I've been interested in building things for as as long as I can remember. I've founded several companies, and the last startup I co-founded, Performable, was successfully sold to HubSpot. So I know how hard it is to get a business off the ground; it's crazy, chaotic, terrifying, and exciting -- all at the same time.
But before I started my first company, there was a lot I didn't know.
Here are some of the key things I wish I had known:
1. Never lose sight of the small picture.
People love to talk about staying focused on the big picture, but in a small business -- and especially a startup -- short-term results matter most.
Focus on the long term and you can quickly run out of cash. Take branding: Revenue and cash flow matter a lot more than branding, especially at first. (Who cares that you were trying to build a great brand if your company goes out of business?)
Stick to short-term metrics that lead to long-term success:
Focus on daily sales.
Focus on weekly revenue.
Set targets that ensure you can stay in business.
Monitor your results and take decisive action whenever you fail to meet a target.
You will never see -- much less get to enjoy -- the long term if you fail in the short term.
For example, my current team focuses on measurable monthly results. Our revenue, customer retention, and product margin goals are set in monthly increments. We only spend about 10 to 15 percent of our time working on long-term projects that will not impact the business for years to come.
2. Don't spend too much on marketing.
Many startups spend too much to acquire each customer. While a high customer acquisition cost (CAC) could make sense if those customers generate consistent, long-term revenue -- like in a subscription-based business -- most startups can't afford to indulge in high CAC. (For a cautionary tale where CAC is concerned, check out Blue Apron.)
We made this mistake with our business card product -- and almost went out of business.
We had a great logo product that customers loved. That made us feel the need to scale quickly. In the process we started paying too much for each new customer, though, so we had to pull back our marketing fast and cut our staff by approximately 20 percent to get back on track.
If we had kept going and not made changes, our company would have failed.
3. Don't pivot too often.
Like "stay focused on the big picture," "pivot" is a popular buzzword, but changing focus too frequently can kill your business.
Improving your product or service is great, but few startups have the resources -- much less the team -- needed to drop one idea and successfully focus on another.
One of the best examples of this is Fab. Fab started as a gay social network, then raised over $310 million in VC funding, became an e-commerce flash sale platform, went through major layoffs, and was eventually sold for a low $15 million. The business was not profitable, but rather than creating a sustainable plan, the Fab founders over-pivoted.
If you pivot too often, you'll never build a stable (or sustainable) business.
4. Don't spend your time worrying; spend your time doing.
When you're trying to run a business, the fear of the unknown is a constant. It's impossible not to worry about lacking total control over the success or failure of your startup.
Unfortunately there's no way to completely overcome that fear. So don't try. Instead, use that fear as motivation..
At one point in my company's history, we were heading towards financial disaster. We were months away from going out of business. It was tough, but I managed to get out of my head and stop wallowing in the bad decisions that put us in this predicament. I got to work on a plan -- and then we relentlessly executed that plan, saved the company.... and turned FreeLogoServices into a high-growth business.
5. Don't hire specialists. Hire passionate Swiss Army knives.
Many entrepreneurs look for experience and credentials. I do, too. But I really look for a great attitude and the ability to learn quickly. Every startup evolves -- which means what you originally hired an employee to do may suddenly not be what you need.
Plus, if you're like most startup founders you're an expert in your field. You can teach your skills to others. But you can't teach motivation, work ethic, and dedication.
Look for people who are adaptable and eager to learn. They will drive your business forward -- even to places you may never have considered.