There is a book from Fernando Trias de Bes that is focus on the key failures factors in entrepreneurs, it is called: “El libro negro del emprendedor”. I really recommend you to take a look to it.
In this post i would like to share with you all what are the most important keys i extracted from this book to apply them to Newen, the company i am part of.
He defines 14 most common factors of failure based on his experience and interviews with relevant entrepreneurs. As a resume:
1. The idea is not a good reason to start up a business. You need a motivation behind based on your attitude rather than your idea.
2. Being entrepreneur is not having a company it’s being able to live in the uncertainty, it’s about character.
3. Not having resilience. Always we are going to do a huge error and we need to be resilient to overcome it.
4. Partners are the most expensive resource we could have. It’s one of the most common failure factors.
5. If we are going to have partners we need to choose them following relevant criteria for us.
6. Equal benefits when not everyone gives the same value. We need to define the conditions at first.
7. Lack of trust and comunication are the main problems with partners.
8. A good idea doesn’t mean success. It’s just one more factor, not decisive.
9. The sector is fundamental. We need to focus on sectors we like o know about.
10. Choosing an unattractive sector implies a lot related to funding and financing access. Choose an attractive one.
11. Need to have the support of family and personal environment.
12. Misunderstand what is going to be the impact that is going to have your business in your personal and professional life.
13. The business model is key. We need to make it sustainable and with benefits the sooner the better.
14. If you are not the indicate to manage your business, stop doing it. That’s the difference between entrepreneur and businessmen.
Related to my company Newen, we are in a phase of testing new ideas, new business models and developing our team. As you can see, there is a lot to do. As a result, i will explain why i choose this key factors to take into account:
– Budgeting: We are not taking into account our work value. We need to make our business sustainable the sooner the better.
– It’s not about sales, It’s about benefits: I am realizing how important is to have a good % of benefits in our products. More sales implies more management problems, if we take just a short benefit from it it’s not profitable for us. I think it’s better to focus on less clients but earning more benefits from them and learning to create more value with those “early adopters”.
– Motivation: Our motivation is not our idea, we need to have a common goal in mind if we want to succeed as a team.
– A good idea doesn’t mean success. As you can see, Gross speaks about the most relevant factors of successs based on his incubator database and they are:
1. Timing: It’s super important. Airbnb, in a non crisis situation, may not succeed. It’s not just about economical aspects, it’s about infraestructures, environment, etc.
2. Team / Execution: The team is a key. You could have a bad idea but with a good team you could pivote and create a good business (execution).
3. Idea “truth” outlier: the idea has importance but not as much as we usually think.
4. Business Model: it’s important to design a good business model and pivote it following the time. But you always can change it.
5. Funding: As you see, the money isn’t a key to success. Having funding doesn’t mean to have a 100% of posibilities to succeed.
- The importance of the sector: it is important to start focusing on a group of sectors we like or we know about.
What do you think? I would love to receive tips, comments, feedbacks, etc. I just love business and i really like learning by doing so i will take notes of every contribution!