September’s Digest focused on startups by taking a look at the role of entrepreneurial networks and the services they provide. This week’s blog builds on that theme, with lessons learned.
Starting a new company is daunting. You may just think it’s about coming up with an idea, obtaining the funding, creating a model, and marketing your product/service. However, as owners of start–ups can tell you, you will face issues and problems you cannot foresee.
Chicago’s Women Tech Founders (not all women!) periodically hosts events tied to starting and maintaining your business. Autumn Sharp attended one of their events this past spring entitled “Top 10 Women Tech Founders Startup Lessons” which was held at the 1871 tech incubator at Chicago’s Merchandise Mart. Some of the best and brightest in the Chicago technology industry shared the challenges they faced when launching their own start-ups, how they dealt with them, and what they have found helpful as they have moved from being owners of new, fledgling companies to being successful owners of well-known area businesses.
Here are our top five takeaways from the event. If you would like to attend one of their events, they have an event coming up on October 19th . If you are starting a business or considering starting a business, we think you will find this information helpful.
You’re new. You’re still trying to work out the kinks at New Company (“NewCo”). How in the world do you keep yourself on track? You may even be your own boss for the first time. How do you keep yourself accountable on a daily, weekly, and monthly basis?
Consider turning to others in the same situation, or who have been in the same situation. Seek out a community of people who are just starting their own business, or have done it in the past and are successfully running their businesses today. Those who have been in your shoes in the past will be able to offer some ways they kept themselves accountable, and if they’re successful today, it means those methods helped to guide them toward their current success. Those who are in your shoes today will also need someone to hold them accountable, so consider a “buddy system” where you check in on each other from time to time and remind each other to keep on task.
How do you make sure you’ve aligned with people who have NewCo’s best interests in mind?
Look for people who respect and believe in your mission, and who also respect and understand that NewCo is your “baby,” so to speak. Be wary of individuals who do not meet their commitment to the business, who fuel negativity, or require you to surrender too much ownership of your business. These individuals clearly do not have the same vision you have for your company. Identify these individuals as quickly as possible, and remove them from your environment. Surround yourself with the people who want to see you succeed, and who are invested in your success. This does not mean you should keep out the people who challenge you. Challenges are good, and can push you to a better developed product and business growth. However, negativity and challenges are two different beasts; take the time to determine the difference and let the negativity go. Finally, trust your gut. This is your business, and you know where you’d like it to go.
You have met with potential investors, but haven’t had much success. What are some things you can do to make yourself stand out?
Investors want to know that you have the necessary drive, passion, and hard work to get them a return on their investment. And they want to see you “hungry.” The hungrier you are, the harder you’ll work, and the greater chance of return on their investment. Therefore, when meeting with investors, don’t rely only on a presentation of NewCo’s services and/or products. Make sure you show that NewCo is your focus now, and will be in the future. Let them know how hard you’ve worked, will continue to work, and how much of your own funds you’re contributing to show that you too have “skin in the game.” After all, your own investment in NewCo will show you believe in your own product, and that will go a long way in getting others to believe in your product as well. Finally, be sure to explain how NewCo will be a differentiator. You will not likely be the first of your kind a prospective investor has considered. Focus on how your product/service is different from other similar products/services in the marketplace, and how that difference will show itself in returns.
What’s the best way to test your service/product?
In as close to a real-life situation as possible. Think about how you’re going to sell your product or service. Are you planning on just marketing to friends and family? Not likely. Then don’t test your product or service on only friends and family. Friends and family may not give you the honest feedback you need to revise your product or service to its best. As much as you may want to hear her honest opinion, your mom is not going to tell you that your product is subpar. However, people you barely know may not hesitate to explain how you could tweak your product so that it would be beneficial to them. This is the kind of feedback you’ll need to allow you to develop your product or service into one that can be marketed to a wider audience.
In addition, test your product/service when and where you plan on marketing and selling it. If your product is lemonade, for instance, don’t test it in the winter. No one wants ice cold lemonade in a frosty Chicago December. You’ll receive skewed results, and may make unnecessary changes to a product/service that may otherwise be well-received once you actually launch it under those “real life” conditions.
How do you set up for a successful launch?
- Gain access to the industry you want to be in. This may mean, for instance, taking a position that you may consider beneath your education and experience. It may be worth it if it can get you a foothold in the industry you want to build your new company in.
- Hone in on the particular problem you want to solve. Start-ups are invariably problem-solving companies. Take the time to do the research necessary to determine the best way to solve the problem, and then get a solid vision of how you want to approach that. Things may change as you move forward—in fact, they will—but with a solid vision, you will be able to bend and adapt to the changes instead of having your vision fall completely apart.
- Don’t be afraid to partner up. If you come across another entrepreneur and the two of you have complimentary skill sets, consider working together to create synergies to benefit the both of you. However, be sure to find and keep your own voice, and figure out what NewCo means to you on a broader scale so that you don’t lose your vision in this new partnership.
- Understand who your audience is and figure out how best to cater to your audience. After all, this is the group of individuals who will decide whether to purchase NewCo’s product/service over other products/services in the marketplace, and will ultimately help to dictate whether NewCo flourishes or fails.
- Realize that your voice may dictate what your product/service looks like down the road, and the more your product/service is a genuine extension of you, the more likely you will enjoy developing and marketing it. Therefore, though you may consider your peers’, purchasers’, and partners’ thoughts and commentary, keep your conviction.
This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
If you need assistance with a related matter, contact us.