As a first-time entrepreneur, I have made lots of mistakes.
Hence, I hope I can share my lessons learnt here to help those aspiring entrepreneurs avoid the mistakes I have made, and also to celebrate that SilkStart has ended 2010 with quite a bit of cash in our bank. It’s been an awesome year!
About being the Founder and CEO
Being a successful founder and CEO means you have to be good at just one thing: execution.
When I first started, I didn’t know what “execution” means simply because I didn’t know what to execute. Thanks to my advisors and investors, I have learned the following critical numbers for a B2B company:
- What do you need to do to get your first 20 customers in a month?
- What do you need to do to get $10K of revenue per month in 3 months?
- What do you need to do to get $100K of revenue per month in 8-12 months?
One mistake I made during the early days was that I tried to execute on the following targets:
- What do I need to do to raise my first $100K in less than a month?
- What do I need to do to raise my first $1M in 6 months?
Then I realized that I am not running a fundraising campaign for the Daniel Chu charity, but I am running a business for God sake!! So, my goals should be about how to make money from getting more and more customers! Fortunately, I was able to turnaround from that crazy thinking, so I hope you don’t make the same mistake as I did.
Most importantly, I have, and many other successful entrepreneurs, such as Bill Gates, have proven that you don’t need to have a product to close a deal, so don’t make that an excuse to not go out there and start selling.
Suggested Reading
About People and Team
As my great mentor Pankaj said, “Daniel, you gotta make an effort to only work with A+ people.” And I have to say that during my early days, I didn’t stick to that principle all the time because sometimes, I’d get someone on board just because we need someone to fill the position. Having A+ people on board and being able to build a strong team with them are critically important.
An A+ person, besides being competent at what he/she does, has, in my point of view, the following values:
- Do whatever it takes to deliver as promised
- Always go for the extra mile to WOW the customers and other stakeholder
- Put the group’s good before his/her own good
- Take initiatives, always look for ways to improve the product, the team, or the customer experience
- Resilience: someone who can endure drastic change and bad news without reacting destructively
I believe these values are very hard to be developed in a short period of time. So going forward, I will not hire someone who hasn’t been living and breathing these values because we simply don’t have that much time to spend on developing these values for a new hire.
In addition, I think working together at an office regularly is very important. Again, I hugely discounted it during the early days because we didn’t have enough money to get an office, but now I really regretted it — we have lost some great people because of it.
Despite the mistakes I’ve made about team building and people, today I am still surrounded by great people, who are 100x smarter than me, and who live and breath those values — I guess I am just lucky that way.
Suggested Reading:
About Money & Pivoting
I have become a strong believer for the theory that entrepreneurs need to go through severe poverty before they can succeed, and I mean it.
When I was at TELUS, the company paid me well. Hence, I started to lose the sense of value for money — I didn’t have to worry about making money, and money would just show up every month — that was pretty easy.
However, after I quit TELUS and live through severe poverty during the early days, I started to develop a hunger for making money. That’s when, in my point of view, one would start to think really hard about his/her business and the flaws in its business model that prevents money flowing into the households from his/her customers — that’s when you pivot.
I am a firm believer of Steve Blank’s customer development theory, but I think that is not enough — you need an emotional driver to make you pivot. In my case, poverty was the emotional driver that just outweighs the emotional driver for making the initial non-sensical idea work. Of course, an easy way out would have been to go to Best Buy or MacDonalds, but you’d just get yourself into a vicious cycle because at the end of the day, your business is not making money for you and that’s why you have to be in Best Buy, and if you are not full-time on your business, it’s very very hard to make it work.
So, develop a hunger for making money and pivot until you are making money!
Suggested Reading:
About Advisors, Investors, and Board of Directors.
Great advisors get you started, great investors build the company with you (not just giving you money and leaving you alone), and great directors help set your company governance to keep you focused and motivated.
The best way to get you started is to get an advisor, investor or director, who is running a company that offers products and services that are similar to yours, but in a different market.
For example, we have Mike Tan, who is the CEO of TeamPages, a venture-backed, top membership solution for sports teams and leagues as advisor. TeamPages and SilkStart are very similar, but SilkStart is for associations and business organizations, such as your local Board of Trade, and etc. So, having Mike’s experience and guidance was essential. And he’s an awesome entrepreneur and a great CEO whom I really look up to.
The key here is that you need to recruit someone who you can work with and who you can learn from.
Suggested Reading:
About Sales & Marketing
First of all, you have to know your market, meaning you gotta do some market research to determine what kind of people will pay for your products, and where they are geographically!
One lesson I learned during the early days was that I should’ve moved to the US market much sooner because it is where the money is. The fact is that Canada only has 33M people, but the US has 300M+ people! So of course, the demand is higher there — more people, more organizations, more needs, and more money! So, I can almost say that one should just forget about the Canadian market and start with the US market.
If you look at the Taiwanese entrepreneurs (Taiwan is where I was born, and lived for 14 years), all they think about is exporting because the Taiwanese market is just too small to be relevant. I think Canadian entrepreneurs should also be thinking that way. (p.s., Taiwan has 23M people, but the size of its land is 0.3% of that of Canada).
Suggested Reading
About Some Other Stuff
- Choose your lawyer wisely — bad lawyers will bankrupt your company (financially). Always set a budget for your lawyer, and don’t let him charge you by time, but by project.
- Always have a vesting schedule with a 1-year cliff to protect yourself
- Don’t always think about getting the best deal during your early days, think about how you can turn every deal into your reference
- Run a business, not a charity — make money, don’t just raise money
- The Free model doesn’t guarantee massive adoption — if you can deliver value, people will pay for it. The try before you buy model is much better
Conclusion
Being an entrepreneur is fun and rewarding, but it certainly isn’t for everybody. You need lots of resilience, persistence, and passion to get you through many days. However, if I were to choose again, I would still choose to be an entrepreneur… maybe even sooner.
2011 is going to be very exciting!
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Filip Elazar’s first passion is software development. He obtained a Master’s Degree in Mathematics from the University of Belgrade and joins the team after a semester studying Computer Programming in Seoul, South Korea. Always interested in different cultures and perspectives, he began his professional career in Brussels, Belgium, as a web programmer. To join SilkStart, he travelled 9000 kilometres from his homeland of Serbia, ironically not the farthest distance travelled to work for Silkstart.
