5 Pieces of Advice I Never Expected to Give to Entrepreneurs
Grow Your Business, Not Your Inbox
I believe in mentoring, and I enjoy the time with entrepreneurs in answering whatever questions they may have. When an entrepreneur asks, for example, "What do investors expect to see in due diligence?" it’s an opportunity to talk about contracts and cap tables, but also about integrity and transparency. When another entrepreneur wants to know the best way to build a trusting relationship with her board of directors, I talk about milestones, financials and how surprises are a terrible idea.
These discussions are typical — all part of the time-tested process of de-risking a startup and raising capital to fund growth and sustainability. And then there is another category of advice that I’ve built up over the years — I call it advice I never expected to give.
1. You do have competition
If you think you don’t have competition, think again. With the power of the Internet and the availability of information and cloud computing, competitors may not necessarily be traditional. Still, I assure you, there are smart people out there thinking up solutions to win the hearts, minds and wallets of your current and future customers. Do you think that back in 2008, as Airbnb founders were selling cereal to fund their idea, that any strategic thinker in the traditional hotel industry was imagining how people’s extra rooms could become key assets that would help build a $4.7 billion nontraditional competitor?
Related: Get to Know Your Competition
2. Never miss the chance to step on a rake
Do you ever have one of those days when you wake up, put your feet on the floor, and have the whole morning and afternoon planned — and then something happens that is so unexpected that it is as if you stepped on a rake and the handle hit you in the head. Welcome those “rake” moments, those times when you could not have possibly anticipated or planned for what occurred. You will have a headache, and you will also learn something you couldn’t have learned any other way.
3. Say yes until you can’t. Then say no
The minute you sign up your first customer, there will be sticky situations you must address. Successful customer partnerships are successful because a business genuinely cares about its customers. That means compromise and negotiation.
There will always be the customer who wants special pricing and terms. Give something away, but know your limits. Driving revenue by selling more units below cost never works. Suppose your customer insists upon features that aren’t in your product plan. Will they help share the cost or sign a larger contract for a longer term? Consider all the options, but if re-prioritizing development adversely impacts other customers or your business plan, respectfully decline. Always understand your boundaries. Your responsibility is to your employees and your investors, as well as your customers.
4. Learn the lessons and mentality of the last mile
In shipping and delivery, “last mile” traditionally refers to the final leg of moving a product from a production facility through multiple distribution points to the doorstep of the actual customer. The “last mile” is often the most costly and logistically difficult step. Any business that moves goods understands that success is impossible without doing the last mile right.
Every startup has a last mile. There are critical final steps that deliver the experience your customers paid for and expect. Maybe it is the training that makes an online dashboard easy-to-use. Or it could be the navigation buttons on a patient’s telemedicine screen or the packaging of cold roasted coffee. In the physical delivery business, Amazon and others are road-testing driverless cars, robots and drones. What innovation can you bring to your company’s last mile?
5. Remember the value of having a phone conversation
Texting and Slack are great tools. Digital communications have an immediacy and in-the-moment connection. Texts are all about efficiency and information. Emojis save words. Texts allow a person to multitask and ignore the background noise.
Call me old-school, but I remember the AT&T tagline from the eighties: “Reach out and touch someone.” In today’s day and age with texting, Slack and other communications tools, it is essential to remember the value of having a phone conversation.
Texting is a great way to receive transactional information. The benefits are enormous — efficiency and instantaneous access to another person virtually anywhere and anytime. Here’s what you miss: The opportunity to hear and react to the tone and inflection of the other person’s voice. The moment to declare out loud that you don’t understand — or that you do.
Nothing replaces human-to-human conversation for true collaboration and understanding. This is true for founders, managers and employees — especially now.
The opportunity to coach and mentor entrepreneurs is one of the great rewards of being a venture investor. For me, the learning process is a two-way street. Sharing my experience with entrepreneurs has helped them make good decisions and overcome obstacles, while I have gained insights from their creativity and points of view.