One Practical Reason to Keep Going as a Startup
This article is written by Jeremiah Uke, a Contributor Author at Startup Turkey.
Magdalena Yesil is an entrepreneur, venture capitalist, author, and board member at many of the world’s top technology companies. She was one of the speakers at Etohum San Francisco 2017, she tells her tale of how she took her startup to success after a number of failures, lack of venture capital, and times of being bankrupt.
Many startups crash just as soon as they take off, for a variety of reasons including inefficient funding, government policy, poor planning /execution, unfavorable environment, competition, incompetence and so on, this is asides the difficulty startups face in the process of delivering their services.
The startup business can be very difficult, and only those who
find smart ways to reduce the difficulty to its minimum are able to survive the conditions, it takes a lot of personal qualities such as dedication, resilience, and doggedness to be able to start from the scratch or continue after experiencing failures as a startup. Startup failures mean a lot of losses to the team, possible venture capitalist and investors, but on the bright side, it also presents a chance to go back to the drawing board, and come up with better methods of doing things.
Magdelena Yesil, who joined entrepreneurship after 2 degrees in engineering, was unemployed at age 31 but went on to become an entrepreneur out of necessity, and was part of a number of failing startups, but also, she contributed to a number of successful startups, her startup journey is one that portrays resilience and will to keep on trying.
According to Magdelena, startups in Silicon Valley have two different cycles which are “boom” and “bust”, boom signifies a time when funds are available for employing as much as hands possible. Bust, on the other hand, comes with a scarcity of funds, while running her most successful startup Salesforce, Magdelena recounts being rejected by venture capitalists, and series of “bust” cycles where the startup was not able to pay members of the
team, mentioning that she had to pay employees from her pocket on several occasions.
On one of the occasions after being turned down by a venture capitalist, Salesforce was on the verge of bankruptcy and Magdelena got an idea to charge customers for one-year and three- year deals, giving them discounts to motivate them to pay upfront, the money paid can be used for immediate running of operations without having to raise extra funds from venture
This idea worked perfectly and the funds got from customers saved Salesforce, in 2018, Salesforce realized revenue of over $10 billion dollars.
Magdelena advises startups to spend more time with customers and lesser time with investors because customers are able to help your startup grow while investors carry different opinions criticizing your startup. In the end, it is not always easy to keep pushing as a startup facing challenges, but it’s definitely always worth it.