Entrepreneurship Tips — Pre-Startup

Startups should never, ever, never compete with big companies. They must offer something different. “Differentiated” is the most important word in designing a startup market entry strategy. Look at this diagram and decide how you can adjust your company to be in the top right quadrant. Without that you have no chance of surviving, never mind profiting, because you will compete with companies 100 to 1,000,000 times larger than you with already developed marketing and sales channels and huge budgets.     Only these kinds of companies will attract investors (needed to grow) and top employees because they know the...

A reasonable salary for any CEO or founder is a $100K to $200K today. This depends on their experience and market value which could easily be $500K+. A CEO with ten years in that seat is worth $300K to $500K base salary, but investors want them to have skin in the game and urgency too. Like a salesperson you never pay them enough in base salary to be totally happy, or financially comfortable. Stock value should be the main long-term motivation. At 20% capital gains tax, not 50%+. What is more important is that the base salary is a small...

Here is a short list of others, because there are hundreds: Assuming you can raise capital before you have a product, most cannot. Not building a team of 2–3 founders who can work for cheap or free for a year. You need this to build an MVP. This team needs marketing, sales and technical skills, not just product development, as the vision needs to be complete with a sales and marketing plan that requires senior expertise. Not doing sufficient market research and competitive intelligence to understand the target market and customer. Many are so paranoid of their idea being stolen...

Prepare for years in advance by study and experience in management, leadership and smaller companies. Read 2–4 books per month. Always be learning. Now, you can build a tiny house alone, but building a significant company requires a team without about 20 different skills that no one person possesses. Many think they can build a skyscraper alone, even without capital! Dumb. A formula for disaster and why 85% of new companies fail. It takes tremendous commitment and perseverance and is always a rollercoaster ride. Almost never a straight, predictable, linear process. Here are some great educational sources I have created...

No good investors would want to invest in a company where the CEO did not have their head around the capital needed. A financial projections and plan is required to even get a meeting with most investors. That said, there can always be some back and forth negotiations. A VC might want to put more money in to scale faster. A CEO wants minimum dilution and to get the valuation up by achieving key milestones like MVP, traction, team building and quantification of customer acquisition costs. All of these reduce risk and hence increase the share and valuation price. Click...