Entrepreneurship is trending thanks to the countless tales of success from Silicon Valley: the garage company that conquered a place in the Fortune 500, the start-up sold for a couple of millions or the expensive lifestyle of a teenager that kicked off his career on YouTube. The stark reality, however, is that edgy marketing campaigns are not always effective and becoming a unicorn is not only unlikely, but also extremely demanding. Starting and maintaining growth of a company requires hard work, time, and significant trial and error.
Authors: Nadim Habib and Maria Brás Frade | Reading Time: 3 minutes
If (however unlikely and demanding) starting a company is still in your bucket list, you must make sure you are doing it for the right reasons. It is often the case that the wrong agenda can condemn a project right from the start, ruining the motivation of the founder and their followers. With that said, I will be listing 5 deadly sins that stand out in the stories of failure and bankruptcy.
1. I want to be my own boss so I can have more freedom
Unfortunately, those who are familiar with successful companies know that, during the first years (sometimes even the first decade), your company will require a tremendous and fastidious effort, leaving you with little or no free time. Your boss will be your team, your bank, your suppliers and all the stakeholders who surround your business. In short, being an entrepreneur marks the end of your holidays.
2. I want to earn money quickly
Any successful project normally requires more money than anticipated, for longer than expected. There are exceptions, as there will always be, but the truth is that many companies with genuine potential fail due to lack of financing and liquidity during their early years. Therefore, it is essential to be conservative while managing the finances of your project in the first years. With that said, if the driver of your ambition is to become wealthy, keep in mind that is better for an entrepreneur to lead a frugal life in the beginning.
3. I want to work with my friends
When starting a company, many entrepreneurs hire those who are available, instead of those who are right for the job. They do not invest enough time recruiting, nor analyzing and structuring recruitment processes that could be an asset for the project. The costs of this decision are extremely high, and will later result in issues like lack of focus, control and opportunities. In fact, choosing the right people is the second most important task (right after ensuring a sufficient amount of funding) you must endure for the survival of your company.
4. The ends justify the ends
During the first years of activity, you will most likely face decisions of conflicting nature. Some, will involve putting your values on hold in return for a result you need. Experience tells me, however, that ignoring your values today will cause much pain later. For that reason, it is essential to stick to the values and purpose that drove you to build the company in the first place. Staying true to your ethical code will provide you with the necessary resilience to fight through the toughest days.
5. Celebrating the first year more than the ninth
You have every right to celebrate the founding of your company, the day you chose its name, designed the logo or even throw a party in your first office. However, bear in mind it is easy to found a company these days: in Portugal, it takes an hour. The difficult part is seeing it still standing and growing after ten years, certain that it will endure another ten. It is easy to be a founder, but it is hard to be a builder. Even though you have every right to celebrate the small steps, you should truly celebrate from the eighth or ninth year onward.
Summing it all up!
If you are creating a company to be your own boss so you can have more freedom, to get rich quickly, to work with your friends, to spend money as you best see fit and you are willing to forfeit your moral values for the sake of you project, then… Think again. Maybe you should stick to you day job.