Simeon Ivanov: We all know that nine out of 10 businesses die in the first year. Or at least, that's the widely-accepted statistic. Most of those who survive die in the following few years as well. As a founder of multiple companies, what do you think are the most important areas to focus on in the first few years to make sure that the business survives and thrives?
Dimitar Ivanov: Oh, you got to cover all the areas. There's like five, six, seven things that you need to cover. Not to focus on all of them at all times, but you definitely need to cover them. I think Tolstoy in Anna Karenina has this, the Anna Karenina principle I think. He says that, "All happy families are alike, but all unhappy families are different in their own way." It is the same with companies. All the happy companies are alike, meaning that in all these 10 different points, all the 10 different important things they are the same, because they got them covered. But all the unhappy companies, the companies that fail, they're different in a different way. One of them ran out of money. One of them, they had the real issue to culture. The other one, their maybe potential was too small, so they couldn't really grow. The other one had some other problem.
So I think to succeed you really need to cover all of them to survive, not to succeed, just to stay in business. To fail, you need to fail at one. You can run out of money. It's like a happy family needs oxygen to breathe, otherwise you cannot even survive, let alone be happy. So it's the same more or less, but definitely people to get the thing done, you cannot do it alone most of the times. You need large enough potential, which means that okay, there is some opportunity there, but is it big enough to really support the business, to support even yourself? I mean, to support the lifestyle, to pay salaries to your employees, to pay taxes, to rent an office. Is it big enough? Can it grow? Culture, cashflow, there is a lot of different things that you need to cover. And at different stages, you need to focus, of course, on different ones but still have all of them covered in a way. That would guarantee your survival.
Simeon Ivanov: I remember from our experience, in the first years when we partnered together, we focused so much on sales. It was crazy. Everything was sales, sales. Obviously, get the right people to work with us, and nothing else really mattered. I think we did good, but we didn't know what we were doing, but we kind of hit the right note there. But at some point, the company started getting completely derailed and everything was out of order. So we said, "We need to step back, look at the bigger picture, and stop focusing on sales and focus on structure."
So if you remember, one year we were doing only structure and nothing else. Sales were hurt, but we already had the cash in the bank to be able to support that. I think it was the right thing to do. I believe that speaking with a lot of people also here in the United States, people that don't have much experience very often focus on the wrong shit to do. Every business is different obviously, but some people focus too much on marketing or too much on how your office looks or if you have the employee handbook just right, or just stupid things that take a lot of time but don't bring money in. At some point, you try to optimize on taxes, for example. At some point you realize, I don't even have the money that I need to optimize on taxes, and you die.
So obviously, different for each business, but for us, this worked. I believe that for most businesses obviously like make enough money first that you can start figuring out all the other things. Yeah, I wouldn't say, like "Don't focus on the culture," definitely because that will be a huge mistake.
Dimitar Ivanov: Yeah, yeah. Depends on what your situation is. In some businesses, especially with platforms, the goal is to get market share and to grow.
Simeon Ivanov: Growth, yeah.
Dimitar Ivanov: If you look at now companies like Lyft, I think it's losing more than $500 million a year, and they just need to grow. I don't think they even know how they would get to profitability, it's just growing, growing, growing, growing. So they're focused on that. But of course, you need some healthy balance just as in any ... like with a family, like with any organism, you need a balance. Just as we were focused only on sales, if you don't recalibrate every now and then, you stay there at this extreme, then usually it will be the thing that kills you. It's like a person. It will definitely control you, and it will probably kill you. So I think it's good to have some perspective to look at it from the side, to think strategically and to recalibrate when needed. But of course, at different points, you need to focus in on different things.
Dimitar Ivanov: I think there's this example about Facebook where Zuckerberg, for one year, his main focus and goal was growth. So when they would bring something to him the question was, "Does it help us grow? If the answer is no, then don't tell me about it." I don't know if it's too exaggerated, but it certainly makes sense that you can only really, really focus on one thing.
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After years of testing, after all experiences as a professional racing driver, an entrepreneur, a Neuro-Linguistic Programming Coach, and simply a human being that wants to grow, I've narrowed down a set of skills that help me win the day, the week, and the game of life.