This is part one on a series about what to do as someone interested in entrepreneurship but no idea where to go. Part 2 on “What to Do Once You Have an Idea” will follow soon.
Last December, the business that I and 7 others had been slaving over for two months received seed funding and was accepted into an incubator. When talking to other students about our company, the question I constantly get is:
I have an idea… what do I do now?
In a university setting we tend to assume we need to get our knowledge from classes. But this is a problem for would-be entrepreneurs, at least at CMU, since the entrepreneurship classes tend to be higher-level business classes you don’t take until junior year and the STEM majors are too heads-down to have even a few lectures on starting up.
Thus the questions of “what do I do now” is left unanswered. I hope this series of posts can answer that question for anyone, not just students, who has an idea but doesn’t know what to do next. I want to start with what not to do though, since these are the mistakes I see a lot of people I talk to make and you want to make sure you don’t do the same thing. I’ll address what you should do instead in the next part of the series.
What Not to Do
Before I dive into what you can do, I want to talk briefly about what not to do. These are the most common “wantrepreneur” mistakes I see in others (and myself) that prevent them from starting something great.
#1 Don’t Do Nothing
Simply doing nothing will obviously not get you anywhere. Don’t be one of those people at a party who goes on about the great idea you have but haven’t acted on because “the market isn’t right.” You’re either scared or lazy, and neither is admirable. Even reading a few books or articles would be an improvement.
At heart, I think everyone wants to be an entrepreneur, but most are scared to go for it. You have to make sure you’re crazy enough to do it. I asked one of my mentors if I was crazy in how I did a valuation for our company, and he responded in a way that captures it brilliantly:
To answer your question: YES — you are freakin’ nuts. But that has nothing to do with your projections. On a normal scale, you took a leave from a great university, to start a business when you have no real experience — so by all rights you are crazy! But it takes crazy people to change the world.
You’ll have to be alright with being crazy. Don’t let fear of the unknown cause you do nothing.
#2 Don’t Read Everything
This was the big mistake I made. I didn’t want to spend a year taking classes in entrepreneurship, so I read about 2 books per week related to startups and entrepreneurship for 4 months.
Pro tip: knowledge is mostly useless when you can’t apply it right away. Worse, if you can’t apply it quickly, you won’t remember it either. Books are useful to solve problems, but not to front-load everything you might need to start a business. You’ll find the entrepreneurship books useful later when you’re actually running into the problems they help you solve. You just have to get started.
#3 Don’t Fear Failure
This gets brought up too much, and honestly it seems sometimes like people in the startup world have a hard-on for failing at things. You should never go into something expecting to fail, but you have to go into a startup recognizing it’s a good possibility.
“Don’t be afraid to fail, be afraid not to try”
— Michael Jordan
75% of startups don’t make it past year one, and 75% of the ones that do don’t make it past year 4. And those are just the stats on startups we hear about. Imagine how many dormroom ideas don’t make it past the first couple of months? Your odds of having the same job in 4 years is around 6%, which is not the type of job security your parents probably want you to have (believe me, mine are lawyers).
But you can’t let this be an excuse to do nothing. My first entrepreneurial endeavor dissolved in about a month and a half but it was an incredible learning experience that I’d value above any class I took.
#4 Don’t Wait for the Perfect Idea
A lot of people think that an idea has to be perfect in order to startup. Ideas are cheap, we don’t live in an idea economy anymore. 200 years ago if you came up with a new way to forge steel that would make it twice as strong and half as light you’d guard that with your life. But ideas for tech startups? They’re worth nothing. It’s all about how well you can execute. This graphic captures it nicely:
#5 Don’t Assume You’re Not Ready
To quote one of my friends and mentors, “Entrepreneurship is like ignorance squared. You don’t know what you don’t know.” That can be terrifying for a lot of people, including myself, so we assume we’re not ready to start a business. But no one’s ever really ready, you can never know everything, so you have no reason not to just go for it.
“Entrepreneurship is like ignorance squared…
You don’t know what you don’t know”
I think that when we have this fear (as I did) we assume that we’ll wake up one day and say “hm, yes, I am ready now” but that day never comes. Every book you read will make you feel you need to read another, every class will prompt you to take another. You simply have to go for it because that “I’m ready” moment is never going to come.
#6 Don’t Build Something Nobody Wants
The TV show “Shark Tank” is not something I’d recommend you use as a resource, but it is very useful to watch a couple episodes to see the commonalities among people who don’t get funded. The most common reason? They built something no one wanted, and now they can’t sell it.
This is the kind of mistake that gives entrepreneurs a bad name and creates the belief that entrepreneurship is “risky,” it’s only risky if you bet the farm on something you haven’t validated and wind up broke.
Entrepreneurship is only “risky” if you bet the farm on something you haven’t validated first
Before you build anything, before you write the first line of code, you need to go out and prove that there’s a market for your idea. If you don’t do that first, then I guarantee you’ll waste a lot of time, money, and energy. Building is deceptive because it makes us think we’re “getting started” on our business, but if we’re building something we haven’t validated then we’re just spinning our wheels.
How do you validate it? More on that in part two.
To-Don’t lists are just as powerful as To-Do lists. There’s no perfect formula for starting a successful business, but there is a list of ingredients that will certainly lead to failure or getting nowhere. Now that you have that list, it’s time to move on to part two (forthcoming) which will give you ideas for what to do instead.
Nathaniel Eliason is CEO/Co-Founder of Tailored Fit, a site bringing the curation and discovery to online clothes shopping that Pandora brought to music.
Follow him on twitter @nateliason for future articles.