I was in Melbourne Australia last year talking about entrepreneurship with a group of students at Deakin University. Later on one of them approached me while I was on the way to the airport and he said “Mr Tukaki (I feel really old when kids do that!) if there were seven things you could tell your teenage self about entrepreneurship so as not to fail the first time what would they be?”
What a great question! So, I thought about it for a few minutes and this is what I said:
#1 Procrastination is the root of all failure
I spent too long with my first start-up procrastinating about the idea I had. By the time it came to get it off the ground when I was just 18 the timing was off, someone had already beaten me to the punch and before I knew it I regretted more the fact my competitor was not only realising their dream but had made an enormous amount of money from it! That idea was a travel editorial website back in the early 1990’s that would have been the pre-cursor to Lonely Planet. My advice is that procrastination certainly is the root of all evil when it comes to business start-ups and entrepreneurs!
#2 Failure happens – get over it, pick yourself up and start again
It wasn’t until my second start-up failed that I realised that yes, you often fail before you succeed as had many others. Failure enables you to learn lessons from your mistakes and about what you did right and wrong. You need to sit down and identify gaps in skills, knowledge and expertise. If you never recognise that you have failed before than you miss learning those very lessons life and others are trying to teach you. If you are not careful and learn along the way then life may through you a really dodgy curveball that will be hard to recover from. My advice? Failure happens learn from it, pick yourself up and get going again.
#3 Prepare, prepare, prepare
Never think that it’s easy to get an idea off the ground. Research, look at what your competitors are doing, invest time in walking before you run. In my first start-up I would have been much more successful if I had have got the price point right. It was an education training workshop that I managed to overprice because I mistakenly believed what I was offering was better quality. What the competition was offering was quality + history + current clients. I never needed to learn that lesson twice because once you price yourself out of a larger market your hip pocket hurts!
#4 Stop thinking and start writing your idea down!
I believed in my second start-up (an education company) that when I made the pitch to investors it was okay – it was all in my head and I had a PowerPoint presentation. Well that was stupid! I should have completed the business plan and understood spreadsheets and how to put together a cash flow forecast instead of basically winging it. The thing I have learnt is that investors have all heard it before what they want is to see you have considered everything there is to consider and you do that by making sure you write that business plan and know it back to front.
#5 Don’t think you know everything – there is no “I” in entrepreneur
By the time I got to me third start-up (a technology company) I knew something that I had learnt as a result of my first idea not getting off the ground. I failed to recognise that there was no “I” in entrepreneur just as there was no “I” in team. In other words I should have identified my own skills gaps and not been as arrogant to think I knew it all. In doing so I would have built a really effective team around me and I bet we could have executed a stronger strategy and plan. Team work and having the right team around you is as about important as having capital sitting in the bank.
#6 Research if people want what you have to sell – don’t think they do
Just because you think you might have a great idea don’t kid yourself! You only know if you do if you market test it and there is demand for your product, service or idea. It doesn’t matter if it’s a pure start-up or a social enterprise. Also, how do you know that someone else isn’t doing what you are proposing if you have no idea who exists in the market and how successful they are? Also, don’t kid yourself that just because a potential competitor may not know what they are doing that it’s because they are just useless – chances are, there just isn't a market.
#7 Don’t build it and hope they come – build it because they want it and go and lead them to you
I thought in my second start-up let’s just get the website up and running, spend $20,000 and they will flock to us. When that failed we said let’s take out an advertisement in a local trade publication. The problem with the first is we designed the website not for our clients but because we thought it looked good and how good did we look when our own photos were added to “about us”. Well that was stupid! Then when we advertised in the trade publication we did so because it was cheap – but you know what? There was little connection with the IT consumables market we were trying to tap into. The fact is we could have spent $5,000 on the website (we didn’t need a Rolls Royce version we just needed a Toyota) and we should have spent more on advertising in the right publication. So, don’t build it in the hope that they will come – know your audience and engage with them, convince them you have something they want to buy.
Just because your mother loves you and tells you that your idea is fantastic the truth is most mothers have to say that! It doesn't make the idea right!
Now for the students reaction: he turned to me and said “that’s sage advice” especially the one about failure."
That’s why it’s important to cut through not just the words of inspiration you see people post, sure read the stories of the billionaires but remember this – we all started somewhere and we all have war stories to tell. It’s because of those war stories we learn and its only through learning we succeed.
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