Years ago, I read Robert Kiyosaki’s book, Rich Dad, Poor Dad. The book does a good job of explaining the mindset that holds many people back from ever becoming an entrepreneur. Ironically, Robert’s story compares the advice of his academic dad (i.e. poor dad) and his entrepreneurial dad (i.e. rich dad). Robert suggests that working hard and earning good grades isn’t the best advice anymore. Working for someone else won’t lead to financial independence, which is where you’ll likely end up by earning a college degree and hoping for a corner office in a big company. You’ll find that the people you work for aren’t willing to give up the good life or share much of it either. The biggest gains go to the shareholders.
I can attest to Robert’s concept myself. My dad was the employee with the great work ethic who worked in the same company for over 30 years and I was the son with all the college degrees. Neither one of us found financial independence that way. Today, the young professional mindset is changing slightly. Professionals are getting the college degrees and then chasing the entrepreneurial dream. They are using both paths. The downside is that most of the lessons they get from academia and the parents who haven’t owned businesses still lack some important truths about entrepreneurs. Here are the truths that will help you understand the makings of the entrepreneurial mindset.
Don’t just think about it, do it. All through college, you spend your time solving problems that already have answers (i.e. they’re in the back of the book). If you brave the world of graduate school, you’ll likely solve problems analytically because you can’t really test your solution in the real business world. I think all of the analytical techniques are great to learn and easily taught by academia but it forces you into a state of analysis when you run into a situation for which you don’t know the outcome. In other words, the more educated you are, the less likely you are to take risks. Why? Because you’ll spend too much time estimating the risk rather than just taking it. Risk can also result in failure which could damage your “I’m a smart person” self-image. If you plan to be an entrepreneur, you need to get over this idea and develop the “anything it takes” self-image.
“Entrepreneurship is neither a science nor an art. It is a practice.” – Peter Drucker, management consultant, educator, and author.
You won’t figure it all out. Most startups don’t create a business or marketing plan before they launch. So they don’t have a good picture of what resources and effort are really needed for the initial phase. This leads to considerable effort figuring out how to do many of the activities that must be completed. Another factor that makes this overwhelming is that startups also begin with as little resources as possible, which forces you to spend too much time on what I call non-value added activities. For example, if you plan to use social media as part of your marketing plan and you aren’t good at it, find someone to do it. You need to spend your time selling and directing the business. This is why you build your plans before you launch. The other benefit of building plans early is that you can do this while working another job. Then, you can easily step out and launch the business. There are a lot of benefits to planning early and defining who will do what. Plan it first and use expertise where you can find it.
You will fail, hopefully. Most startups fail, roughly 9 out of 10. Failure is inevitable. This is worth saying twice. FAILURE IS INEVITABLE. The key to overcoming the failure, at least according to the 10% of companies that succeed at startup, is versatility and teamwork. Challenges and setbacks are a huge part of success. They often put you back on the right track. Versatility is the possession of numerous skill sets among your team. If you’re launching your company alone, your versatility will be limited. You might consider building a team or getting a partner. Teamwork will then become vital in rebounding from setbacks and failures.
“You may be disappointed if you fail, but you are doomed if you don’t try.” Beverly Sills, opera singer
Be a punching bag. As a business owner, you’ll get feedback from customers, vendors, suppliers, employees and investors. The majority of this feedback will be unfavorable. The success of your business will depend on how well you handle it. You can’t become aggressive and fight it. You can’t just rollover and accept everything either. Feedback is some of the best learning you can get and most of the time is offered to you at no cost. Soliciting feedback is the ideal way to extract information about your product and how well it meets your customer’s needs. This is key in getting them to buy your product. So why wouldn’t you eagerly accept this advice? Don’t let your passion and ego get in the way of growing your business and allowing others to help you do it. You’ll grow faster that way anyhow. Just remember, every blow you get will only give you more information on how you are doing and will help you find ways to improve. If you’re unfamiliar with making feedback actionable, check out this article at Entrepreneur.com.
Don’t make all the decisions. Just as we discussed above, you’re not going to be able to provide all the answers to your questions, but you are going to feel compelled to answer them. It’s your company after all. Well, if this is what you’re going to do, you need to create as many habits as you can. These habits will save you time so that you can focus on the tough problems. One of the most important habits you need to develop is to reduce the number of decisions you make, especially the little things.
Even President Barack Obama avoids making the little decisions that don’t usually mean so much to the success of his business. “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.” Focus on the major value adding decisions and create habits that don’t steal your time. Again, this is best accomplished when it is laid out in a business plan.
There’s nothing easy about being an entrepreneur. Those that can’t handle it become employees. It’s not for everyone. If you’re considering it, it’s critical that you establish the right mindset. Remember, entrepreneurship is a journey, not an event. It will be difficult and all consuming. It will eat everything you have (e.g. time, money, energy, passion, drive, attitude) if you don’t adopt the right mindset.