Pitfalls of a startup entrepreneur and a great speech

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The question I’ve asked myself for years, and I assume many entrepreneurs ask themselves that question, is “am I doing it right?”. And when asking myself that question it’s not only about my business or career but also my personal life, my joy, how I interact with family and friends and how they see me. The question applies to how I do business, how I work and how I balance it with my social life, which should be more than Facebook and Twitter. Well, I’ve been an entrepreneur for 16 years now and it took me most of that time to come to the conclusion that I’ve been doing it WRONG and fell into many pitfalls!

My second startup, which was the first in which I owned 100% of the shares, was a web development company that developed e-commerce platforms for SMB. I started this company just after the Web 1.0 bubble bursted and I believed that was a great moment to start because it caused a lot of shakeouts leaving lots of companies looking for new suppliers and of course I thought I could do better. Well, in retrospect I think there was nothing wrong with my ideas but I lacked executing properly. Somehow I convinced myself that I was the only one able of executing just about everything and so I did, I lacked trust in other people’s capabilities and was a complete control freak.

Result of this mindset was working 10-12 hours per day including the weekends, neglecting my family and friends. It wasn’t something I wasn’t aware of but I convinced myself, and tried to convince my wife, that it was an investment which soon would lead to a perfect balanced situation. “As soon as we finished this all will become better” followed by “Well, we’ve finished that but now we’ve still got to implement this” but things didn’t change.

I definitely knew better but somehow it seemed like I got trapped in a situation where I thought I couldn’t get out off and it took some major wake-up calls to change this. So what did I do wrong?

Stop doing it yourself and start managing the company!

Of course years of hard but mostly inefficient work had led to some assets and small successes and my gem was Tokobagus. We’re now in the end of 2008 and Tokobagus had some nice traction and had become one of the major players in the online classified market in Indonesia and had attracted the attention of two major investors. We (my business partner and I) made a deal with one of them and a new adventure started for me in Indonesia.

So, one of the first things our VC told us was to stop doing everything ourselves and start managing our company. Now I’m a pretty stubborn guy that doesn’t always handle advice or criticism well so I threw in a lot of “Yeah… but” kind of responses but on average “yeah… buts” aren’t really popular with VC’s. You can say a lot of (bad) things about VC, but on average they do know how to manage a company, don’t often take no for an answer and they had a pretty simple solution, they just overloaded us with work and deadlines creating a bend or burst situation. Well, bust wasn’t an option so we started building a team and applying the real that first we needed to make sure that others are working before doing “hands-on” things ourselves and looking in Alexa to our traffic development you can pretty much estimate the time in which this occurred. Currently we’re blessed with a great team with motivated and skilled people, each with their own skills changing Tokobagus from a startup with potential into a market leader.

So, I can hear startup entrepreneurs already saying: “Yeah, but you need money to hire staff and I’m just a small startup!” Well, I understand and I’ve been in the same situation but depending on how big your ambitions are you then need to put some deadlines on reaching a point at which you are able to hire staff preventing from getting stuck in a situation where you’re working for your company where it should be the other way around.

What’s your motivation?

I always did things that I really like but maybe not always for the right reasons. Money and recognition seem nice but by itself they won’t make you happy. This may sound snobby to lots of people but I now really believe that this is true. I’ve seen people around me with more an more stress the more money they make or the more “famous” they’ve become. The main motivation of what you do in life should be that you enjoy doing it and it makes you happy and when so you’ll see that everything becomes so much more easy. In my opinion a hunt for money is a never ending one because you’ll probably end-up wanting more because nothing is more relative than that.

The Pareto Principle

Vilfredo Pareto, an Italian economist, “discovered” this principle in 1897 when he observed that 80 percent of the land in England (and every country he subsequently studied) was owned by 20 percent of the population. Pareto’s theory of predictable imbalance has since been applied to almost every aspect of modern life. Given a chance, it can make a difference in yours. (source AAFP.org)

I’ve read and thought about this principle a lot in the past but usually dismissed it as being untrue or a utopia but luckily one is never too old to learn and I now really believe in this principle. Taking your wife out for a romantic dinner, reading your kid a bedtime story or just supporting a friend in trouble by a phone call. These are all really not time consuming activities but can do so much for your personal life and your relations.

Find out what your 20% is that produces 80% of your output and focus on that!

Business wise, take a good look at the work you do and the actual output, or better, let someone else like an experienced business coach do that and you’ll see that 20% of your time accounts for 80% of the output. For me its coaching our team which takes less and less time because basically they most of the time know what to do and do it better then me. So, find out what your 20% is that accounts for 80% of your output and focus on that!

Getting back to what motivated me to do the things I did, I guess it definitely had to do with striving for a situation in which I’m not vulnerable, translated in financial independence. I picked up the speech below by Brené Brown from Fabrice Grinda’s blog, the founder of OLX, which for me is very inspiring and recognizable (I too suffer from the fatality syndrom). I hope you’ll watch it, understand the link with this post and hopefully helps you in life and your start-up. Let me know your thoughts!