5 Things You Need More than Money
Stop looking at money as an obstacle.
As a venture capitalist, I talk to a lot of people who are starting new businesses and looking for cash. Some businesses need money, and it depends on the industry, but too many times I see smart people with great ideas who don’t need money, and yet that’s ALL they are focused on.
After hundreds of conversations and my years of experience building business, I’ve found that there are five things entrepreneurs need more than money. Each one will take you further than any capital investment, but when you use all five together they are dangerously powerful.
A Strong Network
You are who you surround yourself with, PERIOD. If you want to be successful, surround yourself with successful people. A good network will provide you with three critical items: council, introductions, and a fast learning curve.
This is the number one thing I recommend to any entrepreneur and startup I talk to, because I attribute a lot of my success to this. Your network will take you so far. You can read all my reasons why and the tips I have for building a strong network in You Don’t Need Money, You Need A Network.
Expert-Level Industry Knowledge
Become an expert and know almost everything about your industry, including your product or service and the influencers in your space. You can’t expect to penetrate a market unless you have a better solution than what’s available. You can’t know your solution is best unless you’re an expert and you’ve actually done your homework.
To learn where you stand in the market, put your business into practice. Take the initiative to go out to a small subset of the market and seek feedback on what you’re doing. (I’m a firm believer that a first impression is everything, so take a subset of your audience and do a pocket test.)
Ask every person you talk to in the marketplace a dozen questions. Get to know what their real issues are. Ask them what solutions they think they need. Leverage your network to find people. The market will not hesitate to tell you what they think.
The feedback you get from the marketplace gives you insight. Use the insight to improve your business, and then go back to the market to test your model again. When your business starts resonating with your market, you know you have real knowledge about what they need and what you can do.
For example, a graphics company came to me years ago. They were a sharp team that had grandiose ideas of what they were creating—pre-designed car graphics. They wanted to buy this massive printer with a HUGE price tag.
I said, “WAIT! Create a few designs. Don’t print them—put them on eBay and see if anyone bites.”
Well, no one purchased them. So, they tweaked their design until the market said yes. Then they bought the $30,000 printer. In doing this, they proved their design had a market and could now justify the printer cost.
If you think you’re going to sell your company for 1 million dollars, then I GUARANTEE that you will not make a dime over one million. At the same time, just because you think you deserve one billion dollars does not mean you’ll make that either, but working on your knowledge and becoming an expert will allow you to continue to increase your confidence. Thus, your mindset gets stronger.
I can’t tell you how many times I’ve looked at businesses and the owner has NO CLUE whatsoever that their business is worth millions. They are attracting the wrong buyers, selling their product way too cheap, and getting the wrong advice. Most of them think that they can’t compete with the larger players. As soon as you realize you have a competitive advantage you can attract big dollars.
Often, when people hear “business plan,” they think “boring.” But business plans are anything but boring.
You have to know exactly how you are going to deliver value to customers, and whether you call that a “business plan” or not, writing it down is a critical exercise. Force yourself to think about different aspects of your business you may not be considering. Create financial forecasts to marketing plans.
Ultimately this exercise will show you just how much you do not know about the business you’re about to go into. I’m not a waterfall guy; creating some master plan from now until the end of time on how your business is going to generate cash is not effective. However, the key here is to just spark your brain and find cracks in your business that you’ve never thought through.
When I start a new business venture I inject all the info about the new business into a project management system. I write down everything I think about. Later on, I may decide it was a bad idea, but I need to house the ideas somewhere. I draw a map of all the tasks the business needs to do, and how each of them needs to get done. This map informs my organizational chart as the business scales up.
Hopefully, this is a given for most, but you have to follow through on what you say you’re going to do. You have to be honest with people. Burning bridges will limit where you can go. Do the right thing, be honest, in the long run, you will finish first.
I’ve met rich business people before that cheat and lie and still get ahead. At the time it was frustrating to me. However, I can tell you from firsthand experience, EVERYONE that I’ve encountered who cut corners is not in a good place today.
If you don’t have integrity and don’t plan to do right by people, please check yourself. Pay your taxes, get the right attorneys, and don’t cheat your customers or your employees.
To ensure you don’t fall into this trap, surround yourself with good people who can be your accountability partners. I personally have some good ones, and they have helped me stay on the high road when I’ve been tempted to cut corners myself.
More Than Money
Don’t raise money. Dial in these 5 points first.
If you focus on acquiring these five critical assets instead of looking for capital, you’re going to set yourself up for success. Later, if you absolutely need to raise money, you’ll have everything a good investor like me wants to see in a healthy company.
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