1. Many of the entrepreneurs I know started businesses because they needed money, not because they had extra time or cash to burn. The vast majority of business publications (Inc., Entrepreneur, Fast Company) espouse the idea that you need a stroke of inspiration or a really great innovation to make a venture work—which is crippling for someone who has lost a job. What’s your advice for someone who needs a solid venture idea, fast? How do you come up with your venture ideas?
Innovative ideas are often the worst. How many Kickstarters have you seen for amazing products that you thought were very clever, but didn’t actually even really consider buying? Look, you can control all your devices with this cute robot! These sunglasses warn you when UV rays have outpaced your SPF! People post these ideas to Facebook with comments like “Cool!” and “Amazing!”, and then most of them go spend their money on sandwiches and dry cleaning and tax preparation and haircuts, as they always have. If you need money fast, try doing something with sandwiches. Or haircuts. Seriously, just take something that people already need and already buy. And then find one single problem with those things, and fix it. Or add one awesome improvement. Now you have a business people understand and are already primed to pay for, regularly.
Obviously, that’s just one idea. My other go-to is to sell services to rich people. If you’re broke, your best way out will not involve sending samples back and forth from a factory in China. You could be helping a rich lady lose ten pounds tomorrow. You can offer workshops out of your home. Be honest and transparent – “I’ve been doing nail art for ten years, but I’ve just gotten up the courage to do it as a business. Right now the workshops are in my home (and available for parties), and I welcome your ideas and feedback!”
Also of interest:
2. I know clickbait sucks by definition—and yet I still dupe myself into reading “57 Ways Your Idea is Guaranteed to Fail” or “Make This Fatal Mistake and Spend the Rest of Your Life on the Streets” every. single. time. It’s baloney 95% of the time. You have plenty of business experience and insight, so I’m wondering: what do you think the most dangerous action(s) are/is for a new business? What do you think is the most critical part of a new startup? Any insight would be much appreciated.
Well, in the last question, I talked about businesses you can start fairly easily, especially if you’re broke. The flipside of that is getting stuck in businesses that aren’t scalable. How much effort do you want to put into a dogwalking business? Some dogwalkers make $100K. Some hire other dogwalkers and presumably make even more as owners of dogwalking businesses. But if your goal is to start a company and ultimately sell it for a substantial amount of money, you want to avoid thinking too small.
The other big mistake I see small businesses make: the business owner starts something really cool but then doesn’t make money fast enough, and so cuts expenses by killing what made the business great in the first place. For instance, a new coffeeshop opens and it’s pretty cool – there’s free WiFi and they give out little cookies with the coffee – but business is slow, so the owner decides to be stingy with the cookies, and, even worse, decides that he can’t afford to heat the whole coffeeshop for just a few customers, so he’ll turn the thermostat down to 62. WELL, THEN. You’ve stemmed the bleeding by killing the entire business. Who wants to come to a freezing cold coffeeshop staffed by a surly guy who withholds a cookie when you just order drip coffee? A lot of business owners have unrealistic expectations for how fast a business will take off, and just when they should be reinvesting, making the coffeeshop much cooler and introducing new types of cookies, they shrink back and sabotage themselves.
So don’t do those things!