PreEntrepreneurship: What To Do When You Are Waiting


Starting a business isn't something you should do without some serious thought. Timing plays an important role in the success of a new venture, and I am sure there are lots of you that want to do something but either don't have an idea or don't have the resources. A few of you even have ideas that are so far ahead of the curve that you would fail if you started now. The markets aren't ready.

So what do you do while you are waiting? What do you do pre-entrepreneurship? Most of you probably work a full-time job. I am a big fan of working a few years at a large company because you get the chance to learn some valuable things about process, procedures, and other ideas that you may need someday when your company grows. But be careful, don't stay so long that you get twisted and think the corporate way to do things is the only way.

You probably have some free time while working a regular job, so use it wisely. Turn off the tv and spend your evenings to prepare for your entrepreneurial future and you will significantly increase your chances of success. Here are the top ten things I either did, or wish I had done, before I started my first business.

1. Become an IntraPreneur. Someone from the Anchorage Angels (here in Louisville, not Alaska) first turned me on to this idea. Some entrepreneurial skills can be learned in a corporation (when the failure is on their dime instead of yours). Make it known that you want to lead a new effort, organize a team, do market research etc. Take it on even if it is extra work that you don't get paid for. The experience will be invaluable.

2. Save money. Seriously. I know those of you that are fresh out of college want to spend some of your new-found wealth on a nice car or a cool vacation. And those of you that are older with families want to have nice stuff and private school and all that. Don't. Be a miser. Save it and invest it so you can live off of it when you start your startup. Plus, it gives you a cost cutting mindset that will serve you well when your cash flow is limited.

3. Network, but do it wisely. Try out all kinds of local business group meetings. Listen more than you talk, and after a few visits you will begin to figure out who are the talkers, who are the doers, who has resources, and who has connections. Be careful, these meetings are full of people that want you to sell you a cheesy business opportunity, or that want to drag you into their dumb idea. Don't fall for it. Figure out who really knows their stuff and get to know them better. I always try to talk to smart interesting people because they can teach me a lot. Plus I make mental notes about people I meet that have good skill sets to complement mine, in case I want to work with them someday.

4. Learn the Industry. If you already have your idea, learn as much as you can about the relevant industry. If not, just pick a few interesting ones to target. You would be surprised how many people have business ideas that won't work, or already have lots of competition that they weren't aware of because they knew nothing about the industry. Subscribe to free trade publications. Find people working in the industry and buy their lunch in exchange for a brain dump. (Everyone has to eat sometime.) Start a blog following industry topics. Even if no one reads it, writing will help you remember facts and clarify your ideas.

5. Learn About Entrepreneurship. Dr. Jeff Cornwall claims that studying entrepreneurship will greatly increase your chances of success. Learn why people fail. Learn what challenges you will face. Learn what is most important for new companies.

6. Read the books Starting Something and You Have to Be a Little Crazy. (and there are probably more good ones) Why? Because they present the dark side of entrepreneurship – the financial and relationship challenges it will bring, the stigma that may come from failure, the emotional rollercoaster involved – in other words, they help balance all those ultrapositive "Entrepreneurship Rocks" idiots that are all over the web but have never started anything. And you need that perspective. The more prepared you are to take a few shots on the chin, the quicker you can get back up and fight. Plus, entrepreneurship isn't for everyone. If you can't deal with the downside, don't do it. Many of the most successful entrepreneurs languished for years before finding the right path. You have to be ready for that.

7. Test the Waters. Maybe it's just the engineer in me, but I think if you can run small scale experiments that validate your idea, you will learn a lot of things that will help you when you really launch. Don't be afraid to build a prototype product or service and have a few people use it. They won't steal your idea. And even if they did they probably couldn't execute it. Most people that want to be entrepreneurs can't even execute successfully, so don't worry so much about spreading the idea around. First mover advantages are way over-rated.

8. Learn To Sell. I won't say that every entrepreneur needs to sell, but most do, and they all need to understand the sales process. Nothing is more valuable than learning what customers want and how to deal with them. Yes, it can be uncomfortable, but you need to learn to sell. You will be selling your product to customers, your idea to investors, and your young struggling company to potential employees. Take a part-time job, help a friend who has a business, whatever it takes to get some selling experience.

9. Study Financial Statements. Yawn! Yes, it is very boring. But you need to understand how money flows through a company. You don't need to understand esoteric rules about revenue recognition or hedging foreign currency, you just need to understand the basics. Don't think that is just the accountant's job. Business is about making money, and you can't do that if you have zero understanding of the numbers. I recommend you read annual reports and 10-Ks to see some of this in action.

10. Line Up Your Resources. Familiarize yourself with the different programs offered by the SBA. Check out the Kauffman Foundation. Learn about all the programs and services that can give you advice or money. You may need lots of both. (Check out the Vogt Awards. Pure grant money for the best idea, but you have to be in KY, or be willing to move your company here if you win.)

11. (bonus) Write a Letter to the Future. Mail yourself a letter. Write to your future self about where you hope to be in 5 years and why you think you will be there. Keep it in a safe place and then open it (five years after you mailed it, of course). You will be shocked at how much you have changed and how wrong you were about so many things 5 years ago. It is a humbling and eye-opening experience.

That is all I can think of right now. I hope I gave you at least an idea or two that you had not thought of before. You wouldn't run a marathon without training, so why start a company without a little preparation as well? Don't think of it as wasted time, think of it as an investment in a successful future.

Feel free to add your own ideas in the comments, or if you have several, write your own post and I'll add your link to this one when I see it in the trackbacks.