Don’t focus on the bullshit, focus on the reality. Next Step’s team strongly agrees with Guy Kawasaki regarding the top ten mistakes of entrepreneurs.
Mistake 1: Too Big Numbers. Trying to magic all of your numbers and talking about getting “only 1%” of some enormous, billion dollar market. Instead, calculate from the bottom up. Prototype your product, get customers, and start growing it. Investors want to see the success you have now, not listen to a bunch of calculated stats about where you might be someday.
Mistake 2: Scaling too fast. “I have never seen a company die because it couldn’t scale to meet customer demand” . Don’t think you need to begin by supporting the mobs of people you haven’t acquired yet but might (see Problem #1). Instead, “eat what you kill.” Focus on SELLING what you have, and then scale when you really need to do so due to customer demand.
Mistake 3, 4, 5, and 8: Not focusing on selling to paying customers. Focusing on the wrong things: your partnerships, your pitch, your patents, and your slide deck. In short, focusing on the bullshit. Investors care about your revenue and customer adoption of the product. So put your effort into the prototype, get sales, and present what you actually have DONE ie revenue and customer adoption.
Mistake 6 Lack of Adaptation –instead of proceeding serially, proceed in parallel.. In the real world, it doesn’t go: raise money, then hire team, then build product, then make money, and now go public. In reality you must do those things all at once. So get used to it. Learn to work successfully in parallel.
Mistake 7: Think you’re going to retain control. As soon as you take outside money, as soon as you have outside investors and you’re going to lose control. But, Guy claims, “control is overrated.” If you have a large percentage of a company that fails, who cares? “It is much better to own 0.05% of Google than 51% of a piece of crap.” So instead of clutching the purse strings, “make a bigger pie.” Grow your business and you’ll be able to share success with your investors.
Mistake 9: Hire people like you. Instead hire your complements. You’re white and male? Hire a woman of color. You’re young? Hire someone older. Hire the skill you don’t have, like experience or a diverse perspective.
Mistake 10: Expecting investors to be friends. “They want to give you a dollar and get fifty back. You are a tool, you are a means to an end.” Yeah, the investors told you they believe in you, they love you, they “invest in people” – but in the end, they care about the success of your company, and about how much money you can make them.
So what is the secret of success in Silicon Valley? Focus on gaining paying customers for your product and building your team.
Provided by Jennifer Vessels, CEO Next Step, Silicon Valley based consultancy with an Oslo branch. Next Step improves revenue results for Norwegian and global companies as they launch, expand, scale and succeed in international markets through their 40 person team across US and Nordic.