Should you become an entrepreneur now? Or stay in a salaried role? This is not a new question; it likely lingers in many professionals' minds as to whether they should jump onto the entrepreneurship bandwagon - and when. This article explores some of the why, how and when questions around entrepreneurship. Is the time right for YOU to go out on your own?
- Look at the why, when and how of pursuing this pathway
First, why would you like to become an entrepreneur?
- Is it because you think you can make money?
- Is it because you are passionate about solving an issue and contributing to society?
- Or because you are either not getting a new job, or have been fired from a job?
If your objective is only to make money then this is probably not the path for you. We get carried away by some startup success stories, but there have been many failures which are mostly unreported. 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 entrepreneurship. Many people do not venture into starting their own business for fear of failing. This can be a motivator too, looked at from the right perspective. 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."
- There is no ‘right’ age to become an entrepreneur
- Mark Zuckerberg founded Facebook when he was just about 20 years
- Sachin Bansal co-founded Flipcart 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
- Validate your idea
If you decide to embark on this journey, don't keep it a secret (unless it is an innovation that you'd like to file a patent on). Share your idea with friends and family and gather feedback. Try not to be paranoid as to whether somebody can steal your idea, since ideas can be a dime and dozen - success lies in how well you are able to execute it with passion. You need to ensure your product / service will service a wide customer base.
- Does your product / service solve any challenge(s) or business / operational problems?
- Does your product / service save money for your customers?
- Does your product / service use extreme innovation? Think Apple
Most often the reason for venturing into a startup is to solve issues / problems or one that brings out efficiency, or effectiveness, thereby saving costs and increasing profitability.
Apple did none of these things when they launched the iPhone in 2007. iPhone was not launched to solve any serious problem; nor did it save costs (it was high-priced compared to alternatives). It had the ‘cool’, ‘feel good’ factor which revolutionised the phone market, and Apple became a market leader in smartphones.
- Look for the 'right-fit' co-founders for your business
Running a company is like a marriage; you need to be cautious in choosing your co-founder, as you may be working together with them for a very long time. Their strengths should address your weaknesses and vice verca.
- Bootstrapping
Most entrepreneurs raise funds through personal sources, family and friends in the first instance. 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 may have a majority stake, you lose a lot of control. At the same time, approaching an investor / venture capitalist can be a good idea if you are looking for a strategic fund raising option, as the additional capital could help you to scale to the next level.
- Conserve cash
You will need to plan for a one to two year period where you won't have a consistant revenue stream. Plan for the best, but also be prepared for the worst. An entrepreneurial journey is going to be tough but can also be exciting. Do not flush out your funds by moving into swanky offices and spending on things that are not an absolute necessity for the survival of your business. Staying lean and smart will help you stay afloat in the early days, and also help you to be nimble and agile to succeed in your business.
- Create the brand / identity for your company
Have a name that either directly relates to your business (easy recall strategy) or a name that has a positive impact. Choose a name that resonates - one that makes you and your stakeholders (employees, customers, advisors, partners, vendors) feel proud to be associated with. What feelings do you want your brand to inspire in your cutomers? Work on being consistant with that message in all communications.
- Set goals
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 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 them.
- Start small
Get an initial set of customers and groom them. They act as reference customers in building your business. Be bold enough to fire your customers, if you feel that you are getting a raw deal. Do it smartly and politely, and certainly not with arrogance. Humility and staying grounded are critical if you have early success.
- Set up effective sales and marketing teams
You can either spearhead sales and marketing directly, or hire smart sales professionals who can help you open doors and build your enterprise. You need to give equal importance to both marketing and sales. Most companies mix up these two functions and hardly differentiate them. Startups can still make a big impact if they know how to adopt digital marketing strategies and implement them effectively.
Without revenue, 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 constantly monitored. Any good idea / product / service can be for nothing if sales are 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 they need to surmount in order to win deals / customers.
- Pick the right advisors
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 can either 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.
- 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 its challenges to surmount. Being the owner of your business gives you the freedom and flexibility to explore avenues that you might not be able to do in a regular job. 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.”