A time tested way to learn how to do almost anything is absurdly simple: find out the recommended course of action from someone who has already done whatever it is that you want to do – and then do it!
Learning how to become a successful entrepreneur is often a process of trial and error, and while that is to be expected, who wouldn’t want to shortcut some of the headaches and hassle and jump straight to the “learning the lesson” and seeing success part of things?
Let’s see if we can cut down on some of the pain and get right to the gain by looking at some of the top tips for startups that “been there, done that” already successful entrepreneurs have doled out as advice.
Here are 5 tips arranged in the natural chronological order of a typical new business life cycle: “Ideas” to “Risk” to “Funding” to “Systems” to “Marketing”:
1. “Ideas” – Derek Sivers
How many times have you heard a family member, friend, or classmate make the statement, “I have a great idea for a business. I should start a business someday.” ? Once? Twice” A hundred times? A personal pet peeve of mine is to hear anyone and everyone rave about their business idea (often for years and years) and do absolutely nothing about it. Often the person making the statement knows full well in the back of their mind that they will never actually get around to putting their idea into action but the reassuring comfort blanket of self delusion is just too comfortable to ever break free from.
After all, it’s nice to think that, “If I wanted to actually start a business I would definitely be successful.” However, actually taking action means that it’s time for the proverbial rubber to meet the road and with it the potential for that idea to both succeed and to fail.
Four-time successful entrepreneur Derek Sivers gives his assessment of the value of ideas: “It’s so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.) To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions. Explanation: AWFUL IDEA = -1 WEAK IDEA = 1 SO-SO IDEA = 5 GOOD IDEA = 10 GREAT IDEA = 15 BRILLIANT IDEA = 20 NO EXECUTION = $1 WEAK EXECUTION = $1000 SO-SO EXECUTION = $10,000 GOOD EXECUTION = $100,000 GREAT EXECUTION = $1,000,000 BRILLIANT EXECUTION = $10,000,000 To make a business, you need to multiply the two. The most brilliant idea, with no execution, is worth $20. The most brilliant idea takes great execution to be worth $20,000,000. That’s why I don’t want to hear people’s ideas. I’m not interested until I see their execution.” Source
2. “Risk” – Tim Ferriss
Successful entrepreneurs are often stereotyped as having an almost unhealthy appetite for risk. This may be true in some cases, and in fact could very well be true of many successful entrepreneurs, but a risk loving personality is certainly NOT a prerequisite for becoming a successful entrepreneur. I have made the case before that entrepreneurship is less risky than being an employee if undertaken in the right way but it’s worth pointing out even to existing entrepreneurs, let alone those considering becoming an entrepreneur, that in order to become a successful entrepreneur there is no need to force yourself to jump headfirst into risky situations because “that is what entrepreneurs do”.
Serial entrepreneur and best selling author Tim Ferris gives his opinion of the idea that all entrepreneurs are risk takers: “One of the most frustrating types of resistance I encounter when talking about lifestyle design or entrepreneurship is a general response along the lines of: “That’s great for you, but I have kids and a mortgage. I’m not a risk-taker.” The fact of the matter is, most of the uber-successful entrepreneurs I know hedge their bets and place small bets while keeping one foot on secure ground.
This often includes testing the waters while employed full-time, as Rick himself did before creating World 50 from nothing. Most of them never gamble in real-life, and a decent percentage don’t invest in the public market (like me) because of the lack of control. Are there mavericks who lay it all on the table for the big win or cataclysmic loss? Sure. But don’t believe, just because the media likes to highlight such daredevils, that they are the majority of kick-a** founders. They aren’t.” Source
3. “Funding” – 37Signals
“If I could only find a deep pocketed investor then I know that my business would be a success?” Really? Is there maybe a possibility that you could keep full control, grow a little less fast, and fund yourself instead of looking for outside funding? Sure, the needs of a company with warehouses and machinery is quite different than a company that develops software but maybe we could all stand to learn how to operate as lean as possible and learn how to bootstrap our way to entrepreneurial success.
The ultra successful entrepreneurs over at 37Signals have this to say about looking for outside money vs funding yourself: “Outside money is plan B The first priority of many startups is acquiring funding from investors. But remember, if you turn to outsiders for funding, you’ll have to answer to them too. Expectations are raised. Investors want their money back — and quickly. The sad fact is cashing in often begins to trump building a quality product. These days it doesn’t take much to get rolling. Hardware is cheap and plenty of great infrastructure software is open source and free. And passion doesn’t come with a price tag. So do what you can with the cash on hand. Think hard and determine what’s really essential and what you can do without. What can you do with three people instead of 10?
What can you do with $20k instead of $100k? What can you do in three months instead of six? What can you do if you keep your day job and build your app on the side? Constraints force creativity Run on limited resources and you’ll be forced to reckon with constraints earlier and more intensely. And that’s a good thing. Constraints drive innovation. Constraints also force you to get your idea out in the wild sooner rather than later — another good thing. A month or two out of the gates you should have a pretty good idea of whether you’re onto something or not.
If you are, you’ll be self-sustainable shortly and won’t need external cash. If your idea’s a lemon, it’s time to go back to the drawing board. At least you know now as opposed to months (or years) down the road. And at least you can back out easily. Exit plans get a lot trickier once investors are involved. If you’re creating software just to make a quick buck, it will show. Truth is a quick payout is pretty unlikely. So focus on building a quality tool that you and your customers can live with for a long time.” Source
4. “Systems” – Michael Gerber
The vast majority of small businesses are owned by landscapers that landscape, mortgage brokers who broker mortgages, plumbers who… plumb, well you get the idea. A truly successful business is one that is successful with or without the time and hands on involvement of the entrepreneur. As someone who loves to create new things and think up new business ideas, I have never and would never be interested in starting or operating any type of business that would require my hands on involvement every step of the way.
Whether its a website to compare car insurance or a workout plan website or any other number of projects that I always have my hands in – if there isn’t a system in place so that there is money being generated with or without me then I haven’t really built that great of a business (I’ve really just created my own tailor made job) Sure, when first starting out it’s almost required as the entrepreneurs rite of passage that you spend some long hard hours doing anything and everything to get your new business off the ground.
That being said, if that still describes you 10 years later then you probably don’t have that great of a business system set up, you just have a way to trade your time for money. Successful entrepreneur and bestselling author Michael Gerber has this to say about the importance of systems: “The entrepreneur is not really interested in doing the work; he is interested in creating the way the company operates. In that regard, the entrepreneur is an inventor. He or she loves to invent, but does not love to manufacture or sell or distribute what he or she invents…
The entrepreneur builds an enterprise; the technician builds a job… If they don’t fail outright, most businesses fail to fully achieve their potential. That’s because the person who owns the business doesn’t truly know how to build a company that works without him or her.. which is the key.” Source
5. “Marketing” – Joel Spolsky
I can still remember as a new entrepreneur thinking that the concept of learning about marketing was such as waste of time. That is, until I realised that people couldn’t buy something if they didn’t even know it existed! I can remember the time the light bulb first went off. I saw an advertisement for a company that claimed to teach CPA’s and attorneys how to better market themselves and increase their business. Wow! Even accountants and lawyers, two professions seemingly polar opposites to anything sales and marketing related had to be good at marketing in order to be successful.
Different marketing strategies are appropriate for different kinds of businesses but one thing holds constant: keeping the focus on where the customer is and what the customer wants. Nowhere does abuse of this principle happen more frequently than online. How many Facebook “Like” requests or self promotional tweets have you gotten from friends who are starting their own business and want to do “Social Media Marketing” by spamming-excuse me, marketing to their friends and contacts in roughshod blitzkrieg fashion?
Successful entrepreneur Joel Spolsky offers this marketing wisdom in reference to marketing online with a blog and finding customers the right way: “These days, it seems like just about every start-up founder has a blog, and 99 per cent of these bloggers are doing it wrong. The problem? They make the blog about themselves, filling it with posts announcing new hires, touting new products, and sharing pictures from the company picnic.
That’s lovely, darling — I’m sure your mum cares. Too bad nobody else does. Most company blogs have almost no readers, no traffic, and no impact on sales… So, what’s the formula for a blog that actually generates leads, sales, and business success?.. To really work, [game developer and author Kathy] Sierra observed, an entrepreneur’s blog has to be about something bigger than his or her company and his or her product.
This sounds simple, but it isn’t. It takes real discipline to not talk about yourself and your company. Blogging as a medium seems so personal, and often it is. But when you’re using a blog to promote a business, that blog can’t be about you, Sierra said. It has to be about your readers, who will, it’s hoped, become your customers. It has to be about making them awesome. So, for example, if you’re selling a clever attachment to a camera that diffuses harsh flash light, don’t talk about the technical features or about your holiday sale (10 per cent off!).
Make a list of 10 tips for being a better photographer. If you’re opening a restaurant, don’t blog about your menu. Blog about great food. You’ll attract foodies who don’t care about your restaurant yet. If you make superior, single-source chocolate, don’t write about that great trip you took to the Dominican Republic to source cocoa beans. That’s all about you. Instead, write the definitive article about making chocolate-covered strawberries. For the next 10 years, whenever a gourmand or a baker searches Google for a recipe on how to make chocolate-covered strawberries, he or she will find your post. Helping your users make awesome chocolate-based confections is likely to attract readers who might buy fancy chocolate, and that’s the point of a successful blog.” Source
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