6 things I’ve learned about being an entrepreneur
I wrote last week about an academic framework which I suggest to my Stanford students who are studying the history of high-achieving entrepreneurs.
But academic frameworks are one thing – what most of us care about are actionable lessons for the real-world. So here are my six very simple lessons I've learned in my own career as a Silicon Valley entrepreneur:
1. Obsess on learning everything there is to know about the customer. Every time I've ever launched a business, I've wished that I had spent more time learning about the customer. My worst offense was in 1999, when I spent two years and $5 million in investor money building a product that it turned out no customer actually wanted. If I'd just gotten out and had a few cups of coffee with real potential customers before we started building the product, it would have saved me a lot of time (and my investors a lot of money).
In a startup, no business plan survives first contact with customers.
2. Develop the ability to fail and learn but not regret. F. Scott Fitzgerald famously wrote "The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function". High-achieving entrepreneurs know that embracing failure is part of success. If you're not embarrassed about some of the past decisions you've made, you're not learning.
Failure is simply the opportunity to begin again, this time more intelligently.
3. Learn to tell the story with clear authenticity. One day many years ago, I walked into a scheduled pitch meeting with Rich Melmon of Net Service Ventures and opened-up my laptop to show him my pretty slides. "Close that damn thing up", said Rich. "I don't want to see your stupid slides. What I want to know is whether you can tell me with words – and words alone – why your venture is compelling enough that I would want to invest." It's a lesson I've never forgotten – great entrepreneurs can tell the crisp, clear, and compelling story anytime, anyplace. No slides required.
In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create -David Ogilvy
4. Team is everything. When it comes to teams, 1+1 is never 2. On high performing teams, 1+1=3. On crappy teams, 1+1=½. Hire the best damn people you can. Don’t be afraid to hire people smarter than you are. If you’re the smartest guy in the room, you hired the wrong people.
An idea can turn to dust or magic, depending on the talent that rubs against it.
5. Never be afraid to ask for help. Every great entrepreneur knows how to make the ask. This video clip tells you everything you need to know.
6. Integrity wins. I'll never forget the hiring speech I got when I got hired for my first real job, at the age of 21. The president of the company called me into his office and said "Kid, the one thing that will get you fired here is if I ever catch you doing something dishonest. Dishonest with a customer, a vendor, a colleague – anyone. People can say what they want about our product quality, but I don't want anyone to ever say we're dishonest businessmen. A reputation for poor product quality you can overcome, but a reputation for dishonesty you'll never overcome." Over the years, those words have served me well.
There are lots of reasons why integrity matters, but I'll just give a simple practical one: most entrepreneurs fail in their first venture. Many fail in subsequent ventures. If you fail honestly, you can get back up again – and people will help you. If you fail dishonestly, you'll be a very lonely guy.
Management is doing things right; leadership is doing the right things.
– Peter Drucker
I mentioned at the top of this post that I lost $5 million in investor dollars on my first venture-funded company. I felt pretty shitty about that, and wanted to climb into a black hole. But after while I swallowed my pride and asked the VC who had been my lead investor whether he'd be willing to meet me for a cup of coffee to give me input.
I was apprehensive about the meeting, but we ended up talking about a new idea I was working on. He listened carefully as I told him about my new idea. "I don't know that sector very well", he said, "but I will definitely invest. I trust you."
Five very simple, obvious concepts: Customers, Team, Story, Trust, and Ask. From my experience, these are some of the key ingredients to entrepreneureal success.
So simple, but so hard to get right.