We were both at a stage in our lives where merely working to make a dollar was not rewarding enough. We wanted to create something. And we did, in a way. Today, Arielle has a team of 5 staff and in 2015, our revenue will reach $1 million. All without taking a single dollar of debt or investment. Although the numbers look promising, the journey of building the business has been an unpredictable one, often hair-raisingly confronting and far from smooth. Here I’d like to share some of the lessons I’ve learned on this path.
1. Realize That You Are The Problem.
The business you’re about to build will be a direct extension of you. Its DNA will mirror your own beliefs, motivations, worldviews, strengths and weaknesses. If you’re experiencing a problem in your business, it’s because you haven’t yet developed a capacity for something that the world requires you to learn in order to move forward on your path.
2. Address Issues At Their Core.
One of the main challenges for a new business, for example, is to get enough clients. If there’s not enough of them, you might be tempted to view it as a marketing problem. While that is true, there’s more to it than that. At a deeper level, it’s also probably an empathy and generosity problem on behalf of the person in charge of marketing. If this person is not wired to solve other people’s problems and doesn’t experience joy from a pure act of giving, teaching them about USPs and SEO will be a poor investment of time.
3. Embrace Personal Growth.
Your business is a giant classroom in which you’ll get an opportunity to learn about your own barriers and – if you’re willing – to move past them. The aim is to use your role as a business founder as an opportunity to grow as a human being (which will, in turn, bring about happiness and fulfillment; not to use your business as a vehicle to build fame and fortune in order to bring about happiness (it won’t).
4. Believe That Final Destination Is A Myth.
When I was starting out, I watched too many YouTube videos in which business founders talked about raising millions of dollars and being bought by Google in the space of 6 months. This led me to be distracted by the promise of a magic, fictitious destination – one where I have “made it”, there are no struggles, no threats and little stress.
5. Enjoy The Process Of Building A Business.
The reality of achieving business goals is that every time one is reached, a new set of challenges present themselves, some of which were not relevant or visible at earlier stages. It means that the very process of building a mature business has the effect of moving goal posts back hardwired into it. A business that’s struggling to define its value proposition, for example, has little concern for refining processes and writing manuals. However, one that’s trying to scale will view those as a priority. The lesson here is to cease aiming for a future where life is effortless and learn to enjoy the day-to-day challenge of solving new problems.
6. Don’t Let Your Time Be Easily Wasted.
Results are a product of your effort multiplied by traction. The problem is that when you’re starting out, you don’t really know what you’re doing, so you don’t have much traction. It means that a lot of your effort, and possibly money, is wasted on spinning your wheels in the mud. You simply haven’t yet figured out which of your actions create the most value – and that’s totally normal.
7. Believe That Woody Allen Was Right – “80% Of Success Is Showing Up” – Woody Allen.
This leaves you with just one other variable which leads to results – the amount of effort you put in. If you’re juggling your business commitments with a desire to maintain a healthy social life, attend yoga classes, be a great parent, look fashionable, cook nutritious meals, read Charles Bukowski and take regular holidays, you might find that you’re a startup founder more in theory than in practice.
8. Sacrifice Three Things.
For someone who decided to build a business, learning to consciously pick battles which you want to fight (and win) is critical. If you’re not saying “No” to most of the requests for your time and money (from yourself and others), you’re probably sabotaging your success as an entrepreneur. Chances are, your current life is not set up in a way that is helpful for building a business. Decide which 3 significant demands on your time and money you’re willing to give up in order to make room for your startup. Be honest with yourself. Are you prepared to abandon hobbies, let go of friendships and/or move to a cheaper area to chase your entrepreneurial dream?
9. Don’t Be A Hipster.
Building a business is quite the trend these days. You see fashionable-looking people with Macs at cafes and think that’s what your life would look like if you were an entrepreneur. Don’t be fooled. Most of those people do not have a real business. Even if they do hand you a business card with a fancy title. I’ll get to that shortly. Take an honest, hard look at your motivations. If you are drawn to entrepreneurship mainly because of perceived glamour of it all, you won’t survive. Most of it is very, very non-glamorous. A good test for examining your true motivations is the amount of sacrifice you’re prepared to make (see the point above).
10. Understand Why Business Isn’t Glamorous.
The idea of starting a business like Uber or AirBnB might seem cool – until you consider that you’re simply in the business of selling cheap transportation or accommodation – and being hated by a lot of people in the process. Most successful companies in the world sell very boring products – e.g., toothpaste, consumer goods, gadgets, clothes, cars, etc. Arielle sells job search tools. It’s not glamorous at all, however what’s important to me as one of the founders of the business is not the perceived glamour value of our products, but the quality of the problem that our business has been built to solve.
11. Find A Problem Worth Fixing.
I’m passionate about Arielle’s mission because I know that the recruitment industry is rapidly changing, which means more and more talented people are getting overlooked by employers. To me that is a problem worth fixing – and our job search tools are one of the ways we help people get noticed. Always start with a problem that you want to fix and work back to product. Don’t be surprised if most people think your product is boring. The people who you’re building the product for won’t.
12. Utilize Every Single Minute.
I’m a little extreme in how I operate, but let me make a few examples just to give you context for how I chase higher levels of productivity. I typically work in hyper-focused mode for 10 hours a day. Most mornings I’m at my desk by 7:15 am, having already been to the gym. I also keep an iPad in the toilet to leverage my time there. Before my bathroom call is up, I typically flick through a few articles on my Feedly reader in order to get up to speed with the latest SEO/SEM/PPC news and schedule in a few tweets via Sprout Social. Maybe someone has figured out a way to build a business whilst living a well-balanced life. I have not yet met such a person and it’s certainly not been me. (I personally don’t think that it’s possible for one simple reason – business is a competition and your competitors are running forward, not strolling along).
13. Know That Cash Flow Is King.
Irene and I had no savings to fall back upon on, so we had to find a way to generate a profit quickly. To be specific, when we started we had less than 1 month worth of wages in the bank. If we did’t get some clients during that period, we’d have to abandon our startup idea and get jobs. Having our backs to the wall like that was not comfortable, but it taught us a valuable lesson – lack of cash can be a great catalyst for creating results fast. Being comfortable typically leads to sloppy thinking and wastefulness.
14. Accept That You Are Selfish.
I got into entrepreneurship primarily because of my own selfish reasons. Specifically, I wanted to experience fulfilment from getting to build something every day and I didn’t like the idea of just swapping my life for money. I don’t use the word “selfish” in a negative sense here. Everyone becomes an entrepreneur for selfish reasons. For most people, building a business is a path to having more personal power, fulfilment and/or freedom.
15. Become Expert At Creating Win-Win Situations.
However, being selfish creates an interesting problem as soon as you decide that you’re “officially” in business, as I mentioned earlier. The first few years for a startup founder is essentially a marketing and leadership game. And winning at it means learning the skill of giving more thought to other people’s problems than those of your own. The trick, at least how I’ve approached it, has been to connect other peoples’ problems with mine in a way that benefits everyone.
16. Come To Terms With The Fact That You Do Not Work Here.
When you’re starting your business you wear all kinds of hats – marketing, customer service, accounting, blogging, etc. It’s easy to slip into the mindset of “I must get through all this work” and begin to think yourself as a CDO – a “Chief Doing Officer”. Incorrect! As a founder of a young business, you might choose to work in it, however your focus is different. You do not identify with the part of you that attends to enquiries, writes blog posts, settles accounts, etc.
17. Remember That You Are Building The Business.
You are – primarily – the custodian of your vision for the company. As Michael Gerber famously said, your product is not whatever you sell, but the business itself. What’s the vision you have for your business in six months time? 12 months? Three years? Five years? You must be wrestling with those questions on a regular basis.
18. Learn To Be A CEO.
Your projections will be wildly inaccurate and probably overly optimistic, if you’re like me, and that’s OK. The point is not to get them 100 % right every time, but to train yourself as a strategist. Create the vision, make a plan which will bring it to reality, execute on it, then measure results. Repeat. Always be working with a clear understanding of how each action you take fulfils on the bigger picture.
19. Get Ready To Suck At Being Present.
The flip side of being hyper-focussed on your business is the impact on other areas of your life. Spending so much time in your head means that it’s difficult to be present – with your partner, friends and the world around around you. Switching off at the end of the day is difficult. There’s always an inbox of unread emails, always a number of projects which need to be moved forward, a client who is waiting, a problem that needs attention and a number of social media feeds that require input.
20. Accept That “Long Hours” Will Take On A New Meaning.
Irene and I have done a number of stints during which we’ve worked from 5 am until 10 pm, seven days per week, for weeks at a time. During those stints, we paused only to sleep, eat and go for a walk around the block as a form of exercise.
21. Build A Team.
“I can do it all myself” is a common sentiment among startup founders. It was certainly mine. I thought that we can learn to become jacks of all trades and that way, cover most of the vital business functions. In a way, it’s true. However, it depends on your end goals. If you want to build something great or to lead the way in a niche, you’ll need other people to help you. I think 5-10 people is an excellent size for a team because it’s big enough to pack a punch, yet small enough to be agile and not plagued with politics.
22. Consider Profit vs. Wages.
Separating profit and wages is a challenge in early stages of bootstrapping, because at the beginning they tend to be one and the same thing. In fact, there’s usually not enough profit to pay your bills, which means you’re likely to view 100 % of your profit as wages. And probably make up the balance from savings or other income sources. If you hold on to that habit as your business grows, however, you’ll rob it of the money it desperately needs.
23. Pay Yourself Below Poverty Line.
Your wages will be one of largest expenses the business will carry in its first few years and figuring out how much to pay yourself with them will be one of the most critical business decisions you’ll have to make. If in doubt, give yourself less and the business more. Aim to take as little as you can personally tolerate whilst remaining productive, reasonably healthy and relatively sane. When times get tough, and they will, the stress of an overhead in the form of an expensive rent or car repayment will significantly outweigh any comfort that such an item may provide.
24. Don’t Spend Money On Looking Good.
Learning to spend money well in your business is an art. Most businesses fail because founders spend money away in a way that makes them look impressive in front of their friends, rather than yielding returns. You probably don’t need a $2000 logo and a $5000 website. At least not until you have a steady stream of customers, anyway, Arielle, as I write this, still has a logo that Irene designed in Microsoft Word two years ago and a WordPress template which we bought for $99 (redesign in coming in the next few weeks).
25. Know That Business Cards Are (Mostly) Useless.
I honestly think most business cards are created to satisfy ego trips. Unless your business model relies heavily on networking or making face-to-face pitches to clients, you can spend your money more wisely during the early days. Namely, on whatever gets clients through the door in your business.
26. Obsess Over Data.
If cash flow is king, data is queen. Begin to measure and track everything. At minimum, install website analytics which include goal conversion data. As the business grows, use a combination of simple spreadsheets and reporting tools. However, watch your spending on cloud-based solutions to measure enquiries, sales, expenses, hours worked, items sold, etc. Paying $25/month for each one of them doesn’t seem like much, but adds up quickly. Track it all, even if you don’t use all of the data in a meaningful way now. It will provide you with a valuable context for your growth in the future.
27. Reinvest In Your Business.
Remember that as your business grows its expenses will grow exponentially. If your revenue is $1K per week, then it will probably seem like you could take 80 % of it as profit. You do some math and dream of the day when your revenue hits $5K/week, because that will mean you’ll keep $4K per week in profit, right? The thing is, to generate $5K/week you have to spend a lot more of your revenue on wages as well as tools and consultants to help you with legal compliance, accounting, analytics, recruitment, IT, marketing strategy, PPC, content, training and all those other things you didn’t think were relevant. Remember that your priority in the first few years is to grow your business, not your personal bank account.
28. Reject Bad Business Advice.
Every day you’ll come across people who will offer you business tips (including me). Often, their advice will conflict with your own viewpoints. It will also come from people who seem to have a lot more business and life experience than you do. How do you decide who to listen to? My definition of bad advice is – it comes from a person who is not living a life that I want to live. I look for mentors who have have a similar definition of success and have produced real results that I want to produce. Look out for know-it-alls who seem to be able to talk the talk, but can’t walk the walk.
29. Learn From The Greats.
Read Predictable Success by Les McKeown. It was probably the single most valuable book I’ve read in the last 12 months, because it helped me understand how all the pieces of the business puzzle fit into the overall strategy. The second most valuable book has probably been the Steve Jobs biography by Walter Isaacson because it taught me the power of focus.
30. Hire Positive People.
Job interviews are generally a waste of time because answers to standardized questions such as, “So, tell me about a time you’ve dealt with an upset customer” can be learned. And just because I don’t have an answer doesn’t mean I can’t be effective at customer service. What a job interview does, however, is provide an opportunity to catch a glimpse into the bigger picture faculties that are present in a person’s life. Where does the person you’re thinking of hiring operate from – Acceptance? Trust? Reason? Or do you sense scorn, craving and anxiety?
31. Avoid Time-Wasters.
If you hang out around other entrepreneurs (e.g., at co-working spaces), you’ll regularly come across people who are always more than willing to chat endlessly when you bump into them and keep suggesting that you “should have a coffee”. Networking and exchange of ideas are great. However it’s easy to mistake talking about business with building a business. Before you know it, half of your day is gone and you still haven’t created any value. If you agree to having a coffee, set boundaries at the onset – clearly articulate the purpose of the meeting and set a 15 minute limit. Don’t be afraid to skip the small talk and cut straight to the chase.
