Qualities of a successful entrepreneur - Sustainability (4/11)
Translation of the fourth post of Mark Saster from the series about the quality of a successful entrepreneur (previous posts: 1 , 2 , 3 ).
__________
This is part of my new series of posts on what makes an entrepreneur successful . Originally, I published them on the VentureHacks site, one of my favorite sites for entrepreneurs. If you have not been there, then you should go.
')
The series began with a conversation about what I consider the most important quality: persistence . The following posts were devoted to practical acumen and ability to change course .
4. Sustainability . I like to say: “being an entrepreneur is really cool ... for those who have never tried it”. The reality is that entrepreneurship is loneliness, hard work, pressure from the outside and a lot of routine. To survive, you have to endure all this. Things are arranged in such a way that, no matter how hard you plow in, and even if you hit the TechCrunch50 scene, in fact, everyone doesn’t care. The next round of investment will not be easy. Getting customers to enter into contracts is harder than we would like. Journalists have just written a critical article. Competitors announced their success. You have money left for 8 weeks, and one of the employees just asked you to fill out the necessary papers so that they could get a mortgage on the house.
Every day you go back home and feel insecure, but in the morning you need to come back strong. Your employees are looking for traces of weakness and uncertainty in your eyes. They believe in you and borrow power from you. You should be able to leave an unsuccessful meeting with venture capitalists, pull up your socks and go to the next. You need to take customer care as a lesson and look for places where to improve by the next time. You need to see the weak points of your product and strengthen them. You will need to listen to all the doubters, and the world is FILLED by doubting people, and still do not give up. You need to look your workers straight in the eyes day by day and convince them not to worry. You will have to establish contacts with competitors . And do not lose the mood.
Perseverance is a constant effort in a given direction, regardless of resistance, while resistance is the ability to take blows every day and not to fall under their weight.
Sustainability is one of those qualities that gives the entrepreneur. If I, a venture capitalist, see that you had a hard time, but you do not look beaten, this is a huge plus. One of the most famous examples of sustainability in US history is Abraham Lincoln. If you do not know how many failures he had to endure before taking up the presidency, read the link .
Sir Winston Churchill’s brief statement: “Success is the ability to go from one failure to another without losing enthusiasm” (quoted by David Fishman ).
My personal story about sustainability
For the only time in my career, I actually thought that I would go bankrupt. We worked on the merger of BuildOnline with a competitor, iScraper. We had strong positions in Britain, they had in Germany and Israel (there they were working out). I have developed a good relationship with their CEO, whom I still admire (he resigned many years ago). The agreement was as follows: both sets of investors invest in a joint venture, we reduce overlapping costs and become a healthier company. This was shortly after the explosion of the dot-com bubble in early 2001.
The agreement on the terms of the transaction was reached, joint business plans were prepared, and both sets of investors in words approved the transaction. Fuh! It seems that we were going to avoid an unpleasant fate, prepared for many dotcoms.
And then I received some unpleasant phone calls. The first one was from gene. Director of iScraper, who said that they could not complete the transaction, because one of their investors, the firm Apax Partners, changed his mind, despite the agreement given in words. From the BuildOnline side, we attracted a new investor, the ETF Group (Switzerland / New York). My contact in the ETF told me that they called Apax from them and said that they wanted to invest in iScraper on their own, without merging, and that the ETF should support their deal, not ours. I was angry because the ETF was in fact thanks to us. With the ethics of some investors (or with its absence) everything became clear.
So Apax went its own way and invested in iScraper without us. Their calculation was that we go bankrupt and they will pick up our assets for that. There was money left on our bank account for 3 weeks, so the situation was awful. I called the top management of BuildOnline and arranged a general gathering in the nearest pub (well, we were in England), where I told the news. We began to figure out action plans: what to do to properly liquidate the company. For this case we spent a couple of hours (and drank a couple of pints of beer).
And then my leading investor called me (by coincidence, it was GRP Partners, where I myself am now a partner), and I was convinced not to lose confidence. They said that they are not going to endure these Apax antics and that they still believe in us. I dialed the ETF Group, where I was told that they would not refuse us, provided that we made changes to the plan that would suit them. Then I called Goldman Sachs (this is another investor), where in response I heard literally the following: “If these m ... ki from Apax think that they will get away with it, then they should not do it”.
Here began the rally. I flew on a plane to New York for a day to meet with ETF's investment director. I presented a modified plan, which my team and I prepared in 24 hours. Then from London I went to Los Angeles to meet with GRP partners. The flight lasted 12 hours, I jumped off the plane, took a shower at the hotel and - at a presentation to their office. In the morning I flew home. We are committed to focusing on costs, product introduction and the achievement of planned targets. We pledged to get by with far less capital than originally intended. Their agreement was obtained, and our existing investors supported us financially for a time until a new stage of financing is completed. The day we reduced the staff from 92 people to 38, and immediately after - to 33 (yes, perhaps it was worth it to do it all at once).
The good news was that Apax gave iScraper only $ 1.5 million to see what came of it. The money quickly ran out, and after a few months it went bankrupt. We hired their management staff in Germany without spending a cent. We studied the signed contracts, flew to Germany and met with all their customers. We agreed to transfer customer data to us for free, in exchange for concluding a long-term contract. In two years, deals worth 1.2 million dollars were concluded, which made our company profitable in Germany from the very first day. And with those customers who did not agree on a long-term contract, we did not sign anything. And for all this we did not pay the money, there was no weakening of positions (the Israeli branch of iScraper closed, their assets in the UK took control of another competitor).
That was our first year of sales. It was the worst year in the history of software sales for enterprises, and we also sold software as a service (SaaS) , which was still considered experimental in the minds of customers. Nevertheless, we collected $ 2.1 million of regular contributions, of which 600 thousand came from Germany. The following year, revenues amounted to $ 5.9 million, of which Germany gave 1.8 million. We were on the way to building a real business.
I felt my own resilience. Apart from a couple of hours in the pub one day, I never let my stress get out. And it did not give my team the opportunity to absorb the particles of the uncertainty that I encountered every day.
Such stories are not uncommon. Ask any entrepreneur experiencing the recent recession that began in September 2008. The best entrepreneurs have a survival instinct.
_________
Previous translations of this series:
1. Perseverance .
2. Practical grip .
3. Ability to change course .
__________
This is part of my new series of posts on what makes an entrepreneur successful . Originally, I published them on the VentureHacks site, one of my favorite sites for entrepreneurs. If you have not been there, then you should go.
')
The series began with a conversation about what I consider the most important quality: persistence . The following posts were devoted to practical acumen and ability to change course .
4. Sustainability . I like to say: “being an entrepreneur is really cool ... for those who have never tried it”. The reality is that entrepreneurship is loneliness, hard work, pressure from the outside and a lot of routine. To survive, you have to endure all this. Things are arranged in such a way that, no matter how hard you plow in, and even if you hit the TechCrunch50 scene, in fact, everyone doesn’t care. The next round of investment will not be easy. Getting customers to enter into contracts is harder than we would like. Journalists have just written a critical article. Competitors announced their success. You have money left for 8 weeks, and one of the employees just asked you to fill out the necessary papers so that they could get a mortgage on the house.
Every day you go back home and feel insecure, but in the morning you need to come back strong. Your employees are looking for traces of weakness and uncertainty in your eyes. They believe in you and borrow power from you. You should be able to leave an unsuccessful meeting with venture capitalists, pull up your socks and go to the next. You need to take customer care as a lesson and look for places where to improve by the next time. You need to see the weak points of your product and strengthen them. You will need to listen to all the doubters, and the world is FILLED by doubting people, and still do not give up. You need to look your workers straight in the eyes day by day and convince them not to worry. You will have to establish contacts with competitors . And do not lose the mood.
Perseverance is a constant effort in a given direction, regardless of resistance, while resistance is the ability to take blows every day and not to fall under their weight.
Sustainability is one of those qualities that gives the entrepreneur. If I, a venture capitalist, see that you had a hard time, but you do not look beaten, this is a huge plus. One of the most famous examples of sustainability in US history is Abraham Lincoln. If you do not know how many failures he had to endure before taking up the presidency, read the link .
Sir Winston Churchill’s brief statement: “Success is the ability to go from one failure to another without losing enthusiasm” (quoted by David Fishman ).
My personal story about sustainability
For the only time in my career, I actually thought that I would go bankrupt. We worked on the merger of BuildOnline with a competitor, iScraper. We had strong positions in Britain, they had in Germany and Israel (there they were working out). I have developed a good relationship with their CEO, whom I still admire (he resigned many years ago). The agreement was as follows: both sets of investors invest in a joint venture, we reduce overlapping costs and become a healthier company. This was shortly after the explosion of the dot-com bubble in early 2001.
The agreement on the terms of the transaction was reached, joint business plans were prepared, and both sets of investors in words approved the transaction. Fuh! It seems that we were going to avoid an unpleasant fate, prepared for many dotcoms.
And then I received some unpleasant phone calls. The first one was from gene. Director of iScraper, who said that they could not complete the transaction, because one of their investors, the firm Apax Partners, changed his mind, despite the agreement given in words. From the BuildOnline side, we attracted a new investor, the ETF Group (Switzerland / New York). My contact in the ETF told me that they called Apax from them and said that they wanted to invest in iScraper on their own, without merging, and that the ETF should support their deal, not ours. I was angry because the ETF was in fact thanks to us. With the ethics of some investors (or with its absence) everything became clear.
So Apax went its own way and invested in iScraper without us. Their calculation was that we go bankrupt and they will pick up our assets for that. There was money left on our bank account for 3 weeks, so the situation was awful. I called the top management of BuildOnline and arranged a general gathering in the nearest pub (well, we were in England), where I told the news. We began to figure out action plans: what to do to properly liquidate the company. For this case we spent a couple of hours (and drank a couple of pints of beer).
And then my leading investor called me (by coincidence, it was GRP Partners, where I myself am now a partner), and I was convinced not to lose confidence. They said that they are not going to endure these Apax antics and that they still believe in us. I dialed the ETF Group, where I was told that they would not refuse us, provided that we made changes to the plan that would suit them. Then I called Goldman Sachs (this is another investor), where in response I heard literally the following: “If these m ... ki from Apax think that they will get away with it, then they should not do it”.
Here began the rally. I flew on a plane to New York for a day to meet with ETF's investment director. I presented a modified plan, which my team and I prepared in 24 hours. Then from London I went to Los Angeles to meet with GRP partners. The flight lasted 12 hours, I jumped off the plane, took a shower at the hotel and - at a presentation to their office. In the morning I flew home. We are committed to focusing on costs, product introduction and the achievement of planned targets. We pledged to get by with far less capital than originally intended. Their agreement was obtained, and our existing investors supported us financially for a time until a new stage of financing is completed. The day we reduced the staff from 92 people to 38, and immediately after - to 33 (yes, perhaps it was worth it to do it all at once).
The good news was that Apax gave iScraper only $ 1.5 million to see what came of it. The money quickly ran out, and after a few months it went bankrupt. We hired their management staff in Germany without spending a cent. We studied the signed contracts, flew to Germany and met with all their customers. We agreed to transfer customer data to us for free, in exchange for concluding a long-term contract. In two years, deals worth 1.2 million dollars were concluded, which made our company profitable in Germany from the very first day. And with those customers who did not agree on a long-term contract, we did not sign anything. And for all this we did not pay the money, there was no weakening of positions (the Israeli branch of iScraper closed, their assets in the UK took control of another competitor).
That was our first year of sales. It was the worst year in the history of software sales for enterprises, and we also sold software as a service (SaaS) , which was still considered experimental in the minds of customers. Nevertheless, we collected $ 2.1 million of regular contributions, of which 600 thousand came from Germany. The following year, revenues amounted to $ 5.9 million, of which Germany gave 1.8 million. We were on the way to building a real business.
I felt my own resilience. Apart from a couple of hours in the pub one day, I never let my stress get out. And it did not give my team the opportunity to absorb the particles of the uncertainty that I encountered every day.
Such stories are not uncommon. Ask any entrepreneur experiencing the recent recession that began in September 2008. The best entrepreneurs have a survival instinct.
_________
Previous translations of this series:
1. Perseverance .
2. Practical grip .
3. Ability to change course .
Source: https://habr.com/ru/post/83315/
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