Let’s start with this: 1) I cannot at all claim that I am a succesful entrepreneur. It’s way too early for that, and I don’t have any credibility to claim this. I just like talking, recording videos and blogging. 2) All that we have reached so far with our business AM-TEAM is due to great teamwork, and my co-founders, that helped me to control my dangerous impulsive me.
That being said, it’s good to make an evaluation after having started an own business 2,5y ago. Exactly 2 years ago, I wrote a LinkedIn post about ‘My last week as an academic‘. Rereading it now makes me realise the following:
- Time goes extremely fast if you’re starting and running your own business
- You don’t know anything when you start, and that’s fine as long as you realise this
- You evolve and learn extremely fast. Actually you have no other choice
When you start your first business, steep is an euphemism when it comes to describing the shape of the learning curve. It’s not only steep: you have different curves. One for finance, marketing, sales, operations, technical, HR, leadership and legal. When you have an initial academic background, the R&D pillar should be fine I guess.
Before I list some of the major lessons I learned, please bear in mind that:
- I am talking about the starting, running and growing of a pure service business, with no initial ‘physical product’. I mean something that’s typically related to ‘recurrent revenue’ or ‘something that can be scaled easily’, such as a new technology, an app or a software. I am also talking about a self-funded business, with no external investors (yet). So please don’t generalise. Generalising is dangerous: one can drown in a river that averaged out only eighteen inches deep (Franklin quote).
- I only limit myself to aspects where I’m 100% sure of. And this means only a few. However, if you neglect these aspects, they most likely will cause damage in short or long term.
LESSON 1: a founding team with complimentary SKILLS is determining
If you can only remember a few, remember lessons 1 and 2. In lesson 1, I’m talking about skills, related to talents, such as ‘that guy can sell’, ‘he has management experience’, ‘she has good technical training’, … I always compare skills with ‘digging like a mine’. The dream person is a specialist in all business domains. However, I still need to meet Superman. So try to mine deeply and widely by combining people, FROM THE START. And realise, the ‘specialist’ can have negative sales skills (i.e. confusing clients), while a typical ‘sales person’ can have negative technical sales skills (i.e. selling what’s not technically feasible). Only few are good technically and can also sell brilliantly. I know like 2 or 3. So be humble from the start, and admit that you are worse than others in some areas. In our business, I was the sales/marketing/business guy from the start, while my co-founders mainly focused on project management and technical aspects. But we challenge each other continuously to avoid tunnel vision in our mining shafts.
LESSON 2: a founding team with complimentary PERSONALITIES is determining
But apart from skills, we have the personality dimension. I think this is most often forgotten, as even established corporations make errors in this field. Every personality type has natural strengths and risks associated with it. I’ve read quite a bit about it, and we have studied and applied it in practice. For example, if you consider Meyers-Briggs type indicator (MBTI; just google and run the test), I’m the ENTJ type. It means, I’m a rather direct leader type, extremely competitive and a rather high level thinker. However, my risk is making decisions too fast, being reactive and the fact that I can appear ‘coldhearted’. I am not the best at handling people’s emotions, for example, while inside I do care. Also, I’m bad with details. These are fundamental weaknesses. My co-founders are much better at this and complement me. We really try to balance each other. My ENTJ allows me to naturally take the role of captain on the ship. It would be extremely hard if we would have two ENTJs taking the steering wheel… Realising that people are wired differently (stole this expression from Ray Dalio’s excellent book ‘Principles’) is extremely important. Without going into detail, take a look at a more simple ‘4-color’ test I did with my family. It’s a full spectrum! And notice (comparing my 2016 and 2018 values), you can (gradually) evolve. I shifted to the ‘red’ in 2018 because of the need for decisiveness.
LESSON 3: Divide the shares wisely
It’s a difficult conversation. You love your founders and do not want to hurt them. However, removing this elephant in the room is a sign of love and care. We were really struggling setting this up, because it was our first time ever. However, don’t avoid this discussion. In the analysis, we considered the past and now (who contributed what to date), but especially on the future (who will take which burden and risk). I know, it’s abstract language. I want to say that you have to consider different criteria. That’s all. I’ve only done it once, but now I realise how important that was. An eventual second business will go much easier in this respect. Don’t let inexperience and the initial joy of starting up overshadow this important discussion.
LESSON 4: Have a vision from the start
You can never reach a certain spectacular goal if you don’t dare to express and set it. Make the distinction between ‘being humble’ and ‘being ambitious’. People often think that you cannot combine them. And then, you have to make a practical plan to go there (and I don’t mean a 500page business plan that is outdated after 6 months because of a lack of experience and market intelligence). A bad plan is better than no plan I often heard, and it’s true. Because a good plan will get you there, and a bad plan will lead to invaluable feedback to improve. It confronts you with an initial assumption, provided that you look back to it and analyse. Here are some (not all!) aspects that we included in our vision:
- Globally or local?
- What will make us truly unique? Where can we be the best in the world at? (stolen form Collins’ Good to Great)
- Do we want to scale, or stay limited in size? Revenue numbers for the coming decade?
- Who would be our ideal customers that would make us happy?
- What are our core values that we want to make the fundaments of our (hiring) decisions? AM-TEAM’s values? 1) Fun (applies to everyone in contact with AM-TEAM), 2) Ambition (nothing is impossible), 3) AM-TEAM spirit (radical openness and trust), 4) Good modelling practice (the best, honest craftmanship)
Why is this important? Because founders do not always agree here. And you have to engineer your business to what would make you a happy person. And that’s different for everyone. I know ‘one-person-consultants’ that hate hiring people and want to rule over their little empire. But they’ know it, admit it, applied it and are extremely happy. They succeeded. AM-TEAM has growth ambitions, for example.
Now I realise that this vision determines who you attract as coworkers, partners and customers. It trickles down through your whole marketing and branding strategy. Without this, your decisions might be scattered, and business might not be strongly focused. I’m not saying that doing business will be impossible without it.
LESSON 5: the first hire is difficult and crucial
I heard it this morning. I hear it regularly. From other entrepreneurs. When you don’t work with coworkers, you don’t understand it. Now we know how true it is. The first person sets the standard. We’ve even had some very painful but extremely valuable lessons. Hiring can be painful. And apart from that, I heard ‘the second, third, fourth, … colleague’ it’s much easier. And that’s also true. Again, the learning curve is so steep, that you get used to hiring and standardise. Let your vision (point 4) determine who you want to attract, and especially who you want to avoid. It was Charles Munger that learned me to ‘invert’ questions with his book.
LESSON 6: self-development is crucial
What I learned from Flemish entrepreneur Carl Vandevelde is that ‘THE GROWTH OF THE BUSINESS IS PHYSICALLY LIMITED BY THE CAPABILITIES OF THE LEADERS‘. If you don’t get better as a founder, you will not be able to solve more difficult problems and scale. And that’s the beauty with business. Your challenges scale with the business. How to develop yourself?
- Talk with entrepreneurs with much more credibility than you
- Read, read, read, listen, …: books, blogs, podcasts, videos, …
- Subscribe for training courses. But check the credibility of the teachers. And check their numbers. If these are much more spectacular than you: invest. And a 1000 EUR course is not about the cost. It’s about your time, that’s much more expensive.
WHAT I NOW REALISE: SCALING IS MUCH MORE CHALLENGING THAN STARTING. This must be encouraging for aspiring starters, right? And it’s our biggest challenge right now.
LESSON 7: your brand is everything
First: know the difference between sales and marketing, and between marketing and brand. I didn’t know it 3 years ago. Your brand is your reputation. One of my internet mentors, Gary Vaynerchuck says:
Sales lasts 3 months. Brand lasts 3 generations.
That’s the power of the brand. So:
- Think about what you stand for, and dare to tailor your marketing to that, even if you will lose some customers that would not associate with this brand
- Make a good logo and show, carry, wear, … it everywhere! EVERYWHERE. We have plans to make some underwear with our logo… We are all so proud when we wear our AM-TEAM T-shirts, and our fans like it.
LESSON 8: listen to your clients carefully, and adjust to that
They are always right in the end. And we started as academics and had big problems with this. Luckily we adjusted our behaviour rather fast. If you have a sales conversation: do you write down everything they say? Do you analyse their needs, which they express in your face? Do you smell their concerns, including their concerns to work with you or spend money on your services? Well, if your sensors work + you turn them into actions (and I mean, adjust proposals, presentations, communication, execution, …), that causes significant improvement in short term. You really need someone with these senses! For us, one drastic improvement iteration took a few months. And never go to a client without 100% sincerely believing you can help them with your fantastic service. Selling = helping. This mentality, if sincere and backed up with other happy customers, destroys the barrier to sell. I think customers have better sensors than we have. They smell confidence and sincere belief.
And with this, I would like to thank:
- My cofounders for having the patience to work with me and compensate for my weaknesses. But especially for making me a happier person.
- My wife and 3 kids: for having extreme patience and being extremely supportive. And here’s actually LESSON 9: without this support: either your business fails, or either the relationship ends. I have validated this lesson with many others…
- Our initial coworkers: for betting their precious time on our adventure
- My mentors: brothers, parents, grandparents, other entrepreneurs I go to, …
- Our customers: for having so much confidence in what we do, and for being so honest. AM-TEAM loves you.
- Our partners, that give us so much unasked support
- Others I should have thanked but forgot to mention.
Written at the end of a busy but exciting day. If you think it can help others, please share.