First things first. These are not my commandments. No coming down the mountain with tablets from me on this one. This is all Andy Swan’s, check the brother out here on Twitter.
I stumbled on a mention of his thoughts after reading a Fred Wilson oldie from 2010 on liquidation preferences, and Fred quickly dropped them on his followers on Twitter. Not sure why, but his commandments are hard to find on the net. Which is not cool, as he dropped some serious wisdom here.
But I found them, and I am sharing them. Because they are awesome.
Establish and grow relationships
“Contacts” are not nearly as valuable as you think. Relationships are the key. People who trust you and like you are very likely to help you. In addition, they are very likely to induce their own relationships to help you.
Develop relationships BEFORE you need them. Do this by GIVING first and freely. Participate in, and enable the success of others at every opportunity.
Define a single problem or niche opportunity and resolve to find a simple solution (Idea)
This is crucial. DO NOT spread yourself thin. Do one thing extraordinarily well that either A) solves a common problem or B) creates a new niche that can be expanded. It is tempting to attempt more in one broad stroke, but this path leads to failure.
Do not rely on having the best and latest technology unless you are willing to run the 100m dash…. forever.
Related Article: The Commandments For The Republic Of Indian Startup Ecosystem
Structure a business around your idea, with a killer team
Everyone you involve in your project is a part of a team. crucial to pick the right people. This will go back to your relationship group, because there is little room for risk here. Find great people that are passionate about the space you are entering. Give them UPSIDE and RISK, and don’t hire anyone that asks what the hours will be….because the answer is “all of them…it’s a startup”.
Remember…they are not employees, they are partners. Align interests. Align risk. Align reward.
Eliminate your personal “outs” (burn the ships that you would retreat in)
Any option other than success must be taken off the table. When Cortez sought to defeat the Aztecs, the first thing he did was burn the 11 ships that brought his army to shore and declared that retreat was not just unacceptable, but IMPOSSIBLE. Imagine the difference in thinking that must have transpired….from “let’s see what these Aztecs are all about” to “we must win”.
Having “something to fall back on” increases the odds that you will “fall back” by multiples. Instead, make sure that it will be painful to fail, and therefore that you will do everything in your power not to fail.
In addition…does having “something to fall back on” make your relationship group more or less likely to invest in you? Exactly…everyone wants to invest in someone that feels the pain of a zero more than they will!
Collaborate with relationship group, don’t present to strangers
When you present an idea to strangers, they always look for ways to shoot holes in it. It doesn’t matter if it’s door to door cleaning solution or a startup investment opportunity….my first reaction will be to try to find fault with your claims!
On the other hand, people with whom you have an established relationship are likely to desire to help you. Allow them to PARTICIPATE and collaborate in the process. Get them mentally invested way before you ask them to pull out the checkbook. This is a win-win, as it insures the entrepreneur and the investor are both in the project for the same reasons, with the same expectations and fully aligned interests.
Persist in the face of temporary defeats
Understand that there will be setbacks. BIG BIG BIG setbacks. Read this. Then read it again. Oh, and remember….your ships are burned, so it would be a really really bad idea to quit now
Listen to your customers and partners
Your customers and partners are the lifeblood of your business. Take what they say to heart. DO NOT EVER tell them that their feedback is wrong, unless it is a customer or partner that you want to fire on the spot. If you give them an open line to tell you how to make your product/service more beneficial, they will do it, and both of you will benefit.
When I see an entrepreneur in a suit, the first thing I think is “I wonder what else he is dressing up”. Again, this is about forming RELATIONSHIPS, which you can’t fake your way through. People invest in people more than they invest in ideas (which are a dime a dozen). They want to be sure they know what they are investing in….and since that is YOU, it pays to be up front about this from the start.
If there is something you don’t like about yourself, fix it!
Always make money for your partners
Don’t squeeze anyone. Make other people rich. Align interests and move on. You remember why Hyman Roth lived to such an old age in Godfather, right?
Hardball negotiators are rarely worked with a second time, and only invite further conflict down the road when the numbers are more meaningful.
You will become very wealthy by consistently adding to the riches of others.
This one comes naturally if you are dealing with established relationships.