Starting a company is easy. You just need some assets to show and a name to register. Sustaining and growing a company is remarkably difficult. We have all heard about the statistic – 90% startups fail within the first 5 years of operations. And there is enough data to back that figure, with extensive research published by IBM and Oxford University.
As a budding entrepreneur, you are bound to have a difficult journey by design. This is because as a new business owner or operator, you would be challenging the norms, trying to build trust, and running your business in parallel. Amidst all these challenges, it is easy for entrepreneurs and business operators to lose all hope. Imagine, having to figure out how will you pay this month’s office rent, salaries, supplier invoices, marketing costs, and invest in the product’s development, while constantly selling your vision to internal and external stakeholders.
It is easy to search for motivation on YouTube, TED, and Google. However, most of the times, all we are looking for a solution or a potential solution. When you understand a problem in its entirety, it becomes easier to focus on the solution rather than getting intimidated by the gravity of the situation. That is what differentiates the winning business operators from the 90% who have to shut shop.
1) Getting Started
Believe it or not – getting started is indeed one of the most difficult tasks for most of the entrepreneurs. It take immense courage and faith in your vision to get started.
However, getting started becomes a challenge only when you are too heavily invested in the idea. You have to understand that you are in the business of making a profit and not in the business of bringing your idea to the world. Like software products, businesses have to be treated with iterative decision-making that focuses on objective progress instead of making one idea that may or may not potential, exist on the crutches of capital.
Think about it like standup comedians. Before they prepare a joke and present it in a show where thousands of people are watching it with paid tickets, they go through months of preparations in working on the joke through open mics. If you have visited an open mic, you must have seen the room full of half-a-dozen people in the audience and the comic trying very hard to entertain them.
You can do the same for your idea. Take a toned-down version to the audience and then gauge their feedback. Instead of jumping head-first into the idea, keep your day job and build the product over the weekends. When you can sense a market-size big enough to pay your bills and still scale the company, take the leap of faith.
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2) Gaining Traction
Even after you have launched the business, there is no assurance that you will get the necessary traction. Even if you are engineering a quality product and investing in marketing, you might not get the desired CAC vs LTV balance to make the business profitable.
The idea is to focus on getting ‘obsessed’ with the customer’s problems. Reid Hoffman, the founder of LinkedIn and General Partner at Greylock, said in his podcast, “Entrepreneurship is like jumping off a cliff and building a parachute on your way down”. That is exactly what you have to do.
Learn more about the lean approach and be open to failing. Add features, put them in production, put the product in the hands of the customer and then get the feedback. Take all the feedback and then start focusing on the most prominent trends in the list of feedback. Add them, and pivot wherever necessary. Remember – Netflix was started as a company that couriered DVDs on demand and Blockbuster was a major corporation with thousands of stores. Netflix saw the value in convenient content delivery and scaled only on that front.
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3) Managing Cashflow
As soon as you start doing the rounds of investments, you will find the common pattern among investors – most of them would be interested in funding your growth and not your operating expenses. However, operating expenses are what help your business pay its temporary bills like rent and salaries. Without them, you wouldn’t have the basic resources necessary to run a company in the first place.
There are several creative ways to manage cashflows. Airbnb founders took the advantage of presidential elections and sold cereals to get some funding. They got enough to survive till the next round of funding came. The founder of FedEx had less than $5,000 in his bank account and a fleet of planes without any fuel in them. He went to Las Vegas, gambled his way out, and got enough money to keep the operations running for a week. In that one week, he got an extended line of credit and was able to survive.
While selling cereals and gambling your last dollars are creative but extreme steps, you can take up more conventional approaches like taking up ad hoc projects and consulting assignments. On the weekends, you can also work with your team to provide product development services to other smaller startups. Or, you can try to find out the biggest line item in expenses and see if you can have the source of this expense converted into an investment-based partnership. Employee-owned businesses and supplier-made investments are the common solutions to solve this problem.
You can also consider having your startup incubated in a government-aided or funding-based incubation centre that does not charge for its services.
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4) Scaling Operations
After you have built the operations, you will have to focus on scaling. Believe it or not, scaling is not a linear process. The company that has 10 employees and the company that has 150 employees are fundamentally different businesses with different challenges.
You have to understand two things – what are the parts of your business that you want to scale and how would you keep the culture intact? Yes, there would only be some parts of the business that you will be able to scale. And in order to do that, you will need a deep understanding of that business process. Going back to Airbnb, the founders initially saw a problem in the quality of photos posted by property owners on the platforms. They understood that potential tenants were not getting the type of information necessary to make a decision, out of these pictures. So, they hired a professional photographer and visited each Airbnb listing to get new photos. Once they understood the process, the installed guidelines for posting photos that would attract more visitors.
Karsanbhai Patel, the founder of Nirma, a multibillion-dollar conglomerate based in Ahmedabad, India, initially used to deliver his formulated washing powder on a bicycle. This helped him understand the customer sentiments first-hand. The same insight panned out into Nirma’s marketing, when the company managed to undercut the expensive pricing of washing powder brands largely operated by Procter & Gamble.
Doug Leone, the Global Managing Partner at Sequoia Capital, once stated a speech that maintaining the cultural tenets of the company is the responsibility of the founders. His advice was that the founders should write down their beliefs on a piece of paper and use them as rules to guide the operations. This is how companies can ensure maintaining their culture, even when they cross the 150-people threshold. That threshold is important from the management standpoint because that is where a manager to instil systems of governance, as highlighted in the book ‘Homo Sapiens’ by Yuval Noah Harari.
Your Personal Toolkit to Stay Motivated
Despite taking up the aforementioned ideas, you may not feel motivated enough. It’s Ok. That happens to every entrepreneur. Here are some ways to find that inspiration again, and get back to firefighting in the office:
- Connect with Fellow Entrepreneurs: Go to the startup meets, visit the incubation centre, talk to the students from your university – only an entrepreneur will be able to give you the perspective you need in this situation. You may end up finding a solution to your problem or just the right inspiration to get started with solving the next challenge.
- Find a Mentor: This person does not have to be a venture capital investor or a successful entrepreneur, though it would definitely help if she/he is one. Having a mentor will help you bounce your ideas off someone when you need it and get some time-tested advice.
- Hackathon vs Take a Break: These are two different approaches to finding a creative solution. If you have reached an impasse, take a day off. David Ogilvy, the advertising legend, had a process of reading a lot and then going for long walks. He said that disconnect helped him clear his head and focus only on things that mattered the most. You can try the same and see if it works for you.
Hackathons are great way to put your entire focus on solving just one problem. Many a time, as the key person in the team, you would be bombarded with questions from all the directions. It can become overwhelming to solve one problem while having the other ones as your key constraints. Instead, a hackathon session will help you narrow down your entire focus on one problem.
Q. How Do Most Entrepreneurs Stay Motivated?
A. Focus on the solution more than you focus on the problem. Delegate the ancillary responsibilities. And set yourself up for solving the problem by equipping yourself with the knowledge, tools, and people necessary to tackle the challenge. The more challenges you are able to solve as an individual and as a business, the more motivated you will feel.
Q. What are the Most Common Challenges Faced by Entrepreneurs and People in Business?
A. Managing cashflows, raising funds, and hiring the right talent are the common challenges faced by most businesses. However, for individuals, keeping their own performance consistent, delivering value to the business operations, and managing their personal as well as professional responsibilities are often considered to be the biggest challenges.
Q. Who is the Role-Model for Staying Motivated as a Businessperson?
A. There are several leaders in business who can also serve as great role-models. Col. Harland Sanders started franchising his KFC recipe when he was 62. Indra Nooyi, former head of Pepsico, was able to raise a family and run a major conglomerate at the same time. Jack Ma failed in several businesses and was rejected for a small role at a food chain outlet, before he founded Alibaba. Walt Disney’s cartoons were initially rejected by newspapers. Sir Richard Branson had dyslexia, a learning disorder, that did not allow him to excel in academia. They all succeeded despite of and because of the challenges they faced.
Eventually, you have to understand that you are in the ‘problem-solving’ business, more than anything else. Businesses that are able to build resilience are the ones that can survive in the long run. And till your company becomes so big that you don’t know most of the people who work for you, your entire company-culture would be a reflection of your personality. So, develop resilience in your mind, and you will see it get reflected in the operations.