Well, what a start that was! (But let me tell you more.)
Navigating the process of starting your own company and ensuring its success with growth and funding can be a nightmare, to put it simply.
So during these meet-ups, we decided to chat with really smart people who’ve done it themselves and hear the stories of their previous struggles, almost-failures, and how they built a successful startup.
With the first event of the Founder War Stories series complete, we want to share with you the 3 most interesting tips about starting your own business.
#1 It’s not about the idea
60% of companies fail because of co-founder problems. Pretty unbelievable, right?
Although if you consider this for a moment, it all makes sense: a lot of people choose to start their business with a family member or a really good friend. It’s kinda great… Until things turn ugly (and that is not unheard of in the business world). It’s only then that we remember about the dangers of mixing friends and business.
According to Alejandro, when looking for a co-founder, you shouldn’t go to a person you like – you should go to a person who possesses a range of skills you don’t have. Someone with something different to add to the table.
“As Jim Collins wrote in his book “Good to Great”, every company is like a bus. During the early stages, it’s like a bus without a direction. You need to have the right people seated on the right seats. Even though that bus doesn’t have a direction to get to the finish line, eventually it will, because it’s all about the team. It’s not about the idea. The idea is 10%, execution is 90%,” claims Alejandro Cremades.
Finding the right people to take on board is perhaps one of the biggest hurdles for startups in all stages. And what’s even more nerve-wracking, is that a wrong hire can really hurt your company’s culture.
“A start-up is a trial and error type of thing. It’s all about finding that repeatable and scalable model to strike a nerve on the market and make things happen. That’s why I would recommend that you find those skillsets that perhaps you don’t have”, continued Cremades.
As far as co-founders go, it’s a solid advice. Take your time and find someone who can really help you steer that bus to the right direction.
But how can a startup overcome the recruiting problems when there’s no perfect candidate in sight?
#2 Hiring freelancers the smart way
And that is your answer. Outsourcing.
What you want to make sure from day one is that you have full-time, brilliant employees who are taking care of the core aspects of your product and business. Everything else is noise, and freelancers are just the right solution for those types of jobs.
“There are certain pieces that you don’t necessarily need to have full time in the business because that’s a significant cost. Having freelancers to help you with certain things that are not part of the core of the product is great. I’ve had freelancers all the time.”
“Let’s say you peruse a content marketing strategy but it’s not the primary thing of the business – it’s a way to get lead generation and acquire customers. There are certain things, where you can apply freelancing and I think it’s an awesome idea,” said Alejandro Cremades.
Of course, it often depends on the story and scenario that the company is dealing with, however, anyone who’s been dabbling in online business knows that timing is of the essence.
Alejandro reiterates: “If you need to achieve milestone A by a certain date, and you know that you’re not going to be able to get someone on board, I think that getting a freelancer to help you and pushing that part of the parcel is a great thing.”
#3 Mastering the art of fundraising
Fundraising is a multifaceted game. It’s almost impossible to ease into that process without a few bumps along the way. But hey, prove us wrong if you can.
One thing that Alejandro can’t stress enough is “raise money when you don’t need it” kind of attitude.
“Investors can smell the desperation from a mile away. That means you might not raise the money or you might raise the money on really awful terms. But when you are in a position of growth, when the curves are starting to move in the right direction, you have leverage and the conversation with investors changes.”
“The biggest mistake that I see founders make, over and over again, is that when they speak with an investor, they hear the usual phrases – that are all bullsh*&. The fundraising game is all about the follow-up. If someone is telling you “you’re too early”, it doesn’t mean they are not going to invest in you. That means “keep me posted”. You are never going to receive a cheque the first time you meet the investor. What investors are doing is, basically, connecting the dots of your story. It’s all about getting people to invest in you, and to invest in your future and in the vision and in the mission, so you need to be a good storyteller,” explained the author of ‘The Art of Startup Fundraising’.
Good news for London and New York
The success of your business lies in your ability to ask the right questions and often not having an answer is what prompts entrepreneurs to search, invent and create things that have never existed before.
As a startup ourselves, we’re very much into asking loads of questions, so we seek out brilliant conversationalists all the time. If you want to keep up with the best industry advice and meet the experts face to face, watch this space for announcements about our upcoming #FounderWarStories events in London and New York!
Next on the list is a meet up with the CEO of PeoplePerHour and Supertasker Xenios Thrasyvoulou in New York!
Breakfast with startup champions #FounderWarStories. Friday, May 6th 8:30am. More details: here.