There are so many adages about persistence; it can make your head spin. “90% of success is just showing up”. “Genius is one percent inspiration and ninety-nine percent perspiration.” And perhaps my favorite “Being defeated is only a temporary condition; giving up is what makes it permanent.”
Persistence is unquestionably needed as an entrepreneur, and is often highlighted as the number one quality of a successful entrepreneur. Mark Suster recently covered this topic well on his blog.
What really needs to be said about persistence though is that it has to be married with the ability to change course quickly if that is what the market is telling you. Steve Blank of Four Steps to the Epiphany fame has a great story about adapting quickly when initial market assumptions don’t work out. An entrepreneur went to his VC board to tell them what wasn’t working and what the plan was to change it. The inexperienced VCs screamed, but the older, wiser VC in the room calmly told the entrepreneur to follow his gut and make the strategy change. That’s brave for an entrepreneur to admit what wasn’t working, and commendable for the investor to believe in the entrepreneur.
Having a quick iteration loop and adapting quickly has been defined by Eric Ries as the pivot. This turns out to be incredibly hard to do for tech entrepreneurs when you have a large “sunk cost” of a particular iteration or set of code. You really want to believe that your initial assumptions will work out, and it can be difficult to determine when enough is enough and to try something else.
I don’t think there is anything more important to remember as an entrepreneur, or general business person, as 1) be persistent and 2) be willing to pivot. Those two qualities are at the foundation of any successful venture. If you can do both of those things well, your chance of success goes up by an order of magnitude.
A careful balancing act is needed when running your business. You must carve out a lot of time initially to strategize on how to build your business. You must also strategize on a regular, almost daily basis, as you research, fine tune and tweak the business model and long term goals. Your strategy is a set of plans to reach a set of goals. But most of your time is spent on tactics. You need to do all the things necessary to execute your plan. Your tactics are usually a laundry list of dozens of items you should prioritize and act on every week.
The key is to make sure that your tactics always correspond to a strategic goal. This can be a challenge. A good trick to ensuring tactics-to-strategy alignment is for every task ask yourself “why am I doing this?” What strategy does this support? If you can’t put a tactic in the bucket of something that supports your strategy, you should seriously question whether it is necessary.
Correspondingly, all tactics should be prioritized by where they fall on the list of strategic goals. This is a great way to prioritize your day. For example, your strategic goals may include getting five new customer wins by the end of the month, or doubling traffic to the website in six months, or increase revenue by 30% in three months. Every action item on your plate during the day should be weighed against that list of goals. Does the action support the goal? Yes? Proceed. No? Why are you doing it? If you don’t have a good answer to that, you need to re-prioritize.
One of the biggest questions entrepreneurs have is how to get funding for their venture. Fortunately there are many sources for venture dollars. Where to look for funding depends on what stage your company is at.
Early on you should either bootstrap or go to friends and family. Many companies start this way, and the goal with limited early funding is to stay lean and get something built as cheaply as possible. There is disagreement on whether bootstrapping is ultimately successful, and whether you should take angel money early on. Personally I believe it is crazy not to bootstrap, at least initially. Bootstrapping forces you to think very carefully about your business; and it is your chance to prove to yourself and potential investors that there is something worthwhile to invest further in and keep the ball rolling with the company.
The next stage of funding is usually angel money. The amount of angel money can vary widely, but is often within the $25K to $100K level. However, anything south of $1M is usually considered to be an angel level. To get an angel level of investment, you need to get plugged into your local angel network. In most high tech communities like Austin, there are dozens of organizations and hundreds of angel investors. In Austin, a good list to reference is on Austin Entrepreneur Network.
After an early seed round, if your company continues to do well, you may want to go for venture capital funding. As with angel, you should first reach out to local VCs. It’s best to do research on the venture firm and see if they typically make investments in your space, and target those first. Unlike angel, going for VC money opens up a wider aperture and you can look at VCs in other cities, as it’s harder to get angel money from someone living elsewhere.
Regardless of where and from whom you attempt to get funding, the most important thing in most investor’s eyes is where the introduction comes from. Cold calls to investors or throwing business plans over the wall will never get a warm reception. It takes a reference from a trusted source to get a meeting, and ultimately get an investment. In the case of VCs, they see hundreds of business plans per month, and there is no way they have time to look at all of them. Priority goes to known entrepreneurs and references.
Alternative funding sources are starting to emerge. Companies like stealth-mode Profounder promise to bring crowdsourcing to venture financing. Profounder is being started by the founder of the microfinance site Kiva.org, and counts Reid Hoffman, chairman of Linked-in, among its advisors. A crowdsourced model of investment is a brilliant idea that it’s surprising hasn’t been already done yet.
There are so many adages about persistence; it can make your head spin. “90% of success is just showing up”. “Genius is one percent inspiration and ninety-nine percent perspiration.” And perhaps my favorite “Being defeated is only a temporary condition; giving up is what makes it permanent.”
