The following is a guest post by Kristoph Matthews of Smashing Entrepreneur. He’s had many adventures traveling the world and making a living in a wide variety of ways ranging from work as a fashion model, scientist, and entrepreneur. Kristoph believes in overstepping boundaries and getting out of your comfort zone to get the most out of life.
We all dream of it: being able to put the “TPS reports” in the shredder, walk past the cubicles and out the door triumphantly while proclaiming, “Today is the day my life really begins. I’m going to make my millions, travel the world and live the life of adventure and pleasure.” But why doesn’t it happen? Because it’s risky.
First of all, we all enjoy the security that a regular income brings, despite that what we experience every day is far from ideal and adventurous, and we value the certainty that a regular job provides. Even if our dream picture above doesn’t include nagging, unappreciative bosses and mundane work, at least we know what to expect. When contemplating the idea of redesigning our lives and starting a business to support ourselves, we simply don’t know what we don’t know and the uncertainty is frankly, quite scary.
I faced the same blocks in my mind for years through college and grad school until I finally learned how to reframe risk and let it work for me to design an exciting, purpose-filled life, and it’s my goal to show you how you can do the same.
Let’s focus on how you’re going to support yourself as you design and live your new life. This is probably going to require you to start a business, which you may have no experience doing and have heard that “9 out of 10 fail,” giving it a risky image. However, let’s reframe “risk” for a second: Do you think it’s not RISKY to go through your whole life settling for certainty instead of following your passion and purpose, and getting massive enjoyment out of it? And retirement—why delay gratification until you’re not even in the state to enjoy some of the things you wanted when you were younger? Both can betray your right to enjoyment and your destiny to contribute to society. Phew, I hope that didn’t sound too strong, but I wanted to emphasize how important this is. Do you see how your passion and purpose cause risk to cower in comparison?
With that in mind, I want to go over four practical steps you can take right now to start a business that’s aligned with your passion and purpose, and drastically reduce risk at the same time.
1) Find a market that already exists. Many people I talk to claim that their ideas have all been taken and there’s no use acting on them. Well, a lot of the ideas that fail are the ones that are so novel and different that a market doesn’t even exist for them. In contrast, many great businesses stem from taking old ideas, products, or services, and doing a better job at it. Think about the intersection between your talents and passions and the needs and complaints of others. Amazon.com customer reviews is a great place to start. By addressing a pressing need from a market with dissatisfied customers who are already paying and looking for something better or with a different edge to it, you’ve reduced the risk of entering uncharted territory.
2) Surround yourself with people who have already done it. You’ve probably heard the adage, “you are the average of the closest people around you.” It’s true. If you can leverage or learn from the advice, behavior, and network of contacts of an entrepreneur who has made it happen in your niche already, you significantly reduce your risk of failure. The successful entrepreneur can be your mentor to help you avoid the traps that you may be unaware of, which tend to decimate many fledgling startups. Go to business plan competitions, entrepreneurship conferences, seminars in your niche of interest, business school lobbies, and places where entrepreneurs and executives may hang out, such as Toastmasters public speaking clubs (Toastmasters.org). I’ve met quality mentors in each of these places.
3) Don’t use your own money. For that matter, try not to use “blood money” (your family and friend’s money) either. Having a lack of tension between relatives and a lifestyle on a thread of a budget can free up a lot of mental and emotional energy. Several ways to do this exist, but I’ll mention a few that have worked for me or my successful entrepreneur peers: blogging to gain a following and then accept donations or investments, sell “junk” around the house on Ebay to get some startup capital (you’ll be surprised how much people will pay for it), apply for government, state, and private grants, hold a “bowl-a-thon” fundraiser where people will pay a little extra to bowl to support your cause, and gather a team together to enter a business plan competition. Reduce your financial risk by using your knowledge and relationships as capital, not what’s in your wallet.
4) Deliver all the value that you can and let it become contagious. Look at companies like Virgin Atlantic Airlines and Zappos.com. Both strove to make the customer experience fun and unforgettable, and they thrived because of it, despite starting out against formidable competition and not having a completely original idea. As a smaller player starting out anew, with little experience, you need to get your audience or your customers to become evangelical fans so that you have a following that supports you in an otherwise risky environment where your competition would crush you. You win fans and reduce risk by being yourself to the max and living YOUR passion and YOUR goals and using them to contribute as much as you can.
I hope after reading this that you not only view “risk” as something a lot less significant than the bigger picture of your life, but also that you can reduce that risk further by following a few practical principles.
Financial Samurai says
Hi Kristoph, thanks for your article. Change is risky and sometimes scary indeed. Perhaps you can share more of your story, regarding how long you were in the work force before you decided to do your own thing?
In retrospect, would you have gone to grad school if you could do it over again, given the time and money it takes?
Kristoph Matthews says
Thanks for your comment! To answer your question, I went directly to grad school after college, partly to please my parents, and partly because I didn’t know what I should be doing so I decided to climb the academic ladder- both bad ideas. During grad school I did research in engineering and got a chance to work with many companies (if you consider that the “work force”) for a total of 5 years.
It was painful, because although I was learning a lot, I knew deep down that I wasn’t living my destiny, I wasn’t reaching out to many people (instead I was stuck in a lab with a couple people), and it was just hard to get anything done when I was feeling so motivated.
I would not have changed things if I had the chance, however, because the depression really caused me to hit a tipping point. At a certain point I got really clear that there’s no reason why I shouldn’t be living an outrageous fun life of my design where I’m creating value, using my talent and enjoying it at the same time. So I set out to start a business in finance with no experience, but a lot of positive intent, and it worked out.
Good question Sam, hope this answers it.
Financial Samurai says
Thanks for your reply! I’m always curious to understand the other side when one goes from work to entrepreneurship full-time. I’m assuming that as an engineer post grad school you made a decent income?
Was it hard to call it quits, or very easy since you hinted you were getting depressed? We get caught up in the cycle of making money, making more money, saving money and such that I wonder if we are really ever able to break free.
How do you know when to give up being an entrepreneur though? Or is that something you feel you never give up, even if you don’t make much money? I’m wondering what my own cross point is.. and I think that’s if my entrepreneurial endeavors can reach 50% of my day job income, then it’s time.
Kristoph Matthews says
All great questions! I’ll try to address each one.
1. First of all, let me clarify that I’m not a full time entrepreneur. Although I have a couple of businesses of my own that I’m expanding, I’m working with a small tech startup that’s paying me. I did what I could to get out of grad school early, but still needed time to develop my new businesses after selling my previous company. Why do that and not go in with two feet as a full time entrepreneur? Because being a successful entrepreneur is about surrounding yourself with the right people and having great passion and purpose. The people on the team of the startup I joined are energetic, fun, and strong leaders with several connections and I couldn’t pass up the opportunity to learn about starting a company and get paid for it at the same time. I’ve let them know it’s my intention to go on to my own ventures after a few years so they’re well aware.
2. Sure the money is good as an engineer/professional, but there was no question about my passion for entrepreneurship for the long term. The thing is, most people think they have to choose one or the other, but not both. People look at guys like Bill Gates who dropped out of school to create his own little software company later to become something huge, and think they need to do something risky like that. But for every Bill Gates there are thousands of entrepreneurs who make it by working on their business beside their day job and slowly develop it. If you learn how to become more productive by managing your time well, you get the best of both worlds this way.
3. How to know when to give up being an entrepreneur? I would never. Becoming wealthy and feeling fulfilled comes from being able to contribute to the world by doing what you’re most talented and passionate about. It should be something that you would do even if you didn’t get paid for it (as you suggested).
Good luck, Sam. Listen to your passion
I think working and building side businesses while having a steady paying job is a smart way to start out. It absorbs most of your free time, but takes a lot of the pressures off when you are still getting your feet wet.
I love your outlook on risk Sydney! What an encouraging and honest perspective.
I especially like your take on leveraging money and ways to get it. Very creative!
Credit for this post should go to Kristoph 🙂 but I totally agree with his points. If we challenge ourselves and take the scary part of risk out of the equation we can accomplish a lot. Finding ways to diversify our income streams is another way to reduce risk and try new things.