Want to Grow a Business? 1 Entrepreneur 60 Investments 6 Questions
As a small business, finding investment is always in the back of your mind. If you want to grow a business, one of the best ways to do this is through investment. I know first hand how hard it can be to secure investment, so when I came across this article about HubSpot’s co-founder Dharmesh Shah I knew I had to share it with my community.
Dharmesh Shah is a startup expert, founder of onstartups.com and has (as an angel investor) invested in more than 60 startups. When Vulcan Post sat down with Dharmesh, they asked him some of the most common questions businesses have around investment for businesses. Below are the 6 questions he was asked, and his answers.
1. How will I know I am ready to start pursuing my idea?
“One of the most common mistakes entrepreneurs make is assuming they can analyse a given idea from the sidelines to determine if it’s any good before jumping in. In reality, the best ideas come to entrepreneurs after they’ve already started a company.
My advice is to pick what you think is the best idea among the group of ideas you are considering and start testing it with the market. This doesn’t mean trying to build the full-product — it means talking to potential customers, writing blog articles, and generally figuring out if there’s a potential market for what you’re looking to build.“
2. How much should I let customer feedback affect my overall business plan?
“When you launch a startup business with a highly targeted market, you will need to make certain concessions to meet the needs of your early customers. Sometimes, this means consolidating your vision with your customers’ needs.
Businesses will pay attention to what customers are saying, and use that to adjust their product or strategy. Other businesses focus more on the end goal and what it will take to get there, viewing customer feedback through the lens of their own vision for the future.”
3. When is the right time to start looking for investment?
“While it can be tempting to want to raise money early, my advice is to wait as long as possible. Raising funding is exceptionally difficult, so waiting can be a tactical move by entrepreneurs.
It is best to make as much progress as you can before turning to investors. You can create a proof of concept, testing it out on a limited market. Once your business starts to gain momentum, and when you can no longer afford to continue alone, think about talking to investors.”
4. How important of a consideration should location be when opening an office?
“For tech companies, situating yourself around like-minded entrepreneurs who can give advice, influencers who are familiar with the tech industry, and VC firms that have been through the process with similar companies is crucial. Singapore is a great example of this startup community in Asia.
Of course, location isn’t everything — many tech companies open in places that wouldn’t necessarily be considered technological hubs. HubSpot began in Boston, once a non-traditional location for tech startups. We’ve had tremendous success in the area, have encouraged other tech companies to do the same, and we’re really seeing a vibrant tech startup community take root.”
5. What is something many entrepreneurs fail to consider?
“Many entrepreneurs fail to realize the importance of the early team. If you’re looking for a co-founder (which you should), be sure to pick them for the right reasons.
My co-founder, Brian Halligan and I are very different. He is an outgoing, congenial sales guy, and I am an introverted tech geek. But we share a core set of beliefs and when we disagree on something, we both enjoy a healthy, productive debate. This “different backgrounds but similar values” has helped shaped the strategy of HubSpot and made it into the company it is today.”
6. What are some things that many entrepreneurs spend too much time thinking about?
“The early days of running your business can be crazy. You will have to learn from your mistakes, and trust me, you will make mistakes.
The important thing to remember is not to obsess with certain details at the expense of others. For example, I cannot tell you how many entrepreneurs I have seen become so obsessed with branding that other aspects of their business get neglected. While branding is certainly an important part of giving your business an identity, there are other aspects of business strategy that should not be overlooked.”
Coming from someone who has invested in over 60 startups, Dharmesh has a wealth of experience and his article above has some priceless advices for startups and businesses looking for investment.
To see the full article with Dharmesh Shah click here.