According to online dictionaries, an entrepreneur is “a person who starts a business and is willing to risk loss in order to make money” or “one who organizes, manages, and assumes the risks of a business or enterprise.”
Well, I get a check for both of those. My past venture into the fashion industry was fraught with risk and cost me plenty. Now, I have little to show for it, save for a closet full of the most amazing handbags EVER CREATED.
I’m normally a risk-averse person, but somehow, when I’m on a quest to find the formula for success in some endeavor, I throw tons at it – money, energy, time – hoping to find the magical components. The problem is, when you invest in something you really don’t understand, you come up empty more often than not. Knowledge is power, sometimes more so than money, and that’s what struck me with this video from Mark Cuban.
The big takeaways?
Seeking funding for a new business venture is failure. It’s an admission that you can’t hack it on your own, can’t find success with the resources you already have, and need to sell-out in order to plunge forth. The question is, how successful will you really be when you are on the hook for millions of dollars to others who believed enough in your idea that you probably could have rocketed on your own first, albeit a little slower??
I never thought of it that way…
My latest venture is challenging, to say the least. And while I’ve researched the concept itself, I’ve thought many times about how I’ll pitch the idea to investors, how I can get into an accelerator, how I can get the attention of venture capitalists…all so I can command funding and leverage expertise from those who have already found success.
But after watching this video, I realize my mindset needs some fine-tuning. Funding is not necessarily the answer. Preparation is the missing element in my formula. It’s where I fell short with my first business. Not taking enough time to learn about the industry before jumping in, spreading myself and my resources too thin to be even slightly effective, not doing enough research in the form of focus groups prior to designing my products. It was a totally ad hoc, fly-by-the-seat-of-my-pants, throw-lots-of-crap-at-the-wall-and-see-what-sticks process, with no tried-and-tested repeatable elements. I had no blueprint, no measurable metrics, and no plans for future execution. So, what did I do? Hired a new, more expensive PR firm (which did squat, btw), designed even more products without customer input, spent more money than I could afford…only to land flat on my face with no answers and lots of anguish.
I never acquired the knowledge, though I did amass mountains (now they’re more like hills) of debt as a result. I could have mitigated the risk with a deep understanding of the business landscape, including potential pitfalls and competition elements. But not me! I’m an instant gratification whore, way too impulsive and impatient to waste time on LEARNING, of all things.
To my own peril. I’ve raised many a glass to that toast, regrettably…
So, Mark. Thanks for the advice. Knowledge is the most powerful tool in your arsenal. The more ammo you have, the more prepared you are for battle. And yes, it IS a battle. But winnable if your head is in the right place.