Lessons for an Entrepreneur

by Ash Kumra

This chapter is a free excerpt from Confessions from an Entrepreneur (Volume 1).

Renee LeBran: Venture Capitalist & Women’s Entrepreneurship Advocate

If you surveyed the general population as to the hardest part of being an entrepreneur, I am sure that the top answers would include coming up with a great idea and all the hard work. But the fact is that there are many good ideas that fail, and hard work alone is never enough. So what increases the chances of success?

One of the most important elements of success is being clear on what you are trying to accomplish, as well as how you will know if you are meeting those goals (for example, technology proof of concept, acceptance by beta customers, or a certain amount of revenues), and being willing to change if you are not hitting your milestones. Perhaps the idea was flawed in the first place, something changed in the environment, or things were not well executed. It is important to have milestones so that you know when things are not working and can make adjustments, either to your plan or to your team. Whatever the reason for waiting, whether it is pride, loyalty, miscalculation, or simply inertia, taking too long to make a change can result in burned investment, lost opportunities, or in the worst case, in failure.

Complete 10-second survey to read full article!

Renee LeBran: Venture Capitalist & Women’s Entrepreneurship Advocate

If you surveyed the general population as to the hardest part of being an entrepreneur, I am sure that the top answers would include coming up with a great idea and all the hard work. But the fact is that there are many good ideas that fail, and hard work alone is never enough. So what increases the chances of success?

One of the most important elements of success is being clear on what you are trying to accomplish, as well as how you will know if you are meeting those goals (for example, technology proof of concept, acceptance by beta customers, or a certain amount of revenues), and being willing to change if you are not hitting your milestones. Perhaps the idea was flawed in the first place, something changed in the environment, or things were not well executed. It is important to have milestones so that you know when things are not working and can make adjustments, either to your plan or to your team. Whatever the reason for waiting, whether it is pride, loyalty, miscalculation, or simply inertia, taking too long to make a change can result in burned investment, lost opportunities, or in the worst case, in failure.

It is rare for a business plan not to morph along the road to success. The real question when to actually make a change in direction or model. New businesses take time, so you don’t want to abandon ship too early, but on the other hand, it is more often the case that an entrepreneur becomes irrationally attached to a plan, and makes the changes too late. Change might mean a tweak, or it might mean a complete shift (or “pivot”). I have seen businesses add new products into their plan and hire a team to develop and market the new product, and then continue to pour money into what seems to be a losing proposition, in hopes that something will change. There is no specific amount of time you should wait before switching gears, but set a realistic timeframe, and if the product or service is not meeting milestones, be a tough grader. Few companies go under because they didn’t spend enough—more go under because they made a mistake, and by the time they acknowledged it, it was too late to change course. Are the customers who are buying the product wildly enthusiastic, and are they representative of the where the market is going? Or do they have some unique reason for buying the product that may not be replicable with any other customer. These are not easy questions, but sticking with a failing product or model for too long will deprive the business of the chance to make a mid-course correction.

The second place where entrepreneurs wait too long to make changes is in personnel. It is natural to want to be loyal to someone who helped you get the business to a given milestone. But the person who can get you to point A is rarely the person who can also get you to point B. As a leader, you need to determine what is critical in reaching the next milestone and find the exact person who can help you achieve that. Sometimes it is the incumbent—they have enough experience or they can grow into the job, but often it requires a new person in the role. If success depends on building relationships with distributors, for example, don’t you want the sales leader who has proven they can do that and who has the key relationships that are needed? If the business is getting complex, don’t you want a financial executive who has the experience to provide financial insight that can help you manage the business? Making changes in your team is often emotionally difficult—it may mean replacing a longtime friend, but if you treat the person fairly and recognize their contributions to date (typically through their ownership) they will appreciate your position.

Building your team also requires facing your own insecurities. The best entrepreneurs hire the best team, even if that means they are hiring people who may have far more experience or expertise than they have. If an entrepreneur is threatened by experience and hires people with less experience than they have, they are simply diminishing their chances of success. Of course it is harder to manage a team that may be older than you are and more experienced, but if you hire people who buy into your vision, they will focus on the collective success of the business and not on just showing off their personal prowess. When it comes to businesses that take in outside funding, a very high percentage of founders end up being replaced along the way because the business outgrows the founder’s skills or they fall out with their investors.

There are many things that go into entrepreneurial success. But since we can’t entirely control our own luck, we have to control as many things as we have under our own control. These are only two aspects, but critical ones that will at least make sure you don’t waste resources, and that you will be best equipped to make things work.

* * * * *

Renee LaBran is a partner with Rustic Canyon/Fontis Partners, a late-stage venture capital and private equity firm based in Pasadena, CA. LaBran helped form Rustic Canyon in 1999, following 15 years of strategy consulting and hands-on operating experience. She is also an alumni advisor to the Women's Student Association at Harvard Business School.
Price: $4.99 Add to Cart
  • Lifetime guarantee
  • 100% refund
  • Free updates