In this guide, we are going to tackle the basic skills in various domains that a founder needs to have in order to successfully get a startup project off the ground. While the list is not exhaustive, it should help you take care of any big holes in your own toolbox as a founder.
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We live in a world of extreme specialization – one of the most common pieces of advice young professionals receive is to specialize as quickly and as deeply as possible in order to raise their value to employers and speed up their career development.
Whether this is good or bad advice for people trying to climb the corporate ladder is up for debate, but it certainly is not applicable for people looking to become startup founders.
Yes, deep understanding and skills in any domain are helpful, but they are not enough to prosper as an entrepreneur.
The first, more concrete reason for this is that in its very early stages your startup wouldn’t have the resources to build a well-rounded team of all the specialists required to run a business. Yet, all aspects of the business need to be taken care of, and initially, this would be done solely by the founding team. This requires you to have a wide range of basic business management skills.
The second, more abstract but equally important reason is that the role of the founder isn’t just to perform the needed tasks but also to make the right decisions. And in order to do so, the founder needs to have a much more holistic understanding of the business.
“You have people walking around with all the knowledge of humanity on their phone, but they have no idea how to integrate it.” – David Epstein
The role of the founder is to integrate all the knowledge and expertise needed for the success of the project, which means that being close-mindedly specialized in a single domain is simply not an option. You need to have a wide view of the business to see and understand its problems and opportunities. Moreover, being familiar with good practices and new trends in different fields is a great way to think outside the box and come up with unorthodox solutions for the unusual problems that an innovative startup throws at you.
1. Sales Skills
Unfortunately for all people who are allergic to sales (which is a significant portion of the population), good sales skills are at the very heart of the success of a startup project.
Fortunately, startup sales have little in common with the forceful sales that most people are imagining when they think about sales. Startup sales are much more about carefully trying to find a win-win situation for all stakeholders in a project. The reason for this is that in order to scale up, you need to find a product-market fit. This can not be achieved by simply pushing your product hard onto the market. On the contrary – the startup sales process is much more about listening carefully, rather than trying to convince people to commit to a deal.
You need to deeply understand the problems, wants, and needs of the person standing on the other side of the conversation in order to come up with the best possible solution. Remember that as a founder you are not only a salesperson but also a builder, and the two roles need to work synergistically.
Succeeding in this endeavor would help you feel a real pull from the market, and pushing hard wouldn’t be as necessary as you’d imagine.
That said, this doesn’t mean that you wouldn’t have to be good at clearly communicating what you are building alongside its value and potential. After all, you would have to convince not only your customers but also your potential co-founders, business partners, and investors that your project is something with their time and/or money.
After all, in order to be successful as a founder, society needs to see why it should pay attention to your efforts. Building a product alone in a basement sounds great as an inspirational anecdote but simply doesn’t cut it. Entrepreneurship is mostly about communication.
2. Technical Skills
Of course, you would also need technical skills in order to actually build your solution.
This is pretty obvious if your product is technically complex. At least one of the cofounders needs to have technical expertise – a large portion of the value that the startup generates is in the quality of the technical solution that it builds. I.e. Steve Wosniak was just as crucial to the success of Apple as Steve Jobs.
Therefore, completely outsourcing the technical part of the project is not a good idea. Since the tech aspect is crucial for the success of a tech startup, the people who are responsible for it need to be properly incentivized. This usually means that they should have a significant stake in the upside. In other words, in technically complex startups the founding team needs a competent builder.
For low-tech startups, however, things are less straightforward. No-code solutions are gaining a lot of traction nowadays, and generally speaking, you don’t need to be an experienced full-stack developer to build a functional technical solution of low complexity.
What this means, however, is that in the early stages of your project, if your founding team doesn’t have a developer, you’ll have to learn the basics and do some building on your own.
Even if you outsource the technical part later, getting your hands dirty early on would give you a better understanding of the technical aspect of your business, which would help you in building a more holistic picture of the project, which in turn would, later on, help you communicate with the technical team much more efficiently.
3. Financial Skills
Of course, finance is the lifeblood of any business, no matter if it’s a multi-billion dollar corporation or a small early-stage startup project.
Neglecting the financial side of your project is a sure way to let it slip outside of your grip. A lot of small businesses fail due to bad liquidity management – this is especially true for startups in which revenues could be inconsistent and volatile, and for which fundraising might be crucial for success.
While finance seems daunting to outsiders, the financial knowledge and skills you need in order to run a small business are very minimal. You need a good grasp of arithmetics combined with a basic grasp of managerial accounting and finance for startups and you are good to go.
In practice, this means understanding a handful of terms and concepts. For more details, you can check out our Startup Finance and Accounting Guide for Non-Specialists. But for the purpose of this article, we can just say that you need to get a good grasp of the meaning of pricing (you can check out our Complete Startup Pricing Guide), cash flow, revenue (and revenue models), profit, direct costs and overheads (cost structure), gross and net margins, burn-through rate, customer lifetime value, customer acquisition cost, equity, debt, leverage, and pre and post-money valuation.
Later on, when your business grows and becomes much more financially complex you would be able to hire a specialist. Risking sounding like a broken record – this isn’t just a necessity because you can’t afford a full-time CFO early on. Going through the motions of getting familiar with the language of finance would help you understand your business much more holistically, and would allow you to make much better decisions.
Moreover, by being fluent in the language of finance means that you won’t be at the mercy of specialists later in later startup stages. E.g. in order to defend a high valuation of your business, you need to have a good idea of how a startup could be valuated.
4. Communication and People Management Skills
As mentioned, entrepreneurship is mostly about communication. This isn’t applicable just to sales – once you get co-founders, business partners, and early employees your ability to keep everyone looking in the same direction would be absolutely essential to the success of your project.
In order to do that, you need to be a good communicator, but you also need to have a good understanding of the incentives driving the people connected to your project.
In fact, once your business grows, your main role as CEO would consist mostly of strategic and tactical decision-making combined with communication and people management skills.
Needless to say, the early startup stages are a good time to try to build a good foundation of these skills. Building a productive startup culture from early on is important because culture tends to propagate from the founding team outward through each new hire. If your culture is chaotic and destructive early on, it would be very difficult to fix it in the later stages, so it’s important to think about this as early as possible and actively try to remedy it mostly by setting a good example.
The term corporate values can make any sane person noxious mainly because they are extremely non-genuine. However, this doesn’t mean you can ignore the subject. The truth is that each organization has internal values and culture whether they are explicitly stated or not. You need to make sure that the right values are adopted from early on precisely because you want to avoid this situation of value mismatch within your own team.
Of course, this doesn’t mean you need to implement a traditional corporate culture. On the contrary – the internal culture of a startup is usually quite different compared to a corporate one. For example, you’ll have to succeed in building a startup team capable of creativity and flexibility.
5. Networking Skills
Your people skills would come in handy outside of your team as well. When you are prominent, you’d hardly be able to keep up with the opportunities that come to you. Early on, however, as a young entrepreneur, opportunities are a very scarce resource. Because of this, you need to learn how to put yourself in positions where opportunities can find you organically.
This usually means being active in your local startup community, as well as the other communities linked to the industry or market you are targeting (local or online).
Opportunities come from people, and the best way to let them find you is to get yourself out there and let people know what you are doing.
Again, closing yourself in a garage to build your solution simply isn’t an option anymore.
6. Domain Knowledge
Needless to say, good domain knowledge is an absolute prerequisite for a successful startup.
Steven King famously said “If you don’t have time to read, you don’t have the time (or the tools) to write. Simple as that.”
The same is true for many other domains. If you are not deeply curious about blockchain, you simply wouldn’t have the tools to build a crypto startup. People with much more domain knowledge would out-compete you. Even worse – you won’t have a good idea of the real problems and pain points of the crypto market, which means you would most likely try to build something useless.
That said, this doesn’t mean that you need to be an expert in the field before you start your own business. If you have professional experience outside of your target domain but you are involved in it as a customer, a part of the community, and you are intellectually curious, this would be more than sufficient. Coming from an outside industry means you have unique perspectives and skills that can differentiate you and give you an advantage in some aspects.
7. Strategic and Analytical Skills
Being open-minded and comfortable with data is a must for any 21st-century startup founder.
The work involved in the earliest startup stages is 50% empirical science and 50% business management – testing and validating your ideas in the market is crucial in order to find product-market fit and to make sure that you aren’t building something useless.
First, in order to manage this process successfully, you have to be open-minded – you need to be able to change your mind when the evidence leads you in a new direction.
Second, you need to be comfortable with both qualitative and quantitative market feedback. You have to listen carefully to what people are telling you. At the same time, you need to choose the KPIs which are leading indicators of product-market fit, and you need to adjust your decisions and actions based on the new understanding that these KPIs are giving you.
Last but certainly not least, you need to be able to look at the big picture. The resources that your project has access to are limited. You need to choose where exactly to invest your capital, time, and effort in order to have the best return on investment in the long run.
Being a narrowly focused specialist is rarely an option if you are managing an early-stage startup. Because of this, you need to adopt a can-do attitude. You have to be able to get out of your comfort zone and gain new knowledge and skills quickly in order to do what needs doing and to make good decisions. With time, you’ll be able to build a great holistic understanding of your business and market, which is one of the keys to a successful startup journey.