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Tag: Startup Basics

  • Here Are the Top 50 Mistakes I’ve Seen Kill New Companies | Entrepreneur

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    I’ve seen many startups succeed, and many fail. I’ve consulted for and invested in lots of them. My previous startup, Anchor, navigated its own challenges and missteps; we were fortunate to survive them, and ultimately Spotify acquired the company in 2019.

    Over the years, I’ve come to think of startups as a game of Minesweeper. Remember that game from early PCs? You’d start with a grid of clickable squares, with cartoon mines hidden throughout. Your job was to take a few guesses, gain some information about where the mines were, and logic your way through finding them all. Similarly, startup founders start with an empty board. And although nobody can know their locations, the mines are guaranteed to be there — and certain types of mines are common to every kind of business. A founder can save a lot of time, money, and energy if they know how to avoid these pitfalls from the very start.

    After many years of navigating mines, I’ve identified the 50 most common ones. (I share lessons like this regularly in my newsletter — which you can find at my website, zaxis.page.) To be clear, this list is far from exhaustive. And while there are certainly exceptions, it can be a great shortcut for anyone leading a new initiative, at any sized company.

    Related: The Path to Success Is Filled With Mistakes. Do These Four Things to Tap Into Their Growth Potential.

    Ready to find your mines? Here they are.

    1. Thinking you have all the answers

    My favorite piece of advice for startup founders: You’ll be 90% wrong about your assumptions. The problem is that you don’t know which 90%. Therefore, do everything you can to challenge your convictions, and be willing to shed them or tweak them as needed. Rapid iteration and an open mind are two necessary ingredients for a successful startup journey.

    2. Ignoring the impact of compounding

    Meaningful long-term change takes time, be it learning new skills, obtaining new customers, or establishing a brand. The most underrated way to drive improvement is through incremental steps that compound over time. Einstein apocryphally called compound interest the “eighth wonder of the world.” Tiny changes each day multiply to astronomical gains, so long as you’re consistent and committed.

    3. Disregarding the law of funnels

    Any action a user or customer needs to take is considered the top of a “conversion funnel.” The goal is to get them to the bottom. One of the easiest ways to lose someone along that journey (a phenomenon known as churn) is to require them to go through too many steps. I call this the “Law of Funnels.” It states: “The more steps a user has to go through to do something, the less likely they are to complete it.”

    4. Hiring based on experience

    Startups have very little time and resources to focus on the wrong thing, but it’s impossible to predict what they will need to focus on. So don’t waste energy and precious hires on what a person has done in the past. It’s 97% irrelevant to what they will be doing in the future. Instead of hiring for relevant experience, hire people who are adaptable and good problem-solvers.

    5. Focusing on scaling too early (see fig. 1)

    Many startups overengineer and future-proof in the early days, which is almost certain to result in a tremendous waste of energy. At the start of the journey, there are very few knowns (see mistake No. 1). But one thing that is known is that there is a fundamental difference between the friction that prevents a product from taking off and the friction that prevents it from scaling.

    Related: Failed Startups Made These 7 Marketing Mistakes — Are You Making Them, Too?

    6. Wearing too many hats

    In my favorite brainteaser of all time, 100 prisoners wear different colored hats and strategize ways to identify their own hat colors. A startup often has far fewer than 100 employees, but often has far more than 100 hats. Context-switching carries a real cost, and early-stage employees who fail to delegate responsibility often end up performing all tasks poorly. Find people you can trust to take some of those hats off your head, and bring them in early.

    7. Comparing your work-in-progress to others’ finished works

    One of the easiest ways to get discouraged while running the startup marathon is to compare your rough drafts and works-in-progress to polished success stories. All difficult tasks (be they entrepreneurial, creative, educational, etc.) require iteration and more iteration, revision and more revision. The mistakes along the way are countless, sure, but they are also priceless. Comparing a work-in-progress to the finished products we see every day is not only demotivating — it’s also disingenuous. It’s comparing a sapling to a fully grown tree.

    8. Trying to solve unbounded problems

    To be solved effectively and efficiently, problems must be segmented and bounded. First, split your intractable problems into small, digestible challenges with a single goal in mind for each. Second, ensure that their solution is bounded to a finite solution space. Not realizing this is almost always a recipe for wasted resources and disappointing outcomes.

    9. Being frightened of incumbents

    Founders are often scared to take on powerful incumbents, believing those paths to be dead ends. This is a mistake. Taking on a monopoly is often a missed opportunity with enormous upside, and with lower costs than you think. There are four main reasons: Monopolies have already proven the industry is viable and lucrative. They refuse to cannibalize their own dominance. They’ve institutionalized their inefficiencies. And perhaps most importantly, they have the most to lose from making mistakes. Startups, by contrast, have the most to gain.

    10. Fearing the pivot

    For most startups, there are only two viable outcomes. In the unlikely case, they will be a big success. In the more likely scenario, they will fail. Don’t stick to early product or strategy decisions that raise the likelihood of the latter. If your startup fails, the value of all your decisions will be zero — so do everything you can to maximize the likelihood of success. If that requires pivoting from what you know and are comfortable with, so be it.

    Related: I Have Helped Founders Raise Millions. Here Are 7 Fundraising Mistakes I See Many Startups Making — And What You Need To Do Instead.

    11. Thinking you need to be first

    Passionate and creative thinkers often believe that in order to succeed, they need to be the first mover. This is wrong. Being the first mover is often a tremendous disadvantage. What matters is not being first but having consumers think you were first, all while benefitting from the courses charted by your forerunners.

    12. Catering too much to existing users (see fig. 2)

    Your existing users or customers are critically important; you wouldn’t have a business without them. But focusing too much on their needs necessarily comes at the expense of the audience you haven’t yet reached, and for whom you’re still struggling to showcase value. Catering to those who have reached the bottom of your funnel prevents you from serving the needs of those higher in the funnel, whose needs have not yet been served. This is the push and pull of product development, and there is a flip side to it. That’s the next mistake…

    13. Catering too much to potential users (see fig. 2)

    The danger outlined in mistake No. 12 swings the other way too. Neglecting to serve the needs of your existing users runs the risk of causing unnecessary churn. The cost of retaining customers you have already converted is substantially lower than the cost of obtaining new ones. Don’t be overly protective of the users you have, but don’t be overly dismissive either.

    14. Not understanding employee motivation

    Your employees are motivated by different things, and failing to recognize their different styles often leads to poor management as well as to employee dissatisfaction. I categorized people into a “Climber, Hiker, Runner” framework: Climbers are driven by the prospect of unlocking future opportunities. Hikers prefer to take on new challenges and learn new things. And Runners are happy when they can dive deep into what they’re good at. Approaching motivation this way has made me a better manager, and has helped me identify effective ways to keep employees happy.

    15. Focusing too much on short-term gains

    Successfully growing a startup is a marathon (see mistake No. 2). Short-term wins offer little beyond dopamine hits and the stroking of egos. In long-term success stories, accomplishing tough goals takes time but yields meaningful and lasting benefits. While it takes many short-term wins to get to the finish line, don’t miss the forest for the trees. Those incremental achievements are not the true goal. They are the means to an end.

    Related: 7 Common Mistakes to Avoid When Scaling Your Business

    16. Putting off hard conversations

    Your life is divided into two parts: that which occurs before you have the awkward, unpleasant, or emotionally taxing conversation you’re putting off, and that which occurs after. Which would you rather extend? If it’s the latter, why not do everything in your power to cross the boundary right now?

    17. Failing to recognize power laws

    Power laws govern everything you do. Most of the work you put into your startup will yield little clear benefit. Most of the success you see will come from a handful of bets. Internalizing this phenomenon leads to better decision making, less emotional turbulence, and healthier, more sustainable businesses.

    18. Overprotecting your idea

    Have a brilliant idea and an NDA preventing anyone from peeking at it? You’re likely not doing yourself any favors. Truly successful companies win with superior execution, not superior ideas (see mistake No. 11). And by overprotecting your idea from being prodded and challenged, you’re weakening its probability of ever coming to fruition. Often, those individuals who frighten you as potential competitors are those whose feedback is most valuable. And if you fear them stealing the idea, be comforted in knowing that there is no shortage of great ideas in the world. There is, however, a dire shortage of people who know what to do with them.

    19. Keeping interactions inside the office

    Whether in person or remote, the value of having your team “break the ice” cannot be overstated. I mean that in two ways. First, it’s of course good for your colleagues to get to know one another (and hopefully like one another), which leads to happier employees and higher productivity. Second, when people let loose, it “breaks the ice” of the day-to-day mayhem of startup life — or what I like to call “a necessary thawing period.”

    20. Getting too comfortable (see fig. 3)

    There is a big difference between being at a local minimum and being at a global one. Yet from a day-to-day vantage point, they look the same. Any change in any direction means more work, more stress, and more risk. We must zoom out and look at the entirety of our options. Sometimes the best paths or strategies lie just beyond a hill we’re scared to climb.

    Related: I Made These 3 Big Mistakes When Starting a Business — Here’s What I Learned From Them

    21. Not putting things in perspective

    When lost in the hustle and bustle of the early stages of a company, it’s important to remember that most stressful things don’t actually matter in the long term. They will do little to affect the eventual outcome, but they will heavily drain you in the near term. Please take regular moments to stop yourself, look at your small stressors, and ask if this really matters in life. It probably doesn’t.

    22. Not quantifying goals

    Goals without metrics are unbounded (see mistake No. 8). This makes them harder to achieve — and how will you know when you do achieve them? How will you hold yourself accountable when you’ve veered too far off course? Particularly when working as part of a team, quantifiable and measurable goals are of paramount importance to achieve any level of alignment.

    23. Waiting to find a technical cofounder

    Nearly everything I’ve needed to learn to become a technical cofounder, I taught myself (with the guidance of great mentors). You live in an age of wonders, where anyone can learn anything with incredible efficiency. Do not allow the search for a technical cofounder to prevent you from pursuing your dream. Become the technical cofounder yourself.

    For instance: Are you interested in AI but think you’ll never understand how it works? Think again.

    24. Looking for complicated answers when there may be simple ones

    Often, problems that seem intractable have elegant and simple solutions. We are trained to look for complexity, and to value those perspectives that overcomplicate the world. Ignore that instinct! The greatest insights I had as a founder came from light-bulb moments when I realized things were simpler than I’d assumed, not more complicated.

    25. Assuming there is only one path to success (see fig. 4)

    While other people’s success stories can motivate and inspire you, they can also be dangerous. Everyone’s path is unique, and often meandering. Anyone who says that your journey to success must follow a single trajectory has never built a company of their own; they’ve merely studied other people’s.

    Related: Business Owners: Are You Making These 10 Mistakes?

    26. Not filtering out high-frequency noise

    Most day-to-day problems are just noise. Sometimes it’s angry employees or customers. Sometimes it’s a deal gone bad or failing servers. Successful leaders adopt what I call a low-pass mentality. Just as low-pass filters in engineering absorb short-term shocks by filtering out the high-frequency ups and downs, a startup founder must filter out the noise and focus on solving long-term, systemic issues that will have a high impact.

    27. Putting your eggs in one basket

    As shown in mistake No. 1, you’ll be wrong about pretty much all your assumptions. So why risk your business on a single bet? Of course, it’s important to have convictions — but that doesn’t preclude you from simultaneously having other convictions, particularly at the very early stages. If the primary goal of a startup is to reach product-market fit quickly (see mistake No. 5), the risk of being wrong about your one big bet would be extremely costly.

    28. Putting your eggs in too many baskets

    Just as it is dangerous to wear too many hats (see mistake No. 6), it is similarly dangerous to tackle too many strategies at once. Successful leaders prioritize ruthlessly; that means tackling “critical” tasks before ones that are only “very important.” It means committing to seeing through strategies before expending energy on other ones. And it means rallying the whole team around a single milestone or goal, rather than splitting their attention and making everyone worse off because of it.

    29. Underinvesting in long-term relationships

    Most of the key turning points in my business career came through the strength of relationships fostered over many years. Small decisions to help others, to build trust, and to keep in touch can have a tremendous impact on your future in unpredictable ways. The worst-case scenario? Some wasted social energy. The best-case scenario? You open doors you never knew were there.

    30. Failing to recognize recurring patterns

    Despite all the unpredictable noise in business, there is an often-overlooked consistency between market cycles and the players within them. While it’s dangerous to place too much emphasis on individual success stories (see mistake No. 25), it is even more dangerous to overlook the cyclical nature of market dynamics. Human psychology is notoriously predictable — and notoriously forgetful.

    Related: How to Turn Your Mistakes Into Opportunities

    31. Not talking to other founders

    As a founder myself, I overlooked the learned experience of other founders. There is so much guidance buried in their success stories. There is even more to take away from their failures. As I said at the top of this article, startups are like a game of Minesweeper. You can tackle a blank board and start clicking away, or you can put aside your ego and get help from those who have played that board before. If you choose the latter, the likelihood of success can skyrocket.

    32. Focusing on vanity metrics

    There is a reason they are called vanity metrics. Hitting them is the kind of short-term gain I advised you to disregard in mistake No. 15. Why achieve goals that look good but aren’t strategically important? Why care about the number of users if those users are a poor fit and don’t stick around? Why focus on time spent using your product if that number is only high because your product is hard to use (see mistake No. 3)? Identify your desired outcomes, and then find the metrics that actually map to those outcomes.

    33. Misunderstanding the CAP principle

    In computer science, there is a fundamental limitation on how database systems can be built. One can never achieve more than two of the following three goals: consistency, availability, and partition tolerance (or “CAP”). The same is true of companies, which will inevitably see a decline in one of these as they invest in the other two. For instance, when ensuring all teams can talk to each other (availability) and that there is always an individual who can be the “source of truth” for others (consistency), your ability to manage when an employee leaves or communication channels go offline (partition tolerance) drops considerably.

    34. Never setting arbitrary deadlines

    Arbitrary deadlines are a tool. Like most tools, they can be good or bad, depending on who’s using them and for what. Yet while there are many times a team needs the space to think, build, and iterate without undue pressure, there are just as many instances that benefit from the structure and direction provided by arbitrary deadlines. Importantly, arbitrary deadlines should be recognized as arbitrary, and they should be adjusted if needed. But that doesn’t diminish their power in aligning a team and incentivizing productivity. In the right circumstances, I’ve seen them work wonders.

    35. Ignoring uncertainty principles

    Early-stage entrepreneurship, as in quantum physics, presents an inescapable tradeoff. Resources (time, money, etc.) can be spent on investing in a specific strategy or on keeping open optionality; they cannot do both. I call this phenomenon the Startup Uncertainty Principle. It shows that the more you focus on the present, the less you’re able to prep for the future. And the more you prep for the future, the less effective you’ll be now. Companies that attempt to do both at once are fighting a losing battle.

    Related: Common Mistakes First-Time Entrepreneurs Make and How to Stop Them

    36. Not prioritizing low-hanging fruit

    As shown in mistake No. 28, successful companies prioritize ruthlessly. When companies spread themselves and their employees too thin, they hurt productivity and morale. Of course, there is value in investing in longer-term projects with higher costs and higher rewards. Yet it is also critical to regularly prioritize easy wins and short-term opportunities that move the needle incrementally. In addition to laying the foundation for compounding improvements (see mistake No. 2), it will also reengage your teammates and keep morale high.

    37. Overlooking unexplored markets

    As founders and dollars race to build in competitive, high-growth markets, opportunities often exist in “hidden layers” of industry. Companies that focus there can ride waves of market growth while avoiding fierce competition, by turning potential competitors into actual customers. Some of the most valuable companies in the world have taken this approach (including the two most valuable) and it has paid dividends (literally).

    38. Not relying on proven technology

    New technological solutions to longstanding problems can be attractive. But the hidden downsides can surface much too late — often when you’re already dependent. New technologies can break, can go out of business, can have unexpected side effects. By contrast, longstanding problems tend to have proven longstanding solutions. While not as exciting to use, they work, and that’s what matters most.

    39. Sugarcoating bad news

    Managers sometimes believe that when things get hard — and they inevitably will, many times over — bad news is better delivered indirectly or with a positive spin. This is an innate human desire. But employees are smart. Being disingenuous about the state of the business or the rationale for business decisions will hurt your company over the long term. This applies to everything from layoffs to pivots to cutting perks. Your employees will see through the euphemisms, rendering your sugarcoating fruitless, and they will respect you less for your lack of directness.

    40. Ignoring entropy

    It’s a law of the universe that everything trends toward disorder. Knowledge and control are no different. No matter what, eventually you’ll be wrong. Your convictions will need to adapt as the world in which they exist evolves. The stable parts of your business will suffer from unexpected market dynamics, new competition, and shifting consumer attitudes. Those who succeed in the long term embrace entropy as a fact of life, and they know that they cannot hold anything too sacred for too long.

    Related: 10 Mistakes I Made While Selling My First Startup (and How You Can Avoid Them)

    41. Forgetting your only advantage

    With limited time and limited resources, only so much can get done. A startup has every disadvantage relative to more well-funded incumbents, and only one advantage: speed. Leverage this. Big players are slow to move and slow to turn, like giant cruise ships. Startups are small and nimble sailboats that can race faster and turn on a dime when it matters.

    42. Treating money like it isn’t fungible

    A dollar is a dollar is a dollar. Every single dollar spent—no matter how it’s accounted for — is money not spent on something else. This is all the more reason to prioritize ruthlessly (see mistake No. 28). Resources have a habit of disappearing faster than you’d expect.

    43. Not explicitly deciding how to balance productivity and alignment (see fig. 5)

    Companies that overinvest in aligning their team members do so at the expense of productivity. Those that focus on productivity do so at the expense of alignment. The optimal balance depends on the company, its size, and its unique journey. But the important takeaway is that you are making this trade-off whether you explicitly choose the balance or not — so you might as well choose it.

    44. Only talking to people you know

    The “birthday paradox” shows that if you put 23 people in a room together, there is a 50% chance two will share the same birthday. By the same mathematical logic, if any conversation has even a 0.3% chance of being life-changing, then putting a few dozen people in a room together is virtually guaranteed to lead to some life-changing conversations. The takeaway? Meet more people. (Here’s a good way to do that.)

    45. Working only from home

    Startup stress can seep across any boundaries you’ve set. To drive both productivity and better mental health, don’t work exclusively from where you sleep and spend time with family. I say “exclusively” because I have seen startups achieve great success in a fully remote setup. Still, the early days of startups rely critically on serendipitous conversations and ideations — and that can only happen when employees are colocated. Get the team together now and then.

    Related: 5 Marketing Mistakes Startups Must Avoid in Order to Survive

    46. Working only from an office

    Most founders I know get their best ideas when they’re not at work. There’s something about the change of scenery, the connections between unrelated neurons, and the exposure of a problem or challenge to a new environment. Whereas mistake No. 45 showcases why it’s important to sometimes bring your team together, this one recognizes that it’s equally important to take them out of their comfort zones and get them to interact in brand-new places and brand-new ways.

    47. Forgetting to revisit whatever motivates you

    When things get difficult (and they will), it’s important to reflect on the things that helped motivate you to start in the first place. Have it readily accessible—be it a movie or a podcast episode or a book or a soundtrack — and revisit it when you feel the morale drop. For me in my Anchor days, it was Daft Punk’s Random Access Memories. To this day, if I need a jump-start in motivational energy, I just put on that album and get to work.

    48. Not taking pictures

    You’re going to miss the early days. You’ll wish they were better documented. If things end up working out, you’ll look at those moments in time and say, “Wow, look how far we’ve come.” And if things don’t, you’ll say, “Wow, look how hard we worked. If I did that, I can handle anything.”

    49. Assuming you have product-market fit

    Product-market fit is the elusive transition point at which you realize who your customers are and what value you’re providing for them. Hardly anyone reaches this point without considerable effort, and the easiest way for a brand-new enterprise to fail is to assume they have reached this point when they have not. There are only two ways — talking to customers and looking at data — that can verify the milestone has been hit. Once there, things get considerably easier.

    50. Thinking there are only 50 startup mistakes

    I suppose I’m guilty of this one right now. No list of startup advice is exhaustive. Every new entrepreneurial journey is bound to uncover unique challenges. Yet that’s also part of the fun of the startup journey: You never know what’ll happen next.

    A version of this article originally appeared on Nir Zicherman’s newsletter, Z-Axis.

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    Nir Zicherman

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  • ‘We Live the Brand’: Why Mark Wahlberg and Harry Arnett Built a Company That Embodies Relentless Ambition | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Municipal CEO Harry Arnett met his future co-founder in a setting familiar to many business leaders: the golf course. They bonded quickly over shared experiences — raising kids, navigating careers — and from that connection, a friendship grew. At first glance, it sounds like a typical entrepreneurial origin story.

    But in Arnett’s case, the partner by his side wasn’t another executive. It was Oscar-nominated actor and Boston icon Mark Wahlberg.

    Related: John and Hank Green Built a Company That Gives Away 100% of Its Profits — Here’s How

    Purpose over products

    “When Mark and I first discussed starting a brand, it wasn’t about the products,” Arnett tells Entrepreneur. “It was about how we could equip modern consumers with what they need to achieve their goals.”

    They, along with film and television producer Stephen Levinson, identified a major white space at the intersection of fitness and fashion. Arnett formerly served as executive vice president at Callaway Golf, where he noticed a shift in how consumers engaged with brands.

    “They were starting to seek direct relationships with brands they liked, primarily through digital media,” he explains. As EVP, he focused on revitalizing Callaway by reconnecting with consumers in a fresh, dynamic way — a strategy he calls the centerpiece of his community-building efforts.

    After years of back-and-forth, the duo finally launched Municipal in 2019.

    “The idea for Municipal was something I’ve wanted to do for a long time,” Wahlberg tells Entrepreneur. “It wasn’t about just attaching my name to someone else’s idea, which is often what celebrity-led brands are. Municipal is different — this is a real partnership from the ground up.”

    The launch meant Arnett had to leave Callaway. “For me, that was an aha moment,” he says. “A chance to step away from a comfortable, familiar career and start over in pursuit of the best version of myself.”

    That mentality became the ethos of Municipal, a company founded on helping modern consumers pursue excellence in all aspects of life.

    “Municipal is about creating the best products in the world for workouts, athletic pursuits and everything in between, from the office to an active weekend,” Arnett explains. “It might sound like we’re trying to be everything to everyone, but when people see our product, they get it immediately — no one makes gear like we do.”

    Related: Restaurants Are Throwing Away Billions of Gallons of Water — This Startup Said Enough

    Building tomorrow’s leaders

    Contrary to standard practices, where brands are encouraged to hone in on a focus area, Arnett positions Municipal as more than just another activewear company, calling that label too “one-dimensional.”

    He envisions the brand inspiring a drive to succeed in any arena — athletics, academics or beyond. A key part of this approach is Municipal’s Next Gen Brand Immersion, a free, week-long program that gives young people an inside look at every aspect of building a modern, purpose-driven brand — from product design and marketing to finance and operations.

    “Too often, young people are fed the myth of overnight success and shortcuts,” Arnett says. “From our experience, those are fantasies. We saw an opportunity to use our platform to celebrate ambition, hard work, and self-belief in a way that feels ‘cool’ for kids.”

    The idea for the program didn’t originate with Arnett or Wahlberg, but with Arnett’s youngest daughter, Kerris, who has shown a keen interest in Municipal.

    “We’ve been talking about the brand since day one, and she got really passionate about it,” Arnett shares. “She said it would be amazing if more kids her age could experience these kinds of things firsthand, instead of just reading about them. I told her, ‘Karis, that’s a big idea.’”

    Building on his daughter’s suggestion, Arnett sought to replicate what brands like Nike have done with sports camps — creating a talent pipeline for Municipal while connecting the company with the next generation of potential entrepreneurs and gaining insights into the preferences of the highly coveted Gen Z audience.

    The effort culminated in a week-long, hands-on program giving ambitious 18- to 24-year-olds a real look at what it takes to build a modern, purpose-driven brand. Participants work directly with Municipal’s team across product design, marketing and operations, gaining experience in creating, launching and promoting a real collection.

    The students even designed a capsule — featuring a hoodie, pants, shorts, t-shirt and hat — that Municipal will release and help market.

    “It’s a way to engage with this group beyond just selling the best gear in the world,” Arnett explains. “These 25 students are leaders in their schools and have become rabid Municipal fans. They’ll tell their friends, and even when they go off to college, they’ll maintain a connection with us. The possibilities for extending that relationship feel practically endless.”

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    Leo Zevin

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  • Is This Where Future Business Owners Will Start Their Education? | Entrepreneur

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    Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

    In the early stages of running a business, your venture lives or dies based on your expertise. Before you have your own skilled team, everything is on you: management, marketing, data analysis, everything. It sounds intimidating, but there are actually ways to get a broad education in the skills you’re looking for.

    EDU Unlimited is a learning platform with more than 1,000 courses across subjects, so you can refine all your essential skills in one place. Right now, lifetime access is also on sale for only $19.97.

    What can EDU Unlimited teach you?

    This platform gives you unlimited access to beginner and advanced courses in business, IT, graphic design, coding, finance, digital marketing, and more. Whether you’re building a website, developing a product, or managing your own bookkeeping, you’ll find courses designed to help you grow your skill set. New content is added regularly, so you can stay current with the tools and trends that matter most.

    You also get course certifications, access to quarterly instructor webinars, and simple progress tracking to keep you on task. Lessons are self-paced and easy to follow, whether you’re squeezing in a few hours after work or dedicating full days to leveling up.

    EDU Unlimited works on desktop and mobile, with no limit to how many devices you can use. After redeeming your code, you have lifetime access with no subscription fees or added charges. That makes this a one-time investment in a long-term learning resource.

    If you’re building something from the ground up, having the right knowledge makes a difference. EDU Unlimited gives you the flexibility to learn what you need, when you need it.

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    In the early stages of running a business, your venture lives or dies based on your expertise. Before you have your own skilled team, everything is on you: management, marketing, data analysis, everything. It sounds intimidating, but there are actually ways to get a broad education in the skills you’re looking for.

    EDU Unlimited is a learning platform with more than 1,000 courses across subjects, so you can refine all your essential skills in one place. Right now, lifetime access is also on sale for only $19.97.

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    The rest of this article is locked.

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    Entrepreneur Store

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  • How to Build a Thriving Business Without Venture Capital | Entrepreneur

    How to Build a Thriving Business Without Venture Capital | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    After recent conversations with Y Combinator alumni and other promising entrepreneurs, I hear many of them have no plans to raise venture capital — ever. While raising funds is often crucial, bootstrapping is an approach every entrepreneur should consider.

    Contrary to the “move fast and break things” mantra that echoes through Silicon Valley, bootstrapping often means adopting a steady and deliberate approach. This allows for a deeper understanding of your market and more meaningful connections with early customers.

    For instance, instead of chasing rapid growth, Tuple focused on building a product users would truly love. Their strategy revolved around a relentless focus on user feedback and incremental improvements. By prioritizing the quality of their screen-sharing functionality, a critical feature for developers, over the rapid expansion of their feature set, they created a loyal user base that fueled organic growth.

    Related: What I Wish I Knew Before Bootstrapping My Startup

    Steering your own ship

    Bootstrapping isn’t just about money; it’s about maintaining the purity of your vision. When you bootstrap, you retain complete control over your company’s direction, culture and values. This autonomy can be invaluable, especially if your vision doesn’t align with typical investor expectations.

    Keep in mind that maintaining control doesn’t always mean rejecting all external input. Mailchimp, which bootstrapped its way to a $12 billion acquisition by Intuit, did seek advice from outside experts. The difference was that the founders had the freedom to choose when and how to implement this advice.

    Can your model fuel itself?

    The ideal bootstrap-friendly business generates revenue quickly and requires minimal upfront investment. This often leads bootstrapped startups to focus on solving immediate, painful problems for customers willing to pay for solutions.

    Gumroad, a platform for creators to sell products directly to consumers, built its business model around immediate monetization. Gumroad aligned its success directly with its users by taking a small cut of each transaction.

    Being bootstrap-friendly often requires creativity in finding ways to generate early revenue. Pieter Levels, founder of Nomad List, bootstrapped his company by creating multiple small products and services for digital nomads. This diversified approach allowed him to generate revenue streams that collectively funded the growth of his main platform.

    Related: Bootstrapping vs. Seeking Venture Capital — How to Decide the Best Avenue for Your Business

    Walking the line between brave and foolish

    Bootstrapping often means betting on yourself — sometimes quite literally. It requires balancing necessary risks and avoiding reckless gambles. This often involves personal sacrifices and a willingness to operate with a much thinner safety net than funded startups.

    When Sara Blakely started Spanx, she kept her day job selling fax machines while developing her product at night and on weekends. She invested her entire $5,000 savings and even wrote her own patent to save on legal fees.

    The key is to be realistic about your risk tolerance and financial situation. It’s about finding creative ways to extend your runway and validate your ideas before going all-in. This might mean starting as a side project or finding ways to generate supplementary income that aligns with your long-term goals.

    Building big while starting small

    One of the most pervasive myths in the startup world is that certain ideas require massive scale from day one, necessitating significant upfront investment. However, numerous examples prove that it’s possible to build a large, impactful company from humble beginnings.

    Shopify, which now powers over a million businesses, started as a simple online store for snowboarding equipment. They bootstrapped the company initially, only seeking outside investment after they had a proven product and clear market demand.

    This paradox is often resolved by focusing on a specific, underserved segment of your target market. By dominating this niche, you can build the resources and reputation necessary to expand into adjacent markets or scale up to serve larger clients.

    Turn constraints into advantages

    One of the most powerful aspects of bootstrapping is how it forces creativity and efficiency. With limited resources, bootstrapped startups often find innovative solutions that end up becoming key competitive advantages.

    Referring to Basecamp’s journey again, their limited resources led them to focus on doing a few things exceptionally well rather than trying to match every feature of their competitors. This constraint-driven innovation resulted in a product known for its simplicity and ease of use — qualities that became major selling points.

    Related: Starting a Business? Before You Seek VC Money, Here’s Why Bootstrapping May Be the Better Choice.

    Building a team with more than money

    One of bootstrapped startups’ biggest challenges is attracting and retaining top talent without high salaries and extensive benefits packages. However, many bootstrapped companies have found innovative ways to build strong teams despite these constraints.

    By openly sharing the company’s revenue, salaries and equity distribution, Gumroad attracted talent that was aligned with their values and excited by the opportunity to work in such an open environment.

    Many top performers are motivated by factors beyond just salary. Autonomy, mastery, purpose and work-life balance can be powerful attractors, especially for those disillusioned with the high-pressure environments often found in heavily funded startups.

    Defining success on your terms

    The bootstrap path can lead to unexpected and often more favorable exit opportunities. When you bootstrap, you retain more equity and have more control over the timing and terms of any potential exit.

    When Intuit acquired Mailchimp for $12 billion, the founders owned 100% of the company, a feat unheard of in tech unicorns. Their bootstrap journey allowed them to grow the company at their own pace and exit on their own terms.

    An “exit” doesn’t necessarily mean selling or going public. Success can be defined in many ways — building a profitable business that supports your desired lifestyle, creating a company that makes a positive impact on the world, or, yes, eventually selling for a significant sum.

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    Arian Adeli

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  • How to Know When to Hire Your First Employee | Entrepreneur

    How to Know When to Hire Your First Employee | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    At some point as an entrepreneur, you’ll face a challenging decision: When is it time to hire your first employee? After incubating the idea of your startup. then deploying your resources and making it all happen, at some point you may realize it’s time to bring someone else in to help you achieve your vision and grow the business. It’s exciting, but at the same time, can be daunting. What if the new hire doesn’t work out? What if you hire too many people or too few?

    Entrepreneurs are inherently self-starters and ambitious, and shifting responsibilities to new workers can be difficult – but it’s a necessary step for growth. A company needs support to grow and thrive. You can’t do it all on your own, which makes hiring employees — especially the early ones — a crucial step toward entrepreneurial success. Before you do anything, though, ask yourself: Is this the right time to hire?

    Knowing when you shouldn’t hire

    Before addressing best practices for hiring, it’s vital to recognize common pitfalls entrepreneurs face when starting to grow their workforce – that starts with knowing when not to hire. Similar to making big life decisions, you should avoid hiring employees out of anxiety or uncertainty. Your choices should be deliberate and strategic. Take a step back and reconsider hiring employees if you find yourself in the following situations:

    You’re desperate

    If you have more work than you can humanly handle and you just need to get another body behind a desk, it’s tempting to find someone right away. However, a hasty decision born of desperation is rarely a good one. Take the time to find the right person for the job.

    You don’t have specific responsibilities for an employee

    Unless you have a defined set of tasks and expectations for your new hire, do them a favor and don’t hire anyone. A new hire at this stage will rightfully be confused and ineffective. You may need help, but if you don’t know exactly what that help will look like, consider hiring a coach instead of an employee.

    You’ll take anyone

    If you’re lucky, the first applicant will be an absolute rockstar who can bring your business to the next level – but that’s not the norm. You’ll learn a lot about yourself, the applicant market and your own position by interviewing more candidates. The variety of skill sets on display can also hone your focus for what your future employee will do.

    Hiring your first employee

    Hire someone too early and you could have cash flow problems, a worker who has nothing to do and the added stress of management. Hire too late, and you could be inundated with work you can’t accomplish, which could lead to missing deadlines and losing out on business.

    Finding the right moment to hire, therefore, can make the difference between a failed enterprise and a successful business. But how do you know when the time is right? The following tips can make this process a little less painful and provide options for making that first hire:

    Start with a cofounder

    If you’re a solopreneur looking to make that next step, bringing on an employee can be intimidating. Instead, hire a cofounder, or at least someone who thinks like one.When making that first hire, look for someone with cofounder potential and traits, such as complementary skills, similar values and vision, teachability, passion, emotional intelligence, flexibility and honesty. Your first employee will hopefully be one of your longest lasting and most knowledgeable.

    Ask yourself: Will these tasks generate money?

    It’s been said that the only two purposes of an employee are to: 1) make money for the business, or 2) save money for the business. If you’re confident a new hire will do at least one of those two things, go for it. In the early stage of a company, making money is more important than saving it. Typically, these early roles involve creating products (designers, developers, etc.), marketing products (growth hackers, content marketers, etc.) and supporting products (customer support, help desk, etc.).

    Know your desired skill set

    Before you search for an employee, you need to know what kind of candidate you’re looking for. It’s not enough to simply know that you “need some help” or “need a developer.” Get specific: You don’t want just a “developer.” You want a Javascript developer with GitHub experience able to create machine learning algorithms with educational applications, for example. The clearer your set of responsibilities are, the more effectively you can hire someone to fulfill those duties r.

    Delay the decision by hiring a contractor

    You may still be undecided over whether or not it’s time to hire. Don’t sweat it. Instead, test it. Try hiring a contractor with the same set of parameters you’re looking for in a full-time employee. The introductory hassle of onboarding a contractor is relatively low compared to that of hiring an employee. You can create a contract for one month, six months or a year. If it works out, you can transition this person into an official hire or look for a full-time employee.

    The differences between hiring freelancers, contractors and employees

    The major differences between freelancers, contractors and employees has to do with their relationship with the business owner. Freelancers and contractors are self-employed individuals, while employees are hired by the company. Freelancers and contractors typically set their schedules based on the needs of their clients and work out a payment schedule (typically upon completion of a job).

    Employees, on the other hand, work the schedule established by the company and receive a regular paycheck on a schedule set by the company. As a business owner, you’re responsible for tax reporting on your payroll employees. But since freelancers and independent contractors are considered self-employed, they are responsible for reporting their taxes.

    So what’s the best decision for your company? It depends on your needs, your resources and your ambitions.

    When should you hire a freelancer?

    Some people use the terms “freelancer” and “contractor” interchangeably, but there is a difference in the type of professional you are hiring. Freelancers usually work on smaller, short-term projects, while contractors work on larger, more long-term projects.

    Freelancers are great options for specific support — for example, bringing on a digital marketer to get your social media up and running. If you’re not financially ready to bring on full-time employees for whom you have to provide employee benefits, a freelance relationship may be a better setup.

    When should you hire a contractor?

    Contractors generally come with a team of expert professionals who can get you the help you need, whatever it may be. They can handle specialized projects, such as IT, remodels, design and consulting. As your business grows, financial consultants can keep you on track with your financial goals. If you need highly specialized work that requires a team, contracting a company will ensure the job gets done right.

    When should you hire an employee?

    Not every company needs a large number of employees, but if you hold frequent meetings, rent an office space or interact with customers, you’ll want reliable employees to help support the business. Remember, just because someone looks good on paper doesn’t mean they’re a good fit for your business. They must fit into your company’s culture. Consider bringing on full-time staff if they can make you more money or improve the customer experience.

    Why hiring globally might be your best move

    The growing popularity of remote work has meant dramatic growth in the pool of available talent. Don’t limit yourself to just domestic workers, though. By hiring workers outside your country, you can save money, increase efficiency and still provide customers with superior service. Consider the following benefits to hiring globally.

    A wider talent pool

    As unemployment levels drop, the demand for skilled workers rises — especially for roles in software engineering or data science. By looking past your own borders, you can grow your pool of potential employees and have access to a wider swath of workers. For example, Poland, Slovakia and India are renowned for their pool of highly qualified tech professionals available to work remotely for international companies. Tap into this talent network to find the right fit for your company.

    Cost efficiencies

    Hiring overseas means access to employees who live somewhere with a much lower cost of living, which generally means lower salary expectations. The requirements for compulsory employer contributions and payroll taxes that increase business costs also vary by country. For example, countries like Germany and Japan generally require that employers deduct a certain amount of the employee’s pay for health insurance. But Australia and New Zealand, with public healthcare systems, do not require such employer insurance contributions.

    Access to resilient international markets

    If you run a growing, ambitious business, you may be eyeing overseas expansion. One of the biggest factors in your success will be having employees familiar with that market. You have a few options for growing an international presence: set up a local entity or subsidiary (abiding by local employment laws) or use an Employer of Record (EOR) solution, in which you designate a third-party company to handle payroll, HR compliance and employee tax withholding.

    Compliance benefits

    Employer compliance can vary depending on the country, and some are more strict than others. Whether you’re concerned about at-will employment, parental leave allowance or pension contributions, you can hire from countries whose labor laws align with your needs.

    24/7 customer support

    Customers expect fast and capable support, no matter where they’re based or when they contact the company. With just 9% of customers able to solve business queries on their own, customer service channels are more important than ever. Having staff in multiple international locations and time zones ensures someone will always answer the support line and provide 24/7 support for your customers.

    Before you hire globally, though, you should look into any logistical challenges it might create. Despite the many benefits, hiring international talent can lead to internal communication challenges, scheduling conflicts across time zones, cultural differences, and discrepancies in pay scales. While these challenges can be overcome, they’re worth considering before building a continent-spanning workforce.

    Related: 10 Pros (and Cons) of Hiring International Employees

    Can college students solve your employee needs?

    Different hires provide varying solutions for business, and hiring college students can infuse your company with young energy and ambitious workers. Whether you develop an internship program or employ them part time or seasonally, college students are often more affordable to hire than full-time employees and can support your team’s specific needs.

    Creating a pipeline between universities and your business could be a worthwhile investment. Students are trying to get their foot in the door, and they can also provide your company with much-needed help. Here are a few benefits of hiring college students:

    They bring fresh perspectives and new ideas

    College students are at a unique stage in their lives and are just beginning to form professional identities. Eager to develop skill sets and apply classroom lessons in the professional world, they often bring welcome new perspectives to the table. This can be especially valuable in industries that are constantly changing or in need of innovation.

    They’re highly motivated and ready to learn

    The most ambitious college students are proactive and eager to take on new challenges — both promising traits for future employees. When you empower college workers, they’ll go above and beyond to learn and contribute to your organization. Additionally, young people are generally tech-savvy and comfortable with digital tools and platforms — a huge asset in today’s business landscape.

    They’re cost-effective employees

    Because school is the main priority, students are often willing to work for less pay than more experienced candidates; they’re also more open to part-time or internship positions, helping small businesses bring in new talent without breaking the bank. These internships can act as trial runs for potential full-time employment.

    How to attract and hire the best salespeople

    Just about any business needs persuasive salespeople. In order to sustain and grow your company, you need someone who can bring in new clients while you focus on the business itself. No matter what role someone in your company fulfills, everyone does some kind of selling on a regular basis — pitching investors or bankers, selling coworkers on a new project idea or vision, providing customer service, negotiating with vendors, etc.

    Ultimately, though, it will be your sales team that drives your company’s growth. If you want to add top-notch talent to this group and increase your revenue, keep these things in mind:

    Your mission should be exciting and purposeful

    What are you looking to achieve with your business? Most people these days are looking to join a company because of its mission — its goal to change the world in some meaningful way. According to a 2021 McKinsey study, 70% of Americans say work defines their sense of purpose. Your mission doesn’t need to save lives, it just needs to inspire workers and point to a larger goal. Find salespeople who buy into this mindset, and they’ll evangelize the company or product for you.

    Be the best salesperson you can be

    If you’re looking to hire salespeople, you should also know how to sell. You may get to a point in your business where you’re not the main person bringing in new clients, but you still have ideas you need to sell to investors, journalists or marketers — and your own team. When interviewing a potential candidate, pay attention to your own energy level. Are you charismatic? Are you enthusiastic about the position and the opportunity? When the interview is done, you’ll want the candidate to feel like they’re ready to jump on your bandwagon and get started right away.

    Know what else you can offer

    If you can’t compete in the market with a high salary, you can at least offer other incentives that attract top talent and keep your business afloat. Many employees are looking for better work-life balance. Can you offer a flexible work schedule? Consider offering profit sharing or a higher commission in the near future. If your product or services are innovative or revolutionary, that can also be an incentive, as employees are eager to join a business that’s about to rapidly expand.

    The best recruiting platforms for small business hiring

    When it’s time to hire, finding quality candidates doesn’t need to be complicated. Job search sites can help you recruit and retain talent no matter your company’s budget or size. Some companies advertise jobs across a variety of platforms, and the sites you choose will determine who applies for your open roles.

    Similar to reaching a target audience, you want to meet candidates where they already are — think industry-specific forums, alumni networks or on social media. But there’s also value in casting a wide net and posting on major job boards with millions of visitors. With so many platforms to choose from, which will best support your mission? Here are some of the top recruiting platforms to consider:

    ZipRecruiter

    ZipRecruiter allows you to post job openings and receive applications from relevant candidates, as well as organize applicants in a resume database. Applicant tracking tools, including providing candidates with notes and feedback, also help you manage the hiring process.

    LinkedIn

    LinkedIn is particularly effective for recruiting candidates in the business, finance and technology sectors. To help you find and hire top talent in — and outside of — your network, it offers job postings, resume searches and applicant tracking.

    Indeed

    One of the world’s largest job search websites, Indeed allows you to search for candidates based on their location, experience and skills. It also provides rates for sponsored listings that prioritize your job openings in the search results.

    Glassdoor

    In addition to job postings, Glassdoor features reviews from people who’ve worked at various companies. By providing insight into a company’s culture and employee satisfaction, the site can help attract candidates to your open positions.

    Workable

    With affordable pricing plans and an easy-to-use interface, Workable is a recruiting platform that’s particularly effective for small- and medium-size businesses looking to streamline their hiring process. It offers a variety of features, including job postings, applicant tracking and candidate sourcing.

    Writing job advertisements to attract remote workers

    The pandemic ushered in a widespread adoption of work-from-home policies that may be here to stay. These policies allow for more flexible working situations, and they’re an excellent way for businesses to stay competitive in the job market.

    When writing your job advertisements, keep in mind it’s still just a listing, so you need to effectively communicate the benefits of working remotely and the job requirements. Consider the following tips for writing job advertisements to attract remote workers:

    Communicate the remote nature of the job

    Specify that the job is a remote position and include details about the type of work environment and equipment that will be required. Does this person need to work certain hours or be in a certain time zone? Spell everything out. If the job advertisement doesn’t say remote up front, many people will assume that it’s not.

    Highlight the benefits to employees working remotely

    Make it clear that the job offers the flexibility and autonomy of working remotely. Mention any perks or benefits that come with the position, such as a flexible schedule or the ability to work from anywhere.

    Clearly outline the job requirements

    Your job advertisements should clearly state the skills, experience, and qualifications that are required for the position. This will help you attract the right candidates and weed out those who are not a good fit.

    Use language that resonates with remote workers

    Use language that speaks to the realities of working remotely. For example, mention the ability to work from anywhere or the need for strong self-motivation and discipline. Also mention skills necessary for collaborating remotely, such as clear and concise communication.

    Include information about your company culture

    Whether in-person or working remotely, employees place a high value on company culture. In fact, this may be even more crucial in a remote environment, where your only coworker interactions are happening in chats and on video calls. Include information about your company’s values and mission in your job advertisements to help attract candidates who are a good fit.

    It’s time to start hiring

    By following these tips, you can make the most effective hiring decisions for your business. Keep in mind: no two companies are the same. Before you make a hire — or post a job, for that matter — consider the work you need done, the kind of worker you need to complete it, and where that person should be located. By outlining your needs early, you’ll save money (and headaches) in the long run.

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    Neil Patel

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  • A Lawyer Shares the Common Legal Slip-ups Startups Must Avoid | Entrepreneur

    A Lawyer Shares the Common Legal Slip-ups Startups Must Avoid | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Last year, more than 5 million new businesses were established in the U.S. While that may be great news for innovation and the American economy, startup founders face a unique set of legal challenges that could inhibit their success.

    Some common issues include:

    • Starting a company while still employed elsewhere
    • Offering shares at different prices to investors
    • Not understanding capitalization
    • Misusing form documents
    • Ill-documented relationships
    • Not paying employees or treating everyone as contractors

    Imagine the following scenario: Jack and Jill were both employed at BigTechCo, but Jack left several months ago. He contacted Jill and asked her to leave BigTechCo to start a new company, HillCo (Jack may have violated a non-solicitation agreement with BigTechCo by inducing Jill to leave).

    Jill says no but agrees to work with Jack on HillCo, which will pursue a line of business competitive with BigTechCo: a SaaS product. Because Jill is still employed by BigTechCo, BigTechCo probably will own any IP she purportedly makes for HillCo while still employed with BigTechCo.

    Additionally, Jill is probably violating a conflict of interest policy and her duty of loyalty to BigTechCo.

    Jack and Jill agree verbally to a 60/40 (Jill/Jack) equity split, but they never document it.

    Related: Ask a Startup Lawyer: How Should You Manage Co-Founder Equity?

    Jack and Jill copy and paste BigTechCo’s terms of service and privacy policy onto HillCo’s website. BigTechCo has privacy and security protections that HillCo does not offer, and HillCo is eventually sued in a class action by website visitors.

    Jack leaves six months into working with Jill. Jack claims he owns 50% of the company, but Jill says he is owed 40%, and only part of that should have vested. But there is no documentation about equity and no agreement on vesting.

    Further, Jack says he never signed any agreement with HillCo. He concluded that he is free to use any IP he created; that he’s not bound by any confidentiality provision in favor of HillCo; and that HillCo is not authorized to use IP he created.

    Jill decides to dissolve the entity, as it’s too expensive and burdensome to fight with Jack over it.

    Starting a company while still employed elsewhere

    First, there may be a conflict of interest with Jill’s employer and/or there may be an ambiguity as to who owns the IP she created for HillCo while still employed elsewhere. To avoid the issue altogether, Jill should have first reviewed an employee handbook or other moonlighting/conflict policy to see what consent she may have needed from BigTechCo.

    Reviewing her employment agreement would have enabled Jill to see what scope of IP her employer will own that she created while employed there.

    Typically, she’d have been safe if she created the IP outside of work hours; if she didn’t use employer facilities, equipment or confidential information in creating the IP; and if the IP is unrelated to her employer’s current or anticipated business or R&D.

    Offering shares at different prices to investors

    Some founders try to bring in early investors by issuing common stock at different prices. This can create tax and other problems for the company, as stock cannot be issued for $1/share to an investor and then to an employee for free.

    The best way to ameliorate this is to use convertible securities (i.e. SAFEs, convertible notes), which avoid tax problems and are simple and cheap to implement.

    Related: 4 Intellectual Property Mistakes Startups Make and How to Avoid Them

    Not understanding capitalization

    Founders sometimes do not understand how they will be diluted as they issue more shares or convertible securities.

    To avoid this, Jack could have used a cap table management platform, where he’d have seen how he was diluted with different instruments. He also could have conducted due diligence on appropriate documents to sign when he issued securities.

    Finally, Jack could have created a model cap table for his next priced round to see how he would have been diluted by convertible securities.

    Misusing form documents

    While the bottom line is always top of mind for business owners, founders sometimes find ways to cut costs, including saving money by using online forms (e.g. copying terms of service or privacy policies). However, without understanding the documents, there may be agreements that cannot be fulfilled. For example, with a privacy policy, they could get sued for misrepresenting their privacy stack.

    To avoid this, it’s wise for founders to invest in basic forms. A good startup lawyer can draft typical forms and explain how they can be used going forward. This can prevent issues from popping up later.

    Ill-documented relationships

    While drafting contracts may be tedious, it’s a necessary precaution. Bringing on co-founders and advisors without a formal agreement in place, for example, can result in disputes over terms; failure to get IP assigned; failure to have people subject to confidentiality obligations; and not actually issuing equity to people to whom it was promised.

    To avoid this, it behooves founders to research and complete inexpensive templates for advisor agreements, consulting agreements or stock purchase agreements as early in the relationship as possible.

    Related: Covering All the Bases: How to Set the Legal Framework for Your New Business

    Not paying employees or treating everyone as contractors

    In the beginning of a company’s life, there are typically insufficient funds to pay early employees a salary. As such, founders often hire everyone as contractors. However, this practice may be in violation of state and federal law, and it can even lead to personal liability on the part of the founders.

    To prevent this, founders should be judicious by hiring people who they are able to pay. Then, they can gain an understanding of the applicable law regarding wages and who can be considered a contractor.

    It’s important to note that signing a consulting agreement does not mean the signer is a contractor. State and federal law both have standards that override any agreement.

    Founders should understand the risks associated with not paying people. They should also take it a step further by implementing a separation agreement, even if that employee was considered to be a contractor.

    The bottom line

    Establishing a business requires work. It also requires due diligence to prevent avoidable legal issues as the business matures and as founders bring on co-founders, employees and advisors.

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    Mital Makadia

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  • 3 Essential Factors Your Startup Should Consider If You Want It to Bloom | Entrepreneur

    3 Essential Factors Your Startup Should Consider If You Want It to Bloom | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Venture capital funding has always been a complex and highly competitive landscape where startups and established businesses alike vie fiercely for investor attention and financial backing. And in recent times, this state of things has only grown progressively worse.

    Over the past two years, global markets have observed a continuous fall in venture capital funding. In Q1 2023, the figure reached $76 billion, less than half the amount recorded in 2022 ($162 billion). Funding into the fintech sector amounted to just $23 billion in the first half of 2023. At the same time, the number of funding rounds dropped by 64% compared to the same period in 2022.

    The investor sentiment is waning, and to survive in this grim climate, startups must be capable of rapidly adapting to changes and possess a sensible MVP capable of attracting investors and customers alike. These are the foundation upon which a business is built and from which it can improve based on evolving customer needs and emerging market trends.

    Let’s look at how companies can adapt their operations in a challenging environment where investors are becoming more cautious and their funding scarcer.

    Adapt your startup to the realities of the BANI world

    Before we get into the detailed recommendations on what parts of your business you should focus on when seeking investment opportunities, I believe it important to point your attention to a more overarching matter. Namely, the modern-day business landscape in which companies find themselves operating.

    In today’s rapidly changing global environment, any startup founder must know the BANI world and understand its nuances and rules. BANI stands for “Brittle, Anxious, Non-Linear, and Incomprehensible,” representing the key characteristics of the current business environment.

    Today’s world is prone to sudden disruptions and shocks that can significantly impact businesses and their activities. As such, leaders must learn to anticipate potential risks and build resilience within their organizations. To maintain an efficient business in times of uncertainty and volatility, leaders need to monitor market dynamics constantly, understand the ongoing trends and adapt their strategies accordingly.

    In short, understanding the modern realities is essential for heads of startups to successfully steer their companies towards growth and secure investments from stakeholders who value adaptability and foresight. It is particularly important for startup founders, as such businesses already tend to start their journeys in a financially vulnerable position. Failing to acknowledge the aspects of the BANI world may leave them ill-prepared to face disruptions, competition, market shifts and other threats.

    By taking care to keep an eye on these complexities, on the other hand, founders can make more informed decisions and adjust their business strategies accordingly. This can build their organizations more resiliently and attract investments by showcasing their ability to thrive in a rapidly changing and challenging environment.

    Now that we have cleared up the BANI world issue, let’s take a closer look at the actions that startup founders can take when fundraising. Based on personal experience, I recommend focusing on three main aspects of your business when you’re planning to engage with promising investors.

    Related: How to Adapt in a Rapidly Changing Economy

    1. Grow your revenue rather than your turnover

    When the market is going through a boom, investors tend to look at how rapidly a company can grow and capture its share in the market. But in today’s business landscape, it is more important for them to understand that a company can endure and survive in harsh circumstances. And survive for a long time, at that. If you have the capacity to be profitable on top of that, then all the better for you.

    Make sure to demonstrate this fact openly and proudly, as it would make a lot of sense for investors to invest in you to drive this success further and get their share of the profit from it.

    Related: We Can’t Rely on Venture Capital Funding to Build a Just and Thriving Entrepreneurial Economy. Here’s What to Do Instead

    2. Pay attention to your company’s data and analytics

    Showcase figures that would indicate to investors that your business is viable and that they can invest in it safely. In my own company, for example, we demonstrated how much we managed to reduce costs while boosting revenue simultaneously. Things like that give investors the information that you can operate effectively, which worked to great effect for us.

    3. Show that you can make responsible financial decisions

    If investors are to put their money into your startup, it would put their minds at ease to know that you can invest said money competently and precisely. More specifically, under the current market conditions, pouring funds into things that yield a quick result is necessary. You are required to be able to adapt to market trends and make quick decisions that provide quantifiable outcomes.

    Fundamentally, the most important thing is to demonstrate a set of skills and tools that would indicate to investors that your business can maintain itself regardless of the outside conditions in a market filled with uncertainty.

    Related: How to Think Outside the Box and Craft a Values-Aligned Investment Offering

    Data-driven decisions give businesses the power to grow

    By staying updated on industry developments, customer preferences and the competitive landscape, businesses can identify opportunities and adapt their strategies to stay ahead of the curve. This requires strategic thinking, flexible problem-solving skills and a willingness to take calculated risks. It falls to the company leadership to monitor performance and make informed decisions that would enable their business to maintain a level of success attractive to investors.

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    Greg Waisman

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  • 3 Crucial Strategies for Sustaining Growth in a Competitive Market | Entrepreneur

    3 Crucial Strategies for Sustaining Growth in a Competitive Market | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In the early days of a business, there is typically one goal: making sales. Most startups don’t have unlimited cash for their operations, so they’ll quickly fall apart if they can’t attract customers. But those who successfully build a client base face new challenges, including scaling their business for further growth.

    Scaling a business for growth isn’t a simple task. For one thing, startups have limited resources. They can handle only so many sales before hiring more employees or increasing their infrastructure.

    Managers must recognize a specific tipping point as the signal it’s time to boost human or material capital. If they fail to see the signs, the results can be just as disastrous for the company as failing to attract sales in the startup stage.

    If you believe your startup organization is nearing the time when scaling is necessary, take the following steps.

    Related: Want to Scale Your Business? Companies are Using These 5 Strategies Right Now to Unlock Sustainable Growth, And You Should Too.

    1. Assess your staffing needs

    One of the biggest mistakes companies make when it comes time to scale is hiring the wrong employees to do the job. They often end up with bad hires simply because they need people immediately and can’t wait for cream-of-the-crop talent.

    The cost of a bad hire is difficult to estimate, but SHRM places it around $240,000. You’ll incur the expenses of hiring, sourcing and training the employees. If they turn out to be the wrong fit, you’ll need to start the process again, requiring more time, effort and money.

    Additionally, a bad hire can impact your organization, like decreased team morale and lost customers.

    When organizations solidify their plans for eventual expansion, they’re less likely to encounter bad hires. They identify the roles they need to hire for well before it becomes time to fill them. They can start their hiring processes early rather than waiting until the last minute.

    Planning ahead gives hiring professionals time to write a thorough job description, conduct lots of interviews and pick the person with the skills to handle the role that best aligns with the company’s values.

    Hiring the right people for your organization is critical in the early stages of a company. They will often form the backbone of the business and set the tone for future employees. A supportive team on board ensures that you start scaling on all four cylinders.

    Related: How to Scale a Marketing Strategy That Works

    2. Make financial arrangements to support your growth

    Scaling a business requires an increase in expenses. There are no two ways around it. You’ll need more equipment, a bigger advertising budget and a larger team.

    If your company doesn’t have the bank account to support all these changes, you’ll need to find the money elsewhere — by taking on debt or finding an investor who believes in your company’s potential for success.

    It’s critical to seek out financial support early. When you know it’s almost time to scale, get your accounting books in order if they aren’t already. If you don’t have a full-fledged accounting team, seek help from a CPA firm that can prepare your financial statements and set up proper internal controls.

    You’ll also want to undergo an audit, as most lenders and investors will want to review approved financials before they provide you with any financing.

    Once you feel confident about your books, you can research funding opportunities. You’ll need to obtain a loan if you don’t feel comfortable bringing an outside investor on board. The SBA provides financing opportunities to small businesses, but you’ll need to prepare the proper paperwork and collaborate with an SBA lender to qualify.

    Carefully consider your funding opportunities and evaluate each to determine which suits your company most. Look for low-interest rates and fair repayment terms if it’s a loan. Business owners who prefer to work with investors should realize that they may need to give up some control in their organization, depending on the terms of the agreement.

    Related: Should You Scale or Should You Grow? (The 2 Strategies Are Not the Same.)

    3. Define your objectives for the future

    Where do you picture your company in six months, one year or five years? Understanding your vision can help you establish the milestones necessary to achieve your objectives.

    You’ll probably need to set several goals, not just one. For instance, you might envision reaching a certain level of revenue, introducing a new product or opening a location in a new region. Some startups aim to grow their company to a specific level before they sell it to interested investors.

    Once you know your goals, it becomes easier to identify what you need to do to meet them. Expanding your revenue will likely require increased marketing expenses, and you may need to bring a few new employees on board. If your goal is opening a new storefront, you must find a property to lease or buy, hire staff and ensure compliance with local laws and regulations.

    The SMART method can help you define reasonable goals to work toward. Under the SMART process, you set specific objectives and a time for meeting them. As you accomplish each milestone, you work toward the next one. It provides a solid infrastructure for your goals that you can easily explain to stakeholders, including employees, clients and financiers.

    Scaling requires planning

    Moving an organization from startup to scaling for growth is possible through adequate planning. Some business owners start the process very early before opening their doors to their first customers. Doing so is a good idea and can help you get on the right footing in the initial days of your business.

    Remember that you’ll likely need to adjust your plan as you learn more about your customers and operations. Remember the two critical considerations in scaling a business: staffing and finances. Start your hiring processes early, and determine the roles you must fill as you grow the organization. You’ll also need to ensure proper monetary backing as you focus on expansion.

    Taking the time to plan thoroughly for the growth of your business will put you in a good position when the time to scale arrives. Your company can avoid many pitfalls when you are prepared.

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    Shawn Cole

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  • 5 Ways Startups Can Increase Their Visibility | Entrepreneur

    5 Ways Startups Can Increase Their Visibility | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    During the recent pandemic, many startups had to rethink their business models. In some cases, this meant refocusing on their core business and determining how well they served customer needs. In other cases, startups had to change their business models completely to succeed.

    Now that the world is back to normal, I recommend that startups place a new urgency behind becoming more visible and keeping their momentum going. Methods to do so include attending or speaking at events, competing in startup competitions and establishing new customer or partner relationships. Taking advantage of such opportunities will help startups emerge stronger than ever before from the pandemic.

    1. Target the right events

    Around the world, I see event organizers switching from virtual events to hosting in-person events. I recommend that startups take advantage of this opportunity to increase their visibility. Startups can research which events are the most relevant based on event themes and the typical attendee profile. At technology and business events, attendees often include corporate executives, other startups, potential partners and customers and investors. Most events publish in-depth profiles of their attendees, so startups can study these ahead of time and determine which events are the best fit.

    Before any event, take advantage of event websites and apps to see who is attending. This allows you to reach out to set up networking meetings ahead of time. Journalists often attend business and technology events, so there’s a good chance that startups can meet them and ideally set up press interviews.

    Related: 5 Ways to Make Journalists Actually Want to Publish Your Brand’s Stories

    2. Compete to promote your startup

    I also recommend that startups consider competing in startup competitions to raise the visibility of the business and its founders. Even if you don’t win, you get to pitch your business, fine-tune your elevator pitch and network with attendees – including other competitors, judges, investors and journalists.

    Typical opportunities include:

    • Business plan competitions are offered by MBA programs, which offer startups with a connection to the school to present their business plans and compete to win.
    • Pitch competitions are offered by leading technology events around the world, such as Collision, Web Summit, Startup Grind and The Next Web. Startups who compete typically take the stage to pitch their ideas in front of the event audience.
    • Startup competitions allow startups to compete on a local, regional, national or international basis. At the Startup World Cup, for example, startups compete at 70+ regional competitions worldwide. The grand finale winner earns a $1 million investment prize.

    Related: 8 Business Titans Reveal the Best Social Media Tactics to Promote Your Company

    3. Build new relationships

    While virtual meetings have their place, there’s nothing like meeting in person to build genuine, long-term relationships. Forbes Insights reports that 85% of people reported building stronger, more meaningful business relationships with people they’ve met face-to-face. When I attend events and competitions, I often meet influential people from different walks of life that I would otherwise not meet. Startups should take advantage of such opportunities and either ask for introductions or just introduce themselves. My business relationships with partners, startups, portfolio companies and journalists started with a casual introduction and in-person meeting.

    4. Publish thought leadership content

    Another good way startups can increase their visibility is by publishing thought leadership content. I often advise startup founders to write about what they know – whether about new technologies, business trends or leadership advice. This allows the author to establish themselves as an expert in one or more topics. The press might notice such content, and it often opens the door to new business relationships.

    Research shows that thought leadership works. In fact, 88 % of decision-makers surveyed by Edelman and LinkedIn think that thought leadership effectively improves their perceptions of an organization. Business-to-business decision-makers said that high-quality thought leadership strengthens a company’s reputation and positively impacts requests for proposal invitations, wins, pricing and cross-selling that occurs post-sale.

    Writing thought leadership content can take different forms. The most straightforward method is to write an article on LinkedIn, populate social media or use a self-publishing channel. Experts can also submit their articles to local, regional or national publications that accept contributed content. Doing so will help a startup founder share his or her expertise without generating news, which is typically required to get press coverage. Thought leadership content goes beyond articles. On the technical side, startup founders — or other experts, including chief technology articles — can publish technical articles or research findings. On the creative side, entrepreneurs can create short-form videos that demonstrate their expertise while entertaining the audience.

    Related: So You Want to Be a Thought Leader? Here are 5 Steps to Take

    5. Continue your momentum

    Now that it’s possible to meet people in person and attend live events, I recommend that startups work hard to increase their visibility and maintain their business momentum. Don’t sit back and hope that business will come to you. Put yourself out there and take advantage of opportunities to attend events, network, compete and build new relationships. Each can help startups grow more quickly, enabling them to capitalize on their innovative ideas and ultimately make the world a better place.

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    Anis Uzzaman

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  • 3 Key Tips on How to Turn Your Idea Into a Business | Entrepreneur

    3 Key Tips on How to Turn Your Idea Into a Business | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When we find ourselves with a brilliant idea, the pull to transform it into a business is strong. However, the path from an idea to success is filled with uncertainties. As a result, this path can make even the most promising ventures stumble.

    In fact, every great business was once simply an idea. The process of transforming that idea into a thriving company comes with many challenges.

    Nonetheless, as entrepreneurs, we can make an effort to overcome these obstacles by persevering to reach our goals, surrounding ourselves with a network of talented, encouraging professionals and seeking out the right opportunity for our ideas to flourish.

    Related: How to Turn Your Idea into a Business

    1. Persevere to reach your goals

    A cornerstone of success is the ability to persevere in the face of failure. In fact, without failure, many successful entrepreneurs wouldn’t be who they are today.

    The indication of a great entrepreneur doesn’t lie in the success of their first attempt. Instead, the characteristic depends on how they react when faced with hardships. These hardships may come in the form of failed prototypes, unsuccessful launches or financial troubles. What separates great entrepreneurs from good ones is how they respond to setbacks.

    Because success is never guaranteed, it’s critical you learn how to embrace failure as a learning opportunity. So, no matter how often you experience setbacks or obstacles, you must never seek shortcuts. Shortcuts will always lead to an undesirable or inferior outcome.

    Instead, when looking to overcome your challenges, take an incremental approach. In simpler terms, take on each challenge in smaller, bite-sized parts. As a result, you’ll stay productive without losing sight of your end goal.

    2. Build a supportive network

    As your company grows in success, it will also grow in size. While your business may be solely your idea, a supporting team with the right skill set can make it a reality — and even improve upon it. After all, entrepreneurs require the expertise of others to fill in the gaps where they’re lacking.

    Many successful entrepreneurs throughout history have relied on strong teamwork to achieve positive results. The ability to step back and let someone with more expertise take the reins is the sign of a humble and unostentatious leader. Not only will this result in better outcomes at your company, but it’ll build your reputation as a modest leader who people want to work with.

    So, you’ll need to build a supportive team of specialized individuals. To do this, find professionals with the experience your idea needs, from mentors and advisors to like-minded peers. Equally important, these individuals should share your vision while complementing your existing skills.

    In fact, as your idea grows from conception to business, members of your team will slowly grow their own teams. Their success as managers depends largely on how you foster your relationship with them. If you start on day one intending to build strong and reliable professional relationships, they will, too. And your idea and your company will be better for it.

    You can transform your ideas into a profitable venture only by believing in people. With this in mind, you can scale your company with employees who are unquestionably the most essential aspect of your business.

    Related: 9 Steps to Put Your Business Idea into Action

    3. Seize the opportunity when it rises

    Unfortunately, a brilliant idea can fall flat if it’s introduced at the wrong time. Meanwhile, a mediocre concept can flourish with impeccable timing.

    For instance, many factors, such as market trends, emerging technologies and consumer preferences will impact how your idea manifests. By monitoring these indicators, you’ll have the opportunity to adapt to customers’ expectations. This adaptation will give you a competitive edge.

    Moreover, timing the launch of your product or service around industry events, seasonal trends or consumer behaviors can boost your chances of success. By coinciding the launch of your business with certain situations, you can generate buzz and attract early adopters. So, take advantage of market trends, instead of working against them.

    Simply put, timing is everything. It encompasses anything from launching your product and scaling your business to understanding the nuances that can make the difference in the success or failure of your business.

    Embrace the journey your ideas take you on

    There is no limit to the number of good ideas out there. But good ideas only become successful businesses if entrepreneurs take the appropriate actions.

    In order to improve your chances of success, first, you must take a steadfast approach to turning your idea into a business in spite of the number of failures you experience. Then, remember to surround yourself with those who support and complement your ideas for a better business. Finally, master the art of timing by paying attention to the market and industry as it evolves.

    With these tips in mind, you can enjoy the journey of building a business from the ground up with your ideas.

    Related: Got an Awesome New Business Idea? Here’s What to Do Next.

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    Cyrus Claffey

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  • Why Creating a Feedback Culture is Vital to Business Survival | Entrepreneur

    Why Creating a Feedback Culture is Vital to Business Survival | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    A startup is among the most exciting workplaces in today’s business landscape. It suits problem solvers, people who love the challenge of figuring out how to get a promising idea off the ground. For others, what attracts them to a startup is the chance to be part of a company early on and see it through its growth stages.

    But since startup environments can be unpredictable, working at one requires grit, flexibility, and openness to feedback. The last is particularly important because it directly contributes to team members’ improvement. Feedback helps people understand why their actions bring certain outcomes. It also creates a team with a growth mindset.

    Welcoming feedback is also crucial for helping the company grow. Startups must be agile and adaptable. They must innovate rapidly to suit changing customer needs while staying ahead of others in the field. Without feedback, companies grow directionless and people stagnate.

    Related: How to Create a Culture of Feedback

    How positive feedback benefits employees

    It’s simple but often overlooked: a little positive feedback goes a long way. Acknowledging when employees work hard or deliver exceptional work will help them feel valued, and their efforts are seen. Positive feedback also creates stronger relationships—after all, who doesn’t like people who appreciate them?

    Why constructive criticism is necessary, but tricky

    While anyone would like it when their managers notice the good things they do, few people stay cheerful when others notice their shortcomings. Yet constructive feedback is an essential part of giving feedback. It can be difficult to deliver this type of criticism, though! To do this effectively, the first step is to focus on the behavior, not the person. The feedback a person receives should help them

    Constructive criticism is essential for growth but can be difficult to deliver effectively. It is important to focus on the behavior rather than the person. The manager should show–through words and actions–that they are giving this feedback to be supportive. The message should contain specific, actionable steps the recipient can take.

    Related: Open vs. Anonymous Employee Feedback — Which is Better?

    Why give feedback, anyway?

    I understand if managers or business owners might be reluctant to dedicate time to feedback. Especially in a startup, where there are endless things to do at any given moment. But letting your team know how they’re doing leads to better performance. When employees receive feedback, they better understand what you expect from them. So they can align their work with your requirements and the company’s broader goals.

    Employees who receive high-quality feedback also gain a sense of ownership over their work. They can better identify improvements in their processes, which helps them identify obstacles before they become too big to handle.

    For example, suppose you have a teammate who struggles with time management. Instead of telling them, “Just work faster,” which is vague and offers no actionable information, you could give specifics on how they can stay on-task. For starters, you could review their list of things to do and help them prioritize these by urgency. When you teach someone how to course-correct once, they won’t need repeated reminders in the future.

    And this goes for peers, too. Feedback among team members of the same rank will help them build stronger relationships. Having a team that can let each other know areas of improvement without anyone feeling slighted is a special thing. These open lines of communication also allow people to address misunderstandings before they escalate.

    Challenges of giving feedback in startups

    There are many pros, but there are also challenges in giving feedback in a startup. For one, the pace at this type of company can be very fast. So, there could only be a small window of opportunity to give feedback about a crucial process before it becomes moot. This situation leads to missed opportunities for improvement.

    Of course, you also risk losing valued employees when you give them feedback. Managers might be hesitant to provide honest thoughts on an employee’s performance–they might be afraid of alienating their teammates.

    Related: How Entrepreneurs Can Use Effective Feedback to Stay Resilient and Agile

    How to deliver feedback

    Given all these realities, the first thing to do is establish a feedback culture early. When people are used to opening up about work processes, managers need not worry about anyone getting hurt or missing the chance to say what they think. If you’ve established a different culture within your organization, turning it around is possible–it’ll take a while, but it can be done.

    Managers must also frame feedback so it considers a person’s long-term growth. It’s the difference between editing a junior software developer’s code yourself and letting them know what needs to be changed. A manager who corrects the code might say that only the work matters. In contrast, one who corrects others’ behavior shows that they care about their teammates, which builds trust and engagement.

    How feedback contributes to startup success

    Many successful startups have embraced the importance of feedback in their culture and have used it to achieve growth and success.

    For instance, Slack, one of the most popular communication and collaboration platforms, encourages users to provide feedback to make decisions about future development. Another company that leverages feedback is Dropbox. Their “Smart Sync” feature, which lets users access files through the cloud, came from user feedback.

    At Wing Assistant, we implemented a variety of mechanisms to solicit user feedback. Examples include NPS polls in our software product, email surveys (we are leveraging Voiceform to allow customers to speak their feedback freely), and one-on-one calls with customers conducted by our Client Success Managers. We also ask for feedback whenever customers leave us to monitor which areas need improvement constantly.

    Feedback and its role in business growth

    Letting your teammates know what works and what doesn’t is crucial for their personal and professional growth. In the fast-paced, competitive world of startups, feedback is all the more valuable. But feedback isn’t just for growing companies. By embracing and using it to drive innovation, companies of all sizes can reach their goals much faster.

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    Roland Polzin

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  • First-Time Entrepreneur? Here Are the Skills You’ll Need to Succeed. | Entrepreneur

    First-Time Entrepreneur? Here Are the Skills You’ll Need to Succeed. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Laid-off workers are using their severance packages to fund new businesses. That can be a smart move in a bumpy economy — with the right skills and a deliberate approach.

    Some 4.4 million new businesses are started each year. A record 5.4 million of them started in 2021, as generous severance packages and pandemic-related government funding helped make entrepreneurship a reality for many Americans.

    But a large number of startups fail in the first few years, often because the business owners don’t understand the market relative to the product or service they offer. They might have a novel idea, but they don’t understand that there may be others doing the same thing, with the same idea.

    The challenge for a new entrepreneur is to first meet an unmet need, and secondly, to do it better than all the others who are targeting the same market.

    A coffee shop, for example, has to provide a good product, a great customer experience and an unbeatable location. It has to stand out from all the other coffee shops in the neighborhood. To do that requires in-depth market analysis — which takes time and isn’t cheap — in addition to a solid business plan and sufficient financing.

    Starting a business isn’t just about a market and motivation. Being a successful entrepreneur also involves identifying necessary skills gaps to succeed and knowing how and where to fill them.

    Related: The 6 Most Important Things to Do When Starting a New Business

    Skills every new business owner needs

    Financial literacy is one. What are the startup costs and tax implications of starting a new business? Should the business be structured as an LLC or a sole proprietorship? How much does it cost to develop the product or service? What’s the best way to determine pricing? Those are just some of the critical questions to ask on the front end. There are longer-term considerations as well, such as offering a quality customer experience to keep customers coming back.

    A detailed business and financing plan is a must. It’s important to understand how to generate revenue, as well as how to manage costs associated with developing and launching a product or service. Some business coaches often recommend leveraging personal or family finances rather than seeking venture capital, which can be hard to find and comes with ROI (return on investment) requirements and performance metrics.

    Of course, there needs to be a customer. That’s the purpose of a business, to quote marketing expert Peter Drucker. It’s important to find out what excites customers and how to reach them.

    But no customer is going to be interested in a business that doesn’t have a value proposition. Customers need to see how the product serves them. Does the product fill a need?

    Other critical considerations

    Before starting a business, it’s critical to think about whether you really understand the ins and outs of running an organization, and whether you’re familiar with the market sector you’re targeting. If you’re starting a business in a sector you haven’t worked in, you may need to consider a partner who’s familiar with that market. Many people who start businesses have great ideas but aren’t always the best equipped to run them long-term.

    It’s not necessary for every business owner to have all the needed skills on day one. Taking several months to learn product development, then diving into marketing and operations might be a good way to proceed. Finding a partner who can fill some of your skills gaps is another idea.

    There are ways to acquire skills once you know where the gaps are. “Upskilling” courses can help a new business owner learn the ropes. “Micro-credentials,” such as those offered online or through community colleges, can add value to a new brand. Artificial intelligence can help with business analytics and marketing communications. Some entrepreneurs have been leveraging AI to write and implement business plans.

    A support network can be extremely valuable. Owning a business can be isolating, especially in the beginning. Maintaining or establishing relationships with former colleagues, particularly those who have different skill sets, can make all the difference when you’re trying to answer questions you’re not overly skilled at answering.

    Related: 5 Skills That Are the Foundation of Entrepreneurial Success

    Starting a business is not for the faint of heart, but it can be rewarding. And if, after a few years, entrepreneurship hasn’t lived up to the dream, a business that’s managed well and is profitable may be attractive for acquisition by another company.

    Either way, it’s important from the outset to know where your skills gaps are and start figuring out how to fill them. If you think you have a great product or service, you just might have what it takes.

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    Eric Lloyd

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  • Why Effective Communication is Crucial to Startup Success | Entrepreneur

    Why Effective Communication is Crucial to Startup Success | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In startups’ fast-paced and ever-changing landscape, achieving success goes beyond merely offering a groundbreaking product or service. While innovation undoubtedly plays a significant role, there is another critical factor that often goes unnoticed but holds immense power: communication.

    Effective communication is crucial and can be the determining factor in the trajectory of a startup. In this article, we will delve deep into the subject and explore why communication is paramount in the startup ecosystem.

    Related: How to Build Sustainable Communications as a Startup

    Introduction to communication in startups

    To truly grasp the significance of communication in startups, it is essential to first establish what we mean by the term in this context. In the dynamic environment of a startup, communication extends far beyond the mere exchange of words. It encompasses transmitting information, ideas, goals and feedback, both within the team and to the outside world, including investors and customers.

    The role of communication in a startup

    Communication assumes many roles within a startup, each contributing to its overall success. At its core, effective communication sets the tone for the company’s culture, fostering an environment of transparency, trust and collaboration. It serves as the lifeblood that enables efficient problem-solving and facilitates sustainable growth. Moreover, when communication flows seamlessly, it enhances teamwork and ensures that the entire startup operates as a cohesive unit.

    Effective communication is the glue that holds the team together. Promoting a shared understanding and aligning everyone towards a common goal, exponentially enhances teamwork and collaborative efforts. A startup operating with a strong foundation of clear and effective communication becomes more productive, efficient and capable of weathering its inevitable challenges. Furthermore, when a startup can clearly articulate its vision, values and goals to investors and clients, it builds trust and credibility, fostering stronger relationships and solidifying its position in the market.

    The implications of poor communication

    Despite the undeniable importance of communication, it is often neglected or undermined in the context of startups. The consequences of poor communication can be far-reaching, with detrimental effects on team collaboration and customer relations.

    When communication within a startup falters, misunderstandings can arise, leading to confusion, frustration and a decline in morale among team members. The resulting breakdown in collaboration and cohesion can significantly hamper productivity and create a hostile work environment. Ultimately, this impedes progress and stifles the creativity and innovation that are essential for a startup’s survival and growth.

    Effect on customer relations

    Inconsistent or unclear communication hampers internal operations and directly impacts a startup’s relationship with its customers. In today’s business landscape, customers appreciate and value transparency, honesty and effective communication from the companies they engage with. Failing to deliver on these fronts can erode customer trust and tarnish the startup’s reputation, potentially leading to a loss of business and hindering future growth prospects.

    Related: Why Some Startups Succeed (and Why Most Fail)

    The pillars of effective communication

    Recognizing the pivotal role of communication is one thing; mastering it is another. Certain pillars must be embraced and nurtured to establish a culture of effective communication within a startup ecosystem.

    • Clarity and consistency — Clear and consistent communication is the foundation for successful startups. By ensuring that information is conveyed unambiguously, goals are well-defined, tasks are assigned with precision and feedback is provided constructively, clarity and consistency reduce the likelihood of misunderstandings or errors. This facilitates smoother operations and enhances productivity, enabling the startup to thrive in the face of challenges.
    • Active listening —Communication is not one-way; it demands active listening. By actively engaging in conversations, understanding the perspectives of others, responding thoughtfully and retaining key information, startups foster an environment conducive to collaboration and innovation. Active listening ensures that the voices of all team members are heard, enabling the emergence of diverse and creative solutions to problems.
    • Implementing good communication strategies — Creating a culture of effective communication within a startup requires intentional effort and a commitment to continuous improvement. It involves fostering open lines of communication, embracing feedback and promoting a learning and growth mindset.
    • Open and regular communication — Promoting open and regular communication is fundamental to creating a transparent work culture. By encouraging dialogue, sharing insights and soliciting input from all team members, startups foster an environment where ideas can be freely exchanged, challenges can be addressed collectively and solutions can be developed collaboratively. Regular team meetings, one-on-one discussions and open-door policies can all contribute to building a communication-rich ecosystem within the startup.

    In conclusion, communication is the lifeblood that fuels the success of startups. It determines how much a startup can harness its resources, adapt to challenges and build strong stakeholder relationships. By recognizing the critical role of effective business communication, startups can confidently navigate the complexities of the business landscape, ensuring their survival, growth and lasting impact.

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    Sven Patzer

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  • 3 Secrets to Scaling Your Startup Effectively | Entrepreneur

    3 Secrets to Scaling Your Startup Effectively | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Having worked as a corporate executive, entrepreneur and now venture capitalist, I’m often asked about the secrets behind scaling a startup. Ideally, every startup starts with innovative ideas resulting in unique products or services that customers are willing to pay for. Founders typically kick off with their funds, later relying on family, friends or angel investors to grow.

    But what’s next? Let’s review some of the secrets I share with entrepreneurs to help them grow their startups effectively.

    1. Start with a strong foundation

    First of all, I recommend that startup founders test their ideas with potential customers. This could be through an interview, survey or by simply asking people what they think. Does it meet a critical need that customers have? Does it offer something unique that competitors do not? Are customers willing to pay for it?

    During this process, entrepreneurs must be flexible in hearing feedback and adjusting their offerings to address it. In my experience, most startups start with fundamentally good ideas, but they need to listen to customers and adjust the product, service or price structure along the way.

    Related: 4 Keys to Grow and Scale Your Startup

    2. Seek out diverse partners

    It’s challenging for startups to grow beyond their initial phase because it requires additional fundraising. Seeking investment forces entrepreneurs to fine-tune their business plans and articulate their startup’s value proposition. What is your unique selling proposition? How does your product or service set itself apart? How much are customers willing to pay? Making a compelling pitch deck is difficult, but ultimately it makes any entrepreneur improve their business plan.

    I believe that diversity is critical in startup fundraising. Different types of investors offer different perspectives. Traditional VCs are proven investors, but in challenging economic times – such as now – they reduce the amount they invest. They don’t always conduct thorough due diligence and sometimes invest based on trends rather than research. Remember Theranos? Some startups aren’t as promising as they sound, and some turn out to be complete frauds. Other examples of poor investments or outright scandals include Ozy Media, Outcome Health, WeWork and Uber.

    Corporate investors are smart for startups to consider. Corporations typically do not reduce investments during challenging macroeconomic times because they invest strategically. They want to make money, yet they also look for startups that align with their business and technology vision. Investing helps corporations become more innovative while offering startups rapid growth.

    Related: 10 Things You Must Do Before Connecting With Investors

    3. Working together results in success

    Corporate investors offer unique benefits to startups and doing so helps improve their results. Let’s look at how this happens.

    • Corporate Innovation: Startups make corporations more innovative. By investing, corporations find the most innovative ideas around the world without having to come up with them internally. It’s hard to drive internal innovation, but investing offers an effective alternative. Companies seek out the best entrepreneurs from around the globe, investing in their innovative ideas.
    • Technology and business alignment: Due to their strategic alignment, corporate investors and startups can work together to develop products together and sell them to the same customers. A startup’s technology drives the corporation’s product or service growth, and vice-versa. I typically find this results in faster revenue growth for both parties.
    • Unique advice: Corporate investors offer individual advice to startups since corporate managers and executives are sharing knowledge from their own first-hand experience. They have failed, succeeded, and discovered ways to grow. By offering this experience to the entrepreneurs they invest in, the startup founders get a shortcut to success.
    • Valuable networking: Another way that corporations accelerate startup growth is to leverage their networks and offer introductions to partners and customers. This is typically more efficient than startups developing their networks. A corporation’s contacts have already proven themselves, so startups can often start working with these contacts immediately.

    Related: How Startups and Investors Can Thrive in the Current Economic Environment

    I anticipate that corporate investors will play a bigger role in startup investment. Traditional VCs may come and go, but corporate investors are in it for long-term, strategic reasons. Corporations increasingly rely on the Venture Capital-as-a-Service model instead of developing their own investment organizations. This outsources investing to an experienced VC partner, allowing the corporation to invest strategically at whatever financial level they choose. Doing so helps increase startup investments worldwide, ultimately benefiting the world through innovation.

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    Anis Uzzaman

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  • How Public Relations Builds Trust and Credibility for Your Startup | Entrepreneur

    How Public Relations Builds Trust and Credibility for Your Startup | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    You’ve just launched your dream business. You’ve been diligently marketing your products on social media, optimizing your website for SEO and preparing your inventory for your first major sale. You’ve amassed a significant following, and there’s a real interest in your products and your company. However, when the sales data rolls in, it’s significantly less than you anticipated. You’re left wondering, “Didn’t I do everything right?”

    Whether you’re running a new or established business, having a solid reputation in your industry is as crucial as any marketing tool or SEO-friendly website. Your clientele, customers and investors need to trust you. However, amidst all the packaging, paperwork and product production, it’s unlikely that you or your team have the bandwidth to work on developing this crucial credibility and reputation. That’s where a proficient public relations (PR) team comes into play.

    Related: Break Through the Noise: 5 Hacks to Boost Your Public Relations Efforts in a Noisy Digital World

    How does a PR team create business credibility?

    For clients and customers to invest their time and money into your business, they need to trust you. Too many people have been scammed by faux businesses claiming to sell non-existent products. Maintaining a trustworthy and credible reputation means that new clients won’t hesitate to employ your services or purchase your products. So, how does a business like yours become “reputable”?

    A PR team creates connections with existing, reputable media outlets to promote your business. They generate content, typically a guest blog or feature, that is sent to magazines, journals and other outlets to be posted and shared with an established readership. This way, your company is endorsed by a credible source and introduced to potential clientele. Podcasts are also an increasingly popular way to spread the word about your business. A PR team will leverage their existing connections and forge new ones to place information about your business with a reputable podcaster or outlet whose audience aligns with your brand’s aesthetics, goals and values.

    Sharing your brand’s story

    Sharing your brand’s story means connecting with your intended audience through the narrative you create around your brand. This narrative can include your history, values, goals and more. It helps new and existing customers understand who you are as a company and why they should invest their time and money in you. Podcasts and blog features can be a great way to tell your brand’s story in a longer format. Telling your brand’s story gives clients something to root for, an ethos that compels them to stick around with your company. Part of having a PR team is their ability to use outreach to expand your audience while making your business appear legitimate and credible.

    This is an excellent opportunity to talk about your brand’s mission, involvement with social activism, core values, or modes of sustainability/ethical consumption utilized by your brand. Some customers and clients look for these aspects before deciding to make a purchase.

    Building positive relationships

    PR also aids in forming positive relationships with your potential and current customers. Part of confirming that you are a reputable business and crafting a narrative surrounding that business is so that your clients return to your company, not your competitor. You want people to be aware of your brand and loyal to it.

    Connecting with existing media outlets, influential individuals and other reputable sources will aid you in promoting and maintaining a thriving business. The next step to boosting your business is undoubtedly hiring a PR team today. They will help you navigate the complex public relations landscape, ensuring your brand’s story is heard and your reputation is solidified.

    Related: Does Your PR Agency See You as a Project or a Partner?

    The role of PR in crisis management

    Another crucial aspect of PR is crisis management. In the event of a mishap or controversy, a PR team can help mitigate damage to your brand’s reputation. They can craft thoughtful responses, manage communications with the media, and guide your business through the storm. This proactive approach can help maintain credibility and reassure customers during challenging times.

    PR and social media

    In today’s digital age, a PR team’s role extends to managing your brand’s presence on social media. They can help shape your online image, engage with your audience and respond professionally to feedback or criticism. A well-managed social media presence can enhance your brand’s reputation, reach a wider audience and drive customer engagement.

    Related: In The Run for Success, What’s More Helpful PR or Social Media?

    PR and community engagement

    PR teams also play a vital role in community engagement. They can organize events, partnerships, or initiatives that align with your brand’s values and contribute positively to your community. This boosts your reputation and fosters a deeper connection with your audience.

    In conclusion, a PR team is an invaluable asset for any business, new or old. They can help build and maintain your reputation, connect with your audience, manage crises and much more. Sharing your brand’s story and values can foster customer trust and loyalty, ultimately driving your business’s success.

    If you want to boost your business, hiring a PR team should be your next step. They can help you navigate the complex public relations landscape, ensuring your brand’s story is heard, your reputation is solidified and your business thrives. A good reputation is just as important as any marketing tool or SEO-friendly website.

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    Morissa Schwartz

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  • 6 Signs It’s Time to Hire Your First Employee | Entrepreneur

    6 Signs It’s Time to Hire Your First Employee | Entrepreneur

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    The early days of a startup usually present a mix of excitement and fear for a founder. You’re looking forward to embarking on your own and showing the world what you offer. However, revenue isn’t guaranteed, and you may experience some hardships as you grow your organization.

    Most startups begin with a bright idea and someone with the guts to take action on it. Typically, founders handle the operations of their organization from end to end, with no one to support them. However, as the company begins to scale, hiring a supportive staff becomes necessary.

    How do you know it’s time to hire new employees? Look out for these signs.

    1. Overwhelming customer demand — you’re turning down customers

    As your company grows, you’ll likely experience an ebb and flow of your sales. There will be times when you’re so busy you spend all your waking hours handling your customer’s orders, and others when you stare at your computer hoping a new sale will arrive.

    You’ll know your revenue is beginning to solidify when you can’t physically handle all the orders that come in. You might need to turn down work simply because you only have two hands, and they’re both full to the brim.

    If this situation sounds familiar, it’s time to bite the bullet and hire someone to support you. Turning down customers is a bad look for any organization and can discourage future clients from doing business with you.

    If you’re unsure whether you can sustain another employee part-time or full-time, consider a freelancer. You can outsource some of your work to a qualified freelancer during busy times while avoiding the long-term commitment of an employee.

    Related: 9 Ways to Recruit the Best Talent for Your Startup

    2. Declining customer satisfaction

    Providing excellent customer service is crucial to all organizations. After all, your clients spend money on your products or services. They’ll look for other options if they don’t feel you treat them well.

    If you can’t provide your clients with the same white glove treatment that you did in the early days of your organization, you’ll notice a decline in your customer reviews and an escalation of complaints. That’s concerning and will likely lead to revenue declines if you don’t address the problems swiftly.

    Instead of allowing your customer service to tank, hire an employee to assist you. That way, you’ll have more time to ensure every client has a positive experience with your company.

    3. You’re planning to introduce a new product or service

    Things are great — your initial products and services took off, and you’ve successfully propelled your sales since the early days of your organization. Things are going so swimmingly that you decide to introduce a new source of revenue.

    If that’s the case, you’ll likely see a new influx of customers. You’ll need to prepare yourself. After all, you want to continue to service your original offerings while meeting future clients’ needs.

    Introducing a new product or service can potentially double the work you’re already doing, and if you can’t keep up with orders, all your efforts could fail. Consider hiring a qualified employee to help you keep the momentum flowing.

    Related: How to Know When It’s Time to Hire Your First Employee

    4. Your current employees are overworked

    Ideally, the team you hire will have specific responsibilities. For instance, you might have a sales director overseeing qualified leads and a finance guru managing your accounting books. However, if your employees are taking on work outside their purview, it’s time to bring someone else on board.

    You want your employees to concentrate on activities that add value to your company. Your accountant shouldn’t oversee your customer service activities, and your operations manager shouldn’t handle your social media accounts. If your employees’ responsibilities are constantly changing, they may become unhappy and decide to leave.

    Consider hiring an office manager if you need someone to handle administrative tasks or similar responsibilities. They can take care of the extra items that bite into your other employee’s time.

    5. You don’t have time for a vacation

    Startup founders typically know what to expect when starting a new business: endless work hours in a battle to establish a name for their organization. While that’s admirable, at some point, you’ll start burning the candle at both ends, and your work and other responsibilities, like your family, will suffer.

    If you find your weekends are nonexistent, and there’s never enough time to accomplish everything you need, it’s time to bring in someone to help you. We all need time off to rest and recuperate from a busy lifestyle. Even if you feel it’s impossible to take a week’s vacation, you should still incorporate the occasional three or four-day weekend to reset your mind and get away from the pressures of your business.

    Hiring someone you trust to handle your organization’s daily activities can do wonders for your mental health and prepare you for upcoming challenges.

    6. Your business bank account allows it

    After months of solidifying your revenue streams and mitigating your expenses, you’ve built up a pretty impressive bank balance that you’re quite proud of. While that’s quite an accomplishment, it can signify that it’s time to hire someone to assist you.

    As your company continues to scale, your workload will likely increase. Eventually, you won’t be able to keep up with your orders. Preparing in advance by hiring a new employee provides a buffer that will prevent you from turning down work if your sales become overwhelming.

    If you hire now rather than wait until the last moment, you’ll have time to train your new employee on the responsibilities they’ll handle. There won’t be a mad rush to onboard them when you become too busy to manage the company yourself.

    Related: 5 Expert-Backed Strategies for Hiring Top-Quality Talent for Your Startup

    If you see signs it’s time to hire, take action quickly

    Founders who note any of the above signs in their organization are wise to take action and look for team members to support them. At a certain time, your business will begin to scale, and you won’t be able to maintain the same output level if you don’t have some help. Recognizing that time is now can ensure you have the staff you need to continue building your company.

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    Shawn Cole

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  • How to Manage a Startup Through Recessions and Downturns | Entrepreneur

    How to Manage a Startup Through Recessions and Downturns | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    A hesitant market and retraction in funding has directly impacted startups at every stage of growth. So how can founders steer their companies through a difficult period and come out stronger on the other end? I’ve led businesses through two economic downturns, in 2008 and 2020, and I’ve found that while no two downturns are the same, key learnings can help founders effectively manage through these headwinds.

    Here are some critical tips I’ve learned when times were at their most dire.

    Focus on what you can control

    Negative headlines have risen steadily over the last two decades alongside the rise of cable news and social media. Despite study after study showing the poor effects on mental health as a result of negative headlines, the trend has continued. Why? It’s simple: negative news sells.

    Downturns are distracting and stressful, especially for business leaders who are trying to focus on decisions. According to a 2021 Harvard Business School survey of global CEOs, the most recent crisis left them feeling just as “scrambled and unsure as their employees.”

    To effectively manage through negativity, it’s important to focus on what you can control: reducing waste and expenses, increasing efficiency and building your product or service to serve customers better. Tuning out the noise will help you maintain focus and stay grounded.

    The reality is that downturns impact everyone, and if you’re affected, your competitors are too. Focusing on your business and what you can control will leave you in a far stronger position once the market stabilizes.

    Related: How to Recession-Proof Your Business

    Keep cash on hand

    If you wait until a downturn to think about generating cash, it’s already too late. That’s why companies must reach a profitable state on a timeline that makes sense for that business. Even in growth mode, founders can focus on a clear line of sight to profitability while simultaneously planning when to limit overgrowth.

    The main benefit of having cash on hand during a downturn is that it lets you continue investing with a focus on the long term while everyone else is waiting it out on the sidelines. It also means you won’t need to raise funds during a time when purse strings are tight, and you’ll inevitably get less favorable terms. According to our research, the most common reason startups fail is, unsurprisingly, running out of money (37%). By having cash on hand or cash coming in, you can avoid the worst possible scenarios.

    Another important way to conserve cash is to build a culture of reducing waste. Our portfolio companies perform a monthly bottom-up expense review to help cut waste continuously. When there is a downturn, this eliminates the need to review prior month’s (or year’s) worth of expenses. Leadership can instead focus on running the business and making continuous improvements.

    If you have money on hand, what can you do with it during a downturn? You can negotiate better terms on long-term contracts like real estate and advertising or focus on hiring for key positions with more available talent on the market. Cash can solve many of your problems, but maybe more importantly, cash can always be put to use for longer-term investments.

    Related: 4 Ways to Adopt and Maintain a Growth Mindset Even During a Recession

    Look to the future

    In 2010, Harvard Business Review analyzed 4,700 public companies that weathered the recessions of 1980, 1990, and 2000. The researchers found that 17% of the companies fared particularly poorly — they went bankrupt or were acquired — and 9% flourished coming out of these difficult times, outperforming competitors by at least 10% in sales and profit growth.

    What did the businesses that thrive have in common? The authors shared that the successful companies focused both on operational efficiency and continuing to invest “comprehensively in the future by spending on marketing, R&D and new assets.”

    Downturns can be a great time to focus on building so that your company is ready for the eventual upturn — which will happen. During economic slumps, many companies pull back and wait on the sidelines. That’s a reactionary, short-term mindset and creates opportunities for other businesses that have their eye on the long term. If you have enough cash to sustain the company during a quiet period, you can more aggressively invest in growth at a time when others aren’t. This can mean targeting new consumer segments, working on a new product or hiring a new team of developers.

    Related: 4 Ways Entrepreneurs Can Achieve Massive Growth in a Recession

    Conclusion

    Scarcity drives creativity and innovation; entrepreneurs can flourish with the right mindset and strategy. Remain focused on building your business, think long-term and sketch out opportunities for growth. If you have managed your capital and been prudent about your growth strategy, then you will be well-positioned to take advantage of a slowdown and enjoy a head start when others still have their business in first gear.

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    Phil Santoro

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  • 9 Steps to Put Your Business Idea into Action | Entrepreneur

    9 Steps to Put Your Business Idea into Action | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    You’ve just had a wonderful idea for a startup company. It’s been spinning around in your head for months now, and you just know that you have something special on your hands. Your thinking is, “If only I could make it work” or “If only someone would give me the money to get it off the ground!”

    Well, guess what? No one’s going to hand you a sack of cash. But the good news is that you don’t need anyone’s money if you can’t find anyone to help fund your business idea. Here are the steps you need to take to put your business idea into action:

    1. Validate your idea

    The best way to validate your business idea is by asking people for their thoughts on it. Don’t ask for money or investment. Ask them for specific feedback about certain aspects of your business. For example, if you’re opening a new restaurant, ask them what kind of food they like eating at restaurants and what restaurants they like going to most often.

    You’ll get better results if you focus on one specific part of your business at a time rather than asking them if they’d use your entire product or service — it allows them to give more in-depth answers without feeling overwhelmed by everything else in your pitch!

    Related: 5 Ways to Validate a Business Idea, Right Now

    2. Write a business plan and business model

    Writing down your ideas and plans not only helps you clarify what you want to do, but it also allows you to make sure there are no holes in your plan. Here’s what you should include:

    • A description of your business, including its mission statement and goals

    • A description of the target market for your product or service

    • A description of the competition in your industry

    • A description of how customers will find out about your product or service

    • How much funding is needed for startup costs and ongoing expenses

    3. Talk to your potential customers

    In order to put your business idea into action, you have to talk to your potential customers. That’s right — it all starts with a conversation.

    When creating a new product or service, you can’t assume that your customers’ needs will align with yours, because they might not. You need to speak directly to potential customers and ask them what they want and how much they’d be willing to pay for it.

    4. Develop a prototype

    If you have a great idea for a product or service but want to know if people will buy it before you invest time and money into making it, you need to create a prototype. A prototype is a working model of your idea that allows you to see if it works, what needs to be reworked and how you might improve it. This can take many forms — from an Excel sheet or Google Sheets document with all the features you want in your product to a fully-functional website that mimics the final product.

    5. Test it out and prove the concept

    It’s time to test.

    Test your business idea in a small way. For instance, if you want to be a freelance writer, write up a few sample articles and offer them free to some clients. If you plan on starting a food truck business, make one or two dishes and sell them at one or two events (or even in your kitchen). You can also use tools like Google Analytics or SurveyMonkey to see which ideas are most popular with customers before you launch your business.

    Related: How to Take Your Product From Idea to Reality

    6. Understanding the legal implications and registering your business

    A big part of creating a business is selecting one available business structure. In the United States, no single government agency is responsible for registering new businesses. Instead, many different types of entities can be formed for small businesses, including corporations, limited liability companies (LLCs), partnerships and sole proprietorships. Each type of entity has its pros and cons and is suited to different types of companies. Once you have determined which type of entity is right for your business, you will be able to register it with the appropriate state or federal agency.

    7. Financing and investors

    While not all startups fail, those that do usually make one of two mistakes. First, they run out of money before they have developed a market for their product or service; second, they fail to persuade investors to give them money in exchange for equity. The best way to avoid these mistakes is to demonstrate that people will want your product or service enough to pay for it.

    8. Build market awareness

    Before starting your business idea, building awareness and credibility with potential customers is essential. Start by creating a website, social media profiles and a mailing list. Reach out to people who can help you get feedback on your idea; find out what business would best suit your skillset and where there is enough demand for it in your area. There are plenty of ways to get started without spending lots of money on marketing materials or advertising campaigns; just go through Neil Patel Blogs to start.

    Related: 3 Strategies Entrepreneurs Can Incorporate to Build Brand Awareness

    9. Hire employees

    After you have completed the above steps to start a business, it’s time to begin hiring employees. You should hire people for customer service, sales, marketing and accounting roles. I have found that the best way to hire employees, in the beginning, is by word of mouth. If someone has had a positive experience working with you, they will tell others about their experience and recommend that they apply for a job at your company.

    If you have a brilliant business idea, you should work hard to put it into action — but here’s one last tip: Before you start up your own business, make sure to research what the competition is all about. Is there anything already in place? Is there a product or service similar to yours? If so, look into the advertising and marketing strategies, and study the areas they’ve succeeded and failed. Don’t steal their ideas, but rather be inspired by them, coming up with an idea of what works for you since every business is unique.

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    Chris Kille

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  • How to Stay Motivated When Starting a Business | Entrepreneur

    How to Stay Motivated When Starting a Business | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Americans launched new businesses at unforeseen rates during the pandemic. Perhaps the time in isolation inspired individuals to finally take a chance on a new idea, or maybe unfortunate layoffs prepared people to take a new path. Either way, if you are a recent or new business owner, you are likely facing some challenges that discourage you from time to time.

    If that sounds familiar, keep reading to find out what those common challenges are and what you can do to motivate yourself again.

    Common challenges business owners face

    Starting a business requires a high level of grit, resilience and reliable resources to make it possible to overcome challenges and see through to your goals. Individuals who start businesses of all kinds — from products to services, startups and more — face many of these challenges:

    • As you embark on the new path, fear and uncertainty lead many business owners to worry when taking risks and find themselves second-guessing their plans or intentions.
    • Financial issues like needing funding, using your savings as an investment and making ends meet at the start of a business can pose significant hurdles for many entrepreneurs and cause stress early on.
    • Differentiating yourself from competitors and standing out in the market can be challenging initially.
    • Finding and maintaining a solid team and reliable employees can be complex and majorly impact your success rate early on. High turnover and a poorly functioning team can negatively impact a business’ workflow and output.
    • Balancing your new business with your personal life or full-time job, if you have one, means you will be tight for time, and this can be a point of stress early on for business owners.

    Related: 7 Factors That Make a Brand Stand Out

    How to stay motivated

    With all these challenges, it’s important to put systems in place to help you manage your workload and stay on track. Running a business is challenging in the long term, but there are particular stresses associated with starting up that may level out over time. So, when you are getting started, consider the following strategies to help you maintain motivation amid hurdles.

    1. Set goals: Make sure you use the SMART method when setting goals so that you make specific and achievable targets. SMART stands for Specific, Measurable, Achievable, Relevant and Time-Bound. This structure can help you stay focused and on track.
    2. Celebrate as you achieve goals: Make sure to enjoy your wins. Honoring those moments will help you feel optimistic about your progress and your path forward.
    3. Track your progress: Check in at various milestones to measure how far you’ve come beyond just income and earnings. Have you acquired more clients this month than last, sold more items, or increased your average order value? Tracking various metrics will help you see your strengths and accomplishments.
    4. Get inspired: Consume media and content that excites you and find leaders who inspire you. Listen to podcasts, read books and watch videos that can teach you how to look at your challenges in a new way and expand your understanding of your business and yourself.
    5. Upskill: Keep improving your skills and learning new ones to add additional value to your business operations. If you still need to hire a whole team to cover tasks that need to be done, you will need to learn to do them yourself. Brush up on your marketing, Excel, accounting, or sales skills to elevate the part of your currently lagging business.
    6. Remember your why: When you feel like giving up, it’s hard to remember why you started doing all this in the first place. Having your why written down somewhere you can always see it can help you feel motivated again when you feel like you can’t go on.
    7. Visualize success: It’s vital to create a strong mental picture of what success looks like for you. Make a vision board, keep a journal and return to these things when you’re feeling unmotivated.
    8. Create a motivating workspace: Surround yourself with an atmosphere that promotes inspiration. Motivational quotes, pictures, or just things that make you happy can help you achieve this. Keep your workplace clean and free of clutter that could contribute to stress.
    9. Seek an accountability buddy: Sometimes, you’ll need help to get where you’re going. Find someone or a group of people on the same path as you that can help you stay accountable. It feels great to connect with like-minded people to help achieve your goals.
    10. Take strategic breaks: Working too much or too hard can lead to burnout. It’s important to plan breaks that rejuvenate and refresh you. Find an outlet that helps you destress, such as yoga, hiking or swimming.

    Related: Building a Business? Here Are 4 Common Challenges You’ll Likely Face Along the Way

    It is understandable for any new business owner to feel inspired some days and lack motivation the next. Running a business can feel like an uphill battle in the early stages, but when it works, it’s worth it. Incorporate some of those practices into your daily routine to keep yourself motivated.

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    Prabhat Sharma

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  • How Startups Can Manage Their Cash Better, According to a VC | Entrepreneur

    How Startups Can Manage Their Cash Better, According to a VC | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    The bankruptcy of Silicon Valley Bank caused a great deal of stress for many startup founders. Although U.S. financial regulators intervened and took charge of customer deposits, the incident has shown that financial markets remain unstable.

    Amidst a banking panic, Signature Bank has suffered bankruptcy, while Credit Suisse is being acquired by its competitor UBS; First Republic Bank’s customers have recently withdrawn over $100 billion.

    To avoid being swept up in a bank run like this, startups should concentrate on getting better at cash management and fostering strong relationships with banks. That’s something VCs are going to pay more and more attention to when deciding to invest in a startup.

    Here are four tips that startups could take to minimize their financial exposure.

    Tip #1 — Put money in multiple banks

    When the economy is unstable, the likelihood of bank failures rises due to factors such as higher interest rates, increased risk of loan defaults, investment losses, large customer withdrawals and stricter regulations by the government.

    But even in steady economic conditions, banks may decide to freeze or close accounts for security or other reasons. That’s why relying on a single bank account is never a safe option.

    Businesses should distribute their funds across two-four non-affiliated banks, preferably in different countries, while closely monitoring the activity of each account. I’d recommend keeping two checking accounts with sufficient cash to cover 2-3 months of expenses in each one and a third account for investing any surplus cash in safe and liquid assets.

    Those who find managing more than three accounts challenging should have at least two. One account can be designated for regular business operations such as payroll and supplier payments, while the other can be used for holding the remaining funds.

    For startups with a balance sheet exceeding $3 million, it is advisable to open a savings account with a reputable and stable A-level bank such as JPMorgan Chase & Co or Bank of America in the United States, Deutsche Bank or Crédit Agricole in Europe.

    Consider buying Treasury Bills (or T-Bills), U.S. government bonds issued in U.S. dollars with a maturity period from one month to one year, which also have an annual yield of up to 5%. If a bank goes belly-up, T-bills won’t be impacted by the bank’s financial position because they are kept independently from the bank’s finances.

    A clever idea would be to create an investment plan that prioritizes capital preservation rather than aiming solely to profit. Never hold the money of your VCs in cryptocurrency — it’s too risky.

    Related: What Is A Cash Management Account?

    Tip #2 — Research countries, not just banks

    When you choose a bank for your startup, don’t just look at how secure it is. Think about other factors that could make it stable or unstable in a particular country, especially if there were times when banks went bust there.

    To find a bank in the right place, learn about the local rules and laws that control banks there. Evaluate economic and political climate, including inflation rates, the amount of interest banks charge and the stability of the currency and banks in that location.

    Related: Choosing A Bank For Your Startup: Here’s Some Things To Consider

    Tip #3 — Learn about deposit insurance provided by regulators, institutions

    Different countries have their regulators that manage their financial systems. For instance, the United States has the Federal Deposit Insurance Corporation, and the United Kingdom has the Financial Services Compensation Scheme.

    These regulators are intended to safeguard bank deposits to a certain extent by providing insurance in case of bank failure.

    The U.S. The FDIC insurance typically covers up to $250,000 per depositor per bank for individuals and businesses. Nonetheless, certain financial companies may provide additional deposit insurance options.

    In the wake of SVB’s collapse, U.S.-based financial platform Brex has upped its FDIC insurance limit for companies to $2.25 million. Meanwhile, neobank Mercury has increased deposit insurance for its customers to up to $3 million.

    Other ways to increase deposit insurance coverage are using certificates of deposit accounts (CDARS), credit unions, or the MaxSafe program, allowing to increase FDIC insurance to $3.75 million.

    The U.K. U.K.-based startups can obtain up to £85,000 deposit insurance coverage per bank, per depositor, via the Financial Services Compensation Scheme (FSCS).

    Private banks and building societies (a type of financial institution) offer deposit insurance above the FSCS limit by joining the FSCS Temporary High Balance Scheme (THBS). It may offer extra protection for deposits of up to £1 million for up to six months.

    Europe. In the European Union (EU), all member countries must have a deposit guarantee scheme (DGS) to safeguard customers in case a bank fails. DGS usually offers coverage of up to €100,000 per depositor, per bank. However, non-EU banks may not offer deposit insurance for companies at all.

    Some European countries — both EU and non-EU — have supplementary insurance opportunities beyond the DGS. In Norway, deposits of up to 2 million kroner per depositor, per bank are protected by Bankenes Sikringsfond. In Germany, many private banks are part of the Association of German Banks, which provides insurance coverage for deposits of up to €50 million.

    Due to the lengthy process of opening an account with an A-level bank (6-18 months), many startups prefer e-money institutions such as Wise, Stripe or PayPal instead. In this case, the account opening process is faster (a few weeks) and offers a more seamless customer experience. But financial regulators don’t normally protect the funds kept there.

    Related: Collapsed Silicon Valley Bank Finds a Buyer

    Tip #4 — Warm banks up to you

    By developing a rapport with your bank, you can benefit from more individualized updates on the status of your accounts and investments. One way to strengthen this relationship is by creating an investment account and buying shares or debt obligations through the bank.

    To establish a favorable relationship with banks, consider entrusting them with the management of your funds. High Net Worth Individuals (HNWIs), who possess investable assets of at least $1 million, are the main source of profit for banks through their money management services. In CEE, the standard commission for investment management services averages around 1-1.5%.

    In my experience as an investor, startups that adopt smart cash management strategies have the edge over their rivals when trying to raise funds.

    Create a plan for how much money you will have/need for the upcoming month; check and update it every day. Keep track of when you have to pay bills and when you expect to receive funds. Make sure to have a process for approving money transfers to avoid fraud; try to use the “four eyes principle.”

    If you anticipate any financial difficulties, notify your executive team and board, and reserve a credit line from one of your key banks to support the company’s operations for at least six months (but use it only if necessary).

    Related: Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team

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    Vital Laptenok

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