Everybody and their dog seems to want to build a startup, but guess how many of those actually get to delivering a finished product and turning a profit? Not many!
The problem is the way most approach entrepreneurship is flawed from the beginning. They try to be disruptors, build the new put-successful-company-name-here and end up with a unicorn. Unfortunately, though, not many of those actually have the chutzpah and genius needed to do that.
Ever wondered why we always hear about the Jobses, Zuckerbergs, Kalanicks and Cheskys, and only about them? That’s because there are not many people who can actually build something so successful and disruptive.
I’m not being negative here: it’s ok not to be a genius. It’s enough to be smart and willing to work hard, which is all it takes to be successful in entrepreneurship. Ok, throw in a bit of luck, too, but keep in mind luck favors the persistent.
Too many people focus on money when beginning in entrepreneurship. They dream of billion dollar valuations, fame and IPOs. However, that’s not the best way to start a business.
Anyone can create a job for themselves. But not everyone can change the world.
Dan Norris, The 7 Day Startup: you don’t learn until you launch
Building a healthy business
What you should focus on instead, is to build a small business, focused on growth and most important on delivering value to your customers. The focus from day one should be on getting clients to pay for your product.
If you need a lot of money first, then it’s not a good idea for a business. A solid and healthy venture should get the money it needs from its customers, not from VCs (click to tweet).
I know many who say: “I need X amount of money to start”, “Without a VC we can’t make it” and many more excuses.
The reality is you can easily start a business while working a 9-5 job, which will dramatically reduce the amount of money you need. Then when you have 6 to 12 months of cash in the bank, you’re ready to quit your job and focus solely on your business.
Would you rather be a Basecamp or a dead unicorn?
Photo by Jason McELweenie
One business I deeply admire is Basecamp.
They did everything right:
- Launched a product while being a full-time consultancy shop
- Once they had enough traction they focused on Basecamp full-time
- They didn’t sell-off to VCs
- And most important: they made money in the process
This is what most failing startups did in comparison:
- Raised money from angels
- Built a limited version of their product
- Raised some more money from VCs
- Built more features
- Raised some more money from VCs
- Burnt through their cash reserves
Now, I admit Basecamp is a pretty solid product which for most people would be considered a huge success. However, you could be just as successful even if you didn’t make it as big as Basecamp.
But what would you prefer: making some money and be a success or burning through others’ money and fail?
How to start your own business
Everyone is an entrepreneur. The only skills you need to be an entrepreneur are the ability to fail, to have ideas, to sell those ideas, to execute on them, and to be persistent so even as you fail you learn and move onto the next adventure.
James Altucher, Choose Yourself!
The first step is to leave your assumptions aside: we all have ideas we would like to turn into products, however, they are just our own and so we tend to be a bit biased.
Instead, you should look for others’ pains and needs and build a product out of those.
Go on Quora, Reddit or any other online location where your peers like to hang out and discuss.
Look for common questions being asked: people trying to fix a problem they have, looking for a better way to do something, complaining about an existing tool’s shortcomings. You get the idea.
Now, think about how you could help those people by building a product or providing a service — if you decide to provide a service, try to present it in a way to make it look like a product, WPCurve-style.
At this point, you should know what you want to build. It’s time to build the easiest, yet still useful, version of your product.
All the nice-to-haves should be left out for when you have the time and money for them. Focus on where the meat is, what gets you the most results in the least possible time.
If you’re building a productized service, you might even want to do everything yourself manually, while presenting it in a way that makes it look automatic: it’s not cheating, since your customers would be getting the same result anyway. But always deliver — or over-deliver — on what you promise!
Launch and start selling!
Once you build the first version, your focus should be on promoting your product and the best way to do it is to start a blog and talk to your audience, helping them by writing great content that speaks directly to them and gets them to realize how much value you can provide them.
Be honest and helpful, always, and try to give away more than you get back (Click to tweet).
After a while, you’ll know if your product can make it or not, but you won’t know it until you actually sit down, build it and launch it.
It’s good to be profitable
Remember, the focus of a business should be on delivering value and making money while doing so, unlike a usual startup, whose sole purpose often seems to be burning money and thinking of ways to eventually turn a profit in the future.
Unless you have plenty of your own money to invest (think Elon Musk) or you are 16, let the others be the disruptors and be an entrepreneur instead!
Do you want to start a business?
In my career, I started more than 10 businesses, some where great, others not so much and a couple of them failed hard. At 23 I was nominated by BusinessWeek as one of Europe's Best Young Entrepreneurs. It was and still is a great ride and I want to share everything that I learned with you.
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