Two years ago I had an idea for a website. I decided to leave a steady job, invest all of the money I had made after college, and begin the terrifying journey of building a company. I started at a time when the economy was at its worst and capital was scarce, so it was empowering to realize that I could make my vision a reality even under difficult circumstances.
Whether you’re considering opening your own shop on Etsy or starting a full-blown startup, I’ll share the ten most powerful things I’ve learned about starting my own business.
Many of these tips were passed down from others who were kind enough to share their experiences and insight with me. Feel free to share your own thoughts on what works and what doesn’t in the comments section below.
How to Know Whether This is the Right Time for You
Starting a company requires time, money, and expertise. Do you know enough about the field you’re interested in? Is there a certain kind of experience you might need in order to make your business a success, like taking a course or learning a new skill at your current day job?
Get Skin in the Game.
Investing your own money will make you (even more) focused. In December 2008, when people were hiding cash under their mattresses, I took a leap and invested most of what I had saved since college into starting LearnVest. Of course, it’s important to have an emergency fund for at least eight months so that you’ll have your basic expenses under control if you get off to a rocky start, but putting your money on the line makes this personal.
Anyone who tells you that you can go it entirely alone is wrong. If at all possible, rely on friends and family for support, but not for funding. First, mixing friends and money is complicated, and you don’t need the (additional) stress. Plus, when the time comes to seek additional funding, investors will prefer to see that you’ve been able to convince people outside your immediate network about the validity of your idea. When starting LearnVest, I only accepted money from people who could also provide invaluable strategic advice. If you’re looking to found a full-fledged startup, start by creating an advisory board composed of successful people, and don’t be afraid to give them stake in your company. They can help you with advice and connections to other experienced people.
Hold Tight to the Big Idea, But Be Willing to Adapt
You’ll be able to get other people on board if you have a clearly articulated business plan that supports an unmet need, but it might take longer than you expect to get off the ground. Don’t compromise your big idea, but be willing to adjust the details. Always get lots of feedback and be willing to tweak your game plan if you see a better way to achieve your end goal.
Know Your User
At the end of the day, your user is all that matters. How does your product make her life easier? Better? More efficient? Figure out what matters to your user by understanding who you’re targeting—kids? Young women? Middle-aged men? Keep that vision in mind at all times when making critical decisions.
Be a Customer Service Whiz
This is a challenging goal that LearnVest struggles with every day, but nothing gives me more joy than a reader telling me that LearnVest changed her life for the better by helping her confront a financial issue. Plus, happy customers are the best way to find new users. If your product makes their lives better, they’ll want to share it.
Spend $0 on Marketing
Embrace social media by using resources like Twitter and Facebook. They’re cheap, efficient, and probably more effective than a lot of other marketing techniques. Another way to get free PR is to go after awards (for example, we were fortunate to be selected as a Tech Crunch 50 company and a top website by Forbes). Try creative ploys to get new users, like launching an invite-a-friend sweepstakes. Social media is always changing, so stay in the loop.
Identify Your Metrics
LearnVest gets tangible confirmation that it’s moving in the right direction from looking at data like the number of visitors to the website, open rates for the LV Daily, and survey results. Think about ways that you can measure success in your own business, aside from profits. How are people interacting with your products? Clearly articulate specific weekly and monthly goals.
Be Scrappy (Read: Cheap)
I’m not just saying this because I started a personal finance company in a recession! Here are some things I learned:
- When you first start, it’s cheaper to use your own cell phones instead of having an office phone.
- Power your company email through Gmail. It’s easy, intuitive, and means you can use intra-office Gchat.
- Never print in color.
- Buy furniture at places like Ikea.
Spend wisely on office space. For example, we share space (and rental costs) with Easybib.com, an awesome bibliography company led by great entrepreneurs.