The most important skill for an entrepreneur to have is the ability to make hard decisions, according to T.A. McCann, founder of market intelligence software company Rival IQ.
Last month at GeekWire’s annual Startup Day, McCann gave a talk describing the hardest decisions a startup founder will have to make. He spoke with the perspective of an entrepreneur who’s seen his fair share of both failures and successes; McCann has seen two of his previous startups die, but sold another, Gist.com, a business profile site, to Blackberry.
There are at least four difficult decisions that all entrepreneurs will have to face at some point, McCann said. You can’t avoid them, but McCann offered some advice for how you can deal with them:
When should you start your company? You have a great idea and you can’t wait to spend every one of your waking hours working on it. McCann has one recommendation: “Keep your day job as long as possible. It takes a tremendous amount of time to put the foundation in place that's required to build a startup,” he said.
So stay at work, and start your company only when it looks like you’re gaining some momentum. You and your team will know when that is if you can answer “yes” to these three questions:
- Can we build it?
- Will anyone use it?
- And if so, will they pay us for it?
When should you fund it? The thing to remember about accepting money is that once you do, you have an obligation to your investors to grow the company at breakneck speed, McCann said. But the right investors will help you do it, so be choosy.
“Find like-minded investors who have similar views on the world, and similar views on the problem space,” McCann said.
When should you kill it? Knowing when or if it’s time to abandon up to years of work on a company is something you’re likely not going to be able to do on your own. To make this decision, look to someone in your support system.
McCann recommends letting someone you trust, like a spouse, hold you to realistic milestones that you’ve set for yourself. For example, if you don’t achieve X in Y months, then it will be time to quit.
And when should you sell it? “At each funding milestone, define your exit criteria,” McCann said. For example, he decided if he were to sell his company, the deal would only be made if he was offered a certain price, if he wouldn’t have to move, and if his team could stay together.
If you’re interested in listening to McCann’s talk in its entirety, you can find it on YouTube here.