Are you staring a business or a startup? Are you a business owner or a founder? A startup is exciting, high paced, in vogue, tech driven. It is all or nothing – and all means all your life. Not all businesses are the same.
There are a number of different types of businesses, at one end of the scale there is the franchise or single operator – in this instance you are effectively creating a job for yourself. At the other end of the spectrum is the startup – and in between there are as many iterations as you can think of. What suits you?
Around a year into our business – I was feeling lost, stressed, confused. I had started a business but I really didn’t know what I was doing, where I was heading. My mentor gave me some advice – First, figure out what you want in your life.
In 10 years, what do you want to be doing day to day? How much do you need to live the life you want? Do you want to own your own island or are you happy with a holiday house and no mortgage? Do you want to be able to go out for dinner twice a week or do you want to be having dinner with the Prime Minister? These are very different outcomes – what do you truly want?
Frame this concept and use it as your base, your core – know it may change as time goes on… but that is ok… it’s a start.
When you buy a house, you run through a criteria – 3 bedrooms, close to schools, backyard for the kids. Maybe you love going out and want to be closer to the city? Perhaps an apartment works, you are willing to give up space for location. You then find the place that fits and check in with what you actually want, does this feel right? You should do this with a business.
When you come up with an idea, think forward five years, when it is successful what do your days look like? Does it match how you want to live your life? Has it got enough upside to get you where you want to go? Some really big dreams will require big risks for big rewards, others will be more modest. Businesses and strategies come in all shapes and sizes and can be shaped how you want them. Use your framework and create a strategy that suits you.
For me, I like businesses that have low capital requirements at the beginning and you can get early feedback on whether it is working or not. This leads me more towards starting service based companies. The trade off here is that my companies are not going to become the next google as scaling is slower. But this meets my personal goals and how I want to work so I am happy to make that compromise. This doesn’t mean having small goals, but heading somewhere where the day to day is a life you want to live.
Think creatively – can I give those developers equity to mean that I don’t have to provide the seed capital? Or do I want to pay salaries and keep the equity? Decide what is right for you – know what you are giving up and what you are getting when you mould your strategy. Know what it is going to mean for your life.
Distinguish between financial risk and emotional risk. Ask yourself, what is the worst thing that can happen?
Financial risk – Are you going to go bankrupt if this doesn’t work out? Are you putting up the family home on this venture? How risky is it – what do you stand to lose? This should be treated extremely seriously.
Emotional risk – this is what you are going to tell your friends if it doesn’t work out, how are you going to feel? It is identity and status – everyone cares about this and that is ok but it looms larger in our heads than in reality.
Care more about the financial risk than the emotional – it is more real. Know what you want and have the courage to follow it, but always cap the downside.
Once you have decided to commit and begin work hard and have the tenacity to give it everything – particularly in the early years – scrape and make it happen, continue to figure out what is driving you and sink your nails in. Get down into the weeds, do what it takes and never compromise in what you believe in – it will be tested.
- Businesses come in all shapes and sizes – be creative in designing yours
- Don’t be too influenced by the “in” thing, know yourself what is true
- Know what you want in your life – use this as your framework
- Design your business around your framework – make it work for you
- Distinguish between emotional risk and financial risk – challenge your perceptions of emotional risk
- Once you start, follow it through and work hard, scrap, grit and get it done – in the right way
Where did I get these ideas? This blog is a combination of things I have read, heard, pondered, and in the end weaved together. At the end of each post I will do my best to provide some rough references, please let me know if I have made mistakes, as I most likely will;
- Steven Lelli – Baclo Group
- My own experience
- Guy Raz – How I Built this
- Phil Knight – Shoe Dog
- Mark Bouris – What it Takes
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