Starting a business may feel overwhelming with a long to-do list, what seems like no time, money, or energy to do it all. You’ll have to make important decisions every day on which of these tasks are more important. It’s your own assessment if you will.
More often than not, founders seem to get their assessment wrong, according to Boris Wertz, who recently wrote a blog for his firm Version One Ventures. He relates to his own experience and before he lists areas founders underestimated or overestimated in, he writes, “When you’re in the midst of building a company, it’s hard to fully assess the significance of various activities and decisions.”
Wertz lists five business realities that get less of an entrepreneur’s attention than they deserve:
1. Focus
Wertz warns, “Your company and your product will never be all things to all people.” So if you underestimate the importance of focus and you try to do too many things at once, you’ll more than likely end up accomplishing nothing.
2. Importance of Culture
Unfortunately, your culture won’t just magically appear or instantly have amazing perks or free giveaways. You need to underestimate the importance of creating the culture you’re aiming for, from the very beginning. Wertz advises, “From the start, you should be thinking about the type of company you want to build and then make sure your systems and decisions support that vision.”
3. A Great Hiring Process
Not only Wertz, but many investors warn startups about the importance of HR issues. It may seem easy to push off establishing procedures or processes for some other time or give the wrong person the responsibility of doing the hiring. THAT IS A MISTAKE! Wertz claims, “Your company won’t survive if you’ve got a great idea surrounded by a mediocre team.” So you need to pay attention and put lots of thought into who and how you hire!
He continues by saying, “Founders should stay involved in every hiring decision for as long as possible. When you’ve reached the scale when it’s no longer possible to be hands-on in each decision, you need to make sure you have strong hiring methodologies in place.”
4. Reference Checks
Wertz expresses, “I’m always surprised at how often people still get hired without extensive reference checks. When you’ve got a good feeling about someone, it’s tempting to just move ahead without any kind of due diligence. But informal reference checks can be very revealing, particularly if you can talk to people that weren’t provided by the candidate, but know him or her very well.”
5. The RIGHT Advisers and Investors
Not every investor is the RIGHT investor. The saying “every dollar has equal value” doesn’t exactly stand to say that of the investors you get those dollars from. Wertz explains, “Too often I’ve seen founders look at investors as checkbooks. Money is important, but over and over again I’ve also seen just how important great investors and advisors can be in shaping an early stage company.”
If these are what founders underestimate and not worry enough about, what exactly are the areas they focus on more or think are more importance for their business? If you are working on your startup, I highly advise you take these tips into consideration.
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