Since the launch of the Silicon Valley tech bubble; entrepreneurship and tech have been the hottest trends among Generation Z. However, with over 90% of startups failing, how can you start a business and be in the 10%? The simplest answer here is that you just need to get out and do it.
After sitting down with serial entrepreneur and author of A Paperboy’s Fable: The 11 Principles of Success, Deep Patel, I got the chance to ask him about the most important factors for young entrepreneurs to consider when launching their own ventures.
Patel, as a 17-year-old high school student, has published a bestselling book, been asked to speak around the nation at conferences, and is a Generation Z consultant to top brands. So what are the key lessons Patel has learned while balancing classes and career?
1. Surround yourself with the right people
If you have watched The Social Network, you know Facebook went through some rough situations on the people-side of the business. Both the people who thought Mark Zuckerberg was working for them and those who viewed Zuck as a cofounder ended up receiving little to no share of the profits (until after the lawsuit was settled). “Your business will ride and die with the people who associate it with,” said Patel. “If you work with losers, you will be a loser.”
In order to make sure you only pick the best associates, you need to separate all personal relationships from the business. This means no spouses, significant others, best friends, nor relatives. “These are the worst people to work with early on since you won’t really know what the right actions are and they will likely won’t trust your judgment if you both disagree,” Patel explained. “The real problem lies with skeletons coming out of the closet, however. All of a sudden, since Suzy didn’t take out the trash last night, her business plan is garbage.”
Furthermore, he says the best business partners will already have knowledge of how you work. Conversely, you would also know them, their past, and previous partners. Understanding what you are getting into will be key for you to thoroughly examine if it is smart to launch a venture with them. Do not rush this phase. Prematurely launching with a bad partner will cost you money, time, both, or the business.
2. Do what you know
According to Patel, too frequently, young entrepreneurs get inspiration in the form of permutations of existing business models (i.e. Uber for ______). Besides most of these businesses not being sound ideas, most of these inspirations are not rooted in a deep knowledge of the specific industry.
He explains each industry comes with its own basket of problems and solutions. In order to be truly successful, you need to understand all of these nuances. How do you know your business is valuable? What currently exists to solve the problem and why are the customers not happy? Why are you the best person to found this company?
If Goldman Sachs got the wise idea that the tobacco industry is lucrative and launched a tobacco line, it would undoubtedly fail. Ultimately, Goldman doesn’t understand agriculture or tobacco nor did they have the infrastructure to deal with pushing the product or sales.
Yet, many young entrepreneurs dream up half-baked ideas for products or industries in which they are novices and still believe they are ready to be professionals. If you can’t dribble or score, don’t play basketball. 🙂
3. Define your market
Your success comes from your ability to find your customers out of the billions of people in this world and convince them that your product will solve their problems. “From this, we can see you need to know your market for three reasons: how will you find them, how will you know what their problems are, and how will you know what features will solve their problems?” Patel said. “Answering these questions is not going to be easy but will lead to long-term success.”
He says marketing and customer research are young entrepreneurs’ best first steps. “This allows you to gauge whether people are willing to throw down money or not. Once you complete this first basic level of research, you can expand to functionality,” he explained. “This will include asking your base, both what their problems are and what features they want. From here you need to focus on your UI (user interface).”
Robinhood quickly became one of the top financial platforms all because of their ability to understand how millennials wanted to invest in stocks and tailoring their interface accordingly. This tailoring went as far as knowing that millennials spend less than 30 seconds on apps and that they would need to allow them to invest in much less time than that.
4. Build a personal brand
People do business with people. If you treat people poorly, be a jerk, and develop a bad reputation, you will never be successful. Word of mouth is powerful, and the saying “People will always remember how you made them feel” holds true. “You want people to hear your name or see your face and immediately think that they want to do business with YOU. But this takes time,” Patel said.
“Firstly, always look out for people’s best interests — not only will the success of people around you make you look good, but also whether or not you help or hurt them, they will tell people they know about their experience.”
Helping people will directly lead to a better reputation for yourself. It will also create more business. Secondly, he says you need to be active as a thought leader. If you cannot help drive and educate people, then everyone will always be looking to others for that inspiration and a huge amount of potential brand power will be given to your competition.
“I will always think of the Friends episode where they are dragging a sofa up a cramped stairwell and cannot fit it around a corner and they just keep screaming “Pivot!” Patel said. He says this is how young entrepreneurs need to think.
When you stop moving forward, you stop being successful. And that’s a problem. After every interaction, every pitch, every sale, and every success and failure, you need to regroup and think about what you can do better. Without this constant update in quality of service, your customers will get complacent or even angry if their problems are not being solved.
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