entrepreneur

Traction Trumps Everything

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Customer Traction

As an entrepreneur, chances are you will look for funding from investors at some point while growing your startup.

Pitching your company to investors can be a humbling experience for the entrepreneur. As a founder, you are passionate about your product and believe in the future growth potential for your company. Investors however, are skeptical and look to poke holes in the business.

You can’t blame an investor for not being interested in your business. There are many reasons why an investor may choose to pass on your company. The thing that is frustrating is when you get feedback from an investor that makes it obvious that they don’t understand your business.

I’m ok with an investor saying no, but at least know what you’re saying no to. Maybe it’s the entrepreneur’s fault for not being clear enough about how their company solves a critical problem in the market. Or maybe it’s the fault of the investor for not taking the time to understand the business. What I’ve learned is that it doesn’t matter.

There is only one thing that matters and that is traction.

If you have paying customers, then obviously they find value in your product. Customer traction trumps everything! It’s hard to argue with your paying customers.

The more customers, the more credibility your company has and the less you have to explain to a potential investor. At some point, if the investor still doesn’t understand your business even after you have shown legitimate traction, then you probably don’t want to be working with that investor anyway and you should look at it as them doing you a favor for not wasting any more of your time.

The Entrepreneur Mind – my interview with Kevin Johnson

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Kevin and team

I recently read the book, The Entrepreneur Mind. The book is made up of 100 short stories of lessons learned by Kevin Johnson’s experience starting multiple companies, being an investor, and an entrepreneur. One of the chapters in the book is focused on People, which of course is of interest to me because of the focus that my company, Cooleaf has on building strong company cultures.

I decided to send a tweet to Kevin since he is local to Atlanta to see if he would be willing to meet. The cool thing was that within minutes he responded and was Tweet to Kevinopen to doing an interview. Here is a short summary of the interview I did with Kevin.

“People make the world go round. It’s all about people and relationships. Entrepreneurs who are most comfortable working with people will be most successful.”

Lesson #42 – Talent trumps seniority

In the book, Kevin shares a story about being a young developer for a company where there was what he called a ‘seniority complex’. In the story, his manager gave him a project to complete that had been dragging along for months in the company. Kevin spent the weekend knocking it out and presented the completed work the next Monday. Kevin was shocked to see his manager being yelled at for getting the project completed. Basically, by Kevin getting the work done so quickly, it made others look bad, especially since he was so young and a junior employee.

Effective organizations learn to remove the seniority complex and focus on performance above all else.

Lesson #44- People do not work for money

 

One of the stories Kevin wrote about in his book is how he hired people at high salaries for his first company. He found later that interns were just as productive and were willing to work for free. Why? Because they wanted the prestige of writing for a cool magazine (he published a college magazine for his first company). Kevin realized that people were willing to work for something they were truly passionate about.

I asked Kevin how you find people who have that internal passion and are willing to invest into your company. He said to always go with your gut but to also have as many people interview the person as possible. Also let the candidate you are interviewing come in and meet anyone from your company they would like to speak with to get the best understanding of your company’s culture.

Lesson #50 – Fire unproductive people

Making the hard decisions separates true leaders from the rest. I’ve personally experienced how hard it can be to let someone go that you know are not the right fit. In Kevin’s book he emphasizes that productive entrepreneurs are those who are decisive. He says that many entrepreneurs know the right decision but put it off for months before finally making the tough call. This lowers productivity and with a small organization, can be a drain on the entire culture.

When I interviewed Kevin about this point, he mentioned two ideas to think about when making tough decisions.

 

1. For those who have kids, you can be nice until you think about how the unproductive person who you are delaying letting go is getting in the way of your kid’s college fund. This will get you motivated to make some decisions when you make it personal. Regardless, it should be personal. After all, it’s your company.

2. One way to soften the blow for the employee being let go is to help them find a new role afterwards. Kevin says that if you kick someone in the teeth, at least you can help them find a dentist.

The Entrepreneur Mind

Don’t Ever Let An Entrepreneur Complain

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Being an entrepreneur is hard. Very hard. There have been days when my confidence was shaken and I questioned why I was pouring my heart, sweat, and money into a business that I didn’t know the future of.

However, when I take a step back and think about how I’m investing my time, there is nothing else I’d rather be doing. There is something very special about creating things that have never been created before. Being an entrepreneur means that you absolutely stick your neck out by taking risks, but having the opportunity to blaze your own trail is something rare that a person may only have a few times in their life.

This Thanksgiving I thought about where I sit in my career and the decisions I’ve made. I will be the first to tell you that I would do a lot of things different, but that is based on lessons learned as an entrepreneur. I’ve learned so much about how to start and grow a company. I can honestly tell you that I love what I do and feel that I have an opportunity to change the world which makes me feel that every day matters.

This is the special feeling that I think only an entrepreneur has, which is why I think that you should remind any complaining entrepreneur that they hold a great opportunity in their hands and that is something special.