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4 things to remember when things look bad for you as an entrepreneur

(EDITORIAL) We obsess about successful entrepreneurs but don’t always see the struggles it took to get to that point. If you’re struggling as an entrepreneur, let this editorial encourage you and give you an honest perspective.

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The American fairy tale of entrepreneurialism

We love a good success story just like the next guy. We love tales of triumph, of someone winning against all odds, and today, the American fairy tale of entrepreneurialism is one that has captured the minds of screenwriters, musicians, and Instagrammers alike. We worship the Zuckerbergs of the world who went from no one to bajillionaire in a short period of time as their lines of code changed how the entire world communicates.

But in that idol worship, we focus on that moment of success and don’t see the tales of failures hovering just below the surface. Every entrepreneur can tell you about the overwhelming nature of those struggles and failed moments, and they can all tell you about the crushing pressure that exists before the dawn of success.

So what should every hopeful, budding, or veteran entrepreneur keep in mind? We asked Victorio Pellicano, Founder and CEO of Verenia for his thoughts on the topic, on overcoming the difficulties of entrepreneurship. He earned his BS in Computer Science from the University of St. Francis, which he followed up with a law degree from Loyola University Chicago School of Law. He worked as a software engineer and soon founded Verenia which is a popular CPQ company (“Configure, Price, Quote” is software that accurately prices goods as endless variables change constantly).

Although there were already huge CPQ companies in existence (Salesforce, SAP), Pellicano has been able make his company meaningfully competitive and skyrocket revenue, all without outside funding. Talk about a high pressure scenario.

Below are Pellicano’s words of guidance for entrepreneurs when things look bad:

Starting a business from the ground up is tough

A lot of things need to go right to be successful. Too bad human existence has a funny way of doing exactly the opposite of smooth. Things change, people get into fights, or maybe the overall vision of the business isn’t what it once was. When you’re in business for yourself, the term “bootstraps” can mean a lot of things.

It isn’t easy, but if you do find that mythical “magic quadrant,” the payoff is incredible. You’ve built something you believed in, and you put in the work to achieve awesomeness. There are few feelings as gratifying as being the boss and taking a long lunch whenever you damn well please.

But, it ain’t all roses. Stuff will suck a lot of times. It will be hard. That’s just inherent to the culture of being self-made. I mean hey, busting your ass, coming up from nothing is basically, like – 80% of rap music, right?

As new entrepreneurs set off into the business world, there are some things they should know, what to expect and what to do when things don’t go as planned.

Check out these four things to keep in mind when it feels like the sky is falling.

1. Build a support system stronger than the Great Wall

When in business, stuff goes sideways. Anyone who’s ever held a job knows stuff changes and can go bad quickly – that’s just inherent to the DNA of work. But, when you’re in charge, and it’s your business, you’ll be pulled in a lot of directions. Many times, those directions are uncomfortable whether it be about the staff, progress, earnings, whatever. Because of this, you gotta assemble the All-Star team behind you, the folks who’ll always keep your head in the game and won’t let you get too big for your britches.

As an entrepreneur, you’re inherently optimistic. You had the guts to go it alone and do your own thing. That optimism is what makes you, you. Because of this bold attitude of work-related sunshine, you’ll probably not likely pay attention to that bad stuff, until it’s like, crazy bad.

By keeping a group of advisors, friends, and family close who you can talk to, you’ll have voices who offer advice from a place that isn’t about anything but helping you succeed. Success is a long process, rarely do businesses go from red to black overnight. You need some reliable people to keep you sane when all is quiet.

2. Don’t lose sight

When you had the idea to start your business, it was about more than just making money. You had goals, you had a vision, and you wanted to make an impact on the world. After a while, those emotional price points evolve. When you suffer a setback, or something goes way better than planned, it’s important to stick to your guns.

Keep a list visible near your workspace. You got into this game because you wanted to do better for your family, or maybe your last boss was a jerk and this is your way of paying the universe back. Either way, a little motivation never hurt anyone. You wanted to be the boss of yourself, don’t lose sight of that through the rough patches.

Set small goals to nail, and then work your way toward the bigger rocks. Motivation is hard, just ask anyone who wants to hit the gym, but still has a gut. Business is no different. You need to focus on the stretch goals and fight your way through the murk of self-doubt.

3. Rome wasn’t built in a day

You know why this old cliche sticks around? Because it’s true. Nothing worth doing happens overnight. If being self-made was easy, everyone would be doing it, too. (Just ask Biggie Smalls.)

Read any bio of successful folks who built an empire, or just a solid place to grab a burger in the neighborhood – success took time. For many of these folks, that time was spent worried the dream would go under from lack of early adopters.

But they persisted. They invested their money back into the business, they promoted, they made smart choices instead of the easy ones. Building brand equity will take smart moves and a lot of patience. Can’t be selling that charbroiled cheeseburger when no one’s coming in the door, right?

4. Accept your plan isn’t perfect

Just because you dream it down to the final note on paper, that doesn’t mean it’s going to work out that way.

If you’re a business-type CEO, you’ve spent a lot of time planning, writing business plans and Go-To-Market plans – that’s business 101.

If you’re a technical CEO, you’ve spent a lot of time coding, researching, and watching trends.

Both CEOs have done the homework, they’ve planned, prepared, and are committed to taking on the world, helmet strapped on and mouth guard in place.

But then the world doesn’t give a shit. Doesn’t even kind of care. No leads come in, there is no money to spend to bring in new customers, and no foreseeable change.

All the planning in the world won’t prepare you for the harsh realities of the free market. As you roll out and talk to people about your business, invite criticism and learn from what other people tell you. It doesn’t mean you have to change course every time someone’s opinion is different than yours, but their thoughts and critiques could offer a nugget of truth you may have not considered.

Final word of encouragement

I’m from Chicago, and if there’s one thing we love more than The Blues Brothers, it’s His Airness, Michael Jordan. I rely on one of his quotes to get me through the bad times:

“I’ve missed 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” – Michael Jordan

If that ain’t some #realtalk, I don’t know what is. See you out on the court, folks.

#realtalk

Kiri Isaac is the Web Producer and a Staff Writer at The American Genius and studied communications at Texas A&M. She is fluent in sarcasm and movie quotes and her love language is tacos.

Business Entrepreneur

What’s the difference between an accelerator and an incubator program?

(ENTREPRENEUR) When considering your options for growing your startup, do you know how an accelerator differs from an incubator? The differences are bigger than many realize…

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There are now more options than ever when it comes to applying to as well as choosing the best startup accelerator or incubator.

For those of you who may be new to the startup world (welcome!), I’ve compiled some helpful information to determine the difference between an accelerator and incubator, and which one might be best for your company.

Yes, all programs tout value to burgenoning businesses such as business plan assistance, introduction to other founders and mentors, and most importantly, guidance on fundraising to VCs and angels. But what’s the difference? Here’s the lowdown:

Incubators:

Incubators are built specifically for founders that are at the initial stages of starting their companies and don’t have set program timelines.

Unlike accelerators, incubators operate on a less structured time schedule with less programming and resources, and it’s not uncommon for a company in an incubator program to last for several months or even years.

Incubators typically offer their portfolio companies free office space, business plan advice, and mentorship.

The incubator may offer assistance in introducing your company to potential investors, but it’s not always the main purpose of the program (whereas the majority of accelerators have “demo days” where founders specifically pitch to potential investors).

Incubators are especially popular in local economies and can be run by organizations like non-profits, civic organizations, co-working spaces, and universities. Since incubators have less of a time requirement and offer less resources, you’ll only need to commit to a small amount of equity, often around 1%.

Accelerators:

Accelerators are more focused, time-intensive structured programs for companies with a proof of concept/minimum viable product (MVP) and market validation.

Accelerators do just that: accelerate company growth for startups with proven potential to exit (either eventually sell or go public). Because of this, accelerator interview processes are typically extensive and competitive.

Most programs can last anywhere from 10 weeks to 3-4 months. With many top accelerators, you’ll be expected to move to the city where it’s hosted and spend 40+ hours a week minimum in their dedicated coworking space, and several accelerators offer housing stipends to make the move easier.

These programs typically conclude with a demo day to pitch your product to a variety of community leaders, angel, and institutional investors.

Many accelerators are industry-agnostic, but some specialize in specific industries such as The Brandery or Comcast LIFT Labs.

Accelerators offer exclusive access to investors, web hosting credits, other perks, and special access to program mentors as well as program alumni.

Because of this, the equity required is often somewhere in the range from 3% to 6%.

Y Combinator, one of the most prestigious accelerators in Silicon Valley, invests $150,000 in each startup in addition to its program for a 7% equity stake.

Overall, incubators and accelerators can offer extensive value for founders, but make sure to research carefully when choosing a program. Next up, we’ll talk about choosing the best accelerator for your company and founding team, so stay tuned!

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Business Entrepreneur

Entrepreneurs: You’re unemployable in your own company, must define your role

(ENTREPRENEURS) Once you’ve built a successful business, it’s time to reexamine your role and determine where you fit in best.

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In my experience, most entrepreneurs are “accidental entrepreneurs.” They happened to be good at something, or they had a unique one-time opportunity to provide a product or service to the market. Then years later, they wake up one day and realize that they’re running a big business.

As an entrepreneur, one of the unintended consequences of building a business is that you become essentially unemployable within your own organization. After living the life of freedom, flexibility and responsibility of being a business owner, it’s difficult to go back to a “nine-to-five” job. This is why many entrepreneurs don’t enjoy staying with their businesses after they’ve sold to other organizations. Within months, they are frustrated that they’re no longer in control and the new owners are (in their opinion) making poor choices.

I see many situations where entrepreneurs are bad employees in their own organization. In fact, they may be the worst team members in the organization by having inconsistent schedules or poor communication skills and/or by inserting themselves into areas that aren’t useful. They can also have too much freedom and flexibility. And while most entrepreneurs insist on clearly defined roles, expectations and goals for all of their employees, they don’t always take the time to define their own roles, expectations and goals.

So why do entrepreneurs become bad employees?

I believe that it’s because they don’t have someone holding them accountable. Think about it: Who do they report to? They’re the owners. Part of the definition of “owner” is being accountable for everything but not accountable to anyone. Having a board of directors, a peer group or a business coach can provide some accountability for them, but another solution is to clarify their roles in the company and then abide by those definitions.

If you find yourself “unemployable” in your business, it’s time to define your role. It starts with outlining your main focus. Do you concentrate more on day-to-day execution or strategic, long-term decisions? Do you consider yourself an owner-operator or an investor?

Most entrepreneurs start as an owner-operator and put in countless hours of sweat equity doing whatever needs to be done to build the business. But over time they reinvest earnings in the business and hire a management team so they can step back and take on a more strategic role. Sometimes it’s not clear when the entrepreneur makes that transition, which can lead to challenges for the entire team.

Focus: Strategic Overview

If your main role is in dealing with long-term, strategic decisions, then it’s important for you to communicate that to the team. Clearly delegate tactical roles and responsibilities to the leadership team.

I’ve seen many instances where owners do more harm than good by haphazardly injecting themselves into tactical decisions that should be handled by the leadership team. Instead of jumping in when they see something they disagree with, I encourage owners to actively “coach” their leadership team to be better leaders. The approach of micromanaging every decision of others will frustrate everyone and lead to an underperforming organization.

I have one client that decided his role was to build strategic relationships and work on a new service offering. He was confident that his leadership team could handle the day-to-day operations of the business. Over time he discovered that being in the office every day was actually a distraction for him and his team. So, he moved his office out of the building.

To maintain his ownership responsibilities to the company, he scheduled one afternoon a week to physically be in the office. Team members knew they could schedule time with him during that weekly window when he temporarily set up office space in a conference room. Not having a permanent office in the building also sent a message to the team that he was not responsible for day-to-day decisions. Sometimes not having an office in the building is better than the team seeing the owner’s office empty on a regular basis.

Focus: Day-to-Day Execution

If you decide that your role is in the day-to-day execution of the business, then clearly define your role in the same way you would define any other team member role. Are you in charge of marketing? Sales? Finance? Operations? Technology? R&D? Or, some combination of multiple roles? Take the time to outline your responsibilities and communicate them to the team.

Just as you define your role, also define what you are NOT going to do and who is responsible for those areas. After all, sectioning off some tactical work does not abdicate you from long-term decision-making. You must set aside time to make the long-term, strategic decisions of the company.

Being an entrepreneur sounds glamorous to those that haven’t done it, but ultimately, the owner is accountable for everything that happens in their organization. It can be quite sobering. And while some entrepreneurs have a delusional belief that they can do everything in a company, it’s not a path to long-term success.

All entrepreneurs have to decide what their role should be in their organization – even if it means that they’re contributing to their “unemployable” status.

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Business Entrepreneur

7 books every entrepreneur should read

(BUSINESS ENTREPRENEUR) You’ve heard it said, “do as I say and not as I do.” Read these books from authors who have figured out what works and what doesn’t when starting a business.

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If you’re thinking about leading a startup (or already do), but are not sure where to go, the internet is often the first place we look. Surely, you can find dozens of blogs, articles, stories, and opinionated editorials that can help give you something to think about.

However, there are tons and tons of great books that can help you think about what you need to get started, how you could benefit from changing your mindset, or address challenges you may confront as you begin your entrepreneurial journey. Take a look at the following 7 you may want to add to your bookshelf.

1. The Startup Checklist: 25 Steps to a Scalable, High-Growth Business
This text not only boasts a 5 start rating on Amazon, but offers what few books do – practical, tangible, down to earth advice. Where lots of books try to tell you a story, talk strategy, and share wins, author David Rose instead focuses on advice that assumes no prior experience – and breaks it down from the fundamentals.

2. Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation
Nathan Furr and Paul Ahlstrom focus on creating a lean startup by offering a step-by-step process that focuses on nailing the product, saving time, and saving money. The first step is about testing assumptions about your business, and then adjusting to growing it (hence: Nail It and Scale It). Strong aspects of this book include a great theoretical foundation, and an easy to follow framework.

3. The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls that Can Sink a Startup
Wasserman’s strength here is that he focuses not only on the financial challenges, but identifies the human cost of bad relationships – ultimately how bad decisions at the inception of a start-up set the stage for its downfall. This book is a great tool to proactively avoid future legal challenges down the row, and also discusses the importance of getting it right from the start.

4. The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
Horowitz writes about his experiences, taken from his blog, in a way that even inexperienced managers can touch and learn. The advice here really focuses on leading a start-up, and what lessons his experience has given him. Presented in a humorous, honest, and poignantly profane way.

5. The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company
Blank and Dorf here standout due the sheer mass of this text. A comprehensive volume at 573 pages, my favorite piece for new investors is a focus on valued metrics – leveraging data to fuel growth.

6. The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life
A personal favorite of mine, this book is recommended for entrepreneurs not because it’s focus on business, but as a reminder that those of you wanting to start up are people. You have limited resources to manage as a person, and will need to adjust your perspective on what you care about. This book is about changing your mindset to pick your battles and be more focused.

7. Disciplined Entrepreneurship: 24 Steps to a Successful Startup
Bill Aulet starts with an approach that entrepreneurs can be taught, and breaks down the process into 24 steps, highlighting the role of focus, the challenges you may encounter, and the use of innovation. This text wins due to its practicality for new start-ups, and a specific method for creating new ventures. It also features a workbook as an additional, optional resource.

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