Four startup lessons and other (not so trivial) bits of wisdom
I spend more time with start-ups and business people talking about strategy, finance, tax, accounting and raising capital than I spend with my family.
Since our boutique advisory practice moved to Melbourne’s CBD in July this year, demand for our services and advice has almost doubled. So what has the past five months of hard work and intensity taught us about Australia’s startup scene and the new wave of business entrepreneurs?
Like life generally, the answer is a complicated multifaceted one. But here are four essential observations from the experience:
1. Advisors / mentors / business coaches
For most businesses, this key ingredient will either be a successful addition, a complete waste of money or, potentially, a complete disaster.
We have seen it all. Limited qualifications, vague advice and, finally, litigation. Unregulated business coaches/mentors can prey on young business people with the promise of networks, introductions and strategy – for either exorbitant fees or equity (if not both). I’ll go with rapper Ice Cube on this and say: “Check yourself before you wreck yourself.”
Listen to your own intuition and always, always do a thorough due diligence. It is amazing what an ASIC search can uncover.
2. Intuition – it’s the little things
As a recent post-mortem following a litigious business separation uncovered, there were always small but subtle signs that things were seriously wrong.
You don’t need someone to upturn a table to know that your business partner, co-director, investor or employee was toxic. It is amazing what incidental interaction teaches us about someone’s value system.
For example, a sense of hostility and superiority to a waiter/waitress serving coffee during a meeting can be a good indicator of how this person sees other people. Always pay attention to the ‘minor’ interactions – they tell you everything you need to know. But you knew that already.
I have this discussion every day. I need to organise shareholder/unit holder/licensing/employment agreements but don’t want to spend the money on a lawyer. Or (and this is always a terrific one), I really trust Dave/Jan and I think we can always work something out.
So let me just burst that little but gorgeous idealism bubble for you. That is not how people and the business world works. By the time you are thinking how to work things out, you are already day two with a lawyer and barrister (with assistant) and the $3000 you should have spent on legal fees to have the agreements in place will look like spare change.
Running a business and launching a startup can be a lonely, treacherous road.
A mix of anxiety, elation and panic is a daily emotional occurrence. Funding, cashflow, staffing, fellow directors, strategy – the concerns are real. It can bring out the very best and worst in people.
I have seen both from the same people on the same day. But one thing I instil in all my clients is to talk. Speak to us, a partner, a friend – whatever works. Two things you should know – you are not alone and articulating the issues is half of the solution.
Whatever is going on, I can guarantee that someone else has sat in exactly that chair in our office and worried about the same thing. Look after yourself. Your business is only as healthy as you are.