What to Know Before Starting a Business: An MBA Instructor & Entrepreneur’s Tips
For the past decade, I have been teaching entrepreneurship in MBA programs and running startup boot camps in communities. People let me do this because I have experience starting, running, and exiting companies.
I’ve started nine companies, taken two public, retook one private, and went through many machinations, trials, and tribulations of startup founding, growing, and exiting via IPOs and acquisitions. I’ve had success, but I stumbled and failed a lot. I relay lessons learned from my emotional bruises and scars so that others don’t have to repeat my mistakes. And I encourage them to go for it because the journey is so satisfying and fun.
My main takeaway (spoiler alert!) is to start and don’t stop. Don’t wait for everything to be perfect before you start. The ideal starting time is now.
In my teaching and coaching, I have seen that many aspiring entrepreneurs get paralyzed at the start. They feel overwhelmed with what to do first and end up like a deer in the headlights. They get analysis paralysis. They have a vague, inchoate, exciting idea that needs to be honed, focused, and sharpened in the crucible of customer discovery. They invent hurdles and obstacles in their minds that prevent them from taking any action toward commercializing their ideas.
They convince themselves that before they can do anything fruitful, they need to raise a significant amount of money, hire people, build a fancy prototype product, and have an elaborate launch. Usually, their concept is only half-baked—and their fledgling startup ends up making something nobody will buy.
An approach with less risk and fewer obstacles is to test an idea against customers’ expectations and see if there is any interest in the product or service. Does anybody think this concept is interesting and valuable enough to pay for it? Does it solve a problem?
People don’t buy products and services. They buy solutions to problems. As the great marketer and Harvard Business School professor Theodore Levitt said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”
You can focus on the technology, the problem, or the outcome—only one of those is going to provide a shot at success. Early and often, customer discovery is crucial to uncovering the need and it’s costless to start. Talk to people about the product idea and get their feedback. Don’t be shy.
Be disciplined and only be willing to deploy more resources once there is a strong indication of a fit between a market and the proposed product. Protect your resources like a mama bear.
How to Begin: Remembering The Boy and the Bike
The key is beginning with riskless action. Strip out all the self-induced obstacles to talking to customers and be ruthlessly persistent in going back to the drawing board and refining the concept until it generates genuine interest from potential customers.
Once started, it’s all about iteration and persistence. I want to share a story that taught me the meaning of persistence: “The Boy and the Bike.”
I grew up in a neighborhood filled with kids. Almost every house had at least one youngster. We played and rode our bikes everywhere. Bikes equaled freedom, and we were all left free to roam.
There was one boy who was a mystery. He would sit in his window each day and watch us ride and play. He had a terrible disease that limited his ability to move. He never came out of the house.
Kids left to their own devices can be cruel. They focus on making fun of any little thing, a name, clothes, a speech impediment. But no one made fun of this kid. The circumstances he had to deal with were too brutal even for kids to ignore.
One day, his father came home with a bike. It had training wheels. Not just on the back, on the front wheel too.
The next day his dad carried him out and mounted the boy on the stable contraption. He took a pedal, and it immediately tipped over, and he ended up on the pavement.
His dad watched from the window. The boy struggled, got the bike upright, and got himself back on after a long and tedious effort. He took another pedal and landed right back on the pavement. This bruising cycle went on until dusk when his father collected him and took him back in the house.
The next day he was at it again. And the same cycle took place time after time. On the bike, on the ground. Slowly back on the bike, quickly back on the ground.
Day after day, this routine played out. The boy would perform his punishing effort, and his father would watch from the window. And I would watch them both. Back then, there were no bike helmets or elbow pads, and the boy became bruised and scraped. I thought, why doesn’t his dad help him?
Then one day, while the boy laid there, it started raining. It began to downpour. The dad watched from the window as the bruised boy got back on the bike, pedaled, and fell off into a puddle. I went over to help him up, and he waved me off. I looked up at the dad, and he shook his head no. I thought, why is this man letting his son flounder out here?
Then something amazing happened. He got back on the bike, soaking wet, and started to pedal. And pedal. And pedal! He went down the block, turned around, and came back! He looked up at his dad in the window, and he was laughing and clapping, and the kid was laughing. I had never seen him laugh. And I started crying. It was raining, and no one could tell, and I wept without holding back at the power of this triumphant moment.
Whenever I feel like throwing in the towel, I think of that boy, and I get back on the bike and take one more pedal. When we are persistent and consistent, small actions add up.
Small is Beautiful
Start small. Start where you are with what you have. The constraints of having minimal resources make us more creative.
Entrepreneurship is a mindset. It’s about chasing opportunities without regard for the resources we currently command. Once one starts, the resources for progress begin to appear. They may have always been there waiting for your attention to grow sharper. When one focuses on what is next needed, what is required becomes recognizable.
Once started, the universe conspires with you. All kinds of opportunities that are not available while waiting for the stars’ perfect alignment begin to arise.
Commit and don’t stop. It’s only a failure when we stop.
The Power of Committing to an Idea
Understand that launching a successful business will take longer than initially planned. We tend to overestimate what we can accomplish in a year and then get frustrated and quit. Ross Perot said, “Most people give up just when they’re about to achieve success. They quit on the one-yard line. They give up at the last minute of the game one foot from a winning touchdown.”
On the other hand, we wildly underestimate what we can do in a decade. Eddie Cantor famously remarked that, “It takes 20 years to become an overnight success.”
Plan accordingly and prepare to be persistent. Persist in your efforts, and commit to your idea. Keep going. I love Churchill’s observation that, “If you’re going through hell, keep going.” Whatever the morass, keep going. It matters less the size or speed of the progress, as long as it’s progress. A little forward momentum every day. Rome wasn’t built in a day, but they were building every day. Like the boy on the bike, one pedal after the other.
If it seems it requires a bunch of money before you can possibly start, rethink the premises. Start, find things out, and the money will come.
Focus on presenting the concept in a minimal form to potential customers in person or over the web. Start and iterate and course correct and keep going. Start simple and find out what customers want and need. It is usually different than what one initially thinks.
The point is this: until one fully commits, there is hesitancy and tentativeness, the chance to back out. When one commits fully, all sorts of things occur to help that would never otherwise have happened—unanticipated events issue from commitment. Unexpected assistance and connections arise.
Planning can’t take this into account. The process needs to unfold of its own accord. It takes being open, flexible, and mindful of opportunity as it comes along. Opportunities get overlooked because they come dressed in overalls and look like work.
Don’t Burn the Boats
There is a story that the conquistador Cortés burned his ships upon arriving at the shores of the Aztec empire. This irredeemable act sent the message to his soldiers that there was no turning back. They would either win or perish. It’s an awful tale but a useful concept.
Committing doesn’t have to mean going all-in and quitting a day job and relying on success to save you from losing everything. The bravado of jumping off a cliff and building an airplane on the way down is over-committing. That kind of risky scenario will probably end in panic and disaster. Daily expenses still need to be addressed, especially if loved ones are relying on us.
The journey should be fun, exciting, and full of growth. Cultivating a growth mindset requires being able to sleep at night. Creativity thrives when one is relaxed.
Keep the options open and commit to exploring the idea and follow where it might lead. I always find there is no rush, and I don’t think of quitting because I am fascinated by the concept I’m pursuing. Why would I want to stop? If it is that much of a chore, then maybe it’s time to rethink the idea.
Be flexible. If the vision changes in light of new evidence, that isn’t quitting; that is pivoting. Edison initially discovered ten thousand ways not to make a lightbulb.
Ready, Fire, Aim
Rely on testing ideas. Put something out and measure the response. The best plans wilt in the face of customers and need revision, like battle plans in the face of the enemy.
The great military strategist Helmuth Karl Bernhard von Moltke said, “No battle plan ever survives contact with the enemy.” Also, Mike Tyson said, “Everybody has a plan until they get punched in the face.”
An initial plan will be wrong and need to be modified, refined, and adapted to customer needs.
Talk to Humans
Use the scientific method of testing hypotheses (guesses) against real people and revise them based on the feedback. Then it’s a matter of repeating this process until there is a well-calibrated product/market fit. As Karl Popper said, “Good tests kill flawed theories; we remain alive to guess again.”
Just Do It: Persistence and Consistency
In the inimitable words of Sir Richard Branson, “Screw it, let’s do it.” It’s called a startup for a reason. Begin and when you fall, get up, and try, try again. Many times, success is just a lot of losses stacked up to equal victory. Churchill said, “Success is going from failure to failure and not losing enthusiasm.” How one responds to failure determines the capacity for success.
Proceed as though limits to your abilities do not exist. Take a minute to ponder this question: what would you do if you could not fail? Do that.
Consistency is the compound interest of actions. A small step, when repeated consistently, grows into something significant. Over the long term, consistency will beat short-term bursts of intensity.
Persistence and consistency: we become what we repeatedly do. Don’t give up, and have faith something good will happen. Many of life’s failures are those who didn’t realize how close they were to success when they gave up.
Get on the bike and keep pedaling!