entrepreneurs blog


March 13, 2014 was the date I became officially unemployed. I can still vividly remember the first feeling I had the moment I opened my eyes that Wednesday morning. Freedom.

I had anticipated that day from the time I first passed my resignation letter. No, actually, I had wanted for that time to come ever since the seed of the idea to become my own boss planted itself in my head. I remember how I decided to still leave the house that morning, possibly out of habit, and went to sit in some random café, with the intention of doing nothing, except brew up my future.

Recognizing this milestone will always feel surreal, like trying to reminisce a memory from another lifetime. And I have to admit that the past half-decade has not been kind. The years were like a series of tidal waves where each one was worse than the last, and I almost drowned.

We know this story all too well. One comes out of employment, sets up their very first venture, puts all of their heart and soul into the business (as they should), and gets themselves broken when it does not work. Many fail to compartmentalize, and fall into the trap of treating their brainchild as, well, their child. Their “baby.”

I was one of them. Having been in the digital marketing industry for some time, I have dreamt of putting up my own agency, and that’s how Digital Lab was born. It was the realization of me being able to do the things I love: impart my knowledge by directly training people, and earn at the same time.

The aim was simple, and so, I assumed everything should be easy. Yet, I committed mistakes when it comes to entrepreneurship: it all started when I got emotionally invested.

I am known to be a very logical person, but with Digital Lab, I became so attached that all sense went out the window. I became very protective of the brand, blocking criticism, even the well-meant ones. Just like an overprotective parent, no one is allowed to tell me how I should raise my child. And if and when someone dared to do so, I took offense very quickly and personally.

I also became too proud. I pride myself for being a perfectionist. Well, I still am, until now. But back then was an entirely different level of perfectionism. The deep devotion I have for my business blinded me from allowing people to work their own way. Yes, I micro-managed. I felt that doing this was the only way I can ensure the quality of the work would be by my standard.

There was no such thing as team work. There was only work. Work that I instructed to be carried out, down to the minute details. I realized later on how unhealthy that was, as it only hindered everyone’s productivity, including mine, since I had to nitpick everything, and see to it that tasks were done my way.

I also took too much pride in my skills. I thought I was knowledgeable enough to run the entire show, what with almost 10 years of working experience under my belt. I was a Director, and that should count for something. But this way of thinking couldn’t be more flawed. I wish I didn’t have to, but I had to learn this the difficult way.

Soon, all of this took its toll on me and the business. I could no longer hold my emotions in check, and finally had to swallow the bitter truth: I had to let my baby go, and allow someone else to nurse it back to health.

Acceptance took a while to come, but when it finally did, it was exhilarating. I scrutinized what had happened, where it went wrong, and made the conscious effort to not repeat the same errors.

First is having a certain level of detachment. I understand that finding the right balance is no easy feat, especially when it is your very first venture into the world of commerce. Being partly disengaged will allow you to be prepared for anything, including failure.

Remind yourself that a business is just that, a business. Either it profits or it does not. Take care of it, but do not obsess over it. Knowing that you are giving it the best you could is enough.

Second is to lose the business ego. A successful entrepreneur should be open to evaluations. Take it all in, the good and the bad. This is possibly the simplest way to know if you are doing it right.

The third is realizing that you cannot do everything solely by yourself. Unless you are omniscient, accept that you will need help. Up your game by acquiring new skillsets and learning something new, even if it out of your comfort zone. There will be facets of the business that will not be to your strengths, and you will soon need the knowledge or someone with the knowhow who can mobilize this towards your business’ success.

Needless to say, you also need to build trust. This allows more room for productivity, promote growth, and inspire confidence with the people you work with.

Lastly, be kind to yourself. This is probably the most important of all. I used to be guilty of feeling guilty whenever I go home early from work. And when I mean early, it means 6 pm in a 9-5 job. Years of being like this made me feel so burnt out to the point of breaking. Being in this state of mind is not beneficial to entrepreneurs, as it makes you prone to making rash decisions which you may regret later.

I recently felt close to this again, and this time, I decided to take a week-long break to reset myself. (Not so) surprisingly, I found that the business is still there, clients are still there, and life still goes on. Remember, it’s you who is running the business, and not the business running over your life.

The past five years has been taxing, and now that I’ve been thrown into the sea of commerce, I can now genuinely say that being an entrepreneur is not for the faint of heart. You need to toughen up, so as not to be eaten alive by bigger fishes, or be pulled under by challenges crashing your way. As for me, I’ve finally learned how to ride the wave. Have you?

So, you’ve finally started your business. You want to make a difference. Heal the world. Feed the poor. Clothe the destitute. And hopefully, make a shit ton of money while doing it.

If you’re like any of the entrepreneurs I’ve come across in my professional life; it’s very likely you’re so excited about starting your business that you haven’t taken the time out to decide what your exit strategy would be.

Heck, it’s even possible you don’t know what an exit strategy is in the first place.

Anyways, that’s beyond the scope of this piece. My objective is to explore the question: Why do Investors buy a startup and not the other?

However, before we chow down on this, it’s essential to remember that Investors, VCs, Funds, and Big corporations don’t care about your big do-goody dreams. They are out to make money.

They don’t care that you’ve spent incredible long-hours hunched over your computer slaving away to get your business off the ground. They don’t care if you’ve never taken a penny out of the company.

I know this sounds cold. It’s a reality. It’s cruel, yes I know. To survive in this shark-infested waters, you must understand the why behind every move investors make. And here’s how:

Investors buy scalable startups

Sure, positive upward trend figures are great to have. Investors look at them plus more when evaluating your business.

They also want to be sure your business model can scale too. The more people the business has the potential to reach, the higher the chances of receiving an offer from investors.

Is your niche too narrow? Can you expand into other verticals? Great examples of scalable business models include SaaS (10x multiple), Subscription based model (12x) and Digital Media (6x).

Investors buy startups when it cost more to copy them

The acquisition of InstaShop by Souq and WeCashAnyCar by Dubizzle are two examples that hit home this point.

The thing is, once a big company wants to add a new feature or service to their offerings – they are often faced with two options: either build the solution from scratch or look for a smaller company already doing what they want to do and buy it out.

Now, the option a company chooses depends on a number of factors. For instance, if they are in a highly competitive market – they are more likely to go for acquisition.

The reason is developing a solution from the ground up will cost them more both in monetary terms and time.

If you’re threatening their market share

Big corporations like to dominate their space – that’s why they are big in the first place. And, once they realize your business is chipping away at their market share – they would swoon in for the kill.

It’s either they run you out of business or the swallow your startup.

In some instance though, they go for the buy because they are competing with another big brand.

So, keep these points in mind when you begin to woo investors for your business. Above all be mentally strong. Keep an open mind. And try to look at things from their perspective while also looking out for yourself.

Osama Romoh