Most entrepreneurs know the "number one" rules:
Number one rule of business: Increase shareholder wealth.
Number one rule of investing: Buy low, sell high.
Number one rule of real estate: Location, location, location.
While there are many "number one" rules, entrepreneurs rarely find consensus when it comes to startups.
Disagreement often stems from the fact that startups have so many needs, which leads entrepreneurs to mistakenly believe that the only thing needed for success is more capital and resources. They get caught up in a vicious cycle of "if only" logic -- "If only we had more money/people/resources, we could be successful."
In reality, there are numerous examples of companies (dot.com bubble, anyone?) that have received ample capital investments, hired tens of people, and pursued a number of different ideas, only to burn through the capital in months and be back where they started -- none the better.
Entrepreneurs with little to no capital, on the other hand, are forced to get innovative and pursue only the ideas they feel have the greatest potential for success and can be tested rapidly and inexpensively. They get lean and learn the valuable skill of bootstrapping.
Fred Wilson, partner at Union Square Ventures, a highly successful venture capital partnership that manages over $1B across seven funds, said in a blog post recently that "resources are never the limiting factor to doing great things. The limiting factors are 1) having great management that can make the right decisions and drive execution, 2) knowing what to do and what not to do and 3) playing your game and not someone else's."
He went on to say that "resources, measured in available capital and headcount, often make 2) and 3) more challenging" by creating a lack of focus in management.
So perhaps, this is what startups need to consider:
Number one rule of startups: Do more with less.
In the long run, this rule works out better for the entrepreneurs. They find out quickly whether their idea has enough merit to be successful, prove themselves as strong leaders and managers, end up providing a better product or service that has been tested and refined through more efficient testing, and ultimately make their company (and their share) worth more.
What do you think? What other "number one" rules do you think need to be adapted? Please share your thoughts below.