I’ve recently chatted with a number of early stage and wannabe entrepreneurs. Well, not recently. I’m always chatting with them, and I always enjoy it. What has been notable about numerous of these recent conversations is more than one entrepreneur has expressed the fact “it isn’t fair” because he has a family to support, and it is just too risky to quit the full time job and dive into the entrepreneur world full time.
Welcome to jungle, pal.
Who said it was fair? Who said it wasn’t going to be risky and incredibly difficult. So you have a family to support – too bad. These are the decisions that you made. If you can’t give up the job (for any reason), then it is time to give up the thought of being an entrepreneur. In essence, you’ve already made your choice, now is the time to acknowledge that choice.
If you’ve essentially chosen family and children instead of being reckless and risk taking, what’s wrong with that? That’s a choice to be proud of, not to regret. If you don’t get that into your head, you might inadvertently blame your kids for all the things you wanted in life, but were not able to obtain. That’s sad.
As a means of aiding and abetting as many early stage and wannabe entrepreneurs as humanly possible, here are some thoughts on the entrepreneuring life. Welcome to the jungle, baby!
Do What You Love
OK, OK, so you’ve heard this countless times. It’s a business adage that is as old as dirt. Instead of merely giving lip service to the notion, let’s explore what this really means.
I bring this up because during another recent conversation with a wannabe entrepreneur, I asked the person if doing what he was proposing was something he really loved to do.
“Yes,” was the reply.
So I rephrased my question in the form of something much more harsh. I asked, “Do you really want to do this every day, potentially for the rest of your life? Is this what you really want to face when you get out of bed every day? And not just the “big picture” part of your dream, but all the little details, too? The marketing, the sales, the accounting, the product design, the packaging, dealing with customers, taking out the trash, do you really want to do this for 12 or 14 or 16 hours a day, every day, weekends, too, for the rest of your life?”
Our wannabe entrepreneur friend assured me, “yup,” he was mentally ready to do it. Whether or not he truly is ready to do those things every single day is unknown, but all wannabe entrepreneurs need to ask themselves these questions.
The Power of Can’t
Can’t is one of the most horribly overused words in our language. It is an extremely powerful word, too, because “can’t” has the power to stop people dead in their tracks and cause them to give up dreaming and scheming. Far too many of us are guilty of automatically obeying that damn word, usually when it is invoked by a potentially jealous person who simply utters, “You can’t do that…”
Instead of following their dreams, instead of taking some chances, instead of risking looking like a jackass, too many people give up without trying, slump their way to their boring jobs every day, all because some sad sack intoned this horrid word.
No matter what you do, no matter what you attempt, someone will always tell you, “You can’t do that.” Sometimes it is another person telling you this. But far too often in entrepreneurship, the person invoking the “can’t” word is the same person listening to it. Far too many people talk themselves out of striving for something different.
Don’t give in to the power of “can’t.”
Salaries Are For Suckers
There is nothing wrong with taking a salary, of course. A salary comes in useful when paying the bills. But if you’re dreaming big, if you really want to accumulate wealth, you need to own the company, or a piece of it. Unless you’re a professional athlete (in a sport that pays), salaries alone are a tough way to accrue wealth.
And if money isn’t that the main thing for you, if you strive to call the shots in your career and work, then taking a salary from someone leaves you beholden to that person. You’re at that person’s (or company’s) beckon call.
The salary phenomenon has a way of institutionalizing people. During Japan’s decade and a half economic downturn, I have read numerous stories of “Salarymen,” men who have been laid off, but are too ashamed to tell their friends…and even their families. So the Salarymen get up early every morning, put on a suit and tie, grab their briefcases, and leave the house. They walk around Tokyo’s business district, trying to look as if they have a place to go, but instead of an office, they usually spend their days in a library or a museum or some other public place. After their day is done, the Salarymen commute home.
This is about as sad as sad gets. Unless someone is paying these people a salary, they do not know what to do with themselves. So ingrained is the idea of submitting themselves to a benefactor, that they get out of bed and go through all the motions of subjecting themselves to a benefactor…even when they do not have a benefactor.
If you want to do it on your own, if you want to make a big mark of your own design, you have to be willing to give up the salary (from someone else).
Make Your Own Magic – The Hustler’s Hustle
If you have limited resources, don’t try to start a business that is capital intensive! I have said many times: There are no entitlement programs in entrepreneurship. Just because you exit, you do not have the “right” to be an entrepreneur. If it takes too much money to start your dream, and no one is willing to bankroll you, boo hoo! Too bad. Join the long line of other people with dashed dreams.
Instead, find something that you can start of the cheap. In fact, make a virtue of your frugality. Be proud of the fact that you’re cheap. There is this thing called “the Internet” (have you heard about it?), and it can be a marvelous way for someone with limited funds to start a business.
There are some people who have the hustler’s mentality, and others who can learn a few things from people who hustle and strive to find a way of making a buck. This usually involves finding people who are willing to pay for something, as opposed to finding a product then hoping there is a market for it. Find needy customers first. The interesting product should be your second step, not the first.
Gain the Business – Lose the Business
While you’re focused on finding customers, revenue, and creating a real business, don’t lose sight of who puts money into your pocket: your customers.
It’s an age-old adage in business, but customers who have a bad experience with your company will rarely tell they had a bad experience. They’ll simply stop buying your product/service, no explanations given. It is far too easy for entrepreneurs to begin to take old customers for granted. Do this and you risk losing them.
Run Away From “Guarantees”
Avoid using the term in your sales pitches. If you want to have a little fun some time, send your attorney a draft of an agreement you’re putting together a new prospect. Liberally pepper the document with “guarantee,” and watch as your lawyer’s eyes bug out, his face turns red, and steam pours out of his ears.
Be wary of anyone who touts anything that is “guaranteed.” Avoid people who can “guarantee” you a return on your investment. That’s illegal. Avoid shysters who can “guarantee” you investment from others. That’s probably illegal, too. The word is fraught with potentially nasty legal consequences. If someone is using the word as a means of trying to gain your business, the odor of desperation should be noticeable from a mile away.
Don’t Cry For Me, Valuation
If you actually get to the point where you are a viable investment for angels or VCs, stop worrying about getting the best darn valuation, and do the deal. Your focus should be on growing the business. If you are successful enough, there will be plenty for everyone. Would you rather have 100% of a company worth nothing, or 10% of a company worth $50 million?
Further, when you’re raising money from your core of family, friends, and fools, pushing for a high valuation may come back to bite you in the rear. While your unsophisticated investors may be willing to go along with your $100 million pre money valuation (probably because they don’t grasp the concept of valuation), this will cause problems down stream if you get in front of a sophisticated investor. VCs and angels will push for a more reasonable valuation, and you’ll be left with the options of either 1) not taking the needed investment, or 2) explaining to aunt Bea and uncle Vladimir why their stock, once worth $100 a share when they bought, is now only worth 50 cents per share.
Reducing The Jungle To A Merely Scary Forest
You’ll never be able to fully and completely reduce risk as you venture into the entrepreneurship jungle. But being better prepared, being realistic with yourself and your goals, and truly understanding if starting a business is right for you, may help you reduce some risk.
And don’t become enamored with many of the so-called recent entrepreneurial “successes.” Don’t think these people are any smarter than you. Yes, they have fat bank accounts, but since so many “successes” have not been able to repeat the magic and make it happen a second time, I guess their business acumen was being at the right place at the right time.
Instead of waiting for the next boom time, instead of waiting to 1999 to return, instead of waiting to ride someone else’s coattails, get out there and make your own magic.
My VC101 columns were published on ePrairie.com and written in the wake of Venture Capital 101, a self published ebook about venture capital. Send me an email, bill@billsnow.com
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