Inevitable Challenges in Building Successful Start-ups
Accepting the price to pay, selling with purpose and empathy, and knowing what the numbers say.
I started my first business 5 years ago. It was a technology driven last mile logistics services provider for e-commerce businesses. We started with 4 employees (drivers) and grew to 200+ employees in 5 years. We also raised a bit more than $1million in VC funding which enabled the growth to become a large organization.
However, We were forced to shut down the business in late 2020 after taking a massive cashflow hit due to COVID lockdowns and many other reasons. The good thing is, that the entrepreneur inside me never died and got even more inspired when I realized that it was a great learning experience, not a failure!
I wrote a few articles about what the fall of my first business taught me. The purpose of those and this article is to share what I learned to inspire and empower aspiring start-up founders to avoid the mistakes I made and go on to build businesses that last.
Over the last few weeks and months, I listed down everything I realized over the last few years. I also read books such as Built to Last by Jim Collins, Start with why by Simon Sinek, The flow by Mihaly Csikszentmihalyi, Will power doesn’t work by Benjamin Hardy, How the mighty fall by Jim Collins, Deep work by Cal newport, Build an A-Team by Whitney Johnson, Rich dad poor dad by Robert Kiyosaki, and so on hoping that my learnings have to do something what these great authors have to say.
I found great relevance between what I went through and what these fabulous authors had stated. After realizing this relevance, I was inspired so much that I spent the time to pick the following 3 challenges I faced personally during my entrepreneurial journey hoping that this short read will inspire you to make a difference, or at least to give it a try.
The price founders pay
During the initial stages of my start-up journey, I used to work close to 16hrs everyday. I had to wake up around 6am and was able to get to bed only around midnight. The morning hours were spent on thinking, learning and planning. From around 10am to 6pm, it was a daily routine of operational matters. So many meetings and attending to problems. Sometimes, there were no breaks even for meals. There were times I was working till midnight as well but I tried my best to get ready for tomorrow from 6pm to midnight, and get some personal errands done.
This had been the routine for almost a year. During weekends it was worse because now I had to balance my time between work and family. It was the most challenging part. I thought it would be temporary. I was wrong to a greater extent because after 4 years down the line, I was still working for almost the same amount of time, but this time the work I did was different. Still I had to put in those hours often, sacrificing social life, family commitments, friends and even my own health.
A known example of the same nature is Elon Musk. Reportedly, he has been working close to 100hrs every week (14hrs per day). If Elon has to work for 14hrs a day after building a successful business, I’m convinced that we will probably have to work much more than that to build a successful business.
As founders, this expectation should be made within ourselves, that it’s a huge price to pay. If we don’t set it for ourselves, chances are high that we would be frustrated, exhausted and disappointed in no time. However, if we know the price it asks for, and are ready to pay, We are good to go. Chances are now high that we won’t give up.
Sell with purpose and empathy
During the early third year of my journey, I realized that some of the customers I brought in, brought more customers in. I was surprised by this because the service quality was not the best compared to some of the competitors. My sales pitch was something like this.
We want to empower small social ecommerce businesses in the country by providing affordable delivery services backed by technology. We want to enable you to expand your customer base across the country. We believe in making customers happy by providing fast and friendly delivery services which in return brings more sales to you. This will eventually bring more sales to us. It’s a win-win. Would you like to try us?
6 months after my business was shut down, I watched a video. It was Simon Sinek on one of the TED talks speaking about “Start with why”. His narrative on how Apple sells their products gave me goosebumps. At this moment I realized something powerful about selling. We got to sell with purpose. When we start our sales pitch with why we do what we do — as Simon says — people start to buy from us, not because they need to, but because they want to.
The story the numbers say
I studied computer science and engineering from the number one engineering university in the country. I’m from Sri Lanka btw. This also means that I had little to no knowledge in accounting or finance. My financial IQ was weak. However, I was still able to build a large business, but I was not able to sustain it. I realized and learned the hard way that one could build a business, but cannot sustain without proper financial IQ.
Financial IQ is one of the important skills we absolutely need to learn and become experts of. A great vision dictates that making money is not the goal, but every great business makes money. We need to make money to pursue our vision. If we do not know how to read the financial statements, what they mean, and the story they tell us, it’s almost impossible to grow and to make money. If we do not know how to read the story the numbers say, we won’t be able to make decisions that move the needle. This is key to success.
Shying away from the numbers, giving whatever the excuses will do more harm than any good. We must always invest time, energy and money to learn financial IQ. In return, this will enable us to make better and informed financial decisions vital for survival and growth. It’s a pillar supporting the journey to build lasting start-ups.
- If we are not ready to pay the price before we start, it’s highly likely that we will give up. Knowing the price first, accepting it, setting expectations with those around us and then jumping to the deep end would save the day. Not in 5 years, but possibly in 5 months.
- Selling with empathy helps us build loyalty. As Simon Sinek says, the customers will buy from us, not because they need to, but because they want to. We want to build customers who WANT to buy from us.
- Money is only one of the many results of a great business. However, we need to know where money goes. If the money goes in the drain and we do not see it, that will be the end of the story. Being able to read the financial statements is crucial to make the right business decision. Invest in learning finance IQ. It will enable us to make the right financial decisions which make or break the business we are dying to build.
If you aspire a journey to build a business that lasts, and need help, subscribe to my free weekly newsletter Mission: Build to Last. I started it as a way of giving back to the society what I learned building and failing as an entreprenuer. It includes practical and actionable insights to make the journey less difficult and more pleasant.