Being a startup founder (an entrepreneur or wantrepreneur) is not a cakewalk. While walking down this path, you go through various phases during which you need to make firm decisions with regard to your vision, team, and company.
As a founder, you need to wear multiple hats and lead the team with substantial motivation. It is also important to contemplate your intent before you are ready to take your chances. Your plan for the journey has to be exceptionally clever to be able to play the startup game.
Before you roll a dice as an entrepreneur, take a look at the rules that you need to remember:
1. Don’t be an entrepreneur for the funding sake
Although funding provides some validation to what you are aspiring to build, capital is only an enabler to the goal, and not the goal itself. You MUST know why you chose to be an entrepreneur and what you aspire to create in the next 3–5 years. This is a non-negotiable discussion every founding team must have when they start up.
2. If you have raised funding for your venture, you are on a treadmill
The moment you have raised funding, you are on the treadmill wherein the speed gets faster as you raise more capital. Sometimes you may not have the option to get off the treadmill. To be a celebrated entrepreneur, it is important that you do your homework before way before you decide to raise capital.
3. Choose the right investors
If you choose your investors well, you can bring in networks, broader perspectives, and invaluable relationships. The process of fundraising also forces you to think deeper about where you want to be 3–5 years from now. You need to articulate your journey in a way that is well defined and understood.
4. A good legal friend is always a perk
You must ensure that you are thorough with every contract that is being signed, as one of this could snowball into something you might have never anticipated. You MUST soak into the key elements such as Founder’s agreement, Advisory agreements, MOU, employee hiring agreements, non-confidentiality, and non-compete. As the company grows and the organization brings in more professionals, you need to let go of the “trust factor” and safeguard the agreements so that everything is in place and well understood by everyone, including founders and the leadership teams.
5. Fulfil the business purpose
Customers may not always know what they need and what they want. Give them a wish list and they may say yes to all. The details lie in the execution, and in building a business that is sustainable. As a founder, you should know what the market is willing to pay for. Building a business that is solving a must-have versus nice-to-have problem needs to be differentiated.
6. Address the complexity of scaling your business
The human mind by default does not understand the non-linear scale and the answers to scale may not be obvious. It does require bringing in the mindset and teams that understand the market complexities. A scale is defined by market dynamics, user behavior, and product adaption. Scaling a business for the VC is the biggest myth — and probably the most underrated understanding among founders.
7. The Centaur is as good as the Unicorn
As part of the young entrepreneurial nation, you should focus on creating a thousand 1 million $ businesses. With so much furor around startups, the energy, and effort that takes to build a 1M $ business must be trivialized. Aim to create a business that could be worth a 100M $. Of course, this will not fit into a VC thesis but are you building your business for the VC?
8. Maintain crucial relationships
Managing relationships is one of the key characteristics of a founder. In an order, relationship with customers, employees, and investors and each relationship must be sowed with the seed of utmost attention. This requires a time commitment to make it sustained. Don’t underestimate the amount of time and effort it takes to do this — especially if you have raised early-stage funding.
9. Know that you need to be a lone wolf
Entrepreneurship is a lonely journey. Specifically speaking, an everyday marathon where there are no sprints for the gold and no cheering from the pavilion. You should try surrounding yourself with people who are real, brutal and show tough love. Stay real in a world that seems so unreal. You will be surprised how people who love you don’t care much about the success or failure of your startup. Design your life such that you have time for hobbies, friends, and family.
10. Find your “Circle of Life”
At a closing point, as an individual, Let’s Give Back. We call it the “Circle of Life” — and everyone has their own ways of finding a way around this circle. Life is infinity and the horizon will always seem far away. Your internal compass is the only guiding force that will help you reach and celebrate the shore.