Strategies for managing limited resources may no longer be such an issue for some entrepreneurs, thanks to the latest round of venture capital and funding opportunity announcements. This means that startup founders in the WA ecosystem are buzzing with excitement. Undoubtedly, this is also an excellent time for individuals to explore entrepreneurship and test their ideas. However, despite the positive developments, it’s important to acknowledge that new challenges will arise too.
Specifically, most people will not receive any investment, and rejection will be a common setback many founders have to face. Even with more than $100M of capital injected into the local startup scene, there is still not enough money to go around. That’s why as a founder, it’s crucial to embrace rejection, stay motivated, and have strategies for managing limited resources. Especially if things don’t go according to plan.
Persisting in the face of rejection
Building a startup from scratch is a tough journey, particularly when it comes to pitching your early ideas to investors. It takes courage to put your vision out there, only to face rejection. However, it can also be a valuable learning opportunity for founders who persist despite the challenges. Every pitch, meeting, and interaction provides insights that can help refine your pitch and business model. Celebrate the fact that you have put yourself out there, which is a significant accomplishment in itself.
Embracing rejection can be a powerful tool for growth. Rejection is just a temporary setback in your larger journey, and it can provide valuable feedback and insights into what investors are looking for in a startup. It’s crucial to take feedback constructively and use it to refine your pitch and business model. Then, use it as motivation to try again and show off your improved pitch deck and delivery.
To stay focused, it’s vital to keep track of your vision. Keep your vision at the forefront of your mind, and use it to stay motivated and focused on your goals. This will help you push through rejections and keep going until you achieve success. If you’re having trouble visualizing this, create something instead, such as an image, drawing, or recording of your larger vision. This can serve as a great reminder to get you back on track.
One example of a founder who persevered through rejection is Rebecca Wilson, co-founder of ‘Starts at 60‘. She faced significant rejection from investors when pitching her online media platform for over 60s. Particularly because they didn’t see the value in that market. Despite this, she used rejection as motivation to refine her idea and build her audience through social media and content marketing. Her persistence eventually paid off, and she secured funding from a group of angel investors who believed in her vision. Today, Starts at 60 is a thriving platform that serves a large and engaged audience of over 60s. Plus, it provides a valuable resource for a demographic that is often overlooked by traditional media.
Perseverance is a tough ask for many founders. Yet, if you can embrace feedback, grow from the experience and stay on track, you can only get stronger through courage and resilience.
Funding challenges
In my recent article on building resilience, I discussed the common obstacles that founders encounter when seeking funding for their ventures. Despite the challenges, it’s important to remember that with the right mindset and approach, you can overcome these obstacles and emerge stronger. With that in mind, here are some actionable tips to help founders navigate funding challenges and increase their chances of success.
First, it’s crucial to have a backup plan in case traditional funding sources fall through. Rob Nathan’s advice (from a previous Morning Startup session) is invaluable in this respect. He stated that it’s imperative to have a Plan B and even a Plan C in place, such as receiving partial funding (plan b) or even 0 funding (plan c). As a result, exploring alternative funding options such as crowdfunding or grants or side gigs may be a viable option. Alternatively, private funding through family or friends or angel investment could be another possibility. It’s essential to do your research and find funding sources that align with your startup’s vision and values.
In addition to exploring alternative funding sources, you can also figure out ways to continue bootstrapping your startup. This involves finding creative ways to generate revenue and cutting back on expenses wherever possible. This may mean working on a leaner budget and finding ways to make every dollar count. Additionally, it may involve getting part-time or freelance work. Basically, anything that helps to keep the bank account healthy and cash flow ticking over.
Another important strategy for working through funding challenges is to build traction in your product. This means focusing on creating a product or service that users love, solves a real problem for them and convinces them pay something for it. Of course, on a limited budget, this means prioritising only the most essential features of your MVP that your customers will buy. By doing this, you can create a buzz around your startup, which can increase the likelihood of attracting more customers and potential investors.
As an example, Sam Zheng is the founder of Curious Thing, an AI-powered interviewing platform. He faced scepticism from investors about the technology and market potential. To overcome this, he used government grants, incubator programs, and accelerator programs to refine his business model and pitch. Eventually, he secured funding from various sources, raising $1.5M in seed funding in 2019. Curious Thing is now a thriving business that is changing the hiring process.
Funding challenges can be very difficult to navigate. But, founders who are willing to be creative, resourceful, and persistent can succeed in building a thriving business.
Managing limited resources
Startup founders often have to work with limited resources, be it funding, time, or technology. To overcome this challenge, you need to focus on being resourceful and finding ways to get things done with what you have. This may include outsourcing or hiring freelancers for specific tasks, leveraging free or low-cost tools and resources, such as using free interns from a local university.
Another common challenge for founders is a lack of time. To make the most of the limited time available, you will need to prioritise critical tasks and delegate or outsource other tasks whenever possible. It’s also crucial to consider a task’s potential profitability, meaning if it will help maximize profitability, it’s worth investing time in. This way, they can focus on the things that will have the most significant impact on their startup.
Technology can also be a significant challenge for founders, but there are ways to work around it. You can use free or low-cost online tools to manage tasks and streamline processes. Moreover, you could leverage low-code or no-code apps, especially on a shoestring budget. Another option might be to partner with other startups or companies to access the technology they need.
Sheryl Thai’s story is an inspiring example of a founder who successfully navigated the challenges of starting a business with limited resources. She started Cupcake Central with only $2000 in savings and a single recipe. She faced many challenges, including finding affordable rent for her first store and navigating the complicated process of obtaining a business loan. However, she persevered and as a result of having strategies for managing limited resources, now has multiple successful stores across Melbourne.
Overall, by being resourceful, prioritizing tasks, leveraging free or low-cost tools, and embracing low-code or no-code apps, you can make the most of your limited resources and build a successful business.
On Reflection
In conclusion, while this could be a great time for entrepreneurs to enter the WA startup scene, it’s important to acknowledge that rejection and limited resources will remain common challenges to overcome. By embracing rejection, staying motivated, and being resourceful, founders can continue to push forward and build successful businesses, even during tough times. Ultimately, the journey of entrepreneurship is a challenging yet rewarding one, and those who have strategies for managing limited resources will have the best chance of success.
