Every week I have coffee, lunch, or even dinner with a few entrepreneurs. I get to hear about their so called revolutionary business idea, how great their team is, and how much more money they need to take their business to the next level.
After doing this for a few years, you tend to get tired of hearing all the bullshit that comes from most entrepreneurs.
So for all of you entrepreneurs out there, here are the 7 harsh realities that you need to know if you want to be successful.
Harsh Reality #1: Starting a business is like a roller coaster
You probably have a vision of what your life will be like if you start a business. Well, you can take your vision and throw it away because it isn’t accurate.
There isn’t a ton of glamor in creating a company; instead it’s like a roller coaster. And it’s not like one of those kid roller coasters at Disney Land, it is more like one of those crazy ones at Six Flags.
Sometimes things move really slowly, while other times things move really fast. There will be moments in which you will really enjoy what you are doing and then there will be moments where you aren’t too pleased.
And to make things even worse, sometimes things will look really good, but just around the corner will be something that will make you shit in your pants. Sadly, you probably won’t know what to do other than to cry.
Harsh Reality #2: Owning a business isn’t easier than working at a 9 to 5 job.
If you start a business you get to be your own boss and set your own hours, right? Although that is what most entrepreneurs believe, it is very inaccurate.
Instead of having just one boss, you now have hundreds of bosses. Just think about all of your customers because essentially each one of them is your boss.
If you still aren’t a believer remember you have your own business because you are here to make money. And if you don’t do what each of your bosses (customers) want, your business will go bankrupt.
In addition to that, when you work at a 9 to 5 job all you have to do is work from 9 to 5. When you have your own business you usually end up working 10 to 14 hour days and in many cases 7 days a week.
Even after you start making money, things don’t always change. Although I am not rich, I have done well enough that I don’t have to worry about money. None-the-less, I am still working 60 to 80 hours a week.
Sadly, money didn’t change how little I work.
Harsh Reality #3: Consumers have to believe you are solving a problem
It doesn’t matter if you think you are solving a problem, all that matters it that your target customer thinks you are solving a problem.
As a business owner you get so wrapped up in your company that you fail to see what’s right in front of you.
For example, I met up with a great entrepreneur a few weeks ago that started up a real estate company. I love the entrepreneur to death and I think he will do well in the long run, but he talked to me about how his company was different than all of the other real estate sites out there.
As someone who just recently bought a home, I was actually using his site as well as Trulia, Redfin, and Homes.com before I even met him. And although he had some valid points on how his site was different from his competitors, as an end user I couldn’t see much of a difference.
In the end, this led me to use other real estate websites because his company didn’t solve a problem for me.
Harsh Reality #4: You have to make money
If you are creating a business you have to make money! I don’t care if you don’t care about money; the fact of the matter is not only do you need it to keep on moving forward in the business world but you personally need to survive.
If you think you can create a company like YouTube, not worry about making money, and then sell it for over a billion dollars… well think again. Companies like that aren’t just a needle in a hay stack, they are a needle in a billion hay stacks.
Before you put in a lot of time and effort into a business idea, ask yourself how are you going to make money. If you don’t have a solid answer, don’t get into that business.
And if you are already into that non-revenue generating business, get out ASAP.
Harsh Reality #5: You have to give a lot to get a little
The world has changed and it is no longer easy to build a successful business. Unlike the old days, you can’t just pop up a website, point some ads at it, and build a big company.
In today’s world you have to give a lot. Whether it is free information or samples of your product, you have to do something to build trust from your customers. If they don’t trust you, they won’t spend money with you.
For example, one of the main reasons Zappos did well is that they gave a lot. Just take a look at their return policy; you can return your shoes within a year for no reason at all. Plus, they even pay for you to ship back the shoes that you supposedly didn’t wear (but we all know you did).
The sad reality of building trust with your customers is that it isn’t something that is easy to do or cheap. You could lose a lot of money before you gain people’s trust.
Harsh Reality #6: Coolness is inversely correlated to success
All right, I have no proof that coolness is inversely correlated to success, but in most cases this is true. The most successful companies out there aren’t cool or hip, they are actually dull and boring.
If you don’t believe me, just look at Twitter. Although it is the hottest company out there, they probably will never even make what Exxon Mobil makes in a day.
Or just look at Facebook. Unlike Twitter they are making money, but they can never be the size of Exxon Mobil. We need oil to survive… you don’t need Facebook to survive.
So the next time you are thinking about creating a cool and hip company like Twitter, think about creating a company like QuinStreet. You have probably never heard of QuinStreet, but they have been posting good earnings every year.
Harsh Reality #7: Time is worth more than money
The companies that tend to succeed over time aren’t the ones that create the perfect business out the gate. Instead they are the ones that get their company out in the public as soon as possible.
Once you get your company out there you can find out what people are saying, make modifications, and then get more feedback. By being in a constant stream of iteration, you’ll have a higher chance of success because you will be modifying your company to meet your customer’s demands.
If you take your time and release your company when you think it’s perfect, you’ll be in for a big surprise. You will never be able to please everyone and you will always run into things that you never thought about.
What are you going to do when your customers tell you that they don’t like your so-called perfect company? You just spent a year perfecting it and you wasted thousands of dollars. You would have been better off to throw something out there and get feedback ASAP.