Every day, we hear inspiring stories of entrepreneurs who take a simple idea and turn it into a profitable business. But while it’s easier than ever to ‘start’, startup success is far from guaranteed, with estimates that up to 90 per cent of technology startups fail to exit. We’ve asked two promising startup founders and AGSM MBA graduates for their top tips on successfully forging a path as an entrepreneur.
James Albis is the founder and CEO of >Snohub, an automated snow clearing service for homeowners and contractors that is disrupting a market worth more than $8 billion in North America. Mathew Barnett is the founder of Bonjoro, a mobile app aimed at improving customer engagement. It integrates with existing CRM tools and enables businesses to use video to personalise customer onboarding and interactions.
Here are the key things that have made the biggest difference in their success:
- Lay a strong foundation
While many entrepreneurs find success without a formal business education, Albis argues that having the right foundation will help entrepreneurs make the most of their practical experience and fill in the gaps. “The software and way we capture information might change but you need to have the business acumen to understand how to interpret financial data, how it’s constructed, how to apply it and other foundational aspects. An MBA is a very important degree for a lot of folks, myself included.”
- Validate and execute well
In the words of growth hacking expert Sean Ellis, businesses must know whether their idea, product or service is a ‘must have’ and for whom and why. Without this understanding, you cannot execute well, which Barnet says is key to long term growth. “No idea is original, but there is a lot of originality in how you apply that idea. If you believe that you have the better idea, if you believe that you can build a better product and service, if you believe that you can satisfy customers better than a competitor, then build it!”
- You can’t truly ‘fail’
‘Failing fast’ has become the mantra of today’s agile business mind-set. It’s a way of thinking that redefines missteps as lessons and failed attempts as opportunities. Albis thoroughly agrees. “I don’t see anything truly as a failure. If there is a lesson that you can walk away from and you learn from that, then it’s not a failure,” he says. “It’s a failure if you don’t learn and apply on what you screwed up on in the past.”
- Human centred design trumps capital
Capital raised grab headlines but Albis argues success is not a function of the investment you secure. “Everyone seems to be chasing that money train but it’s not about that. It’s about building a really good product, it’s about customer experience,” he says. “There are so many companies that have raised $40 million and then two years later disappear, even ones backed by the biggest names in Silicon Valley.”
- Get into market quickly, test early
Testing empowers startup entrepreneurs to challenge their thinking and gain valuable insight that drives growth. “Test early. Don’t spend two years building something… Build the minimum you need to build to test whether it will work….and if you can’t get customers to love the product and to use it regularly, then it’s probably not the right product,” says Barnett. “And don’t ever make assumptions, because some of them are going to be very wrong.”
- Focus on driving growth and profitability
The early days will make or break your startup. That’s why it’s important to focus on proving growth and profitability quickly and effectively, via customer sales, user acquisition or partnerships. “The business will have to stand on its own two feet at some juncture. If your business model is broken, no amount of funding will prop that up or continue to save it —it’s about driving sales and profits,” says Albis.
- Don’t ignore your flaws
As an entrepreneur, it’s easy to fall in love with your idea, product or business model. But doing so could leave your business vulnerable to disruption or critical mistakes. “If you are infatuated with your product, you run the risk of not being able to discern between what is right and what is wrong for the business. Your product might be going down the wrong course but if you’re too in love with it, you might not be able to see the forest for the trees,” says Albis.
- Know when to let go
Working day-in, day-out to grow a business from the ground up takes dedication, which can make it difficult for many founders to delegate as operations scale. Albis says, however, letting go is critical to enabling the business to realise its full potential. “You have to be visionary leader to relinquish power, assign and subordinate opportunities to those people around you. You can’t do everything all of the time. Well-intentioned and committed CEOs and founders can suffocate the garden that they are trying to run around in.”
- Learn how to make good decisions quickly
Entrepreneurs make hundreds of decisions each day. The opportunity lies in finding a balance between gathering the information needed to make good decisions and deciding quickly and with confidence. “The ability to implement and make good decisions is something you learn over time. People in traditional corporate roles often get worse at it, because they start not having to make decisions all the time. As a founder, every decision comes back to you, so you have to believe in what you’re doing,” says Albis.
- Put talent to the test
Both entrepreneurs admit that finding the right talent is one of the most challenging parts of running a business. While they have different tactics for weeding out the best candidates, both say it’s about finding out what candidates can do. “I’ll give someone a project for example and if they can do that well, then I will have a conversation about bringing them in. As an early-stage, fast-growing start-up, we don’t have the room for a major bad hire - the smaller the organization, the bigger the impact,” says Albis.
"We get them to send us a video and answer a few questions before we talk to them about their experience. Really we're looking for people who can do many things. The most important thing is that they are someone who can get stuff done," added Barnett.