Entrepreneurs often say that the only way to learn how to build a startup is to do it. If you don’t have prior experience in entrepreneurship, it is vital to learn to be an entrepreneur on the job. The ‘Cane Angel Network spoke to two entrepreneurs, Joanna Smith, CEO of AllHere and Sergio Furio, CEO of Creditas, about their experiences building their companies to see if we could glean some insight into this often-opaque process.
Both Furio and Smith followed a similar path: they found a problem that was affecting millions and then imagined a solution that they could provide for this problem despite the obstacles they might encounter along the way. While Furio focused on inefficiencies in the Brazilian financial markets, Smith addressed the problems in connecting students with the support they needed at the time they needed it. One would be hard pressed to imagine two problems more different than these. But while the problems were worlds apart, the attitude and enthusiasm they brought to solving them were the same. Both adopted a “whatever it takes” attitude and embraced the risks that come with starting a new venture. Both understood the value and strength in a team, and both looked at challenges and setbacks as a chance to learn rather than become discouraged. Entrepreneurs everywhere can take from this that while the problems one hopes to solve may differ, the path leading to their solution can often be the same.
Several themes emerged as Smith and Furio spoke about their experiences starting and growing their companies. First, was maintaining a bias toward action and having an experimental mindset which allows you to learn as you build. Smith talked about knowing what you don’t know - skills, target audience, market conditions, marketing, and knowledge gap – and working to understanding them.
A second theme related to growth is how to manage it. Furio says that you feel the vibes of a start-up: they are all about energy, DNA, and passion. It is critical to cultivate and maintain these traits through the scaling phase. Start-ups undergo different phases in terms of exponential growth. Furio argues that we often build exponential companies, whereby every six months, we double the size. However, as individuals we undergo linear growth. According to Furio, mastering growth is all about hiring the right people for the job, retaining them at scale, performing at scale, and constantly reinventing yourself and the start-up.
The third theme was on product development and scaling. It is important to go after exponential growth in the market by differentiating the product or service from other exiting products. Joanna Smith argues that the secret is to develop a product or service so good that people tell their friends about it. The product or service MUST solve a real-life problem affecting the target audience. Resonating with your market is key to growing with a start-up. The product or service must be easy to understand for the target audience.
But, as Furio says, it is easier to build exponential companies than exponential products given that products get exhausted at a certain point. Entrepreneurs should have an exponential mentality and be able to strategize and prioritize, analyze problems, operate at scale, and manage people to build a team that works well together. You should build a high performing team to complement their skill set. Define the purpose of the team, its role in the company, and how it benefits customers and stakeholders. Create an environment where team members can take risks to improve learning, teamwork, and collaboration.
Finally, Smith and Furio discussed a fourth theme: time management and adapting to change. Operators’ priorities must change over time. It is critical to correctly define the target markets, identify the product market position, learn how to scale on time, select problems to address, and find new growth avenues. You should also find practical ways to master the management of the Board, fundraising process, investor relations (IR), and M&A. Mastering the growth of a start-up also entails contributing to the creation of the Ecosystem within which the company operates by engaging in corporate social responsibility. However, when growing with a start-up, entrepreneurs face issues of ambiguity, chaos, and stress. It’s hard to wake up in the morning and not know what you’re going to do. Trying to get everything right and make the start-up operational is stressful. This stress often transfers to the executive team and get under the skin of employees. Considering that stress is part of the DNA, it is vital to find appropriate ways of controlling the chaos and stress.
This blog was written by Martin Mane and Jeffrey Camp. Mr. Mane is a member of the Cane Angel Network investment team and an entrepreneur pursuing his Master of Business Administration from the Miami Herbert Business School at the University of Miami, graduating in May 2023. Mr. Camp is the Managing Director of the Cane Angel Network.
