This morning, I had a really great chat with Adrian Camara of Paper. He shared some great insights about the importance of hustle, momentum, and velocity in business. In my time working as an Entrepreneur Advisor with Innovate Calgary and interacting with startups and the entrepreneurial ecosystem, I have learned that the one key ingredient to a successful startup is hustle. A great startup is constantly engaging customers and validating ideas as fast as possible.
Cash is King, so Start Earning It
Hustle is important because startups only have so much cash available. Moving too slow delays earning revenue, meaning the venture either runs out of cash and implodes, or must go out and find more cash. In the latter case, many companies spends more and more resources searching for cash rather than running the business and making sales. These companies sometimes enter a slow death spiral, where their focus is no longer building product, marketing to customers, and earning revenue, but rather finding investors, doing pitches, and trying to close deals. This happens more times than one may think. Richard Leblanc, founder and CEO of eXDee, told me to “never be in the money-raising-business; remember to be in the business-business”.
Establish your Brand to Fight Off Competitors
Another reason why startups should hustle is due to speed of the market. Business and competition moves lightning quick in today’s world. For companies to create any real success, they need to establish themselves and their brand firmly and quickly. The only way to do that is to get a product that addresses customer pain into the market, followed by growing the brand through marketing activities and successful customer transactions. As the value and awareness of the brand grows and establishes its position in the market, the more difficult it becomes for competitors to displace it.
So many startups will feel energized as they consider themselves a force that disrupts the established players in the market. Most forget that, right behind them, there is another group of startups looking disrupt them. This is not such an issue for startups based on proprietary knowledge with significant intellectual property or other barriers to entry. These barriers will prevent, or at least significantly delay, competitors from entering the battle. However many startups are creating business models on value propositions that are difficult to protect, aside from brand strength. If you are one of these startups, moving quickly to establish and scale your brand is a crucial defensive tactic. Moving too slowly gives competitors opportunity to leapfrog you.
Hustle and maintaining a sense of urgency in a startup is an important, but often challenging, factor to achievement. Engaging customers and making sales is not an enjoyable activity for many people, particularly code-monkeys like myself who really enjoy building and experimenting with technology. However, for any business to succeed, it must earn revenue. For a startup that is building a new product with an unproven business model with limited resources, the best way to succeed is to talk to customers and iterate your product as quick as possible. The sooner a startup achieves validated product/market fit, the more it is to succeed.