This is a guest post from Marc Hedlund, co-founder and CEO of Wesabe, a web-based personal finance tool. Marc was formerly an entrepreneur-in-residence at O’Reilly Media. He also blogs about money at Wheaties for Your Wallet.
A couple weeks ago, J.D. had a conversation with some friends about starting a small business. I liked a lot of what was said, but I’ve had some different experiences, and would like to offer my perspective. Here are some things I’ve learned from my entrepreneurial endeavors.
Starting a business with friends can be fantastic
Both of the companies I’ve co-founded have been with long-time friends, and while of course there were hard parts about it, in many ways it was a huge help. We knew each other well enough to figure out how the other would react in a lot of situations, and had a base level of trust that is always helpful. Of course there are plenty of counterexamples, but it can work.
What matters is that you have a partner with whom you can communicate — if that person is a friend, great.
Write someone and ask them for help every day
It’s amazing how well this works. Just make a habit of coming up with one person each day that might be able to help you in some way — with an introduction, an idea, a conversation, anything. If you think of someone you already know, then it’s easy to ask for help, but don’t be bashful about asking people you don’t know for help.
When you tell people you’re working on starting your own business, many of them will get excited or interested, and be willing to offer a hand. Don’t be discouraged if you don’t hear back — just try someone else the next day. When you’re starting a new business no one knows what you’re up to, so reaching out and asking for help very often can do an enormous amount to get things rolling.
People matter more than anything
When you’re looking for partners, employees, attorneys, accountants, or anyone else to be a part of your business, find someone you really get excited about working with, or just keep waiting and looking. Don’t get caught up thinking you need someone, just anyone, to support you. It’s far better to wait for a star.
The early people in any company shape everything about it — its enthusiasm, public face, ethics, and quality. You can’t afford to have any of those aspects be anything less than stellar when you’re starting your own business. (If you’re not sure about a person, try using them as a contractor first, and bring them on full-time when you’ve had more time to evaluate them.)
Don’t worry about the idea
Entrepreneurs often get all worked up — or hung up — on The Idea; that is, what business exactly they’re going to pursue. Don’t worry so much about The Idea. Choose something you know a lot about and see a need for, and go for it.
The people you work with matter more than The Idea; hardworking, talented people working on the wrong idea will figure that out and adjust, while the wrong people on the right idea are likely doomed anyways.
The only thing that really matters about The Idea is how you (and your partners) feel about it. If you can’t stop thinking about it for weeks on end, get up out of bed to write down brainstorms about it, and don’t get tired of working on it, that’s the right idea. If you have to convince yourself to keep going on The Idea, that’s the wrong one.
Take money from other people as an absolute last resort
Many entrepreneurs get an idea, write up a presentation about it, and hit the road looking for angel or venture capital investors. Don’t do that.
First, investors will always prefer to invest in running, growing businesses, not ideas; and second, you will immediately give up control of your business to people you likely don’t know very well. Supportive, patient investors definitely do exist, but they are the rare exceptions.
Take investment only to accomplish a specific goal for your existing business that you know you can’t achieve any other way.
Know your customers
Do everything you can to put yourself in direct, frequent contact with the people who will be giving you money — your market. When selling to consumers, make sure you’re talking to someone who would actually have a pressing need for whatever you’re selling; when selling to companies, make sure you’re talking to the person who could actually authorize a purchase of whatever you’re selling.
Anyone in your company shaping its products or services should be in direct, frequent contact with your market, too. Listen to your market. Talk to them all the time. Ask them if what you sell is working for them, and take everything they say seriously.
Most importantly: ignore every other source of “feedback” — competitors, reviewers, two-bit commentators, whatever. If what these other sources have to say matters, you’ll hear it from your market directly. If you don’t, what the other sources say is irrelevant.
Have confidence in yourself
Things are going to suck for a while, pretty often. You’ll win sometimes and lose sometimes, often on the same day. Take care of your home life, make sure you have great support from your family and friends, and listen to your gut. These simple, basic steps will get you through the dark times that inevitably come, and lead you to the rewards that can follow.
Treat people well
Most entrepreneurs fail several times before they have a success. If you can fail with your integrity intact, you’ll build a network of people ready to help you when you’re ready to try again.
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