For young entrepreneurs, launching a startup is largely an exercise in trial and error, and unfortunately, the most important lessons can only be learned by making mistakes. Though you can try your best to prepare for success and minimize the risks of failure ahead of time, the only way to really gain experience is by taking the leap.
The biggest difference between those who fail and those who succeed however is their ability to learn from the experiences of other entrepreneurs. By paying attention to what these entrepreneurs did, and most importantly, what they should have done differently, you can be sure to avoid making similar mistakes on your path to success.
We spoke to a number of CEOs to see what they wish they had learned about entrepreneurship before beginning their startup careers. Here’s what they had to say.
1. Be Careful With Your Initial Investment
I wish someone would have told me to put less of my net worth into growing the business. A good rule of thumb is to never put more than 30% of your net worth into starting a business. Starting a company today takes less capital than ever before. For example, if you have a net worth of 10K, only put up to 3K into the business to prove the concept. If the concept is being proven, it is far easier to raise additional capital.
– Dan Dougherty, Remotely
2. Charge for Your Product
Start charging for your product the moment it is usable. Don’t just do customer development by asking if a potential user would pay for a certain feature. Ask them to pay for it. Get a pre-payment. Charge them in advance. That will ensure they really want your product. Otherwise, people are nice and will just nod and tell you they want your product. But when it comes down to it, if they are not paying for it, you don’t know how serious they are.
– Paul Ruderman, UpdateZen
3. Know What Marketing is Best for You
Inbound marketing is one of the critical strategies for entrepreneurs. I became a Hubspot client and began my content creation journey but, even with their guidance, I wasn’t prepared for the hard work which begins after content is created. The need for outreach, social shares and so forth is a full time job. If I had known more about content marketing up front, I would have started the process earlier.
– Robert Sturt, NetworkUnion
4. Stay Flexible
You should always be optimistic and pragmatic at the same time. You should be confident about the direction you want to move in, and at the same time you should be willing to make a course correction whenever required. Having this approach will give you enough flexibility to pivot quickly and to reach product market fit.
– Raman Shrivastava, Fyne
5. Don’t Settle for Less
I’ve been involved in start-ups for 20 years now. I’ve taken very little salary many times, rarely been at market rate over those years, and even went two-and-half years without any salary. I’ve come to the conclusion that entrepreneurs should only do the low to no salary thing for a short period of time. The lack of salary adds up (or rather, doesn’t add up) even with the equity pops every now and then. This puts more pressure on having the big wins, and deprives you of accumulating wealth for retirement. Get yourself to market rates as soon as you can, stay at the acquiring company for a while after an M&A, and set limits to how long you will go with little to no salary.
– Brad Kayton, 1WorldOnline
6. Learn From Your Mistakes
I started as an independent consultant and felt that the money I made was “my money” to spend as I saw fit. I associated spending money with happiness. Now my happiness comes from using my skills to help the people around me, and most importantly, watching my business grow. I’ve realized how important it is to create a proper budget, and know that by doing so I can guarantee the long-terms success of my company. I also try to remind myself that it’s hard to be an old, wise man, without being young and foolish first.
– Douglas Finley, SocialChomp
This article has been adapted from our partner TheStartUpJourmal.