I love this quote. Maybe entrepreneurial personalities just have this thing about them that they want to see how far they can push themselves. Sometimes, I feel like there’s a common trait of sadistically enjoying the struggle, and the abyss that Elon is talking about (I cannot imagine extrapolating our own challenges to that scale).
Part 2 of “The Journey” is about setting up a guide or series of questions and thoughts based on my own experience of doing it — mostly the wrong way. To catch up, check out The Journey Part One.
I could talk about entrepreneurship and fundamentals of setting up a business forever but in thinking of how to structure a plan I thought of breaking down that first leap of faith into 4 categories: passion, position, plan, and percentage.
So you’re sitting at your desk at work. You’re bored, uninspired, not “following your passion”, and all those instagram quotes are pulling at your heartstrings.
What do you do? As much as everyone says “drop everything and follow your dreams” there are a lot of practical decisions that are important before you make the move otherwise it’s going to make things a lot harder for you.
Full disclosure, part of this reflection comes from me dropping everything I was doing, and beginning my journey with no more than the idea that I wanted to start a surf travel company.
At the time I was working in Telecom when I met my now business partner who was a freelance designer. We wanted to start a surf business, I had run a bunch of trips throughout my youth, we both absolutely loved surfing and admired a couple startups and Canadian startup celebs like Bruce Poon of G Adventures who started his business on two maxed-out credit cards. So, I suppose he sort of “hacked” away at starting something as well.
This Surf Business ran for a few years before my business partner and I sold off our stake because we saw much more opportunity with what is now Tennis. (Opportunity aside, running two baby business’ and having challenges with a business partner was killing us).
Starting a business is not easy and contrary to popular sentiment around entrepreneurship there is no easy money. So before you take that leap, sit down and think: passion, position, plan, and percentage.
Starting a business is hard
Starting a business is hard, really hard. If you’re making the leap from employee life, it’s 100% a harder time that you’re venturing into — at least for the first few years. However, even when you’re out of those years you will still face adversity. All the time. You will have very little support, other than mentors and your own team. I love the work we do I love learning about client and business challenges but for me the passion is all around pushing the limits of what I am capable of. Don’t get me wrong; I have nostalgic daydreams of working full-time somewhere, but I secretly enjoy the adversity and I love building something meaningful.
Passion is important because if you start the way I did (zero funding, zero bank loans, zero credit cards) whatever you’re starting is going to encompass your life in some way every minute of the day. The bigger the business the more extended that “yr one grind” will run. Even though we are miles away from where we started it still feels like we’re in our grind stage because we want to build something big.
Passion alone is not going to help tip the scales, but your ideas might. Think to yourself, is this new business something that is really truly needed in large scale deployment? Regional, global? If so, and there’s a gap you may even think about raising some venture capital. If the market is big enough and you can bring on some investors to help your business grow it’s a small price to pay.
If you’re like us (design + dev world), and you are entering a mature market differentiated by expertise and process then your growth probably won’t be exponential right off the bat. Other things to think about at this stage, is this business or industry high profit or not? If you’re going into a business of low profit volume will be important.
Are you at the ideal point
Are you at the ideal point in your personal life to make the leap? Ideal, not perfect, because there is no perfect time.
Cash is oxygen. In hindsight, I would have started way earlier. Right after school when obligations were at their lowest and I could scrounge every single penny by living at home to get my idea or passion off the ground. I had been working in the tech world for a few years out of school before I made the leap. It was difficult, I had just finished my MBA, which brought a certain degree of risk (debt), and then there is making the decision to receive zero income for a certain period of time.
In our first few years, we were 150% focused on making the business sustainable—meaning very little, to no income. What we lacked in income we made up in commitment. I still remember ending our first month as a business and looking at the bank account and then at my business partner and saying “well… we can only afford to pay one of us this month”. That was definitely not part of the plan. Even after that, our main focus was covering our fixed costs for a very long period of time forget any nice-to-haves (including taking the TTC into work, I walked every single day from my home to the office no matter what for an entire yr through blistering cold).
If you can save 6 months worth of living expenses. It’s hard enough without the added pressure of starting from scratch. I was lucky in that I had great jobs with great companies for the years before but starting a business with student debt is definitely going to add some grey hairs. Again, maybe it’s a sick sense of punishment that sends some of us in this direction but it was still some of the most exciting times we have had.
Measure twice, cut once
The more you think and start putting together a general business plan the faster you will get to success. Looking back over the 5 years of doing this there are a tonne of questions I would try to solve before making the leap.
- Is this business a natural extension of your skills and interests?
- Where are your weaknesses? Do you need to bring a partner on?
- Is the idea or business groundbreaking enough that you can approach investors right off the bat?
- How do you set up a proper partner agreement that can reflect future changes (one of the best pieces of advice I have ever received was to read a book called “The Partnership Charter” by David Gage. This book is the bible of partnership agreements
- If you have a business partner do you complement each others skills? Business partnerships where everyone has the same skills and responsibilities are often ineffective, and eventually result in conflict.
What can you do to increase your odds
Starting a business is hard, you all get it. What can you do to increase percentage chance of a smooth growth curve. There are some facts. If you’re doing something that has already been done and is being done all over the city you’re in then you have to be differentiated and different in some way. It’s either going to be an approach and/or knowledge difference that makes you better and more flexible than the big guys.
Sometimes you’re growing with a general technology trend. There’s plenty of businesses out there that are just leveraging technology to augment an existing service. Whatever it is figure it out early. What is going to make someone go to you versus the hundreds, or thousands of options out there—pro tip, it can’t be price, otherwise you’re creating your own demise, and potentially hurting the ecosystem that you’re trying to grow in.
Even if you’re confident about your differentiator, you will still spend your entire career convincing everyone that you are actually different or better than what’s already out there.
Or you can take the other approach and launch something entirely new. A product or service that is needed and doesn’t exist yet which is much more complicated to unpack than one sentence. I have been behind both, and this one is a MUCH easier sell.
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This article was originally published by Marcello Gortana on Medium. You can read the original here.