Starting Your Own Business Is Thrilling But It Pays To Know The Pitfalls Ahead Of Time

Starting your own business is one of the most exciting things you can do, but no one said it would be easy. RSNG has asked entrepreneurs, authors and experts how to overcome these common startup challenges, so that when they raise their ugly mugs you’ll be ready with a solution, rather than flapping into a panic…

1. Your Product Isn’t Cutting Through The biggest challenge when getting traction for a new new product can simply be getting people’s attention. If your product isn’t making the impact you’d hoped, then ask what it is that you’re selling, really? As Seth Godin says in his new book This Is Marketing: ‘It doesn’t make sense to say, “people need a white leather wallet, because: 1. People don’t need a wallet. They might want one but that’s different. 2. People might decide that they want a white leather wallet, but they don’t want it because it’s white or because it’s leather, they want it because of how it will make them feel. That’s what they’re buying: a feeling, not a wallet. Identify the feeling before you spend time making a wallet.’

Give every member of your team two Get Out Of Jail Free cards at the beginning of the year

2. You’re Running Out Of Money Going to investors is part and parcel of running a startup, so you need to make sure you have an investment road map in place that aligns with your product schedule, before you get to the stage of your coffers running dry, says Fergie Miller, entrepreneur and founder of Floa, the snow sports baselayer business who has a raft of startup experience, including founding ski training company Base Camp and tech startups.

‘You need to develop a funding raising strategy, including investor outreach that’s aligned with your principal strategy and product strategy. For example, in tech each investment round should last you 12-18 months. You’ll have an angel round of 150K, with the seed enterprise investment scheme, then you’ll do another 300-500K round after that, which is developing the product, proving that it sells and de-risking the commercial model. Then you’ll get into a 1-4 million round down the line and that’s your first growth round. It all changes, but you know that’s your broad road map.’

3. Your Staff Don’t Take Enough Risks We all know that in order to make progress you need to take risks. Not every new initiative is going to bear fruit but if your company isn’t breaking new ground then it will struggle to grow. You can tell your staff not to be afraid of failure, but previous experiences of a blame culture, or a desire to impress in their new dream job may be holding them back.

So, try Get Out Of Jail Free cards, says Paul Sloane. ‘Give every member of your team two GOJF cards at the beginning of the year. If you try an initiative that is aimed at improving things for the customer, or the business, and the venture fails for any reason whatsoever then you can play your GOJF card and no-one can blame or criticise you,’ he says.

Sure, you still want to analyse what happened and how things could work better next time, but the card means that the person responsible can’t be blamed. ‘The emphasis is on learning lessons.’

4. An Insoluble Problem Is Bogging You Down You’ll often hit potholes in the road to success but occasionally a particularly thorny problem will get stuck in your tyre. It can end up draining time and energy away until the whole business suffers. Pete Lindsay and Mark Bawden’s book Pig Wrestling revolves around the famous quote from writer George Bernard Shaw: ‘I learnt long ago, never to wrestle with a pig. You get dirty and besides, the pig likes it.’

If you’re faced with an intractable issue, the authors recommend you stop wrestling with it, take a step back and ask yourself: ‘Have I seen the whites of the pig’s eyes?’ Leaders often get their information second hand – it’s not practical or healthy to be over everything all of the time. But for your pig of a problem this isn’t enough because you need concrete, first-hand data to remove any possible misinterpretation and maximise your influence. The authors also caution that if you find yourself pig wrestling then you’ve definitely mis-framed the issue; you need to let go of your assumptions and find a whole new way of looking at it…

5. You’ve Messed Up And Worry Your Team Will Lose Respect For You You need confidence to lead a startup, but self-belief won’t always be enough – you’re almost guaranteed to make a mistake or fail at some point. When that crunch comes it can be tough to ‘fess up and tell your staff, especially if you feel they might look at you differently afterwards. Well, according to John Adair, author on leadership politics, the worst thing you can do is attempt to sweep things under the carpet. In fact, he says the six most important words in leadership are: ‘I admit I made a mistake.’

You can’t lead without making decisions, having the confidence to back yourself but then also having the integrity to admit that sometimes you’re wrong.

If pursuing your idea makes you a bit anxious, then you’re probably doing something right

6. You Can’t Choose Between Two Candidates It can be hard to find the right hires for a startup, and the pressure of a launch schedule can push you into a decision you might regret. Floa’s Fergie Miller stresses that getting the right team first time is crucial – he spent two months interviewing forty people and even going back to market to find his product developer. ‘Human capital is so important – at the beginning of your business it’s most of what that business is. Getting really good people that stand the tests of time, that when you have problems will work through them and have the skills to develop the business not for 12 months but three, five ten years, is something I’ve worked really hard at.’

7. You’re Losing Your Nerve If you’ve set out to disrupt a market or challenge the status quo with your startup then the easy bit is at the start; making the decision to step into the fray. After that, says Sam Conniff Allende, the author of Be More Pirate, a feeling of anxiety builds up, programmed as we are to feel uncomfortable creating a change by doing something new, messy, or hard. ‘But we need to learn to embrace this feeling,’ he says. ‘If pursuing your idea makes you at least a little bit anxious, then you’re probably doing something right, and anything less is probably complacency… We need to make friends with mess and get cosy with a little chaos, and accept that these are helpful and positive first parts of the process of creating change.’

WHAT NEXT? Watch Red Bull skier and Floa ambassador Richard Permin tearing up the rooftops of a French resort…

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