I have backed over 125 companies over my Wall Street career and can humbly say reviewed over 5,000 business plans… From start up’s to very established companies seeking financing.
These are my golden nuggets I thought I’d share with every bright-eyed rookie CEO starting his entrepreneurial career. Hope you will make the most out of it.
1. Contrary to the stereotype, startups are a marathon, not a sprint.
The truth is, you are not going to be a billion dollar company or be acquired in the next 18 months. The process always takes longer than you think.
2. Determination is the biggest predictor of long-term success: Nobody had an easy road. You can succeed, but often it is a matter of how badly you want to.
3. Do not mistake activity for growth: Startup founders often don’t know what truly constitutes growth. Adding features to your product is not growth. Neither is getting a fancy office or going to a lot of events. Adding customers and building product counts as growth — that’s about it.
4. The key to growth is progress: Make progress each day and you win.
5. The winner between the alligator and the bear is determined by the terrain: Not everyone is good at everything. Negotiate on your territory and play up your strengths.
6. Make decisions quickly: This can be hard for first time founders, but remember that time is a cost. There are 24 hours in a day, and only about 10% of the information needed to make most decisions. Understand the magnitude of decisions you are required to make and prioritize accordingly. Train yourself to become decisive, so you can move forward with execution.
7. Do not focus too much on competition: Ignore the noise, because what others are doing is out of your control and they’re probably amateurs. Be aware of the players in the space you are in, but focus on getting to the top of your game.
8. There is no substitute for hard work: There’s no way around pushing code or making sales calls. The good news is that the tougher it is for you, the more difficult it is for others to replicate.
9. Opportunity is everywhere: There are countless opportunities for you to introduce ideas that will shape our future. Do NOT play victim (I’m too young, inexperienced, don’t have this or that) – just get building.
10. Be really picky with your hiring, and hire the absolute best people you possibly can. People are the most important component of almost every business, and attracting the best talent possible is going to make a huge difference. Quality and quantity of output is not linear. E.g. one rockstar programmer can produce much better code than two average or slightly below average programmers. Throwing more people at a problem doesn’t necessarily solve it faster, but it definitely costs more. So hire the best people. (And if you make a mistake, don’t be afraid to let them go.) Most importantly, hire entrepreneurs, not employees.
11. Start simply, prioritize, and maintain focus. Embrace the minimum viable product philosophy . As CEO you’re responsible for steering the vision of the company, including setting long-term goals for your eventual total world domination. But to get from A to Z you first have to get from A to B. As tempting as it might be, don’t try to do everything at once, because you’ll end up spreading yourself way too thin and not doing anything well.
12. Don’t give away equity too easily. When you’re just starting out and don’t have a lot of cash, it might seem like compensating people with equity is very cheap compared to having to pay them an actual salary, but in the long run equity is one of the most expensive ways to pay people. Also, you want to have enough in reserve so that as you grow and want to attract top talent you can give them a meaningful equity incentive. And whatever you do, make sure there are vesting schedules, even for co-founders. You don’t want someone walking away with 40% of the company 6 months in.
13. When fundraising, ask people for advice, not money. If you ask for money, you’ll end up getting advice, whereas if you ask for advice it’s a chance to engage people and get them excited about your company and product (which, if you’re doing it right, should lead to people wanting to invest).
14. Don’t build it around friends. The first rule of business and friendship is that you don’t mix business and friendship. It’s harder to give and take orders. Responsibilities are distributed disproportionately. Mistakes are neglected. And it’s only a matter of time before both the friendships and the business start taking the toll. But by working directly with people you don’t have personal relationships with, you’ll be ensuring that things are kept professional and responsible. Building the thing around friends is a recipe for disaster.
15. Burn slowly. Once again, and contrary to popular belief, startups tend to be a marathon, not a sprint. And the bitter truth is that you will most likely fail. The number reason for failure? Premature scaling. By limiting your expenditures to a bare minimum, you’ll not only be prolonging the life of your startup and its chances of success but also minimizing any losses in case it fails.
16. Build a great board and/or advisory board. Depending on who you raise money from, the investors who join your board may or may not have the operational experience of running/growing a company. Look for folks who have proven operational experience and have scaled a company and ask them to be an advisor. If they are amazing and you trust them, get them on your board. Ideally you want folks with experience in your industry, but even someone who has experience in a similar space could be valuable as well. There are some fundamentals of growing a company that are the same no matter what you are trying to do.
17. Communicate and be transparent with your team
They are in this with you too. By making sure everyone on your team is aware of everything going on in the company (both the good and bad), you are building a very important foundation of trust that is vital for any organization. I highly encourage having weekly all-hands meetings, as well as frequent 1-1s with everyone on your team until size makes it not feasible. Effective communication will keep everyone on the same page and quickly bubble up any issues that may easily be missed.
18. Raise money. Or make it with revenues. Up to you to determine which is ‘better’ or more probable, and then execute. Or, as a VC partner friend told me, “go on, take the money and run.” If you have early supporters or customers, do it up. Get someone to pay you to test product/market fit. But never forget the hierarchy: product, THEN market. If product, then market, else fail. Try a mockup, no market? Sad face. Do something else. Rinse. Repeat.
19. Get used to feeling not good enough. It’ll happen. As will screw-ups that feel like you’re starring in the Titanic sequel, and your character is playing the fiddle while the ‘successful’ founders are off on the lifeboats. Get over it quickly. Or, better yet, use it.
20. Be prepared to apologize often, and immediately offer what you’re doing to fix an issue. This is your job. Fixing things. Fixing product, fixing relationships, fixing money, fixing sales, fixing time, fixing yourself, fixing your team. If you’re the CEO, learn to ‘contain’ your emotional realities so your emotive output doesn’t bleed all over everyone in a 10 mile vicinity.
Share your thoughts….
By :� Ziad K Abdelnour
Ziad is also the author of the best selling book� Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics (Wiley, 2011),
Mr. Ziad Abdelnour continues to be featured in hundreds of media channels and publications every year and is widely seen as one of the top business leaders by millions around the world.
He was also featured as one of the� 500 Most Influential CEOs in the World.