Millions of entrepreneurs grapple with the formidable challenges of starting and growing a successful business. Unfortunately, precious few make it beyond the basic survival stage, let alone find the holy grail of sustained profitability. If only there was a simple, easy to follow recipe for entrepreneurial success that could be handed down to future generations; kind of like your French grandmother’s recipe for a soufflé that was guaranteed not to fall (fail!). Wouldn’t you like to know how some of America’s most successful entrepreneurs made it?
Well, today is your lucky day. Robert Jordan, successful entrepreneur has been launching and growing companies and helping other entrepreneurs do the same for the past 20 years, provides jolts of inspiration and shots of courage for new business owners in his new book, How They Did It: Billion Dollar Insights from the Heart of America (RedFlash Press).
Jordan’s book includes a collection of interviews from 45 leading founders who created $41 billion from scratch! Jordan’s newest endeavors are RedFlash project implementation team, and interimCEOinterimCFO, a worldwide network of interim, contract, and project executives. Here are some tips are taken from Jordan’s book:
Too little funding forces discipline.
The upside of having too little funding is that your business can grow organically and you’ll stay much focused on making a profit and positive cash flow.
In the same category, founder after founder cautioned against taking on too many investors. Equity is something to be viewed as precious, and many people don’t think about how much they are being diluted with each investor that comes on board. It’s great to have a vital sense of your mission, bringing your products and services to the world, and it’s also legitimate to be rewarded for your efforts.
Always have a standby investor.
No matter how much you like each other, and how much time and effort you’ve invested in negotiating and paperwork, large financial partnerships can – and often do – fall apart last minute.
You may feel like leaping for joy when an investor agrees to come on board, but it’s not over until the papers are signed and the money changes hands. Jim Dolan experienced this first-hand, when an investor suddenly changed the terms on the day of closing. Dolan was prepared with a “hot standby” investor and was able to create a new transaction with a new investor the same day – because he had already done the additional work upfront.
Create a business plan that’s a selling tool.
Venture capitalists look at hundreds of prospects, so your business plan has to be clear, credible, and able to demonstrate in 10 minutes or less your dedication to solving a crucial problem.
What’s even better than a plan? Phil Soran, co-founder of Compellent, recommends that you finish version 1, a prototype or even a product you can start to sell. You will be many times better off than just showing a theoretical document to an investor.
Be honest in all your dealings.
Running a business is no different than running your life. Founders should be honest in their dealings and in their assessments. Mark Tebbe, founder of Lante and co-founder of Answers.com, put it this way: always look at facts, because facts don’t lie.
You can’t find winning entrepreneurs without hearing about bedrock values that guided them and their teams along the way, including honesty, integrity and passionate desire.
Start with what you have.
Howard Tullman has successfully started and grown over a dozen companies. Howard observed that if you wait for the perfect solution to come along, you’ll never get your business going. Assume that the right tools, systems, and people will come along to refine it.
So many times we think we have to come up with the “perfect” solution to a problem, when the reality is that the marketplace will give you all the feedback you can handle, and then some. And as successful founders point out time and again, it was only with constant iteration and feedback that big winning ideas were finally proven out.
Make your employees shareholders.
When employees have a sense of ownership, it creates a kind of self-enforcement process. Dane Miller, co-founder of Biomet, made sure to give stock options to virtually everyone at his company – all the way to the janitor. Owners think differently than employees.
Challenge your management team to create an employee-oriented company. Raj Soin, founder of MTC, made sure that his managers came to realize that their biggest clients were their employees, which led to building a top-notch team.
What doesn’t work, throw away, and what does work, run with it. Knowing what’s going right and what’s going wrong – and doing something about it quickly – will put you at the front of the class.
Dick Costolo, founder of Feedburner and now CEO of Twitter, described product development and marketing like an eye exam: is A better than B? How ‘bout C? Is C better than B? View your failed initiatives or projects as valuable information to then inform your next generation of products and ideas.
Be willing to tweak your idea.
If you fall too much in love with your idea, you won’t have the capacity to take feedback from other people and from the market. The idea you start with is unlikely to be the exact idea you’re going to win with.
Every one of the founders Jordan interviewed had stories about the problems they wouldn’t have discovered had they not listened to customers, colleagues, and investors in the process of pitching their product. Invariably the first product was not the winning one – the winning product came down the line. Stick with it!
Posted by: Susan Fronk