The Wall Street Journal is one of the few newspapers that I still give the time of day but I still stay mostly in their business and tech sections. Yesterday they posted an article that really nailed it about how an entrepreneur’s passion can destroy a startup. The title is a little click baity for my tastes but passion and startups are definitely hot buttons of mine.
Key points out of the article:
Passion is what drives most startups but it can blind you to the gaping issues.
Issues that you need to pay attention include (but not exclusive to) the following areas in no particular order:
- sales experience
- marketing experience
- technical experience
- business experience
- industry knowledge
- network of folks
- family life
- and much much more
Reality is that we get excited about an idea and want to run with it but without a full team that keeps their eye on all of the various issues, you’re doomed to fail.
If, on the other hand, you’ve got a diverse team with a range of skill sets who are working on the project together and helping cover each other’s weaknesses, you’ve got a much better chance.
One of the big things that a lot of startups forget though is family life. There’s the old adage, “An entrepreneur is someone who works 16 hours a day for himself to avoid working for someone else.” This means that family can easily fall off the side when you are deep into it. Long after you’re startup has been gone (success or failure), your family is going to be there for you. Make sure that you spend some time with them and are sensitive to their needs as well.
The two things that really stood out to me as far as data points in the article:
- 52% of founders are replaced by their third round of funding.
- 78% of experienced founders would either wait longer to get funding or bootstrap themselves the whole way.
Both of these data points hit me as a lot of times my advice to startups is to wait on taking investment and these two give me a little ammo as to why that’s sound advice. I always ask startups two questions when it comes to investment:
- do you have a clear plan as to how you’ll spend every penny?
- Are you 100% sure that the potential investor is on board with your vision and bought in for the long haul?
If you’re just taking money from anyone with a checkbook, that’s a recipe for failure.
In short, make sure that your passion, while an amazing thing and the driving force behind any successful startup, is not blinding you to the potential train wrecks.
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