The amazing thing about great athletes is how hard they work at being great athletes.
Entrepreneurship is no different. If you dont live in a state of constant improvement and research, you will not become the great entrepreneur you envision yourself being. Its the hardest part of being an entrepreneur — self-study and growth WHILE growing a company.
Lets start at the beginning. Its you and a buddy. You are the hacker. Or maybe the hustler. Roles are not defined. You read a blog post by a VC that you hope will one day fund you (it seems he funds all the cool startups, and arent you cool?). “CEO? CTO? What are titles when you are doing everything?” You work 20 hours a day and while you are unsure if you can build the company, you are DAMN SURE your team, idea and market are amazing.
Time continues on. Your minimal viable product launches (after all you read all the lean startup posts. You are a bigger expert on lean startup than, well, most anyone who blogs about it.)
You apply to accelerators (or maybe, you just dont need one. After all, you are going to be the next Groupon, right? But not a daily deal site. Fuck daily deals, right? Those VC bloggers are saying daily deal deals are stoopid and dead. So you are working on something bigger and better and HTML5.)
All of a sudden, people seem to take notice of what you are doing. Techcrunch, Mashable, Venturebeat, maybe your home newspaper writes about you. How cool is that? Investors are calling. So are people that say they can help you raise money, for the low, low price of equity. “Invest? No, I dont invest, but add me as an advisor. I have hookups. I have people who know people. I have a nice car. Want a steak dinner? I can buy one of those too.”
You start reading the VC blogs again about how to invest. Fuck. There is a bubble. You arent sure of what a bubble is, but it seems to be bad. Gotta raise money.
“I’ll do a convertible note.” Why? Well, because thats what everyone on Techcrunch does. What are the terms of a convertible note? Um….
Suddenly, you have raised money. What next? hire people.
What kinda people? Developers. Designers. Dont hire marketing. Marketing is bad. You think you read it in a post. But not on Brad Feld‘s blog. He passed, clearly he doesnt know what he is talking about so you stopped reading his blog. Maybe it was Mark Suster’s.
A million dollars in the bank. Lets get a sick office. But not too sick. After all, you dont want anyone to think that you am arrogant. You’ve seen that OnSwipe kid. Yeah, apparently he makes Fred Wilson want to puke. You want Fred Wilson to invest, not puke.
You hire a couple of people. Turns out that they are friends, but one sucks. You’ve never hired, let alone fired someone before. You call an investor. But, you dont really know any of your investors because you’ve talked to them twice. Once when they said they wanted to invest, and once when you sent them the signature sheets from your lawyer.
Months pass, users are coming, things are growing. You arent Google yet, but your office is sick and appeared in a magazine. You are traveling to conferences all over the place. You even hired a speaking agent. But you dont do panels. Mark Suster says panels are bad, and you want him to invest.
Your million dollars is now $150,000. Shit. Your product is doing well, but not gangbusters, and no matter how hard you try, no one cares any more. You never realized that the Valley is all about shiny objects, and your object has lost its luster.
You hit the road. Sand Hill road. Meet with all the biggies. You check in up and down Sand Hill. Greylock, Red Point, Sequoia. DFJ. You dont have meetings at Menlo or Benchmark, but you check in there any way. VCs check that shit, dontcha know?
Thanks but no thanks. $15mm pre? You have no revenue, barely any users, and the technology is sort of, kinda working. But the design is sick as hell, and the iphone app gets featured by Apple because its beee-u-tee-ful. The tweets you read from the VCs you want to invest all talk about their love for Apple products and iPhone apps. So you built one. And added badging and gameification. Because they have all invested in some gaming company.
You finally raise $3mm against a $7mm pre. Its good money and you have good investors on board. Its cool, its not like you are Instagram.
Your angels all had a $2mm cap, so you have given up more of the company that you wanted, but you have money.
And then you are asked by your board if its ok if they bring in a CEO….
Spending time understanding the profession of entrepreneurship (and dont get it twisted. It is a profession. You can get fired.) and you own strengths and weaknesses are almost the most important thing you can do as an entrepreneur.
Everything about startups is purely mechanics — except for YOU and the people that work with you. The mechanics can be learned, just like a foreign language or calculus. But, you are a work in progress until the day that you die. Improve daily. Be better. Improve the lives of the people that work at your startup beyond the paycheck. Be amazing at what you do, and be without reproach on who you are.
And that is the real secret of a being an entrepreneur. Its not about what you do; its about who you are.
- Vinod Khosla: A Brutally Honest VC Tells Startup Weekenders to Make an Impact (xconomy.com)
- We Read All The VC Bloggers So You Don’t Have To (feld.com)
- Should Entrepreneurs Only Meet VCs When Pitching Start-Ups? (blogs.wsj.com)
- Roger Ehrenberg: Speed Can Kill (huffingtonpost.com)
- So You Wanna Raise Some Money (learntoduck.com)
- Mark Suster: Be a Line, Not a Dot (businessinsider.com)