The popular narrative of entrepreneurship makes it look like a doddle. For example, in The Social Network, the box-office hit about the story of Facebook, Mark Zuckerberg goes from a computer geek coding in his dorm to a billionaire in 120 minutes flat without breaking a sweat - or, for that matter, even coming up with the idea! Of course in the real world entrepreneurship doesn't quite work like that. In this issue we take a look at three major challenges that start-ups face, and suggest some ways to overcome them.
First, ask yourself: how many extra people do you really need? Recruiting people to join your start-up is not the same as making progress. Don't make the classic first-time entrepreneur mistake of recruiting people for the sake of it - you'll regret it as you'll end up spending a disproportionate amount of time and energy trying to extricate yourself from a business relationship you shouldn't have entered into in the first place. So how do you know you need extra people? As a rule of thumb, you can generally tell it's time to recruit when you can't generate sales or execute an order without an extra person.
Before you recruit a new person to your team, note the following:
See evidence that they can do the job you need them to do. Don't take their word (or their CV) for it.
Observe how they work at close quarters. This is the only way you'll be able to tell whether you'll get on with them.
Beware of potential new team members who appear too good to be true. They usually are. Over-qualified candidates have so many other options that they don't tend to stick around long and can be a nightmare to manage.
When you find the right person, do your best to make joining worth their while. Clarify their role, pay them if you can (as well as you can), and involve them meaningfully. Also, if you want them to play a long term role in the future of your business, be prepared to give them some equity.
I'm not 100% sure about my idea
Stop trying to figure out what your business idea should be on your own. Instead, identify a problem or a currently unmet need, brainstorm some reasonable solutions that will cost less to implement than the revenues they can generate, and then run these solutions by trusted friends, then experts, then finally customers. At the end of this process you should have an idea about which you can be confident.
Focus on where you can make the biggest impact. Many start-ups try to do too much and end up doing a range of things to an average standard and nothing very well. Say you're a designer starting a greetings card business. Do you really need to do the packaging, the distribution, the online marketing and the offline marketing in-house? No. In this case it would make sense to focus on the design as you're a designer. Far better to outsource parts of the value chain where possible and focus on where your input has most impact. Otherwise you run the risk of remaining unsure of, and overwhelmed by, your idea.
Overestimate the difficulty and underestimate the rewards associated with executing your idea. Do these calculations before you go ahead for two reasons. First, with start-ups things never go entirely to plan and so running your business will be harder than you expect. Second, if you're comfortable with the possibility that the rewards might not be that great, you'll have done much of the mental preparation needed to keep you on course with your idea when the going gets tough.
I want to gain more exposure for my start-up but I don't have a marketing budget
The way to square this circle is to leverage as much free marketing as possible.
Social media: use your Facebook profile or Twitter account to spread the word about your business.
Online forums: post comments mentioning your start-up on online discussion forums, blogs and other web content sources that are relevant to your offering to spread the net even wider.
Media coverage: Press articles on you and your new start-up can enhance your credibility and can be invaluable when trying to win new clients.
To maximise the impact of your marketing activities, here are some additional points worth bearing in mind:
For every marketing campaign, be clear about why you're doing it and what specific effect you want it to have.
Not all forms of marketing are created equal. Different forms have different impacts and different reaches, so don't assume that each form is interchangeable with others.
Location, location, location. Where you place your marketing material is often as important as the message it communicates. In every instance, try to feature your material where your target audience is most likely to come across it.
Finally, always be marketing. Never miss an opportunity to tell people about your start-up. This way they can help to keep you abreast of relevant information.
Don't let the statistics deter you from starting up your own company, but don't let Hollywood fool you into thinking it's easy either. You can be a successful entrepreneur. It won't happen overnight or in 120 minutes and you will more than break a sweat, but it can be done. This series of articles has suggested ways in which you can get going on the right track. All we ask in return is that when you've made your millions running your company and Hollywood makes a film about you, please invite The Gateway to the premier!