Learnings from a Startup

**Confidential**

Being part of a Startup is not an easy task. It requires full disposition, a lot of energy, flexibility, vision, getting your hands dirty with different paints, oils and sauces, using different hats depending on the situation, but most of all, being part of a startup requires powerful purpose and passion. I am not the same person that I was before joining The Next 150. I’ve suffered, cried, sweat, made terrible mistakes but most importantly, I learned, and I learned a lot.

The following confidential learnings ;) represent a summary of my personal views and opinions regarding some of business and life topics that I consider to be important based on my experience, the goal is to share them in case they could come in handy to other entrepreneurs. This does not imply that I am an expert in the startup universe, I’m actually far away from being that, so you should read this with a pinch of salt, use what works for you and discard what doesn’t.

I divided the list into two sections: Corporate learnings (1-16) and Personal Learnings (17-20)

1. Clear mission. Define an intertemporal workplan with milestones, goals and a North Star to guide the path. I recommend structuring a question instead of a statement about what your endeavor aims to solve. Purpose and passion will be key ingredients, so make sure that your team’s values are aligned with your North Star. Be open minded and flexible but don’t turn the ship without a clear sky.
2. TAM, SAM, SOM. Clients, Market Size and Penetration. Who is your potential buyer persona/company? How are you adding value to their mission? What problem are you solving for them? Answering these questions will help you define your market and approach when hitting ground. Look for fast-growing (10-20% CAGR), big size (+1B USD), fragmented markets (less than 30% concentration in the top players) and you will already have increased your success probability.
3. Financial Model. The FM will show what you feed it to. Be as precise as possible, use real world data, be pessimistic, assume the worst-case scenario is going to happen, this will be a lifeline if the situation turns against you. The FM is a helpful tool to guide financial decisions, giving you the necessary information to pull specific levers, manage a situation and control it.
4. Fund raising. From friends and family to IPO is easier said than done. Accelerators and incubators are a great place to start your fundraising efforts. Partnering up with companies and people that already know the way and what investors are looking for will save you valuable time and money. Learn from experts and build up from there. Key concepts to focus on are risks, proof of concept, technology readiness level and the project’s scalability.
5. Budget. How much money and for what. Transparency and clarity are key elements for a successful periodic deployment of capital and the appropriate sharing of information for investors. Organize periodic meetings to review the budget’s execution and adjust if necessary. Keep a clean and organized folder with meeting notes containing opinions and decisions, that participants can agree on and sign.
6. Cash is King. Sell, sell, sell. Having a healthy cash flow will allow you to be less dependent on money from investors and will also increase your company’s book value. The sooner you can start generating revenue for the company, the easier it will be for day-to-day operations, get financing opportunities at better terms and prove your model. I’ll dive into Marketing, Prospecting and Relationships after.
7. Manage expectations. Fight off the traditional approach of short-term returns and favor long-term results with short and mid-term milestones. All stakeholders including investors, potential clients and partners should not only accept a long-term strategy, but they should also support it.
8. Equity. Investors, founders, management team and early employees play an important role in a project’s success. Equity compensations packages should be clearly presented and in place for the people that are willing to give the extra mile. This will not only generate a sense of ownership and greater effort from associates/partners/employees creating a scenario where interests are aligned, but it will also help keep key people on board in the long term.
9. Accountability. Who does what and to what extent. Because in a startup any person or team can be required to do any activity, it is very important to clearly assign tasks and general activities along with the expected results within a timeline. Request delivery dates and hold people accountable for the results.
10. Internal communication. Watching the North Star together. Sharing information internally on your company’s strategy, situation, next steps, potential deals, achievements, partnerships, mistakes, problems, challenges, will gain buy in from employees because it will make them feel part of the mission, responsible for achievements and accountable for failures.
11. Policies and processes. This is by no means my strength, but I learned the hard way that clear policies and structured processes make a huge difference when something doesn’t go your way, and you are required to give explanations. But more importantly, P&P will make up for more equitable decision making. It will also show investors and potential partners that there is an organized way to do things and that if P&P are followed correctly, positive results can be expected. Please don’t let P&P delay the commercial deals or the execution of projects. P&P are necessary but too much of it can hinder development.
12. Data room or nightmare? I’m also pretty weak when it comes to organization, so I learned this the hard way. Creating an organized space where you can easily find all the company’s relevant documents will save you a lot of time when you need share policies, financials, ownership, contracts, processes, etc. This will also be off great value once you get into more serious conversations with potential investors, clients and partners. It will also have an impact on your company’s image to external stakeholders. If it will be positive or not will be on your hands.
13. Marketing. Whether it’s a B2B or B2C marketing strategy, the message you want to deliver needs to be clearly defined and aligned with the objective of the strategy. For startups, a detailed, specific, targeted, and clear marketing campaign is required to achieve higher return rates. There is also an important data analysis element to consider here, and I learned this from finance-marketing expert Luisa Trillo. Use the data that your campaigns generate to measure their productivity and make changes accordingly.
14. Prospecting. Outbound Sales is one of the most important aspects in startups and most businesses in growth mode. Having a method to generate leads, personalize the reach out efforts, follow up, keep track of the process, and automate it, will generate more transactions and make your life easier.
15. Relationships. Cherish and nourish relationships, build up trust being trustworthy. Organizing non-office related activities with stakeholders will allow you to build a stronger and more open relationship, where mutual trust can be built. More is not necessarily better in this case, not every person or company you meet will add value to your specific goals, so don’t spend too much time in meetings or with people that won’t take you closer to your objective.
16. Supply chain. Logistics, which encompasses all the movements needed to move something from the source to its end use can make or break a project. There are so many variables that need to be considered including transport schedules, routes, vehicle types, back-to-back loads, product characteristics like density and humidity, handling methods like bulk, packaged goods, palleted merchandise, goods in supersacks, that an experienced professional should be managing, or at least advising the team or person in charge of logistics.
17. Ask for more. Always, in work and in life. In general, people (me included) fear requesting additional elements in any human interaction because our brain is wired to avoid rejection, based on thousands of years’ experience during the hunter-gatherer era, where rejection risked getting expelled from a group, which basically meant certain death. This survival mechanism isn’t true in modern society because life is very different compared with the Stone Age’s social structure. Today individuals can survive without core groups. You never know what you might get just by asking.
18. Life-work balance. Don’t be all about business. Being part of a startup means that you won’t be working the traditional 9 to 6 shifts, and most probably won’t be able to go home forget about work for a while and relax until next morning. And even though a startup requires large amounts of time and energy from employees, you must make time for your partner, family, friends, yourself to strengthen other core life’s pillars and live a happy and fulfilling life.
19. Speak your mind. If something does not add up, raise your hand, if something seems wrong and everyone is fine with it, challenge the status quo, in front of injustice, argument and look for change, if you have a solution or found a better way to do things, propose. People will be grateful when they know that they can count on your honest perspective. If you decide to remain silent, you can be sure that regret will eventually be knocking on your door.
20. Always keep learning. As the saying goes: Doctors are students for life. I think that everybody should embrace this idea and keep learning throughout our careers and our life. Improving our current capacity, perfecting skills and learning new ones, adapting to new technology, will always put us in a stronger position.

Of course, there are many additional elements to be aware of in the construction of a startup. It would take a whole book to address every single subject in detail. As I mentioned earlier, these are just some of the elements where I was more involved in and where I feel knowledgeable enough to give an opinion about.

What other elements do you consider important in a company’s startup phase?