Introducing the ‘what not to do’ list
Most lists for entrepreneurs focus on the key ingredients they’ll need to make them successful. Derived from famous success stories, these tips can often be misleading. Just because an idea worked for one individual in one situation does not mean it will work for everyone. Perhaps more importantly, investing in a set of activities, however worthwhile, does not automatically mean new entrepreneurs will avoid the pitfalls they should.
I’ve started 2 companies and 5 websites. For the last 5 years, I have stepped out of corporate life and into running my own things. I can tell you from bitter experience that this is the list I wish people had given me on day 1. Here’s what not to do if you want to be a successful entrepreneur.
Get involved in an industry they know nothing about
Picking an industry to start up in is the hardest part of the puzzle. I had worked in telecommunications for around 15 years. When I examined the skills I had, the only thing I could really offer insight into at the time was phones and phone plans. Since then I have written hundreds of thousands of words of content, outlining everything I know about the field, with a view to even out the information balance between time poor people looking to get the phone plan that’s right for them and the phone companies.
What you take for granted, what people ask you about at BBQs on the weekend, that’s your valuable Intellectual Property and it should probably be the focus area for your business.
Act without insight into the market
The single most valuable thing I have done since I started my own business is to spend money on Google Surveys. For as little as $0.10 per question, per user, it’s possible to mobilize Google’s content monetization chops and get unique, affordable insights into your target market.
Without this, you’ll be guessing at where to position your products and the information you need to provide people on your site to overcome their emotional and rational barriers to purchase.
If you’re operating in an industry you know intimately, and, as we’ve seen, you should be, Google Surveys can add to your trove of understanding and give you unique value on top of what your competitors can provide.
Do it part time – or alone
You’ll never get funding for your idea if you’re doing it part-time. Any foray into entrepreneurship has to be a 110% commitment of all of your resources, including time. If potential investors see you ensuring failure by keeping even a part-time job on the back burner, they won’t take you seriously.
Entrepreneurship gives you freedom but requires, in exchange, discipline. A number of studies have shown that grit – determination and persistence in the face of obstacles are what sets successful entrepreneurs apart from those who fail. Get yourself a partner in crime – if you can’t convince someone else to join you, how are you going to convince investors to invest or customers to buy. And then work the problems between you, full time, if you want to make a go of it.
Do it just for the money
Having a friend and colleague by your side will also help when things go wrong. I’ve been screwed over by suppliers and beaten up by Google’s search results algorithms more times than I care to remember. If your only motivator for working this way is to make money, it almost certainly won’t be enough to keep you going when things fall apart.
Whatever you see in the media, being an entrepreneur can be best characterized by a single metaphor – getting kicked hard in the crotch at least once a week. Money is not enough to justify the experience. You need to be realistic about how passionate you are about the industry you’re choosing, the colleagues you have and this entirely new way of working. If you don’t love, love, love what you’re doing, I’m sorry, but don’t bother starting.
Spend the money as soon as you have it
One of the great things about being an entrepreneur, especially a digital entrepreneur is that the time from an effort to reward can be extremely fast. Have a good idea and your analytics can often show money rolling into the coffers quickly. Take it from someone who learned the hard way – when that happens, bank it. I try and live on the minimum amount I can, investing everything else back into the business. I keep a safety net of 6 months operating cost (some entrepreneurs call this ‘runway’) in the bank.
Small businesses succeed and fail on cash flow. When a good idea pays dividends, bank them for a rainy day. There is one just around the corner.
