Founders reveal what they wish they’d known before starting a business
Hindsight's a wonderful thing. Daniel Seal has rallied together his entrepreneur contacts to impart advice with those thinking of starting up
I’ve heard plenty of great advice from some truly inspirational founders since I set up unbound four years ago.
While I’ve been happy to follow the meteoric success of many of the start-ups we’ve worked with, not all have made it.
However, that doesn’t mean you shouldn’t try to start a business – as Hyperloop’s CEO, Dirk Ahlborn puts it: “If someone tells you that you can’t do something, it just means they haven’t figured it out – it doesn’t mean you can’t figure it out.”
Sometimes that’s easier said than done. If you’re a budding founder, or you’ve already taken the leap and find yourself asking yourself if you’ve made a grave error of judgement, take heart that even the most successful entrepreneurs have faced, and overcome, many of the same challenges you do.
You don’t just have to take my word either as I’ve asked unbound’s speakers, past and present the question of ‘What do you wish you’d known when you started out that you do now?'
Here’s what they told me:
Be prepared for hard work and don’t expect business to be glamorous
A good starting point is to understand just how much hard work you’re letting yourself in for, James Kirkham, head of Copa90, explains: “It will consume your entire life, every waking minute. So, make sure your start-up is predicted on something you love and truly believe in.”
Commitment is key because being an entrepreneur is generally anything but glamourous. Dan Murray, co-founder of Grabble, outlines a reality of starting a business that many will relate to:
“Being a founder is mostly a 24-hour commitment to processes, admin, management and convincing everyone you're not actually as mad as you sound. Oh, and rejection…”
Have self-belief, but don't disregard the ‘no’s’
Clearly, having a thick skin is a prerequisite for starting a businesses but if there’s an audience, there’s an opportunity. Min-Liang Tan founded the pro-gaming brand Razer in 2005 and despite scepticism from investors, carved out a market segment for high end gaming peripherals.
Min-Liang Tan counsels: “You’re not building a company to get funding, if you’re truly passionate about your niche, it could be anything – pet collars, dog leashes, whatever – find your niche and scale from there.”
Self-belief and, to extend a theme, doggedness go a long way, as Jim Corrigan, co-founder of Jimmy’s Iced Coffee, puts it:
“People will tell you ‘no’ a lot and sometimes for good reason. Accept the ‘no’ and work on making it a ‘yes’.”
A solid business plan and cashflow forecasts are a must
No matter how determined you may be, investors will need to see a grounded business plan and realistic forecasts before they’ll even consider parting with their cash.
Nyall Jacobs, partner at accountancy firm CBW, advises: “Entrepreneurs are optimistic people so forecasts are often prepared too optimistically.
“Investors just need to see sufficient revenues and profit to give them comfort that they won’t be asked to invest sooner than expected and that the market is big enough to ensure profits can be made on exit.”
Download our free business plan template here.
Raising start-up funding? Remember that only fools rush in
Turning a profit takes time and, unsurprisingly, the most common reason start-ups fail is running out of money. However, it doesn’t necessarily pay to take the first funding offer that comes along.
Tom McGuire, partner at law firm Taylor Vinters, warns: “Negotiating funding and equity is a difficult balancing act, but take your time.
“If you give too much equity away too early, it will look like you don’t value it and if the deal is done, you may find you lose control of your company too.”
Make sure you have access to, or can source, the talent that your start-up will need
Expertise – financial and otherwise – is one investment start-ups simply have to make.
Understanding what your strategic requirements are from the outset in order to resource effectively will save you money in the long-term.
Aron Gelbard, co-founder of Bloom and Wild learned this the hard way: “One thing I wish I'd understood better when starting was how critical technology was going to be to our ambitions for Bloom & Wild.
“If I started again, I'd have hired the best possible developers to be part of our founding team from the very beginning!”
Costs aside, hiring experts often pays off in the long-run
You can’t know everything from the outset, so it’s a sensible move to bring in the right advisors as early as possible. CBW’s Nyall Jacobs explains: “A professional advisor will provide unbiased advice and often act as part of your team, sharing expertise and experience beyond the support you are paying for and take some of the pressures of running a business away from you.
“Plus, investors and the market place often feel a lot more comfortable when advisors are already on board.”
Urban Massage profited from this approach. The company hired an expert in brand partnerships, who had previously worked with Facebook and Uber to help it grow.
Urban Massage’s founder, Jack Tang, says: “We were very fortunate to catch up on the world of partnerships though his lens. We learned associations and co-branding can be a highly effective way to compete in new markets, raise awareness and, of course, generate sales.”
Understand that you will make mistakes along the way, every founder does
Mistakes and mishaps are part and parcel in any start-up venture, so it pays to listen to voices with experience but also not to be too hard on yourself when things do go wrong.
To finish with a sage piece of advice from Emily Forbes, founder of Seenit: “Be more confident and comfortable with making mistakes… and just remember that everyone is doing it! Even if you can’t see it.
“The best thing to do is to own each failure, learn from it and keep looking forward.”
If you don’t try, you’ll only live to regret it
And, lastly, my advice:
Founding a start-up means aspiring to do things differently and shaking up the status quo requires courage. Take inspiration from the other challenger brands that have been brave enough to ignore the critics and stick to their vision. After all, let’s not forget people said Netflix or Airbnb would never amount to much!
If you have a world-changing idea then embrace it, it’s worth the risk because you’ll only regret it if you don’t try.
Daniel Seal is founder and CEO of unbound