What are some things that first time entrepreneurs should consider? In general or before quitting their day job?
I wrote a book on this topic with legendary investor Brad Feld. We based it on hearing more than 20,000 opportunity pitches. On Dragons Den on Shark Tank and first hand in our decades in the seed stage startup industry.
We found entrepreneurs should not quit their day jobs until they have:
- found something you are obsessed with
- enough money to live for 6 months
- found an unmet market need that they have unique insight on
- tested it with early adopters
- confirmed that your solution could add exponential value to those early adopters
We also found that access to early adopters was a key Barrier. One often mitigated when the founder is also a customer (ie member for the customer segment).
Hope that helps.
Onward and Upward
Dr. Sean Wise, BA LLB MBA PHD
Partner, Ryerson Futures
A seed stage fund and accelerator
I would suggest reading these 3 books in no particular order.
1. Zero to One: Peter Thiel detailed the 7 questions every entrepreneurs should ask themselves when starting a company. Great book for understanding the fundamentals of a tech business.
a. The Engineering Question
b. The Timing Question
c. The Monopoly Question
d. The People Question
e. The Distribution Question
f. The Durability Question
g. The Secret Question
2. Hard Thing About Hard Things: Ben Horowitz, co-founder of Andreessen Horowitz detailed his journey in entrepreneurship building companies and how he controls his own psychology as a CEO and founder. In a nutshell, building a business when there are no easy answers. Great book to build strong mindset being resilient, persevere, and staying calm during hardships.
3. Pitch Anything: Oren Klaff explains how you can pitch your idea taking advantage of how the brain really works by using the S.T.R.O.N.G method,
Setting the Frame
Telling the Story
Revealing the Intrigue
Offering the Prize
Nailing the Hookpoint
Getting a Decision
Great book to understand how 3 parts of the brain (Crocodile brain, mid brain, and neo-cortex) works and how to navigate through it wether it is pitching your idea to employees/investors/customers or even getting into a relationship with your next spouse!
Thanks for reading. Best of success in life!
As a long time entrepreneur, I would say the most important aspect of starting something new is planning. I can not emphasize that enough. It is important to understand product lifecycle and how your new idea will be brought to market.
While planning your journey is important, some aspects of your startup growth are going to be hard to predict. In particular whether customers will like your product or service. I strongly believe in lean methodology, which means creating simple prototypes and testing your market over and over again, until you can build enough confidence in demand for what you are doing. Then it's mostly just following the startup path by the book:
- establish an amazing team
- gain and demonstrate traction
- have a solid growth and demonetization plan
- pitch, pitch & pitch (or if funds are available, bootstrap it yourself until you hit the growth ceiling, then pitch)
- don't forget to watch your life balance, very often entrepreneurs get sucked into the work funnel, set time aside for other things in your life or you will burn out quicker than a candle in a wind.
Any business venture that you plan to embark upon should go through the “3Cs and 4Ps” exercise. You’ll soon realize how incredibly valuable and insightful this exercise is. It may seem simple, but the “3Cs and 4Ps” exercise really allows you to think about a business venture in a structured way. Once you force yourself to really go through this exercise, you’ll realize how much you didn’t know about the business idea you had in mind. This is critical because you want to know that the venture you are about to embark upon is worth giving up a secure job for.
You can read more about it at: https://pezlogic.com/2011/10/20/the-3-cs-and-4-ps-a-critical-first-step-in-business-planning/
Remember that the 3Cs and 4Ps will continually need updating as your business grows and changes. It is what we call a “living exercise” so you need to come back to it often to refine your strategy and approach. The exercise may seem obvious, but once you start thinking about each step in the process, you’ll be amazed at how much more organized your business planning will become.
Please feel free to contact me if you have any follow up questions or want to learn more about business development.
Good question. There are already some good answers here, but beyond the mechanistics, you should determine whether or not entrepreneurship is right for you. Becoming an entrepreneur is a career and lifestyle choice ... and a very rewarding choice for those who fit. Some questions that you can ask yourself (and be honest):
1. How do you handle extreme uncertainty? You won't know when you'll get your next paycheck or when you'll land that first customer.
2. How are you at making big decisions? While you should get advice from mentors, partners, etc., you will be making the final decisions.
3, How responsible are you? Many things need to get done and you'll be responsible for all of them until you hire people to help.
4. How is your support system? If you have a family, then make sure they are OK with your decision. Have trusted mentors in place.
These are just a few questions to consider.
Taking the entrepreneurial path can be very rewarding and fulfilling. I decided over 20 years ago (during grad school) to be an entrepreneur and have thoroughly enjoyed it.
There have been many great answers below covering a wide range of topics necessary for you to succeed at an early stage.
I would emphasize having a strategic plan for how you will survive up to a year and a half without taking a pay check. Once you decided to quit your job you'll have to consider how you will live including housing, food, entertainment (Yes, you need some) ect.
If you're constantly worried about how you'll eat or where you'll be living in a month, it's tough to stay focused on growing your company. By strategically planning and assessing these things you'll free your mind to focus on what's important in your business, not the other things.
And yes, entertainment is necessary. You can't work 17 hours per day 7 days per week. Even Mark Cuban in his book wrote about the bottle of cheap champagne he would drink on Fridays to keep himself sane. Plan to have some entertainment in your life. You can find ways to do it on a shoestring budget.
It would be a good idea to think about your support system. Nobody can do everything themselves both in life and business. Surround yourself with people who you can rely on to be there when you need them.
Other than that, stay lean, stay hungry and get out of the building.
The art of Entrepreneurship can be defined broadly as that central personality, who is tasked to co-ordinate or manage the three major "factors" of production.
Our factors in business are Land (Work-space), Labour(People) and Capital (real or intangible assets).
First things to consider during the growth stage is: HOW to properly Optimize those three scarce productive RESOURCES in the most EFFICIENT way, in a competitive market system.
I have trained start-ups in more difficult terrains on how to develop simple models that can be customized to their specific industries.
Summary: On Entrepreneurship, I am available to discuss with you, simple models that I have created, which can help you optimize scarce resources in the most productive way.
I've now been working with small business owners in Australia for over 15 years on their marketing implementation, but I've also had the benefit of a gifted mentor who works with business simulations and we have consulted on a number of projects together.
Within the context of starting a business there are a whole lot of variables at work, while I take a simple approach, there is an appreciation of the complexity involved.
To start you need a product, you'll need to be able to sell it, then deliver it to get paid. Then to be able to collect that money and to do that profitably ie. get paid more than it cost you to make or buy.
Obviously this is what I mean by simple, but you know there's way more than that involved:
How big do you want to get - just yourself to make a living, or to scale up?
The product for a start, this could be a service or a physical product - does it solve a problem and will someone be willing to pay you for it.
Is it a commodity product/service, or unique?
How much can you sell it for, and how much do you need to sell to make a decent living?
Commodities have to be sold in volumes to make decent revenue, whereas a unique product or service attracts a premium.
These are just some of the ideas to consider. As I mentioned, complexity is part and parcel, but needs to be navigated.
I've compiled a few videos on YouTube that you might find helpful, I will add some on business models at a future date:
Also a very good read: https://hbr.org/1994/03/how-entrepreneurs-craft-strategies-that-work
Plus the book Where Good Ideas Come From by Steven Johnson
I hope this helps add a bit more clarity to the question you have.