Over the past decade, I’ve been fortunate to build several multimillion-dollar businesses, some of which I’ve since exited, and others I continue to grow organically and through acquisition. The end of this decade has me reflecting about the experiences of this past 10 years and what I wish I knew when I started in business in 2010.
Creating real success
I’m in the fortunate position of having started my first business before Instagram, and before Facebook was what it is today. I’m very grateful I didn’t have the pressure of images, stories, videos and posts from self-described, unverified entrepreneurs telling me what I needed to do to be successful. I was just focused on every day — getting up out of bed, rolling up my sleeves and getting to work, and the success came.
We’re told by society that we must strive to be the biggest and the best, but I disagree. This ongoing quest to be ‘better than’ motivates the wrong kind of behaviour. It can foster a preoccupation with crafting a particular image at the expense of cultivating the reality. The goal for founders starting out should be to sustainably build a successful business. It’s essential to know why your business exists and to be laser-like focused on achieving that.
If your goal is to build a complex constellation of satellites, your activity should be focused on raising money for those satellites. Delivering a keynote speech or spending all your time on social media will have little return. I’m not saying they’re not worthwhile pursuits once you’ve proven your business model, but initially, the core foundation and principles of your business, not its image, must be the focus.
The reward of every day
In the beginning of the startup journey, the milestone of an exit and the windfall that would come with it, can be one of the driving factors behind building a business. I really enjoyed building a business, but when I was stressed, exhausted and around-the-clock-busy, the thought of the finish line sometimes motivated me to keep going. However, since exiting a few businesses, I’ve learned the real satisfaction, for me at least, lies in driving a business to its full potential.
Money is useful only because of what it allows you to do; the more liquidity you have, the easier and faster you can make decisions. The benefit isn’t in the money or even what it buys, but in the energy and time it frees up to allow you to focus on what you want to get out of life — and your business. For me, the motivating force is not the pay day, but the satisfaction that comes from driving a successful business with great people to do things no one has ever achieved before.
Know your numbers
Before starting out in business I worked as a commercial lawyer for nine months and was involved in commercial transactions. During my time studying law, I took a lot of the finance electives. I didn’t realise it at the time, but this commercial background stood me in really good stead in business. I’m grateful that I understand cash flow, break-even points and how to read a balance sheet.
As an advisor and investor now, I see too many founders reaching $1 million or $2 million in revenue but they don’t understand their profit and loss, or their cash flow position. When building a business, there is an infinite number of activities you can spend your money on but very few of these actually boost the bottom line. For each expenditure, I ask myself: ‘Does this activity improve profitability, efficiency or client experience?’ If the answer is no, then I don’t outlay the spend in time or money. Does upgrading to a fancy, shiny new office at this growth stage tick one of those boxes? Maybe it improves the client experience enough to justify the spend, but probably not. Sure, your staff need to be comfortable, but a luxurious environment doesn’t pay the bills.
Lean into strengths
At the beginning of my business journey, I believed I had a natural affinity for sales. As I’ve matured over the last decade, I’ve realised it’s actually the entire commercial side of business — building relationships and brokering mutually beneficial negotiations — that I have a passion and a skill set for.
With this self-awareness comes an acceptance. I’ve learned I’m never going to be an expert at everything in a business and I’m also never going to enjoy everything about running a business, and that’s okay! So often we as business owners insist on wearing too many hats, keeping too close to too many areas. Yes, it’s critical to learn your business from the ground up, but once you know it and have traction, then you can bring in people who are specialists in the relevant areas.
This isn’t an excuse to be ignorant of any particular area — it is still your business after all and every single aspect is still your responsibility. But rather than waste time and energy trying to become someone you’re not, it makes more sense to focus on your strengths and leverage them for greater results.
Just as it’s important to delegate the responsibilities not just to the right people, I’ve found it’s also crucial to bring them on at the right time. Profit is essential for basic financial survival, and as a good rule of thumb, the right time for a new hire is when the business’ profits are ten times their salary.
The single biggest takeaway from my experience so far is that continuous learning is a business imperative, and I’m looking forward to seeing what lessons comes from this the next decade.