Building your own start-up is a thrilling and terrifying process. This has always been the case for me on all four companies I started – Klevio, CubeSensors, DeckReport and Zemanta.
It has never been easy. Founders need a level of passion, resilience and commitment for the long haul that most people don’t have. Even though each experience of founding a new company was unique, there were a few common points and lessons I learned along the way.
Have common sense
Probably the most valuable lesson I can give to anyone starting out now is that one needs to have common sense. Be careful not to be lured into jargon and flashy business models that mean nothing without a context.
Remember: just because something is common sense doesn’t mean it’s commonly practised. In the end, it’s all about plain old pocket economy – you build value by selling your product for more than you bought it or built it for.
Take one step at a time
In the beginning, it’s easy to get overwhelmed by the amount of work and you can feel a bit lost of where to start. Having an idea isn’t enough to sustain a business.
The ideas for a product are often driven from two sources. The first is tech-driven – founders have some cool tech that is looking for a problem. The second is that there is a problem and the founders are looking for a possible solution. Both are valid starting points.
Spend the time you need developing your idea, but remember to focus on what is important. It’s too easy to spend a couple of weeks building one extra feature or a demo for a large corporate that yields very little value. Stay focused on what you want to achieve.
Set goals and focus on them
The best way to stay focused is to set clear goals and stick to them.
The first step is to write down what you want to achieve and be realistic when doing so. The secret here is to be as pragmatic as you can, setting specific KPIs and deadlines that should be met. Making objectives easier to meet will give you a boost of confidence and energy when you get them done, motivating you to keep moving forward.
Getting organised also comes a long way. Outlining everything you need to do to achieve your goal will help you track your progress and anticipate potential issues that might emerge along the way. You can do this using an app or even pen and paper.
As a founder, you have to be open to change. When something is not working, make adjustments. Go over your strategies to improve your results and do not be afraid of trying new approaches.
Micromanaging is the worst and it can kill a start-up. It slows the professional development of your employees and has a direct effect on morale. I much rather delegate tasks to my colleagues and see them fail 30 per cent of the time than making sure they execute everything as I would.
Trusting them with important work allows their creativity to flourish and you will end up with a much more smart and self-sufficient team that is motivated and driven. Your business can only gain from that. It is also important to learn how to take criticism from both employees and customers. Use it as an opportunity to improve your business and the way you develop your team culture.
Choose investors wisely
When it comes to choosing your investors these are the criteria you should consider: the amount of money that you’ll receive; the reputation of the investor; their experience; and their network of contacts.
So before deciding which way to go, founders need to consider what they need from the investor. If it’s just money, then they should probably choose the one who will give them more capital, but if they are looking to get a further round of investment after the first one then they need to find someone with a great background and reputation.
If they need an investor that can offer some advice, then they should go after an investor that has an extensive network of contacts and has a great experience.
When it’s time to spend the money, this is the golden rule: have your product as the main priority. As you grow you can set aside funds for other important parts of the business, such as marketing and promotions, but in the beginning, it doesn’t make much sense to promote a product that is still not quite ready yet.
At the end of the day, founders should stop being afraid to fail. Start-up failure is extremely common, with 90 per cent of startups failing within five years. Embracing failure is liberating and will teach you valuable lessons that you couldn’t learn anywhere else.
Aleš Špetič is co-founder and CEO of Klevio