Deals fall through. Tech fails in development. New hires disappoint. Forecasts are always off. These are among the pitfalls that entrepreneurs must navigate to launch a startup.
Pitfalls do not have to become vast wastelands of time and money, said Matthew Moore. Moore, a former Apple executive, is the co-founder of Cruz, a consumer technology company.
"These are not problems," he said. "They're opportunities to learn your business. You need to approach everything with that mindset.
"What you actually signed up for when launching your startup, was an education," he said.
Stay Scrappy To Launch A Startup
Scarcity drives innovation and efficient problem solving, Moore said. "It's a mentality that can lead to extraordinary results."
He has found when teams have overly abundant resources they tend to "become lazy thinkers and are inclined to solve problems with money instead of innovation."
This doesn't mean to go on an extreme austerity campaign just for the sake of it. Rather it translates to budgeting your financial resources strategically.
Rein In Production Costs To Launch A Startup
If your business plan requires borderline unrealistic scale to become profitable, Moore said, "you better rethink your business plan."
With rare exceptions like Amazon.com aside, "planning to get 'costs down with volume' is a fundamentally flawed approach," he said.
Hire Beyond Resumes
When adding to your team, you are hiring for skills you need, especially technical people. But don't be blind to everything else about a prospective employee.
There is a balance between what they've done and what they have to offer your startup. Hire employees "you actually want to hang out with," is how Moore puts it.
Impressive resumes are great. But, Moore said, "it's much more important to hire people that share your values, vision of the future and obsession with solving whatever problems you need to tackle."
Treat Time And Patience As Assets
Find your company's guiding principles as quickly as you can so "your startup has the time to learn its lessons and clear its launchpad," Moore said.
Relentless persistence is the driving force behind successful ventures, so stick with it, said Peter Platzer. He's the co-founder and CEO of Spire Global, which provides space-based data, analytics and services.
"Building a successful company takes more than a great idea, a large market or a fantastic technology," Platzer said. "It also requires the ability to stick with it, show grit and perseverance. Keep going when the going gets tough."
Platzer likens being relentless to the image of a canyon that over time has been sculpted by a river carving into stone. "I think Slack (maker of a messaging app) is a fantastic example, where a team of highly dedicated people pivoted and pivoted until they found something that changed the world," he said. "That's why early-stage angel investors pay so much attention to the team."
Understand Your Value
Jerry Neumann, a 25-year veteran of the venture capital (VC) world, offers this perspective on raising money: "Founders think they are at a disadvantage in the fundraising process, but VCs need founders more than founders need VCs."
He says without VCs a founder can often start their company anyway, "but without founders a VC has nowhere to invest their money."
Neumann, co-author of "Founder vs. Investor: The Honest Truth About Venture Capital," looks for entrepreneurs who want "to go the distance." These are people "who believe they can manage their company while it is a scrappy startup, when it is a larger private company and when it is a big public company. Otherwise, they'll be tempted to sell too soon."
Losing a founder at the wrong time can be a "value-destroying event," he adds.
The Right Time Is Any Age
There is no ideal age to start a business, Platzer said.
He notes that while statistically speaking, people in their 30s with university degrees are far more likely to found successful companies, that isn't the only path.
"I studied the space industry for many years, getting the necessary education and keeping an eye out for the right market conditions," Platzer said. "All the while, I was honing my business plan. The timing wasn't right until I was in my 40s."
"And because the timing felt right, I was emotionally and mentally prepared to endure the hardships that arise when first starting out."
