7 tough problems of a first-time entrepreneur
It’s a fascinating life. I wake up early to start working on my startup. It gives me pleasure and a sense of contentment that I never felt at my corporate job.
But building a startup is both challenging and exciting.
I have a good network of friends who are also working on their startups. Most agree that the challenges they face at different stages of the startup process are very similar. You too are likely to have struggled with one or more of these issues if your startup is less than a year old.
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#1. Co-founders
You may be lucky enough to find a co-founder when you share your ideas with your close friends. Unfortunately, not everyone is so fortunate. So, what does one do in this situation?
You go outside, you talk to people at events, on social media and co-founder matching platforms. It could even be in a place you never thought possible.
Read how Siddhartha found his co-founder at a startup event. Nitin found his co-founder in his neighborhood.
#2. Core Team
Hiring the first five employees often requires the same effort as the next 20 employees. Don’t get discouraged if you face a hard time during recruitment. You are not alone, almost every founder faces this problem.
Share your story with potential candidates. Inspire them to join your mission. You will not have great office space and perks but offer them genuine help and equity.
Don’t compromise on the quality of your employees. They will shape your future (good or bad).
#3. Initial Customers
It depends on what type of business you are running. You can get thousands of customers overnight if you have launched a free mobile app. It will take a few days to get customers to your online marketplace. But it may take weeks to get your first customer for your B2B business.
No matter what you are doing, initial customers will help you improve your product. Don’t chase money initially but pursue a client who is friendly… a person who will work with you even when your product is full of bugs.
That does not mean that you have to distribute your product free of cost. Charge some money but that should not be the prime focus.
#4. Tapping Growth Channels
In the early days, founders used to pitch ideas to investors, now they pitch growth plans.
It’s not very tough to find initial customers for any business, especially when you are running an online business. Most startups struggle with finding the right growth channels.
Growth does not mean more traffic or more app installs. Growth means getting a consistent supply of users who will use your product on a regular basis. Those who are happy with your product will become free marketers.
You should figure out at least one growth channel from where you can get actual users who may become paid customers in the future.
#5. Mentors
I have experience running my first startup without a mentor and my second startup with one. I know how much difference it had made in my startup and personal life.
Mentors help you shape your mindset. They work with you at a deeper level than an advisor or consultant. They understand your life goals and not just the startup.
Find a mentor who has gone through similar phase of life as you, has done similar work in the past, and faced similar issues. Stay away from the ‘so called mentors’ who never started a company or worked with a startup on a surface level.
#6. Contacts in the industry (Influencers)
It is easy for a person who has worked for years in the industry. But young startup founders do not have great contacts in the industry.
You must start building relationships with influencers from the early days of the startup. You not only get to know about your industry but also find ways to spread a word about your startup.
The easiest way to connect with people is social media. Make a list of influential people, follow them on Twitter and keep adding them to a Twitter list. Connect with them on other social media channels like LinkedIn and Facebook.
Send them emails once in a while on topics they are sharing on their social media. Offer something valuable to them (advice, a discount coupon, a free trial of your software, interesting reading material).
Here is a template of such an email.
“Hi Rohit,
Thanks for sharing your contact details over Twitter/LinkedIn.
I enjoyed reading your articles on marketing. It helped me correct my marketing strategy for my startup, and I am converting 2 per cent more customers than in previous months.
Our tool helps in <few words how it can help him> and it costs Rs3,000/month after a free trial of 15 days. I would like to offer you six-months free trial period.
Just sign up for the trial period and let me know. I will apply an exclusive discount code to your account that we don’t offer publicly.”
Let me know if you need additional email templates.
#7. Funding
The problem of funding comes only when you have resolved initial problems of establishing a core team and finding a product market fit. Don’t focus on funding in the early days of your startup.
You have bright chances of getting funding if you have a brilliant team of excellent product executors. If you spend too much time chasing investors, how will you find time to work on your product?
You have almost zero chances of getting funding at an idea level until you have
- A previous success story of a startup
- Have done brilliant work in your field
Conclusion
Entry into startups has become very easy because you can find free software for development; server costs have become negligible with AWS and Azure; marketing expense is zero with social media; and ideas are in abundance.
As a simple startup template, spend one month in market research and talking to customers, the next three months in product development; and two additional months in sales and marketing. In six months, you can know whether to continue working on a startup or need to pivot.
Happy to chat more about your startup issues.
