No matter how many books you read, articles you find or videos you watch, nothing can prepare you for being an entrepreneur, quite like actually being an entrepreneur. The knowledge, lessons and insight you learn from being on the ground and getting your hands dirty provides 10x the knowledge you will find written down anywhere else.
That’s not to say reading, and learning from other successful entrepreneurs isn’t important. It is, but you won’t truly know what your weaknesses are and how your company responds to market forces until you are in there and doing it yourself.
That’s not an attempt to scare you or raise false levels of concern. But being realistic about what you really know (and don’t know) will leave you much better positioned to take advantage of the learnings and lessons that present themselves.
As a 3x Entrepreneur myself and current founder of Task Pigeon here are the top 3 things new Entrepreneurs don’t realize about getting started.
Cash flow is King
While building a profitable business is obviously the goal, cash flow is king. Especially in the early days where you may have a set amount of money to invest in the business.
For example, let’s say you invest $20,000 in your business and are spending $2k a month to “keep the lights on”. This gives you 10 months of runway. I.e. 10 months before you are out of money.
Now let’s say you can manage to hit $500 in monthly revenue. All of a sudden your net outflow is now only $1,500, and that same $20,000 will last you 13.3 months, or 33% longer!
In this scenario, your company is still unprofitable. But you have just increased your chances of success by “buying” extra time to make it all work.
It’s true, people are your most important asset
The people you choose to work with (either as employees, contractors or co-founders) can breathe life into your company, or kill it. This is especially true when you are an early stage startup with only a handful of people in your team.
If you make a mistake, and hire the wrong person, or bring on the wrong co-founder you can seriously impact your ability to make progress and move at the rate required to grow, find product market fit, and hopefully succeed.
While no one likes to make a mistake (or fire people), you and they will be in a much better position if you make a call sooner rather than later.
I am fortunate enough to work with a fantastic developer on my current startup, but I can recall at least two other instances from my past ventures where employees were a drag on performance and morale.
Wherever possible I also think it is great to work with that person first (either as a contractor or perhaps in a past role) before bringing them into the company in a full-time capacity. Especially if you are issuing a chunk of equity to them.
Having the ability to adapt is an underrated skill
When you decide to build a startup it is only natural that there is a strong focus on the technical skills of your team, as well as their experience in sales, marketing and business development. These are all-important skills that can help get your company off the ground and running.
What people don’t often mention however is the fact that your ability to adapt is equally important. Being able to wear multiple hats and constantly change to different circumstances is a critical skill.
It helps keep your organisation lean (as you can perform multiple roles), face challenges and setbacks without immediately fearing the worse and provide your investors and employees with confidence that you will find a way forward no matter the obstacles you face.
These are just three of the core things I believe are often overlooked by early stage founders. There are of course many other things that pop up in the daily life of a startup founder, but that is all part of the intrigue. Being able to work on new and interesting problems each day is what makes being a startup founder so rewarding.