An Innovator’s Rant

Working in startups, corporate innovation and business transformation for almost a decade, the concept of innovation still eludes me. Don’t get me wrong, it’s not difficult to deliver on the promise of innovation to the board and management when it comes to the literal definition of innovation - trying something new and enabling change for the organisation. What eludes me is the kind of innovation which brings a sense of purpose to a career in innovation.

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Don’t get me wrong, I’ve had a rewarding career in innovation and still enjoy the funs of being in a job where ambiguity is the prize and price of my daily routine. The experience of different industries allows me to see how each tackle disruption in their unique way.

However, one thing was consistent for me which I also noticed in many of the innovators i’ve had the privilege to work with - the proverbial question of where does these innovation lead to? We had the hopes of pushing the industry into unchartered waters, dabble in areas where no one else was willing to go, and plant the flag of a frontiersman as we topple the industry from where we stand and build a new empire on top of new foundations.

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Maybe what we’ve been familiar with is the pop culture of innovation - where Facebook, Google, Amazon and Netflix toppled the industries and redefined the mechanics of it. Maybe innovation isn’t about restructuring legacy and sparking a revolutionised future. Perhaps innovating legacy is just that safe answer to a world where if you weren’t ready to innovate, you’ll be replaced.

But regardless of what it is, people like us still stand strong with the belief that we can break the industry’s mould. In that case, maybe innovation is giving others hope in a rat race world where everything remains constant; perhaps, innovation exist to present a glimpse of light that there must be a better way to do what we’ve all known to be the norm - seeding hopes that they, too, can change the world.

Your hesitation is my motivation
— Annonymous

The Real Reason Why Your Customers Don't Buy From You

If you ask sales people what makes their product great, they'll cite great pricing, functional benefits, and the amazing support they are able to provide. In that case, why do some customers choose to stick with suppliers who may not have the best pricing and provide perhaps only average support for an older product? What is the real reason behind your customer's decision to buy (or not to buy) from you?

Well, of course the 4Ps of marketing are important for anyone in sales and marketing, but after consulting with a few startups and launching several digital products in large companies, here's what I've learnt about getting customers to buy from you.


1. Don't Just Sell, Inspire!

Most marketing methods are manipulative, especially in the FMCG, fashion and beauty industry. Such techniques create desire from societal pressures - If you're not using the latest gadgets, for example, you're told you're losing out as you can't perform tasks A-Z unlike your peers. These techniques usually work in the short term but what about the long term? You'll notice that the selling points for such techniques are very much functional, price sensitive and difficult to sustain.

However, if your marketing messaging strives to inspire, it sets your customers thinking that if they were part of your world, they'll be a part of a journey to something greater in future. When you inspire them, they'll follow you as their leader. Apple employed this technique very effectively. Instead of marketing the iPod as an "X GB MP3 Player", they chose instead to market it as "1000 songs in your pocket".

Honestly, your customers don't care as much about WHAT is inside whatever they are buying. They care more about HOW what they buy integrates into their lives and WHY it will make it better for them. By incepting the idea of having 1000 songs in the customer's pocket, Apple made it easy for customers to start imagining all the other possibilities this promise encompasses -- perhaps a 1000 movies, perhaps more, in the near future. This gives customers a sense of purpose, knowing that they are part of this journey. Instead of hearing "You guys have the best prices and best products!", I'd rather hear from a customer say "I don't know, I just love them.".

2. Stop FocusING On Your Product

So how does one inspire? A simple approach would be to focus less on your product and more your customer. A great example of this is how Apple designs the layout of their shops and decides on the placement of their products. Many other competitors have since followed suit but most have failed to understand the idea behind it -- it isn't just about putting a few laptops on large tables over a sparse amount of rental space.

The reason why that particular layout stood out so significantly for Apple was because Windows had been frequently associated with clutter. With the use of clean and tidy layouts, Apple effectively made their MacBooks a symbol of the decluttered life which owning a MacBook would bring. This idea of a "decluttered lifestyle" is what sets them apart and sells their laptops. 

So the next time you design your marketing message, focus less on your product and more on your customers. Don't just tell them how good your product is; show them how buying your product will improve their lives. The image above very aptly depicts what your customers are truly looking for when they buy from you. [credits to useronboard.com]

3. Lifestyle TRUMPS Novelty

Lastly, it is true that novelty sells. Many startup founders I speak with tend to put the spotlight on the novelty of their products. When you're first in your market, that is truly a strong marketing angle you can use to your advantage. However, the longer it stays that way, the harder it will be for you to determine if your product really solves a real problem for your customer and better their lives or if they're just buying it for novelty's sake. If your marketing message and business angle isn't about being novel but truly to better the lives of your customers, you will most certainly have built a brand that sets a higher barrier of entry for competitors.

While there are still many reasons, the main point is that many startups are too self-absorbed and focus on their product way too much that they neglect the WHY in the marketing messaging. Most customers don't buy your product because you say it's good. They buy from you, because they believe what you stand for is great.

What I Learnt From Hackathons and Startup Weekends

Having been a part of various hackathons and startup weekends as a participant, facilitator and mentor over the past 3 years, I've decided to pen down the top 5 lessons I've learnt along my journey. 

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1. Show That You're Foolish

When we join a hackathon or startup weekend, we start off with a huge idea of what we want to build and an imaginary new world made better by the solution we've conceived. Yet somehow, that vision shrinks when we try to translate them into words. Why does that happen? Maybe it's because the dream seems too far-fetched and unachievable, so we choose to be conservative in our vision to avoid sounding silly. That big hairy audacious goal (BHAG) is then lost in the process.

Here's the thing - If your vision doesn't sound foolish enough - it probably isn't good enough. Just do a quick scan of the companies making - or at least standing a chance to make - a real change in the world today. Their visions would have been touted as delusional when they started. Who would had foreseen that it would be globally accepted to stay in a stranger's house when you travel? AirBnB believed in that world, and made it happen.

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2. Focus On The Why

During Startup Weekends, teams are urged to conduct as many validations and experiments as possible to prove that our problem, customer, solution and business model is viable. However, many teams end up validating only the "What" without truly understanding the "Why". In the case of the Business Model Canvas, it isn't about guessing a customer segment and testing to see if your guess was right. It's about investigating the underlying reasons behind why the results are the way they are.

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Here's an example to better illustrate this. Let's say there's a startup that believes in proactive healthy living. Their solution is a mobile app that allows users to monitor and analyse their health history. As health becomes more of a problem when we get older, the startup then assumes that their key customer segment is in the 35 to 55-year-old range. If we tested the "What" of this assumption, it would highly turn out to be true as we'll only be focusing on the fact that 35 to 55-year-olds are more health-conscious.

If we were to delve into the "Why", we might discover that the reason for them being more health-conscious now is because they could not proactively monitor their health when they were younger as there was no good solution available. Investigating further on this, the startup then identifies that the younger generation is actually concerned about health too and do not wish to be in the state where the 35 to 55-year-olds are right now, when they get older. By delving into the "Why", a more tech savvy, younger generation with increasing spending power could had been identified as the potential early adopters for their solution instead.

3. Emotions Trumps Numbers

During demo-day or the final pitch, it is always tempting to put the spotlight on large market sizing and revenue numbers to entice the judges. However, the truth is that it's the customer that makes or breaks your business - not how big your projections are. If your customer connects with the deep frustration you are trying to solve, you'll get the revenue. Even if your market is small, by solving a real negative emotion, you'll eventually monopolise the market.

This was what Google did when other search engine giants were already around. Web users had a huge pain finding something relevant online and existing search engines were plagued with distracting advertisements surrounding the search box. Google's solution was to cut down on frustrations and distractions, thus making them the world leader in search today.

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On top of this, we've got to remember that the judges at such events are people too. By pitching from emotional value instead of market capitalisation, you'll be more likely to get their attention during your pitch.

4. Growth Is Better Than Size

If you do choose to focus on market sizing and potential revenue of your startup instead, it pays to emphasise on growth over existing market size. Let's say your solution is in the travel industry and you've identified that the market is worth trillions because that's how much the industry is generating today. How much market share could you realistically get? Probably 0.1%? If you're trying to convince the judges that you have a grand vision, yet that vision is limited to 0.1% of a highly competitive red-ocean market, it's not that great a vision now is it?

Peter Thiel has a great explanation of this in his book Zero To One. By owning a small percentage of a large but highly competitive market, it's difficult to stay ahead as anyone can join in the rat race. It's probably better to get 100% of a smaller market where you can block off competitors as you gain control of the ecosystem. Whenever possible, show how you'll create a niche market which you'll be able to own a hundred percent of and how that new market will expand in the future. AirBnB created a new supply and demand market for hospitality. Uber developed a new supply channel for on-demand transportation. Facebook was the reason why social media marketing even exists today. These are great examples of how companies can create and monopolise new markets.

5. Minimum Viable Product doesn't mean Broken Product

This is probably one of the most common mistakes startups make. By being lean, we are advised to push out a minimum viable product (MVP) as soon as possible, to test as much as possible, at a cost that is as low as possible. But that doesn't mean that it it is acceptable to launch an MVP that is broken in any form. 

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If your MVP doesn't have the right amount of emotional design, usability and reliability, you'll lose customers right after the first interaction. And all of us know that it's very tough to recover a broken relationship. So I implore startups out there to please not screw up your MVP.

 

OK, The ONE Lesson

If there was only one lesson that is truly more worthwhile than all those I've listed above, it's my newfound definition of a startup. A startup is not the result of a ground-breaking solution, nor the outcome of a grand vision on pitch day. A real startup is created only when a bunch of people who trust one another decide to make an impact in the world they live in - as a team. So, even if you failed to win any hackathons or startup weekends, what is important is the team that you've created. Cherish that team and anything is possible.

5 reasons why your startup should focus on your habits

Much of entrepreneurship literature encourages us to focus on finding actual problems worth solving, but, how do we know which problems are worth solving? A good rule of thumb would be to focus on your customers' habits and here's five reasons why.

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1. Acceptable Solutions

We read a lot about User Experience Design and Human-centric Design being the new focus when developing solutions, but what many startups sometimes forget to do is understanding how the solution is functioning within the user's life (not as a functional solution but a part of the user's life routine and flow of actions). I refer to this as User Habit Design. Take the solution and its functionalities out of the way, and focus on the user's journey around the problem you are trying to solve, their habits and, most importantly, their emotions while facing it.

Here are some examples of how solutions might not be "accepted". If your solution is not a habit the user is looking to improve/change, even if you're solving an actual problem, it is highly unlikely that it will last in the long run as the novelty of your solution will eventually dry out. In short, you've got a cool idea but it's not that big a problem. Or if your solution requires an entirely new habit to be formed and which only works with your solution, it is highly unlikely it will organically sustain.

The "new" behaviours "created" by successful startups (e.g. Uber, Facebook, Twitter, AirBnB) that we are familiar with today were incremental evolutions from existing behaviours. They were not created from scratch nor did they require a huge change in our existing behaviours. If your solution can relate with an existing behaviour and requires only incremental change in behaviour, there will be a higher chance for your startup to succeed.

If you have large coffers of investment and time allowance, you may be able to create new behaviours over 5 to 7 years before getting customers to truly appreciate your solution (e.g. Square, Tesla) - but if you're like most startups, this is a luxury you probably do not have.

2. Higher Retention

When your solution clings onto your users' existing behaviours, it is more likely that you'll see users coming back to you more often. This significantly reduces your retention costs, and the need to run promotional campaigns just to get your users to come back to your solution. Nir Eyal's book "Nir & Far" explains how to tap on existing user behaviours, create incremental behaviours and "hook" them back to reinforce such behaviours. To get higher retention rates, focus on your user's journey and build solutions for habitual problems.

3. Efficient Experiments

Most lean startups would be running a new experiment every other day. If your solution is only used once a year (e.g. when going for that annual holiday trip) or even once a lifetime (e.g. when getting married), it is very difficult to get measurable feedback. Efficient measurable feedback means being able to efficiently contrast your users' behaviours from before the experiment was conducted and after. By working with a core group of users as they grow with your platform, you are able to focus on serving an identifiable group of core customers.

4. Easier Explanations

With so many new product ideas and startups out there, you do not want to spend too much time explaining the core benefits of your product to your customers. It has to be apparent to them. If the problem is a habitual recurrence, it is likely that they will buy into the product just by listening to your elevator pitch. However, if its not a habitual recurrence, you'll face a lot of resistance from users with a "I can deal with the problem" or "I'm not the core customer but I believe others will use it" mindset.

Many startup founders I speak with tend to gravitate towards the belief that when this happens, it's because the benefit is not explained clearly enough. They think, "once the user experiences the solution, they will fully appreciate its benefits." I believe this to be a fallacy. If the customer doesn't appreciate the benefits your solution can offer, it is most likely on the wrong track.

5. Startup Before Product

Most of the startup community evangelise being agile and lean, but much of this is explained in context of building an Minimum Viable Product. Startup founders and team members have to understand that your product doesn't drive your startup. You're looking to solve a problem for a customer – if your product doesn't work, scrap it and start again. By being open to building several MVPs to test against a customer group instead of focusing on improving that one (possibly failed) product, a startup is more likely to discover the right solution that customers are looking for.

Growth hacking your startup? Be a pirate!

Your product is launched and you've got your first batch of customers. Congratulations! Now, your focus is to keep growing. But how do you do that? Many would advise that you start small with low marketing costs as you are a startup. While I agree with that general advice, I'd like to recommend using a more measurable approach - AARRR, also known as the Pirates Metrics.

The Pirate Metrics

Coined by famous investor and entrepreneur, Dave McClure of 500Startups, the AAARR system has been immortalised by so many in the ecosystem. Dave argues that for a startup to be effective at driving the company towards its vision, the founders/CEO needs to focus on only 5 key metrics and develop strategies to constantly improve on them.

Ask yourself - Is 10,000 weekly unique visitors better than 100 customers who each tell 3 friends about your website? If questions like - "How long are the weekly unique visitors staying for?" and "Are the friends turning into paying customers?" are running through your head, you're on the right track. While both unique visitors and customers are important, it's how we use the data behind these metrics that makes a difference. Don't just drive metrics, seek to understand them throughout the customer journey instead.

1. Acquisition

Driving visitors to our landing page is often the immediate answer when we think about marketing our product or service. But it's more than just driving traffic to the site, you'll need to identify where your visitors are coming from, the most effective acquisition channels and the cost-effectiveness of each channel. Acquisition channels include blogs, affiliates, search engines and social media. Most analytics tools provide these basic information for free (e.g. Google Analytics). Services like Bit.ly are very effective in measuring and experimenting the tone-of-voice and micro-copies posted on your acquisition channels.

Most startup growth-hackers break down acquisition numbers into 2 types: landed and engaged. Every acquisition that arrives at your landing page would be a landed acquisition while an engaged acquisition is usually defined as a visitor who doesn't bounce off immediately and spends at least a certain amount of time on the website. In order to grow efficiently, constantly challenge yourself to increase engaged acquisitions percentages instead of only driving new landed acquisitions.

 Example - Squarespace Analytics

Example - Squarespace Analytics

2. Activation

After driving traffic to your landing page, you'll need to "activate" them. Startups need to define what this means and adapt the definition to fit their growth stage. For some, an activated visitor might be defined as a visitor who indicated an interest for early beta trials by providing their email address (e.g. mobile applications), signed up for a free trial (e.g. software-as-a-service) or viewed product details on the website (e.g. e-commerce). To improve on activation rates, you'll need to monitor data-points such as which pages visitors typically click on first when arriving at your landing page, which page they usually drop off and how much time they spend on the site. Crazy Egg's visual heat maps is a very useful tool for businesses to gather such information.

 Example - Crazy Egg's Heat Map for  Chef Box Singapore

Example - Crazy Egg's Heat Map for Chef Box Singapore

You may ask - "Why not define activation as paying for the product?". The rationale behind this is simple. Visitors usually go through a phase of discovering the product (Acquisition) followed by experiencing or understanding the product (Activation), using the product repeatedly (Retention) before paying for the product (Revenue). By breaking down the user experience, we are able to create effective and actionable strategies for every step along way. During a startup's early stages, it is important to focus on activation metrics as most startups do not have a huge marketing budget to dump into acquisition. Having a high activation rate helps you stay afloat longer while you work on retention and revenue.

3. Retention

After activating visitors who have experienced your product in one way or another, you'll want them coming back for more. Retention metrics can be as simple as having a user returning to our mobile application twice in a month, or visiting our website once a week. To increase retention, craft strategies by analysing how the users are coming back and where are they coming back from. Are your weekly mailers effective at driving retention and what's the tone-of-voice that drives the most re-engagement?

Having a high retention value also increases the lifetime value of your users. This metric becomes even more important for digital advertising business models as typical consumers rarely click-through on advertisements when they see it for the first time. It takes a few sightings before consumers will actually click on the advertisement. If users don't revisit the service often enough, it will become increasingly difficult to execute such business models. There's also the value of user data. Having high retention numbers usually means you are able to gather more information about your users in a long run, opening up revenue opportunities for your business. Remember - keep wooing your users and don't be complacent just because they have used your service once.

4. Referrals

If you do very well on retention by focusing on your customers, there's a high chance that some of them will turn into your company's evangelists. Word of mouth marketing has been around for a long time and is still highly effective. Even the concept of viral campaigns stems from word of mouth mechanisms. Having a customer tweet about what you do, share their experience with your product on Facebook or tell their friends about your company are one of best affirmations any entrepreneur can ask for.

To encourage this metric, you'll need to build it into the user experience. Users like to share when they feel their friends can also benefit from that value. Make this apparent and easy for them. Dropbox's refer-a-friend program and Canva's invite-only systems are good examples. As referrals end up as acquisitions and activations, tracking this second cycle allows you to identify key influencers and increase the quality of your referrals.

5. Revenue

While all the previous AARR steps are important for early startups, it pays to understand your potential revenue models as soon as possible. You might not need to integrate revenue functionality early in your product, but by understanding how many of your activated visitors will end up paying for it helps build up investor confidence.

Experiment on your price points to find out what's the optimal revenue model for your startup while keeping an eye on your actual customer acquisition cost. The cost to acquire a paying customer needs to be lower than the total lifetime value of the customer. For subscription services, a customer's lifetime cost can usually be increased by having high retention rates - this is why it is important for startups to not skip a step in the AARRR framework. Just as the work ethic and motivation of each startup founder has a huge impact on the progress of a startup, every step in the AARRR framework plays a big part in defining a successful revenue model for your company.

5 startup tips from Jon Favreau's movie "Chef"

Jon Favreau's latest movie centers on a frustrated but talented Chef, Carl Casper, who quit his job at a prominent LA restaurant and eventually started a food truck which turned his life around. While the trailer had us focused on the mouthwatering foodporn (and Scarlett Johannson), the movie was filled with useful takeaways for entrepreneurs. Here are five of them:

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1. It's Going To Be A Journey

After leaving the head chef position at a prominent restaurant in LA, Carl was stuck trying to figure out what to do next till he decided to take a chance on an abandoned food truck. I assume running a scrappy food truck is far from what any head chef would consider a successful career, but who knew that this would be the path to having his own restaurants in the future? An even bigger twist of events is when Carl's "social media enemy" became his first investor. Entrepreneurship is a journey. New challenges and uncertainty will constantly hit you right in the face. Be ready for them and hustle on.

2. Validate With Actual Customers

Believing in what we do gives us strength for the tough times. However, blind belief will not be able to guarantee your business' success. Test your product with actual customers. Carl didn't just drive his food truck straight back from Miami to LA where he intended to be based out of. He tested his cuban sandwiches with actual customers along the way, and even made changes to cater to the varied local tastes. Constant testing is the only way for us to learn what our customers want, what they dislike and what they are willing to pay for. Most of your tests will fail, but this will just bring you closer to success after all, there are only so many ways to make an awesome cuban sandwich.

3. Align Your Vision With Your Team

This is especially important during the early stages of your startup  everyone needs to be on the same page and believing in the same thing. When Carl's son, Percy, thought that it was alright to serve a slightly burnt cuban sandwich to the customer, Carl had a serious conversation with him. Carl's vision was to deliver the best cuban sandwich experience to his customers and he needed Percy to share the same vision. When your vision is aligned, your team is able to efficiently deliver on that shared vision without you having to check in on them consistently. A shared vision builds trust and efficiency.

4. Humanize Your Social Media

There is no doubt that Percy's tweets and vine posts played a huge role in Carl's food truck success. Carl's social media drama with an influential food blogger gathered many followers for him, and it was a genius move by Percy to leverage on that. However, what connects Carl and his crew to their followers was how Percy humanized the brand. By posting behind-the-scenes images, tweeting their next location and menu items, it is easy for their followers to feel like they are a part of the experience. So the next time you tweet something  ask yourself, how would a 10-year kid do it? Keep it simple and relatable.

5. Learn!

While running your startup, it is common to wear multiple hats which means you'll have to pick up new skills and do things you've never done before. Although this lesson might not be obvious from the movie, to prepare for the role, Jon Favreau actually went for culinary lessons and worked in the line for food truck master Roy Choi. Why did he take lessons when he could have had a double perform those perfect slices of onions? That's because Jon believes in bringing out the authenticity of every character he portrays. The determination to learn and desire to do it as well as others who have mastered the craft is important when you start your own business. Eventually you'll have to hire a team and delegate responsibilities that you are weak in so that you can focus on your strengths, but until you are able to do that, keep learning. Constantly teach yourself new skills and refine your current repertoire. It'll be tough but worth it.

I admit, it's still a movie...

Yes, Hollywood isn't exactly the Harvard for startups. As a Hollywood movie, we expect a good ending despite the struggles throughout the show and everything is always clearer in hindsight. However, I still find myself being inspired by such a simple feel-good movie. If you have seen the movie, what do you think?

What would you attempt if you knew you could not fail?

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Ask yourself this question - What would you attempt if you knew you could not fail? If everything you do would always be successful, would your decisions be any different?

With the creation of new VC firms and billion-dollar exits of technology companies, being an entrepreneur has somewhat become a status symbol for many - for all the wrong reasons. This question aims to bring us back to how we really define success.

These days, we hear stories of companies going IPO or being purchased for billions of dollars so often that it feels like that's the definition of success. Getting huge fundings from venture capital firms became the new acknowledgement that what you're building is a meaningful and successful business. Has our perception of success been so affected by the news so much that we forget the real reasons why entrepreneurs exist?

The next time you come up with a business idea, ask first - not how big the market is, but how much a dent you'll make in the universe with it. Do also keep in mind that what you do has be aligned with everything you believe in first before you can build a business which will make a difference to others.

So what would you attempt if you knew you could not fail?

4 ways to survive being an entrepreneur

Most startups start off with the dream to make a difference to others, attempt to change the world or even to strike a big windfall. Regardless of why your startup was conceived, we all face the day-to-day struggles of being an entrepreneur. In order to survive these struggles, we need to admit we're not superhuman and start taking care of ourselves too. Here's how to make sure you don't become a sociopath while building your startup.

  photo credits  Am y McTigue

photo credits Amy McTigue


1. Recognise It's A Job

When customers tell us they hate our product, they don't like the design or they think that it is pretty useless, many of us take it personally. Working in your own startup is a job. It is not an evaluation of who you are, your smarts or your potential. Once we recognise this, it gives us the breathing space to think rationally and not let these comments affect our ability to deliver the best product/service to our customers. Take all negative feedback seriously, but not personally. 

2. Spend Time With Others (Really Spend Time)

Working more than 12 hours a day on our startup is not uncommon for startup founders. We tend to slowly drift away from our friends and families. We try to meet them as often as we can but when we do, our phones become a part of it. We constantly check to see if we have gotten new signups, feedback emails or potential investor/partner correspondences. Now, that's just a waste of everyone's time. (I used to have a huge problem with this too.)

Time is our only resource as startup founders. When you're with your friends, put the phones away and really spend time with them. Do not spend most of the time pitching ideas or testing concepts with them. Instead, be the person you were before you were a founder, the one that they chose to be friends with, whenever you are with them. These true friendships last a long time, (usually) longer than the lifetime of your startup.

3. Take Medical Leave

Whenever you're sick (even if it's just a flu), take medical leave! You're not as productive when you're not in your best condition. Trust your team mates to do the job well while you rest at home. Imagine spreading that cold to your team mates if you do go to work! Falling sick is the only way your body can communicate that it's breaking down -- so slow down, and give your body the rest it needs.

4. Start A Blog

Many founders do not have much time for themselves, let alone time to write a blog. However, writing a blog gives you the opportunity to share your struggles with others. You tend to find new perspectives when you write about your problems. This helps you grow as a person and can improve your company. Blogs are also a good way to expand your sphere of influence in your industry. Starting a blog is easy -- just start by keeping your first post simple, and before you know it, you're writing tens and hundreds more.