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For many startup CEOs, the company they’re running is their first real business experience. Take Mark Zuckerberg, for example, who dropped out of Harvard to found Facebook, or Evan Spiegel, the Stanford dropout behind the wheel at SnapChat. Many young CEOs are guided largely by passion and instinct rather than by experience. In some cases, that works wonderfully; in others, it’s the path to a quick failure.

As a former partner at both Battery Ventures and J.P. Morgan Capital, and now as CEO of Instore, my approach to running a company is a little different. Here’s what my past life as a VC has taught me about leading a company:

1. Keep your investor hat handy when making major business decisions.
As a VC, you spend a lot of time assessing the potential value of early stage companies. As any good investor knows, valuations are driven not just by existing business performance but also by defensible technology and projected performance that creates incremental value when achieved. At my startup, focusing on business value creation helps me determine when to invest in new technologies, marketing, and hiring by asking whether the investment will be accretive to the company’s overall value in the long run.

2. Raise money when you have a strategy for using it — not just because you can.
I’ve seen too many startups make the mistake of scaling before they’re ready, when they haven’t yet outlined a clear path to profitability or proven their product economics. While it might be tempting to seek VC funding early to de-risk your startup, don’t make your funding pitch until you know how you plan to scale your business. In the meantime, bootstrap your business and focus on measurable growth to figure out what works and what doesn’t before setting more ambitious goals. In our company, we’ve focused on doing more with less, using our resources efficiently to compete against larger competitors who are burning through money.

3. While it’s easy to get seed funding, that doesn’t mean you’ll make it to a Series C round.
Another reason not to get obsessed with fundraising? To be honest, it’s probably not going to happen. In more than a decade in the industry, I’ve seen that it’s easy to get a small seed round for a good idea. But in order to get investments of $5 million or more, you’ll have a lot more to prove to VCs. You don’t just need to demonstrate a great concept; you’ll also need a solid customer base and limited competition. Making things more difficult, it’s important to jump on an idea very quickly to stay ahead of the game. The time to incubate good ideas has shortened dramatically as competitors pop up quickly, thanks to the reduced cost of starting a web-based business. By the time you think of an idea that seems novel (a laundry mobile app startup, anyone?), you’ll probably see that there are already a half-dozen companies in that field, making it tough to gain a competitive advantage.

4. Admit your mistakes (so you can fix them).
As an investor, I often had to assess when a startup was drifting off course and work with management to get back on the rails. The same goes for Instore: We’ve made some mistakes along the way, but those mistakes hurt a lot less when corrected quickly. For example, we made a bad decision early on to outsource our iPad application to an offshore team. We ended up with a poor-performing initial product that we were only able to fix by insourcing all development. This early mistake cost us probably $250,000, but it could have cost a lot more financially and reputationally if we’d waited longer to correct the error. In our company, we’ve focused on doing more with less, using our resources efficiently to compete against larger competitors who are burning through money.

5. Use data analysis to drive your decision-making.
As a VC, I carefully studied financial forecasts and plans for customer and revenue growth, and I looked at comparable businesses when deciding whether to invest in a startup. At my startup, I look at a variety of business metrics (website visitors, revenue per customer, cost of acquisition, and many others) to determine how successfully we’re meeting our business goals and make decisions in line with past trends to help drive business growth. One recent analysis we did: Customers who request discounted pricing don’t value our product, are more likely to churn, and require more support than the average customer. In short, they aren’t worth the sales effort. Numbers don’t lie; in fact, they provide critical insight into what’s working.

6. Trust your gut.
While data is an important part of the decision-making process, as an investor — and now as a CEO — I also recognize the importance of trusting my instincts. Some decisions go beyond what the numbers can tell you: Choosing to back a startup because you personally believe in the founder’s vision, or, at Instore, hiring an employee who may not have as many qualifications as some others but has passion for the work and will help grow the business. Conversely, if you have an employee, however senior, who instinct tells you is not the right fit, both employee and company are better off if you make a change.

Moving from the role of investor to entrepreneur requires a shift in mindset for sure. Instead of listening to entrepreneurs pitch me, I’m the one doing the selling.

While I miss the stimulation of learning about 15 new businesses a week (great fun for people with mild ADHD), I wake up every day knowing that I’m doing work that makes a difference. My job matters; that’s pretty empowering.

Matt Niehaus is the CEO of Instore, a merchant management platform for restaurants and other retail businesses. He previously was a partner at Battery Ventures and at J.P. Morgan Capital. He offers frequent advice for retail owners on Instore’s blog, and has written about entrepreneurship for VentureBeat, KillerStartups, and other sites.

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