Every business starts with an entrepreneur looking to solve a problem. The entrepreneur creates a product they love, and are absolutely sure others will love it too. Real business success isn’t about a lovable product, though - it’s about sustainable growth and profitability.
The key to this success is to love the business as much the product.
I started my first business by drawing screenshots on printer paper at a nursing station desk in Duke Hospital. When I finished my pictionary scribbles on the page, it was love at first sight.
As with all passionate long-term relationships, I learned a few things along the way: raising money requires more than a vision and enthusiasm; customers have different goals than users; getting a contract is just the start of the real work; getting 100 employees to work seamlessly is much tougher than 10; and making all your customers happy gets harder the more you have.
The most important thing I learned, though, is that loving my product was necessary but not sufficient for my business to succeed. The passion of my team swayed customers to buy the product and users to give it a chance. But after the sale, what they continued to pay for was quality follow-through - consistently great service and valuable new solutions.
Successful follow-through required me to master the unsexy operating details - customer acquisition costs, software release schedules, version control, HR policies, trouble ticket fulfillment, revenue recognition, consistent contracting, strategic planning, product management.
None of these things were on that sheet of printer paper that I fell in love with years before. As with any successful relationship, though, I grew to love (and tried to be good at) these unforeseen details. I loved them because they were necessary for my product to have any chance of fulfilling its world-changing potential that I dreamed of.
As a venture capitalist, I really enjoy hearing the entrepreneur’s story and seeing their passion for their baby... their product. This love for the product is always there, but where entrepreneurs differentiate themselves is in how they approach the business issues.
I’m not saying two guys in a garage should include comprehensive global HR policies in their pitch. But 80% of their slides shouldn’t be product screenshots (like I had when I first pitched), either. In finding the right entrepreneur, I do a couple of things.
First I look for the mature awareness that their startup isn’t always going to be just about the product and the problem it solves.
Second, and much harder, I assess whether the entrepreneur can make good Sophie’s Choice-caliber decisions between their beloved product and competing non-product business priorities.
In the end, great business execution is a commodity. It’s very valuable and certainly not ubiquitous, but it’s not magic. The magic is in the entrepreneur’s passion and its infusion into the products and services they create. But you need both the magic and the execution to achieve meaningful success.