Over my short “career” as an entrepreneur, there are two traits that seem to play an important role in the success of a startup. The first of these is the track record and network of the founder and the second being a great team. The former is about traction and your Klout. If you have successfully exited a company or founded a company that is well known, the people you engage with in real life and social media are those with a large sphere of influence and can help you expand the reach of your company rather quickly. For instance, when a VC leaves to start a company, he has a much easier time raising funds and getting to launch because his circle already includes those that would fund him and publicize his company.
However, in my eyes, having a great team is more important and has a longer lasting impact on your company and more importantly, you as an entrepreneur. There is no one person that knows everything about business or starting a business. Some people are idea people and others are more process and execution oriented. Some people are great leaders and others can be great employees. Some people are great at design and structure and some are great at programming. Very rarely will two people have a similar set of traits from top to bottom. It is figuring out how to match these skill sets together that make a team successful.
The expression goes “know what you know, but more importantly, know what you don’t know.” I would say that 75% of building a team is understanding this concept and being able to recognize your strengths and weaknesses. Most founders of companies have limited, if any, technical knowledge on how to actually design and develop their website or product. They go out and have to find someone who knows what they don’t and start building a team. As I wrote about in a previous blog post, just because you found a company or have an idea for one, it does not qualify you to be the CEO. Maybe you are a marketing person or a PR person. In those cases, you need to find a salesman and programmer.
Building a team is not just about compensating for missing skills sets; it is about identifying the traits that all team members must have as that will be the glue that holds you together. Maybe it is a love of travel for a new travel website or religious beliefs that you share that create some connection. Whatever it may be, this commonality is your 75% that hold you together and the combined skill sets make up the last 25%. How you assemble this team and use the collective talents will be what makes or breaks your company in the long run and define you as a leader. The team you assemble will be part of the company and set its culture for years to come.
Big reach and access to VC money based on your inner circle gets you to launch. But if your team can’t put out a great product or leverage its collective knowledge and resources to build the company beyond launch, your company will not have a chance to make it to the next level.
Whether your company is successful or not, it is exciting to tell people that you are a founder of a startup. The fact that you actually started something is more than most people can say and gives you some credibility as an entrepreneur. But the fun part comes when you need to make your business cards and you start “handing out” the titles that you will use. The titles of CEO, Chairman, Chief Revenue Officer, Chief Marketing Officer and other big name positions are always fun to give out. But what do they mean, especially when you are first building your product, and how can they affect the company in the long run.
One of the cool things about being a founder is that you will always be the founder. No one can ever take that away from you and it is a part of the company’s history. However, every other position is negotiable and very often, the founders find that they are not right for those jobs. This may not occur at the outset, but often that is because everyone wears multiple hats and works to get everything done together. In the early stages of a company, there is very little separation of duties and tasks; everyone pitches in wherever they are needed. But as the company grows, management must grow into their roles and this is when it is essential to know your strengths and weaknesses.
It is also important to remember that you can give yourself whatever title you want at the onset, but that can easily be stripped from you as your company grows. When you grow the company and take on investors, part of the due diligence they perform will be focused on the management team in place. While you may think you are right for the job of CEO because you are the founder of the company, the investment may come with you being replaced by the VC’s own CEO. Getting fired from your own company is not a pleasant experience or something that anyone ever wants, but at the end of the day, it may be essential to your company’s growth.
Knowing your role and what you do well are essential. There is a tremendous difference between having an idea and executing on it. While title and roles in the company don’t matter much at the onset, they should still be real and something that you are capable of handling and growing into as your business expands. Outsiders and clients will view you in this capacity and you always want to put the best foot forward by being able to handle your job. And there is nothing wrong with just calling yourself the founder until you have time to figure it out. At least that way you will save some money on business card printing!
Small business owner vs. entrepreneur: What’s the difference or are they the same? This question is something I have been struggling with for a while, not because I don’t know the difference, but because I think it is very hard to define. The main reason for that is the challenge in defining an entrepreneur. The term is becoming overused and almost generic. Almost everyone that I know who starts a business calls himself or herself an entrepreneur. From friends who started making baby/kids clothing, to lawyers who started their own practice to people who started websites and blog to those starting their own companies; everyone calls themselves an entrepreneur.
I recently posted this question on the KAYWEB Angels group page and received some interesting responses. However there seems to be some common thoughts between all of the answers, which are that an entrepreneur is about creating change and having a vision often bigger than their company. These are two unique traits to entrepreneurs that can differentiate them from a small business owner.
Both small business owners and entrepreneurs are risk takers. In many cases, these two groups put their financial future at the mercy of their business. Taking out mortgages or lines of credit, running up credit card debt and borrowing from friends and family are pretty common for people starting a business. But what differentiates the small business owner from the entrepreneur is the vision and the mindset. Small business owners want to build a business where they can work for themselves, make money for themselves instead of someone else and support their lifestyle. Entrepreneurs dream of creating the next great platform that will change how people do things. For entrepreneurs, the thought of a small business never enters their mind, as they are always dreaming of creating the next Facebook or changing an industry. While their business may grow and level off as a small business, the mindset of an entrepreneur is to pivot or create the next great idea beyond their original one.
A great example of this is someone who wants to create a kids clothing store. The small business owner will buy other people’s fabric and designs and use them to create the standard shirts, hair clips, smocks, towels etc. The entrepreneur will dream of creating a new product that can change the way kids clothing functions, such as a new type of clip that is childproof or shirt that is stain proof, or a new way of producing or marketing the clothing. While small business owners may consider themselves entrepreneurs, they lack the vision and passion to be unique and create a new way of doing things.
While these two things may set small business owners and entrepreneurs apart, there are probably numerous ways to differentiate the two, including comparing the strict definitions of the terms. But to me, the difference is greater than the definitions; it is about a mindset and a little bug inside of you that says, “I am an entrepreneur.” It is something that other entrepreneurs can sense and it makes you part of the entrepreneurial community. That feeling and sense of community is something that serves as a true differentiator.
Gary Whitehill, founder of Entrepreneur Week, once told me that one of the hardest things to understand in life is that you’re not what you are, but what you’re perceived to be. In this day and age of social media, I think this is one of the most important things for people to remember. First impressions last a lifetime and in today’s day and age, our first impression is made with the information that people see about us online. Let’s be honest, when we connect with a person at a meeting or are introduced through a mutual contact, the first thing we do is go to Facebook, LinkedIn and Twitter to learn more about this person. If the individual has no information available or a spotty resume on these sites, part of the excitement of the initial introduction is lost immediately. The person will now have to overcome this void in order to make a great first impression.
In today’s age of the internet, you are your own brand and how you market and sell that brand will make you a success. You need to take an active role in building that brand so that when you do meet someone you are prepared and give off a great first impression. Some of the ways this can be accomplished are:
- Start a blog about your industry – Portray yourself as knowledgeable and people will listen to you and ask for your advice. This will give you a lot of credibility.
- Learn the industry – Make sure you know the names of the key companies and players in the industry. You don’t want to look dumbfounded when these individuals’ names are mentioned.
- Network – Build up a network of contacts in your field and related fields so that you can leverage their knowledge. Attend industry events and roundtables so that you can be more visible and be an active participant so that people know who you are.
- Learn how to make a great first impression – Make sure you know how to attract someone’s attention when you meet them. People have short attention spans so make sure you know how to get engage them from the first moment. You only have one chance at a first impression!
This is an especially important lesson for entrepreneurs. Very often entrepreneurs are young and have no track record. The only information people have about you is what they can find online. When you are going out to raise capital or to sell your product, people want to know who you are, what you stand for and what kind of person you are. You need to use all the tools available to you to create a certain perception of yourself in the eyes of others. This perception can often be the difference between getting the funding you need or the potential investors having no faith in you. You are the most important thing that you are selling so make sure you are perceived that way.
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