We all know the statistics: most startups fail for various reasons, primarily because they run out of money, or didn’t raise enough – or any. There is another factor to consider: do you have what it takes to be a founder of a company? There’s a lot of advice out there on the slides you need in your deck and why startups fail, but what about some basic skills you need to be a founder? We do know that many founders of very successful companies are psychopaths – do try to avoid going that route – and that aside, here are some things you need to consider:

 

Do you have the persistence and resilience to get to the finish line? It’s a lot of work and a long slog – longer than you’d anticipated. You’ll no doubt get a lot of rejections – from potential customers and investors. Do you have the fortitude and persistence to keep going? To pivot, if need be and accept the fact that your initial concept/vision needs to be altered? That’s why investors do put the focus on ‘team.’ And are more likely to bet on a second time rather than a first-time founder. The latter has been there, done that.

Are you a good listener? To feedback? Do you get the same response to your pitch or idea every time, believe you know better, and ignore it? There’s also that chance that you may know or see something everyone else doesn’t. When he first started Amazon, Jeff Bezos was the laughingstock of the industry as investors and so-called industry experts knew that he was out of his mind to believe that people would actually give their credit card information online in order to make a purchase. The chorus isn’t always right. Then again, neither are you.

Are you a planner? Do you know what you need to do on a daily basis? Do you work on the easy stuff and push the harder stuff off until later? And speaking of planning, as Howard Morgan of B Capital said at one of our investor breakfasts, it always takes more time than you thought, or costs more than you planned for. Or d) all of the above. There are always elements you simply can’t plan for – plan on it.

Are you a good leader? And the right one for your project? Can you make the hard decisions? Do you play well with others? Do you know how to show the team appreciation? Or offer fair criticism/suggestions? Are your expectations reasonable? And do you know this subject or vertical cold? And see it in a way that no one has seen it before?

Do you have a support system? You’ll need one. Friends/relatives, anyone who can listen when you’ve had a hard day and there will be a lot of those. And who’ll offer support – and be honest with you as well. They might not always agree with you – but do make sure that they’re not competitive with you or a bit envious of what you’re doing, warts and all, and offer nothing but potentially debilitating criticism. Without fail. Or as Peter Shankman put when he was hosting one of our investor breakfasts, “If you can’t change the people around you, then change the people around you.”

Do you have a product or is it a feature? Most startups are there to address a pain point. Fair enough, but does it warrant building an entire company? Video chat – even multi-user – was around for years until Zoom showed up and made it easy. But the company floundered for years until the lockdowns started. An easy-to-use platform! Awesome! Outliers can win, but one can’t always count on circumstances. And speaking of circumstances: Zoom’s usage may have fallen off, but a new need was created: communications and teams have gone remote. It still has a use case. Another lockdown breakout example: Peloton. At the end of the day, it’s an exercise bike with a social component. Gyns reopened: Peloton tanked. Some sort of sustainable user value is key. Otherwise, again, it’s a feature.

Is your focus on customers or investors? There’s a difference. And is the idea big enough and enough of a pain point to attract both? Do you know who your target customer/what your target market is? Is it sizeable? Large enough to find customers and attract investors? And hint: the back-of-the-napkin investment days are pretty much over. You do need a product to show – and traction that will attract investors.

How large or relevant is your network? Does it include the people you’ll need to build your company? Or people who can help you find those people? Are there mentors and advisors in the mix there? Investors? Successful founders? You can’t do this on your own and your network is your best resource. If it isn’t, put that on your to-do list: Expand your network. Now.

Do you have sustainable revenue or know how to get there? Investors like numbers, especially when it comes to sales.  Every business needs revenue, and you’re building a business, not simply a company. If you aren’t bringing in or can’t bring in revenue, it’s a hobby.

Are you in love with your product? If so, do not pass go, do not collect investment. Build a great product, for sure, but your real job is to make everyone else fall in love with your product – customers (how it’ll make their lives better/easier) and investors (how they’ll see their ROI)

Do you know investors, if you get to the point where you need them? Like cybersecurity, many founders put knowing possible investors on the ‘nice to have’ list. You’re busy building a company. Getting to investors isn’t top of mind. Good to start by bootstrapping and getting traction so that you’ll be more attractive to investors. You know how investors mention that warm introductions are best? Good to target possible investors early and establish a relationship before you need them. Attend their office hours. Follow their blogs or twitter feed – and comment from time to time. Go to panel discussions/feedback sessions/networking events, either online or IRL, and introduce yourself, if possible. Then follow up. And stay in touch from time to time. No stalking!

 

Those are a few of the basic considerations. Entrepreneurship isn’t for everyone and certainly not for the faint-hearted. Which is another reason why so many startups fail. Good to keep in mind two things: that heavy lies that head that wears the crown. And that unless you’re the lead dog, the scenery never changes. Onward and forward.