Eight years ago, I came up with a business idea while stuck in traffic. Some months later, I quit my corporate job, invested a large chunk of my savings in my idea and officially became an entrepreneur. Under my leadership, our company, CoFoundersLab, raised venture capital money from respected funds, grew its membership to nearly 500,000 registered users and completed three acquisitions, including the final sale of the company.
When I took the plunge to start my business, no person or event could have prepared me for what was to come: tremendous highs, dark lows and strains on my relationships with friends and family.
Here's what I learned from my winding yet rewarding entrepreneurial journey.
Co-founder dynamics can be tricky. You need to expect and plan for the unexpected.
It's not surprising that 65% of businesses fail due to co-founder conflict, according to Harvard Professor Noam Wasserman. Why do they fail? Personal agendas. Both the relationship and the business become imperiled when agendas don't align.
The easiest way to align co-founder agendas is to be clear from the start. There's less stress and more honesty at this stage of the business. Use this sanguinity to carefully craft an exit strategy. This way an exit won't be clouded by haste or emotion if hard times hit your business.
Founders will always feel vulnerable inside, but show a strong exterior.
Building a business is like walking a tightrope: One false move -- especially in your early days -- could crash the whole enterprise.
But it can be hard to separate yourself from the business. Everyday you live its successes and failures. A negative customer review can re-run over and over in your head. Or an employee that gives their notice will taunt you for days. You are always wondering, am I doing the right thing? Is there anything else that could have been done better? This means that you are walking the tightrope as well.
That's not healthy. You need to disentangle your personal and professional relationships with your employees from day one.
Never hide business challenges from employees and investors.
When times get tough, an entrepreneur's natural reaction can be to shut everyone else out. After all, it's your baby, and you know you have to care for it.
What many founders don't understand is that asking for help doesn't devalue you as an entrepreneur. On the contrary, it shows your investors humility and your employees that you value their opinion.
Raising capital is brutally hard, but managing your relationship with investors is even harder.
If you're lucky enough to raise capital and build a successful business, you will enter a long-term relationship with your investors. But, you'll find, expectations and behavior can change over time.
Pick investors wisely. Make sure they understand the risk of investing in privately held business and are flexible in terms of execution. For instance, we had a small angel investor put $10,000 into the business early on. When we later had to pivot the business direction, he was outwardly mad that we weren't execution on the previous strategy. But here's the thing: does he want us to keep doing something that wasn't working or make him money? I couldn't believe this person's reaction, but there it was, like a 2 year old child that didn't get what he wanted. What a hassle. If possible, avoid unsophisticated investors at all cost. They end up causing more headaches that are really not worth the investment in the long-run. Sophisticated investors understand the ebbs and flows of the entrepreneurial journey and will be that much more helpful.
Being the boss is never easy.
One of the largest burdens for start-up can be bad news. With a young business, there's plenty of it: A beloved employee had to be let go because of budgetary reasons; a co-founder decided that the company was no longer a good fit; or a big deal fell through.
It's one thing for an entrepreneur to be able to deal with these difficult decisions; it's another entirely different and critical thing for an entrepreneur to be able to help their employees process upsetting events.
In these trying moments, I found the best approach to be empathy and humility. Talk to your employees. Tell them the reasons why an imperfect outcome occurred and how you plan to move forward. Don't keep secrets or remain silent, because both create room for speculation.
Being an entrepreneur has been one of the largest challenges I've ever faced. I struggled with many of the obstacles I mentioned above and much more. But it's part of the course and I would do it again in a heartbeat.