3 New Year’s resolutions every entrepreneur should make
Beyond the usual “Listen to your customers,” or “Hire people smarter than you,” type of advice, here are three New Year’s resolutions I feel every entrepreneur should make, along with three concrete steps for acting on each of them.
As an entrepreneur-turned-investor-turned-entrepreneur again, I’ve made these resolutions to myself.
Keep your head in the clouds, feet on the ground
Why?
Some startups fail due to the founders getting caught up in the day-to-day firefighting and missing the big changes in the environment, others due to starry-eyed CEOs daydreaming of the future, oblivious to the fact that their organisations are marching to different tunes based on day-to-day realities they are clueless about.
Firstly, know who you are. Are you a dreamer or one who relishes the details? Very rarely are we naturally inclined to do both. You would always need to over-compensate for the other, missing half.
The three-step plan
- Head in the clouds: Once a week, make sure you’ve at least read up about your competitors, partners, and foreign lookalikes, and industry press releases and news. It would be a great idea to save them in a central repository that can be shared with the core team
- Feet on the ground: Have a weekly, monthly, and quarterly plan for product, tech, marketing, BD, and any other business unit that you may have. If you’re only a three-person outfit, you are still doing some or all of these functions. Review every week and revise (it’s okay if the list constantly changes or never seems to be complete). The point is to always know what’s going on.
- Do U-turns: Never be a prisoner to what you believed was right yesterday. When there’s a change in the macro picture or the facts on the ground are not supporting your most cherished beliefs, it’s time to say, “Oops, I was wrong,” and move on. Knowing when to turn the ship and when to stay the course is what I personally call ‘business judgment’. You need to learn this on the job!
Avoid the perils of groupthink. Get external advice from the right people
Why?
Even the best-run companies fall into the group-think trap. Constant disagreements can make even startups with the most mature founding teams fall apart. The survivors tend to fall into the trap of having everyone look at the facts in the same way and come to the same conclusion, which is the groupthink phenomenon.
Having someone outside the company challenge this can be a lifesaver. Typically, the board, investors, advisors, and mentors can bridge this gap. However, advisors are not thinking about your business 24x7 like you are and your board might also have the groupthink problem.
With a little bit of persistence and a dose of humility, you can reach almost anyone in the world. The trick is to do it consistently and in a somewhat structured way amongst the million other things that tend to take precedence.
The three-step plan
- Get organised: Make a list. I divide my advisors into three categories.
- Networkers and connectors: Those who help you connect with business partners, investors, talent, etc.
- Knowledge guys: Those with deep domain knowledge about something you need to know
- The smart chaps: Two or three really smart guys running a real business who can tear apart your cherished ideas and successes
While most founders do a good job in working with the first two categories of advisors, I personally find the third category most useful. It’s very important that this person is a current CEO/founder of a business or has been one in the recent past.
- Prepare: Make an effort to meet them at their convenience and be prepared. Understand where they come from and decide upfront what you want to tell them and what to get from them. Meeting once in three months is a good frequency; schedule it in advance if the other person is really busy. The third category needs the most preparation and typically is a three-hour marathon where you go through the intimate details of your business, your concerns and fears, future plans, etc. with someone who is running a real-life business and can give you that kind of mindshare. The insights you can get here can be really profound.
- Taking the advice: Assuming you did your homework and are getting good ideas, what should you do? Firstly, you should understand where your advisors come from and factor that into what they say. You would already know what to do with the counsel you agree with. For that, make sure you give them credit, publicly and privately. The tricky part is the advice you don’t agree with or think is low priority. Politely ignoring it is the easy route, but not always recommended. Debating with a well-wisher who has generously given you their time is unpleasant beyond a certain point. Acknowledging and remembering it the next time is the basic must. Politely pointing out why it’s lower priority is the right etiquette.
Don’t fall into the permanent fundraising trap
Why?
Like politicians always running for elections even when they’re in power, most tech entrepreneurs are inevitably looking at future investments even if they are profitable or have money in the bank. Necessary though it is, it can completely skew the company direction.
Here’s why.
Every future investor has a view on what makes a good investment. This is driven by their experiences in their own career, your competitors (yes, they would have spoken to them), returns they need to generate for their fund, previous hits and misses in their portfolio, and a host of factors you will have no idea about, and different investors will have different worldviews. If you start ‘dressing up’ your company to make it a sexy investment for each of your future investors, you’re guaranteed to screw up your future, and most likely not get any investment at all.
The three-step plan
- Set your compass: You and your team know best. Put all your thoughts into the product, tech, marketing, sales, partnerships, financials, competition, vision, etc. on a piece of paper. Brainstorm internally. Then, convert this into a PowerPoint presentation and a spreadsheet business model that you and your board agree upon. All this will change every month but you should always have your own worldview before you talk to anyone else.
- Watch the cycles: Many (luckily not all), investors tend to place bets on hot sectors. In India, e-commerce, transportation, marketplaces, foodtech, and fintech have all blown hot and cold over the last few years, and there are periods when no bets are placed. It’s quite easy to gauge the cycle by talking to advisors and following funding announcements. It’s a lot easier to sail when the wind is blowing in your direction.
- Choose your investors: When Harry Potter goes to buy a wand, the advice he gets is, “The wand chooses the wizard.” There are many situations where any money is better than no money. And the first duty of an entrepreneur is to keep the lights burning. Having said that, most situations are not that desperate and here, choosing the right investor is a decision that will haunt you if you get it wrong. Having a ‘sexy’ fund that’s getting a lot of PR or a big-shot VC is definitely the wrong way to decide. I personally look for who is going to add value to me on my board, has the fund depth and, most importantly, will give me time when I need it most.
Happy New Year!
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)