This is truly the age of start-up entrepreneurship! The culture of starting businesses young, looking for interesting products and services and also daring to embark on that journey is avant-garde. This is a massive mind-set shift from the previous decades and brings in opportunities for the young – far more than the regular destination of stable jobs and careers. The romance of the idea and the hunger to make a difference are not interesting signposts or Postit notes but the working ethos of many an entrepreneur.
But it takes far more than great ideas and innovative business models – to build an institution of repute. Popular research reminds that companies are ‘not entering their teens any more ‘! They run into closure in the first twelve years. But the more worrisome part of that research is that barely a few survive the first five years. Now, that is disturbing – not just the risk of failure but also the pace of failure. To move from the start- up to building an institution it requires an attitude and focus that is very different from the first few years. Here are a few cognitive changes, one has to take into account.
Ideation to Execution
Idea is always the seed to that venture and one cannot underappreciate its value and necessity. But ‘execution’ is often the ‘ugly duckling’ we often tend to undermine. No idea is complete without the ability to execute it and to demonstrate the power of its virtues. If the founder of the company cannot get into the details of a ‘dirty, muddy – roll up sleeves’ plan – you have to hire that talent. While large corporates have been high on rating ‘execution’, it is time the start-ups understand that, it is your ability to execute that will make the difference!
Individual to Team think
We are conditioned to work in cluster or groups but are always wired to think individually. This is often the death knell of the entrepreneur. As an entrepreneur, you have to believe in the power of groups not only for doing things but also to think solutions. A collaborate mind-set helps you delegate, breed trust and breeds the value to ‘taking onus and responsibility’ not just for your actions but the collective decisions of the group – even when it was not yours! Mentally – you have to make that transition from aspiring to inspiring others!
Creativity to work structures
“We have a flat organisation – we don’t want creativity to be stifled in work structures! “ Personally, I had heard entrepreneurs and professionals say this. Work needs order and it benefits from a structure. Delegation which is a key management necessity works best when you are structures around. In fact, fundamentally, an organisation structure facilitates more division of work, allocation of targets and makes it efficient to measure progress. Structure is required even when you are part of a rapidly changing business ecosystem or an uncertain future roadmap.
Top line to bottom line focus
Client acquisition, sales will always reserve top places in entrepreneur minds. But as you progress beyond the idea stage, concepts like savings, burn rate (a monthly outflow) need to govern your decisions. There may be funds, who will underwrite your losses, your expansions and your customer ownership – but you need to remember that you can never make money on losses – a timely wakeup call when you ride the waves of valuation and notional value!
Besides these shifts in thinking , there are also common decision pitfalls –
We have seen friends starting companies, college mates coming and even spouses joining hands in business. There is no concern in this – but you have to be clear on roles. Who takes decisions? Who is the CEO? Who looks at Finance? Who is responsible for customer acquisition? This cannot be taken for granted or subtly understood … Job descriptions need to be scripted!
How much should the entrepreneur take as salary? Should you not take a salary during the initial days? Should I forgo my pay for the first few months / years? There are no golden rules to these decisions, but dep salient thought is necessary
During the initial years, you may be tempted to reward and advice by offering the stake in the company. There is no shame in this, especially when there is money on the table and advice that can help you pivot on the right lines. But excessive dilution will make your organisation lose its basic character and you will see a new, unfamiliar entity emerge in front of you!
The change in focus is multifarious – from exploration to efficiency, complete autonomy to some rules, from short term rewards to long term viability – it will be a bumpy ride!