve the same results as you? Will their contribution be only monetary?
Startup entrepreneurs have a tough job ahead. Difficult decisions are going to be their everyday bread. Some founders tend to overlook the “partner choice”, because they don’t often see the threat of it, but rather focus on the upsides of having someone new onboard.
4. Considering the wrong Startup Growth Engine
Most of startup entrepreneurs, especially those active in the B2C space, often assume that virality will be their key to success. Although some early stage startups have experienced virality and acquired users without spending a penny, startup entrepreneurs should really avoid falling in this trap. I am guilty as well. When I built my startup, I gave clear indication to my tech co-founder (after reading tons of material) to add specific requirements within the website to drive virality. Guess what? No one. Ever. Used. Them!
We assume people will come to our website or mobile app and for some mysterious reason start advocating and doing marketing for us. Well, that doesn’t really happen often. We need to think first of all how consumers will love our products or services and then plan on virality (if it will ever make sense).
5. Funding, funding, funding always sunny in the rich man’s world!
Perhaps ABBA didn’t really think about money in that way. Startup founders, however, tend to focus on fund raising too much, especially in the early stage. Startup entrepreneurs, sometimes, think that funding is a prerequisite to success. You need to raise money to show you have strong partners or that people believe in your crazy idea.
Fund raising is not a measure to success! How many startups we see every day raising tons of money and then going down after a year? Fund raising is a tough job and will take most of founders’ energy. Are you sure you want to dedicate 80% or more of your time to fund raising, rather than proving traction, finding customers who pay for your product? Think it that way, if customers pay to use whatever you are building, you might not actually need to raise funds, and enjoy higher stakes when your business will succeed.
6. Poor hiring
Hiring for your startup is going to be one of the hardest thing you will ever do. You are letting someone else getting in your business and you are paying them for that. Moreover, you know that there is a big probability that they will not be as committed as you are. Obviously hiring is key to success. You cannot think about doing everything yourself. However, hiring can become tricky for startup entrepreneurs especially in the early stage.
It is important to communicate clearly what is expected from them. Especially at the beginning, new employees will be required to do different activities outside of their normal job. Are they going to be committed? Are they willing to go the extra mile for you? Manage expectations and you will be building a successful team!
7. Launching too late
It is often hard to understand when is the right moment to launch your product. Tech co-founders often fail to understand that sometimes a product will need to be changed quickly and often. If you wait too long to launch your product, you might delay the chances of your success.
In the startup world the MVP has become perhaps one of the most misused word of all. What is an MVP? How simply an MVP should be to be released? What features to include in the first MVP? There is not right or wrong answers. If you launch too early, you most likely going to kill your reputation. If you launch too late, however, you might miss on opportunities and build something people don’t really want.
Find the right core features your product needs. Identify what you need to test in this first phase. Once you have all these in place, you can then launch.
The startup ecosystem is booming. Every couple of weeks we read how startups of questionable value get investments of millions of dollars, while others struggle to survive. Together with the incredible need to match dissatisfaction at work and the ability to build a sustainable business, with entrepreneurship we have seen a side trend that has been taking the startup ecosystem spotlight, startup accelerators.
Building up a startup that turns into a profitable business is not an easy task. It seems that the challenge, however, is not stopping many to jump on the entrepreneurship wagon. At the same time, and probably at the same rate, startup accelerators are appearing in different cities around the world with the promise to accelerate your business and help you building the dream. Nowadays Silicon Valley is not anymore the sole center where these types of investment are available. Europe, Asia and also Africa have seen the raise of these incubators for startups.
A recent article by Chris Lynch, appeared on VentureBeat, (“Accelerators claim they are in it for the long haul — I call bullshit“) brought up some of the underlying problems that exists in the ecosystem due to the incredible number of accelerators available. Lynch questions the role (and the benefit) accelerators and incubators have in the startup ecosystem.
Startup accelerators, most of them at least, have become the easiest (and quickest) way for startups to access capital and network of both clients and investors. As first timers in the startup business, many are faced with the same decision: after coming up with a smart enough idea and having found a co-founder, the next move is to find connections and money.
What’s best than a hub where startup entrepreneurs work together, investors and mentors meet and potential clients wander around?
Lynch’s article screams out how most of startup accelerators think, like “compulsive lottery ticket buyers“. “Diversifying” their investment in several startups, without really following one in particular, hoping that one of the many will be a big hit. They are obviously looking at their own return (who’s not!?). If one of the many newly funded company becomes a success, accelerators will gain exposure as a result; hence more potentially successful startups will join and consequently more chances to hit again the jackpot in the future.
However, not all accelerators are the same, and that’s where Lynch is failing in his analysis. Like most things in business, there is a difference between the good, the bad and the ugly.
Pointing out that accelerators like Ycombinator, 500Startups or Techstars have a positive impact on startup activities (and connections) is obvious and it’s a little bit like saying that Google, Microsoft or Facebook will have a (visually) positive impact on your resume (and career).
Reality is that not all of us have the chance to access top players around the world and sometimes we need to take decisions on what’s best for our future and the people who decided to follow us in our startup adventure.
I won’t talk about my experience here. I don’t feel the need to either defend or attack anyone. If my startup didn’t succeed, is due to many factors. However, since my decision to stop working on my company and get back to a normal employee life, I have been thinking about what I have learnt in the 3-month program and what has been the result of this. Lynch’s article has given me the last push to write this down and share some of the things very few will tell: what the bad and ugly startup accelerators usually do.
Look for partners not investors
The same way you wouldn’t marry someone without spending a reasonable amount of time together, you shouldn’t join an accelerator program unless you are sure about what they can offer at all different levels. They are giving you some money, yes, but that’s not the only thing you should look at, because you are giving away a percentage of your dream for it.
One of the main thing that I have seen while applying to few accelerators back in the days is that it’s always about the startup, never about the accelerator. You need to convince them that you are a rockstar, but not viceversa and that’s fundamentally wrong, especially if your accelerator is not in the top league. Sure you should do your research, but how easily can you find all relevant information?
Once you let another shareholder in your startup, they will be there forever! Like any other partners you let in your company, from the co-founder to the last employee hired, make sure you have all the information available to make the best choice.
Accelerators tend to have a pool of 7 up to 12 startups per batch. What will you be getting aside the money? What will it be their involvement in your activities during and after the program? How will they help you getting in front of customers or investors? What other startups have to say about it?
Investors should be your partners. Investors need to be involved in your activities and understand your business. Startup Accelerators are not schools for startups; they are partners in your company and as such you should benefit from their network and expertise. If they have got none or still building it, they should be clear.
Make sure you are not letting in your house someone who will destroy your balance and dream.
Mentorship is broken.
Startup accelerators tend to brag about the number of mentors they have in their rooster. The more the better, usually.
The number of individuals around these institutions is incredibly high. For certain people, being a mentor at a startup accelerator is a little bit like trying to show off a badge on their LinkedIn or Twitter profile.
The idea of mentorship should be defined in a completely different way as it is right now. Why startup accelerators force mentorship sessions? Why do startups have to go through 2-week intense mentors meetings and waste valuable time meeting people who are not always interested in their businesses? Why isn’t there a pre-match based on reciprocal interest between startups and mentors?
Accelerators should help startup accelerate their business not slowing it down with useless activities. Mentorship sessions have no meaning, if there is no interest and both parties think of it as a waste of time. As a startup entrepreneur, I want to meet with people who are in my industry or can give me valuable insights on building a successful company.
Today, the average mentor you meet, read the “Lean Startup”, subscribe to YCombinator’s blog, visit TechChrunch over the weekend, and believe to have the truth in their hands. This of course if you are lucky. If you are not, you might find yourself hearing about Porter’s 5 forces… (true story!).
Startup mentorship, as of today, is broken in most cases. Everyone has tips and advices based on something they have read, but rarely done. Very few can give you real insights and make you think about how to succeed.
Why are accelerators bragging about the number of mentors they have rather than their quality? Why accelerators claim to have internationally famous “mentors”, when in reality you will only see their pictures? Why don’t accelerators focus on their internal strengths, rather than looking at something of questionable value?
When attending sessions at accelerators, try to meet as many mentors as possible. Make a clear request to meet only those who will then be involved in mentorship sessions later on in the program. Make a judgment about the people you meet before you join, don’t overlook anyone. You might meet someone suggesting you should pivot in the porn industry… (another true story!)
Let the show begin.
Demo Days are usually the program’s highlight. Startups gather and show off what they have achieved in 3 months and hope to find investors and clients.
Typically the Demo Day should be the door for startups into the real world. Meeting investors and potential clients or perhaps have some media exposure.
Startups live the Demo Day, dreaming of reaching the right exposure to take their business at the next level and keep building their dream. In reality, when you are not in the top league, the show is all about the accelerator and not the startup. Startup accelerators that don’t qualify to be considered the best, tend to spend their time copying what other more successful accelerators do, rather than reinventing the event to the benefit of their companies.
All the time spent reaching the final goal for that date, vanish immediately once the reality hits you in the face like a stone.
Not all startup accelerators are in the top league, and they better start realising that. Demo Days should not be the focus of the program, if the network is not substantial enough to ensure investments or client or anything interesting to happen. Why not looking at alternatives that make more sense for the strengths accelerators has? Why keep pushing for useless events which take away so much energy and focus from building a company? It’s a show and it shouldn’t be. We are building ideas, or at least we are trying, we are not in it just to show off.
Choosing the right partners when building a new company is one of the most difficult skills that an entrepreneur needs. We spend so much time looking for the right co-founder and then we might take such a light decision when choosing the startup accelerator, blinded by money and the false hope that once in it, everything will work out just fine.
Entrepreneurs, who don’t manage to get their newly funded startups in the top league, should start realising how a bad decision can influence the future of their company. They should start choosing wisely and love their startup more!
How I learnt about what it means to be entrepreneur and the consequences of leaving a stable job.
I have always had this irrational need to try something new. I get bored easily and also easily distracted by new things. I have deep interest for and like to learn new things. If I don’t learn, I feel like I am dying.
I thought that work would bring me to a new dimension. In the end, I knew what I liked the most. Unfortunately, so it wasn’t. The learning is slow, the creativity part is not as it should be, and environment sometimes is not stimulating enough.
My answer to that is always been “when and if I get bored, I will change“. After few changes though, I was still faced by the same feeling,dissatisfaction. However, slowly, a new idea formed in my mind. Starting my business, I thought, would save me by the tedious every-day routine.
But how could I make the jump?
Changing job is easy, at least it has always been like this for me. I never feared changes or had problem getting along with new people. However, starting a business, or being an entrepreneur for that matter, was a whole new topic. So, I started reading. I read so many articles from accredited sources, so many books, that I thought I had everything clear in my mind when I did the jump.
What I had clear, however, was the idea of making the jump, not the jump itself.
So, what’s this jump then? Personally, I see the jump of being an entrepreneur, a process that does not land a person on the ground once you make the decision (although it can look like that). The jump lasts all the way through your “career” as an entrepreneur. You never land until you decide to do something else or quit.
As a matter of fact, I would put it this way. Making the jump is important; however, not complicated in today’s economy. We are continuously stimulated to do what we like, to change what we don’t like and live the life now and not tomorrow. The whole process of jumping is the best one. It is intense, stressful, full of emotions, exciting and it forms you as a person like nothing else will in your life. The “landing” is probably, however, the crucial part in the whole process. It’s difficult to know how you will land and perhaps not knowing it from the beginning makes it even better. Nevertheless, most of those who jump won’t land straight with both feet. Some will fall, some will stagger, and very few will keep walking proudly.
Making the jump is not easy though. The feeling of uncertainty and the whole obscure future in front of you makes it perhaps 100x more difficult than one could think. That’s why, before jumping I read a lot. I was scared and doubtful, will I be successful? will I “make it”? will I end up broken with nothing in my hands? I didn’t know and I read, because reading about it actually made me feel safer.
The internet is plenty of articles and advices for newbies and most importantly there is always an expert in something ready to tell you what to do.
“What successful entrepreneurs do before breakfast“, i.e. take note, are you doing the same?
“How I started my company in 7 days!“, i.e. is it taking longer than that to come up with a successful idea and turn it into a company?
“How I attracted 10000 leads without spending a ding on marketing.“, i.e. are you spending too much money? are you “hacking” your company growth?
“156 inspirational quotes from successful entrepreneurs that will motivate when in doubts“, i.e. don’t be depressed, read and everything will pass.
There’s plenty of material online about this topic; however reading won’t make the difference. Reading helped me getting more secure, having somehow a more clear structure in mind when I jumped. I perhaps fooled myself in believing that if I would read more, I would find a way to succeed. However, what I thought I knew before the jump, disappeared immediately once my feet were in the air.
Nobody can tell you what to do. Nowhere you will find secret recipes for success. You do not have to follow somebody else’s advice, unless you don’t feel it yours.
This is your journey. This is your jump. You can’t just copy what others did. Make it last as much as you can. Live it to the fullest and never regret any choice you might make during the jump.
The way we land might be important for sure, but how we jump makes the jump unforgettable.