Building businesses on line
Building a business on line is hard. Building a business in a brick and mortar location is hard too but there is a different approach. Building any business is hard.
I am hearing from more people who come out of corporate America who are looking to start a business on line. Their approach is one that just sends me the message that building a business on line is not as hard as it looks. Wrong.
What I have learned over the past decade of building businesses on line or even providing capital to these businesses is huge. I am still learning. I also realize that many of the things that seem basic to me are not to everyone. I have also come to realize my value in helping entrepreneurs build their businesses when it comes to anything from hiring a customer acquisition person to making sure there are enough people in the back-end building the site or figuring out the next round of investors. Because I am not a VC and will never write that $3m check I can be the entrepreneurs best ally. I get involved like a VC but am not one. My biggest concern is success for that entrepreneur.
I have recently met with a few companies that have made so many newbie mistakes. Many of them and other people have asked me what book should I read about start-ups to help me build mine. I have pointed many in the direction of Brad Feld and certainly the latest book from Ben Horowitz and recently for food and consumer products Rachel Hofstetter. Yet it is hard to figure out many of the nuances without a supporter that can be counted as a mentor or an investor.
The mistakes can be painful and certainly costly. Not acquiring the right customers or any customers, not having the right back-end system for ecommerce models, putting too much money in inventory that just sits there, selling to the consumer when it really should be sold directly to a business, not listening to who your customer really is, etc. etc.
Not sure where I am going with this or the answers to help more motivated entrepreneurs follow the right path because as we all know 99% is about execution. Good ideas are in ample supply but it is about executing that makes a good idea come to life. Executing on line has a very different set of skills and just because you think it will happen does not mean it will. It is hard hard hard work.
The glamorization of startups as a lifestyle honestly, is a healthy dose of BS.It’s something to love. It’s fantastic when you are among the fortunate to win, but it’s a choice of how to live with a long tail of compromises as well.I love it. I’m also very realistic about it.
More conversation should take place around the realities of building businesses. Hard hard hard
People don’t want to be told its hard.People don’t want to be told to save ala Jimmy Carter.Still true though.
Another area of BS is the fetishization of the founder role in a startup. A corollary to “how hard”: it requires a capable team of willing hard workers with complementary skill sets to achieve anything meaningful in life.Investors like a single throat to choke and the gains realized by a founder are immense – this has translated into the glorification of the founder role. Not every one needs to be a founder at a startup or should be. We need a large team of leaders for every founder if dreams are to be realized. Instead we have a lot of folks running around with the bumper sticker “founder or bust” in their heads.p.s Scott Peck’s “A Road Less Travelled” still has the best opening line of any book 🙂 Ch1, Line 1 “Life is difficult”
We may diverge here a bit.Of course without a team you have nothing. And course in startups your senior team internalizes the pain of it all as their own.But the buck stops with the CEO and there is nothing like the sleepless unrest of not being able to make payroll. That may roll down hill but this is a singular responsibility of just one person.
I completely agree. I think that is why (rightfully so) the gains realized by a founder should be large.My point being that motivated individuals can/should be part of the entrepreneurship movement without all wanting to be founders. This is a statistical truth but the popular narrative from the press these days is entrepreneurship == being a founder. This does a disservice to both the movement and the individuals.
it certainly takes a team.
I think we need to be aware of the word “hard”. It rings differently in our ears than it does for “normal” (not startup investors) people. Maybe “challenging” is a better word. I am not a good word chooser in general. Too direct and too honest. That’s why I use the word hard too.
I understand but my best example is when you watch the moment coming when you aren’t going to make payroll–hard is the only word that fits.
I totally agree – building (and being successful at) an online business is harder than it looks. It takes a lot of hard work, and many people aren’t aware of the realities of the online world.
Faced every one of the problems you describe while trying to build our e-comm/mobile truck showroom business for green products. Could never really nail down the customer (is it someone buying a water bottle for $10 or someone doing a home reno for $50K?), had a lousy back-end, etc etc. Eventually shut it down after 4 years even though we turned a small profit in our final year. Never got the execution right and couldn’t foresee it growing to a real business.
Amen sister. This post hits a lot of nails on the head. Sharing it. I love your thoughts in the paragraph about what you learned. I am learning the same lessons. I am not quite sure if I would have listened to my older wiser self when I started.
I think what’s interesting is how “experience” plays into all of this.Experience building a product isn’t the same as building a business. Experience growing an existing customer base isn’t the same as growing one from scratch. Experience managing people in an established cultural environment isn’t the same as managing a company’s very first hires.Great past experience can inform future success, but it often doesn’t. Very experienced people frequently fail when operating in their own wheelhouse. Conversely, completely inexperienced people frequently succeed at new ventures.And while a lot of it boils down to execution, that’s only half the picture — the tools are the other half. A good team, strategic relationships, ample cash. Without these tools, experienced people can still fail. And inexperienced people, if they find the right tools, can win.
This video might help illustrate what you elucidated: https://www.youtube.com/wat…
Those early mistakes can be costly – I am seeing smart founders reaching out for mentoring, advice/networking aggressively – this is invaluable.
it is so invaluable and under utilized.
I agree that there are a lot of ways to lose a lot of money very quickly when attempting to scale. My co-founder/investor happens to be my brother who has over 13 years of experience in customer acquisition and online monetization. His expertise has been critical in keeping me from bleeding money that I don’t have all over the place. Of course, networking with people offline has been really critical. Local advertisers (incredible insight and feedback), bloggers, other business owners…I get a lot of valuable information that way.
building on line is like forging into new territory.
Always, even if you’ve been building online your entire career. Things just change so quickly.
.Just like any endeavor almost everything about starting a business can be reduced to a process from which the deviations are the special DNA of that particular business.The building blocks are Vision, Mission, Strategy, Tactics, Objectives, Values and Culture. And, you already knew all of that, didn’t you?Every entrepreneur has some of this in their head. Rarely do they articulate it, write it down, subject it to review and eat their own dogfood. Most entrepreneurs are doing it while starting on product, service, site or the business itself.Did I say WRITE IT DOWN?It is hard work and if you haven’t done it before it is both difficult and a bit intimidating.Having been an entrepreneur, founder, CEO and funder for over 33+ years, I have done it right sometimes and sometimes I have just lazily done it by the seat of my pants. I was lazy because I had done it for decades. It was good enough in my head because I had the experience.Still, it would have been better if I did it.In my coaching, I have seen entrepreneurs who have none of these things on paper and then been helped coax it out of them. The experience is liberating, unburdening and invigorating.It is transformational for the CEO. This is not MY words, this is the word of CEOs who have actually done it.I have seen the same entrepreneurs align the efforts of their companies around this work and by virtue of the resulting alignment increase operational production and efficiency in huge multiples measurable by such nasty little parameters as sales.Alignment is really not possible until you have an azimuth along which to align things.This process development approach works.You know what’s really “special” about Special Forces? The quality of the planning and the alignment of their efforts. SF gets V, M, S, T, O, V, C — perfectly. They write it down every assignment, raid or mission. They train for it. They align around it. The LIVE it.If you doubt it, work with me and I’ll teach it to you. I have never seen it fail. I have seen a lot of people who have not completed it and even they have superior results because they did more than they did before.JLM.