David Drake WSJ: Six Mistakes I’ve Learned Through Failure
I have failed hundreds of times with startups. From coupon cutting to club promoting, from restaurant services to technology companies, from venture-capital funds to hedge funds, you name it and I can tell you where I failed.
But I have not stopped trying. In fact, I use the failures I've faced in the past 30 years to help me succeed today. Aside from investing in startups, I founded the Soho Loft Media Group, which is engaged in and runs more than 200 financial conferences annually. Running that business is a lot easier thanks to the lessons I've learned from past failures. Here's some advice I've picked up along the way.
Convey your vision clearly. Always write an executive summary so you can convey your vision in writing. The major purpose of an executive summary is to provide a snapshot of your business -- investors should be able to get useful information about your startup by glancing through it without having to read your entire business plan. A well-written summary that outlines your company’s major achievements and growth prospects is crucial to attract funding.
Have smarter people around you. It’s important that your team is made up of those who can assist you in achieving your dreams. However, it is more important to be open to ideas and suggestions from others if you are to benefit from having them on board. Allowing contributions from your team that are in line with the vision of your organization will speed up the growth of your business. Create a board of advisers that you can draw wisdom from on a consistent basis. An important (but mostly ignored) part of surrounding yourself with smart people is to have a solid board of advisers. You need their knowledge and experience to help you create the necessary structures that will help translate your vision to reality. Spending a few hours in discussion with them every week will benefit you in the long run.
Create a corporate profile for your business. If your goal is to compete on the global scene, you need to develop your business into a global brand. This begins by creating a corporate image for your startup. A way to fast track this is to leverage social media. Start a newsletter once a month that people can subscribe to, and grow its readership gradually by offering quality content online.
Understand how to raise funds. Make sure you know exactly how you can raise funds for your startup. This is crucial because while you can raise funds from a broad spectrum of investor groups today, it is also important to know who best fits the funding needs of your business at any point in time. Venture capitalists, angels investors and "friends, family and fools" are the common sources of funding for startups today. However, it takes an understanding of the pros and cons of each source to secure the right funding for your business. Do your research.
Don't keep talking to the people who cut you down. Share things with the positive people in your life. Be fearlessly curious -- it's liberating.
Mr. Drake, an investor, is the founder of The Soho Loft, a financial media company in New York.