Do you know how much venture capital (VC) firms invested in startups in the last couple of years? Well, global venture funding might have dipped to $22 billion in November 2022 but rose to a record $675 billion in 2021 with VC investment in startups worldwide.
Interestingly, approximately 7.5 out of 10 venture-backed startups fail. Only 1% of startups become unicorn firms like Uber, Airbnb, Slack, Stripe, and Docker. Additionally, the success percentage for first-time founders is only 18%.
According to experts, startups without funding have a better chance of being successful. The argument goes that this occurs because startup founders who have their own funds at stake (bootstrapping a business) are more likely to work on their startup to recover their investment.
Starting a business can have a profound impact on the world. And above that, bootstrapping your startup is unique. Either use your personal savings, take out loans, or start a profitable business quickly. Profitability, slow growth, and smart business decisions are the keys to success. So, here are a few tips that may help – coming from Greg Blazewicz, who’s the CEO and Founder of SALESmanago, an emerging Customer Data Platform – firstly, start with healthy foundations, in fact, start with YOU:
Understand your true motivations for running your own business – the decision to become an entrepreneur is very often a very intimate one. Let’s be honest: achieving KPIs, willingness to change the world or earning money don’t actually play a big role here. It may be that you set up the business because of a broken relationship with your father as a child – or you are simply a bit of a narcissist.There are plenty of reasons why you might be an entrepreneur, but none of them is straightforward.
Create a good working kitchen cabinet / or know who the jesters will be – many entrepreneurs lose touch with reality simply because there is nobody out there that will tell them they are already there. Be brave and surround yourself with people who challenge you – circles of mutual adoration won’t help.
Don’t do it with friends, unless you want to lose them – starting a business means a lot of very difficult decisions, and being in multiple hardcore situations that you don’t want your dearest to see you in. Continue that approach as years go by. The world is full of exciting and intelligent people that will fit you way better than family members and neighbours.
Running your own business will be lonely and painful – it’s a specific form of masochism. People choosing easy and warm corporate careers are right, but they will never understand what pleasure you get when preparing for and crossing the finish line at a marathon. In the words of tech entrepreneur Marc Andressen about founding a startup: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”
Don’t set the bar too high and don’t think too big – a lot of really important or significant things in life start as a bit of an experiment. Why put too much pressure on yourself at the early stage. The fact you decided to become an entrepreneur is enough to be really proud of. Let the idea grow on you. If you’re good, you will always overachieve.
Get an understanding of how you will manage yourself and stay balanced – there is nobody in the space who will tell you the truth how many entrepreneurs turn to alcohol, drugs, and engage in sexual events to deal with the stress. Do you really believe that Steve Jobs’ advice “Stay Hungry, Stay Foolish” is the right piece of advice here? I think this advice should go “Stay Healthy, Stay Balanced while being Relentless.” Get your own recipe for keeping dopamine at the proper level by enjoying something else beyond work. Physical activity works really well. My friend who is a Professor says one hour a day will make miracles. Cold showers, fermented food and proper sleep also help a lot.
And now, some advice on your people when building a business. I am really grateful that in my life, I met really a lot of absolutely amazing and brilliant people.
Your business will be driven by the individual effort of a couple of people – You simply cannot do it alone and your success will depend on your ability to not just find people that can do many different jobs but identifying people that will be as devoted and committed as you are. It’s more important than the vision and mission for the company. Understand what triggers their commitment and make sure they get individually rewarded. And take it for granted that most of them burn out and leave you anyway. If you are not attracting such people, then you have a problem.
Be fair and transparent and always give a chance for growth – you are running a startup, you should be grateful if anybody wants to join you and as you cannot offer a big brand name on their CVs make sure they grow, learn and get serious work experience. Avoid politics, avoid playing with people. Avoid theatre. You will have time for this when you grow your company to over 20 million revenue and your C-Level executives join your business.
Choose hunger over experience – no matter what you want to do, you will experience a lot of stress with managing people. But the stress you will have connected with the fact people don’t know how to do something is much healthier than the stress connected with the fact that an experienced person doesn’t feel like doing what you really believe should be done.
Greg Blazewicz is CEO and Founder of SALESmanago, an emerging Customer Data Platform working with brands such as Starbucks, Vodafone, Lacoste, KFC, New Balance and Victoria’s Secret.
Greg founded SALESmanago in 2011 and has been running the company since then. In addition to running marathons, he is an academic lecturer, a startup mentor, and the author of a popular book. “Marketing Automation Revolution”. In 2014, Greg was a finalist for the EY Entrepreneur of the Year award.