Ever start a new venture?
Starting a new company is challenging and requires tremendous amount of fortitude and risk tolerance. Entrepreneurship is genetic and cannot be acquired. It requires you to take risks beyond reason and strive with unrivaled passion to take an idea from inception to fruition. From determining a company name, to the best tax structure for the entity and state of incorporation, to recruiting the right talent all requires tremendous amount of planning.
My first advice would be to hire the best accountant and lawyer you can find. Their counsel is invaluable and good ones are worth far more than what they will charge, although there are times I have had minor attacks looking at their invoices. Both the accountant and the legal counsel become your consigliores’ and are able to guide you through many of the intricacies involved in establishing and running a company as they have the breadth of knowledge and experience.
Secondly, identify key members of the team that can help take a vision and create it into a tangible business. The hardest part in recruiting is finding team members that are experienced with both wide and deep experience in their subject matter and have an entrepreneurial drive in them. These individuals want to contribute, be meaningful and wish to make a difference. They are passionate about the vision and work relentlessly to get the company to a commercial footing. At Data Dynamics, I have been fortunate to have found team members that are the brightest in the industry and have a strong passion for perfection. Once a team is identified, the most important role of the leader is to motivate his or her team, ensuring they are empowered and enabled and guide them towards a unified goal.
With a strong team, and a united vision it’s all about execution! Can you deliver what you embarked on and can you do so while navigating all the pitfalls that come along the way. Some challenges are self-created, others are market driven and then there is a thing called ‘luck’. The confluence of all of these makes 8 out of 10 start ups fail, therefore being able to address the issues as they arise and foresee potential future pitfalls is important. There is no formula or right answer to managing risk, ensure that you are taking the input from your team, lead them to a consensus and then move forward with a decision. I have made many decisions that in retrospect I thought, “why in the world would I do it that way”, but at the time they seemed like the right choices based on the data available. Some worked, some didn’t but I never hesitated to accept decisions that were flawed and took full responsibility for their results. Leadership is not about always being right, it’s about accepting when you were wrong and learning from them and ensuring the same mistakes don’t transpire again.
There are two key elements that you should continuously measure. First, is there a market need for what we are creating? If so, has the market need changed over time and have you molded to the changes? There are many factors that lead to changes in the marketplace, especially in technology, where what was once a ‘must have’ is no longer needed. It is important to ensure a quarterly review of the marketplace, ensuring that what you are creating continues to have commercial viability. Don’t get stuck in a founder’s syndrome, especially true in technology founders, where rigidity forms around their ideas and before long the marketplace has passed them by. The second key is focusing on the bottom line. Don’t chase revenue, chase profitability! I have made this mistake in the past and I can tell you having experienced it, revenue growth without contribution to the bottom line has no meaning. It is important to gain customer traction, grow across verticals and geographies, but it is more important to ensure that each dollar sold leads to a contribution towards net profit. If you can generate profitability and in turn build up your cash, you will be the master of your own destiny. It will alleviate the reliance on external investors or taking on debt, both of which come with their challenges. Having good liquidity on your balance sheet will give you an ability to get through any down turns as well as take calculated risks.
Now time to get back to my ‘day job’ and apply all that I have stated above to help make Data Dynamics a market leader in unstructured file management.