Know These 7 Things To Avoid Failure In Your Business
It’s a massive shift transitioning from full time employment to full time entrepreneurship.
A shift that most people in jobs underestimate — I know I certainly did when I made the leap six years ago.
The will required to compete.
The depth in thinking that doesn’t get as personal as when working in a job.
Entrepreneurship is personal, and about you and your life, first and foremost. It’s you who shows up each day. And they’re YOUR customers and YOUR employees.
Then it’s about other fellow men or women who’s needs and desires that make up YOUR market. A piece of that market which you’re trying to win and compete with against other people, who like yourself, are out there to win and compete with YOU.
That is something that needs to be appreciated and often doesn’t until you’ve worked on a customer for the tenth time to realize you’re losing to other alternatives the customer has — aka competitors.
So what do you do? You become better. This is the only way.
People need and want more things and better versions of everything — to continue bettering themselves and improving.
This is where knowing the human condition comes in.
It’s critical to know what drives customers to buy.
Not just buying your service or product, but what really keeps them up at night. And what will motivate them to choose you over someone else?
You need to know them better then they know themselves, both to market to them them effectively and to build for them effectively.
Business is about solving people’s problems at the end of the day. Every time someone does something, they’re fulfilling a need or solving a problem. The more painful the better.
The good news is, human desire is endless and only increases each time we upgrade to something else.
When a human being desires a thing, it makes that thing a part of it’s imagined self. The self that’s spending all day and night trying to build up and be it’s best.
So when a human being becomes accustomed to that thing, it becomes it’s new higher standard. A new higher standard that only wants to continue upgrading it’s standards to create new standards that consume more and more.
This is neither good or bad — it’s just how we’re wired and what’s driven us to evolve and win. It’s he good or bad in our world views that cause us to consume gracefully or greedily.
These needs and desires that increase each day are what make up the market.
This is why markets continue to grow and grow. Add to that, populations that are also growing and you have lot’s of market potential.
For example, I am blessed to live in New York City, a city that has some of the best and most efficient conveniences around. I’m now used to a brilliant little massage parlor that charges $35 for the best massage I’ve ever had. Across the street is Morgansterns, one of the best ice cream shops I’ve ever been to and Black Seed, a bagel place that charges $15 for a sausage egg and cheese bagel that’s world class.
Two blocks away is a Michelin starred Uncle Boone’s — the best Thai I’ve ever had. It’s so hard to get a table there that they opened another location a few blocks away — and they made it a fast food version. To think — they did so well they made it even more available at a lower price!
I’m now used to these conveniences and expect them as my standard. It is now more noticeably different when I go back to the Maryland suburb I grew up in to visit my parents. I of course appreciate these facts of human nature and live as gracefully as I can knowing I can be happy and fulfilled anywhere and anytime.
However it’s about deep awareness like this, about human nature, how markets work, why we buy and who we’re selling to that are unappreciated when transitioning to entrepreneurship.
It took me quitting my job too early to start my first company, to learn the hard expensive way to know that we should start our companies before quitting our jobs — both because it’s easier than ever before, yet it’s still hard and requires a learning curve.
We need to know when to quit — when we’ve already succeeded to only put our foot to the floor when we go full time.
The true test becomes before quitting to start the business — having the discipline and tenacity to perform at a level that can succeed with the constraints part timers have.
Since I did myself five years ago, I’ve seen so many people go full time into entrepreneurship not knowing what to do with their luxury of time and resources which can be a slow and excruciating way to learn the hard truths I’m going to talk about here.
With the world moving toward required entrepreneurship, big and slow corporations vaporizing at faster and faster rates — here are the hard truths to realize and mistakes to avoid when considering the leap into entrepreneurship.
Most importantly, here’s the path to starting your company while you’re at your job.
How I Learned These Lessons
I was the first employee of a media company that sold for $50 million.
I worked there for six years and grew it’s sales organization.
After a few years, we went through a massive growth spurt and I began having the entrepreneurial itch as I’d plateaued.
I was naïve and over confident — and anxious to quit and start my own business.
Because the money came easy at my job, I thought the money would come easy working for myself — and that creating a product the market wanted so bad was easier than it was.
This was a massive mistake without having the deep understanding and radical self-reliance I didn’t know I needed. I took the leap of faith and quit my job to start without having the right knowledge and customer base.
Though I knew what kind of business I could start, and even start successfully, I didn’t know why I wanted to start that business.
I just started it knowing I wanted to start something and work for myself. It was very ego driven with no other intentions behind it.
Now that I’ve built two of my own companies the last five years, I’ve realized the secrets of the game.
How simple it is when you’ve applied all the right principles and seen them work, but learning them can be hard without applying them yourself and even harder to persevere through the early days — thus why am now a huge fan of starting while working.
Now that I do what I love, from where I love it, and make money doing it, I’ve realized that if I were to do it all over again to save myself time, money and stress, I’d do it this way with these 7 principles.
1. If You Can’t Start The Business Part Time — You Don’t Deserve To Quit Yet
Quitting your job should happen when you achieve your ‘quit milestone’ — a safe goal that gives you time and runway to quit your job and do your business full time (create one for yourself now!).
There are several reasons for this:
It’s obviously a safety net for your financial runway and requirements of income. It also allows you to take your time, play around and experiment. You want to be able to learn as you go to market with something and have room to iterate and pivot as this will inevitably happen.
Doing it with time and money not being burned is priceless in the entrepreneurship game of limited time and constraints.
You need to become a peak performer who’s effective and efficient and ruthlessly spending time on the right things. This may mean being forced to wake up two hours earlier or sacrificing nights and weekends to fall in love with your work.
You’ll find when things are going well, you will easily be able to “fall in love with work” and enjoy it in fact — I call it voracious enthusiasm — what the best in the world possess.
You must enjoy your work so much you want to do nothing else (though you of course do other activities for rest and recovery which will include hobbies and fun).
And if you don’t have that, you’ll fail. Or you’ll learn over time through mistakes which is fine, but it will cost you lot’s of time and money.
So starting a company while you have a full time job becomes the best test to see if you’d survive the gauntlet of competing to win at full time entrepreneurship.
If you can’t do it, you either don’t have the mindset and/or the skills to get it done. Both of which, need to be had — so you shouldn’t quit.
2. If You Don’t Feel 100% Certain You Can Pay To Predictably Acquire Customers Regularly — You Don’t Quit
A great way to think about this is the simple “accelerator effect”.
As in, if you step on the gas pedal of a car, the car accelerates forward. If you quit your job, each time you step on the gas will it move forward? Or is there uncertainty because you’re only counting on organic outreach or don’t know what your paid customer acquisition would look like?
This can only be achieved after you’ve reached a recurring amount of revenue that doesn’t require you showing up prospecting every day chasing business.
Not that you wouldn’t do organic outreach to your network but the business needs (at least it should for the purposes of this piece) to be at a place where you can predictably invest in advertising X amount of money to receive 2–5x back.
That requires market leading knowledge and experience which can take time to acquire (even a few years) and build and the monthly marketing budget to invest which also takes time to grow and build that revenue up.
Until you’ve achieved the “accelerator effect” with confidence, you aren’t ready to quit your job and start a company.
3. Being The Best At One Thing
If you don’t believe or have evidence pointing to your ability to be the best at one thing, you aren’t ready for entrepreneurship yet. And if you don’t have a plan to become the best at this thing, you’re planning for mediocrity.
For example, I’m executing on a plan to become the best writer and trainer of mindset training and business/start up skills.
I have set both writing goals and sales goals and have reverse engineered the activity paths toward those goals down to the day, dollar, call and email.
A writing goal of mine is reaching 150,000 email subscribers by the end of this year. That means planning to put out articles each day on Medium and Linkedin, writing for other blogs with more traffic, getting my own blogs at other outlets to build influence and other press I’ll need to reach the millions of people to reach that subscriber number.
So far I have about 3,600 followers on Medium and about 1,500 on Linkedin. I have reached a little more than 3,000 email subscribers and began writing regularly about 8 months ago.
I have a Forbes article coming out and retained the help of a PR person to get me onto national publications. I watch my numbers every day and know that I’m chipping away at my exponential growth curve that will grow faster and faster and eventually have the final 80% of my growth happen during the final 20% of the growth (fast!).
I’ve become a “Top Writer” on Medium in 7 categories including #Entrepreneurship, #StartUp, #LifeLessons, #Life, #Business, #SelfImprovement and #Productivity.
For the new training business I started only a couple weeks ago, I have brought on my first four coaching clients and will quickly scale from there with Navy Seal like training that helps people get from A to Z or 0 to 1 to start a business while they’re employed.
4. Understanding Markets, The Human Condition, Natural Selection
This is partly a continuation of “being the best” because the need to be the best at something is because of markets, the human condition and natural selection.
Markets are the outward manifestation of human need and desire. As in — they exist because needs and desire use money to get fulfilled.
So if you’re selling something to fulfill someone’s need or desire, they’re going to go to the market and compare your offering with alternative products or services. That’s why being the best and/or positioning yourself as something that’s the best in a niche is so important.
Knowing the human condition exceptionally well is critical for marketing and sales. The best sales people, marketers and product developers are the best at the psychology of people — what makes them tick, their motivations, fears and desires. This is also super helpful for your own self preservation and resilience on a day to day basis as a high performing side hustler or entrepreneur.
Understanding how natural selection applies to work and people is also crucial for both the human condition and markets. Because markets are driven by human need and desire, with the humans themselves being the players in the game and who you’re appealing too, you need to understand how they’re driven, and they’re driven by natural selection.
This fun video is a great example of the law of growth and natural selection: it begins with one person dancing all by himself in a crowded field looking out of place. It takes a little while until he attracts one fellow dancer, then the second follower comes and the three dance for a while. Then a group of 3 or so join and then 5 more come quicker and quicker. In two minutes, you see one dancer turning into 100 because of the 80/20 law of growth via natural selection.
At the beginning, growth was slow and it trickled up. Then as it slowly grew and grew and achieved a few big pops a long the way, it tipped and the final 80% of the growth came in during the final 20% of the time. This is all of these factors combined, markets, the human condition and the force of natural selection that yields this classic curve of exponential growth:
Eventually, you were “left out” if you didn’t join the dance group.
This is kind of what’s happening now with the entrepreneur movement.
5. Discovering Your Market and Serving Them — Finding Product Market Fit
People over think market research and product market fit. All you’re doing is finding a problem someone has, and creating a solution that delivers a result.
Do this with one person and test it out against a larger sample set to see what feedback comes back.
Make sure you don’t quit or pivot too early. I see people get discouraged so fast every day believing people don’t like what they have when in fact all they had to do was either articulate the problem better with better messaging, or shift the problem to a deeper or different one.
For example, as a research exercise, I am testing different problems and solutions to help investment bankers perform at their peak with coaching and training. I chose that market segment just because my roommate is a banker and I live in NYC so there are a lot of them.
After a conversation with my roommate and asking about the problems he faces at work, I made a list of of bankers and began emailing them with different messages and offers.
The first two hundred emails I sent garnered zero response. I wasn’t surprised but this is where people often get discouraged.
You really need to strike a nerve when you BOTH market a message while you articulate a deep problem (the human condition) when you send notes to people cold.
If you can get a cold list like this to buy 3% of the time, you have a business.
So what group of people do you know and what that can you sell them? They’re people, so they buy. All you have to do is iterate and appeal to their pain points and you’ll get responses.
I’ve only sent a few tests to this group but I’ll report back the progress of my little research exercise.
You’ll realize that people in particular roles and profiles have recurring patterns and you’re able to put them into different buckets.
The nuance is in the messaging — what appeals to them? Bankers have five different titles — analyst, associate, VP, Director and Managing Director. Same jobs but different age demos. So what messages are you sending each?
You could maybe send mindset training or productivity app products to the young analysts but health and longevity services to the older managing directors.
Keep trying and see what comes back — remember, a little engagement and 3% buying what you have right now and you’re successful to scale.
6. Discover and Solving a Deep Pain That Exists Right Now Is Simple, Yet Takes Time, But Is Powerful
It’s like striking gold.
Discovering a deep pain point that the market is experiencing RIGHT NOW, is a simple process that requires putting in knowledge work and discovery on the front end.
But when you do it right, you’ve struck gold and the rest becomes easy.
That’s why it’s perfect for while you’re at a job. You can take all the time you need to do the deep work required to really know and create something the market wants right now.
This takes the following steps:
Understanding one segment (accountants, yoga instructors etc.) really well (this could be you but certainly not required).
Common mistakes of this process are:
- Not starting with cold prospects and starting with your friends.
- Be very selective about working with friends and choosing which to work with. I’d recommend at the beginning only offering free services to close friends who can be testimonials.
Otherwise, you want feedback from the cold market. It’s the hardest but it’s the truth, and that’s the best.
Going to friends who don’t want to hurt your feelings or be discouraging won’t give you the hard feedback you’re looking for. Ideally, you want to go to friends after you have some customers and some credibility. This will utilize the relationship you have best. How can they say no when you’ve achieved results for others?
7. Crafting An Offer and Message
The messaging needs to perfectly reach the perceiver of the message to strike a nerve so they’re prompted to respond.
So what is your segment worried about that really keeps them awake at night? What can you do for them and how can you craft a message that clearly articulates that you’re the person to solve their problem?
So to my banker example, I first started by offering “peak performance coaching” and didn’t seem to strike a nerve. Perhaps they didn’t quite understand the offering or this group just doesn’t resonate with that language.
Then I honed it in to “receive an assessment where we evaluate your personal and professional goals and create a new plan of action a long with strategies for a path”. We’ll see how that does as I just sent that note and will report back.
It may require me to get so specific to something like “stress coaching”. Very clear and immediate problem that’s simply articulated to a group.
At the end of the day, it’s generally all the same thing as we’re discovering problems for a segment of people but it’s finding what really strikes a nerve and creating a way to solve that problem and beginning with simple consulting to both understand the problem and customers well as you build expertise and experience to scale it up from there.
To succeed at entrepreneurship, you need the mindset and performance habits that will allow you to launch a business while still employed.
You need to be far a long in your business so you’re comfortably able to acquire customers and serve them. This is the point you’re able to quit your job and accelerate forward.
It’s this that you need to research and discover and package a solution for what solves a deep pain that you know with certainty exists in your market.
Then crafting a marketing message and offer to serve them becomes easy.
At the beginning, just begin as a consulting services that you’d do by yourself.
You start there and get customers. This is where you learn the most about your market and customers, when you’re actually serving them. Until then, it’s all just theory and you aren’t getting real market feedback.
Then you craft an offer and message to begin testing with lists of potential cold customers and see what comes back.
Remember you’re trying to reach 3% of the market that’s ready to buy right now, so for every 100, perhaps 12 respond and 3 buy. That’s your bogie.
Keep testing until you hit that and voila — you have your business.
Hit that and get enough customers you don’t have time for your job — and then it becomes a no brainer to quit your job and go full time.