Once upon a time, I was a dreamer like you. Not so long ago either. I dreamed of coming up with an Idea that would change the world; a Real World Impact Idea, something that would make a quantifiable difference to a group of people whose sole unifying characteristic was the need that would be met by my Idea.
The Idea itself was not the problem - I was in the business of apps and had plenty of examples of applied Software-as-a-Service (SaaS) that I was willing to try. I figured four years at Accenture had given me the project management experience and digital mindset I needed to make whatever I chose a tangible reality. Plus I had one company already - a small consultancy employing friends and family, which had won a couple of reasonably-sized contracts - I figured starting a second would be easy.
How wrong I was.
The fact is, it's easy to start a company. By that, I mean it's easy to incorporate a limited company (www.companiesmadesimple.com), open a bank account (Barclays are very obliging) and create a limited digital presence (a template website with Wix or Squarespace, a LinkedIn page, plus complementary Facebook, Twitter and Instagram social media accounts will do).
Running an objectively successful business - a business that is profitable, cashflow-positive, visible and well-branded - is another matter entirely. According to Small Business Administration (SBA) about 50% of businesses go bust in their first year as a result of not being all / any of the above.
So for those of you out there who are interested in having not just a company but an objectively successful business, here's the first of 5 Tips for Not Going Bust In Year 1, as shared at the recent Startup Funeral with TechHub London and covered here:
TIP 1 - LISTEN
If you're strong-willed and/or used to getting your own way and/or used to people doing what you tell them (I'm the oldest of eight siblings; you could say "bossing" runs in my veins), you can get into the habit of always hearing only what you want to hear.
If you are unsure whether you do this, here is an example of what people-who-only-hear-what-they-want-to-hear do:
They always win arguments. Or at least, they think they always win arguments. This could be for one of two reasons: either (1) they are so forceful with their opinions that everyone eventually submits to them (which is not the same as agreeing with them, by the way), or (2) they interpret people's responses as affirmatory even when they are not - they find affirmation where there is none.
This is a good thing occasionally, but a bad thing mostly. Here's why:
If you force your opinion onto a person, it does not mean that they agree with you, or that their vision aligns to your vision. If they do not agree with you, and their vision does not align to your vision (and you won't know whether this is the case if you've forced your opinion onto them), eventually cracks will start to appear. If you "hard sell" your idea to a potential business partner or investor - and that doesn't mean doing it nastily, or gracelessly, just forcefully: with an immense application of will and charisma - you will come to grief at some point. Like most relationships, when things are good you will both be happy, but as soon as your relationship is tested - if revenue slumps, or deadlines move back, or a new competitor appears in the market - and if, if you are not and never were truly "on the same page", your relationship will end and, in most cases, messily.
Learn to read body language. Learn to ask non-leading questions. Learn to hear what is NOT said, as well as what IS said. NEVER use "the mom sell" to sell to potential investors or business partners - these people are too critical, they cannot be "mom sold".
An example of a "mom sell" for those of you who haven't heard the phrase before, is as follows:
A child runs up to his or her mum yelling, "Mummy, mummy, look at my new painting! I did it at school, isn't it amazing??" Mum, not wishing to hurt her child's feelings (although she is unable to tell which way up the painting is meant to go, let alone what it's of), says, "Yes honey, it's really amazing! You are such a talented artist! I'll put it on the fridge so Daddy can see it when he gets home." The painting goes up on the fridge. Daddy questions its presence, and although Mummy is unable to justify it with anything more than a shrug, it remains there until the fridge is replaced ten years later.
Does the child ever really find out what either parent thinks of their painting? No. Does he or she know whether either parent is an "active" or "passive" supporter of his or her "product"? No. Why not? Because he or she has left them no room to do anything other than agree that the painting is amazing and that it is just what they needed to occupy the space on their fridge.
If the child had wanted to know what his or her parents really thought about their painting, and ensure they were going to be active supporters, this is how he or she could have approached the situation differently:
Child: "Mummy, mummy, don't you think the fridge looks a bit empty at the moment?"
Mum: "Er yes dear, I suppose you're right, it is a bit empty."
Child: "Mummy, don't you think it would be nice to have something colourful to brighten up that big, empty grey space on the fridge?"
Mum: "Yes, I suppose it would. A painting or photo would brighten it up quite considerably."
Child: "What about a piece of original abstract art? Abstract art is bright and colourful AND would go really well with all the other pieces of abstract art already on the fridge?" (This is an unusually articulate 4-year-old).
Mum: "Yes, you're right. A piece of original, abstract art would be just the thing!"
Child (produces painting): "What about this?"
And the ending is the same. Although this time, Mummy is able to explain to Daddy why yet another piece of "original abstract art" has been adhered to the fridge - "Don't you think it brightens it up considerably? It was such a big, empty grey space before".
There is a time and a place for the "mom sell", and it is not with investors or business partners. When you are pitching to either, your job is not to force your vision onto them - to convince them that what you are doing is amazing, even when everything about them says, "it is not, and you are not for me"; it is to listen. Ask open-ended questions. Have faith in yourself and in your product - if it's good, and you have a business plan that objectively explains just how good it is, it will sell itself. Give potential business partners and investors the space to make up their own minds. That way you can be sure that, even if the final decision is not the one you want, it's the right one.
Coming up next week: TIP 2 - WAIT FOR THE RIGHT OFFER.