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Summary: Entrepreneurship is the ultimate DOING. As opposed to sitting and thinking and directing. It is the closest we ever got to nature. The transformation and metamorphosis of entrepreneurs from a boy to man is incredible. Only DIRECT EXPERIENCE will teach you how nature works and how business works. Nature is history and creation, business is relation, and audience is naked humanity. Two most important insight at the end.
Entrepreneurship, no matter it is for a SasS software company or a coffee ship, is already an huge undertaking. It is the lonelist strive, the longest learning of no return, and the best way to understand how the world really works - by experiencing it without any protection or elemental comfort.
Many newbies will "get it" after 3 years ... here are the top things they will realize.
Whether you are an entrepreneur already, or you are thinking to start your own business, this article will prove invaluable along the way.
1.ENTREPRENEURSHIP BOILS DOWN TO COMMON SENSE
Wile grasses grow everywhere, but when you want to plan a vegetable it is still hard. Entrepreneurship is as easy as wild grasses, and as hard as growing a tree that bears fruits at a place you designated (MVP spotting).
But common sense isn’t always common practice. That’s something a former colleague of mine told me while I was working as a business consultant. This simple yet powerful remark has stayed with me, and I keep referring to it, till this very day.
The real question, however, is this: what does common sense look like and how do I know I have it?
Common sense is nothing more than good sense and sound judgment in practical matters. Some examples include:
You can’t hire someone just because you know them. It is common sense that you need to evaluate their background and identify whether or not it fits the type of product you sell.
You can’t look and act unprofessionally. It is common sense that if you look and act that way nobody will trust you.
You can’t expect your sales people to improvise on how to promote your product. It is common sense that you need to train them and provide them with the necessary material.
You need to create an accurate image of your ideal customer. It is common sense that you need to know your customers in order to find them, understand their needs and target them accordingly.
I will elaborate on most of these and some more below.
Additionally, you identify common sense by detaching yourself from your ego and by stepping into your customer’s shoes.
When you start your own business, you are blinded by your ego. It is the same feeling you get when you have your first child. Your business is your baby. You have an idea of how to raise it, but because it is your “possession” you can’t see things objectively, oftentimes reverting to unorthodox practices and behaviors. Even if you do things wrong, you are convinced that you do things right.
Most of business owners fall into this trap and therefore suffer dramatically.
I understand that when you do things wrong and you eventually have to face potential change, more often than not, you develop resistance towards change. That’s because of laziness and because of fear of change. You aren’t sure what to expect and you don’t know if the required change (which will certainly require time and money investment) will yield the expected returns.
Well, I can assure you that if things aren’t going as planned, change is the surest way to go. I read somewhere that:
“Insanity: doing the same thing over and over again and expecting different results.”
"Insanity: Expecting the mountain to move to you".
That is very relevant when it comes to entrepreneurship.
Entrepreneurship is hardest work, just to learn the many ways of failure. After you learned them, you know it is important to go with the flow of nature. Then things are easy.
Many "school entrepreneurship competitions", "entrepreneur class" and "accelerators" are forced. They are best teaching swimming on dry docks, or teaching driving through reading theories. They are useless because the lack experience and practice. Students in such programs are even more frustrated because their natural instinct of making a lemonade is not amplified, but killed. Schools teach fallacies. What entrepreneurs need is wet knowledge, is mentor, is skills to build know-how, and skills and practices to build companies and business.
2.YOUR IDEA IS WORTH NOTHING AND TRACTION IS EVERYTHING
Two years ago, I attended an amazing entrepreneurship conference called Pioneers Festival. One of the speakers was Philipp Moehring from Angelist who gave a prodigious speech on what investors look for when they evaluate your company. In one of his slides, he mentioned that your idea is worth close to nothing.
That is something incredibly important to grasp. Your idea, no matter how innovative you think it is, no matter how interesting it sounds in your head, no matter how much research you have put into it, is worth nothing.
If your team is not great, if your execution is not close to perfect, if you haven’t properly identified your niche, if you don’t understand your customer’s needs, the idea is worth nothing.
Which brings us to the most important part when it comes to product and business evaluations: Traction.
If your product is converting, if it is generating revenue and if it is attracting interest, it is a great product.
Market is 90% of work and 90% of product price. This means if you worked hard for making a product already, you are still going to spend nine times more to market it. Remember, (1) People don't need anything; (2) market is protected, not open.
Do me a favor and watch Shark Tank. You will notice how the eyes of the sharks shine whenever the entrepreneur mentions good numbers in the users acquired or sales accumulated over the past year. Regardless of the industry or type of product.
Great investors know that once your product generates traction and reaches product-market fit, it has the potential to become a gold mine.
The reason I stress the importance of this is because some wannapreneurs have two bad habits:
Are secretive about their ideas.
Give insane evaluations to their companies when they are actually worth nothing.
So, the main principle here is that, in the beginning, you have to assume that you know nothing and that your idea is worth nothing. Now you are more humble and you can make sure that you will focus on the fundamentals of your business.
3. CONSUMERS ARE ANIMALS. BUT THEY ARE WHERE ALL CASH FLOW COMES FROM.
If you want to make money from consumers, it is not enough to be useful, to be functional, to solve a problem, or to be good. Consumers want something much more hardwired. They trust only people they have seen many times.
Business is only about relation. Branding means "we are family" and "you can sell us anything".
I have heard people on the Internet suggest that as far as your product is great, your branding doesn’t matter. This is wrong and dangerous. When someone tells you that, they are either ignorant or they are leaving a lot of money on the table.
The reason is twofold:
Humans are visual creatures. We are attracted to aesthetically pleasing views and we will always favor something beautiful to something ugly.
Every successful salesman and marketing person will tell you that most buyers are impulsive. They don’t always buy something because they need it, but more because they are convinced that they need it. Part of that convincing is how the product looks.
That said, I am not suggesting that it is ok for your product to be average and that you should spend most of your time on marketing and branding.
What I suggest, is that you should spend an equal amount of time on creating a great product and on promoting it successfully.
Great branding makes your product look professional and people can trust you easier.
Every product out there has to face competition. Successful branding is one of the surest ways to make your product stand out.
4.NETWORKING IS PROBABLY 50% OF SUCCESS. IF YOU ARE NOT PART OF NETWORK, NOTHING YOU MAKE SELLS
People only need what they needed during the COVID_19 lockdown: relations, safety, enjoyment to break boredom.
You will hear a lot of people stress out the importance of networking in business success, but you can’t really understand that importance if you don’t experience it first hand.
I am going to demonstrate this importance with a simple analogy. Imagine you are Super Mario. You fight turtles, you spit fire, you eat mushrooms and want to save the princess. At some point, you find a magic star that makes you invulnerable for a small time frame. That magic star is networking.
Without the magic star, you struggle a lot. You face a lot of obstacles and difficulties. You need to try different approaches and tactics in order to reach the end of the game. With the magic star, nobody can touch you. You actually kind of bulldoze your way to success.
Networking allows you to meet the right people and these people feel obliged to help you if you were introduced to them by someone they trust and respect.
Now, this is good in theory but practically it is quite arduous because it requires a lot of effort and great social skills. There are some great books that explain how it is done, like the seminal “Never eat alone” by Keith Ferrazzi, but most of them repeat the same advice:
Put yourself out there
“Ping” constantly
Be generous (buy people drinks, dinners etc.)
Make it more about them and less about you
Leverage social media for exposure
In that respect, I want to add one more thing: Do not consider networking unless you have made a lot of progress with your product development.
If you are just starting and you have just an idea, going to networking events is a waste of time. You might listen to some successful people promote their story and you might get some interesting feedback, but, most probably, you will end up disappointed because no one will be interested in you.
Make sure that you focus on creating a great product and once you see the first signs of traction, you will be in a position to promote it.
5. TO THE ECOSYSTEM, THE ONLY THING NEW IS YOU AND THE WEIRD THING IN YOUR HAND
Don't try to introduce new things to the world before you have any business experience. If you try anything new, you must tame the market or build the market. There is no alternative. You are not going to suddenly make something people have secreted craved but did not know. No one just jumps on the scene because of their "cleverness". People don't have to buy your solution. They are perfectly fine living without it. If you want someone to buy, you have to have "eco proof", like "social proof".
If you suddenly bring something new to the world, just imagine that the only person who is truly excited is you.
The market ecosystem you must enter has been there forever. You are the only confident and wide eyed new buck.
6.WHEN HIRING PEOPLE, NEVER HIRE THE SECOND BEST
Some years ago, I attended a startup event. Among the presenters was a company that developed a platform that helps consumers find the cheapest price of a product online.
They are a very successful company and they stand out because of their incredible work environment. That, however, didn’t happen to them accidentally. Hiring the right people is a very challenging endeavor and many companies face extreme problems because of that.
What the representative of this company suggests is that, when hiring, you should do the beer test. What this means in simple words is this:
Ask yourself. If you go out for a beer with this person, will you have a good time?
Does this person show empathy? Can they listen? Can they contribute? Are they open minded? How do they handle criticism? Are they eager to learn? Can they stay cool under pressure?
All these are extremely critical and when coupled with a solid work ethic, you found the perfect match for your hire.
Startup success is 10% luck and 90% making trash.
Startup success is 90% marketing and 10% products.
Startup success is 9 part decision and 1 part efforts.
7.THE CHOICE IS THE MOST DIFFICULT. MOST PEOPLE FAIL BEFORE THEIR FIRST LAUNCH, BUT THE FIRST LAUNCH AND FIRST FAILURE IS REQUIRED COURSE
Your beginning will be borderline suffering. You will be really enthusiastic and everything, but once you realize how overwhelming the processes of entrepreneurship can be, you will start having second thoughts.
That’s why what I suggest to people who have no previous experience in the area is to invest some time upfront in studying the subject. There are a ton of online courses on entrepreneurship, marketing, sales, management, coding etc. out there. With so much free knowledge, the world is your oyster.
Also, read some great entrepreneurship books to see what others faced before you. My two favorite ones are:
Zero to one
The hard thing about hard things
They both focus on technology startups, but the lessons suggested are universal.
Before I quit my day job as a business consultant, I spent almost a year reading and studying entrepreneurship. I still didn’t have a good idea of what this new world really is. I understood it when I actually started being “in business.”
Good decision comes from experience, which comes from bad decision.
However, when you start working on your project, make sure to focus primarily on getting things done. Don’t inundate your schedule with podcasts and blogs and social media. You will lose your ability to focus and your performance will suffer dramatically.
If you have a concrete work ethic in place that is characterized by discipline, flow immersion, and time management, everything will work out fine.
Until your launch, everything will be vague and uncertain, but after your launch, you will get a good idea of what works and what doesn’t in order to make the necessary adjustments and corrections.
You will soon realize that after you spend some time “living” your product, you will feel that you “own” its processes and some things will work automatically. This is the best time because it is then when you can actually focus on profitability and sustainability.
8.PEOPLE DON'T BUY ANYTHING. WHEN THEY BUY YOUR PRODUCT, THEY BUY YOUR STORY, THEY BUY WHAT YOU DO JUST FOR THEM.
People want enjoyment, and you can make "knowing you" part of their enjoyment. Then your product makes connections above the utility level.
Give people what they value: THEIR OWN IDENTITY.
This is a pro tip and something that has helped companies enjoy tremendous growth.
Sharing your journey allows your clients or customers to get an insider’s view of your business. It demonstrates that you are transparent and confident about your product and culture and it makes you look interesting and approachable.
There are many people who have attempted this successfully, but I will mention here the most interesting ones:
Do people need electric cars? do people need to travel to space with SPACEX rockets? not really. Is electric car and reusable rocket really the future? the answer is, who cares. If none of these things are happening, people still live. But why is Elon Musk's company making money? what contribution is he really making?
Elon Musk is a master at this. In space X for instance, he sells the journey impeccably.
Space X emphasizes on the journey. A journey almost everybody wants to take part in.
Additionally, their events are astonishing and the enthusiasm of their followers is palpable.
Customer first must know if they can trust you or not.
9.DON’T WASTE TIME IN IRRELEVANT STUFF, KEEP YOUR EYES ON THE ONLY BALL
There is usually a huge confusion when people start.
As I mentioned before, there are many things to be done and you oftentimes lose track of what really matters. People praise you, people invite you, people talk to you, you talk to people, you invite people, etc. But in the end, al these are just theater.
Never waste time on unprofessional people (e.g., people who needs to make money but pretend otherwise). Be the ultimate professional, not a player in a entrepreneur play.
Be absolutely the world's number one in the only event you choose to compete in.
Professionalism and delivery will help you stand out. It is absurd how many businesses are leaving money on the table because of their inability to exude professionalism.
In the trade business I run, our operations are in Greece at the moment. Some of the companies I decided to contact, in order to buy raw material and other services for my product, dumbfounded me with their lack of professionalism. I wanted to make really big orders, way bigger than what they usually get, and instead of treating me with utmost respect they lacked enthusiasm and oftentimes they didn’t even respond to emails. There is nothing worse than that when it comes to business.
Jordan Belford mentions a similar incident in “Straight Line Persuasion System” about a time he visited a Porsche Dealership. He was very excited about buying a new car and when he starting discussing with the dealer he got turned off because he was unable to make him feel sure about what he was buying.
So, if you really want to stand out, make sure to:
Respond promptly
Be polite
Over-deliver
Offer competitive prices
10.IT WILL BE THE MOST DIFFICULT THING YOU WILL EVER DO IN YOUR LIFE
If you have studied hard to get into Harvard, went through medical school and been a practicing doctor, and have a good life. And one day you are an entrepreneur, it is like starting your life all over again, from zero.
It includes risk. It includes losing money. It includes losing friends. It includes losing your mind.
A lot of people will question you, a lot of people will envy you and a lot of people will admire you.
At the end of the day, none of that matters.
The reason you decided to start your own business should be unaffected by external influence. Maybe you do it because it is challenging and because it gives your life more meaning. Maybe you do it because you want to make money and you think that money can buy you some freedom. Maybe you do it because you don’t like having a boss and you want to be your own boss.
Be clear about your reasoning. Clear reasoning leads to clarity of intent and this makes your progress smoother.
And make sure to read the following quote by the great Charles Bukowski every day:
“If you're going to try, go all the way. Otherwise, don't even start. This could mean losing girlfriends, wives, relatives and maybe even your mind. It could mean not eating for three or four days. It could mean freezing on a park bench. It could mean jail. It could mean derision. It could mean mockery--isolation. Isolation is the gift. All the others are a test of your endurance, of how much you really want to do it. And, you'll do it, despite rejection and the worst odds. And it will be better than anything else you can imagine. If you're going to try, go all the way. There is no other feeling like that. You will be alone with the gods, and the nights will flame with fire. You will ride life straight to perfect laughter. It's the only good fight there is.”
These are, in my opinion, the most critical elements to consider when starting a company. HOWEVER, most newbies would not find this article, would not search for this article, would not understand this article, and would not heed advice. Only they can tell themselves, after three years.
Experience and failure go together, growth and failure go together.
Failure is not only inevitable, it is necessary for any smart person to become wise. You must test your command of knowledge against real world, and you must understand the true value frame work of nature and people.
It makes you humble, and failure makes you happy.
Know your audience and build for them. Don't build something then find a "buyer"
It is far better to meet your audience and then develop something for them, then to make something first and then find the audience.
Your product must win the approval of "I will keep it because it is made for me" test, not your mom test. Customers are meticulous in detecting the smallest degree of ingenuity and authenticity.
New is not creation.
New solution, new idea that are created in vacuum is not creation. If you want to create it, then build it yourself and bring it to the shelf. But what you THINK is new in vacuum may never become a change. There are a number of reasons:
- you think it is new, but it is not. It has been done.
- you could not build it, you could not sell it.
- no one will help you just because you "got an idea".
- some ideas are fake, called fallacies.
- no customers want to take it and keep it, despite your intention.
- no network wants to carry you.
Think about making a new TV programming in the world of TV instead of general vacuum and market. If you can not bring something to the shelf, no one will care.
Knowledge, inventiveness, epiphany, serendipity
Many people spend their whole like in school, reading books to pursue knowledge. They are good students, good engineers, good professors. But they are not good creators and entrepreneurs. They lack the following:
- building skills;
- deep knowledge about market;
- knowledge and experience of building a relational business in real life;
- knowledge and management skills of running a company at start.
- ability to choose and select good ideas.
Creativity is not "having an idea about a good problem to solve'. It is also about "solving a problem that is known". People don't need to solve problems unless they know you and they trust you and your solution is uniquely effective and dirt cheap.
The shout out EUREKA! by Archimedes is not when someone identified a "never thoughts of" problem of strangers. It is for finding a solution to a tough problem prescribed by a customer, the king, King Hiero II of Sicily. He discovered a simple effective solution to a problem associated with finance, of the paying customer.
A note on reddit
haring these lessons with my fellow newbie small business owners/aspiring entrepreneurs who may not have had access to that generational blueprint (how do you know what to find if you don't know what to search for?) and thus hopefully can save a headache or 2 from this!
1- You can't do it all alone. Hire. Collaborate. And connect.
2- Insurance (when possible) is worth the peace of mind. Anything can happen. Example: 2020.
3 - SEPARATE business bank accounts/credit cards for business transactions are a MUST for organizational purposes, taxes, grant applications (where they ask for proof of XYZ), etc. Don't forget to snag one of those new business account cash bonuses ($500/50,000 points+)
4 - Considering turning into an LLC for limited liability protection. Talk to a lawyer/accountant/buy books to research which is best for you.
5 - Aim to be a GIVER, instead of a taker or a reciprocator (reciprocating is NOT the same as giving). Check out “Givers and Takers” book for more info.
6 - Connecting > Networking. 10-minute conversations per person while passing out business cards solamente por interes < Realmente conectando con gente for who they are not what you can get out of them.
6 - Invest in books and courses. There are workshops, non-degree college courses, online tutorials, etc ranging from $20 to $500+. Do your research & invest wisely.
7 - Join Facebook groups in the fields you're in/interested in = Community of others churning the same type of butter as you. You may find so many resources, OPPORTUNITIES, classes, events, grants, etc thanks to these groups.
8 - Stay up to date. Things evolve. Change is inevitable. That's why lawyers, doctors, must take continued learning education. And so should you, especially in today's high tech world.
9 - Follow your intuition! This is the MOST important one of ALL. Nothing worse than sliding into caca and your intuition saying "I told you so".
What would you add to this continuous learning experience of starting your own biz? I am continuously learning something new throughout this journey!