I’ve experienced a myriad of trials and tribulations throughout my startup career. Before selling two companies, I managed to fail at three; before raising over a million dollars from my own website, I was surviving off 30 cent cup-of-noodles and five dollar foot-longs from Subway; before running a 15-person startup out of San Francisco, I was working out of living rooms and garage spaces.
Perhaps you could say it was essential to my “life experience,” but living with five other roommates in a cramped, one-bedroom apartment wasn’t exactly what I pictured after college.
It took quite some time—six years to be exact—and although the process of getting where I am was a memorable experience, there are three key lessons I’ve held onto that I wish I knew when I first began my startup journey. These are factors I believe every entrepreneur should consider, whether they’re a technical entrepreneur (an engineer who can build a website or mobile app) or a business-based entrepreneur whose primary focus is sales and online marketing.
Lesson #1: Learn How to Make Money
Learning how to financially stabilize your life is absolutely crucial. Before building plans for your company, you’ve got to learn how to make money, stabilize funds in your life, and invest that money later into your own company.
Back in 2008 when we built our 40-page business plan, we had a goal of raising five million dollars. At that point, everything had monetary value: the amount of shampoo or toothpaste we would use, the number of hours we left the lights on, and how many times we actually ate during the day. We were careful about everything, and eventually, it became impossible to build a product without a stable source of income.
This is why it’s important to make your first venture a product or service that will generate profitability now, rather than sell for millions later.
How can you change the world if you can’t take care of yourself?
Once you learn how to make money, you can move on to bigger ventures like starting the next Facebook or Instagram.
Lesson #2: Hire the Best, Not Just Those Willing to Work for Free
Early-stage startups are usually searching for college interns who are hired to work without pay, but receive academic credit instead. What most companies don’t instantly realize is that taking the time to train a new batch of people compromises precious time and money. Interns end up only doing a basic list of items, which brings us back to Lesson #1:
If you can make money, then you can hire the best people to do the job. There is a huge distinction between an unpaid intern and hiring somebody who is absolutely amazing at what they do.
This realization is what got me to overlook unpaid interns and jump straight into interviewing talented account managers or engineers. Hiring the best people is EVERYTHING, and if you can’t make money, then you can’t hire the best people.
Lesson #3: Build a Solution for Your Current Network
Our first product was a virtual world for Fortune 500 companies. We were fresh out of college and had absolutely no connections that were execs at the top companies; needless to say, we were lucky to get one client (I actually hustled like a madman to close Disney as a client).
But there is a simple trick to get started on the right track immediately: build a product that you and your current network would purchase. In this way, you don’t have to build an entirely new network, which takes a ridiculous amount of time and money.
I now use this technique with all of my startups, which is a main reason why my current projects are thriving. We are so well connected to companies that need reputation marketing that we immediately started with a batch of clients without having to go through the struggle of hunting them down.
If I had discovered these top three lessons when I first began as an entrepreneur, perhaps I would have been able to indulge in more than deli sandwiches earlier on in my career. Regardless of the infinite amount of struggle and setbacks we had to face, we still maintained a goal to grow.
If you’re a first time entrepreneur, taking these tips to heart can really influence your progress in this industry and bring you more success as a beginning entrepreneur than others.