Look, nobody can write a play-by-play guide for starting a business with any remote sense of certainty because the cornerstone of entrepreneurship is defined by uncertainty. Nothing is guaranteed, and the road is almost always less travelled, leaving you with no option but to go it alone and find out for yourself.
So, in the spirit of honesty: we’re no experts. Partly because no such title exists in the entrepreneurship game, but mainly because if it did, we wouldn’t come close to the title because like all who have come before us, we have made our fair share of mistakes along the way. Starting your own business is fraught with challenges and obstacles which at times will seem insurmountable, however, once overcome, make you into the business leader you want to be: resilient, agile, and above all, humble.
What started as a simple idea between Jack Myashushkin (CTO), Mario Grunitz (Co-Founder) and Elvire Jaspers (CEO) back in 2014 to start a new breed of company in the technology and digital consultancy space, WeAreBrain has evolved into something bigger than any of them had imagined. But it wasn’t easy – and still isn’t.
We’ve come to learn there’s no room for complacency in entrepreneurship, and in 6 short years, we’ve managed to cram a lifetime of lessons and understanding about what it takes to evolve an idea into a fully-fledged business. It may be different for other entrepreneurs, but here are a few of our key takeaways.
Start slow, but strong
It’s common knowledge that roughly 90% of startups fail, many within the first year. There are a lot of reasons and variables which attribute to this, but the one which we see occurring a lot does the most damage: too-much-too-soon.
According to Forbes, 70% of startups fail due to premature scaling. Many entrepreneurs fall into the trap of spending too much of their valuable startup capital on unessential things, such as sales teams, expensive marketing initiatives, trendy office rentals, and so on, before nailing the market or product fit. These things are important, but don’t get caught pulling the cart before the horse.
“Master one thing first before you start expanding and doing something new. Don’t overexpose yourself and don’t try to do too many things at once” says Mario. You are going to encounter numerous teething problems within the first few months of your business, so be aware that many of these are unforeseeable, or consequences of various occurrences that you have no control over.
These are par for the course, and will vastly differ depending on your business model. But it is important to quickly handle the issues which you do have control over, like premature scaling, which even we were guilty of. “We kept growing our team before we defined our business model, and kept people on for longer than necessary out of loyalty” says Jack. Premature scaling is a common mistake, but a potentially devastating one. Be sure to focus all your time and capital on defining your business model and market fit before anything else. With this solid foundation, the rest will come a lot easier.
In the first 6-12 months, it is crucial to keep an eye on your capital too, as Mario explains: “Be frugal in the way you spend your money. We have often taken risks that quite frankly we couldn’t afford at that time (investing in new ventures, etc.). It’s important – especially for young companies – to build cash reserves early. Ideally, enough to carry you through at least 6 months when business might be slow or a COVID-19 type of lockdown forces you to reassess your entire business operations.”
Define your vision
On average, startup founders require 2-3 times longer than expected to validate their business model. Ideas that appear concrete at the start may begin showing cracks as you begin to test them out in a real-world scenario. This is why defining your business’ vision and mission is of paramount importance as they serve to guide you in all business decisions and directions. We have gone into the details of this subject in a previous post, so for now, we will be brief.
Your brand mission is the what and how of your business: what you do, how you do it, and who you do it for. It establishes the purpose for your business. Your brand vision deals with the why of your business: why do you do what you do, and where do you intend to go with it. Your vision serves to inspire you as to why you are doing this in the first place.
Together, your mission and vision help you establish a clear direction for your business that is used as a decision filter: each business decision must align with your brand’s mission and vision. By doing this first, you can establish your brand values: attributes that define your approach to business that your customers can relate to.
Entrepreneurs are often pulled in many directions and it can sometimes be difficult to keep track of must-haves and nice-to-haves, so a clearly defined vision and mission keep your business focused at every turn. Without a vision and mission, your startup runs the risk of being stretched too thin trying to do too much too soon at critical stages for growth. Being able to quickly ascertain what is important will help you tremendously in staying on track with your business why and brand values.
Start a family
One of the most important lessons we have learned in our journey from startup to a fully-fledged digital agency is that the success of your business hinges on the quality of your team. It’s no secret that we consider our Brainiacs as family, and each team member has a share in the business.
We didn’t do this as a cheap marketing gimmick, but instead, we understood early on in our business development that if you want to get the best out of people you need to empower them with ownership: over their work, responsibilities, goals, and even career path. In our case, we took it further by giving each team member ownership in the business because when you work for something that is yours, you get the best results which often turn out to be pure magic.
Establish a company culture that serves your people and puts their needs first. When your team feels appreciated they will give you the best quality output, which only serves to advance your business. Plus, you spend most of your life working anyway so you might as well make it an enjoyable place to be in.
Mario has some advice for future startup founders regarding their team: “Stay true to yourself and surround yourself with people that are better than you. Focus on your team’s strengths and how they complement you by filling gaps in your own skillset. But at all times, make sure that whoever you hire shares the same values as you do.”
The investor conundrum
For most startups, the issues of initial and continuous funding are as cumbersome as it is inevitable. Startup capital is essential in getting your business off the ground, but when the well dries up (almost always far quicker than anticipated), how do you keep your project afloat? Do you approach investors? Do you raise capital yourself? How? Each startup will have differing opinions about this, as did we. The short answer: there is no short answer.
At WeAreBrain, we usually try to fund new initiatives from our own operating cash flow which allows us to stay in control of our own destiny and take the long view on our activities. We try to stay away as far as possible from banks, VCs and other formal investors. But there are exceptions of course: with clevergig, a side venture of ours, we completed 2 successful investment rounds on Leapfunder and we are successful alumni of Startupbootcamp.
“There is not a black or white answer to recommending what to do regarding getting investment. There are a lot of routes, like the SBC route (and other initiatives like that), funding circles and meetings, networking events, etc. There will be different pros and cons for each option depending on your business model” says Elvire. “We have financed all our initiatives ourselves (and continue to do so even now) without any external help, which has been rewarding but also cumbersome. I encourage all startups to apply for a credit line or loan when all is going very well, and not when you need it.”
Don’t try to force investment. It is like finding a life partner: it should happen naturally when the time is right. Never try to oversell or do things to please investors: stay true to yourself, your beliefs, and your team and the rest will follow. Remember, fundraising is a journey that takes a lot of time and energy, so you need to be prepared for this as a team and as a business.
Augment your team
Resources are stretched thin in the early stages of a startup, with your core team forced to wear many hats. This is clearly not a scalable solution, and during the early stages of business development is precisely when you need specialist expertise, rather than the handiwork of a Jack-of-all-trades.
Augmenting your team is extremely important to meet all the demands of your business in the startup phase. When capital is sparse, it is a good idea to outsource specialist assistance from service providers who focus on doing the job for you while you can take care of other components of your business.
Depending on your business, you will need to outsource various positions such as IT and digital services, and even enlisting the guidance of C-Suite executives who are well-versed in handling the strategic elements. Wherever you are stretched thin, consider augmenting your team to get the benefits of a larger enterprise at a fraction of the cost.
For example, WeAreBrain offers augmented teams services to help businesses digitally scale to meet the needs of a growing business. Find out more here.
We hope you have found value from our advice, born from the lessons we learned along the way. Like anything worth doing well, we encourage you to learn as much as you can from businesses who have successfully managed to transition from startup to enterprise.
Although the entrepreneurial path differs from business to business, there are common elements that arise for every entrepreneur which must be understood well before embarking on your journey. Knowledge is key in avoiding the mistakes of those who have come before you.
We’ll leave you with this sage advice from Jack, “Invest your time into setting up your own philosophy and values, and make sure you build a team that genuinely shares them. Invest your time serving your team and your clients and never make compromises with your philosophy and values as you move forward.”
More from our Founders
For World Entrepreneur’s Day 2020, we interviewed WeAreBrain’s founders Elvire Jaspers (CEO), Jack Myashushkin (CTO) and Mario Grunitz (Co-Founder) to find out more about what it takes to go from a small startup to a multi-million Euro business. Read the full interview.