DEVELOPMENT

7 Lessons You Learn in Your First Year as an Entrepreneur

1.7.15 Lessons

Story provided by Inc. – 

Few learning curves are as steep as the one that faces first-time entrepreneurs. So how do you avoid going tumbling down it like an amateur skier who wandered onto a black diamond trail? Get advice from more experienced founders who are willing to share their own initial bumbling missteps, of course.

And what if you don’t know any successful, experienced founders? Quora has your back. The question-and-answer site recently hosted a discussion in response to the question “What are the most important lessons entrepreneurs have learned in the first year of their first startup?” Hugely successful founders, early-stage entrepreneurs going through their first battles, and even a handful of investors offered answers. The entire thread is worth a read in full but here are some highlights.

1. Listen…

“Entrepreneurs, by necessity, need to be headstrong, but they also need to be capable of listening to and accepting feedback. So listen to others and, if they are correct, be capable of changing course,” advises Simon Olson, a former VC and head of new business, Google Brazil. “Stay intellectually honest,” he concludes.

2. … but take advice with a grain of salt

That being said, a host of respondents suggest that starting up soon teaches you thatnot all advice is good advice. Axel Schultze, founder of the accelerator Society3, puts this simply: “Don’t take any advice too seriously–including mine.” AngelList founder Babak Navi agrees, reminding readers that “nobody knows what they’re doing. Things are much messier than they seem from the outside. And much messier than they seem from reading people’s answers on Quora.”

3. Cash is king

When you’re starting up, passion for your idea and blind belief count for a lot, but only as long as you actually have money in the bank to keep the doors open. “Cash is King. And Queen, Jack, Ace, and Joker. Startups are the quintessential example of ‘take care of the pennies and the dollars will take care of themselves,'” writes angel investor David S. Rose, for example. “Don’t let visions of being a future billion-dollar company lure you into spending cash recklessly in the beginning. Staying alive is the most important thing for a startup, and cash problems kill more young companies than all other causes put together,” he concludes.

Technologist Twain Liu uses the same phrase as Rose but with a fresh elaboration: “Cash is King, board control is Queen, and equity is your castle. Just as in chess, it’s inadvisable to sacrifice any of these too early in the game, so it is in how you run and finance your company.”

4. Your expectations are too high

Another common theme that emerged among a number of respondents was the idea that your estimates–whether of the time it will take your business to get off the ground, your market size, or anything else really–are likely to be too optimistic.

“Things take longer than you expect. Plan 2-3 times longer than your estimates,” writes Aaron Franklin, co-founder of LazyMeter. Entrepreneur John Greathouse is even more pessimistic, citing the “Rule of Four” from the MouseDriver: Everything takes four times as long as you predict; everything costs four times as much as you budget; everything yields one-fourth the results you project.

5. Be kinder to yourself

Should you insist on sky-high standards and be ruthless about improving your product? Yup, but balance that drive with a little gentleness toward yourself. Starting up is hard, so you won’t make it through unless you keep your spirits up, suggest several entrepreneurial veterans. “Mistakes will be made so don’t beat yourself up over these but learn, adapt, move forward and persevere with your vision and those lessons learned,” Liu reminds founders.

Besides keeping your perspective during your down days, Jason M. Lemkin, co-founder of EchoSign, also insists that entrepreneurs take care to acknowledge and celebrate their ups. “My #1 lesson with hindsight: give yourself credit for what is working even at the most nascent stage, and double down there immediately,” he writes.

And what goes for your emotional health goes for your physical health as well. “You must feel good to create something good. Your health is important: Get exercise and eat well,” writes Franklin.

6. This isn’t a Bond movie

Spies do not lurk around every corner, and there is no need to run a covert operation. “People (including VCs) are not out to steal your idea, so don’t be too crazy about confidentiality and siloing information,” says Olson. (Feel free to channel your inner 007 with debonair dressing and shaken martinis instead.)

7. Working from home rarely works

It sounds like a good idea–you can skip the commute and the expense of an office–but several experienced entrepreneurs warn that working from home is rarely as nice as it first seems. “In many cases ‘working from home’ is not really working,” PayPal co-founder Max Levchin cautions. “Working from home is a last resort. Try to find a coffee shop or co-working space where you’re surrounded by others,” agrees Franklin.

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