When asked in a recent interview with YoungEntrepreneur.com for a piece of advice for young entrepreneurs, I answered “dream big but act lean”. This is critical advice.
Wikipedia defines an entrepreneur as “a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome”. An entrepreneur is someone who is better served without the shackles that come with a traditional job, without a boss, without top-down imposed key performance indicators, etcetera.
Entrepreneurs want to be their own boss, set their own key performance indicators and their own agenda. To achieve this, entrepreneurs need to dream big.
But if they are not awake while dreaming, and if they lose focus, they could lose control and end up more shackled as entrepreneurs than they were as employees.
One common way startups lose control is by trying to get too big, too soon.
There is a tremendous amount of cash available in the web and mobile industry at the moment, with giants like LinkedIn, Zynga, Yandex and Facebook going, or preparing to go, public. Early stage startups are fascinated by these dollars being thrown about by investors and are trying to get their hands on some to make their big dreams come true faster than what is sometimes natural.
I meet entrepreneurs at the very early stage of their startup journeys every day. Some have no cohesive strategy, and in many cases, they do not have any version of their product ready. But they seem to be intent on raising money to fund their entire process.
I advise them to ignore the romanticism of dollars, and try to act as lean as possible for as long as possible. Raise money from friends and family, join an incubator, or find co-founders who will help you get more done before a major stage of fundraising.
It is simple mathematics that the more money entrepreneurs raise when they have nothing to show, the more of their business will need to be given away to the party that provides the money.
Many companies raising money are losing control of their businesses. They are being imposed key performance indicators and trenches to receive that money. How is this different to the life of an employee?
With no major ownership and with no control, these entrepreneurs cease to fit the “possession” component of the definition provided above by Wikipedia.
I suggest that a shackled entrepreneur would feel worse than a shackled employee. Imagine becoming a slave of a company that would not have even existed without your idea and input.
I repeat my advice to entrepreneurs. Dream big, but act lean in order to hold on to as much control of your entrepreneurial venture for as long as possible. The financial rewards will come.
Author of this blog, Haig Kayserian is CEO of KAYWEB Angels – a New York-based angel investment company that fills the role of a technical co-founder, providing development services and mentoring in exchange for equity in web and mobile startups.