Don't focus on the bullshit, focus on the reality. As the keynote speaker at this year's Startup Grind, Guy Kawasaki, kicked it off with a bang, with the top ten mistakes of entrepreneurs - yet they all speak to the same thing: stop trying to blow smoke and build a good product.
Watch Guy Kawasaki's "10 Mistakes Entrepreneurs Make" at the Startup Grind Global Conference.
The 10 Biggest Mistakes Founders Make
Mistake 1: Trying to magic all of your numbers and talking about getting "only 1%" of some enormous, billion dollar market. First off, it's hard to get even 1% of a market, don't take that for granted. Second, no investor wants to hear that you're going for a "mere" 1%. Instead, calculate from the bottom up. Prototype your product, see where it's at, and start growing it. Investors want to see the success you have now, not listen to a bunch of calculated stats about where you might be someday.
Mistake 2: Scaling too fast. "I have never seen a company die because it couldn't scale too fast. That's what we call in Silicon Valley a high quality problem" smirks Kawasaki. Don't think you need to begin by supporting the mobs of people you haven't acquired yet but might (see Problem #1). Instead, Guy says, "eat what you kill." Focus on what you have, supporting and growing that, and scale when you really need to scale.
Mistake 3, 4, 5, and 8: Focusing on the wrong things: your partnerships, your pitch, your patents, and your slide deck. In short, focusing on the bullshit. Investors care about your product, they care about your bottom line, and they care about the partners who are actually affecting your bank account. So put your effort into the prototype, get sales, and present what you actually have well by following the 10/20//30 rule of presentations - 10 slides, 20 minutes, 30 point font. "A picture is worth a thousand slides," Guy points out, "But a prototype and demo is worth a thousand pitches."
Guy getting ready to hit the Startup Grind stage, getting cozy with our audience.
Mistake 6 is more interesting: instead of proceeding serially, proceed in parallel. Even Guy admits it actually "might be more optimal to do things serially," but life gets in the way. In the real world, it doesn't go: raise money, then hire team, then build product, then make money, and now go public. You do those things all at once, some not at all, you end up putting the cart before the horse. So get used to it. Learn to work successfully in parallel.
Mistake 7: Don't think you're going to retain control. You're founding in the real world. As soon as you take outside money, as soon as you have have outside investors, you're going to lose control. But, Guy claims, "control is overrated." If you have a large percentage of a company that fails, who cares? "It is much better to own 0.05% of Google than 51% of a piece of crap." So instead of clutching the purse strings, "make a bigger pie." Grow your business and you'll be able to share success with your investors.
Mistake 9: Vitally important - don't hire people like you, hire your complements. You're white and male? Hire a woman of color. You're young? Hire someone older. Hire the things you don't have, like experience or a diverse perspective. Hire a wide range of ideas. "I see so many companies that are like Stepford - everybody is the same" says Kawasaki. "You have two jobs - you have to make it, and you have to sell it. If you've only got makers, you're not going to sell anything. If you've got a bunch of MBAs, you've got nothing to make." You need a diverse group of skills, and for that, you need a diverse group.
Mistake 10: Maybe the most important reality check of the bunch, is don't befriend your investors. "They want to give you a dollar and get fifty back. You are a tool, you are a means to an end." Yeah, the investors told you they believe in you, they love you, they "invest in people" - but in the end, they care about the success of your company, and about how much money you can make them.
So how do you make investors swipe right on you? Cut the bullshit, focus on your product and your sales, and show them you can be successful and exceed their expectations, and they'll love you for it.