Naeem Zafar runs companies, advises startups, heads committees, and teaches Entrepreneurship and Innovation at the Haas School of Business, University of California in Berkeley.
The most relevant advice I can give to entrepreneurs is to ask yourself why you are doing it. Is your purpose clear and does it make sense? You’ll be surprised how often this is not clear. If the answer is because you want to make a lot of money, then you’ll be likely disappointed because thathas a low probability. You become an entrepreneur because it’s fun to do, because you make the rules and you pick the teams and usually get to work with pretty smart people. Sometimes you make money, but that doesn’t happen often enough for it to be the reason to do it. So have clarity about why you want to do it.
The second advice is to do things that you are passionate about – then it won’t become a drag.
The third advice is to appreciate the difference between good and great people. Great people are not two times better than good people; they are ten times better. The cost of a great person is only 20 percent more than that of a good person. So attract great people and don’t compromise. I’ve seen that happening over and over again. If you compromise you will end up with a bunch of B-players, which will attract C-players. The A-players won’t join once they see it’s a B-player only company and you will quickly end up with a mediocre organization. So, painful as it sounds, the first 10 hires are critical. Go for great people because they will do amazing things.
The fourth advice is that whatever idea you have right now is not the right idea. All ideas are chiseled away or refined over time; not a single company goes to market with the original idea, there’s always some evolution. So the idea will change and you will need the great people mentioned before being able to adapt to that change and make the idea even better.
The fifth advice is that you need conviction. You should not move in all directions like a boat without a rudder. That might seem in contrast to my fourth advice but it isn’t. There is a difference between conviction and stubbornness; conviction comes from actual customer data. So that means you need to live and breathe in your industry as a customer. If you’re Steve Jobs maybe it works to imagine and be able to look around corners, but not all of us are. So in 90 percent of the cases you probably would need intimate customer knowledge to make the right choices. Too many people don’t do that; they base a business on an idea but don’t validate it.
How do I know, you ask? Because that’s exactly what I did when I first started.This advice I share with you is not because I am smart, or have read a lot of books – no.All the experiences and mistakes mentioned here, I have made myself. I have gone through it all, and speak from personal experience and personal agony.
Taken from Startup Best Practices , Conversations with Silicon Valley Entrepreneurs