by Melissa Thompson, CEO of TalkSession
2014 will be a formative year for new business owners and early-stage entrepreneurs. For those would-be entrepreneurs debating the startup leap? There is no time like the present. For current founders, in our hyper-pressurized worlds of being incubated, accelerated, and constantly switching modes between pitching and executing, how do we successfully navigate the labyrinth to success?
In 2013 the funding landscape changed with the JOBS act. Continuing into 2014, there will likely be a shift in the role of the investor into a more hands-on player in businesses. More non-professional investors will become angel investors and entrepreneurs will benefit from their domain expertise. And finally, in Darwinian fashion, competition for market share amongst the venture capitalists as a result of increased numbers of angel investment syndicates will clear the decks of the low-value add venture capital dollars. All of these attributes will effectively benefit the entrepreneurial community. Now, how do we become successful founders?
Below are 10 tips for the entrepreneur (or entrepreneur-to-be) to run a successful startup:
1. Don’t fear Goliath.
Or at least learn to manage those fears. At some point founders will be asked after a pitch, “Why can’t Google/Facebook/Apple do this?” The answer lies in the story of David and Goliath; in the notion of all frogs started as tadpoles. A startup is a nimble entity that can pivot, grow, change and ideate more quickly than large companies. In Malcolm Gladwell’s newest book, “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants“, he examines our misconceptions about what constitutes an advantage. Gladwell says it best himself, ““We have a definition in our heads of what an advantage is — and the definition isn’t right. And what happens as a result? It means that we underestimate how much freedom there can be in what looks like a disadvantage.” Tightly defined budgets, small teams, and offices in “the cloud” may seem like a weakness, but these are also these are the attributes that can drive us to success through being “lean and mean;” more efficient and more maneuverable.
2. Maintain a 95%/5% focus ratio.
Entrepreneurs are entrepreneurs because we have visions of how to make something better; usually, many things better. Always keep two active lists of ideas. The first consists of core focus areas and try to focus 95% of your time and effort; your core competency. The second is the 5% list; the list reserved for the ideas that get you temporarily excited, but ultimately are distractions. In order to maintain open minds, keep creativity flowing, and continue to develop long-term visions, the 5% list is very important. Ultimately with a small team and limited resources, if you spend 95% of your time on core needs and responsibilities, you will be more successful.
3. Learn from Breaking Bad.
Inspiration can be found in unexpected places, like in the addictive series Breaking Bad, based on the life and work of a man in the business world of crystal meth. Star-of-the-show Walter White exemplifies the importance of creating a perfect product, the value of loyalty to one’s team and business partner, and how in business, there will be many challenges through competition, life/work balance, and risk-taking. Of course a few viewings of Locked Up Abroad, based on real-life law enforcement should provide sufficient inspiration to not become engaged in the illegal and illicit recreational pharmaceutical industry. Bottom line, entrepreneurs should look to other industries or life for inspiration to gain fresh perspectives.
4. 99 Problems? Just fix one.
My excitement over my company sometimes leads me to talk about the problems we are going to address in what I call, “phase 27”. Investors don’t want to hear about “phase 27”, they want to know in simple terms, what one problem our idea will fix, how it will fix it, how much will it cost to fix it and how much is that solution worth. Our musings might excite clients on the possibilities of “phase 27.” In reality this is harmful, since an entrepreneur cannot deliver these dreams right now in “phase 1.” No matter what the situation, remember to set expectations properly with regards to what you can doright now, and maintain the focus of solving just one problem.
5. Clear the clutter.
Clutter includes: toxic people, time drainers, unnecessary events, and non-crucial product features. Founders must wear many hats, and choosing the ones that bring the highest value is critical to success (and maintaining sanity). Rid your life of the physical clutter and learn to gracefully remove the social clutter.
6. Work harder than anyone.
Be the first one to work and the last one to leave. Set the tone for your teams. Also, resources for startups are limited and precious. The more an entrepreneur can do personally, the more the entrepreneur is investing in the venture and can allocate financial resources elsewhere.
7. Simplify it.
Get product feedback from an eight year old, an eighty year old, and every decade in between. No one will ask for more complexity. My app started as 36 pages of detailed wireframes. The current design consists of one large circle with a call to action written in a large font with an accompanying icon. An eight year old knows what it means, and an eighty-year old can read it and knows what to do without instructions.
8. Talk less, listen more.
To get to the user-interface described above, I have to thank my client. I am glad I listened. In a seminal meeting, a client tested my app’s prototype and asked, “Can the whole platform just be one button? If I press the button, I get the service.” I replied, with “of course you can,” then sprinted to the office to improve the interface. One person’s musing substantially improved our user-experience. Often, entrepreneurs are too deep in the weeds of their own visions and can benefit from listening to users, testers, investors, potential clients and anyone not directly involved in the product’s creation.
9. Nurture your network: they are an entrepreneurs’ biggest assets.
It is the assets not listed on balance sheets that can often drive the biggest growth. Networks grow from friends, coworkers, peers, former teachers, bosses, and clients. It is this network that will help entrepreneurs the most in the early stages to turn napkin ideas into successful businesses. Find other entrepreneurs in your particular industry and watch your network grow exponentially. You need to find those who believe in you, believe in your ideas and together with other entrepreneurs in your networks, grow successful businesses.
10. Implement digital detox.
I became addicted to my company this year. Zeal is great, but beware of diminishing returns. I was not sleeping well (or much at all) nor socializing. So I took a vacation. I did not have access to WiFi or cellular service and felt like a mother leaving her child with a babysitter for the first time. It was nerve-wracking for the first day out-of-touch, but amazingly, the stress and nerves lifted. After a week of startup sobriety, I returned to find my business completely under control. That week did wonders in my life. I slept more regularly, got fresh air, and interacted with people outside my startup bubble. I believe the physical and mental renewal of a digital detox will far outweigh a founder’s inclination to “work-til-ya-drop”. Do yourself and your business a favor: power-down, and reboot from time to time.
Melissa Thompson is the founder and CEO of TalkSession (www.talksession.com), an online counseling company which launched in April 2013. She is a member of GE & StartUp Health’s Entrepreneurship Program, as well as Springboard Enterprises’ Life Sciences Accelerator. Previously, Melissa was an analyst at Goldman Sachs as well as a technology and business development advisor to multiple startups. Melissa is a member of 37Angels, a Board Advisor to the Flawless Foundation and Newport Academy, and is on the Board of Directors of the Center for Health Innovation, Women in Healthcare & Life Sciences.