Recently I had the privilege of speaking in an entrepreneurship class at the Tuck School of Business at Dartmouth, where I got my MBA. I had dinner with 7 students the night before and then spoke in class the next day. A friend of mine, Arno Harris,, who is CEO of Recurrent Energy, gave me a great idea for starting the class, which was to point out that entrepreneurs are not rational business people. This is because they are way out at the end of the risk reward curve. Most take huge risks in the hope of big rewards, but the risks they take are much higher than most reasonable business people would be willing to tolerate.
Students asked me why I was willing to do it. I explained that it gives me control over my own destiny. My success is between me and the customer – if I can provide a service that people want, do it well, and get the word out profitably, then I can succeed. No corporate politics or playing golf with my boss to get ahead. I also like the fast learning curve you get from the big challenges and many roles you must play in a startup. Your work always has impact because there is so much to do spread across so few people. Ultimately I’m also willing to sacrifice my standard of living, working 60+ hour weeks and being underpaid in return for the thrill and the challenge and the hope for a big outcome.
Toktumi is my fourth startup and I’ve learned a lot along the way. Most of my learning has come from the mistakes I’ve made but I’ve also had some positive reinforcement along the way when things went well. In the class I took students through each of my companies and what I learned from them, and what other entrepreneurs shared with me. Lessons included:
- In the long run, whoever gets profitable first wins
- Your first business plan will be wrong
- Timing is everything
- You can’t do it all yourself. Build a great team and delegate.
- The team you build is more important than the idea itself.
- Start young while your tolerance for risk is high.
- Do your diligence before you quit your day job.
- You can fix sales and product problems, you can’t fix market problems.
- Know the appropriate investor type for each stage of your funding.
- Act like an investor in your company when deciding your long-term role.
I’m sure there will be more lessons to come. The next one will be how to run and fund a company when the economy is collapsing around you!