Doesn’t it feel as if everyone has a start-up these days? There are certainly more than there were when I started my first “service company” – collecting tuck money and sprinting to the front of the line, as the bell went for break time, to bulk-buy and deliver food for a nice margin.
This is said to be the most “entrepreneurial generation” of all, sidestepping the conventional career paths held in esteem by Gen X and boomers.
They were the generation that saw internet upstarts uproot and eradicate established industries entirely, within an alarmingly short space of time, and know that career success depends on your ability to be nimble, independent and yes – entrepreneurial.
But despite this fact (or perhaps because of it), there are many who see entrepreneurship as the domain of app developers and millennials and prefer to stew in their cubicles with great ideas and plenty of excuses, believing that going into business independently is simply not an attainable goal.
This is usually because of a few common misconceptions.
To be an entrepreneur, you have to be inventive
Having a unique product, service or idea is sometimes a gateway to great success.
Sometimes, it’s actually the source of failure. You can have a great product and a great new technology and fail to make a single cent.
Consumer 3D printing-related sales, once lauded to be “the next big Thing”, is dwindling despite huge capital investment and the market is still in shambles. On the other hand, AirBNB decided to take renting out spare rooms and holiday houses (something people have been doing for as long as there has been noticeboards) and digitise it, effectively changing the way the world travels.
You don’t need a brilliant tech idea or engineering degree. You can create tremendous value by doing something that has been done for years and doing it differently – being innovative, rather than inventive.
You have to be an expert
There are a huge number of successful individuals out there who entered their respective industries without knowing a whole about it.
But you don’t have to be a developer or a lawyer or an engineer to start a business – in fact, sometimes knowing too much about a certain field means knowing all the reasons why it’s not even worth trying to do things differently…an outsider’s perspective can be extremely valuable.
You need Yeezy Sneakers and an Apple Watch
You don’t have to be young and trendy to become a successful entrepreneur.
Everyone is battling for the boomers’ business, so age may very well be in your favour. True – in your twenties you might be less settled and have less to lose, but having more experience in life and in your chosen industry can very well count in your favour.
You have more contacts, more people skills. Ray Kroc bought MacDonald’s when he was 59 years old, and lived to see it become the world’s first mega-restaurant chain. One of the fastest growing segments for new businesses are over-fifty-five year-olds.
You have to start a company
Not every entrepreneur becomes a business owner.
In fact, I would encourage every one of my employees to develop the mindset of an entrepreneur – coming up with new ideas and ways of doing things within the company. It’s the only way businesses today are going to thrive in a highly competitive market.
You need tons of money and should quit your day job
You don’t need access to mounds of venture capital to succeed.
Half of the Fortune 500 companies in the United States today were started with less than $5,000 – under R70 000. With crowdfunding it’s even easier to start your own business.
Related: Is Entrepreneurship Dying In SA
Zaheer Moola, who founded Z-Creations in Johannesburg and recently spoke at the Google International Small Business Conference started his business by posting single headboard on Gumtree – he quit his job six months later and today runs a six-figure interior design company. Entrepreneurs aren’t necessarily risk takers – they are risk minimizers.
At the end of the day, the biggest barrier entrepreneurs face is psychological. You have to be prepared to be contrarian, to go against the norm. And you have to value yourself and your ideas. You can be an entrepreneur and a mom, you can be an entrepreneur and a full-time accountant, you can be an entrepreneur without a degree.
Our business is founded on the principle that anyone can make money – wherever they are, without being “ready”, without being tech savvy, without any prerequisites. The ones who are proving us right are the ones who take action, no matter how small. It’s time to join the club.
Why Optimism Isn’t Enough – You Need To Also Accept The Brutal Facts
Entrepreneurs tend to depend on optimism in the same way that fish depend on water. It’s absolutely crucial for survival. In fact, it’s arguably the single most important character trait that a successful entrepreneur can have, but it also has a dark side…
A realistic path to success
- Lead with questions, not answers
- Engage in dialogue and debate, not coercion
- Conduct autopsies without blame
- Build red flag mechanisms.
No matter how bad your day’s going, it’s probably nothing compared to your average day at the ‘Hanoi Hilton’. This was the euphemistically-named prisoner-of-war camp (actually called Hoa Lo Prison) where American soldiers were interned during the Vietnam War. Pilot Jim Stockdale was shot down on 9 September 1965 and sent to the prison. While there, he was tortured, denied medical attention, kept in a windowless cell and locked in leg irons at night. Stockdale spent almost eight years in the prison, and while many other American soldiers died there, he survived.
This brings us to the topic of optimism. You don’t survive eight years in a prison camp by giving up hope. Despite almost impossible conditions (and odds), you need to stay optimistic. Stockdale never lost hope.
“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade,” Stockdale later said about his time in the prison.
The Stockdale paradox
So, Stockdale was an optimist right? Yes, but it’s a bit more complicated than that. Jim Collins interviewed him while writing his seminal book Good to Great: Why Some Companies Make the Leap… and Others Don’t. After hearing how Stockdale refused to give up hope and stayed optimistic throughout his internment, Collins asked him who didn’t make it out alive.
“Oh, that’s easy,” he replied. “The optimists. They were the ones who said: ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say: ’We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.
“This is a very important lesson. You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
From this, Collins identified one of the key things that differentiated great companies from others: The ability to accept brutal facts. Greatness demands optimism, but not in the face of obvious disaster. Collins called this the Stockdale Paradox.
Too much optimism
What happens when a bunch of executives enter a boardroom with their charismatic founder? The founder is optimistic, inspiring… and demanding. He has absurd expectations. He wants the impossible. (Steve Jobs was a good example, who employees said had a ‘reality distortion field’ around him). The executives are eager to seem equally gung-ho, of course, even those who know that a crucial deadline won’t be met, so the brutal facts are ignored.
“We’re going to be shipping product by Christmas,” they all say. And Christmas comes, and Christmas goes. Then they say: “We’re going to ship by Easter. And Easter comes, and Easter goes. And then Thanksgiving, and then it’s Christmas again…
An overdose of optimism is a dangerous thing. While optimism is a crucial tool in the entrepreneurial kit (especially when it comes to motivating employees), it can lead to disaster if administered too liberally. Like morphine, a sensible amount can take the edge off a scary reality, but too much will distort reality to such an extent that you become oblivious to existential threats.
And how do you keep your company off the morphine? Collins suggests four things: Lead with questions, not answers. Engage in dialogue and debate, not coercion. Conduct autopsies without blame. Build red flag mechanisms. If you do this, optimism becomes a powerful tool, and not a ticking time-bomb.
Alan Knott-Craig Weigh In On Living Your Entrepreneurial Dream
From raising capital to getting the most from your employees, business ownership is all about living your dream.
How do I chase my dream? — Sam
First, you need money. Moola. Cash. Capital.
Chasing your dream without enough capital is akin to having a premature baby. All the baby’s energy goes into survival rather than growth. Start-ups are not about survival (paying the bills). They’re about growth (getting rich).
Before you chase your dream, make sure you have enough capital. Keep your lifestyle simple and living costs down. Save up enough to last two years. Or marry rich.
I’m considering selling my business. I need help. — Clark
Before you enter M&A conversations, first decide: “Am I a seller?”
You won’t find it easy backing out during negotiations. Don’t start a process you can’t finish. Don’t look for buyers if you don’t want to sell.
Most people I know that sold their business regret it, unless they had a very specific reason: i.e. the business was about to die, or the business can’t grow without a big brother, or they want to leave the country. If that’s your reason, go ahead and sell. If it’s simply to have a pile of cash, reconsider.
What are you going to do with the money? Put it in your bathtub and wash yourself with notes? Buy fancy cars? Buy a fancy spouse?
Lots of money in your pocket can only tempt you to the dark side. Eventually you’ll get bored and you’ll want to start a business again, and you’ll start all over. If you don’t need to, don’t sell.
How do you instil an ownership mindset in your staff? — Johan
It’s hard to work with people that have no drive. Some people just come to work and go home with no planning or vision or energy. Start with getting rid of the bad apples, then start fine-tuning recruitment to only let in the folks with a good attitude.
Use some of these methods to motivate and encourage buy-in from staff:
- Ask staff for feedback.
- Do not tolerate mediocrity.
- Make sure everyone knows their job.
- Share information. Keep everyone in the loop.
- Look after your staff and they’ll look after you.
- Lead by example. Pick up litter. Be first to office. Be last to leave.
How do I determine what venture to dedicate my energy to and when do I know when to stop pursuing one of the opportunities? — Mike
Go with whatever gets traction first. Ruthlessly scratch everything else off your to-do list. Generally speaking, go with the business with the most tried-and-tested business model.
I left my former employer to move away from the legal side of things. I know that I have the technical skills in this area and I have used that in completely running the legal side of the micro lending venture, but the ultimate aim is to be an entrepreneur/businessman rather than constantly seen as the ‘lawyer’. Do I discontinue the legal consulting or slowly taper off? — Mike
If you can live without the sideline income, do so. Focus 100% on business. If you need the money, keep selling hours on the side.
I have a very successful farm store. I’m considering expanding countrywide. Any advice? — Elo
Ask yourself “why?”
If the answer is to get rich, that doesn’t necessarily mean you need to scale your successful farm store.
Maybe a better option is to take the free cashflow of your farm store and invest it in a different business. An annuity revenue business. A business that will make money while you sleep, rather than only when you’re behind the till. Cash cows are hard to come by. If you don’t want to lose your cow, don’t try to scale it unless you’re 100% sure you never have to sell it.
Can you help me flesh out the detail of a pitch to investors? — Mamkhele
There’s only so much you can rely on others for. At some point, you need to man up and do the work yourself. You need to answer the questions yourself. The answers for all pitch-related questions are on the Internet. Google it. No one will save you, only you will save you.
Listen to this
Alan’s audible book Be a Hero: Make Life an Adventure is now available on amazon.com and Audible.com
Read by Alan himself, Be a Hero is a collection of stories on how to make your life an adventure by changing your mindset and tackling adversity.
Go to amazon.com or audible.com to download your copy. Be a Hero is also available in Kindle and paperback through Amazon.com.
Read ‘Be A Hero’ today
What Real Entrepreneurs Do When They Hear The Word ‘No’
Are you strong enough to push through early struggles?
In this video, Entrepreneur Network partner Jason Saltzman sits down with two founders to hear their stories of perseverence and resilience.
Raul Tovar is the co-founder of WindowsWear, a fashion tech company based in New York City that archives display windows. He moved from Mexico to New York determined to make something of himself and resolved that he would not go home empty-handed.
Jordan Wan is the founder and CEO of CloserIQ, which builds sales teams for startups. He started his business through tragedy – losing his mother and his marriage in the early stages.
You might think these difficulties – whether moving, or being told their ideas weren’t good enough, or working through tragedy – would be enough to make them give up. But they didn’t. They only spurred them to greater success.
Click play to learn more.
This article was originally posted here on Entrepreneur.com.
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