To celebrate National Small Business Week, we’ve put together a four-part series that delivers honest, helpful advice from successful entrepreneurs.
Let’s start with the good news: According to the Small Business Administration, nearly 80 percent of small businesses make it past their first year.
The not-so-good news: Only about half of those companies are still kicking by year five. The main reasons for failure? According to CB Insights, which studied the postmortems of 101 startups, the top three reasons were a lack of market need for the product or service, conflict among the founding team, and a lack of money. Three founders, who have been running their companies for five or more years, offer hard-won wisdom and lessons in longevity that will help your business make it in the long term.
Hayley Berlent, a member at WeWork 81 Prospect St in Brooklyn, New York, founded The Additive Agency, a purpose-driven brand consultancy, in 2014.
The year it all clicked: “I always knew that we had something special: a clear purpose, a loyal client following, and a small but passionate team. But it was not until the end of our third year that we stabilized our workflow and staffing, and I felt like we had a viable business model.”
What I wish I knew then: A smaller team can be an asset. “In our second and third years, I made some hires that weren’t a good fit. They were lovely people, but didn’t have the skills necessary to serve our clients. That placed a significant strain on all of us personally and professionally, and had a cascade effect on the business and culture. In retrospect, I would tell myself that it’s better to have fewer, well-qualified people. Only when you have scale will you have the ability to invest in education and training.”
Best advice for other entrepreneurs: Define your purpose—and don’t waver. “I have seen countless peers chase revenue, rather than pursuing their purpose and letting revenue follow. Many are no longer in business, because they’ve failed to carve out a distinct position, or they’ve developed a reactive, unstable business model. I can’t underscore enough how important it is to do your competitive research, and to define and pursue your unique purpose.”
Kirk Reynolds, a member at WeWork 154 Grand St in New York, founded Discover Outdoors, a guide company for hiking, camping, and backpacking, in 2004.
The year it all clicked. “To be honest, I’ve never felt like I could completely relax. And I don’t think I want to operate a business that’s in sustainability mode. We all have the need to grow, to learn, and to change. Our businesses should reflect the need to constantly evolve, too.”
What I wish I knew then: Ask for help. “Early on, I often felt timid to ask for advice or to even seek investment. Turns out, people love helping. Plus it’s impossible to realize your full potential alone.”
Best advice for other entrepreneurs: Think long-term. “Don’t make decisions completely based on the situation in front of you. It’s easy to get deflated when you’re focused on the bumps in the road. Think about where you are going, what your company will look like, who will be with you, and the impact you’re going to make in the world. Keep your eyes on your future self and the struggles in the beginning won’t feel daunting.”
Peter Sullivan founded Jackpocket––a member in a headquarters by WeWork space––a mobile lottery app that allows you to play official state lotteries on your phone, in 2012.
The year it all clicked. “We’ve been collaborating with the New York State Gaming Commission and the New York Lottery for over two years to develop new regulations around our business model. This March they were finally approved, and we hope that they’ll serve as a guide for other lotteries to adopt. For me, this was a huge milestone and turning point in Jackpocket’s life cycle, as it’ll give us the largest lottery in the country to prove we will be successful.”
What I wish I knew then: Be patient. “Momentum means everything, but sometimes you’re waiting to hear back from some investor, partner, government agency, or third party to move forward. Learn to be patient, and understand that big ideas and deals take time. Showing this kind of cadence to the team is super important to keep morale up.”
Best advice for other entrepreneurs: Make friends. “Don’t forget to talk to other founders. Being a founder is extremely lonely. The emotional roller coaster never goes away, so take the ups and downs as they come. Learn to enjoy the ride a little more and not sweat the small stuff.”
WeWork offers companies of all sizes space solutions that help solve their biggest business challenges.