Advice for young entrepreneurs

A few takeaways from my own experience, including advice I received from others.

Your third idea will be successful

We need to prepare for our first two ideas to fail. It is important to be attached to our idea and approach so we can keep trying even in the face of failure. However, it is equally important to know when to give up and try another approach. By acknowledging that our first two attempts will be unsuccessful frees us up to be flexible and try different approaches.

It will get easier in the third year

The first year will be spent in setting up the company, building the first version of the product, and finding early customers. The second year will be spent in iterating on feedback and discovering use-cases that customers really care about. The third year is where we will hit our stride and figure out what business we will really build in the coming years. We should not start up unless we are prepared to see little or no real success for two years.

We have a 30-year career

Most people, including founders, forget that they have a long career ahead of them. Classmates, colleagues, investors, customers, partners, and vendors will cross paths with us. Knowing that we and these people will have 20, 30, 40 years of professional life remaining means that we will work with them in some capacity in the future. The way we conduct ourselves and what they think of us can make or break our business. In Rocketium’s history, a person reporting to me became my fellow co-founder, another former colleague became our customer, my ex-boss became my investor, one classmate became my team member, and another classmate became our competitor. My relationship with them today hinges on my relationship with them in a totally different context several years ago.

Risk is an onion

Every business has several layers of risk like an onion. Building a successful business requires eliminating these layers of risk. Examples of risk - hiring and retaining a good team, finding a big enough problem, solving it in a way that is achievable, defending from large existing competitors and nimble new businesses, finding a sustainable customer acquisition channel, and so on. Every risk we eliminate increases the chance of the business’ success, getting funding from investors, and surviving long enough to succeed.

Solve a problem

Companies can be created for multiple reasons - it sounds cool, someone we know faced this problem, this sector is getting a lot of funding, this feels like an important area of growth, and so on. Any of these is good enough and companies started for these reasons could very well succeed. But no company succeeds if it does not solve a genuine problem even if a lot of people think the idea is cool. Solving a problem for a niche customer segment but doing it really well can still create a strong business - just ask $8B Qualtrics that was built for academic surveys or $7B Github that was built for developers to save code online.

We cannot create a market

No matter how much we believe in our idea or how big a problem it is, we cannot create a market all by ourselves. Even revolutionary ideas like the Internet, cloud computing, genomics, or blockchain are not brought to market by one company in one single attempt. It is advisable to tap into existing markets with a better solution or apply emerging trends to existing problems.

Goal-oriented and task-oriented people

Broadly speaking, there are two types of people - goal-oriented and task-oriented. Goal-oriented people prefer being told broad goals we want them to achieve and being given the freedom to figure out the best way to achieve them. They do not like being told how to do something. Task-oriented people prefer being told specific tasks we want them to complete and being given specific instructions on how to do them. They do not like being asked to figure things out. It is very important to know what kind we are and each of our team member is so we can work with them in the appropriate way. Applying the same formula for every team member is guaranteed to fail.

Do not optimise for VC money

A lot of people chase VC money and do anything needed to get and keep getting investor funding. Most times, optimising for our customers and the market is the best thing and what will ultimately get funding as well.