Lighthouse Sydney CEO Annie Parker has seen startups come and go over the years. Here are 5 things the founders who find success have in common.
Having invested in hundreds of startups through my work with various incubators and accelerators, I have seen the things early-stage entrepreneurs go through, and I have made my own mistakes, too.
As they are setting up a new venture, business founders tend to go through a wringer. Their life is spent building, testing, learning and trying to grow. They’re constantly looking for ways to make it work, but much of the time it can seem the most difficult task they have ever taken on.
Building a tech startup can take up to 8 years of hard slog, determination and dedication. It is not a sprint, it’s an ultra-marathon. And in the lead-up to judging PitchComp at World Tour this month, I’ve been thinking about what it means to succeed as a founder, and what sets those who do succeed apart.
Do you have a clear purpose and is that purpose shared between you, your co-founders, and your employees? Why are you building this business? What is the end-game vision? Have you captured it, can you articulate this vision easily, can your team? Does everyone 100% agree with this vision?
If it isn't simple and clear, and your core staff haven’t bought into it, things start to unravel as soon as it gets tough. And it does get tough in a startup – it’s the preparation for that risk and how well you handle it that sets a good founder apart.
When you face problems you can always go back to your purpose and remind yourself and your team of why you decided to do this in the first place. It keeps everyone on track and gives you the motivation to keep going.
Six months after an accelerator program I get in touch with participants and ask them what was most valuable. I always get the same response. The seed money was handy. The mentoring, connections and education were invaluable. But the biggest value-add, hands down, was the rest of the cohort.
Knowing you're not alone, having that mental and emotional support, and having others around you to ask questions, to confide in, to discuss issues and to share your own knowledge, is enormously powerful. So seek out your local startup community, find your tribe.
Speaking of support, don’t hesitate to reach out to family and friends too. It’s amazing how many people don’t do this. It's up to you to ask for help when you need it, and that can be quite a confronting thing to do. But asking for help is not a show of weakness. Tap into your friends and into your connections. You'll be surprised at how many will be keen to help.
A successful business doesn’t always need to change the world, it just needs to fix a problem that is worth solving, or introduce something new that people love. The ‘love’ part is really important. People have to want to move towards it.
Then consider whether your solution or new idea is 10 times better than what already exists.
If it isn’t, it’s probably not got the legs to stay the course.
Investors need to see your credibility and expertise; you should know the problem inside out. Typically we’re looking for or your cofounder to have direct industry experience. I see a lot of startups fail because they don’t have enough market knowledge.
Assuming you are a leading expert on the problem your business is solving, you must then develop a convincing pitch – which absolutely has to pass the ‘mum test’.
What’s the mum test? You should be able to explain what your business does in just a few sentences so that anyone, including your mum, can understand it. Investors see hundreds if not thousands of pitches, so keep your pitch clear and concise so that anyone can understand in an instant why your business is so amazing – by the way thanks mum for hearing so many of these pitches from me over the years now!
Always carve out time for yourself. It’s so easy to fill up your days with meeting after meeting and, given you’re so passionate about what you’re building, you’ll fill every waking moment with business. Make time to get away and do something that relaxes you and gives you a break.
It might be walking your dog, going for a surf, anything that allows you to switch off - even just for a little while. Many founders think that’s a distraction, that they should be using that time to do something more important. But your body and your brain need a break. It’s important to do that so you’re more effective – so you can recover and keep going.
Learn more about the digital landscape SMBs are operating within and how to make the most of enabling technology. Access the full Digital Opportunities for Today’s Small Business report.
Annie Parker is CEO of Lighthouse Sydney, a startup precinct at Barangaroo that aims to help founders to build their skills. Her mission is to improve the innovation literacy of Australia and make Sydney a world-leading startup ecosystem.