One can find a lot of articles about people who started their own business on something that he/she enjoys and earned millions. Although the business goes into such “original” fields like brewery, cosmetics and the like. Besides an oversimplistic advice “do what you like” one is assured that beginnings are always hard and one must just persist long enough.
This ends up with a mass of unhappy and poor people who do not do what they originally wanted to do. How is that possible? What did that do wrong when they bet on what they liked and persisted till the (bitter) end.
I know people saying that too much intellect can be a disadvantage for making good business. I also know people saying that they have a lot of very smart but poor friends. I would rather say that well-developed logical and abstract thinking is certainly an advantage for business. However, there is more important factors, like social intelligence, presentation skills, family support, financial situation and others. This is why graduates of geeky-style computer science studies have often just a small chance for business success despite their high IQ rates. On the contrary, some of their class-mates who did not finish their studies at all and spent their studies with partying all the time set up successful companies and employ the graduates in the end. OK, we have already known that human personality is important for business success. But honestly, it does not guarantee success, does it?
A Small Business Roulette
Face it. The fortune plays an important role in our lives. Of course, we are able to route our destiny, we can increase a chance of success and minimize risks. However, I do not know how about you, but I am aware of cases when the things turned out good only due to a bigger or a smaller fortune. No doubts that I did not have everything under my control all my life. When doing business you can influence a lot of factors, but there is still enough you cannot influence much. So, even if we do the best we can, the success comes just with a certain probability. Moreover, if we are beginners, the probability is pretty low. However, from the mass of beginners there is always someone luckier than the others.
Just from the mathematical point of view: Even if the probability of beginner’s success would be 1%, the probability that 1 of 300 such beginners succeeds is 95%. The sad thing is that such a lucky person often feels like the one who has a unique sense of business, because he/she did not have to do all the boring stuff that others are doing. So he/she simply hit the right time, the right place with the right product. And media love stories like “He followed his dream and succeeded.” Sometimes, it is covered in a less emotional wrapper, like in the interview with a co-founder of Capturio who admitted that they just “felt with their sixth sense that such a product is missing on the market”.
I do not say that such businessmen have not deserved their success and that they did not work hard. I just say that possibly there are 299 other businessmen who worked hard too, who kept similar procedures and failed.
Anyway, I wish the best even to those who have just been lucky, because they have risked more than anyone else, they are doing good business, employ people and pay taxes. I hope that they will rationalize their procedures one day, found more successful companies, write interesting articles and books about that so that others will be able to learn from them.
What to take from this essey then? That just working on your dream and persisting is not enough. If you do not want to play this roulette game and if you want to make your dreams come true, be incredibly smart, increase your chances to succeed in any rational way you can. Just from the mathematical point of view: If you increase a probability of your success to 20% and you will be able to do at least 5 tries (by careful usage of your time and money), the probability that at least one try will be successful is 67%. Definitely worth trying.
Reproducibility of Success
In my 31 years of age I can only silently envy to 20-years-old guys who have built their businesses in the age I used to admire algorithmic complexity, beauties of formal systems and beauties of the same age. Their stories are interesting and grasped by media quickly. I wish them good luck and i am looking forward to their subsequent successes in next 5 years.
Nevertheless, at this moment I am more interested in stories of businessmen who set up the second, the third or the fourth company or who at least brought more than 1 product to the market (in this context, different beer flavors are still considered the same product). For example, the phenomenal Elon Musk. Such businessmen are able to reproduce their success again. Because they are those who have validated procedures in their heads and they can always defend these procedures by hard arguments and numbers.
The reproducibility of success can be supported by measuring of every single step. This way one can find out which steps were beneficial for the business and which were not. And this way one learns a lot. It has already been partially depicted in my previous posts on lean methodology. In every failure, there is always an essence of success that is reproducible. On the contrary, even in successes, there are always some mistakes which may be avoided next time. If you do not learn from the others, do not miss a chance to learn from yourself.
Few Advices for Beginners That Make More Sense to Me
This is what I heard either at Techpeaks or another time during the last year – so it is not completely out of my head (without citations anyway, since I do not remember anymore)
- the business you work on should:
- be at least a bit enjoyable,
- correspond to your skills,
- produce enough money for your life. (this use to be the most critical point)
- Consider the money you spend for starting your business being lost. For instance, if you get a loan to start our business, you must be able to pay it back easily even if your business fails. If you get an investment from friends or from a family member, be sure that these people consider the investment risky and know that there is a high probability that the investment will be lost.
- Your team of co-founders is like a marriage. First, an elaborate courtship and then a big commitment and a lot of time spent together. Do not set up a company with people that bother you with something. It will only get worse.
- Start with demand and customers, not with building a product. If you do not know the customer and do not know what is his/her problem or need to be solved, it makes no sense to come up with solutions or spend months with product development.
- Talk to everyone about your idea. Except for real corner cases, noone steals your idea. On the contrary, you have a good change to obtain so-much-valuable contacts and feedback. If anyone has a good counterexaple for this, put it into comments.
- Once you started own business, it can last the rest of your life. Therefore, understand it as a process of continuous learning and self-improving, so that you would do it the best way you can. The above mentioned measurements of single steps can help with that.
- Set up the timeline that determines deadlines for different kinds of results you want to achieve. If you cannot keep up with it substantially, shut your business down in time. “In time” means 2 months from launching MVP latest. Sigh, why do I know so many people who got stuck in their poor businesses for the third year already?
- Do not envy to those who attracted an investor to their company. The investor is just a way to accelerate business development, not a goal of your business. The goal of your business is to be stable and profitable.
- Have vison. Have goals. But enjoy everything along the way. One gets used to success quickly, but has just one youth.