How many times have I heard entrepreneurs say that if they knew how much it actually cost, how stressful it was going to be and how long it would take took to succeed – they probably wouldn’t have started?
The successful ones, and those with masochistic tendencies, quickly respond…”But I’m glad I did!”
Since innovation is about doing something different or better, it’s also often the case that building a business based on innovation will be like navigating in uncharted waters – you can never be certain of what you’ll find.
Successful entrepreneurs prepare well and learn to deal with the unexpected (expecting the unexpected is too cute by half!).
Preparation involves testing, retesting and testing again the underpinning assumptions of why your target market will buy. It also requires deep research into your market space and the development of a thorough understanding of the competitive environment and customer inertia points. You need to be completely convinced of the opportunity and be very confident of your path to market.
That done, it still won’t go to plan, but you’ll be better placed to firstly cope and secondly re-direct your strategy based on a solid foundation of industry knowledge.
Experienced investors also have an appreciation for this reality.
For this reason it is the generally accepted wisdom that one should raise as much as one can while it’s on offer…
That may sound a little gratuitous given how difficult it is at the moment to raise start-up capital but, of course, this rule applies even if you’re self-funding – don’t start unless you can cope with a serious blow-out in start-up costs and at least double your planned time without financial returns.
So balance your irrepressible entrepreneurial enthusiasm with detailed preparation and some tough financial planning and go for it… it’s worth it!
Doron Ben-Meir has been an active venture capital manager for the last eight years. He founded Prescient Venture Capital and prior to that was a consulting investment director of Momentum Funds Management. He was a serial entrepreneur over a 12 year period, co-founding five new technology-based businesses.
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