Startup eSeries: Ideas About Entrepreneurship That Make Sense... Mostly - Common Sense Living Newsletter
 
Common Sense Living India

Startup eSeries: Ideas About Entrepreneurship That Make Sense... Mostly

Entrepreneurship
Life
Dec 13, 2014

 

During the last decade, I wrote hundreds of essays and a half-dozen books on entrepreneurship... I have a reason for that: Back in 2000, just about everything available to read on the subject - and there wasn't much of it - seemed wrong to me. Everyone was writing about having vision and taking risk. It was about defying odds and spending the last dollar of the family savings account to launch an improbable business. My own experience - and I had a good deal of it - was nearly the opposite. These days, at least half of what I read seems more or less right. I like to think that's because my writing inspired true entrepreneurs to take to the Internet and publish their truths. Recently, I came across the following two essays that provided a total of 19 ideas about entrepreneurship - some of which I agree with. At the end of each essay, I give you my views.

Source: Andrey_Popov / Shutterstock

Ten Lessons for Aspiring Entrepreneurs
By Jeffrey Tucker, CEO, liberty.me on December 20, 2013 | Full Essay

One of my favorite web spaces is meetinnovators.com. It interviews startup entrepreneurs, people who created something new and made it successful. Through casual conversation, it investigates their thinking, mode of working, trials and tribulations, breakthroughs, and visions of the future. Just hearing these people talk gives you a real lift.

Major media don't usually cover this world, which is strange because the technologies we use and the businesses we trade with define a major part of our lives. The trouble is that most people just take it all for granted.

"Of course there's an upgrade." "Of course there's an app." "Of course I can make a video call from a wireless device to a person on the other side of the world for free!"

I recently caught up with an old history professor, and it would have made sense to talk about big ideas (about which we both really care). But actually, and very quickly, we gravitated to more interesting stuff. (Read more here...)

About half the entrepreneurs I know went into business for themselves. They had reasons other than the desire to become wealthy. The other half were people that wanted - simply and purely - to get rich quickly by whatever means necessary. Needless to say, the second group was less apt to maintain their wealth over the long haul.

If you're a new entrepreneur - or soon-to-be one - here's some advice: People from both of these groups will try telling you why you will fail. When people tell you such reasons, pay attention to those who have actually succeeded in business. They might be trying to dissuade you from competing with them. But they might be trying to save you time and money.

Smart entrepreneurs- the chickenhearted ones like me - work hard to reduce uncertainty. They want uncertainty to be as little as possible before risking serious time and money.

Start-up businesses need neither dreamers nor accountants. They need idea-generators, marketers, and profit producers. Most of the time - during the first year or so of operation - one person will play all three roles.

I'm not saying you shouldn't dream big or hope it will be quick and easy-at least in the beginning. Every business I started ended up being more work than I wanted it to be. But if I didn't have the ability to pretend it would be quick and easy, I wouldn't have started a single one.

Competent people now run most of the business I've started. They seldom - if ever - ask for my help. I imagine this is a truth for Mr. Tucker now, as well... But if he rereads Ready, Fire, Aim, he will figure out how to get off the treadmill.

Nine Lessons From the Shark Tank
By Brett & Kate McKay, www.artofmanliness.com on February 4, 2014 | Full Essay

I don't watch much television-with two small children and a business, I just don't have time. But there's one show that I DVR and watch without fail every week: "Shark Tank."

For those of you who aren't familiar with the show, here's the premise:

Aspiring entrepreneurs get a once-in-a-lifetime opportunity to pitch their business to a panel of "sharks" - five self-made millionaires and billionaires including the likes of Mark Cuban and Daymond John - and ask for funding in exchange for equity in their business.

Basically, it's the dramatization of one of the most stressful, sweat-inducing, make-or-break moments in capitalism: the business pitch.

On any given episode you'll see amazing and innovative businesses secure hundreds of thousands (and sometimes millions) of dollars' worth of capital, or you'll get to watch what's obviously a weird, laughably-bad business be eviscerated by the sharks. (Read more here...)

Here's my take on Mr. McKay's nine lessons:

  1. Learn How to Pitch: McKay is stressing here the importance of doing your due diligence in preparing your pitch. I disagree. "Shark Tank" is about how to sell your startup to venture capitalists. This is a very small part of entrepreneurship. And it's one that shouldn't interest you if you want to build a serious, lasting business.

  2. Hustle is Necessary But Not Sufficient: I agree. Hustle in business is a given, but it's not the end all.

  3. Don't Be Blinded by Passion: Yes. Passion is not a virtue. It's an emotion that will usually do you more harm than good.

  4. Just Because Your Friends and Family Love Your Idea, Doesn't Mean It's a Good Idea: That's correct. Ignore the advice - good or bad - that comes from anyone who doesn't know the industry you are entering.

  5. Know Your Business: Yes. With a capital Y. I've written about knowing your business-and industry-a lot.

  6. Concentrate on Your Core Competency: This is true. The temptation to veer away from one's core competency is ubiquitous in growing businesses. Things are looking up with your primary product and with the primary method of selling it. So you figure that almost anything you do will be just as grand. In moving away from core competency, move one step at a time.

  7. The Best Businesses Solve Real Problems: I don't agree. We sometimes like to think business is about solving problems. Some businesses are. But most are not. Most products that comprise any country's marketplace are not necessary. What drives economies is demand, not the need to solve problems.

  8. If You're Not Making Money, It's Just a Hobby: Yes and no. As a rule, you want to develop positive cash flow by the end of your second year. And be profitable by Year Three. But some businesses take longer than that. My art business is an example. When I started it, I estimated it would take 10 years to achieve profitability. But I was willing to do it because - by then - it would be a cash machine. One of my nieces or nephews could tap into it for life. That said, don't go into such a business unless you have plenty of money to spare.

  9. Not Every Business Needs Investors: I agree. I have started dozens of successful businesses and never once needed an investor.

 
 

We request your view! Post a comment on "Startup eSeries: Ideas About Entrepreneurship That Make Sense... Mostly". Click here!

1 Responses to "Startup eSeries: Ideas About Entrepreneurship That Make Sense... Mostly"

Kalyan Kumar Sandilya

17 Dec, 2014

Mr. Ford, this is my first feed back against your letter. I completely agree with your nine points agree & disagree. because you discuss the points not from a business profit stand but from a mind set as if you are an Entrepreneur.

FREE NEWSLETTER SIGN-UP

Sign up for a wealth of Common Sense Living ideas delivered to your Inbox for free every week.