3 Lessons I Learned When Starting My First Business

Starting a new entrepreneurial venture can be an adrenaline-pumping rollercoaster ride of emotions. This ride fuels entrepreneurs towards working long hours for an uncertain and unlikely reward.

I was very lucky to receive a $1,000 grant from the  Victor C. Alvarez Spark Innovation Fund for my first venture.

Link: http://tulane.edu/socialentrepreneurship/upload/2014-Victor-C-Alvarez-Spark-Innovation-Fund-Application.pdf

These are three lessons I learned along the way.

Lesson #1: The first step is being able to explain your idea in less than 30 seconds.

When Manny and I first started, a thorough description of our project would take no less than 20 minutes. Frustrated, we’d end up blurting out something like “it’s like Facebook for non-profits.”

While using metaphors for other products can be useful, this description horribly misrepresented the business we were trying to build. The truth is, if you can’t interest people in 30 seconds, you probably won’t be able to in 30 minutes

Your 1-2 sentence pitch is called a value proposition. In it, you are conveying the VALUE you provide to your customers. You should probably also mention exactly who your customers are.

Your first milestone in starting a new venture is matching a compelling value prop with the appropriate customers. This is called product/market fit. You are creating a product specifically with these customers in mind.

Let’s take a look at some great targeted value propositions:

AirBnB – Rent unique places to stay from local hosts in 190 countries for the young adventurous.

SouthWest Airline – Low prices and great customer service for domestic travelers.

Starbucks – European style coffee shop for the young and affluent.

You get the point. This process is all about being able to quickly communicate and sell your idea to people. Notice that all of these concepts took one sentence to explain.

For more information on developing killer product/market fit. Check out Steve Blank’s excellent free class on “How to Build a Startup” at Udacity.com. Link: https://www.udacity.com/course/ep245. Just sign up and start. It’s completely free and an incredible resource.

Lesson #2: It’s not all about product development, marketing will be HUGE.

                When I first started, I was all about product development. Manny and I designed a beautiful initial test site. This site was meant to test whether people would really use our product, if we built it. We didn’t want to invest a year of our time or $30,000 to build the site unless we were 100% sure it would get used.

I didn’t end up listening to my own advice though, and so I spent hours, no days, building a visually beautiful site. Looking back, all this effort was in vain. I hadn’t moved past the key product/market fit stage and so I couldn’t attract or retain the right target visitors. This is when I should have been worrying more about marketing.

On day one, you have 0 customers. Customers are the lifeblood of a company. So spend time thinking about your marketing strategy. This effort will pay huge dividends.

For a great practical guide on marketing, check out The 22 Immutable Laws of Marketing. Link: http://www.amazon.com/The-22-Immutable-Laws-Marketing/dp/0887306667.

Truth is, you can have a fantastic product/service, but if you’re the only one who knows about it or your product/service does not satisfy a real need, your business won’t get anywhere. Spend a ton of time on marketing.

Lesson #3: Create a schedule, and stick to it.

                “Do not confuse motion and progress. A rocking horse keeps moving but does not make any progress” – Alfred A. Montapert

As an entrepreneur, it’s very easy to book a lot of meetings, apply to some grants, and generally hide behind a computer alone in your room. Many young entrepreneurs simply tread water on their ideas because taking concrete action is scary.

In contrast, it’s very difficult to put yourself out there, talk to potential customers, and market your new venture to everyone who will listen. I know its scary, but you have to try. It’s time to stop talking and start DOING. Your efforts early-on should seem a lot like a sprint to get to actual sales.

You have to constantly be taking constructive concrete steps to growing your business

To keep yourself on schedule, mentally keep track of the three biggest solve-able problems your business faces each week. Write down what you can do to solve them. Then do it! Being an entrepreneur means facing your fears and taking action when no one else will. Go for it. The time is now.

If you need some motivation, I highly recommend reading The Four-Hour Workweek by Tim Ferris. Link: http://fourhourworkweek.com/

Thanks for reading! For more on Dan, visit Danstlouis.com