Practical Lessons Learnt As An Entrepreneur

It has been more than two years I quit my job and started my startup journey. One year back I had written this post – Lessons Learnt As An Entrepreneur For One Year. Since then I have learnt many more lessons and I thought it would be good to revisit and write down all the lessons. So here they go –

  1. Business Value Proposition: Your business value proposition messaging has to be right – and it takes hell lot of time and experiments to get it right. Hint: “The customer rarely buys what the company thinks it sells him” – Peter Drucker
  2. Learning from mistakes: There are some things you cannot learn from other’s mistakes, you will have to make your own.
  3. General advice: General advice are best to be avoided. Whats works for one startups may not work for the other. So general stuff like “Raise money early” or “build a viral product” does not hold true in all cases.
  4. Get an independent board director: Even if you are not funded, you should bring the discipline to report to the board. Bringing someone else on board (apart from the founders) brings this discipline.
  5. Create a focus group of external people: These are some people whom you keep updated about your company. They review the progress and bring in external perspective to the company.
  6. Business Metrics: Work on defining the key business metrics and have a business dashboard for tracking them.  Each business function should have a set of metrics – customer (growth, satisfaction, churn, virality), revenue, product, costs etc
  7. Show up: An opportunity knocking is useful only if you are at the door. Always be looking for opportunities – to partner, to sell, to hire, to whatever.
  8. And follow-up: Overheard on twitter: showing up is job done 50% and following up is remaining 50%.
  9. Always be closing: Pick up the phone. Get out of the building. Get help. Make that sale happen. Keep closing. Get inspiration.
  10. Sharing your ideas: Talk to people around. Dont hesitate to share your idea with others. Nobody gives $*%# about YOUR idea, everyone has one.
  11. Leverage: Physics 101 –  leverage your resources – contacts, infrastructure, talent, anything.
  12. Do not assume anything: Assumptions go wrong most of the time. Hypothesise and test the riskiest ones first.
  13. Experiments vs Research reports: Experimenting on smaller (or inaccurate) sample size is better than macro numbers published in research reports.
  14. Be crazy about customer analytics: Because the original idea that you think is worthless and only by understanding your customers, you will be able to pivot to the right idea.
  15. Budget time to pay technical debt: With fast experimentation and hypothesis testing, it is okay to go forth with makeshift technology backend. Treat this like a technical debt that you have to pay later.
  16. Working hard does not matter: Building the right product is better than working hard on the wrong product.
  17. Tracking:  Track the milestones weekly, monthly and quarterly. Time runs so fast that you wont realize what you did.
  18. Keep probing customers: What would you do if you could no longer use this product? What was the primary benefit you received by using this product? Would you recommend this product to someone else? Why?
  19. Be open: Be open to change your product based on feedback from customers. Things you think will work, will not always work. Be very open to what customer means. Listen to customers, don’t just hear them. Dont just stick hard to the early business plan.
  20. MVP is easier said that done: It is not just coming with reduced set of feature sets. MVP means testing your core hypotheses most cheaply.
  21. Start with MVM: MVM is minimum viable market. Become a big fish in a smaller pond and increase the scope.
  22. Product usability: Remove the resistance to product usage. Easier the product to use, lesser motivation is required behind using it (Check my Notes on Behaviour Design)
  23. Dont repeat yourself (DRY):  Leverage existing apps / infrastructure / frameworks / web services and tools.
  24. Who is the CEO?: Whether you are a single founder or multiple cofounders, you need one CEO – the one where buck stops.
  25. Vesting for founders: Always have a vesting clause for founders. Standard is to have monthly vesting with 100% vesting in 4 years.
  26. It is not about working on your startup, it is about working on yourself
  27. Be honest with yourself: It’s not about being honest in literal sense but about bringing your suppressed emotions or doubts in front of you. It’s difficult and you might need someone’s help to bring them out.
  28. Learn public speaking: Comes handy when you need to present your ideas to other people.
  29. Write a Blog: Writing does bring out some suppressed idea and also consolidate and channelize your thoughts.
  30. Dirty your hands: At least in the initial days you will have to dirty your hands with things you are not comfortable (unless you are obscenely funded)
  31. Read books: Read as many books you can get hold on. I wish I had read these books before starting up – Lean startup by Eric Ries, Customer Development by Steve Blank, Founders Dilemma by Noam Wasserman. Dont expect to learn and follow all that is written in these books. But it will help in building new perspective.
  32. Cash flow: Always keep 1 year worth of cash in your account. Assume zero revenue when you calculate this one year buffer.
  33. Funding Philosophy: Decide on if your company really needs VC money. Only few types of companies need VC money.
  34. What is the exit: Get acquired / long-term IPO / I don’t care about exit
  35. Eat lunch with your team: Spend some quality non-work related time.
  36. Office environment: Have an inspiring atmosphere in your office. Use motivational posters. Buy a TT table.
  37. What are core values of your organization?: Core values define your culture.
  38. Core values: Core values should be clear to the team and everybody who joins. These are non-negotiable business principles.
  39. Customer service: All employees should take turn for customer service. The empathy with your customer will bring a lot of ideas.
  40. Customer service: Good customer support is the best marketing
  41. Distribution: What is your distribution strategy? A good product means nothing without good distribution. Check Peter Thiel’s lecture on distribution.
  42. What are your drivers of growth? Paid, Organic, Viral, PR, Push based Sales? Do you have model for your growth? Check out this great article on how to model viral growth.
  43. Try a lot of things: Try many things but treat everything like an experiment. Use the output of an experiment as validated learning for next experiment.
  44. And be ready to fail: Treat failure just as an outcome of an experiment. However, don’t make failure as an excuse to fail deliberately.

Looking forward to learning more in coming years.

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8 Reasons Why You Should Not Become An Entrepreneur And 1 Reason Why You Should

There are hundreds of articles written and many more lectures given that glamorize entrepreneurship. Then there are examples of great entrepreneurs and how they changed the world. It all feels just like being part of the movie, you being the hero. But then few days (or months or years depending on your endurance) down the line, you start facing the truth. Alas, none of those inspiring_authors_and_speakers told you about these. And even if some good ones warned you, there are some things you learn only after experiencing. Here are some reasons why you should not become an entrepreneur –

1. You will have to ask help from others many more number of times than you can help others. Very painful process specially if you are not used to ask for help.

2. You might stop enjoying the luxuries of life and good food in expensive restaurants. These will become objects with a price tag on them with an opportunity cost.

3. There is a large probability that you will not succeed and not become one of those heroes who inspired you to take entrepreneurship. This apply even if you think you are better than 90% of other startups [although you might not be]. You might just be unlucky.

4. Those precious moments that you used to enjoy – reading a book, watching a movie, writing articles – gets limited.

5. There is nothing like work-life balance. You life is your work. And your family needs to be understanding enough to understand this.

6. It will take twice (or thrice) the amount of time you are budgeting to make it click (if it clicks – see point number 3)

7. Unless you are very rich, your living standards will go down compared to your friends – who will be buying apartments, going on vacations abroad and throwing parties in expensive restaurants.

8. You might have to learn the hard way. And you might have to learn lot many things. Even things that you don’t like. And sometimes learning those things can take more time than you expect (point no. 6)

However, there are other reasons that nullify all these points and make you go through the tough journey. And as I mentioned earlier there are some things you learn only when you do them. It’s totally worth doing it – just for the amount of things you learn and of course there are slight chances of success too. This is what Charlie Munger says –

Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserves

5 Inspiring Movies That Teach Entrepreneurship

As I keep repeating, entrepreneurs are irrational. And they need to be so. The biased optimism keeps the confidence high and helps them keep going. However, there are times when pessimism runs high (that sinking feeling). Its time to stop working and instead pick up some movies. And start watching non-stop –

1. The Shawshank Redemption

shawshank redemption“Hope is a good thing, maybe the best of things, and no good thing ever dies.” Andy Dufresne kept his hope alive and kept on digging his way out of the prison. And how many days did it take him? Getting rejected by your customers and VCs? Been in business for so long but not getting rid of the red ink? Tried 50 things but nothing working out? There is no other way but to continue trying. Two very important lessons learnt from this movie – hope and perseverance

2. The Lord of the Rings – The Trilogy

The Lord of the RingsThis movie reminds that the journey is not easy. And the odds against are very high. Also there is no other option but to succeed. But if you and your team are firm and determined, you provide a solid leadership to your team, and team members trust each other blindly, it is possible to pass the test. There are innumerable lessons we can learn from this movie (and the book).

3. Dead Poets Society

dead_poets_societyStudy. Go to work. Climb corporate ladder. Keep getting pay hikes. Live easy life working 9-to-5.

That is conventional path. Entrepreneurs break out of this path somewhere. The words from O Captain my Captain –

“They’re not that different from you, are they? Same haircuts. Full of hormones, just like you. Invincible, just like you feel. The world is their oyster. They believe they’re destined for great things, just like many of you, their eyes are full of hope, just like you. Did they wait until it was too late to make from their lives even one iota of what they were capable? Because, you see gentlemen, these boys are now fertilizing daffodils. But if you listen real close, you can hear them whisper their legacy to you. Go on, lean in. Listen, you hear it? – – Carpe – – hear it? – – Carpe, carpe diem, seize the day boys, make your lives extraordinary.”

4. Ice Age

Ice Age“That’s what you do in a herd: you look out for each other.” That even people like Diego change their hearts when they see trust. That all members in a team are different but are tied together with the same objective. And that you should have fun in your journey because that is where you spend most of your time.

 

5. Lagaan

lagaanA guy challenges winners to a game he has never played. He builds a team and brings out stars from ordinary men. He creates a solid plan and works with the team to execute it. All for a purpose. He was an entrepreneur. He was Bhuvan who defeated the opposite team at their own game.