Starting a business is never easy, but what many entrepreneurs find is that building your business is just as tricky. I talked with several entrepreneurs of some well-established companies and asked: "What were some of the biggest challenges you faced when trying to grow your business?"
Jon Henshaw. Co-founder and Chief Product Officer at Raven Tools.
One of the biggest challenges we ever faced at Raven Tools was in the first half of 2013. We had to make a business decision that would conceivably lose a third of our business, but would position us well in the market long-term. After making the decision, it ended up being much worse than we had predicted. We lost half of our customers in a matter of months. As you can imagine, it was a time of incredible stress and self-reflection. Not necessarily personal self-reflection, but who we were as a company and what we were trying to achieve. Our faults and our strengths were illuminated like never before. We immediately set out to fix our faults and to build upon our strengths. In the second half of 2013 the company experienced a much-needed period of maturity. My fellow co-founder and CEO, Patrick Keeble, helped transform the company inside and out. He transitioned us from a free-for-all culture to a professional one. We hired an HR company and rewrote our employee handbook to better reflect our values and expectations from one another. But most of all, we empowered our employees to be in control of how we communicate and relate to our customers, and to also more greatly impact where we would take our software next. Surviving 2013 was not an easy task, especially as a non-VC-backed bootstrapped company in a sea of VC-backed competitors. But we did it, and not only are we better for it, we've become a new company because of it. In 2014 there's been a level of momentum and excitement from the entire team that I've never experienced before. And it may have something to do with the fact that earlier this year we achieved more customers than we ever had in the history of the company. Sometimes you have to accept, embrace, and persevere through adversity in order to become something much greater than you were before."
Adrian Nazari. Founder and CEO of CreditSesame.com.
As a serial entrepreneur with two successful exits, we face some of the same challenges, regardless of the product/service, for growing the business. 1. Attracting and hiring the right people. Execution is one of the key risks for any growing business. Fortunately, this is something that is within the control of the management and greatly depends on the people and the culture of the company. With an improved job market and shortage of skilled high-tech professionals, it has become increasingly difficult to attract and retain high-performing talent. Building a good collaborative corporate culture, publicly rewarding good performance, and making the work environment more comfortable are some of the things that help attract new talent and retain existing talent. 2. Accessing capital for growth. This is tricky. Typically entrepreneurs have easy access to capital when they do not need it and have a more difficult time when they need it the most. While it seems the VCs are taking more risk for early stage investments, the risk appetite at the later stage investments has decreased. I see a trend that the later stage venture investors are behaving more like private equity firms but require higher returns. As an entrepreneur, you should be prepared to show that you are growing fast and/or have completely figured out your business model before entering the later stage rounds. Otherwise, you will have a difficult time raising capital when you need it most. The market has certainly shifted to lower risk. 3. Building a scalable platform from the beginning. A sort of walk the talk. If you believe your idea is big, build your platform to become big. One of the challenges most entrepreneurs face is that because of lack of sufficient capital in the early days, they do not invest in infrastructure or scalability. It is a balancing act but one that cannot be ignored. This can haunt them when things are ready to take off. Planning ahead is key.
Nick Friedman. President and Co-founder at College Hunks Hauling Junk.
Some of the biggest challenges we faced when trying to grow College Hunks Hauling Junk was our lack of industry expertise in the franchising industry. We had mastered our local moving and hauling business, and we knew that we wanted to grow our business via franchising, but we didn't know how to get started. The way we have been able to overcome this steep learning curve was by joining associations and groups where we could learn from experts and peers such as the International Franchise Association. We also reached out and developed mentors who could help guide us through the process. We have read a lot of books about franchising, and basically became students of the industry before we officially launched our franchise offering to the public. We continue to learn and grow from mentors and successful franchisors who have come before us. While we now have 50 franchises, we want to get to 150, so we have to speak with business owners who have done it before. I think this scenario holds true for any business owner or entrepreneur who wants to take a business to new heights but hasn't done it before. The key is to learn and grow from those who have done it before.
Yoav Schwartz. Founder and CEO at Uberflip.
The Biggest Entrepreneurial Challenge: letting go. When you're starting a business, and in general during the early days, it's all about doing as much as you can on your own. Entrepreneurs tend to think they can do everything, and that's likely a key ingredient (mixed with crazy) required to start your own business. But if you're successful in getting your startup off the ground, one of the biggest challenges any founder will face is learning to let go. When I was fortunate enough to bring on a business partner and add our first hires at Uberflip, the first thing I did was let go of doings things I wasn't great at--operations, support, and sales to name a few. It was relatively easy to loosen my grip on those responsibilities. My passion is product. I still love to design and code, and for better or worse my daily routine still touches on those "in the business" tasks. That said, as we've scaled to more than 30 full-time Uberflippers, I've struggled to let go of those tasks that I love. It's as much about control as it is passion, but what I've learned is this:
- No matter how good I think I am, there are always more talented folks who, when empowered, can take my vision to new heights. Although it's a struggle to find great talent--especially in a competitive job market--I've learned to resist the temptation to do things myself, and instead spend the time finding great people.
- The more I've learned to delegate, the more time I've been able to spend working "on the business" and setting out the course for the vision. By getting out of the way, I've freed myself from managing every day-to-day task so I can stay focused on the big picture which is where I'm most needed.
This really applies to any business, and any entrepreneur will likely suffer this struggle of "letting go"--especially when it comes to areas where they excel. Whether it's product, sales, marketing et al., like me, you'll want to invest more and more of your time hiring, evangelizing, and thinking big so you can take your business to new heights.
Chris Goward. Founder and CEO at WiderFunnel.
The thing I find with growing my business, WiderFunnel, is today's challenge is usually the biggest challenge I've ever faced. The challenges don't get smaller as the business grows, but my capacity to meet the challenges grows to--I hope--match the need. This is similar to what Mihaly Csikszentmihalyi (pronounced "cheek-sent-me-high") talked about in his outstanding book, Flow. His research shows the optimal performance experience is where a person is challenged beyond their boredom state, but not enough to be in the anxiety state. If your challenges outstrip your skills, you feel anxiety and need to learn how to perform at a higher level, but if challenges are below your skills, you'll be bored and take on more challenges. I've found I'm more likely to run into the anxiety wall than the boredom zone, personally. I think entrepreneurs don't let the threat of boredom appear without taking on new challenges instinctively. The risk is in taking on too much and losing productivity up in the anxiety zone. That's a real threat to performance and happiness that I believe a lot of entrepreneurs face. At WiderFunnel, for example, we provide conversion optimization testing services. Our biggest challenges have been our hiring and training speed, developing new systems to accommodate new client growth, anticipating the direction of this changing industry, and increasing our leadership skills to meet the demands of the next level of the business. Early on, we had an inconsistent internal culture. It was greatly influenced by some team members who had different values than I knew I wanted to build the company on. So, over the past few years, I've taken our culture on as a primary challenge, and we're now creating an awesome culture we are all proud of. Next year, I'm sure the challenges we face will be entirely different. I'm looking forward to chalking them up on the "win" board, too!