In a recently concluded Global Entrepreneurship Summit, I had the opportunity to meet some from the student community too. One of them posed a question, “Should we become an entrepreneur now? Or are we safe in taking up a job with a decent salary?” I am sure this question is not unique to this set of individuals; it is likely to linger in many students’ and professionals’ minds as to whether one should jump into the entrepreneurship bandwagon at this stage or not.
Let me try to uncover some part of this challenge and trust that will help you as to why, when, and how, this could be pursued.
- First, why would you like to become an entrepreneur?
- Is it because you think you can make tons of money than your job?
- Is it because, you are so passionate about solving some issues and contributing to society?
- Or because, you are either not getting a job, or fired from a job, and like to pursue entrepreneurship?.
If your objective is only to make money, then I would raise a caution flag that this is probably not the right way to approach entrepreneurship. We get carried away by some startup success stories, but there have been many failures which mostly do not get reported or not known. This is not to scare you from taking this plunge but to share with you the brutal reality that there are high risks involved when you jump into this entrepreneur-ship. Many do not venture into starting their own business for the fear of failure. According to Jeff Bezos, Amazon’s Founder and CEO, “I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”
Right at the start, if you are looking at an exit for your business (by selling your entity sooner or later) you probably may not find one. You need to believe in your idea, product, or service; the one that you plan to build bigger and better. Tons of entrepreneurs have sold their company (in part or full) but then, selling and making money should not be your only goal. Another common question that I come across is, ‘what’s the best age to step into an entrepreneur’s shoe? Should I get into a job now, make some money, and then start something on my own? Well, there is no one right, or wrong answer. I would say there is no ‘right’ age to become an entrepreneur.
Mark Zuckerberg founded Facebook when he was just about 20 years.
Sachin Bansal co-founded Flipkart at 26.
Jimmy Wales founded Wikipedia at the age of 35.
Craig Newmark founded Craigslist when he was 42.
Ray Kroc started McDonald’s at 52 years.
John invented Coca-Cola at the age of 55.
Now, you could decide what best works for you to jump into this entrepreneurship bandwagon. When you decide to embark on to this journey, the best is not to keep this a top-secret (unless it is an innovation that you would like to file a patent on). Feel free to share with your friends and family about your idea and collect feedback. Not to be paranoid as to whether somebody can steal your idea, since ideas can be dime and dozen and the success lies in how well you are able to ‘execute’ it with ‘passion’.
Validate your idea, to see if your product/service is something that will find customers. You can choose any of the routes;
- Does your product/service solve any challenge(s) or business/operational problems?
- Does your product/service save costs for your customers?
- Or do you want to follow the ‘Apple’ way? Most often the reason for venturing into a startup is to solve some issues/problems, or one that brings out efficiency, effectiveness, thereby saving costs, increasing profitability.
Apple did neither of that when they launched iPhone in 2007. iPhone was not launched to solve any serious problem; neither it saved costs (it was priced high, and still continues to be); it had the ‘cool’, ‘feel good’ factor, revolutionized phone market, thereby became a market leader in smartphones. You may need additional hands when you start a venture and so look for ‘right-fit’ co-founders for your business. Running a company is like a marriage institution; you got to be cautious in choosing your co-founder as you might be working together with them for a very long time.
Next important step is ‘Finance’. It is best to start your venture through bootstrapping. Raise funds through your personal sources, family and friends. Approaching an angel investor should be the last option, as the risks are very high. The moment you bring in an investor, even though you might have a majority stake, you lose control. At the same time, approaching an investor / VC, may not be a bad idea if you are looking at a strategic fund raising option, as that could help you to scale to the next level.
Conserve cash. You will need to plan for a 1-2 year period even without having revenues flowing into your system. Plan for the best, but also be prepared for the worst. Entrepreneurial journey is going to be tough but can also be exciting. So do not flush out your funds by moving into swanky offices and spend on things that are not an absolute necessity for the survival of your business. Staying lean and smart will help you stay afloat, and also help you to be nimble / agile to succeed in business. Read More
Next is to create a brand / identity for your company. Have a name that can either relate to your business for an easy recall strategy (founding Startup Xperts was with that idea), or can have a name that has a positive impact. Choose a name thatyou can resonate with, one that makes you and your stakeholders (employees, customers, advisors, partners, vendors) feel proud to be associated with.
Work on your Mission and Vision. Set goals that you wish to achieve, or see yourself. This could be a tough part as you are embarking in an unknown territory, but the discipline of setting goals and measuring them, will ensure that your venture is steered in the right direction.
Hire right. This is easier said than done. It is people who make or break your venture. In hiring for a startup, your employees need to have the fire and passion in working towards building your enterprise. Startups usually start small and lean. So it is critical that you have professionals who work for you that have a good cultural fit. They may be smart, super achievers, but then if they do not believe in the values of your system / enterprise, or simply put, if they do not have the right DNA, you need to stay away from hiring those resources.
Start small. Get initial set of customers, and groom them. They act as reference customers in building your business. There are always 2-ways in a relationship. Be bold enough to fire your customers, if you feel that you are getting the raw end of the stick. Do it smartly and politely, but certainly not with arrogance. Humility and staying grounded are critical when you see early success.
Set up effective sales and marketing teams. Either you can spearhead it directly, or hire smart sales professionals who can help you open doors and build your enterprise. Marketing and Sales are like the two eyes of your enterprise. You need to give importance to both these aspects.
Most companies mix up these two functions and hardly differentiate them. It is like chalk and cheese. Even startups, or online businesses, can make a big impact if they know how to adopt digital marketing strategies, and implement it effectively. Startups can be so powerful and they can shake up the established ‘traditional’ players through powerful digital marketing techniques.
Without revenues, your company does not grow and will cease to exist at some point in time. So sales is a critical function that needs to be seen through a lens constantly. Any good idea / product / service can become zilch, if sales is not effective. While you are setting up your business, hunting for new clients will be challenging and so sales professionals should be wary of the challenges that they need to surmount in order to win deals / customers.
Have right mentors, advisors on your board. They act as an executive coach to you and your business. You can engage them across functions, be it strategy, marketing, sales, technology, operations, finance or human capital. They either can be part of your venture having a stake, or can be outside of your board; but seek those who understand and have passion to make your business successful. It is important that you have the right mentor(s) from the beginning as that will help you avoid early and costly mistakes. As these mentors / advisors are successful professionals, through their rich experience and expertise, you can propel you forward by making many right moves to ensure success.
It is all about practice and moving forward. Michael Jordan, the Basketball Legend says, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life and that is why I succeed.”
Success is a journey and not a destination. Entrepreneurship is an exciting journey and can be very rewarding, but certainly has challenges to surmount. But being the owner of your business gives you the freedom and flexibility to explore avenues, pursue your passion, which you might not be able to do in a regular job. Finally to close, Steve Jobs, Co-Founder and CEO, Apple, once said, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”