What it takes to be a successful entrepreneur

As you may know, in addition to my brand management and marketing consulting practice, I have also been a coach to dozens of startups over the past five years. In working with business founders, I have determined that these are the most important contributors to success:

• A great idea that adds value to a specific set of customers
• A passion for transforming that idea into a successful business
• Ample "customer discovery" to validate the viability of your idea
• A belief that you can accomplish anything
• A high tolerance for calculated risk - that does not mean that you are motivated by risk or seek it out, only that you are willing to work with risk in smart ways
• The ability to repeatedly overcome adversity - resilience and perseverance (the ability to repeatedly "pivot")
• Learning from failure
• Adaptability
• A strong work ethic
• Decisiveness and a penchant for action
• Ability to thrive in an unstructured environment - there are no directions, there are no hard and fast rules
• Some level of smarts - you do not need to be a genius
• Emotional intelligence
• Salesmanship - the ability to tell a compelling story about your new product or service
• A willingness to network with others - you will fail if you try to go it alone
• No fear of asking for help
• Along with this, an ability to seek out and gather the needed resources to succeed
• Knowing when to switch from an emphasis on product/service development to an emphasis on business development, sales and marketing - this does not mean halting work on product/service development
• Establishing a continuous loop of customer feedback and product/service enhancements
• It is an added benefit if you have some financial management skills, the most important of which is cash flow management
• It is also an added benefit, but not necessary for success (you can hire this expertise), to be a savvy marketer, understanding the target customer so well that you can think through the best messages and marketing strategies for them
• Most successful entrepreneurs also have an ability to delay gratification - many are willing to work tirelessly with little or no pay for a period of time with the vision of one day cashing out for millions of dollars (or at least managing a very successful business well into the future)

The most important of all of these skills is a "can do" entrepreneurial mindset. As an investor in startups, I always focus on the entrepreneur and his or her mindset/skills over the idea. I would rather back an outstanding entrepreneur with a mediocre idea than a person with questionable entrepreneurial tendencies and an outstanding idea.

Having said all of this, these are some of the common problems that entrepreneurs encounter:

• Not offering the right “value proposition,” that is, something people really want
• Not doing enough “customer discovery,” that is, understanding customer needs and desires
• Founder is too focused on product development vs. business development, especially when it is time to switch primary focus from the former to the latter
• Lots of uncertainty and risk and need to change course or “pivot”
• Access to funding/$
• Hiring the right employees and not being afraid of firing those who don’t work out
• “Scaling”/growing the business - investment in inventories (and marketing efforts) before sales occur is a particularly common problem in cash flow management
• Knowing when you need to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded your talents and abilities.

The good news is that entrepreneurship adds value to the world in these ways. It is often enough motivation for an entrepreneur to "push through" when the times get rough.

• Introduces new products and services
• Creates jobs and economic growth
• Empowers entrepreneurs to pursue their passions
• Creates wealth for the entrepreneur and his or her investors and employees
• Can address social issues
• Can advance technology, which can be used in other ways

If you have thought about becoming an entrepreneur, I hope this blog post has helped you think though what it takes to be a successful entrepreneur.
 

Startup Insights

Many of you may know that in addition to my brand strategy consulting I am a new venture coach. I have been coaching pre-seed to series A startups for over three years now, during which I have coached two dozen companies with a very high success rate. Many of these companies have reached the commercialization stage in which they have achieved rapidly growing profitable sales. Here are some of my thoughts from working with startups. 

Entrepreneurship adds value to the world in these ways:

• Introduces new products and services

• Creates jobs and economic growth

• Empowers entrepreneurs to pursue their passions

• Creates wealth for the entrepreneur and his or her investors and employees

• Can address social issues

• Can advance technology, which can be used in other ways

These are the most common problems entrepreneurs encounter:

•  Not offering the right “unique value proposition,” that is, something that people really want that is different in meaningful ways from what is already available

•  Not doing enough “customer discovery,” that is, understanding customer needs and desires

•  Founder is too focused on product development vs. business development, especially when it is time to switch from one to the other

•  Lots of uncertainty and risk and need to change course or “pivot”

•  Access to funding/$

•  Hiring the right employees and not being afraid of firing those who don’t work out

•  “Scaling”/growing the business, especially anticipating increased cash flow and customer service demands

•  Knowing when to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded the founder's talents and abilities and being willing to give up personal control

26 of the Most Common Startup Challenges

 

Following yesterday's blog post, today I list the 26 most common startup challenges. 

1. Having the right idea – building something someone wants
2. Understanding your business’ unique value proposition
• Confirming customer need / marketplace gap
3. Listening to and acting on customer feedback
4. Thinking too small
5. Taking the first leap – knowing where to start
6. Assuming you need a lot of money right away
7. Money / fundraising
8. Cash flow management
9. Chasing investors over customers
10. Trying to do it alone
11. Finding / hiring the right people
12. The founders
13. Not researching competitors
14. Competitors’ actions / competitive responses
15. Planning & focus
16. Scaling up
17. Unrealistic expectations
18. Remaining within one's comfort zone
19. Self-doubt and fear of failure
20. Inability or unwillingness to pivot when necessary
21. Failing to ask for help
22. Lack of mentorship
23. Time management
24. Customer acquisition / sales
25. Marketing mistakes
26. Customer retention

Branding Lessons for Entrepreneurs

It is never too early in the process to understand who your brand’s customers are, what motivates them and how to reach them. Doing this at the end of the product development process is usually too late. You will have developed a more unique and compelling solution if it was based on these insights earlier on in the process.

Your solution needs to deliver greater value (that is more functional, emotional, experiential or self-expressive benefits for less money or effort) than competitive offerings for it to break through and gain share. Make sure you understand what your brand’s unique value proposition is.

Customer insight will help you create a brand message that resonates with your customers, one that is unique and purchase motivating. Effectively articulating relevant differentiation is key to building a strong brand.  In addition to advertising copy, this message can be translated to a pithy brand “tagline” and a brand “elevator speech” (typically 40 to 70 words) that you and your company’s employees can use when talking about your brand.

Marketing your brand and its products should not be underfunded. If you offer superior products backed by outstanding service at very good prices delivering an outstanding value but no one has ever heard of your company, brand or products, how many sales will you get? Zero.  No awareness = no sales. Awareness building is perhaps the most important component of building a strong brand.

You have the most potential to save money on marketing when deciding on which media/vehicles to use to get your messages out – email, direct mail, targeted publicity, targeted advertising, specific trade shows, etc. Spending money on highly targeted media (versus less targeted or mass media) will save you quite a bit of money in reaching your target audiences. It is usually not wise to jump on a good media deal if it is not laser focused at your intended customers. Develop and follow a highly effective and efficient media plan.

After you have accomplished all of this, distribution becomes the most important key to success.  The brand that is more available to its target customer has two advantages: (1) it is easier to find and purchase and (2) it has greater marketplace exposure leading to greater brand awareness.

Finally, a word on consistency. Changing the brand’s logo, tagline and messaging on a frequent basis will ensure that nothing about your brand sticks in your intended customers’ heads. Consistency and repetition build strong brands.  Once you have developed a unique and compelling value proposition for your brand, repeat it again and again and again. In general, people need to hear something 7 to 10 times before it registers with them.