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7 Ways to be a Great Startup CEO

Many entrepreneurs have to face a lot of competition in the business world. Over thousands of new businesses are opening every day, and about a quarter fail within the first 12 months. Amid the many hurdles that a budding start-up encounter is having enough operating cash, providing exactly what consumers want, and distinguishing themselves from their competitors.

Studies have found that the top reasons why some new businesses fold are that they are building the products that the market doesn’t require. To be successful, it is essential to have a crystal ball-like-vision to look into the future. Other than this, a person also needs to be resilient and fearless, as for every ‘YES’ you are going to receive, you will also receive a hundred ‘NOs.’

Of course, many entrepreneurs already know about the perseverance needed as they have heard this mentioned numerous times for new business owners, and they know that overcoming the odds takes a lot more than a can-do attitude. In short, it is your unique qualities that will eventually make or break your business.

Below are the seven ways that make the entrepreneurs stand out and be great start up CEOs:

1. Willingness to begin from scratch

A lot of the founders of the new startups are ready to fight for the ideas that they have, but that is not all that is needed. The person also has to be ready to scrap the plans entirely from the beginning as it is just as valuable as the fight for the startup.

As shared by an expert - passion is vital, but if you are very passionate about what you do, you might also have the blinders on. It is great to have the willingness for burning the house to the ground and then starting all over again if it is necessary.

If you have a closer look at any of the companies around you, they always started off with a new idea and something that was different from the others. There are many who might have had other plans where they wanted to start something, did all the planning before they reached halfway to see that it was not worth it.

These people then took up another plan and made it reach the top today, such as Stripe, Startupr and SeatGeek. These people lost and started from scratch again, which was what made them gain a lot in life.

2. Braveness regarding frontloading intoxicating conversations

It is possible in the most successful startup for an internal conflict to arise and tear it up. Moreover, studies and research have shown that about 65% of the startups that tend to fail is only due to the friction between the co-founders.

And the only main key to prevent the blowup down the road as you build your company with a co-founder is to have clear communication right before you begin the project together.

If it was your idea for the company and someone else says yes to join with you and be a co-founder, it is vital to clear out the portions at that moment itself. Do not wait for tomorrow, since the tomorrow would never come until you get into a fight and tear the company apart. Moreover, as the time passes, it is crucial not to let the resentments fester.

It is essential to have an awkward conversation without phrasing things as an attack or getting emotional. Also, it is vital to look at the person in the eyes and let them know that you want to discuss about the situation where you are not feeling comfortable about something that is happening in public.

If the founders have waited for a very long time to have a discussion about the stakes percentage in the company, it is crucial to approach the subject with care.

Also, this does not mean that you need to send an impersonal email out of nowhere, it is better to bring it up over drinks and dinner. Have a glass of scotch, sympathize a little, and place expectations out in the open and as soon as everyone is happy, that is when you can send that formal email.

3. Enthusiastic for criticism

The entrepreneurs that are the best are always insatiably curious to know more about how to enhance their business. All-in-all, the best founders, are those who are excited and intrigued by criticism where they do not feel like objecting to each and every concern.

To explain this, let us talk about a class in the University of Texas where the professor’s students made a new food delivery app, and the professor commented on the effort saying that the food app space was already taken by many famous and well-funded successful competitors.

The best thing that was seen in this class was that even though no one could get excited about the game since it was too late, they were not stubborn and listened to that feedback so that they can prepare another new idea.

These were the students that eventually founded the Harvest Delivery app which was a KAYAK-like app that would aggregate various different Austin-based food delivery services all in just one place.

4. Brave & Confident in asking the payment from Customers

A lot of the budding entrepreneurs feel that it is vital to first give away their products and services for free so as to be recognized in the market. But if you have a service or a product that is worthwhile, the customers would willingly pay cash for it while some might even get an advance cash payment. This is great for the cash flow in the company.

A great example to prove this point is the Risk Pulse that was formerly called Stormpulse. It is a thriving weather-tracking company that assists the businesses to plan against costs and damages from any natural disasters. This business started off by giving the services for free after which the founders then ran into a trouble closing a round of funding eventually.

When the investors got back to them with some bad terms since they were not able to earn anything with the idea, they were out of money and were afraid that they had no other choice.

Now, instead of taking the deal, the owners decided to test a paywall where they had given a discount to any business that was voluntarily ready to pay for a year in advance. And the great news was that many of their customers were not only happy to pay upfront, but they also paid them the very next day.

This just teaches us that it is better to try out instead of assuming and if your product is worth the cash, you would be paid so do not get afraid of asking for it.

5. Prioritizing prototypes over capital

There is this craze around venture capital currently where everyone desires to get in the game as it is seen as a glamorous one that is a very dangerous thinking. And if you are a great founder, you know that it is healthier to focus on your ideas first, and funding second.

Let us assume that you had to start your business in your garage and you would use the investor capital to estimate your business, not to build initial prototypes. It is worth it first to test the idea and to think about how you grow a company differently when you have no money.

Many people start off on their own where they use the money from their pocket at first and even use the credit card when it is necessary. This might be a struggle at first, but then it would keep you focused and also allow you to grow the revenue later on. Due to the high focus on the company and building the revenue is how a person becomes profitable quickly, within six months.

6. Following the Customers

Customers are not just there to assist you in bypassing the fundraising game; they can also provide you with the keys to retooling a broken idea. The only thing concepts are ever unimportant to is the customer. It is hard to go awry when you are trying to delight and surprise your customer.

To share an example here, let us talk about Startupr.hk. When the founders were asked how they would stand out from their many competitors, their answer was a one-word answer that said - Love. They would work day and night researching what customers hated most about existing hosts, and scouring message boards.

And with all this, the founders want to make something that would make customers love them by correcting those dilemmas. In the end, the company became well known to be the company that gives the best services in incorporating a business in Hong Kong.

A relentless focus is needed on the customer, and without that, you miss out on the real opportunities and solutions services that all the customers are prepared to pay for.

7. Smartness & awareness of when to walk away

One of the hardest things about the startup game is knowing how to quit when you are ahead. Many great founders are the type A and relentless people who are utterly blind to what the reality holds. These people even tend to sell at a much lower number than they expected. Everyone in the world does not always get an acquisition offer, and that can be powerful when you have investors and a fiduciary obligation to generate a return on capital.

Even though it is hard to sell your business to someone since it is something you put your sweat into and worked hard for it. But it is a great decision to sell it purely based on your answer of where does this company go from here and if you are only looking out for the business to get better.

In the end if you have failed already once, it is better to learn from your failures, as you owe it to the employees and the business. The business that continues to grow also lets the CEO grow along with it. It is crucial to learn from the failures and even use others experiences to grow. These tips shared above would help you get a little help as you walk your way into the new world of startups.

This was posted in Bdaily's Members' News section by sarath .