If you ever decide to forego a “real” job in favor of starting your own company, you’re bound to make at least a few rookie mistakes. If you’re lucky, most are the kind that are easy to fix and learn from.
But most entrepreneurs, in hindsight, agree that there are some things you’re better off being prepared for. Hindsight is definitely 20/20—especially when you’re the boss. Consider these lessons you don’t have to learn the hard way.
Changing how we approach and build modern solutions to personal dilemmas and satisfying intrinsic human needs is everyone’s passion.
We’ve picked up many, many useful tips and wanted to pass some knowledge along. Below is a list of 10 things we wish everyone known before creating a startup.
Solve Your Own Problem
Many businesses and failed numerous times. When you finally find success, it is because you created a solution to your own problems and turned that into a business. Many launched many new companies and websites to foster their business and help people.
Do Your Market Research Early On
Like most entrepreneurs, you must be passionate about many ideas and opportunities. Many have also launched and funded many startups only to realize later on, as they learned more about the market, that they should have done more extensive market research early on. It is important to understand the industry you are playing in, your competitors, and the market forces at play. Even more so, it’s important to understand your customers–their behaviours, pain points and decision making processes.
Be Extremely Focused
There is a tendency for entrepreneurs to try to do too much at once. But the key to success in the beginning lies within having laser focus. If your product or service solves a big problem, try to focus on a niche instead. Facebook started out as a social network for college students. Only when they were successful with that niche did they open their service to the general public.
Keep It Simple
One may think that offering customers a large number of choices is the smart thing to do. Yet, more choices lead to decision making paralysis. It is usually the company that provides users with fewer choices that wins. Examples include: In & Out Burger’s simple and limited menu, as well as Apple’s limited number of choices for most of their products. As a startup, resources are limited. Focusing on providing a simple product or service with less choices, less steps, less features may be the way to go.
Bootstrap Whenever Possible
Raising money to launch a startup is very common among entrepreneurs. In doing so, you give up valuable control of your business. When entrepreneurs had to do it all over again with their company, many decided to bootstrap. Writing the software code yourself, hosting the service with a cheap ISP and using free marketing resources at your disposal, you would be able to launch the business with your own money.
Think Carefully Before Taking Money
Whenever possible, venture capital (VC) money should be considered unacceptable except in specific circumstances where VCs can add significant value to your business. Being a young founder in your mid-twenties, you may be asked to take on an experienced CEO. Times are now tough after the dot-com crash when online advertising went from $20 CPM down to under $2 CPM. Instead of sticking with your strategy to revamp the company’s business model. So it’s better to fund your own money and it’s advisable not to be dependent on any third source.
Focus on Intellectual Property Early On
Entrepreneurs may not focus too much on intellectual property in the beginning, but copyright and trademarks are important and will be increasingly crucial in protecting one’s product, service or brand once some success has been achieved. When you launch, one of the first things anyone does was to apply for a trademark. The trademarks which have since acquired secondary meaning, have come in handy as many competitors try to encroach upon our space.
Screen Your Hires Well
Some of the worst hires have been always experienced with first few employees. Back then, people lacked the resources to perform detailed background checks. They have too experienced many fraud degree holders whom we hire unconsciously and later they prove to be a setback for the company.
Leverage Free Marketing Opportunities
As an entrepreneur with a limited budget, spending money on marketing can be a very costly proposition. When launching, many looked into free marketing opportunities. First leveraging free online resources such as Craigslist, then moving onto PR opportunities to get free media coverage for their service. A controversial product or service may shun away investors but it was a gold mine when getting lots of free media coverage.
Have Strong Agreements Up Front
One of the most important lessons to have learned over the years as an entrepreneur, is that whenever there is the possibility for misunderstanding put expectations down clearly in writing. A strong agreement with partners, investors and employees are crucial.
Dr. Kyle Hoedebecke is a Certified Physician Executive with nearly 20 years of leadership experience.
Within healthcare, he served in many leadership roles across the clinical, insurance, bio-pharma, and military sectors.
As an executive advisor and coach, he work with small/medium-sized business of all sectors.
In the startup community, he serve as a mentor and angel investor with a focus in healthcare technology, wearables, AI, AR/VR, 3D printing, energy, IoT, and bio-pharma spaces. He currently serve in advisory roles and angel investor in 40+ startups and am always looking for the next win-win situation!
In the following interview, Dr Kyle talks about his entrepreneurial & angel investor’s journey, struggles and the lessons learned along the journey.
You are a doctor, can you please tell us about your life journey?
I started off in the military, where I also received my medical education and Board Certification as a Family Physician. I did 10 years of clinical medicine (seeing patients) as well as serve as an assistant professor teaching medical students. I transitioned to a leadership role in the insurance/payor sector of the US healthcare system.
I’ve had the opportunity to employ my knowledge and skills in healthcare systems in 120+ countries and now in the startup environment as well.
When did you first discover your angel investor spirit and how it is giving feedback from life?
I have invested in real estate for 15+ years and dove into angel investing during the past 3-4 years. I really see this as an opportunity to remain on the cutting edge of innovation while simultaneously making the world a better place.
What has been the biggest success and biggest failure stories you went through?
My biggest success would be my current company Oscar Health going public 3 weeks ago. The IPO process has been a great success and will help us continue to improve the healthcare system. As there are high levels of risk involved with angel investing, my biggest failure would be from companies that have failed.
Tell us about your latest endeavor.
I have several ongoing endeavors currently. I am excited about one startup called Covimro – who has a natural molecule that has been shown effective against COVID-19 and HIV viruses. Another is called HECOLL, which has created a biodegradable fabric that also protects against COVID-19, smog (pollution), and UV light.
How did you get involved with Angel investing?
I first joined a startup accelerator/incubator as a physician mentor. I then found many amazing startups and founders who I mentored wanted me to join as a formal advisor as well. I find being an advisor and an angel investor is a nice fit where possible.
What do you look for in a startup as you evaluate it for a potential investment? I look for the “3 Ts” – team, tech, and traction.
How does someone get you excited and willing to commit?
The stronger the 3 Ts – the more excited I get. There needs to be a good balance in all 3 areas.
Besides providing capital, what additional support do you offer as an Angel investor?
I am also available for advisor roles in the right situations. My situation is unique because I have the clinical background as a board certified physician, but I also bring a strong business pedigree with 4 Master degrees. I have a background in various sectors within medicine across 5 continents and speak 4 languages.
My specialties are AI, wearables, medical devices, SaaS, 3D printing, and AR/VR.
What are the red flags for an angel investor?
There are several! Some common ones include poor/incomplete business plans, aiming for a market that is too small, no way to protect against copy-cats (i.e. a patent, trade secret, or trademark), and excessive debt.
In your opinion, what are the hurdles that keep people away from starting an entrepreneurial career?
These include fear of failure, not believing in oneself, and lack of mentorship.
What advice would you give to the new angel investors?
Check out crowd funding angel investor sites like StartEngine and Republic. Build your network of more seasoned angel investors for deal flow and mentorship. Never invest in startups more than you are willing to lose (ie If you lost ALL your money in a single investment, would you still be able to survive?).
Like the stock market, also diversify your angel investing portfolio. Lastly, do your research and due diligence!