Before beginning your entrepreneurship journey, you need to know this. I tell this to everyone who is trying to start their own venture,
Experience. It’s the only reliable teacher I’ve ever had. No books ever captured what it is really like. You just have to do it.Craig Gomes
I know experience is vital and most of the knowledge we gain from entrepreneurship books is worthless.
I invested in more than 30 companies and later on started my own and I read almost everything that is written about entrepreneurship. According to me, you can never find a way which you will say helped you to be who you are in entrepreneurship, there is no straightforward way of doing entrepreneurship right. I think there are only a few things that you can do which can teach you the method.
While reading can never be a replacement for doing, it can help you get a starting point.
I went ahead and explained what the entrepreneurship lessons are and even went to details on where you can read them.
Here’s Your Entrepreneurship Lesson in 3 Parts
Paul Graham once said:
“You need three things to create a successful startup: to start with good people, to make something customers want, and to spend as little money as possible. Most startups fail to do it because they fail at one of these. A startup that does all three will probably succeed.”
Let me break this down for you.
1. Involve Great People When Your Start
If you want to build something great, you should surround yourself with powerful and great people.
Many people do not consider this helpful and they end up skipping it and I know why – it is very difficult to understand how important people are in your business life until you try to build a business with bad people.
There’s a great difference between a good co-founder and an average co-founder. There are many instances in my life when I have experienced this. There are times I have been the average co-founder if not bad and this ruined me a lot.
When looking for a great co-founder, what are you looking for?
The founding team you decide to partner with must be people who get everything done.
Paul Graham says your founding team should be made of people who are resourceful and determined. It sounds simple to understand and it is. It might, however, be a task finding such people. Most of the people you associate yourself with say they are like that. The truth is they are not like that; they want to be like that.
As long as you have the products which fit the market well, the intelligence of your partners and their degree of resourcefulness is what brings about success.
How do you know if you are working with is a resourceful and determined person? Look at the milestones they have achieved in their life and determine whether resourcefulness and determination are visible. Their past behavior should help in predicting bow their future behavior is.
Your starting point should not help in determining your resourcefulness and determination, you can still display the attributes. If during your starting point you are poor and you have nothing, you have very many opportunities to show people what you are made of. In your whole life, you should always be determined to overcome the obstacles presenting themselves in your mice despite having few resources.
Likewise, if during your starting point you are rich and privileged, you can still be resourceful and determined only that it is in different ways. You can show these attributes by discovering new things by yourself, exploiting all opportunities that come up in your way, and by coming up with new things from the resources you have.
People who have shown such attributes before you start working with them will help you build big in the long run; you should consider working with such people.
2. Make Things That People Like
The user of the product you are coming up with should be the first person you are concerned with. Do not be like most of the founders who build for their status and ego rather than building for the usefulness of the product to its users.
Most founders think that they need a great idea; you do not necessarily need a great idea.
Ideas are not determinants of anything. On most occasions ‘great ideas’ end up being worth something less. This is because when starting up, you do not need an idea. You need to solve the problem.
The main aim of a startup is to find a solution that is commercial enough for a real human problem. This perfectly describes “make things that people like”.
Paul Graham talks more about this and says,
I like to find simple solutions to overlooked problems that accurately need to be solved and deliver them as informally as possible, starting with a very crude version, then interacting rapidly.
The only thing that should matter to you is now the product will fit the market.
According to Mark Andreessen, product-market fit is:
“Product/market fit means being in a good market with a product that can satisfy that market… The life of any startup can be divided into two parts-before product/market fit and after product-market fit. When you are before product-market fit, focus obsessively on getting to product-market fit.
Do whatever is required to get to product/market fit including changing people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital-whatever is required.”
If you think you have a business, ask yourself whether you have a model that can be repeated and sustained, whether the model can bring in users and turn them into active customers and whether you are making something that people want.
Your brain should always be aiming at solving a problem and not aiming at your idea or your solution. If you are aiming at solving a problem, you will keep on trying until you come up with something that people want.
This is the best time in history to start a company. It’s not complicated and you should not even make it more complicated. All you should have in mind is starting with a real problem, look for solutions to the problems until you come up with something that the people want and this can be seen when people buy and use your products.
It is true that ideas matter. But it becomes easier to come up with ideas when you understand that they only matter if they are applied to solving problems challenging humans. There are so many problems that need to be solved everywhere.
If you are an entrepreneur and you can’t find a problem to solve, you can consider brainstorming with people, asking questions, doing surveys or exchanging ideas with people. If you still can’t find problems, probably you weren’t made to be an entrepreneur.
3. Spend Less Money, Spend Wisely
Many of us would call this ‘avoiding mistakes’. I, however, think I know why Paul Graham called it ‘spend less money’.
He assumes that people are spending money so fast yet they are not achieving anything. That’s the biggest mistake that can be made by a startup- so he’s right.
If you are spending money too fast especially in venture companies, that shows that you are a poor decision-maker and you are a poor thinker and this is very difficult to get past through.
If you spend less money, you are forced by circumstances to be resourceful and have your focus on the important things that matter which normally are achieving product-market fit and then selling.
If you spend less money, eventually you will be fine because you get time to solve all the problems you make inevitably.
However, that is not the only mistake that you can make during the early startup stages. Also, being inexpensive does not help in solving all, your problems. There are many more mistakes that people make. Most of the common mistakes people make are having bad teams and having a product-market fit that does not serve the people. If during your startup you spend as little as you can, you will not have these problems since you will get time to solve them.
You not only follow what you have been told but also you have to go practice it to experience it.
The most important lessons you need during a startup are;
- Involve great people who are resourceful and determined.
- Make something wanted by the people through solving the problems they have.
- Spend as little as you can so that you get time to come up with solutions and fix mistakes.
If these three fundamentals are kept at the fingertips during startup and if they are used as a guide during the decision-making process, the only thing left us for you to start building.