While startups and CEOs might be glamorized in TV shows and the media, the honest truth is that, “It often sucks to be an entrepreneur,” Matt Pittinsky, CEO Parchment said. When you own a business, you have to deal with competitors, raising money, putting out fires, hiring and firing people, try to have a work/life balance and staying optimistic he shared.
Pittinsky was the keynote speaker at Venture Madness and shared insight, advice and personal stories about truly understanding your business, and yourself. Here’s his top 10 lessons learned building a business.
1) Know (Love) Thy Industry
First and foremost, you have to know, love and be passionate about your industry. “I care a lot about education and I am super passionate about education,” he said. This passion has fueled him to find solutions for education with Blackboard and Parchment, an eTranscript service. “You’re not going to figure out the solution to a big problem unless you’ve experienced the problem,” he said. Which leads us to his next point…
2) Identify a Simple Problem in a big Market
“The best companies start by solving a very simple problem in a big market,” he said. Using Parchment as an example, they wanted to turn paper transcripts into electronic ones – simple right – but solves a problem in the educational market.
3) Steal the chairs
“The most expensive part of starting an office are the chairs,” Pittinsky said, so why spend a ton of excess money when you don’t need to. He stressed the importance of frugality when building a business and at times you need to be comfortable about living on the edge to get ahead.
4) Master the elevator pitch
Raising money is the hardest thing to do and when you pitch investors, drilling your message down to an emotional, core level is important, he said. During this process he encourages startups to be more thoughtful and self-critical when developing their message as you will have professional people question and scrutinize every decision.
5) Egg the chicken (on-ramp)
See if you’ve heard this before…“I can’t raise capital until [we hit] a couple of milestones, but [we] can’t reach the milestone until [we] raise capital.” Pittinsky stressed that reaching those milestones is about finding a way regardless of all your limitations and weaknesses. “What is the minimal viable thing that you could actually do that could drive revenue?” he said.
6) Talk to everyone – including your competitors
“It’s all about execution,” Pittinksy said. “You have to tell everyone, because you never know who can help you.”
7) Fire yourself or pick a good co-founder
It’s important to know your strengths and weaknesses when building your business, and know when to get out-of-the-way. Pittinsky said, “You must be willing to fire yourself or find a good co-founder. It is a team sport. If you don’t have a co-founder, then find a good operator to help build your business.
8 and 9) Pick a clear business model and be a principled opportunist
Create the art of the possible and a clear message about your direction.
10) Recognize Hill Takers vs Civil Engineers
In thinking about your startup team there are two main categories of people: those who take the hill and conquer a problem, and those who want to build the process (civil engineers). Figure out what type of person you need during different stages of your business and make sure you have balance, “If you have too many civil engineers up front, you will fail,” he said.
Read our coverage about Venture Madness at AZTB
For more lessons learned from tech leadership check out Lunch and Learn TV series
