Guest writer Adrian Enache, who runs an online financing platform for startups, tackles several of the challenges anyone should consider when turning entrepreneur.
Romania has a unique opportunity to make its mark on the global tech scene: more than 50 venture capital firms from UK, Germany, and US are looming to the local ecosystem and targeting potential investments. In this context, intellectual property is crucial for Romanian startups and investors are particularly interested in it but also in the potential for accelerated growth on large markets.
The potential for startup development is considerable, as more institutional investors have developed partnerships here, the Diaspora started to positively impact the perspective on our country and more Romanian senior managers have reached top positions in the global investment ecosystem.
So much good content is written about how people should go about starting a business startup, but little is said about whether someone should start one – and if starting and running a business is suited to them.
These are the question we should be asking:
1) Would you give up the dream if you were offered a high paid job? Most entrepreneurs argue starting a business is about so many different things and say they never want to work for anyone else again. But when asked if their current salary were to increase dramatically, their determination wavers and they start thinking about financial security, paid leave and all the other perks of being employed. Not everyone is suited to running a business and the economy needs workers so don’t feel pressured if on balance it is not for you.
A growing number of corporate specialists are turning to entrepreneurship in Romania, but the trend is still at the beginning. Sometimes stability & predictability are more important than “reaching for the stars” – it depends on age, marital status, personality, and other factors. However, if the answer is yes, then the thought of having a safety net might draw you back from being “all in”.
2) What does success like to you? I often hear from people who want to start and run a successful business but in truth they don’t even know what that would look like for them. Is your goal a certain level of turnover, a percentage of market share or do you just want to make enough to live on and have happy customers? Without a goal in mind it is hard to plan.
The vast majority of thriving start-ups that now impact the world did not start as a way to generate more profit but had an impactful and innovative purpose. At least in the beginning. Does your success have a second component?
3) Are you prepared for the non-financial costs of running your own business? Starting a new business may put a strain on relationships and family life and while lots of people think if will give them flexibility there are always costs usually in terms of long hours and the strain on knowing in the early stages you have to do everything yourself. Even being sick can be an issue as the business must run regardless.
4) Can you keep it simple but legal? So many businesses fail because founders get so caught up overcomplicating things and needing all the best tech and bells and whistles, they don’t devote enough attention or money to the legal side of things. Legal requirements for business vary hugely in different sectors and while some may only need to address issues such as insurance others will have a whole host of regulations to meet. Start simple, ensure you meet your legal obligations and you can improve things like tech as you grow.
You can notice the failure of so many startups failing because the regulators started paying attention to their activities and shut them down: this has started to happen way more aggressive once the cryptocurrencies and their exchanges started becoming more and more popular. Many startups failed by not being able to prevent regulation or have a full understanding of the regulations on their activity or products. One of the examples is Raden, “the smart luggage startup” – an amazing startup – that went from sold-out/startup of the year to bust in less than 2 years.
5) Are you ready to step down for the greater good? Not every start-up leader will be the best person to take the company to the next level so are you prepared to step aside or change role should the time come? If at some point in future an experienced CEO is needed to accelerate the company, then it can be a very different role for the founder and not everyone can cope with that.
by Adrian Enache, guest writer
Adrian Enache is the CEO of Angels Den. Angels Den Funding is an online investment platform that makes it simple for investors to own shares in early-stage companies with great potential.