When Launching a Company, Consider These 5 Things
From being passionate to choosing the right partners, entrepreneurs need to focus on a few key components to help build a sustainable business.
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While entrepreneurship is in vogue (2012 was a 14-year high), the success rate for new businesses is disheartening. Indeed, according to the Small Business Administration, only about half of all establishments survive five years or more. There are numerous reasons for failure, but "lack of experience" tops the list. Fortunately, the entrepreneurial ecosystem is not a zero-sum game, and you can learn from other entrepreneurs around you.
As the co-founder of payroll service ZenPayroll, here are five lessons I've learned through my own startup experience.
1. Be passionate about what you do. Make sure the problem you decide to tackle connects to personal motivations. Getting a company off the ground is hard work and you'll want what you're doing to inspire you every day.
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I'm passionate about empowering small business owners and making unnecessarily complex systems easy and intuitive. One of our goals at ZenPayroll is to abstract the government so business owners don't have to deal with the 15,000 plus tax codes in the US. It's not sexy -- but it doesn't have to be.
2. Think big. If your initial concept doesn't generate a lot of product possibilities, potential partner opportunities and customer profiles, consider going back to the drawing board.
The best business ideas solve problems and make people feel something -- whether that's relief, joy or curiosity. Find a group of people who find your solution valuable. Pursue that audience and keep iterating until you have a million things to do. Then prioritize relentlessly and execute.
3. Listen, but don't obey. A lot of businesses misunderstand the goal of customer feedback: It isn't to have your customers tell you what they want, it's to discover what their pain points are and determine the underlying opportunity. Customer input should inform your decisions, not drive them.
To build something that has never been built before, address these hidden cause-and-effect relationships and take risks. People may not even be happy with your offering at first because it is so new, but over time, your solution will prove to be better if it addresses the root of their problems.
4. Done is better than perfect. Entrepreneurs have to make so many choices that it's easy to stagnate by doing a lot of little things without proving or learning anything -- what is known as decision paralysis. "More options, even good ones, make us freeze," Chip Heath and Dan Heath wrote in "Switch."
Related: 5 Lessons Entrepreneurs Can Learn From German Philosopher Friedrich Nietzsche
Setting goals is critical to maintaining focus. At ZenPayroll, we regularly establish key questions (things we want to prove to ourselves), and then revisit them to see if our assumptions were correct. Learning by doing is much better than over analyzing. There will always be more things to do and questions to answer. Starting a business is a progression, and you have to prioritize where to start.
5. Choose the right partners and mentors. Your startup team -- including partners, investors and mentors -- should be built around common values that permeate your decisions and shape your company culture. That said, it can sometimes be tricky, especially when you need funding. Resist the urge to follow the money. You should be as choosy about investors as you are about the rest of your team:
- Identify what specific help you need, whether it's for personal development or tactical advice.
- Learn about their goals, motivations and ambitions and choose folks who align best with your needs.
- Have a goal for each relationship, and remember, it's up to you to make use of their wisdom and experience.
- Seek guidance, but don't blindly follow.
Launching a startup can be a daunting adventure because it challenges you to define what you stand for and want to accomplish in life. Start a business that's authentic to who you are, stay focused and always be open to suggestions. If you're a mission-driven entrepreneur, remember that building a truly great company is a marathon, not a sprint.