Successful entrepreneurs are constantly asked a very simple question by people who want to make their mark in the business world:
What’s your secret?
It’s a lot easier to get a divorce than to get out of a business partnership
Trouble is, you could ask 100 entrepreneurs that age-old question and wind up with 100 different answers. I know because I’ve been asked the question dozens of times — and have also been on the other end, prodding other successful entrepreneurs to share their secrets.
So, what’s the right answer? There isn’t one. Every entrepreneur succeeds or fails for a very wide variety of reasons. The variables at play in the development and growth—or fizzling—of a business are far too numerous to list here.
What I can tell you is that from my experience, there are three issues that need careful managing if a start-up is going to realize its true potential (and keep its founder out of bankruptcy!) :
I’ve written about this topic before in this space, but I can’t reiterate enough times just how important it is to choose the right people to work with in each new venture you embark on. I’m very lucky that I’ve been able to work with the same team for years and in multiple ventures, but the reason we’ve found success is because we complement each other’s skillsets. I don’t need clones of myself, nor do I need yes-people who will agree with my every decision.
I need people who have skills that I don’t, and who are willing to share their opinion to push me and make the company better
I need people who have skills that I don’t, and who are willing to share their opinion to push me and make the company better. And as I always say, it’s crucial to work with people you can get along with.
It sounds like a secondary concern when millions of dollars are on the table in a new venture, but believe me, the start-up environment is very much like a marriage. It’s based on a huge amount of mutual respect and compromise. And as I always say, it’s a lot easier to get a divorce than to get out of a business partnership.
This is a big one and it took us more than a year of tinkering and second-guessing before we came up with the answer. Ultimately, it was feedback from the market that pointed us in the right direction. In fact, the feedback we received highlighted value propositions and a competitive advantage that we hadn’t even considered.
Such is life in a start-up: product positioning changes on the fly, market research is one of your lifelines and flexibility is what can turn successful companies into industry leaders.
It’s been said a thousand times and written about in countless business books, but the message never gets old. Nothing will destroy your start-up faster or more decisively than a major cash flow crunch. If watching the books isn’t your strength, then ensure that your team includes a CFO or senior-level management member who has that acumen.
Avoiding frivolous or ill-timed expenditures is one way to help mitigate just such a financial crisis, but ultimately, it comes down to watching your monthly burn rate and ensuring product development proceeds on time and as planned. Nothing helps maintain strong cash flow more than strong sales.
Until next time,
Steven Lamb, CEO
NEVEX Virtual Technologies