All businesses begin with an idea but require so much more than that in order to become successful. The person behind the company, their purpose, vision and passion, are key to directing the company on the start-up journey towards ultimate success or absolute failure.
One of the key questions we ask entrepreneurs at the beginning of their journey is ‘why you?’. Although trivial, most are caught unprepared and are forced into deeper thinking. Start-up founders inevitably go at a faster pace as they attempt to kick off their business and, in doing so, fail to reflect about the deeper implications. Most people like the idea of starting their own business but pausing to reflect upon who you are, your beliefs, values and ultimate purpose is something many entrepreneurs fail to do. Having these ideas emerge and exploring the greater implications is vital when launching a business.
Defining the business purpose
It’s important to understand if the founder has seriously thought about the broader implications the business journey will have on their personal life and how the their company will relate to the kind of life they wish to live. And, more importantly, how will it play to their strengths or weaknesses.
Over the last couple of years we’ve worked with many interesting start-ups and have presented them all with the same question: ‘Do you really want this?’. We consider it’s important to make them aware that if they are doing something challenging it’s going to take a long time and a lot of effort to make it a successful reality. When interviewing applicants for our programme, a very significant number of times we find that founders have not really considered the impact that being an entrepreneur is going to have on their life and have not clarified their personal expectations. Very often this is the reason we decide not to work with them.
Founding a business implies setting its foundations, which must be congruent with the personality, choices and decisions of the individual behind it. You have the power to pick the kind of business culture you want and to hire people who fit in with your way of thinking and doing things. Our philosophy at Activate Capital is ‘consciously choosing to build the kind of business that you want is part of the fun and also part of the success’. Questioning why you’re pursuing a specific idea helps you make better decisions and choose the right people to be a part of the journey with you.
One of the most important crossroads a founder will face, beyond deciding what product they want to have, is hiring the first member of their team. A wrong person is as likely to sink the business as any other internal or external factor. The whole team must understand the journey and want to be on it with you, as well as sharing your passion and motivation.
One of the scenarios we like to present start-ups with is answering to the question ‘why would you fire someone?’. This usually helps understand which are the core values of the founder and, in the future, of their company. Figuring out which are the lines that must not be crossed is key to finding the qualities that we look for in the first hires.
Leading the business through vision and passion
The fast pace of the start-up world means certain in-depth thinking is inevitably left behind. The reasons behind why a founder is doing things are fundamental to understanding the decisions they will make later on.
Making quick decisions is very much the definition of being a start-up founder, you need to be guided by a clear and sharp vision of what you are and who you want to be. Having a vague idea of what you do is useful for investor pitches but can prove useless when confronted with tough decisions.
All the founders we have worked with through our Digital Start-up Studio have had a personal passion or motivation behind their idea. More importantly, nearly every business has an element of wanting to change the world for the better, of having an impact on the people around you and the people you care about. Fundamentally, being an entrepreneur implies driving yourself and others towards a goal, seeing a problem and using all the available resources at hand to solve it.
One of the key characteristics we look for in a business idea is that it tries to provide a whole solution to a problem. Ultimately, being aware that there is a problem to solve, creating a product that can solve it and finding the way of connecting the product with the people being faced with that specific issue. Although some founders’ visions aren’t always clearly defined we find that there is always a need to address a social issue. Those entrepreneurs with a whole vision who are also in touch in some way, either personally or professionally, with the problem have more chances of succeeding.
Business narrative and strategy
Once the purpose, vision and passion have been explored the next step is to build a narrative in order to tell a story that can be inspiring and give you a clear view of where you want to be as a business in the future. However, this has to be combined with a growth mindset.
Founders must understand that starting a business is extremely challenging, and if we look at the statistics it’s very likely that they will fail. Narrative alone doesn’t help understand situations when the wrong decisions have been made for the business, that’s when critical thinking and questions need to be introduced in the form of a hypothesis. Ultimately, the business strategy will be a combination of the storytelling component that provides the direction and a set of hypotheses that will allow to verify the progress day by day.
This article was supplied by Activate Capital.
Further reading on starting a business
Nominations are now open for the British Small Business Awards 2017, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today using the hashtag #BSBAwards. Good luck!