Last week I announced that I’ll be sharing some of the things I’ve learned during my time on this planet over the next few weeks. In case you missed it, you can catch up on the 10 things I wish I’d known when I started freelancing here.
Today, I thought I’d share some of the best pieces of business advice I’ve been given by entrepreneurs. If you’re a new reader (hola, by the way!), here’s a little bit of background: as a journalist, I cut my teeth as a junior writer on Growing Business magazine. It’s an online-only publication now (part of Startups.co.uk), but at the time it was also a print title aimed at owners of fast-growth businesses. I stayed there for the next four years, working my way up to features editor and sub-editor, before leaving to go freelance for the first time.
I’m not going to lie, those four years on the magazine were some of the hardest years of my life (as anyone who’s worked on a mag during a recession will no doubt relate to!). But as an education in business and publishing, it was amazing. What I loved most was being able to connect with entrepreneurs on a weekly basis, and ask them not only how they got started, but what mistakes they made along the way.
With this in mind, here are 10 of the most memorable business lessons I learned from interviewing entrepreneurs:
1. Empower your team
The two most successful entrepreneurs I’ve interviewed, financially speaking (as in, turnover in the hundreds of millions), are also two of the most gracious and humble people I’ve met. I don’t think that’s a coincidence.
They are Sir Tom Farmer, founder of Kwik Fit (who sold the company to Ford for £1.2bn in 1999), and Neil Hutchinson, founder of Forward Internet Group. Now a huge investor in tech startups, Forward began life as affiliate marketing firm TrafficBroker, which Neil started with £2,000 in his bedroom in 2004.
Both spoke at length about the importance of empowering your staff – and how a motivated, loyal team had been a huge factor in the growth of their companies. In other words, hiring great people is not enough, you also have to give them space to thrive and grow.
Both worked hard to build an environment where people felt trusted to get on with their jobs, valued and suitably challenged, and where ideas and opinions were welcomed and valid. Not only are these vital ingredients for a loyal, engaged and productive team, this has a direct impact on the bottom line.
2. Don’t strive to be the smartest person in your company
Yes, you read that right! As serial entrepreneur Adam Baker sums up nicely in this piece for Startups.co.uk: “Lose your ego, hire people who are better than you.”
This sentiment has been echoed by many of the successful entrepreneurs I’ve met over the years. In other words, to build an awesome business, you have to be able to recognise your own weaknesses and hire people to do the things that aren’t your strong suit – either as staff or on a freelance basis.
On the flipside, I’ve seen businesses with shedloads of potential limited by the egos of founders who felt the need to incessantly micro-manage or weren’t interested in pursuing any ideas that weren’t their own, leaving their team feeling fed up and demoralised. Don’t be that guy (or gal!).
3. Bootstrap (self-finance) for as long as you can
When you’re starting a business, there are lots of reasons why keeping your startup costs as low as possible is a good idea. As Adam Baker explains: “Many startups fail because they’re not focusing on the right areas. Small, quick wins boost confidence, generate revenue, enable early feedback and help you reach proof of concept.”
Often the business that actually takes off looks quite different to the one you originally imagined. Making big bets or looking to raise external finance (debt or equity) before you’ve proven there’s a market for your business is a risky strategy, and puts you under unnecessary pressure. If you hold off, you’ll also be in a much stronger negotiating position if and when you do seek external finance.
4. Don’t wait until your idea is perfect before you start
This is the founding principle of the Lean Startup movement, and is based on the idea that you should launch a ‘Minimum Viable Product’ (MVP) – (although I actually prefer The Happy Startup School’s take on this: ‘Minimum Loveable Product’!) as soon as possible, because you get much better, faster and more actionable feedback from watching real users interacting with your product, than you do by asking people theoretically if/how they would use a product like yours.
The idea is to find a low risk way to test out your idea, get feedback from early users and use this to improve – or even ‘pivot’ to create a different and stronger offering for the same market.
5. We’re not all cut out to be employees
I’ve lost count of the number of successful business leaders who’ve told me they’re ‘unemployable’ or that they could never ever work for someone else again, because they can’t stand being made to do things a certain way (if they can see a better way).
I have these tendencies myself and often used to wonder if there was something wrong with me because, on the whole, society brands people like this as ‘troublemakers’. But after meeting so many entrepreneurs, I now embrace this side of myself, because if it weren’t for people who question the way things are, nothing would ever change! We wouldn’t have any of the great innovations of our time without those brave enough to challenge the status quo and forge their own path.
So if you have these tendencies too, take heart: that which makes you a rubbish employee will probably make you an awesome entrepreneur!
6. Not everyone wants their business to be huge
And it’s OK not to want that. While the majority of the entrepreneurs I spoke to as a reporter were running fast-growth businesses (I did write for Growing Business, after all) one of the most important things I learned was that success means different things to different people.
There are all sorts of reasons for wanting to start your own business, and many people simply want the freedom to lead a life on their own terms and do something they love. They can quite happily do without the stress of running a company that’s growing at breakneck speed or having to answer to investors/shareholders. Decide on what success means to you, and go for it. Don’t fall into the trap of chasing someone else’s dream, just because that’s what everyone else is doing.
7. Find a mentor
Many entrepreneurs swear by the power of mentoring to help new business owners. There’s really no substitute for advice from someone who has been there and done it themselves, and understands the stresses and challenges of starting your own company.
8. Ideas aren’t as important as execution
As Edison famously said, genius is 1% inspiration and 99% perspiration. The idea is just the beginning; the bit that will make or break your business rests in the hard work (or lack of) that comes next to deliver your idea in a compelling way.
For example, Google wasn’t the first search engine, but by focusing on delivering a much better product and experience to users, it became the clear market leader.
9. Business model innovation can be just as powerful as product innovation
One of the most impressive startups I’ve worked with is Naked Wines. Selling wine is nothing new, neither are wine delivery services. What’s innovative about the company is its business model (indeed, others have now followed suit).
The company focuses on supporting independent winemakers. As well as enabling one-off orders, it invites customers to become ‘Angels’ – investing £20 a month into their wine account to spend whenever they want in return for a 25-50% discount on each order, plus other incentives.
It’s a cashflow dream; the regular income helps the company invest in independent winemakers’ own businesses (sometimes buying the entire production of a wine), while enabling the customer to discover artisan wines at affordable prices. Genius!
Make-up subscription service Birchbox is another great example of business model innovation through a subscription model.
10. Focus on solving a problem first and foremost
This was another of the most frequently repeated pieces of advice from entrepreneurs. To build a successful business, you need to set yourself apart and work out what your ‘USPs’ (unique selling points) will be – how your offering is different to others and why people would buy from you rather than anyone else. When doing this, focus on solving a real problem and meeting a genuine need.
Then, when marketing your business, remember that people don’t buy products, they buy better versions of themselves. Instead of focusing on the features of your products or services, instead focus on how it will benefit your customers.
The link above goes to a brilliant post on the Buffer blog on features vs. benefits. It gives the launch of the iPod, with the following strapline, as a great example:
iPod – 1,000 songs in your pocket
“When everyone else was saying ‘1GB storage on your MP3 player’, telling people about the product, Apple went ahead and made you a better person, with 1,000 songs in your pocket.”
So there you have it! And now, over to you… what’s the best piece of business advice you’ve been given? I’d love to hear in the comments below.