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Money And Idea Is Not Enough

Money And Idea Is Not Enough

We are in an era where people with money and an idea seem to think that it’s enough for them to start a business. They’re setting themselves up for failure.

Being an entrepreneur requires a massive amount of emotional strength and skills. Let’s first understand one fact. Every business needs 3 things: employees, products and/or services, and paying customers. These things combine to generate fun and profit.

Having money and an idea may be the starting point, giving you the initial resource, tool and a goal to work towards. I feel, however, that people are jumping on the “entrepreneurship” train without being aware of what it really takes.

idea money

Hone your Skills

The greatest killer of startups is the lack of skills. It’s surprising to me how many founders I’ve met and worked with lack this very simple understanding.

What are these skills you speak of?

The first and most important skill you need as an entrepreneur is communication. You need it to sell your idea to your co-founder, to your employees, and all the way to your customers. Your ability to express your vision to your initial team will inherently determine what kind of people you attract into your team. It will determine if your team is inspired by your vision and are committed to working with you. A good entrepreneur can make tea sound exciting. A great entrepreneur will inspire someone who says they don’t need tea into buying some ?.

Your ability to communicate will determine how well you sell and therefore how successful you are in the marketplace. I am talking about your ability to get customers to pay more money than 1) you spent to get their attention and 2) produce and deliver the product you are giving them. If you are spending investor’s money to ‘buy’ your customers, i.e. you are spending more money than you are getting from each customer, you either don’t have a good product yet or don’t know how to sell just yet. Anyone can spend money to acquire customers. If that’s your strategy for growth don’t start a business, first learn how to sell. Go work at Starbucks or any front-line sales operation— they’ll teach you a thing or two. Some people I know building businesses think they know how to sell, when in fact they are either manipulating customers or spending money to acquire customers.

Selling infers that the majority of your customer, is happy with the product or service that you provide. It also means they will come back for more or refer you to their friends. If your sale lacks profit and/or customer happiness then you haven’t sold, you’ve manipulated.

You can build businesses on manipulation if you are a large conglomerate with lots of money. You may fool yourself into spending your own money and even a good amount of tech-crazy investors while raising Series A-Z.

Ultimately however, if you don’t learn how to sell to generate more than you spend while making your customers happy, your business will fail.

Another overlooked skill is the actual understanding of the craft that builds your product. This goes hand in hand with your ability to sell. Many people I talk to put themselves in the “Idea Guy or Girl” category and aim to delegate product development to someone else, like a CTO. If that is your idea of being CEO, then you don’t have what it takes. Quit and do something else.There is no room for the idea guy or girl. Having enough skill to understand the problem beyond what you see on the surface, and knowing the existing tools to discover and execute on a solution, goes with the ability to lead and give your team direction. It is crucial to the execution of a successful product.

A lot of people justify their lack of craft with the fact that Steve Jobs doesn’t code and he built Apple. Steve Jobs wrote code at one point in his life, he was exposed to it enough to give him an understanding of what it took to build a technical product. He used to work for Atari as a game developer. He understood enough about the craft to be able to lead the team that would then do the execution for his vision. Listen to the guy talk about programming.

If you are comparing yourself to Steve Jobs, ask yourself if you are able to understand the craft behind your business on a level that allows you to see the future. Are you then able to articulate that future to your team and your customers? Can you do it in a way that that you appear crazy and bold, but still believe and buy-in with you anyway? That is the essence of innovation. It’s where understanding the craft and the ability to communicate come together. It’s what made Steve exceptional. His deep understanding of the field he’s in, combined with his ability to communicate — both are just as important as his commitment and passion for the future he envisioned.

Are you the Idea Person? or Are you just Lazy?

Most tech-entrepreneurs I know don’t know enough tech and don’t care to learn. They think they can push that responsibility to ‘the tech guy or gal’. Ask yourself are you just being lazy or is it really not necessary?

How will you:

Develop empathy for your team if you don’t know what your team is up against on a daily basis?

Develop strategy for your team if you don’t understand how your product is being built?

Plan a product release if you don’t know how long development going to take?

Not burn your team out if you don’t know how much time your team needs for a specific feature that you promised your customers?

Know what promises you can or can’t make to your customers?

If you can’t answer those questions, how will you make business decisions? They all directly affect the outcome of your business. It affects everything from your burn-rate all the way down to your product quality and time to market. Being able to answer these questions on your own and not relying on someone to answer it for you is crucial to being a good leader that willinspire rather than manipulate.

Would you start a restaurant without the ability to taste food? I didn’t think so. Most people in the tech business justify their lack of technical understanding with their abilities in ‘networking’, ‘partnerships’ or ‘fund-raising’. Believe it or not, those are not skills you need when you build a start-up. They are distractions that can cost you your business. Don’t believe me? I’m not the only one saying this.

Those other skills will come to you when you are confident enough about the product your team has built with your leadership. When you have people paying you for your product, directly tied to your business. You will attract “partners” and “investors.” You don’t need to go out and find them — they will come to you. Focus on your business!

The only thing a startup founder needs to focus on is employees, product, and customers.

Your Team: They Come for the Vision, and Stay for the Leadership

Expressing your vision to your team is one thing. Once you’ve done that, you also have to understand leadership. Leadership is a skill that is very much overlooked. Great leaders don’t just express their vision. They are also able to inspire their team into action and keep the team inspired even in the toughest of times.

Leaders understand the importance of employees. Generally, they put their employees first. They make sure their employees are taken care of. They will be the ones to take risks first. They would never ask their team to do things they themselves would not do.

Understanding leadership is a philosophical journey combined with art and science. From my experience, not many people are cut out to be leaders. I would dare say only 3% of all the people I know can lead. Leadership requires practice, experience and deep understanding of oneself aka self-awareness. I learned leadership going through a personal struggle, the kind of struggle not many people go through in their lifetime.

Just because you call yourself a leader or CEO doesn’t make it so. In a team, its very easy to spot a leader. Find out who the team members go to when they have a problem. Who is their go-to guy / gal?

So what does it take?

You can learn how to sell, how to build products, and leadership as you build your business. That method really depends on how deep your pocket is. Learning costs money. I see people doing this a lot. Anytime a friend says they are raising Series A, B, C etc… in my mind they just haven’t figured it out yet. They’re usually fooling themselves into thinking they are using money to grow, where in fact they are using money to buy time to learn. I admit, there needs to be learning when you are a start-up. Thats fine, but there needs to be progress and growth as well. Learning and growth go hand in hand. They shouldn’t be mutually exclusive like in a lot of start-ups I see these days. Where do you think the statistics of “most businesses fail” come from? Its when there is only learning and no growth. Growth happens only when you apply what you’ve learned and are not delusional about reports and metrics. The only metric that qualifies for business growth is revenue, not money raised nor valuation.

The best training ground for an entrepreneur is putting yourself in the position where you may lose everything. I don’t mean investor’s money, I mean your own hard-earned cash and time.

Train your mind to not let this investment bother you, so you have the will to continue with full optimism. That’s the kind of emotional strength you are going to need. Add to that great understanding of the craft your product depends on so you can communicate your vision and direct your team with solidarity within your team. Throw in the ability to inspire the genius out of people. Combine that with the patience and perseverance to get your product to market and sell to your customers. Have the humility to listen to feedback and continuously improve yourself as an individual. Then apply it to your business.

Got it?

Good!

Now prepare to keep all that up for the rest of your life.

That’s what it takes.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

Author

Zack Siri

Community

Dad, Entrepreneur, Founder

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https://inc42.com/resources/built-indias-largest-o2o-fashion-ecosystem/
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