Forget all of the advice that you've heard from bright lawyers, accountants, Angel investors, venture capitalists, and other high-level advisors. Most of it is wrong. You don't need to be well-funded, have a buttoned-up business plan, and all that smart. Trust me - my first attempt at a startup taught me what
not to do even though I thought I was keeping costs down and listening to the right people. I'm not a proven entrepreneur and it remains to be seen how successful my startup
eROI will be, but here is some of my candid, unconventional advice for first-time entrepreneurs:
1. You've got to be naive and a little insane. How is being naive an asset? As a first-time entrepreneur of a high-growth company, naiveté of the challenges you'll confront is a requirement. Otherwise, you'd never start your company in the first place. As the Adidas ad campaign says, "Impossible is Nothing." A few simple truths: you'll get close to bankruptcy at least three times in your first couple years. Which leads me to my second bit of advice:
2. Don't worry, be scrappy. Cash flow is everything. If you need to incorporate your company, start with online resources like www.filinginoregon.com and talk to a small law firm that will quote you a small project fee to guide you through this process. Manage expectations and always ask how much things will cost before having a vendor start the project. If possible, recommend a partial trade-out for product or services that you can offer the vendor.
3. Do NOT write a 40-page Business Plan ever (until you're no longer a startup)! Write a 2-3 page Executive Summary where you focus on how your company makes money and how quickly that will happen. Do
not get carried away with how big the market size is or how popular or unpopular your niche is in the investor community - it does not matter. All that matters is that you address a need in the market with a unique solution or approach and that you make customers happy. But don't settle for that, turn customers into evangelists for your brand. If you can begin doing that early on, you won't need to rely on outside funding and investment will come to you when you don't even need it.
4. Network, network, network with other entrepreneurs and with as many people in your industry as possible. You'll find partners, customers, employees, speaking engagements, and great ideas among this group of people.
5. Balance is the secret of life. Most first-time entrepreneurs work 80 hours per week and it shows. They look dead tired, even though the overwhelming passion puts a warm glow on their fish-belly white complexion. The ironic thing is that entrepreneurs with more balance can think more clearly and work strategically
on the business instead of
in the day-to-day business. Get some sleep, go on a hike, bike ride, or get some turns on the ski slope. Your company will be better for it.
Ryan Buchanan is the CEO of eROI.
