The Five Most Important Rules for Entrepreneurial Success

Growing up, entrepreneurs were my idols. I have long been obsessed with the idea of building businesses–the hard work of coming up with a wild idea, translating your vision to teammates and investors, and bringing something to life that simply started in your head.

I got to live out my dream as a founder when I started LearnVest, a financial planning company that was acquired by Northwestern Mutual in 2015. Today, as the founder and managing partner of Inspired Capital, I get to pay it forward by investing in the next generation of passionate founders, who are working to build category-defining companies.

My childhood obsession with entrepreneurs has only grown, which is why my role as host of Inc.’s Founders Project podcast is one of my favorite hours of my week. I’ve gotten the opportunity to sit down and talk with the best founders across the country–people who turned their crazy ideas into brand-name businesses like Robinhood, Toast, Slack, Databricks, GoodRx, Cameo, and Patreon. 

We’ve now talked to 100 founders on the show. Through all of these conversations, it’s clear to me that there are some superhuman traits linking this group together. On the occasion of this milestone, I want to share the smartest lessons I’ve learned along the way, and the quotes I just can’t get out of my head.

1. You have to believe–even if it’s irrational–that there must be a better solution. 

In startup rhetoric, “disruption” is a cliche. But there is a nugget of truth there: you have to be confident that your idea will win against all odds, even when it’s in total opposition to the way things are done.

Paul Judge, serial entrepreneur and investor, put it best: “Once you eliminate the fear of failure, you’re in the zone where you will explore things, and you will assume that a solution exists. A lot of it comes down to assuming there’s an answer in there somewhere and other people have just overlooked it.” 

Paul has founded a number of companies, among them: Pindrop, Ciphertrust, Pure Wire, and Luma Home. When we spoke, he shared the repeated framework he uses when trying to solve a problem. He starts by decomposing a problem into pieces and questioning every assumption the world has made about a topic until he finds something that no one else has stumbled on yet. 

Going against the grain takes guts. That’s why many of the most successful founders I’ve spoken with have enough self-confidence to shift reality–like the way Iyah Romm and Toyin Ajayi at Cityblock Health are building an entirely new healthcare model, or how Johnny Boufarhat at Hopin is reimagining how we attend events in a virtual world. 

2. Your mission must be an obsession.

I made the transition from founder to venture capitalist because I’m passionate about finding and empowering world-changing people. Whenever I talk to a prospective founder, I always tell them to think about what you are most authentically passionate about. What do you love so much that you’d do for free? 

Jessica Rolph is a perfect example of this. After her organic baby food company Happy Family was acquired, starting another childhood-focused company–Lovevery–was intimidating. Her sense of risk was still high, but she went for it because her commitment to her mission gave her confidence.

In her words, “It just came down to purpose. This company is my life purpose. This is me living fully and really giving what I uniquely have to give to the world…it was tapping into that deeper sense of self that helped me become confident to do this again.” 
 

3. You must excel at managing anxiety.

We too often think of entrepreneurship as glamorous. In reality, the stress of being a founder is sky-high. It’s asking regular people to pull off superhuman feats.

I love how Irving Fain at Bowery Farming described the roller coaster: “Being a founder is a Friday afternoon where you’re finishing up your last call, and you have a set of plans you’re really excited for that weekend and then you get a text message or a phone call from someone asking for a few minutes. You then spend the next 48 hours dealing with this issue that 15 minutes before you just had no idea about.”

In order to stay sane, you need to build a skillset that empowers you to work through it. As Will Ahmed of fitness tech company WHOOP put it, “I read somewhere that success is overcoming a level of stress that would break most people.” Our guests have shared tons of tactics. Sleep was universally mentioned as something essential, and meditation was a common theme, but we’ve also talked to passionate runners, yogis, and even those practicing fasting. And, they all leaned on loved ones for emotional support throughout it all. (Lord knows I have too!) Whatever your go-to is, finding a mode of self-care is imperative. 

4. You shouldn’t view failure as an option.

Yes, it’s cliche, but the smartest founders know there are two ways to fail: running out of money, or running out of money. That’s because they’ve taken the other “types” of  failure completely off the table. Quitting simply isn’t in their DNA. 

We’ve heard this time and time again on the show, like from Jack Conte of Patreon who said, “The main thing is just not quitting, honestly. I’m going to drag myself out of the mud and just put on a smile and love the pain and just march forward.” 

Staying the course often means that your business evolves in unexpected ways. Blake Hall of ID.me originally started with a concept called TroopSwap, building Craiglist for the military community. But he realized that the team was spending the bulk of their time trying to verify actual military members. A few years into building, he had a new aha moment: “It looks like we have to pivot now to something else…maybe what we really need to build here is not a website, but an identity utility.” 

Fast-forward and ID.me was most recently valued at $1.5 Billion and is widely used by major institutions, including the IRS and Department of Treasury. Sometimes, you can “fail” your way to a bigger, better business.

5. Find meaning in the small stuff.

I always ask founders what their biggest “pinch-me” moment has been, the time that stands out as the most exciting moment of the whole ride. Some have shared stories of meeting their idols, but most tell me a story of their very first customer. Even after they’ve scaled up, it’s that very first transaction that often remains a moment of pride.

Steven Galanis of celebrity marketplace Cameo told us the story of the first reaction video he received from his very first customer. He said, “I still get goosebumps thinking about it, because ultimately the second I saw that we could make one person feel like that I had conviction [that] at scale we could make millions and millions of people feel this way.”

In the early days, every company is seeking out product-market fit. No matter the undying belief you have in your idea, the earliest signal of validation from the market is one of the most meaningful turning points in predicting success. 

In addition to these insights, there’s one piece of advice that I would add to this list from my own experience as a founder (it’s something I always share with our founders at Inspired Capital): your most important job is as a capital allocator. Yes, founders are supposed to be visionaries, talent magnets and customer-obsessed product leaders. But the core of the job is capital allocation and all the greats have that skill. As you think about setting strategy and where to spend your time, ask yourself: Am I investing company dollars into places with the best returns?
It’s impossible to summarize all of the wisdom that’s been shared 100 episodes in, but if you’re looking for some inspiration, make sure to listen in. You’ll get great wisdom, plus an inside peek into the journeys behind the best startups of our generation. As Vlad Tenev, founder of Robinhood said, “You have to enjoy the journey. Right? The journey is ultimately what we have as founders.”

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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