Last week, I had the pleasure of inviting all the Neal’s Running Start entrepreneurs to Aspen, Colorado for a reunion. It’s been a little over a year since these four entrepreneurs from scattered parts of the globe were chosen to be part of the NRS 2016 program. Their month with us was a non-stop marathon of lessons on business from Silicon Valley’s finest. I wanted to see how they’ve applied what they learned since leaving.
I thought I’d share some of the lessons we talked about, as they can apply for any entrepreneur. And they also had some good tips for any entrepreneur who might be facing the same challenges. We’ll start with some lessons they took back, applied to their companies, and made a big difference:
Top 5 Positive Outcomes:
- Cash flow – cash is king, so master your cash flow management, and that will make a huge difference for the survival and growth of the company.
- Embrace change – if what you’re doing isn’t working, change. If you have to make changes, do it fast and decisively.
- Raise as much capital as possible – if cash is king, so is capital. You’ll need it to grow and keep up with the market. Don’t worry about taking too much capital, as investors will only give you what you need and observe you how stretch to make it work. Take capital from multiple sources, including VCs, angels and government sources if you can.
- The right customers – everyone needs customers, but choose the right customers who fit with your long-term vision. Minimize customizations that can slow down product development.
- The right team – hiring the right team members can take burdens off the CEO and bring new inspiration. The wrong hire can be detrimental to the company, brand, reputation and finances. Hire carefully, but fire quickly.
Top 5 Challenges:
- Cash flow – the inverse of mastering your cash flow is not having the cash flow to master. All the entrepreneurs have learned the importance of revenues and if you don’t have cash, you must solve that problem first before anything else can happen. Have a back-up plan or a cushion in case fundraising takes longer than expected.
- Product – managing the product direction can prove difficult when you’re being pulled by customers in various directions. Pick a vision, but go where the money is. That’s a hard tightrope to walk.
- Managing growth – once you have investment and cash, deciding how best to apply it to manage growth is challenging. From which hires to make to what R&D investments will yield the most results, managing growth is complicated.
- Making cuts – sometimes, you must make the hard call and cut a team member who isn’t working out as the company grows. Sometimes you must cut people to manage cash flow. But no matter the reason, in a small business letting people go is difficult because it’s personal.
- Don’t give away the company – at an early stage, people will be vying for stock. While you need to give some away to get investment and a committed executive team, don’t lose your ability to call the shots at this early stage.
ProTip:
One of the entrepreneurs had a tip that everyone liked: Make a one page list of your yearly goals. Keep it where you can see it every day. That will help everyone manage tough decisions and prioritize activities.
I’m proud of the entrepreneurs. Running a company is never an easy climb. There are always ups and downs. I’ve said it before and I’ll say it again: No company I’ve ever worked with has been a straight shot to the top. They all face challenges as they go. Our reunion was a chance for us to share the ups and downs of entrepreneurial life, and have some fun in the mountains at the same time.
I’ll continue to keep you posted on our entrepreneurs. We haven’t seen the last of them yet, and I look forward to more great times in 2017 and beyond.