[Image by Gerd Altmann under Creative Commons]
I am 28. I have just raised the first round of venture capital for my e-commerce company. It is a heady feeling. We know the killer app we are building will rapidly transform the industry we are looking at; it will change how people will buy and sell in the future. But as the high fives are settling down, please tell us the things we should keep in mind, what must be done to take the company to the next round of funding and 20x valuation—maybe even beyond?
First things first: please focus on building value, the valuation will follow.
The reverse is a chimera and a slot machine view of business. As entrepreneurs, we must be faithful to the organization we have set out to build. That one thought must permeate every moment of your wakeful being—focus on the fundamentals. Most startups will never see the 20x valuation unless they keep in mind what I am about to tell you.
Since you are an internet company (well, who isn’t?), do not shift your eye from a fundamental reality: customers may interact with the business you are setting up in a virtual world, but always know, they live in the real world. Thus, it is not the killer app you are building, but the living experience of fulfilment that will ensure where your company will go next. Please spend time with your customers with religious regularity, immerse yourself in their world in which they use, not just buy, your product or service.
When you immerse yourself in the world of your customer, you will soon realize who holds the key to building customer loyalty. It is the last-mile guy, happily outsourced by most. Whether it is a cab driver or a pizza delivery guy or whatever, that guy is the one the customer sees when she opens the door. In most businesses being built today, that guy is identified by a motor bike and a cruelly designed backpack. He is no one’s man. No one is making that guy shine. No one is invested in him. The benchmark there is UPS, Fedex and Starbucks in countries in which they operate directly. That man is your brand.
Now let us look at how you run the company overall. Let us talk about the Type-A personality that all entrepreneurs are cast in, its overpowering masculinity and what that does for many of us. Beware of the stereotype.
You would do well not to emulate startup entrepreneurs who have a macho view of leadership.
Look at the best business leaders who have been around for decades. Most of them do not build on machismo; they build on empathy. For creating empathetic relationships, humility is the foundation. Build humility. Tell yourself that you are here because of your paying customers, your employees and your investors; it isn’t the other way round.
Build a long view of time. Rome wasn’t built in a day. Amazon is 22 years old.
Do not suffer false comparison.
If the less smart guy from the same dorm in Powai or Kharagpur has a better valuation from SoftBank, so be it. Don’t fret. Shift your gaze to the last-mile guy and ask yourself, what you should be doing personally, and this very week, to train, motivate and grow him. Go meet your most recent customer at home and have tea with him. Ask the customer what will bring him back for more.
Just as I told you Amazon was built over 22 years, someone will also tell you that it made money after 21 years. That works for Amazon because Amazon has a 210 year view of business. For you and me, we would be better off to internalize that losses are not cool. Businesses are meant to make money. Whoever told you otherwise is smoking and wants you to be dopey.
These days, every newspaper, every business magazine is agog about startups. The stratup kid is the new glam baby. While it is a good thing, it can go to your head.
Please know that media is like alcohol. Drink responsibly.
And please, don’t get carried away by the unicorn tag. It is not without reason that such an animal doesn’t exist in the real world.
Let us now talk about something called The Burn.
Businesses are built on burning desire, burning ambition. But don’t burn at both ends.
Please don’t dump your girlfriend or boyfriend because you need to be at work every night, past midnight. One day, someday the entire world will be a let-down for you. It is the inevitable rite of passage. That day, you will need the open arms of those who care that tell you, it is okay, that it has been worth it. Money hasn’t yet bought love. It never will.
Today, you are in your 20s. You have just started a promising enterprise. You are entirely focused on bringing it to life, on building it. But please do take a moment to realize that in reality, there are two things coming into this world at the same time, being born simultaneously.
The visible one is the business.
The not-so-visible one, and in reality the bigger and more important one, is the entrepreneur. In you, an entrepreneur is being born. That person must be handled with care, nurtured like a child. That someone is not 28 years old. That individual is what I term as Me Inc.
Today, you are delivering two babies: the business and the entrepreneur. Don’t throw the entrepreneur to the indeterminate outcome of ego and randomness.
Never forget, the second baby is very precious. You are responsible for it. If you handle that one with care, that one will grow the business, actually, build many great businesses in the future. Please take care of Me Inc. Nourish its body, mind and soul.
Finally my friend, I have one counterintuitive thought for you. Everyone glorifies startups as the epitome of smartness. People say, hey, this guy is smart, the business idea is smart. Everyone worships at the altar of smartness. Yes, smart is important, cool and essential. But while startups are about smartness, staying on is about wisdom.
Be smart and be wise.
[If you have a question for Subroto Bagchi, mail us as askbagchi@foundingfuel.com]
