5 Best Pieces of Advice Ever Received

When you are young and starting your business, it is easy to trust your instincts and ignore many people’s opinions. This is a good mentality to be there in the early stages. However, to be able and confident enough to venture into the world of entrepreneurship will require a certain amount of stubbornness. You will need to be driven and have a singular focus that isn’t easily distracted by others.

But, as with all virtues, it can eventually become a vice. Entrepreneurs, especially younger ones, must ensure that their confidence does not turn to arrogance. My personal experiences have taught me a lot, but I learned essential lessons from others. Below I share five of the most valuable pieces of business advice that I’ve ever received, which I still remember to this day.

“Don’t count money unless it’s in your bank.”

Because of how emotionally exhausting this lesson is, I find it hard to think about it. Stan Kats (founder of Abbot Capital) gave me this piece of advice. Failure to follow this advice can cause significant problems for entrepreneurs. The bank does not make money by getting customers or investors to commit verbally. The bank does not consider signing a contract to be money. Money in the Bank is when the funds are deposited, and you can see it on your bank statement. This is especially important when raising capital. Because they are always looking for good news, entrepreneurs make this mistake every day. Unfortunately, this is a lesson that entrepreneurs don’t often learn until it’s too late.

“Great products can succeed in spite, not because, of an executive team.”

Al Reyes, a venture investor, was asked what type of businesses he would like to invest in. As I was accustomed to the VC world’s conventional wisdom, I expected him to say, strong management teams. I was shocked by his response, which has stayed with me to this very day. He explained that he seeks out businesses whose products are so strong that they will succeed despite their poor execution. He sees lousy execution as a natural consequence. The idea must be so compelling that ineptitude cannot stop it from coming to life. This should be remembered at all stages of your product development and idea generation.

“It’s crucial to be financially successful.”

William Seidman, a former FDIC chairman, was a constant questioner in the early stages of Sageworks. He also served on our board. It was almost his only focus. Like many other companies of that era, we were focused on rapid growth and customer acquisition. Realizing this, I now realize that we wouldn’t have lost any real value if we had accumulated customers at a slower rate to make it cash-flow positive. This is the reason many entrepreneurs fail: They lose large swathes of their business to create its cash flow negative. Bill and Fred Luconi (MIT) shared these points with Bill. However, they didn’t sink into my mind until much later. This model, despite the trade-offs, would have worked, as always. Rapid growth should not be used to replace profitability and cash flow for most businesses.

“Sometimes, there is no solution. Sometimes, there is the only optimization.”

Ferris Chandler was a friend of mine who explained to me that 15 years ago, I was trying to think of business as an equation. I also tried to solve impossible problems. This was under the pretense that there was always a perfect, perfectly correct solution for every situation. I was able to run through every issue on an endless loop, looking for the correct answer. Ferris was right. The majority of business decisions are optimizations and not solutions. The choices that have minor adverse outcomes are usually the best. This advice, along with the one below, has enabled me to work much more efficiently in business.

“Don’t swing for balls in the dirt.”

Jim Sharman (a friend and mentor of mine) gave me this advice once. It was immediately resonant with me. The analogy brought back childhood memories of playing baseball. Sometimes, you will see a pitch coming at the bat and take a swing. It’s essential to recognize the differences between what is solvable and how productive it can be (the balls that you hit) and what is just there to derail your business (the balls in dirt). These “balls-in-the dirt” may manifest in many ways. Let’s say you’re presenting, and someone makes an argument that is totally out of your scope. You may feel compelled to respond and explain why the point is wrong, but it’s best to avoid mentioning the topic. Sometimes it’s best not to make any move. This concept may seem abstract, but it has dramatically helped me in business.

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Samatha Vale
Samatha a senior writer for HC's entertainment team. She is an entreprenuer, mother and an excellent writer. She's also an avid reader, music enthusiast and all around inquisitive person - which is just a nice way of saying she's nosy.

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