5 skills for internet entrepreneurship
Internet entrepreneurship is hard because it requires connecting 5 skills: marketing, technology, finance, design and sales.
You don't need to be an expert in any of them, it's much harder than that: you need to be good in all of them. Here are the 5 skills
that I think every startup needs to succeed.
Let's start with sales. As an entrepreneur, you first need to sell yourself and your vision to raise capital and build a team. Then,
you need to understand how to sell your product or service, and that requires crafting a compelling sales message to can be replicated
and delivered by your salespeople. What salespeople? Before you can have productive salespeople, you need to hire, train and then manage
salespeople, and that requires sales management experience. And even if you find experienced salespeople, it doesn't mean their previous
sales experience will translate to selling your product so you will need to train them; how can you train someone to sell if you can't sell?
Now may be you're thinking that you're going to build an internet business that's going to scale with viral marketing and online advertising but before you can
get to that stage, you still need to sell your stock to raise capital and selling investors on your vision of what "could become" requires serious
selling skills. So if you can't sell, how can you build an internet business? Here's a 10-minute segment from a Stanford video that really explains how interconnected sales and entrepreneurship are:
How about corporate finance? There are 3 components to corporate finance in startups: accounting, legal, and financial management. An accounting
professor of mine had a good definition: accounting is the language of business. So if you don't understand the difference between a balance sheet
and an income statement, it's going to be really hard to understand what's going on in your business, or to even book an entry in your own accounting system.
Of course, there are bookkeepers that are great and probably the only things I think every start-up can safely outsource are payroll and bookkeeping.
But if you're outsourcing accounting, you still need a minimum of accounting skills to understand what's going on. Legal is not about being a lawyer
but it's about having general understanding of how contracts work and what they mean over the long term. Lawyers are easy to come by but evaluating a lawyer's
skill and understanding the long-term implications of the agreements you enter into requires some basic knowledge of corporate laws. Financial management
is about understanding how you're allocating your capital and what drives your costs and your revenue. Based on that, you can build financial projections
and metrics that measure the performance of your business and modify hypothesis accordingly. Without financial projections, you won't be able to raise
capital and you'll be flying blind. Luckily, there are plenty of startup advisors who can help you with financial management and who can build an Excel spreadsheet
but even so, I think that building an internet startup without a rudimentary understanding of corporate finance is somewhat like going on a road trip
without knowing how to read a map.
Then, when it comes to internet entrepreneurship, there's the obvious skill: programming. When I started my first internet startup in 2007, I didn't
know much about programming. I started programming when I was 10 with Basic and I had taken a few programming classes in college to learn Excel VBA
so I had the general concepts of algorithms, loops and conditions but that was it. I wrongly assumed that building software was a matter of just coding
specs. Alas, at the time, I didn't understand that programming is an art: there are multiple ways of writing code and outsourcing programming without
understanding programming is almost guaranteed to produce bad code or even no working code at all. So the lesson I learned is that if you don't know how
to program, I think there's no chance whatsoever of launching a successful internet startup. Thankfully, programming is usually the least of problems
because most internet entrepreneurs start with a programming background.
The most important skill: marketing. I think most techies make the mistake of underestimating that without marketing, there can be no business. Building a
startup is not about knowing how to program: it's about knowing what to program. Programming is complex and marketing's hard. Marketing, in the context of
internet entrepreneurship is about understanding what people want, what are their needs, where's demand that you can convert into value, and then understanding
how to deliver this value to scale your business. I think that with capital you can fix just about anything about a startup but if you've got the marketing
wrong, there's nothing you can do to salvage your business. I remember hearing an entrepreneur saying something
like "Now that my application is coded, I'm going to do marketing." Marketing isn't something you can do after
you're done coding: I think coding shouldn't be driving marketing but that instead marketing should drive the coding so that the code sells.
And then finally, design. Once you've figured out what you're going to build, you need to figure out how to convert your understanding of the market's
need into a design that addresses a pain point. I think design in the context of a startup means building software that both looks good and works well
for the end-user. A good design will help you attract and retain users but a bad design will be repelling so if you don't know how to create good designs,
then it's going to be hard to attract users, even if you have everything else working for you.
These are the 5 skills needed for internet entrepreneurship: sales, finance, programming, marketing and design.