[Below are notes on a talk I gave on entrepreneurship in August 2012 to a class of MBA students. Stumbled upon it and thought I'd put it up here for posterity.]
10 Tips for those of you looking to become entrepreneurs.
Tip #1: Don't be an entrepreneur
As dramatic as it might sound, there is merit in this. There is a tremendous amount of value in first learning how businesses [or specific parts of successful businesses] operate before taking the plunge yourself. My first stint out of college was as a Sales Manager [people still wonder what the heck a Civil Engineer was up to] and I cannot overstate the value of what I learnt.
Of course, you could have a mother-effin’ idea that needs to be in the market now. In which case, go for it. But if you don’t have such an idea yet but at the same time, are clear that you want to be an entrepreneur building value, learn the system before re-inventing it.
Tip #2: Better still, do a sales job
In my first [and probably the most defining job of my life so far], I was tasked with leading a team of 19 Sales Officers. More than half of them had been working longer than I had been alive! Talk about jumping [being thrown into is probably more like it] into the deep-end of the pool.
Business and entrepreneurship more so, is about selling: Selling a vision to get others to work with you, Selling an idea to investors to put faith in you, Selling a future to vendors to do work for you, Selling a product to consumers who don’t know you and Selling the multi-millionaire dream to friends and family!
It’s not just negotiation skills. It is actually about people with vastly different world-views, aspirations, fears and hopes. Learn to be able to listen, empathise and solve something for them.
Tip #3: 'kaizen' is bs
Kaizen – the process of continuous incremental improvement. Great for established businesses [maybe dangerous even for them. We digress].
If your idea is a 10% improvement over an existing product or service, ask yourself: are consumers going to switch for that? Newton’s First Law of Motion: Every object continues in its state of rest, or of uniform motion in a straight line, unless compelled to change that state by external forces acted upon it.
And it helps if that force is a massive force and worth your while.
[Edit: Read what Peter Thiel has to say about product innovation [point #1] - http://blog.hypeinnovation.com/peter-thiels-7-questions-for-product-innovation]
Tip #4: Roger, copy that!
Here's a little exercise:
Step 1: Close your eyes.
[Edit: read the Step 2 before you do so as otherwise you won't be able to follow the rest of the instructions. This was originally a talk, remember!]
Step 2: Now imagine a face but one you have NEVER seen.
It’s a lil tough, isn’t it?
What is art if not inspired forgery? Leonardo da Vinci's masterpiece, Mona Lisa, is thought to be Lisa Gherardini, the wife of a silk merchant who commissioned the painting.
The trick is not in coming up with an original idea. The trick is also not in identifying an idea to copy. True smarts is in connecting an idea with a user-need in a way that hasn't been connected before.
Read what Ev Williams, founder of Twitter, had to say about 'getting rich online' - http://www.wired.com/2013/09/ev-williams-xoxo/
At a time when so many internet entrepreneurs are running around Silicon Valley trying to do something no one else has ever done, Williams believes that the real trick is to find something that’s tried and true — and to do it better.
“We often think of the internet enables you to do new things. But people just want to do the same things they’ve always done.” - Ev Williams
Tip #5: Scale is dead
My guess is almost all the spots at the ‘soaps’ table are taken. Same with pretty much all other categories that operate on scale [i.e., very high volumes/very low margins].
Following from this, a business plan that talks about a USD 2.5B branded t-shirt market [which is the size of India market] and about capturing a 1% share of it is dangerous.
Instead, a plan that talks about a very clearly identified set of prospective customers and why these set of customers will consumer your product or service in huge quantities, even at a premium, is better off.
If you do end up reaching 1 in 7 people on the planet a.l.a Facebook, good for you. But start by building for the 1,000 people.
Tip #6: Stop listening, actually stop asking
When you are still figuring out what you want to do, attend all the conventions and conferences you can. Interact with as many people as you can.
Once you know what your business idea is, shut down. Stop running around trying to get constant feedback. This will only muddle your thinking.
And if you do want an advisor, pick your worst critic! Nothing gets me off my seat more than a critic dismissing my idea and telling me why something won’t work.
Tip #7: You don't need that money
In my first venture, we boot-strapped it for almost an year [with a total of USD 10K keeping us alive] and had already started retailing our product before we approached investors.
In a majority of cases, the startup doesn’t need the money it thinks it does.
Problem with going after getting this money – it is a huge distraction in the early stages. Very soon, you are talking about ‘pivoting’ the business, reprioritizing, making a paradigm shift and such words I don’t fully understand yet.
Money is an enabler, not an outcome.
Tip #8: Use data to base decisions on
‘Smell of the soil’ follows the lizard brain in our head. We selectively pick up signals and information – the ones that support our world-view.
Data screws all that. Data has no feelings. You do.
Most market research is pretty in-expensive. Do it.
And if you aren’t comfortable with numbers. Get comfortable!
Tip #9: Be clear why
Be very clear why you want to do a startup. Any reason is kosher.
Some might want to do it for the money, some for the fame, some of something else. All are fine.
But be clear. Helps you make the right long-term decisions.
Tip #10: Don't waste time
There is no perfection.
There is no perfect idea | No perfect time | No perfect team
Do it. Fail. Learn. Do it again. Fail again. Do it again. The ‘Law of Averages’ will catch up sooner or later!
To quote Charles Bukowski: You are marvellous. The Gods wait to delight in you.
Entrepreneurship is like a relationship [not in the sense of both are ‘ships’ that ultimately sink!]. You will rarely regret a relationship much as you will rarely regret having started up. Go forth!