Updated: Apr 22, 2020
I am writing to a long time friend of mine - MYSELF. I was a professor with research credentials wanting SO MUCH to have a business. Yet around 2007, I did not know how to start, how to design, and I have no idea what would happen after the JUMP, or dive, whatever you call. But now I know. So I am writing to tell myself.
I am writing this to my former self living in 2010. After having started and experienced, I wanted HIM to get it, clearly, quickly, convincingly. I finally have answers that you wanted.
Starting up a business means you, the founder, wants to have a business. Because you can not buy a business or don't care about joining one, you need to start one.
Before you start, you are very naive. You don't have detailed market information and don't know much about business, let alone starting a business. You don't know much about careers and jobs, and yet you are trying to make a company that will support the careers of many employees.
If you want to find a partner to try something, no one will come along.
Forget any fantasies or assumptions. There is no casual and chance startup. A company is not a business yet. A company will not automatically get business. Most business or company loses money everyday. Honestly, a single person operating a solo entity is not even called a company. It is just called a job or side gig.
In the book of "Startup 101", I will only discuss STARTING A COMPANY WITH A CONTINUOUS BUSINESS.
Starting up is a multi dimensional, multi stage, multi phase, multi year, multi disciplinary engagement. It is one of the most complex endeavor for a single human being. It is a long journey of no return. In this journey, you learn it all, and by personally failing. Because it literally takes two lifetimes to start one business, no matter how small, very few people are blessed with the experience or success.
Don't guess the needs of anyone you don't have a relationship with, don't solve anyone's problem when they don't know who you are. The world literally needs nothing new. Anything you offer won't gain any traction or even be known for 22 months, and anything you sell won't get a profit easily. You see successful companies, shops, restaurants, organizations everywhere - but building one for yourself is hard.
A startup is not a trial balloon or a vehicle of hope. In startup, if you wish or hope for something - it will never happen. Startup is not to make something and then try to sell to people. A startup company is not business yet, and a startup business is not a business yet. These all remain to be proven.
Starting up is the science of business. Any smallest company that can survive takes a life time to build and maintain.
A good business means continuous profitable sales. The core of a business is sales. Money-generating good business is rare and heavily competed - hence the phrase "there is nothing new under the sun".
A founder needs to build the offering, the company, the name, and the channel. After you have those, you can try if people want to buy them. If people don't want to buy, or you can not sell them profitably, then you don't have a business. You had a run of curiosity. You can be sure that no one will fund an expedition - both an expedition that you are not sure what you will get nor an expedition where you are sure what you will get. It does not matter how good you prepare your motivational elevator pitch.
Startup is a skill that needs to be learned and practiced. A clever or hardworking person is not enough.
To start up a business, you must know business, and you must know how to startup one. And you must know yourself.
Further, you only learn the skills through personal experience, not just through books or conventional schools.
Starting up is ultimate learning, even if you are a professor or guru. If you have read every book there is and have written books, you are still starting at ground level with everyone else. Startup is a new set of skill. You learn by personally experience (not by reading) and learn by failure. Failure means you are trying hard enough. If you want a business and fame and money, you must try hard and get out of the comfort zone.
Startup is not a project or a THING. It is life long journey to the highest and loneliest place with no return. A startup involves three magnificent story lines:
the growing up of you
the growing up of a company
the building of a business from ground up.
Starting up in a nutshell, is this: you quit your work and build a company that runs a business. The business provides value to your audience and they pay you if they want to. When you have enough people pay you, your company is self sustained. You raise funds at start to support building up the business and the barrier. You pay the investor back in rich multiples. Eventually, the company stands, the business thrives, you build strong branded relation with the audience, and you provide steady jobs to your employees, and you are called a business man or founder. And this makes you happy.
Business means generational money and means livelihood for many. It is heavily fought after. You need money to start - money to build. You need to build the offering, build quality, buy advertisement, build work force and inventory. Most startup entrepreneurs need money.
There are investors out there. Dumb or clever, they are extremely alert. They only want to make money, no matter what they tell you. They want their best interest, never yours. They are not friends, nor eager benefactors. They are just potential investors. Starting up is all YOUR business. There is no one to help, only you helping others.
Because you don't have a lot of resources (e.g., money), you must start in advance and pick correctly. Ideally, you start when no one understand the vision and build diligently over 10 years. Only then will your efforts be rewarded. Vision is simple - it is earned by finishing a level once.
There is NO CHANCE SUCCESS. Anything new takes a long time to be accepted or wanted. Don't try to get lucky by acting on whims and logic guessing. Building a new thing is just building a new thing, not starting up a business. People generally don't need new things. Starting up a business is offering new value in an old line of business through innovative and inventive method.
New business must sustain financial turmoils and copying/competition. If possible, make sure your new business idea is not a small-business idea. A small business remain small forever, but a new business must grow into a mature business at the end of the process. If you want to do anything small, use your own money. If you plant a watermelon seed, it will never grow into a tree.
If anyone utters one of the three phases, "I have an idea", "I was a good student" or "I don't like money", or "I want some extra income", run as far away as possible immediately. You will waste a lot of energy trying to help or convert them.
There is no such thing as an easy startups or a "small startup". In fact, try not to start a small business or a small company - for first of all, no one would let you, and secondly, it would never grow after created.
Starting a small mom-pop shop or a multi national tech company requires the same attentions to details and business acumen. When you startup, you go beyond your schooling, beyond graduate school, beyond job. You go beyond interests, beyond assumptions and hope, beyond chances, beyond skills, beyond pride. You go to the intersection of life, business, and value creation.
The entrepreneur years are the blunder years, the hard knock years. It is lonely and you must make mistakes. Make sure you are ready for it. If you survive, you will grow into a captain of man.
I really benefited a lot from Dr. Milton Chang's book. He founded two optics equipment companies and is a trustee of Caltech. Thank you Dr. Chang.