What should first-time entrepreneurs know before starting a business?
The best performing athletes are not only outstanding from a physical standpoint but also a psychological one. Keeping a cold head in the crucial moments is vital for winning the game. Entrepreneurs, as with athletes, master their skills over time. They are highly motivated to achieve their goals and become better by raising the bar higher and higher. Often, we fight with our inner voice about if we should give up or not, but a proper mindset allows you to move forward despite failing. Being an entrepreneur is definitely not a bed of roses. It’s a constant rollercoaster when you can be at the top, and suddenly catch a breath from exhaustion. I know people who started their first companies and failed. There are many of us. Been there also, and there is a chance too that your first business is fated to fail. How are you supposed to succeed if you are a rookie? But what makes those people that started again, and again? Is it insanity or grit? I proudly lost the title of “first-time entrepreneur” at 21. Over the following seven years of business adventures, I’ve learned a few things that might help you with kicking off your first company.
In my opinion, there is much distortion about what entrepreneurship looks like, especially among young people who haven’t built any venture yet. We are overwhelmed by stories of huge VC rounds, huge exits, flashy headlines of successful 21-year-olds who sell their companies for millions. It looks like 10% grinding, 90% champagne. It’s easy to fail into the trap “Everyone is crushing! What’s wrong with me?” Social media and the internet only exaggerate it.
I think it’s all fake.
What people often won’t tell you is that:
1. Business is a marathon, not a sprint
Building a reliable, stable company in a short time is hard. I don’t want to say impossible, because as Muhammad Ali in an Adidas commercial said, “Impossible is nothing,” but probably you won’t make it, my dear friend. If you are thinking about creating something meaningful, prepare for a journey. You need to learn how to run a business, especially if you have not worked in any company before and you are starting as a solopreneur. Reading books, listening to Ted Talks, or motivational speeches of Gary Vee that you need to Hustle 24/7 is fine, but you need to apply it on your battlefield. Don’t fall into the trap of pumping yourself with knowledge without execution. Your own mistakes are going to be priceless lessons: unpaid invoices, employees who might take your customers, hundreds of unanswered emails from people who will not give a f**k about your product.
Be patient, don’t expect much at the beginning. Leave thoughts about becoming an overnight millionaire at the doorstep. Why are there no articles on how hundreds of thousands of businesses fail within the first two years?
My first company failed after a year. In my second, it took me at least three years to get to the point where I didn’t need to worry that much if I could cover all expenses and salaries. Of course, I was a poor entrepreneur, but where I was supposed to learn how to run a company, hire people, or negotiate with 22 years of my life? Studies won’t teach you as well as experiencing business on your own.
You need to be persistent, and from day one, acknowledge that your first business venture might go terribly. However, the people whom you meet can also provide priceless experience. It’s a marathon. On average, if you are a European man, you will live for 75 years. If you are lucky as a woman, you will get seven years more to conquer the world.
So please don’t treat time spent building a company that eventually failed as a waste. Treat it as an investment.
2. Build a network
It’s said that you are an average of your five close friends and I somewhat agree. (I’m not counting my friends’ net worth and checking if the above statement is true!) I have to admit that I learn a lot from my friends. In fact, they are often entrepreneurs. As people, we like to spend time with people who are like-minded. So, exchange experiences, learn from their mistakes, ask them for advice. You’ll soon realize that you might have your board of advisors for the cost of a coffee or lunch. It’s called a relationship. It takes time, so invest in that. Nurture your network by having regular calls and meetings. However, you can’t expect to have instant benefits and you will need to meet new people. Look for events, lecturers, online mastermind groups. Please don’t try to sell them once you meet new people. I’ve visited many networking events, and the worst scenario is someone who is pushing you the business card, talking about themselves and trying to sell. Don’t be that guy. I often finish a short chat by “Is there anything I can help you with?”. Once you know many people, there is a high chance that actually, you will be able to help. Give, give, give, and then ask.
And as far as you might be lucky with your business idea, there is no shortcut to building a solid network, but it is one of the biggest assets. You can go bankrupt, but no one can take your contacts. After years in the game, your phonebook will be worth many figures.
3. Be open and talk to people
One of my biggest strengths would be my ability to talk. I’ve met many people at conferences or networking parties who later became my clients or friends. I know that talking to a stranger is not comfortable, but who said it’s going to be easy? But you can also meet people online, in fact, due to Covid-19 it’s going to be even more common. When you are spinning off your first company, you are a total newbie, and that’s okay. How were you supposed to gain experience, right? But there is a shortcut. You can always learn from other people’s failures. They have already crossed this path, so why not to pick their mind? If I were you, I would make a list of companies playing in the same field so you can reach out to founders — just short & sweet messages asking for a 30 minute call. I invited many entrepreneurs for a coffee, lunch, or video-call, and that always has been priceless coaching lessons for a couple of dollars. Remember that you have nothing to lose. In the worst scenario, someone won’t reply or say “no”. There are almost 8 billion people. Just move on. I promise you, out of 100 sent emails, you will get at least five answers. However, for god’s sake, do some research, refer to something, don’t just copy and paste. Make it count!
4. Work smart
I know that there is a hype for “hustling”. But sooner or later, you will realize that you cannot work 12, 14 or 18 hours per day. You are going to burn yourself out. When I was at the early stage of my second company, I felt like I had to work every waking hour. Not doing something work-related on the weekends was weird to me. The moment when I didn’t want to get out of bed and go to my own company was the day when I realized that I couldn’t push myself more. And it was destructive for me, my relatives and the company which I led.
The older I get, the more I value quality time with family, weekends without opening a laptop. I find joy in bicycling, strolling in the forest with my girlfriend, and throwing sticks for my dog.
I’ve bumped into the phrase “slow biz”: the approach of going slower, but steadier, without reckless growth, crazy investors and setting KPIs that are almost impossible to meet. I find it quite appealing as there is a sweet spot between running a business and your life.
I believe that it depends on the character and values of a person. Some people put family first, others live a life as a party. It’s all okay. You have to ask yourself what works for you. Your perspective changes a lot when you start your n-th business.
5. Find a passion
You really need to do something apart from running a company. A hobby helps you not to think about the company, customers, invoices and struggles. We need to reset ourselves, have a clear mind, and be ready to tackle the next challenges, like an athlete needs to recover. Try sports, travel, take pictures. You will realize that often your customers and business partners also have hobbies, and it’s a great way to build relationships. I turned some of my customers into friends because we shared common hobbies. People do business with people, not companies. Remember that!
Passion pushes you to be better in that field. Whether it is riding a bicycle or studying history, it makes you more exciting for others.
Many entrepreneurs have a character of achievers, and they passionately fulfill themselves in different fields other than business. Maybe you could find something that drives you.
6. Ideas are cheap
I’ve met many founders who were obsessed with NDAs (non-disclosure agreements) before even saying a word about their idea. I find it silly because people tend to overestimate their genius and underestimate the effort needed to launch the project and first get paying customers. Ideas are worth a few beers. Execution is the king. Any knowledgeable investor would bet money on a good team and poor idea vs. a poor team and a good idea. The reason is that a good team can always pivot and set a different direction after some learning. Try to build a very initial version of your product or service. This is called MVP (minimal viable product), something very modest, which resonates with the pain you are trying to solve. If you can’t create anything tangible on your own, something is wrong. Of course, you don’t need to know how to code to launch some mobile app (you can find a technical co-founder), but the point is that you need to take ownership of some part of the business. At the beginning, it’s often product or sales and marketing. Choose one.
If you are wondering how to come up with an idea, this can help you: Link here
Whether you are a teenager, in your 20s or an experienced, burned-out corporate employee, entering an entrepreneurial path gives you loads of experience, opportunities, and often disappointments. Having the right attitude is incredibly helpful so you don’t quit along the way. According to Harvard Business Review, the average age of a successful startup founder is 45 (source), and it is likely their seventh or tenth business. Play long term! Don’t be misled by all this fake noise of easy success. It’s a minority. Enjoy your entrepreneurial path!