I do speak on a regular basis with people who think about starting their own companies or are in the very early stages of building their own businesses. Most of these talented people look for answers for the same type of questions and challenges that they face when starting their companies.
So when asked to share my Principles and Learnings from my first 2 Start-Ups at a conference in Berlin I tried to answer a very simple question: What would have helped me the most when starting out? What would have saved me from wasting time, energy & failures before starting out.
The result are 8 Principles that can be applied broadly to anyone starting out.
Principle #1: Only being Top 1% matters
The one big question that a lot of entrepreneurs have is the rather most simple one: What opportunity should I actually pursue?
The paradox of choice – where having too much choice causes stress and even paralysis – is one of the main reasons why people struggle to get started (note: check out Barry Schwartz Ted-Talk on this if you like: Barry Schwartz: Paradox of Choice ).
If you plan to start a company in the world of tech (but also increasingly in other industries) the answer in a transparent, globalized world is simple: Just focus on doing where you are the best at.
Take the example of a Kebab store: You are running a Kebab restaurant in London. It is good, but there are better places around in other cities – say Berlin. Your restaurant is still going to make a killing, because people are not going to travel long distances to Berlin just to get a slightly better Kebab. The incentives to go the extra mile and be part of the 1% is limited.
Contrast that with the world of technology: The rivaling services and products are always just one click away.
In this world, only being Top 1% matters. You want to focus on the thing that your team can do better than anyone else – and drop the rest.
In real business life excelling at very few things is way better than doing a lot of things well.
Principle #2: Go Big or Go Home.
There are some unchangeable rules in the world: A day has 24 hours, a week 7 days.
No matter how hard you hustle, a limited amount of time is what you are facing.
So you want to be smart and use that limited time to go for Big Markets to have an impact.
To stay with the Kebab example from Learning #1: A Kebab restaurant owners also works very hard, up to 16 hours a day, every day. The payoff however is way more limited and significantly smaller vs other business opportunities that you may decide to pursue.
A similar amount of effort is needed to win in a market, no matter if it is big or small.
So make sure that the addressable market you are going for is Big.
Principle #3: Build your Network before you need it.
Founders & CEOs, investors, and executives get plenty of requests every week from people asking advice or favors. How to stand out?
I personally approached this by offering support to the people that I wanted to learn from: I worked for several start-up companies as an intern (for some of them for free) to learn first-hand. I asked people what is causing them headaches and problems at the moment and then went ahead to solve those issues.
I was lucky to be in the middle of great rocketship-companies – and not so great failures at a very young age – and hence unlocked tremendous experiences along the way. After proving myself as a hard worker I received the respect of those people and won mentors for life.
So go out, ask how you can help the people you want to learn from and see how those relationships get built quicker than you ever imagined.
Principle #4: Look at data day-to-day. Listen to your gut for the Big decisions.
Being data-informed and making decisions rationally is a big driver for the success of individuals and companies alike.
Only things that can be measured will be achieved & done!
However, there are some decisions in life – the really big ones – where no rational train of thought or excel spreadsheet with options can help out. Those are the decisions that will greatly impact your life & we all know those kinds of decisions.
When you can’t stop thinking about the different choices, when you can’t fall asleep, when you have to talk all the options through with your friends and family.
How do you come up with the right choice???
In hindsight I reflected on this and realized that for the big decisions I didn’t even ponder so much – they just FELT right.
My decision to pack my backpack and travel through Australia after high school; the choice of university; the decision to reject all employment offers, move to Berlin & start my first own company: For all of them I just closed my eyes, envisioned me in the situation and listened to the reaction of my body (your gut, heart, soul or however you want to call it): If it feels good, I go for it.
Because you cannot go wrong when your heart is cheering for something, no matter what the outcome.
Principle #5: Focus & Burn the Bridges
This one is very much related to Learning #1: If you want to become the best in something, you really need to focus on this one goal.
Don’t let yourself get distracted, dare to say NO to anything that does not lead you towards your goal and keep pushing.
There cannot be a Plan B in case of failure. Because you cannot allow yourself (or your subconscious) to think of that possibility.
If you go for something: Burn your bridges and never look back.
Principle #6: Speed matters.
The normal human instinct is to be risk-averse and see always the flaws, fix them and only then release. This is, ultimately, how humans survived in the Stone Age.
But when building a company you want to ship out: That’s how you get feedback, that’s when you feel the forces of the market that tell you how to improve, that’s when adrenaline kicks in.
If you wait until you are perfectly happy with the product, you are waiting too long.
“Perfectionism is the enemy of entrepreneurs. Speed & just doing it is all that matters.”
Principle #7: Be tough. Start with yourself.
Running a company ain’t easy. It comes with a lot of tough choices. Every (!) company has ups and downs.
So make sure to go into this journey with the right mindset: That in order to be successful you will go through pain. You will suffer and you will need to get out of your comfort zone. 18 hours of work, cancelling holidays, not being able to spend time with your family and friends on Friday nights when things go wrong, making unpopular decisions, people (sometimes even yourself) doubting and criticising everything. (Note: a good preparation is this book from Ben Horowitz: The Hard Thing about Hard Things).
A great entrepreneur & leader grows with this challenge and learns that being tough to himself and his team is the only way to make everyone better off.
Principle #8: Make it happen. Now is better than later.
This is the last and most important principle: The only right moment to start a business is NOW.
By waiting and procrastinating no single problem will be solved, nothing will get better and you will not miraculously become a better entrepreneur without jumping into the waters and doing things.
So go out & reach for the stars!
