7 Personal Strategies That Define Great Entrepreneurs

As an angel investor in startups, I’m a believer that smart investors invest more in you as the entrepreneur than the next billion dollar solution you are pitching. Yet I find that most of you find it hard to make the case that you can be the next Elon Musk or Bill Gates. I’m not looking for words, but examples of how your habits and attributes have produced results, even before your startup.

In my experience, building a business is more about getting results than having the right dream, or the right technical skills. I want to see and hear that determination, never-give-up attitude, and focus that separate the exceptional entrepreneurs from the other ninety percent that ultimately fail or give up in the face of the big challenges that face every new business.

In this context, I recommend that you highlight in your investor pitch some key personal attributes and mindsets, such as the following, that will convince a savvy investor to believe you can deliver the business as well as the solution you are pitching:

1. Highlight prior results from your early initiatives. Even if you are still in school, and never started a company before, strong entrepreneur candidates can point to projects they initiated, led, that produced significant results. Founders like Gates and Zuckerberg always had projects going, and even dropped out of school to start their big business.

2. Relate a higher purpose to your business proposal. These days, customers expect to hear and see social and environmental value from a new business, rather than just a new technology or profit. Certainly, investors want to see a financially attractive opportunity and return projection, but also want entrepreneurs who can take it to the next level.

   For example, Patagonia founder Yvon Chouinard made it clear from the beginning that his company mission was to save the environment, not just be another outdoor clothing seller. He built an "activist company," and continues to lead and profit from that strategy.

3. Give your examples of determination and problem solving. The startup road to a successful business is always a long one, with many unknowns to overcome. Even if you don’t have previous businesses to reference, relate examples of your problem solving ability and determination in other contexts. Highlight your growth and continuous learning.

4. Demonstrate business acumen as well as technical. Many aspiring entrepreneurs are so focused on their technology, that they display no interest or credible understand of the financials and metrics of growing a business. This can be mitigated by introducing a partner with the necessary complementary skills and focus to balance the equation.

   Before looking for an investor, you or a partner need to demonstrate an understanding of the implications of startup valuation, revenue projections, break-even, and ROI. Ignoring these, or taking an unrealistic position, will kill even the best solution proposal.

5. Practice excellent communication and listening skills. The ability to get your message across effectively, through story-telling, examples, and clear terminology is key, not only in convincing investors, but in attracting customers, vendors, and business partners. Great entrepreneurs know how to listen and learn effectively, as well as talk.

6. Keep a positive perspective, even on competitors. Great entrepreneurs never degrade their competitors, and provide a positive outlook on all the challenges ahead. They position competitors as a base for their solution advantages, and an indication of existing market demand. They talk positively about how customers will appreciate value.

   For example, I often hear statements such as, “competitor x’s product is expensive and hard to use.” Real entrepreneurs highlight their positives by saying “compared to product x, our solution supports new environments, and still gets the job done faster and easier.”

7. Show credibility as an industry influencer and leader. As an entrepreneur, you will have be able to deal with disparate views, and ultimately build solid people relationships in support of your efforts. Relate how you have been able to lead a team, and positively influence an organization to align with your beliefs. Leadership is tougher than invention.

As an investor, I see hundreds of innovative solution pitches, but only rarely do I see an aspiring entrepreneur who demonstrates the attributes outlined here, and can convince me that they could be the next Steve Jobs or Jeff Bezos. I urge you to take a hard look now at how you come across to peers and people in business. You may be the biggest hurdle to your own business success.

Marty Zwilling

*** First published on Inc.com on 07/16/2020 ***

7 Costs To Consider Before Taking Your Startup Public

Despite the fact that the number of IPOs (Initial Public Offerings) for startups have continued to stay low, I still hear it touted often as the preferred exit strategy. I suspect the exuberance for an IPO is still being driven by the highly visible successes of a few companies several years ago, including Facebook, Yelp, and Twitter. Everyone dreams of becoming a billionaire overnight.

According to TheStreet, US IPO market results in Q2 2020 posted a strong bounce-back from Q1 with 58 IPOs, after a slow start due to the Covid19 pandemic. The numbers represent a 45% increase from the previous quarter’s tally, but a 14% drop from the same quarter in 2019. They are still nowhere near the rate required to match the yearly total of 486 hit way back in 1999.

Key drivers for the drop this quarter are the general negative numbers for Q2 earnings, and concerns about how quickly or slowly the world will emerge from the pandemic. Yet I believe the trend will continue at least flat as entrepreneurs become more aware of other considerations that make the IPO route less and less attractive. These include the following:

1. Taking a company public is an expensive process. It will take many months and require endless amounts of time, money, and energy. According to a dated but still relevant study by PricewaterhouseCoopers, companies average $3.7 million spent directly on their IPO, in addition to underwriter fees of 5 to 7 percent of proceeds. It takes real money to find money.

2. Make sure you can effectively use a big cash infusion. There is a big difference between needing a million dollars versus $100 million, or even a billion. New stockholders will expect to see rapid growth. You better have lined up a major international expansion, some major acquisition candidates, or a wealth of unfilled orders.

3. There are real ongoing costs of maintaining a public company. You will need an experienced CFO, and the best legal and accounting help to comply with the audit requirements of the Sarbanes-Oxley Act. PwC estimates that public companies incur an average of $1.5 million in annual recurring costs as a result of being public.

4. Exposure to increased liability risk. Public company executives are at civil and even criminal risk for false or misleading statements in the registration statement. In addition, officers may face liability for misrepresentations or speaking out in public and SEC reports. Executives shoulder new risks for insider trading and employment practices.

5. The public company corporate culture may not fit you and your startup. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Most startup founders voluntarily exit or are pushed out, and the fun is gone. Analysts want escalating profits.

6. Public companies bring new expectations of benefits. If you want to give stock options, or have already been giving them, the employees will love the liquidity of their options, and the thought of selling shares for a profit. On the other hand, “competitive” salaries will likely go up, and health and retirement benefits will jump to a new level.

7. Market volatility usually hits public companies first. Private companies can often fly under the radar in turbulent times like the pandemic and recession. Public stockholders are more easily swayed by emotion and the activities of the crowd, rather than market conditions, and all performance numbers are public. Shareholders can jump ship quickly.

Before you forge ahead to an IPO, I recommend a thorough readiness assessment, to quantify the need, as well as to identify potential gaps within processes, areas needing internal controls, and positions requiring enhanced technical accounting skills to operate as a publicly-traded company.

The costs of an aborted IPO are sizable, and may not be deferred to a later period or offering. Along with the time and effort required, this can severely cripple your company for an extended period, not to mention your entrepreneur lifestyle.

While the wins can be big, I still see the IPO option as one to be considered only under exceptional circumstances, rather than as the default exit option. Your odds of hitting the lottery may be better.

Marty Zwilling

6 Today Strategies For Creating The Next Killer Brand

Brand loyalty is still critical for your business growth, but is becoming tougher and tougher to achieve and hold. According to studies, the alternative of acquiring new customers still costs you five to seven times more than retaining existing ones. But customers today are fickle, instantly aware of every new alternative, due to the Internet and social media, and not afraid to change.

Yet, as a business advisor, every entrepreneur I meet assumes that they are destined to become the next killer brand in their space, like Tesla is to all-electric vehicles, and Apple is to smart phones. They don’t realize how much it costs in time and money to get there, and only one out of a hundred large consumer product companies around the world have ever made it.

Despite the challenges, I encourage every business to really focus on achieving an exceptional brand image, because the payback is huge. In my experience, your first step should be to look beyond traditional marketing practices, per the following strategies:

1. Make every customer experience a memorable one. Today’s customers demand to be more than satisfied with your price to be loyal. They need to remember their “total experience” as one that stands out – starting with how easy it was to find you, simplicity of the transaction, and superior service. They want to be your real advocate to others.

   At a Ritz-Carlton, for example, employees are authorized to spend up to $2,000 per guest to solve a guest issue or improve a guest's stay. Believe me, if I experienced that kind of memorable attention at a hotel, both loyalty and advocacy would be easy to understand.

2. Every employee must exude passion and loyalty. All the marketing and pricing in the world won’t make your brand memorable if your employees don’t live and communicate that feeling. You need to build and reward a highly motivated and engaged front line. They are your greatest resource for generating brand loyalty in your customers.

   Toms shoes donates a pair for every one sold, and maintains employee passion and loyalty by giving their most effective employees international trips to assist non-profit partners in distributing shoes in interesting places like Nepal and Honduras.

3. Appeal to all your customer senses all of the time. Focus on innovation in the design of your delivery and service, as well as your product. Visual appearance and taste still matter, whether it be food, clothing, or facilities. Make your customers pleased and excited when they think about your brand, and they will return often, bringing friends.

   Smart marketers call this the “five senses” strategy for improving customer experience and loyalty. Find ways to let your customer touch, hear, see, smell and even taste your product, even if only virtually, by analogy, or by providing snacks or rewards.

4. Convert customer interactions into relationships. Even digital and virtual interactions can feel like real relationships, if customers hear names, commitments, and follow-up, rather than rules and requirements. Be responsive on social media, as well as every physical interaction, so that every customer feels a special sensitivity and connection.

   Businesses as potentially mundane as Apple Stores demonstrate the importance of a modern airy design, coupled with well-dressed and friendly salespeople who approach you with warm personalized welcome, and really listen to you without a sales pitch.

5. Go beyond asking customers how they want you to improve. Certainly you need to listen to customer feedback, and fix existing problems, but the real challenge is to excite customer imaginations with products and services that they could not envision. Truly loyal customers are ones who trust you to lead them, rather than them having lead you.

   Very few customers are likely to envision a new concept, such as combining a computer with your watch. You have to excite their imagination, and entice them through clear customer value. They will reward you with brand loyalty and line up for the next step.

6. Highlight only larger customer-focused initiatives. Not every change you make is worthy of hype in your marketing. Customers become bored or immune to constant harping on your latest incremental change, special sales, and internal changes. Your challenge is to create special events and exciting changes that lead to customer loyalty.

Let me assure you, these strategies are just the beginning. I see new and innovative brand initiatives appearing every day, but unfortunately from too few companies. Let me assure you that an exceptional brand image is far more valuable than adding a new product or more support. Now is the time to measure your brand loyalty, and figure out what it takes to move it up a notch.

Marty Zwilling

*** First published on Inc.com on 07/09/2020 ***

9 Stages to Building a Robust And Rewarding Business

Many of the entrepreneurs like you that I have met in my role as a business advisor are really product creators versus business creators, convinced that a great product will generate a great business. Unfortunately, these two are rarely closely coupled, and navigating all the stages of building a business is typically the more challenging task. But I’m not one to rain on your parade.

Thus one of my first objectives as an advisor is to assess your current ability to navigate the stages of a new business, and then give you the guidance and direct assistance on what to anticipate and how to prepare for it. I found real confirmation of my approach, and much practical guidance in a recent book, “Entrepreneurial Leap,” by a friend and cohort Gino Wickman.

In the spirit of helping you avoid some of our own learning experiences with startups, I will paraphrase here the nine key stages that he and I both see most businesses going through in their evolution from a startup to a successful and stable entity:

1. You can’t sustain a business without positive cash flow. Even though profit may not be your driving motivation, you can’t sustain any business without generating cash. In most businesses, this means selling something, and proving that your product or service has value. Don’t delegate this cash management stage to anyone else in the business.

2. Make sure someone is managing people and operations. Entrepreneurs are typically focused on the big picture – creating a vision, purpose, and a long-term strategy. Building a business requires a stage of focus on execution and managing people accountability. Very few entrepreneurs can play both roles, so find a partner or hire an integrator to help.

3. Build a business culture to match your core values. For the business to prosper, every employee, and your customers, must know and relate to your core values, such as product excellence, care for the environment, and personal integrity. These are the timeless principles that must guide all hiring, marketing, and execution decisions.

4. Implement the key business metrices you will live by. This is the stage where you move from managing by your gut to managing by numbers. Identify the three most important metrics your business must hit every week to achieve growth goals. These will almost always be related to sales and marketing, since they must tie back to cash flow.

5. Stay connected and engaged with your employees. A common entrepreneur mistake is hiding in your office, and assuming that everyone knows what is going on. People need to see and hear from you in a formal sense at least weekly, and you should practice “management by walking around.” Give constant feedback, and say “thank you” often.

6. Build pivot plans early to recover from oversights. Every startup I know has had to pivot one or more times, no matter how certain they were of initial plan perfection. Thus you must constantly prepare for this stage by listening to customers, measuring customer value, and watching outside forces. Build change agility into all your processes.

   Every founder has a story about the pivot that made their business, such as Starbucks switching to selling coffee from expresso makers, and Flickr from an online game to photo sharing. There are also many more stories of companies that pivoted too late.

7. Don’t try to do it all – capitalize on your strengths. Stay in your personal sweet spot. Your challenge is to hire help just before you reach capacity so you don’t stop growth. Each time, fill where you have the least interest and strength, so that over time you enter the stage of doing only the things you love, while using your talents to the fullest.

8. Don’t let your business grow beyond your comfort zone. Too many entrepreneurs get so caught up in the challenges of growing their business, that they can’t stop, and the business gets away from them. This stage may eat all your profits, and your schedule makes you miserable. The answer is to learn to say “no” when you’ve had enough action.

9. Increase you focus on coaching, training, and mentoring. Every one of you entrepreneurs should recognize the stage in your business where your greatest satisfaction can come, not from more growth, but from the opportunity to share what you have learned with those who follow, and may carry your legacy forward.

Bill Gates is an example of someone who is in this stage, and is now focused on using his insights and resources for the greater good, through philanthropy, speaking at TED forums, and helping many other entrepreneur organizations.

Building a business should be and can be as exciting a journey as inventing and building your product. I think you will find that both are hard, with each stage being challenging, rewarding, scary, exhilarating, and yet amongst the most satisfying of things you will have done in your life.

Marty Zwilling

*** First published on Inc.com on 06/26/2020 ***

5 Keys to Moving From Entrepreneur Thinking To Action

As a mentor to aspiring entrepreneurs, I’m always surprised by the fact that some never seem to be able to that first startup going, while many others never seem to stop, starting their second or third initiative before the first one is fully hatched. I’m now convinced that serious entrepreneurs relish the startup process more than success. They enjoy the journey more than the destination.

If you think about it, most of the influential names in the entrepreneur world today, including Elon Musk and Richard Branson, have each started many companies, learning from each, and fully recognizing that not all are destined to be remembered. Others, like Jeff Bezos and Bill Gates, have one company, but are known for their frequent internal “startup” initiatives to foster growth.

The lesson here is that the right actions, follow-through, and commitments involved in starting a new venture are likely more important to ultimate success than honing the single ultimate idea, or getting the solution exactly right the first time. Here is my summary of key principles that you can follow to join that select realm of recognized and successful entrepreneurs:

1. Thinking and talking won’t get you there – just do it. Starting something new is risky, no matter how many experts have reviewed it, or how much money you have. You can’t win a race that you never start. The key here is to gather the relevant facts, risks, and resources, make a decision, and move forward. Real entrepreneurs start experiments.

   A while back, one of my aspiring entrepreneur friends was trying to impress me with his expertise, by bragging that he had the idea for a couple of innovations before anyone else, but he just never got around to filing a patent before someone stole it from him. As an angel investor, you can bet I wasn’t convinced he would ever start his next proposal.

2. Plan to learn from what doesn’t work, but never give up. Based on my experience, most startup failures occur simply because the founder gives up too soon, without exploring creative alternatives. More determined entrepreneurs take every step that fails as a new insight to success, pivots to a better alternative, and moves on toward success.

   Most people don’t remember that Bill Gates first software venture, called Traf-O-Data, was a dismal failure. As well, Jeff Bezos admits to having make an embarrassing number of bad investments, which he calls painful learning experiences, but he never gave up.

3. Rally people behind a higher purpose, not just a product. The customer culture today responds best to a greater vision for improving society and the planet, which can easily sustain a constant stream of new products. Challenge your team, and your customers, with expanding their mindset, achieving personal goals, and changing the world.

   For example, renowned TOMS shoe company founder Blake Mycoskie continually made it clear that his most important goal was making life better for the less fortunate. Thus he donates a pair for every pair sold, and keeps his employees engaged by sending them internationally to work directly with constituents who can most benefit from the donations.

4. Incent and reward new ideas with action, not more study. Counter the traditional business thinking that the key to long-term growth is repeatable processes and volume manufacturing. Today the key is building momentum, customization, and continuous innovation. Don’t let your team forget that you can’t have innovation without new actions.

   The best way to start is to enable employee decision making on customer satisfaction issues. For example, the hotel chain Ritz-Carlton, incents employees to try new ideas by allowing them to spend up to $2,000 per guest to overcome a particular problem.

5. Spend more time nurturing partners and outside influencers. Too many early entrepreneurs go into stealth mode, or are unwilling to share what they know, for fear of ideas being stolen. The best are willing to share what they know, actively build partner communities, and constantly expand their realm through new learning and experiments.

   Elon Musk, while clearly in the lead with electric autos, recently announced that he is freely offering his battery intellectual property to partners and competitors, in order to expedite the development of the charging support network needed to expand the market.

Obviously, you need the confidence in yourself to make that first step. Here again, giving yourself a purpose and committing to that purpose is a good way to drive you to action. Practice by working to convince others to support you, and then follow you into action. Remember that everyone stumbles as they learn, so don’t be afraid to pick yourself up and try again.

It’s also important to surround yourself with smart people who can hone your vision, complement your execution skills, and drive you to action. Before you know it, you too will become the real entrepreneur and influencer that you always wanted to be. There is still plenty of opportunity out there for all of us.

Marty Zwilling

*** First published on Inc.com on 06/27/2020 ***

8 Steps To Success With A Startup Board And Advisors

Many startup founders I know avoid establishing a formal advisory board or board of directors for as long as possible, with the excuse that this is just another burden, or it has more risk than value to the founder. In my experience, just the opposite is true, since outside experts with the right experience can greatly reduce risk and improve the quality of your decisions in time of crisis.

Of course, if a board is set up just to appease investors, or just for window dressing, the value may indeed be minimal or even negative. You may be committed to running the leanest possible team, or convinced that you know the business better than anyone else, but all of us can use some help from time to time, especially in today’s world where things are changing quickly.

In the spirit of helping you avoid some of my own experiences with startup boards, I would like to offer some of my own “rules of thumb” for establishing at least an advisory board well before you sign up investors or ship your first product:

1. Here is your chance to select your future boss. It’s not often that we in business get to pick the leader we want work for, so approach advisors with this in mind. Remember that a formal board can technically replace you, so make sure you choose only people you respect, who will set realistic objectives, and provide good business governance.

2. Offer reasonable compensation to maintain focus and access. To show your commitment, and keep theirs, all board members should be compensated. A reasonable place to start is one percent of your company equity, plus actual expenses to cover travel and meeting attendance. A voluntary board sounds good, but is generally not effective.

3. Start with a small number of board members. I suggest that a manageable number on a new board is either three or five members, including yourself. An uneven number works best to avoid tie votes, and a larger number just makes it that much more difficult to maintain relationships. Control board growth over time to match business growth.

4. Make sure each member brings unique value to the table. Having friends or family members on the board, or habitual nay-sayers, is not productive. Your objective should be to select outside directors or advisors who have a wealth of expertise and experience, are not hesitant to speak up, with a positive intent of making your business a success.

5. Look for boards members who have divergent views. If you expect that board members will always agree, or always support you, then you are destined for trouble. You need diversity and a broad demographic experience to prepare you for the range of customers in today’s markets, to balance your own views, no matter how experienced.

6. Formalize the board process and meeting structure. I recommend that you schedule a formal board meeting on a regular schedule, probably quarterly, and make it clear that you will meet individually with each member as often as once a month. Adopt a written set of board rules and governance policies, and make sure everyone sticks to them.

7. Ask for status feedback from the board after each meeting. It is your job as CEO to provide advance information and an agenda before each meeting, run the meeting, and ask for an assessment from each board member at the conclusion. Other committee or special assignments should be used as follow-up on specific issues to be resolved.

8. Make sure board members know your organization. No board members should be allowed to be strangers to your business setup, how it works, and unrecognized by key members of your team. Arrange regular orientation sessions to provide updates, and set up get-acquainted meetings with your high-level managers on a regular basis.

In my experience, you can learn more about how to run and grow your business from your board members than from any other source, if you approach the process positively. On the other hand, a contentious or cavalier board relationship, can quickly end your career as CEO, or can lead to the downfall of your company. Thus this role needs to be taken seriously by all concerned.

Early in your startup’s life is the best time to build relationships with the key industry influencers you will need later to make your company an attractive acquisition to a partner, or take it public (IPO). You need board members who are these influencers, or know them well.

Be one of those highest performing entrepreneurs who know how to build the right board teams and relationships, as well as run and grow their company.

Marty Zwilling

*** First published on Inc.com on 06/24/2020 ***

5 Rewards Of Independence That Excite Entrepreneurs

For all entrepreneurs, starting a business is the route to “life, liberty, and the pursuit of happiness,” no matter how risky. It’s the American dream that has been the goal of people in this country for over 240 years. If you are here in the U.S., I hope you are all able to take some time off this holiday period, to contemplate what you do, and why you do it.

According to a classic article and poll by Startups.co.uk, having the independence to make your own decisions is considered the key benefit of being an entrepreneur. Nearly 90 percent of respondents said decision-making independence was very important, closely followed by more flexibility for a better work/life balance. Job creation and innovation are the results, not the drivers.

Personal satisfaction also ranked close behind, with 70 percent of respondents claiming it was a key advantage to running their own business. Contrary to popular belief, most business owners did not start a business just to earn more money. Only 32 percent of entrepreneurs cited money a key benefit of running their own firm. This indicates that lifestyle and satisfaction factors are often more important than financial ones.

As with everything in life, there are advantages and disadvantages to every choice we make. Choosing entrepreneurship is no exception. Beyond the obvious advantages mentioned above, there are some additional advantages that get mentioned often.

1. Challenge of originality. A good entrepreneur feels the incentive to offer a new service/product that no one else has offered before. That’s the same challenge an artist feels on every new canvas, or every musician feels when composing a new work.

2. High level of excitement. Entrepreneurs love the continuous challenges of a startup, and the satisfaction of solving them. Some are so high on this life, that they hate the fact that they have to "waste" part of their life in sleep!

3. Minimal rules and regulations. Work in a conventional job is often difficult to get done because of all the "red tape" and consistent administration approval needed. With a startup there are no rules, until you make them.

4. Flexible work hours and conditions. Entrepreneurs can schedule their work hours around other commitments, including spending quality time with their families. Many love working from their home or garage, in casual clothes, serenaded their by favorite music.

5. Beat the competition and discover yourself. Competition drives innovation, and innovation drives competition. The cycle never stops. But the best part is that ultimately entrepreneurship isn’t a race against others but an opportunity to discover your potential.

Of course there are some challenges that every entrepreneur knows all too well:

1. No regular paycheck. Starting your own business means that you must be willing to give up the security of a regular paycheck. In fact, most startup founders work for no salary during the first year or two of company operation.

2. Few paid benefits. There will likely be no medical and dental benefits, and no vacations or other perks during the formative years. Don’t expect a staff to do the accounting, handle correspondence, or even clean the bathrooms.

3. Decision responsibility. All the decisions of the business must be made on your own, better known as “the buck stops here.” This may sound like an advantage, but is actually a major source of stress and loneliness for startup CEOs.

4. Staffing challenges. Hiring and firing decisions are hard, and that’s just the beginning. Often times, you will find yourself working with people who "don't know the ropes" and require extensive coaching and assistance. Then you have to deal with the mistakes.

By definition, if you see the rewards here as outweighing the risks, you are an entrepreneur. So you should fully appreciate the independence factor fought for so hard by our forefathers. I hope you have had time this holiday weekend to savor the dream. You earned it, and you need the rest.

Marty Zwilling

5 Challenges No Entrepreneur Anticipates In A Startup

Every entrepreneur I know finds it a challenge to balance the joys of entrepreneurship against a set of frustrations they never anticipated. Of course, most of you expect that raising money will be difficult, as well as staving off competitors, and handling that occasional toxic customer. What you don’t expect is to feel out of control, or to always be fighting the many demands for your time.

Based on my own experiences in startups, and many years of advising new business owners, I’m convinced that there are a few common frustrations that we all need to anticipate and prepare for, rather than let them be a surprise and a painful dent in your enthusiasm and personal satisfaction from living your dream. You need all the positive traction you can get to survive and prosper.

In the spirit of helping you prepare and respond positively, I offer my list of the most common new venture founder unexpected realities, with some thoughts on how to mitigate each one:

1. The business seems to be driving you, rather than you driving it. The list of things to manage seems to grow endlessly, including financial crises, personnel, investors, and customers, with each going in different directions, and threatening to be out of control. There are just not enough hours in a day, and knowledge available, to keep up with it all.

   Thus I recommend that you learn early how to focus on the things you can do, surround yourself with help rather than helpers, learn to say “no” often, and keep some balance between your business and the other elements of your life. The startup world is all about causing change and reacting to unknowns, so set your expectations early to deal with it.

2. Managing cash is an overwhelming burden, in good times and bad. You expected the difficulty of finding funding, but you never expected it to go so fast into unanticipated expenses, inventory, support, and marketing. Then there are those pesky competitor responses, always driving down margins and forcing you to develop new features.

   The norm for entrepreneurs is to be optimistic on revenue projections, and miserly on funding needs. I urge you to be more realistic in your projections on both ends, for example, always asking for enough to cover the next 12-month runway, plus a 6-month buffer for your next milestone to include contingencies and time for the next fundraising.

3. One or more key players need extra attention or replacement. Every startup is like a family, needing constant commitment to specific roles and priorities. Inevitably, someone you counted on will disappoint you with conflicting objectives, emotional challenges, or an inability to deliver. In a startup, this can be a team member, investor, or even a vendor.

   There is no way to predict where and how this will occur, but it should help to realize that it does happen, and you should not assume you are the cause. Just don’t take the “shortcut” of not doing your due diligence on aspiring team members, strategic partners, investors, or vendors. Cheaper in the beginning can be more costly in the long run.

4. Endless pivots are required to keep up with market changes. No matter how certain you are that your solution, target market, and customer need are well-proven, you are likely wrong, or the world changes by events you could not have anticipated. Thus you need to reduce the extra pain by having a Plan-B, and a process for rapid change.

   It may help to realize the essentially every successful startup has endured one or more pivots, even though few remember them today. YouTube and Facebook, for example, both advertised themselves as dating sites until they recognized from results that the dating market segment was already over-saturated.

5. Getting to the next level of growth is a constant challenge. Scaling a business is hard. Every time you think you understand the market, you see your growth flatten, or fail to respond to your best initiatives. You will never seem to have the time, skills, or resources you need for that key acquisition, global expansion, or new product offering.

The key here is to plan ahead, nurture a relationship with your favorite venture capitalists, and leverage the growth and assets you already have with other lending and funding organizations. Of course this means taking some smart risks, not resting on your laurels, and continuously updating your business plan and strategy.

With these forewarnings, and a little extra effort on your part, I’m confident that you can make your entrepreneurial journey a lot more satisfying, less frustrating, and you can leave a legacy we can all be proud of.

Marty Zwilling

*** First published on Inc.com on 06/17/2020 ***