What kind of entrepreneur are you?

Having been a busy startup consultant for all these years, there are some things I run into again and again. The most curious to me is how some people just jump into a startup project with little thought and preparation while others think and wait and think some more and wait some more then come up with a new idea and think about it for a while … well, you get the idea.

I have yet to find a person who doesn’t have at least some kind of idea about a new business to start. I have seen outstanding ideas get pushed to the side and forgotten, and I have seen terrible ideas put into action and, surprisingly, succeed after considerable tweaking along the way.

Entrepreneurs divide into two groups: the quick starters and the slow starters.

The Quick Starters

Most serial entrepreneurs fall into this category. They start a company, sell it or close it, and then start another company – often in a completely different industry from the preceding company. Sometimes they make money and sometimes they don’t. They are the living breathing example of the old saying “Fall down 1000 times, get up 1001 times.”

If you have a business idea, there is nothing wrong with just jumping in and starting it. Of course, you do need to figure your costs and potential revenues, but a simple idea that will make some money right away and later can be expanded is something that can be planned along the way. Instead of planning the business, get it started on a small scale and start planning its expansion. A good example is an interesting new take on coffee called Kickstand. It got started one summer as a fun project among a group of young guys who wanted to make some money, have fun and meet girls. It’s now in the process of adding new products and opening up new markets. The actual planning didn’t start until the concept proved to be a good one.

If you have an idea that can start with a little money plus your time and effort, don’t delay putting it into action because you think you have to write a business plan and go through the full venture investment process. Better to start with a small proof of concept, make some money and then use that money to expand your business. The expansion part is where you need to do your planning.

Of course, this type of startup takes a certain type of personality. If you are an enthusiastic, high-energy person who doesn’t get discouraged if your first 1000 tries fail, you should go ahead and start businesses until you hit upon a concept that succeeds. There are lots of ways to think about this type of entrepreneurship. Basically, it recognizes that business startups have a high failure rate so if your goal is to make a lot of money by starting a business, approaching it as a numbers game is a valid way to achieve your goal. In other words, put your ideas into immediate action and worry about planning and perfection after you find out whether the idea makes money.

The Slow Starters

While some of my clients are busy quick-starting new enterprise, selling it off, then starting another, the majority of people come to me with ideas they have developed over time and are still developing. Some have written extensive business plans and have spent months researching every category and niche of their intended startup project. They have visions of a billion dollar company supported by million$ in venture investment.

The benefit of this type of startup process is the avoidance of foolish mistakes – although there are many examples of well-meaning entrepreneurs carefully planning what ends up being a foolish mistake, anyway. What makes a long-planned startup into a foolish mistake is the assumptions that go into the planning. If the assumptions are all based on “if I say it, it must be true” thinking, then your efforts will create a well-researched and well-planned foolish mistake. This is where the quick start philosophy has some merit. It leaves no time to develop faulty assumptions. Either the idea itself is good or it’s faulty, and that question is quickly answered without extensive time, effort and planning.

However, most entrepreneurs are creating a dream. This is a powerful force. The planning of perfection and the excitement of launch are all part of the process. If done properly, it practically guarantees success. However, most such entrepreneurs plan for the ultimate goal of a big business. This adds risk. The first risk is whether the entrepreneur can raise enough money to actually put all the planning into action. I see a lot of good ideas that get abandoned because investment can’t be found. So, this is where elements of the quick start make sense.

Instead of planning only for the ultimate hugeness of your business idea, create a way to start very small, earning money with a reduced version of your big idea. This gives you time and freedom from pressure. It reduces your risk and makes for a more perfect company because perfection can be planned but the real world is not perfect. Face it, if you are putting in long hours of research and planning, you will run into real-world variables that send you back to tweak your plans, anyway.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s