VC in DC: Growing up, I always wanted to start a business, 8 things I wish I knew...

Things take longer than you ever imagine

Everything that involves people, resource, tasks and coordination takes longer than you ever think it should take to get done. It isn't about developing patience, as patience doesn't really help you keep driving things forward. It is about being realistic in your planning and and management.

Items that do succeed tend to do so quickly

I have seen more successes - products, projects, employees, start strongly than slowly. The great salesperson or employee is great from the first day. The strong employees contribute immediately. The product that is going to be a hit gets strong, initial reactions from customers.

People will let you down

In ways you can't even imagine when you start out. Everything from inattentiveness, laziness to fraud and theft can be expected from the people you meet along the way. Your faith in people or belief in them can be a dangerous thing. As Pres. Reagan put it,
"Trust by verify". Blind faith will get your butt kicked again and again. Love and reward your employees but don't have too much confidence in them.

Good employees are really hard to find

Not difficult to find, really difficult to find. And they're the first ones to leave. The truth is that 10% of the world is competent and you're looking for that 10% in every hire. It is hard to do consistently. And it is why organizations that do it with frequency have such strong reputations. If you want to build a business predicated largely on finding, getting and keeping quality employees to succeed -- you should understand that premise will be your greatest risk. Finding a market and profitably selling to it, the usually greatest risks, will take a back seat. Better yet, pursue a business that needs some reasonable percentage of employees to be really good.

Your bad employees rarely quit

For thing they're not really all that motivated to look as that might involve actual performance. For another, no one else is likely to recruit them. Your marginal and weak employees are with you for life unless you move proactively. In many years of running businesses, the only time this wasn't true was during the dot com bubble. At that time, every idiot could get a 15% to 20% raise here in Northern Virginia by changing jobs. And they did. Aside from that blessed time, weak employees are your most "loyal".

You will be lucky and unlucky

In the fullness of time, you will be assuredly lucky and unlucky. And, good luck for that matter, knowing which events will turn out to be good or bad luck once time has past. This is to say, sometimes what appears to bad luck will turn out to be good -- the weak salesperson who turned down your job offer -- or vice versa. Look you will have ups and downs and you will win or lose things that you don't deserve to win or lose. You will be unlucky and lucky, you just may never know when.

Avoid the myth and misery of sunk cost

See the item about succeeding quickly above. Don't chain yourself to the anchors you lovingly create in pursuit of success. If it isn't working for you or the business, let it go. Understand that it isn't good money after bad money, it is all bad money. Fire that salesperson, let that manager go, stop selling that product, get used to moving on. One makes a lot of decisions in running a business, accept that not all of them will be right.

Fill the pipe, always fill the pipe

The difference between good times and bad times is often reflected in how many of the opportunities, customers, etc. end up closing successfully. In good times, more deals close from a normal opportunity pipeline. In bad times, less deals close from the pipeline. So, fill the pipeline of opportunities, always look to add to the pipeline. Deals don't close for a million reasons. Your only defense is to fill the pipe.

VC in DC: Growing up, I always wanted to start a business, 8 things I wish I knew....