On the first day of TechStars Chicago, we weren’t sharpening our business plans or refining our elevator pitches- we were selling water.
As part of a one-day start-up exercise led by Sam Yagan and Zach Kaplan, teams ordered thousands of bottles of water, convinced they could sell them in a 5 hour window.
Comments from teams included: “the sales cycle was extremely long,” “competition was fierce” and “logistics/fulfillment was more difficult than we imagined.” It was clear from the thousands of leftover bottles from the experiment that being an entrepreneur, even one selling life’s most basic of necessities, is difficult.
This simple exercise taught us important lessons on building inventory, driving sales, working on teams and learning from mistakes. These were all important but the most important lesson learned was that the key to learning how to run a business is to take the first step. In fact, taking the first step to becoming an entrepreneur is often the toughest part.
I’m routinely asked by would-be entrepreneurs (“wantrepreneurs”) how to get started. My advice? If you want to be an entrepreneur, go do it. Find a business and figure out how to generate revenue that exceeds your cost. The lessons learned from creating the proverbial lemonade stand are easily applied to fast growing SaaS businesses.
Figuring out how to hire and fire employees, how to sell, how to forecast, and how to exceed customer expectations are all fantastic lessons that will serve you well in any start-up. If you’re careful, even working at a big company can be great training.
Reading technology blogs and spending all your time at conferences with “social/local/mobile” in their title are fine in moderation but they won’t help you start a business. If you want to be an entrepreneur focus on building your company and be an entrepreneur. Build a business.
Perhaps keep the safety net of your full-time job (but be careful of non-compete or intellectual property stipulations in your contract.) Find ways to simulate the ideas of entrepreneurial responsibility, whether it’s in a startup or in your full time job. By all means, network, build relationships and get to know the community.
If you want to be an entrepreneur, just do it. Focus on building a company (even selling water) and let the rest sort itself out. Worst case -- you’ll learn a tremendous amount in the process.
Erik Severinghaus is a Chicago-based serial entrepreneur and business leader. Erik was part of the founding team for iContact (a leader in email marketing) and spent six years as a consultant in IBM’s IT Optimization Practice before founding his current company, SimpleRelevance. SimpleRelevance specializes in marketing personalization and helps companies easily send the right email content to the right person at the right time, leading to revenue increases of 30-300 percent per email campaign. Learn more at SimpleRelevance.com, Find Erik on Google+ and follow him on Twitter.