Over the years I’ve helped around 2,500 founders along their entrepreneurial paths, so I’ve been around the block when it comes to setting up a company. Here are 10 things I have learned along the way.
Step 1: the basics, dot the i’s and cross the t’s
Sometimes the best startup ideas are born on the back of a napkin. But don’t let the romance of that distract from the legalities required to set up a company.
To get your venture off the ground, be disciplined and thorough with your shopping list of to-dos. This will vary geographically, but spans everything from corporate formalities like registering as a limited company and obtaining incorporation documents, through to technical procedures like filing for an IP patent or buying a domain name.
Put the important stuff — like shareholder agreements and employee contracts — in writing from day one. Get the fundamentals sorted asap; they only get harder the longer you leave them.
Step 2: conduct a founder audit
The biggest risk you can take in starting a company is not understanding why you’re really doing it.
If it’s to make stacks of cash or to finally make your parents proud, then I’d suggest a reassessment. Becoming a founder is as much a personal journey as a professional one, requiring gruelling decisions that determine other people’s lives.
Understanding the inner workings of your cofounders — their aims, needs, fears and life plans — will increase your chances of success when the going, inevitably, gets tough.
As a first step, invest in working out who you really are. I use the “Entrepreneur Canvas Model”, in which founders ask themselves the same core questions over and over.
Be it through professional coaching, talking therapy, CBT or alternative treatments like psychedelics, carve out time to interrogate the big, juicy questions.
What gets me up in the morning? What stops me from sleeping at night? Where are my blindspots? Why am I doing this?
From my experience as an entrepreneur, I realised that almost every obstacle in my way stemmed from myself. You can’t build a brilliant building without strong foundations. Your company and its founding team are no different.
Step 3: to remain agile, triple-check you’re in love with a problem
Setting up a company boils down to one thing: value creation.
You’re trying to create value for a group of people by fixing a problem that they face. Every day, I encounter founders too wedded to a specific solution. Inevitably, this derails them when circumstances beyond their control change, like economic downturns, technological advancements like AI, wars or pandemics.
If you channel your energy into solving a specific problem for a specific audience, then it won’t matter which way you pivot. This is what it means to be agile; weave it into the fabric of your business. Make your problem your North Star: keep an eye on it at all times and don’t be put off if it leads you across rough terrain.
Step 4: play the name game
You are not alone in agonising over what to call your company. After all, it can literally mean boom or bust. A good name can define brand identity; a bad one can ensure no one knows you exist. Think of your company’s name like an introduction: what feeling do you want it to conjure? Rather than being didactic, choose something that embodies the general commitment of your business (think Too Good To Go, Clue, Mint).
This leaves room for you to evolve without the headache of a rebrand. As for legalities, find out which domains are available (go for .com) and do due diligence on trademarks. Choose a name that people can spell, pronounce and remember, so that customers can track you down.
Step 5: consider every funding option
The tech world remains obsessed with VC fundraising. It’s what everyone talks, thinks and reads about, despite not being attainable or right for most founders.
Persuading investors to part with their money is hard at the best of times and nigh-on impossible at the worst (which, arguably, is right now).
Founders should explore every funding option available to them, from bootstrapping and crowdfunding to angel investors and grants. None of these options are easy, and if your product is technically complex, then you’ll need sizable investment to get started.
But if a path to profitability without external investment is possible, then it’ll avoid unnecessary dilution. Whatever funding path you pursue, be sure that it’s a conscious decision.
Step 6: it’s time this little startup went to market
The difference between tackling a problem that is interesting to solve and tackling one that has market need is the difference between failure and success. No product-market fit? Then your company won’t be blowing out candles on its first birthday.
Completing an “investor audit system” grants you an objective pair of eyes on the market, risk and direction of your business. This 360-degree analysis, which mirrors a VC’s assessment, can help founders ascertain the bigger picture and course-correct where necessary.
Step 7: grow your team wisely
Above your shiny product or indispensable solution, your team is your greatest asset. Without your people, you wouldn’t be building anything at all. More hands do not mean lighter work; they mean overhauling existing processes.
Increasing your headcount is a common growth trap; don’t fall for it. Even if you’ve got cash to burn, be intentional with who and how you hire. And never compromise on the quality of your employees.
Step 8: diversify your network
Products can’t meet the needs of today’s population without diversity of thought. When homogenous groups approach a problem, chunks of the innovation spectrum are chopped off, resulting in limited thinking.
Set up your company for success by engaging a plurality of voices — be that employees, board members, advisors or market researchers.
Diverse teams are 70% more likely to capture and penetrate new markets, so bake inclusion into your business core. The more perspectives you draw from, the more resilient your proposition will become.
Step 9: make a commitment to balance
According to Startup Snapshot’s latest report, 72% of founders reported the entrepreneurial journey having a negative impact on their mental health. 44% reported very high levels of stress and 36% burnout.
It may not feel like top priority, but physical and mental wellbeing is a founder’s most precious possession. The odds are against you, so commit to protecting it.
A 20-minute check-in at the start and end of every week allows you to ask yourself how you’re feeling and what you need. Treat these reflective moments like you do every other meeting: show up on time, stay focused and follow up on action points.
Sleep, nutrition, movement, rest and connection are non-negotiables. Don’t put all your eggs in one basket: a 10-minute meditation won’t undo 17 hours at your screen. Learn to identify your needs, coping mechanisms and warning signs for when you’re near breaking point. If you’re not functioning well, you won’t be executing well.
Step 10: set a BHAG (Big Hairy Audacious Goal)
According to Bill Gates, “Most people overestimate what they can do in one year and underestimate what they can do in ten”.
That’s why every company needs a BHAG (bee-hag), driven by your company’s values and framed in a way that is energising, compelling and magnificently ambitious. This is more than a long-term aim; it’s a rallying cry for your team. It’s a reminder for why they’re spending their limited hours on earth working alongside you.
