37 Pithy Insights From Street-Smart Entrepreneurs

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37 Pithy Insights From Street-Smart Entrepreneurs

 

The response to an earlier article “Startups: 10 Things MBA Schools Won’t Teach You” has been overwhelmingly positive.  The article has now received about 150 comments across various websites (on the OnStartups.com site, in the OnStartups LinkedIn group, etc.)  Unsurprisingly, many of the comments are much better than anything I could have ever come up with on my own.OnStartups Gear Head

So, to further the conversation and discussion, I decided to collect, edit and share some of the fantastic insights from reader comments. 

Thanks to all of those that contributed such great insights.  Sorry I could not include them all.

Enjoy.

37 Pithy Insights From Street-Smart Entrepreneurs

1. Infect employees with pride of ownership. If the employees feel like they are part of something bigger than themselves, then they'll work that way. 

2. Every company has "idiotsyncracies." Some crazy thing they do that works for them but would never work anywhere else. Trying to “correct” that ends up destroying what makes the company special.

3. You pour your heart and soul into a startup.  Someone who hasn't done it won't understand the effort until they go through it.

4. Most start ups should start selling the product before they think they should.

5. Ritualize the work atmosphere -- everytime a contract comes in, ring a bell or gong and let everyone celebrate. There's a reason Survivor has rituals.

6. Competitors & customers can, do, and will do irrational things. Neither care about your title, your education, your pedigree, your investors, or your SAT scores.

7. Customers are defined as people or organizations who pay more for something than it costs you to make it.  The relationship should be arms-length (which is why your dad is not a real customer).

8. A lack of competitors is almost always a bad thing because it means the market you entered doesn't interest anybody else.

9. Your core founding team needs to be smart, energetic and committed. It helps if they can fill multiple roles at the same time (sell, write software, deliver services and invoice). 

10. Leave your ego at the door and hire people without big egos that can understand how to look at a problem and be open to solutions no matter where they come from.  Keep those people.

11. Get exposure to potential customers as cheaply as possible and then make sure that all the information is there for them to make a decision.

12. If prospects won't open their wallets for the beta or prototype, then no amount spent on marketing or sales will matter.

13. No matter how great your service or product, there will always be very smart people who's advice you trust telling you that your service or product is crazy and will never sell.

14. S**t happens, but it's usually not as bad as it first seems. 

15. It's tragic when good products never make it to market because they were never properly sold. If no one in your company knows how to find qualified leads for your product, you are in big trouble.

16. Take care of the people with integrity

17. Startup entrepreneurs need a handful of trusted, objective advisors who will share their perceptions of what's so - no matter what.

18. How are you continuing to invest in your customers and their experience after they have purchased your product? Value relates to the entire customer experience.

19. No one deal or opportunity should be worth damaging a long term relationship (business or otherwise).

20. The most successful businesses are ones where a group of friends help each other succeed.

21. Ultimately, the CEO's position is to simultaneously lead and serve others. 

22. You never know when you will be working with people from your past, so always be respectful, and professional. Paths cross when and where we least expect them.  

23. It is important that you like your customers. If you do not like your customers you will by design not do the best you can for them because they annoy you.

24. As any entrepreneur knows, you are pretty much selling all the time to everyone, whether VCs, prospective clients, employees or significant others.

25. Life will happen.  Your best employee will quit to do something else..that doesn't mean that they don't care, just that it's their time to move on. 

26. Keep doing good without being able to sight an immediate reward. The reward often comes unexpectedly.

27. A startup mentor is really like a therapist, if you think about it…

28. Tough times never last, tough people do.

29. The "iasm" in enthusiasm stands for I Am Sold Myself.

30. A bad decision is often better than no decision at all.

31. There's no better way to research a market than just launching a product.

32. Often you can start selling something simpler, to more customers, sooner than you think.  

33. There are three primary ways to get cash in:  1) Customers 2) Financing 3) Sale/Disposal of Assets.  Great businesses figure out #1 so they don’t have to worry about the others.

34. Just because you’re an Internet company doesn’t mean you are or should be a global company.

35. Distribution and channel partners don’t want to sell your product.  They want to take orders and make money.

36. Startups have many diseconomies of scale: The more people, features, markets, products, business models, investors, etc. — the harder it is.

37. Be objective.  Learn to listen to what the world is telling you (and often beating you over the head with).

Thanks to everyone who has contributed to the conversation so far.  It’s great to see such energy, enthusiasm and experience from the entrepreneurial community.

Any of the above insights strike a particular chord with you?  Which one is your favorite? 

By the way, to get more of this kind of stuff, you should follow me on twitter here.

Posted by Dharmesh Shah on Fri, Jul 17, 2009

COMMENTS

I particularly like the idea of rituals. When we get a private office space, I'd love to install a big gong to bang when we close strategic partnerships. I suppose it might be intrusive if we start closing frequently throughout the day, so I suppose we ring the bell/gong X number of times for X number for closings at the end of the day?

posted on Friday, July 17, 2009 at 12:30 PM by Danny Wong


I like #34. If you target your marketing at the local level as a startup, it's easier to serve your customers. Make sure everyone is within driving distance in the early days.

posted on Friday, July 17, 2009 at 12:49 PM by Josh Asbury


#3 hits the nail on the head. #13 is tremendously reassuring. I am going through it right now! 
 
Thanks for the compilation Dharmesh, some gems in there!

posted on Friday, July 17, 2009 at 12:55 PM by Shuba S.


Getting the culture right is by and far the most important startup task. Culture comes directly from the CEO and cannot be changed by anyone else.

posted on Friday, July 17, 2009 at 2:58 PM by Jarie Bolander


#30 was nice to hear right now -- I am on the verge of the biggest partnership in my company's history, and I've been fretting that I am giving away too much, that I'm too much of a nice guy to make the hard decisions.

posted on Friday, July 17, 2009 at 3:31 PM by J Kaye


WRT #1, just make sure you are offering true ownership, this doesn't mean the actually own part of the company, just that their decisions actually have the ability to change the company. At my previous career (that turned into a job) the owners preached that their main employees "owned" part of the company, but all of our decisions had to be proved and approved over and over again. Making changes that improved the company became impossible. Many of their main employees ended up leaving because of the overcontrol of the owners in areas they did not understand.

posted on Friday, July 17, 2009 at 3:54 PM by Ryan L


Fantastic collection of wisdom. 
My favorites: #16, #26, #28, #34 and #37

posted on Friday, July 17, 2009 at 4:32 PM by Fernando Martins


I needed to read 32, I think I'm overthinking things...

posted on Friday, July 17, 2009 at 5:34 PM by Samantha Armbruster


"16. Take care of the people with integrity" 
 
Have them killed?

posted on Friday, July 17, 2009 at 9:19 PM by jojo


Ritualize the workplace with tangible incentives and rewards rather than mickey-mouse gongs, foosball tables and pretentious toys. 
 
 
 
Even something as small as taking employees out for coffee to celebrate a win is better than this kind of "Office" gong-banging malarky.

posted on Friday, July 17, 2009 at 9:39 PM by TongoRad


you dont need anyones permission to start a company. (?) 
 
dont die (pg) 
 
startups don't die they quit (pg)

posted on Friday, July 17, 2009 at 10:34 PM by Hasan Luongo


Wow. Often when I run into lists like this one they're full of platitudes. Most of these are good.  
One that I would add is "Don't try to be someone else."  
Some of the rituals that work great when they're authentic, for instance, make you look like silly when you try to adopt them and you're uncomfortable with them.  

posted on Friday, July 17, 2009 at 11:04 PM by Dror


I am loving "29. The "iasm" in enthusiasm stands for I Am Sold Myself." This is what should be instilled in all sales people, especially the people who call with their monotone voice to ask me to switch my cell phone provider. 
 

posted on Saturday, July 18, 2009 at 2:55 AM by Minna Van


I agree with #13 beyond anything, its happens with everyone, not just experts, everyone has a opinion and thinks they can 'help' by telling you it will not work. Look past it, follow your dream.

posted on Saturday, July 18, 2009 at 1:12 PM by Akshay K


#2 is one of the key factors. The answers are not always as straight forward as you may think.

posted on Sunday, July 19, 2009 at 5:27 PM by Scopulus


#23 is the best for me. Your customers are your heart. If you don't care about them, then you will lose your more valuable asset. 
 
Santiago L. Valdarrama 
Owner - Laura Software 
www.laurasoftware.com 
Twitter: @svpino

posted on Sunday, July 19, 2009 at 5:48 PM by Santiago L. Valdarrama


The 37 points mentioned are really important for any startup companies like me, I would appreciate the points, and these are basics and need to be strictly followed by any startups

posted on Monday, July 20, 2009 at 3:23 AM by Vidya Sagar


i love #3. Often I'm asked by friends why I choose to work for startups instead of stable corporations... although i see the benefits of working for one, I love experiencing the uncertainty of startups, witnessing the passion and creativity of people, and just how much soul and effort everyone gives. it's such a natural high.

posted on Monday, July 20, 2009 at 7:20 AM by ven


Hi Dharmesh, nice list. I just launched my startup and I'm learning a lot. I'll sure visit your blog from now.

posted on Monday, July 20, 2009 at 7:26 PM by Asswass


Love #10 and #29.

posted on Monday, July 20, 2009 at 11:38 PM by Clifster


Excellent insights Dharmesh! 
 
 
 
I really enjoyed reading this and as you said, those who've never been there, won't get it!

posted on Tuesday, July 21, 2009 at 7:05 AM by Marshall W. Northcott, Canada's Sales Expert


I agree that an MBA is no substitute for experience. Their are aspects of "doing" that a classroom could not hope to simulate. But I hesitate to write off any form of higher education and propose that an MBA program does not promise to provide all of the skills necessary for business. It is the MBAs themselves that feel high and mighty. 
 
However there has been significant amounts of research on the subject and the literature suggests that the success of an entrepreneur is closely correlated to the years of education of the entrepreneur (Robinson & Sexton, 1994). This is not to say that those with less education are not successful or that experience is not a significant factor, only that the probability of success (in terms of earnings) increases with each year of education. 
 
I, for one, cannot wait to finish my program and start a project, hoping to develop all of the skills that my program missed through experience, and learning from those with more experience than me. 
 
Reference 
 
Robinson, P. B., Sexton, E. A. Journal of Business Venturing. 1994, New York.

posted on Tuesday, July 21, 2009 at 10:28 AM by An MBA Candidate


I like #30. A bad decision is often better than no decision at all. You need to add that bad decisions need to be abandoned sooner, rather than try and make them work. Judge suceess by the outcome you want. Remember, if you always do what you've always done, you'll always get what you've always got.

posted on Wednesday, July 22, 2009 at 5:14 AM by Richard Gauder


Business schools don't promise to make you into entrepreneurs. So these criticisms are really irrelevant. If you want to pick on business schools, why not look at other schools too? Ask an engineer how often they use the equations they learned. 
 
No MBA program can make you a successful entrepreneur but it can help you 
* build new networks, 
* make friends from diverse fields, 
* hear inspiring stories and last but not least 
* teach you some structure about business, which is otherwise pretty nebulous. 
And that's pretty much why people go to business schools for. There's no reason for this criticism and all it's doing is create antagonism towards MBAs.

posted on Wednesday, July 22, 2009 at 7:49 AM by Debashish Samaddar


Excellent article. I like 20, 25 and 30.

posted on Wednesday, July 22, 2009 at 10:03 PM by Lalitha Brahma


I love what you said about competition. Some days, the fierce competition makes us want to throw in the towel. Looking at it as a positive entity will help us keep going.

posted on Saturday, July 25, 2009 at 10:41 PM by Sympathy Gifts


When you're establishing a ritualized culture - don't hire cynics like TongoRad. Or at least keep them at a distance. 
 
Don't become the pointy haired boss with an office full of Dilbert obsessed drones. Keep happy staff who will work harder to be happier and avoid staff who begrudge every ounce of effort that doesn't come with a tangle reward. 
 
Your start-up isn't a charity for the well being of your employees. It's yours. Looking after your staff is key to making your business succeed - but you still do it to make your business succeed. Not to make your employee's succeed. 
 
The ownership/staff buy in culture is about finding a way to get the most from your staff. A cynic who sings that the whole process is a sham designed to get the more from employees who want to give less sabotages the psychology behind it and makes everyone miserable.  
 
Staff who are motivated by happiness are better off themselves, better people to keep around you, better for your business and lets face it - better for your bottom line - then people who are just looking to milk as much out of you as they can manage. 
 
And all the cynics who scream for tangible rewards and tell you not to bother with workplace enjoyment - just give them cash - will never give you 100% for long. They'll find out what the threshold is for how much they can bleed you for and then they'll look for a deeper gravy train. 
 
Ironically - those people are normally so cash motivated because of all the money they spend with therapists, drugs, hookers and shiny toys - trying to take their mind of how miserable their job makes them. 
 
Pay your staff what they're worth. Then make sure everyone gets a feel good buzz when they here the gong ring

posted on Sunday, July 26, 2009 at 10:47 PM by scootah


Experienced Quotes , handy for the Entrepreneurs

posted on Tuesday, July 28, 2009 at 12:45 AM by Narasimha Swamy


These are truly inspiring. I like the spirit of #31 - launching a product is the best way to research a market...It says to me to just go for it!

posted on Wednesday, July 29, 2009 at 9:11 AM by Chris


idiot-syncarcies?

posted on Wednesday, July 29, 2009 at 11:58 AM by jay


#30 made me think of the movie/book "Touching the Void"...

posted on Wednesday, July 29, 2009 at 1:44 PM by Adrian


#13 is perfect and can often be the reason why an entrepreneur doesn't give it a go. 
 
Also, when really smart people tell you your product is crazy, go build it anyways. More often than not, the result is astounding...you still might not sell (like the smart person originally said)...but that's ok. 
 
#33 is another favorite. But what if going after financing first will help you get more customers later. i.e. a handful of customers with a little revenue first... vs. raise money first, and go after more customers later? What do you think? 
 
#38 Raise less money than you need. I've always heard to raise more than you need, but often early financing can come from the wrong sources. Raise as much as you need to survive in the early stages.  
 

posted on Thursday, July 30, 2009 at 3:44 AM by Sid Viswanathan


Related to #33 - Thinking thoroughly about the freemium model early on. @manukumar wrote an interesting article about freemium recently that I think every startup should read.

posted on Thursday, July 30, 2009 at 3:53 AM by Sid Viswanathan


This is excellent. I needed to hear #4 "Most start ups should start selling the product before they think they should." I have been waiting to have everything perfect before starting to meet with potential customers. 

posted on Friday, July 31, 2009 at 11:24 AM by Therese Simonds


I Like #1. But, the problem is transferring the thought of pride and ownership to your employee. Ownership is associated with "MONEY" in the mind of any employee.

posted on Saturday, August 01, 2009 at 8:43 PM by Julius Jackson


Julius, Your right but as a start up most can be convinced that if the business successes then they will be rewarded.  
 
You can give them ownership via responsibility and authority, making them feel involved and part of something. They are investing in their future.

posted on Sunday, August 02, 2009 at 4:37 AM by Scopulus


"The truest wisdom, is resolute determination" 
 
- Napoleon Bonaparte

posted on Sunday, August 02, 2009 at 11:40 AM by Andrew Park


I can not believe you give this advice for free. Everyone should review each point and take it in. It primarily focuses on the internet/software companies but it can be applied universal. Good job.

posted on Friday, August 07, 2009 at 7:09 PM by Cameron Gunn


I completely agree with Cameron above. Thank you for providing the wisdom and knowledge for others to succeed, this post was pure gold.

posted on Monday, August 10, 2009 at 11:19 AM by Max


Very good collection of 'pithy insights'. We run a specialist start up business in Australia and have added this link to the 'Resources' section www.business-switch.com.au/resources) of our website and suggested our readers print out this list and stick it on a wall near their computer. Well done!

posted on Monday, August 10, 2009 at 7:49 PM by The Start Up Sage


Amen. 
 
+ every investor has their own criteria and will want to see something different. Customising proposal material to one 'angle' can leave you a few months down the track because you followed one voice.. likely without the result you were looking for. I'm learning that it goes FFF, grants, angels and then VC. It's not about skipping steps.. they are their for a reason.. 
 
Nailing #33 and then owning the whole thing; much better idea.

posted on Monday, August 10, 2009 at 8:56 PM by Phil


Very apt insight collection for entrepreneurs. Important thing is to keep them in mind while you are running business. It's more about creating best business practices than just to know how to do your business. 
Dharmesh, you are doing a commendable job as a serial entrepreneur and CTO /founder at hubspot.

posted on Saturday, August 15, 2009 at 1:25 PM by Krishan


Someone else commented on the ambiguity in "Take care of the people with integrity", though I don't support their suggestion. For me it could mean "Use integrity to care for your people" or "Ensure that you support and promote people who have integrity". I think both of these are true.

posted on Saturday, August 29, 2009 at 2:13 PM by John Turner


# 3 sticks out in my mind as the most important one because in order to pour your heart and soul in to something you have to be passionate about what you are doing. So anyone out there looking to start their own business should make sure they have the passion for what they are doing so they don't get burnt out to quickly.

posted on Tuesday, September 01, 2009 at 9:55 PM by Team The Rise To The Top


Corollary to 14 and 30 - If you have to eat s**t, make sure you only eat it once.

posted on Friday, September 11, 2009 at 1:19 PM by charles


Thank you for these great tips. Really like #32. There are so many times where I need to remind myself that simple is often better especially in the beginning.

posted on Friday, September 11, 2009 at 2:39 PM by Chris


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