By Markus Lampinen
Whenever you talk about startups and building new businesses, there’s often someone that chimes in with the comment “money isn’t important for entrepreneurs.” And over the years in building Grow VC, we too have heard that argument several times. Well, guess what, it is actually quite important.
Often the counter argument is the value of the right mentors. Granted, the value of a good mentor, advisor and role model is vast for a budding entrepreneur to rise to their fullest potential. A great mentor will force entrepreneurs out of their comfort zones, to pick up new abilities and hone their business skills to meet the demands of the market. But at the end of the day, if the entrepreneur has no time to listen and learn, even the greatest mentor will not be able to conjure more time for the entrepreneur.
Time IS Money
It’s a saying we shrug off almost daily and it reverberates in many different contexts. It’s not the golden egg of all proverbs, but it does have a point. Each minute of each day costs someone money. The sooner you learn to accept this, the sooner you will also be able to set yourself in the right mindset, of weighing your options and priorities, and focusing your time on what matters the most to yourself.
If you are spending time bootstrapping your venture and not taking out a salary, then guess what, that time is coming out of your own pocket. You are in effect paying for it. This is in various forms, for example through missed salaries or other opportunities (the alternative cost). It is an investment into the future of your startup venture and your own career. However it remains for you to decide if the investment is worth the sacrifice that you will endure making it.
Oh and one more thing, ask an entrepreneur that’s bootstrapped a venture or two if money is important. I’m sure you’ll get quite a clear answer.
No Such Thing as Free Advice
Entrepreneurs form tight networks in their local regions, but nowadays also increasingly much outside of their local setting. Time spent on networking or pitching in to someone else’s business is also time that has to cost someone. You can again decide that it is an investment into some future outcome, be it a relationship, partnership, a good contact or friend, but at the end of the day, if you are paying for it, make sure you get value out of it.
I’ve seen people ‘helping out’ in others businesses for months, only to end up in frustration and confusion as the ‘helper’ does not get anything out of the relationship. Sure you learn a bunch and so on, but let’s get real. If you are adding value to someone else’s operations, you should get something out of it. Often stringing people along ends up in miscommunication and unclear expectations, something that is good to clear up right at the start. “If I’m going to spend this much time in helping you out, this is what I expect in return..”. You don’t have to be so crude about it, but at the same time fair is fair.
Everything is a Trade Off – Don’t Pretend it isn’t
You are the judge of how you spend your time, but everyones time costs money. Make sure you can always justify your use of time to yourself. “I’m doing this instead of X, Y or Z – is it the best use of my time?”. A tangible example is sitting at a meeting looking at the same PowerPoint you’ve seen a thousand times, versus working on actual work, exercising or even spending time with your kids. Everything is a trade off, don’t pretend it isn’t.
Once you get into the mindset of thinking about time as the most precious commodity, which it most definitely is, you will have a hard time justifying menial and ultimately pointless activities to yourself. And that’s the point. You shouldn’t be doing pointless activities anyway.
Ask yourself, would you pay someone else to do the things that you are spending your time on?