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Start-up Advice

6 Common Mistakes First-Time Business Owners Should Avoid

Leave your ego at the door, plan precisely and shoot for alignment, not consensus.

Malcolm Friedberg

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business-mistakes

The famous playwright Oscar Wilde summed up the essence of experience when he stated that, “Experience is simply the name we give our mistakes.” And it’s a given that anyone starting and running a business is going to make mistakes.

New businesses require skills in a wide variety of disciplines: From accounting and strategy, to marketing and legal; from human resources to product/service design. And as businesses grow in people and resources, company founders gain the ability to delegate some of these roles.

But, in the beginning, most CEOs are involved in virtually every aspect of their business.

If you’re one of them, and you have expertise in, say, one or two areas, the broad range of questions you must answer – with little or no prior experience to draw on – burdens those first few years of running a business with challenges. It’s no surprise, then, that 80 percent of all business fail in the first 18 months.

We-recommend-tickWe recommend: The 5 Mistakes Standing Between You and Your First Million

For any new entrepreneur competing against these odds, nothing is more critical than shortening the learning curve and getting your business on solid financial footing.

Here are six common mistakes first-time business owners should avoid to improve their chances of success:

1. Leave your ego at the door

Success in business is often nothing more than making a series of good decisions. The catch is that consistently selecting the best choice isn’t easy to do. And despite common perception, one of the biggest roadblocks to good results isn’t a lack of information or skill, it’s a leader’s inability to put aside his or her ego.

In short, outstanding leaders are willing to be wrong. They develop the ability to select the best idea, regardless of the source.

If you want to be successful in starting a business, invite input and keep an open mind. If you can do that, you’re much more likely to do what’s right for your business.

2. Don’t treat everyone the same

Learning to manage people is a skill that takes time to acquire; it’s not something you’re born with. One of the common misconceptions about management is that leaders should have a particular style and require others to conform to it. Nothing could be further from the truth.

Regardless of your business, your employees are your most important asset. As a leader, your job is to get the most out of them, and the best way to do that is to understand them as individuals. So, take time to identify how to motivate each one and become aware of how he or she responds to your input.

If you can adapt your style to align with what works best for each individual, you’ll dramatically impact his or her performance.

3. Don’t hire too quickly

Big companies have the luxury of significant resources, allowing them to invest in the hiring process. Typically, they put candidates through multiple hiring interviews, as many sometimes as eight or nine. Why spend so much time with a simple hire?

These companies understand that the cost of hiring the wrong person is a significant waste of money and time. Small companies, in contrast, commonly limit interviews to the candidate’s prospective manager, and maybe the CEO. Don’t fall into that trap.

When you’re small, every individual can have a disproportionate impact on your business.

How these people fit in with the team, the alignment between their skills and the job’s requirements and whether they buy into the company vision are all critical to creating a dynamic and powerful team. So, vet your candidates thoroughly, and if you can hire them as consultants for a few months to “try before you buy,” that’s even better.

We-recommend-tickWe recommend: Derek Thomas from Letsema Holdings on Learning from your Mistakes

4. Admit your weaknesses

male-entrepreneur-mistakes

Even the most talented people have strengths and weaknesses. One of the easiest mistakes a new CEO can make is to ignore those shortcomings.

Maybe you were good at math, so you figure you can handle your company’s accounting. Or, you took a business-law class while getting your MBA and you think you’re somehow qualified to review simple legal agreements.

The best executives know what they do well and what they don’t. And their key hires and valued consultants provide valuable input in areas in which they lack experience. Don’t try to be a superhero.

5. Spend time planning

Most new businesses start because the founder or team has strong expertise in a specific field. That’s a great advantage because it cuts your learning time dramatically. But making the leap from the role of practitioner or product engineer to running the entire company is significant. So, take time to plan.

In the immortal words of Benjamin Franklin, “If you fail to plan, you are planning to fail.”

6. Consider that alignment, not consensus, is the goal

Successful teams exhibit numerous behaviours: Shared vision, passion for the work and honest communication, to a name a few. But many small teams incorrectly assume that everyone’s being in agreement is always optimal. What’s more, those teams will compromise the best solutions in order to gain consensus.

We-recommend-tickWe recommend: Are You Making These 4 Leadership Mistakes?

That may be understandable; but it’s the wrong way to run a company. Encouraging robust debate and thoroughly vetting competing viewpoints is the process that usually yields the optimal result.

As long as detractors are on board and the team aligns around the plan or vision, differences of opinion, not consensus, should be the goal.

This article was originally posted here on Entrepreneur.com.

Malcolm Friedberg is the chief marketing officer at CleverTap. He brings nearly 20 years of industry experience to his position, overseeing marketing and customer acquisition operations for the venture-funded mobile messaging company. Before delving into the world of marketing, Friedberg held C-level positions at several prestigious companies including Lead Targets, Euphonix, No Red Tape Mortgage and eVox Productions.

Start-up Advice

Start-ups: Creating A High Tech/High Touch Environment

Here are some practical tips for creating a ‘high tech/high touch environment’.

Dirk Coetsee

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In this fast-paced tech orientated world things are changing at a frightening yet exciting rate. It is so easy and so quick to create a tech start-up from anywhere in the world and office space as a requirement to start up has become obsolete, your garage will do. Yet because it is so easy and so cost effective for so many to create a start-up it is so hard to stand out amongst this entanglement of serial tech entrepreneurs and innovative start-ups.

The millennial generations’ general paradigm of thinking, which is more open –minded and entrepreneurial is slowly but surely breaking through the barriers of traditional business operations, mechanisms and methods, imbalances are created, however, when tech is the sole focus and people are forgotten in the process. As is so evident throughout history eventually by some means balance is sought in order to create equilibrium.

This writing serves as advice to all tech start-ups to seek balance from the onset in creating a “high tech/high touch” environment. A “High tech/high touch” environment can be defined as a balanced approach where both tech solutions, and of equal importance, team empowerment and inspiring leadership form a potent combination of enduring success.

Related: What Is Limiting Your Entrepreneurial Mindset

Technology by itself cannot solve everything but technology applied in unison with a strong people centred approach can be a powerful catalyst towards solving at least some of this worlds’ major challenges.

Although many factors such as for example fiscal discipline and other management controls play a vital role in your start-ups’ success do not forget to create an inspiring environment for your team within which they feel safe and united in purpose. Key to business growth is the individual growth of all team members and no stone should be left unturned in moving from a toxic and/or culture of complacency to a learning and growth culture.

Co-create an inspiring vision for your team and get their full buy-in. If you cannot do that you might have to put in more effort when it comes to your own leadership skills and/or “free up the future” of complacent and lethargic employees whom simply do not want to work hard to collectively actualise your business’ co-created vision.

Although very hard, it is worth the effort to only hire people that are passionate about and have integrity in what they do. If a sustainable and successful “high tech” environment is the aim ensure that it is underpinned by very smart hiring and training practises further enhanced by a good dose of inspirational servant leadership.

Generally speaking, everyone wants to feel part of something bigger, exciting, and inspiring. It is your responsibility as founder and leader to create a motivating and energetic business climate wherein every team member is empowered to execute at a rapid pace and with a “zero defect” mind-set. A team environment wherein everyone sincerely wants to be great at what they do and are energised by ‘small wins’ on the path to actualising the grand vision of the company is far more inspiring and sustainable as opposed to an environment where ‘subordinates’ are only managed and basically forced to do their jobs.

Related: The Anatomy Of Peak Performance

Sincerely care for your people yet maintain balance,as caring does not mean you treat them like children. Caring means taking great interest in both their career and personal development, and to be tough enough to eventually let those go that does not constructively contribute to a positive growth culture.

Here are some practical tips for creating a ‘high tech/high touch environment’:

  • Have a balanced approach in hiring. Hire for technical and people skills and ensure that there is a clear development and training plan for all team members that is reasonable and attainable.
  • Find your purpose as an entrepreneur and with great enthusiasm model that purpose at every juncture as to inspire others to find their purpose.
  • As ‘culture eats strategy for breakfast’ guard the positive and growth culture that you model as a leader with all your energy and remove anything and anyone from the aforesaid culture that is counter-productive to your business performance.
  • Sincerely care about and show that you care about each individual team members’ personal and career development.
  • Regularly put having fun and inspiration high on meeting agendas as we generally take ourselves too seriously.

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Start-up Advice

Why You Shouldn’t Quit Your Job To Start A Business

Rather than taking the plunge, consider dipping your toe in first

Yannick van den Bos

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As the world becomes more digitized and access to the internet is something we all enjoy, more and more of us want to quit our day jobs to start our own businesses. The word “entrepreneur” is thrown around a lot these days, with many people seeing it as a means to enjoy a whole new level of professional, financial and personal freedom.

It is not difficult to see why, either. Having the ability do what you love, when you want and on your own terms is certainly attractive, especially when you could potentially build it into a sizeable income. Don’t be too quick, however, to abandon your day job to pursue your entrepreneurial dreams. Many of today’s best-known entrepreneurs consider doing so to be reckless and unnecessary.

“Entrepreneurs” are rarely the modern-day maverick who suddenly decide one day to quit their jobs and pursue their dreams. After all, quitting a job to pursue business is risky, especially without having a safety net in place. In fact, the majority of people who decide to start an online business will fail within the first year.

Further, there is far more involved in transitioning from being an employee of others to becoming your own boss than you may realise. Changing your mind-set from that of an employee to an entrepreneur is a major key to successfully bridging that divide.

Related: 3 Key Law Areas To Know When You Launch That Start-up

If you operate with the mind-set of an employee — a person who is used to working for others and being paid by them – you will almost certainly fail. When you work for others, you do what they tell you to do. As an entrepreneur, you decide what the next best step is, and you execute that step in your day-to-day actions. The latter requires both a significant mind-set shift and major discipline.

At the same time, in our rapidly changing economy, you would almost be doing yourself a disservice not to start a business. But, how can you do so while working full-time?

Take the “hybrid path” to entrepreneurship

If you’re willing to sacrifice much of your free time now to reap the rewards later, you have what it takes to become an entrepreneur. Often called the “hybrid path” to entrepreneurship, many successful entrepreneurs started their business while still being employed full-time.

Research has shown that those who kept their day jobs while starting their businesses were 33 percent more likely to be successful than their risk-taking counterparts.

Leveraging your full-time job in the early days of your business, allows you to build on firmer financial ground, increasing the likelihood that your enterprise will last and thrive through the initial stages.

Related: What You Need To Know About The Lean Start-up Model

In addition, being entrepreneurial within your existing job allows you to build the necessary skills and traits you will need as you transition from your employee to entrepreneurial role.

Being impatient and chasing short-term gratification by quitting your job and going all-in, is risky and often ill-advised. Building slowly and steadily for the long-term is often the wisest course of action.

Today, it’s more important than ever to start a business

Still, with all that being said, the time couldn’t be more right to start your own business and become self-sufficient. Unlike in years past, having a job no longer guarantees financial security.

Rapid developments in technology and the ever-increasing digitization of our world puts creative and business-building tools in the hands of everyone. Whether you have skills to market or a great idea for a product, you too could be the next Bill Gates or Elon Musk.

Even if you set your sights a little lower, consider what skills you have that others would gladly pay you for. Figure out what you can charge per client, and how many clients you would need to completely replace your income. Unless you’re already earning seven figures, you’ll soon realise that the numbers are not that daunting.

Related: 6 Resources For Start-ups Looking For Funding

I was able to build my first business through affiliate marketing With affiliate marketing, you don’t have to create your own product. Rather, you earn a commission by promoting other people’s products.

Though the thought of running your own business, spending your days working on something you’re passionate about, and choosing how and where you spend your time is enticing, realise there are days if not years of sleepless nights, cash flow shortfalls and mind-set hurdles between you and your destination.

By building your business while working full- or part-time, you will have the cash flow in the short term to get your enterprise off the ground. Once your business begins bringing in an income which rivals that of your day job, then and only then should you consider whether to pursue it full-time.

Building a business is not for the faint of heart. But, if you’re willing to work crazy hours, delay gratification and learn from your failures, you can build both a business and life like few others. After all, “Life is too short to be living somebody else’s dream.”

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

How To Survive 150 Straight Rejections

And come away smarter, tougher, and more successful.

Joe Keohane

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Sam Sisakhti had an idea for an e-commerce company called UsTrendy. It would sell clothing made by talented, unknown fashion designers from around the world — acting as a marketplace for great styles that could not be found anywhere else.

It didn’t matter that he had no experience in fashion or building a brand, or that he had just quit his first job out of college after only four days. What mattered was that he believed that this idea could be huge. And to get it there, he figured, he needed to raise money. A lot of money.

Initially, it seemed easy. On their very first pitch, Sam and his associate landed a $500 000 offer. “Crazy,” he says. But there was a catch: The VC required them to move to Silicon Valley to receive the money. Sam’s right-hand man didn’t want to move. Sam decided he’d just do it himself.

Related: Beauty Of Failure: The Art Of Embracing Rejection

So he moved, failing to understand that investors buy into a team, not just an idea. He promptly lost the funding. No matter, he thought. He’d just get more money

Thus began Sam’s real journey. He started pitching to anyone and everyone, regard-less of their field of expertise. It went badly. By his count, he was rejected around 150 times in a row over 18 months. Worse, he kept revising his business plan based on their feedback, reducing it to an ever-changing muddle that made it even harder to sell.

This beating culminated with a meeting with a VC who, humiliatingly, was a family friend. “He threw my business plan in the trash, right in front of me,” Sam says. “And I just remember thinking, Man, what am I doing?”

Entrepreneurs hear a lot of nos. In fact, it’s probably the word they hear more than any other, especially starting out. It can come in torrents. It can get crushing. The key, as Sisakhti learnt, is twofold: To survive it, and to learn from it.

And here’s what Sam realised: He needed to stop pitching. Not every business needs funding, nor is every business ready for funding.

“I was spending all my time pitching, and I wasn’t spending any time building the business,” he says. So he scaled back. “I went from wanting to create the next Amazon to just saying I wanted to grow a business organically,” he recalls. “I just wanted to pay for a modest, middle-class lifestyle.”

Freed from the ceaseless need to fundraise, Sam drew on his natural creativity and resourcefulness. He’d always thought he needed funding to help recruit young designers. But now he started to get creative. He recruited them right out of design school — using student brand ambassadors to get around rules about recruiting on campus. Soon he had a thousand. Then he linked up with London Fashion Week to do a show for emerging designers. He pitched a design competition, and that got him 3 000 more, along with a bunch of press coverage.

Related: Motivation-Boosting Tips From 8 Of The Greatest Entrepreneurs

Now he had inventory,  revenue, and exposure. He was feeling good. One night, over dinner, Sam sent a magazine piece to mega-investor Tim Draper, who had rejected him twice already. Fifteen minutes later, Draper responded, saying he wanted to talk. Eureka.

“I think the reason he was interested was that I’d shown I was going to do this with or without the money,” Sam says

He even got a little cocky. “I told him that it’s just a matter of time: ‘If I have your money, I’ll get there faster, but if I don’t, I’ll still get there. And then the valuation’s just gonna be that much higher to get in.’”

Draper invested $1 million in a first round, then came back for a second round. In total, UsTrendy has raised more millions since, grown by 300% annually in its first few years, and worked with more than 20 000 designers from more than 100 countries. It has attracted more than two million followers on social media and other digital media channels.

Now when Sam reflects on all those no’s, he thinks not of rejection — but of how it changed him. How it showed him the way. “It was awesome,” he says.

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