Remember the 10 Entrepreneurship Lessons Venture Capitalist Nicholas Chan Taught Me [Part 1]? I received some good responses and feedback. The following will be the second part of the interview summary.
The lessons below came about when I briefly described to Nicholas about my upcoming venture. What he told me added a lot of work to the research phase of my startup but I appreciate it since it can be quite hard to get someone of his caliber to poke holes in a startup idea and provide constructive feedback.
Let me share the lessons with you so that you can benefit from it as well. Remember to leave a comment below with your thoughts on the lessons.
Know Your Expertise and Experience
Attempting to venture into businesses that you have absolutely no clue about and banging your head against walls just because you are blinded by the desire to be called an entrepreneur is not sexy at all. It just shows the entire world how stupid and shallow you really are.
Before even starting anything, do a self-assessment to know what you are good at, spot a niche where your skills can be appreciated and paid well for, and harness your experience to sufficiency so as to meet the demands of what your new venture requires.
There is a fine line between serial entrepreneurs, serial failures and a world of differences from "so-called entrepreneurs" (such as Ponzi, MLMers).
Serial entrepreneurs are individuals that know how to spot opportunities, assemble high-efficiency teams, ensuring everyone wins, creating great value and bringing it to the world and more importantly, being sincere, truthful and a leader of men.
Serial failures tend to be people who know how to present well and smooth-talk people into believing them but lacks any ability to follow through with what they said, running away when things goes bad and then restarting the cycle.
Finally, the "so-called entrepreneurs" are merely greedy individuals who only know how to parrot what their upline tells them as "entrepreneurship" without having any coherent ability to think and reason for themselves, and when confronted with hard facts, are deaf to truthful feedback and only can keep repeating "if you don’t believe me/if you never tried/why are you against the marketing?" meaningless words.
ALWAYS Do Your Homework Before Asking Questions
Before bombarding your mentors or industry experts with questions, make sure that your questions have 1.) the substance and challenge that deserves your mentors’ time and 2.) do your own homework and research until you reach a dead end. There is nothing more disrespectful than to waste your mentors’ precious time by bombarding them with questions that you have not carefully thought through.
In most cases, successful people are more than willing to share and help you along your journey as long as you respect their time and that they can clearly see that you have already done your best. Always remember that your mentors do not owe you a living and that successful people got to where they are because they made the best use of their time. They will not have the time to guide you from scratch.
Know your Unique Selling Proposition
Many inexperienced entrepreneurs start a business without even thinking. They just take any business idea that they think can make money (ie. tyre shop, carwash shop, launderette) and plunk down their hard-earned savings and in a few months, they wonder why they are bleeding money and not going anywhere.
Never start up anything just because you think the idea can make money; if you won’t anyhow buy a car or anyhow marry someone, why would you anyhow do business?
On a side note, a venture capitalist like Nicholas will never fund a startup without a unique selling proposition, a sustainable innovation, market potential or no clear barriers to entry. Keep in mind that a lot of big companies are prepared and able to copy your idea or even your product once it is released into the market with the amount of cash that they have.
Just look at how fast China can copy and release a product hours after it has been put into the market. A unique selling proposition is made up of a unique blend of human expertise, manufacturing techniques and superior marketing, creating a high level of difficulty to the amateur trying to copy the form, but not the spirit which makes your product/service unique, extremely difficult to copy (ie. certain Satay Chelup in famous Melaka shops), increase in perceived value (ie. Vertu vs Nokia) and greater visibility in the market.
Always remember that a unique selling proposition is different from mere competitive advantage. A unique selling proposition acts as a "secret sauce", a key differentiator which cannot be replicated due to intrinsic, un-copy-able aspects while competitive advantages are merely hurdles for your competitor to match and overcome such as good product design, great customer service, superior mindshare, established marketing and distribution channels.
Your Partner, Your Responsibility
If your “partner” is content in "sweating the small stuff" and always busy doing things apart from the core business, he is probably a runner hoping to be called a partner or an entrepreneur. Nicholas emphasized this: Your partner should not be your runner; he needs to be working with you in a strategic capacity, not in bothering about menial stuff like washing the company van, or be taken for granted.
If your partner does not live up to expectations and have not shown signs of improving anytime soon, begin by gently prompting him so that things can be done. Failing that, a sit-down session would be essential to find out what he really wants in life so as to be clear if both of you are going in the same direction.
Actively reduce the gap between both of you and stop whining on the differences. If your "partner" is adamant on doing menial tasks even after much discussion, relegate him to staff level. Remember the famous quote "Lead, follow, or get out of the way".
Have a Plan B to Mitigate or Neutralize Competitors’ Threat
Always have a Plan B for your startup. Always assume that established companies with abundant resources, whether they are human capital, financial resources or technical expertise, are ready to jump in and start competing by doing it better, faster and/or cheaper thanks to the economies of scale that they are able to leverage on. At all times, always keep in mind that your idea is not unique, and that if someone can steal it just by listening to it, it was never worth anything in the first place.
Contact Nicholas Chan
Did You Learn Anything from Nicholas Chan?
What are some of the new lessons that you have learned? For aspiring entrepreneurs out there working on a startup idea, I hope Nicholas’ advice shed some light for you.
Leave your comment below if you have any thoughts on the lessons. We would love to hear back from you.
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Photo Credits: Tiago Ribeiro (Resting from the 365!)