I can still remember one of the most daunting decisions I ever made. It began during a conversation with my fiancé, in a car on the outskirts of Adelaide in the early 1990s. I had this crazy idea. I thought that there was a big opportunity to start an Internet business in South Australia. But to do it, I’d need to take our entire life savings: $11,000 that we had saved for a deposit on our first house.
Week in and week out on TEN’s Shark Tank we see entrepreneurs who have faced the same dilemma themselves: to startup, or not to startup?
I’ve worked with dozens of startup founders over the years, as a co-founder, investor, and mentor. I’ve found there are no hard and fast rules that determine what skill set or personality types make a successful entrepreneur. However, I have found some common actions that I see successful founders taking, as they endeavour to set up and grow their business.
1. RAZOR-SHARP FOCUS
Launching a startup isn’t easy. It takes a lot of blood, sweat and sleepless nights. It’s not just enough to love, live and breathe your industry or new venture. You need to have your energies and attention wholly devoted to making it work.
Jeff Philips of Grown Eyewear entered Shark Tank with a strong product and good numbers, so while sustainable fashion is definitely not in my usual investment territory, my curiosity was piqued. But as the Sharks dived deeper into his business, it became clear that Jeff was splitting his time between Grown Eyewear and a winter headgear business. He intended to use the investment to set up a full time manager on the Grown Eyewear brand, and continue to divide his time between the two businesses.
If a founder isn’t 100 per cent committed to the business I’m backing, it’s a deal-breaker for me. I only invest in startups I think have huge potential, so if a founder believes their other venture is as equally important, I’m going to doubt the opportunity. The increased risk is another key factor. An entrepreneur who has their finger in too many pies is far likelier to see one of them go bad.
2. TAKE THE SHORT-TERM PAIN FOR LONG-TERM GAIN
Nothing is more frustrating for me than seeing people “playing” at startup – and expecting things to be handed to them on a platter. It’s those rare entrepreneurs who will make sacrifices now, understanding that they’ll reap the benefits later, who are far more likely to succeed.
South Australia’s Oliver DuRieu is a fantastic example of this. He came to the Shark Tank to pitch his car-sharing platform, Lamule Australia.
Oliver was well spoken, enthusiastic and smart. He pitched well, and while his startup was a little too early-stage for the Sharks to invest, he made a big impression. What stood out for me was that he understood the big picture of being an entrepreneur. He’d sold his prized Ute, and turned down a high six-figure wage in the mines to start his venture.
Few people are willing to make these sacrifices, and who can blame them? But if Australia is ever going to transition to a knowledge economy led by high-tech businesses, we need more startup founders like Oliver willing to forgo the easy life for the hard yards.
3. LISTENING TO ADVICE AND CRITICISM
Nobody knows it all. You may be the smartest person in the room, but there will always be somebody there who can teach you more, if you’re willing to listen. Entrepreneurs tend to grow very close to their business. It is after all, their baby – they brought it into the world, and have been responsible for it from day one. And, just as parents don’t respond well to strangers offering parenting advice, startup founders can sometimes find advice and criticism confronting.
Being coachable is a key indicator of success for startup founders, and for most early stage investors it comes as a prerequisite. So keeping your calm, refusing to be ruffled by people who are questioning you or your business, and taking on board what potential investors are saying, can make the difference between “deal” or “no deal”.
Sitting in a car with my fiancé on a warm, South Australian evening over twenty years ago, I made the decision to leap into the unknown and start my first business. It ended up being the best decision I ever made.
My advice for people deciding whether to startup or not to startup is to ask yourself: “Can I be super focused, make short term sacrifices, and be willing to listen even to the harshest advice?” If the answer to those questions is yes, then don’t die wondering. Get out there and give it a go.
This article first appeared on Business Review Weekly. View the original here.