Almost 4.5 million new businesses launched in 2020, an unexpected surge of some 205,000 more applications for new startups than the previous year.
While exciting new trends indicate that some of these startups will thrive in the coming year, overall statistics remain daunting for how many of those startups will survive and become profitable, it is encouraging to see this sign of resilience in a year that brought so much uncertainty.
If you are one of these founders – or are considering it – this year will bring the difficult challenges of growing any startup. It seems like a good time to share some of what I’ve learned as a startup founder – from both my successes and failures – for more than a decade.
- Your startup is alive because of your idea and vision. Don’t give away ownership of your idea by letting someone else set up camp in your brain. Avoid making the decisions based on their values and ideas – even if they have more experience. Some of the best ideas for new companies come from first-time founders, so trust your own vision on where you want your startup to grow.
- The right time to launch your startup is when it is a burning passion that will not leave you, no matter how hard you try – when it’s what you wake up thinking about at 3 AM. It will never feel safe enough, and you will never feel qualified enough, so don’t wait for it to not feel scary.
- If you do not have subject matter expertise, it should drive you to become a student of all things pertaining to your idea. You can (and should) hire experts or find a cofounder who is, but they need you to learn enough to know whether their solutions align with your vision.
- Everyone has advice. It does not make you unteachable to not take all advice you hear. Even experienced people will sometimes have bad advice for you, because they do not know your unique circumstances. Trust your gut. Respect that others care enough to advise, listen to their feedback, absorb their insights, and then filter through the noise and apply only what makes sense within your unique circumstances.
- One area you absolutely do want to ask questions and seek help is where there are legal or financial issues to consider. Whether it’s opening a new business bank account (don’t commingle your revenue in your personal account), creating a pitch deck or anything else, it’s important to know that most experienced founders are happy to provide guidance once you ask.
- Your job as a founder is to become visible enough for customers to believe you are real and capable and for potential investors to surmise that you can lead, both internally and externally. So what if it’s uncomfortable. So is failing. Find ways to be visible without being a megaphone.
- Being a visible leader is not the same as believing your only identity is now as a startup founder. Whether your startup grows or closes, you are more than this part of your life. Protect those other parts, because they will sustain you when things get difficult.
- The time to grow your new network is yesterday. Developing a network specifically for your startup is not just asking famous or rich people to help you. It’s learning how to immerse yourself in the industry you’re now a part of and finding ways to contribute.
- If you take funding from friends or family, go through the same legal process as for strangers. If you lose a stranger’s money, it’s rough. If you lose family’s money, it will always be there between you, so if your startup fails, it holds the potential of being the most expensive money you’ll even land, because it could also cost you that relationship. Having a legal agreement helps navigate difficult discussions if it ever comes to that.
- You cannot micromanage your way to success. You also cannot save your way to success. As scary as it is, be ready to spend what needs spent to get to the next milestone without being frivolous or spending on things that won’t move you forward. Do you really need an office? It’s good to consider that the same money could pay for skilled help that could help you create a killer website that will reach a global audience.
- There is no database that tracks dishonest, manipulative, shady investors. And most investors will not tell you to not get involved with the ones they refuse to do deals with. So do your own due diligence. Smarmy money is much more expensive that dying from no capital.
- A Letter of Interest (LOI) from an investor is not binding for them, so don’t agree to stop pitching or seeking investment until you have a legal commitment and a hard date on when you will see funding. If their fund isn’t ready, then they’re not ready. Don’t wait on them, and don’t ever spend promised money until it’s cleared and available in your account.
- If you’re in a hole, put the shovel down. Do not take risks you can’t afford if you fail. The superhero stories where a founder risks everything and becomes a unicorn are so rare. The founders that live with financial devastation from taking big risks are far more common.
- Talk to your board. Especially when everything is going to hell. If they can’t handle it, they shouldn’t be on your board. Their job is to help you succeed at your job. They can’t do their job if you don’t tell them what is going on.
- Find healthy ways to make space to escape the stress. Your creativity is what conjured up this great idea. Protecting your down time to stay creative is what will help you continue to problem solve from that same place in your brain that got you here.
- You are capable of more than you think. Believe in yourself and give it your best. Be straightforward, apologize, forgive, be vulnerable, audacious and bold. Then it will be worth the journey, because you will be better for it whatever happens.