I’ve been thinking about starting a new business lately and I wanted to share my process with others as I do it to help those who might be thinking of starting their own business.
Every business starts with an idea. That idea may come from you or from someone asking you to do their idea, but it all starts with an idea. Five years ago I had the idea to start my own web design business because friends and family kept asking me to develop web sites for them. I wasn’t really interested in it at first, but once I started getting more clients, I was hooked – especially when I saw the paychecks come in, but I had a rocky start. I wished there was someone there to help me get started when I was starting up.
Inspired by Jim Halperts new business and coming off my last successful business, I have decided to start a new business on the side. One mistake I typically make is to get hung up on the business name and category too soon and too often. I often also jump to see what my future competitors are doing in that space. Instead what I should be doing is creating a product that someone would actually be willing to pay for and then asking them if they would pay for it. This is called customer development, but I don’t always do it. That’s got to change.
One thing I like to do is to come up with an elevator pitch and make blanket statements like “I’d like to create a Salesforce.com for HR.” While I don’t want to get hung up on a business name just yet, I can’t move on until I’ve at least given the project a name so in this example I call it “Workflow” which I know I won’t be able to use, but that’s why it’s just a project name. Once I have a project name I start collecting information about the project in a hodgepodge of places from email threads to Evernote to Dropbox. All of this stuff is easy. That’s because it’s all fluff. You’ve got to get to the point where you have a minimally viable product (MVP), which is something you can sell. If someone doesn’t buy it, you don’t have a company. I call this philosophy “Sell First”.
If your idea is a service then quantify, quantify, quantify your idea. Make what I call an “Applebee’s Menu” of your services. Draw pictures that explain what you do. If you’re not a graphic designer, then hire one or draw them yourself using a pencil and paper. The point is to level the playing field between you and your customer by creating a common interface (a picture) that explains to them what it is you are going to do for them and how much it costs. Think about what it’s like when you go into McDonalds: there is a giant menu of pictures on a board. You point to the picture you want with the number next to it and both you and McDonalds knows exactly what you’re going to get. That’s powerful and there are few service professionals who operate this way. Even if you don’t have a product, you can carve products out of the services you provide. Once you have them, ask someone to buy one. If they don’t, go back to the drawing board – literally.
Simplify Your Idea
The hardest part (I’ve found) about new ideas or organizations is in restricting yourself. Your business idea needs to be one sentence, maybe three words. A while back I read a book called The Art of the Start by Guy Kawasaki, which I have also listed in 13 Books Every Entrepreneur Can Benefit From Reading. Even if you don’t read the whole book, the first chapter is very good and prescribes you to go after a “mantra”, “make meaning”, “define your business model”. and create “milestones, assumptions, and tasks”. Maybe you’re already doing some of these things. If so, good.
I’m currently consulting with a new startup that wanted to start 5 organizations in three locations all at once. Part of my job there has been to reel them in and get them to focus on doing one thing first and doing that well. In the book, Little Bets by Peter Sims he talks about how successful companies try things on a small scale before they build out. Here’s an 8 minute video if you’re not interested in the book. Part of the reason I think people (including me) tend to want to make their business (or business ideas) wide in the beginning is because they aren’t sure what will work. Little Bets should help tease that out.
Who Asked You to Start a Business, Anyway?
In 2011 I wrote about all of the challenges you’ll be up against when you go to start a new business. Everyone from the government, to your neighbors, to other businesses, to your family will be trying to stop you every step of the way. But none of those compare with the biggest obstacle: yourself. You can plan all you want, but eventually someone has to Do the Work. While I believe management is important, it can be used for creative avoidance. If you can’t figure out what to do next, just do the next important thing. If you feel overwhelmed or depressed; if you feel like you can’t move, just do one thing. Do anything.
Getting sick got me behind. Being behind got me scared. Doing one thing got me going. Keeping going got me ahead.
— Erich Stauffer (@erichstauffer) February 10, 2013
When to Quit Your Day Job
First of all, don’t quit your day job. At least not until you’ve made the decision and can stick with it for at least three days straight. While I started my own business on the side in 2007, I worked full time until 2011 when I quit my day job. I didn’t quit because I was making more on my side projects than my day job. I quit because I wasn’t having an impact, I wasn’t being utilized, and I felt like I was wasting my life. There were things I wanted to do and they didn’t include being 33% utilized for 8 hours a day. I would literally spend 2 hours in the bathroom a day and another 2 hours a day watching a movie at my desk. My manager had nothing for me to do and was absent most of the time. There was zero pressure on me to succeed and management was perfectly happy with me doing nothing at all. Everyone was happy except me.
In How to Work a Life of Purpose I share how I learned what does make me happy. It turns out that following your passions has little to do with it. It matters much more that you adopt a craftsman’s mindset and deliberately practice to get over the performance plateau that so many of us reach, but few exceed. Once you begin to get better at something, you begin liking it more and happiness is a natural result. Quitting your job will not make you happy. Being the best at something can put you on a path to being happy. Being the best at something can allow you the career capital to start your own business or gain more autonomy in your existing job. What people desire the most is trust, respect, and autonomy in their jobs. You are responsible for building your own meaning and managing your own growth. No one else can do that for you.
Starting a [Successful] Business is Hard
Starting a business is fun. It’s exciting and full of opportunities. It’s easy to say what you’re going to do, make lists, name things, put them into categories, compare and contrast ideas, and draw stuff on a whiteboard. It’s easy to tell other people about your idea and write blog posts about it and tweet about it on Twitter. The hard part is making something useful, something that adds value to the transaction. The hard part is getting someone to pay money for that thing. The hard part is not giving up and not believing your own self-doubt when it inevitably creeps in. The hard part is not listening to the doubters who will tell you it’s okay to quit, that there is safety in the doing what everyone else does. But don’t listen to them. Do the work. Make the world better. We need you to help us. There are problems in the world that still need fixed.
We still don’t have good ways to desalinate sea water or cheap ways to make electricity. We still don’t have cures for all kinds of disease or good methods for distributing ways to prevent them. These are big problems, but I can get more specific. There is currently no way to sync a Microsoft Exchange password on an iPhone with Microsoft Exchange. It’s a manual process that the user has to do. This one problem affects IT departments all over the globe and every time a user changes their password in Windows, their email on their phone stops working. That seems like a problem someone would be able to work on and there are plenty of companies all across the world who would gladly pay for that solution. If you know of one, please let me know in the comments and please share your new business ideas with me once they are up and running. Do the work! Cheers.