In this episode, Scott and I will be talking about why you want to start a business and we’re going to explore our own reasons that will hopefully give you some insight and get you thinking about reasons that you want to get started yourself.
Here are some items discussed in today's show:
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Scott: This is The Stretch Goals Podcast where each week we’ll share insights and lessons learned based on our experiences as entrepreneurs. We’ll challenge you to create ambitious goals as you start and grow your business. I’m your host Scott Davis.
Robert: And I’m Robert Dickerson. In this week’s episode we’re going to get you to think about why you want to start a business and we’re going to explore our own reasons that will hopefully give you some insight and get you thinking about reasons that you want to get started yourself. Scott, let’s talk a little bit, I wanted to dive into three different questions that I think will answer this overall big question is why do you start a business.
I was thinking for each one we can give some insights on why we started our own business and that will be helpful and some feedback to the listeners as to how this could help them in their business. The first one I wanted to talk about is why do you want to start your business? This ones really important because you might have a great idea, you might be tired of the corporate world, you might want to be your own boss. Not all of those are great reasons sometimes to start your own business and so you really need to think about what you’re trying to do and really think about, does that make sense to start your own business? Why don’t you talk a little about why you wanted to start MobX and why you started these different businesses.
Scott: Sure. These are all great questions, by the way. I think they’re all questions that everyone asked themselves as they’re going down this path. For me personally, at a certain point, there was definitely a part of me that was like, “Hey, I just, I don’t want to be in the corporate world anymore,” or, “I want to be my own boss.” I had all those thoughts just like everybody has but for me, what it really boiled down to is trying to create products that I could influence.
When you’re in the corporate world, a lot of times you’ve got bosses or multiple layers of bosses above you and when it comes to ideation and applying your vision to a product, it’s often not your vision. It’s often not your ideas and that can be both good and bad, because if you’re not experienced, obviously that’s a protection mechanism. It keeps you from doing the wrong things, but when you are experienced or you are passionate a certain aspect of your creativity and product drive gets killed by that corporate mentality.
For me personally it was mostly about that. I wanted to create products that I knew how to develop through my own experiences or through my own passion and what the corporate world was not allowing me to do is pursue those goals and pursue those opportunities so that was the main primary reason why I started my first business and my businesses since then.
Robert: Yeah, I totally agree with that because one of my main reasons was I wanted more control as well over everything, over the whole process and I wanted more responsibility because it’s one thing to listen to someone and just do it but if you have a great idea, you’ve got to get so many levels of approval to actually implement that idea and it takes the steam out of it. It takes the fun out of it. It’s nice to be your boss that you can push those things forward and really have the freedom to make a decision without getting all these approvals.
You can try new things and you can fail. In the corporate world, a lot of times the deadlines and budgets are so tight that you don’t have room to fail. They don’t have room to try things and without being looked negatively upon and I think so much of entrepreneurship is trying things to see if they work and failure is not a bad thing. You want to fail quickly a lot of times so you’re not wasting a bunch of money.
Scott: Right, yeah. You touched on a couple of things that are really important and obviously one of the last ones you just said was, “You can always pivot when you fail.” Pivot your idea into something else and when you’re lightweight and don’t have a lot of overhead in a startup or just a single entrepreneur environment, it’s not going to cost you a tremendous amount of money like it would in the corporate world, but it’s like you said, you wanted more responsibility. You wanted to wear more hats because as human beings, we’re inquisitive and creative by nature. We want to be doing lots of things, at least in my experience, people are that way.
The other thing is that I had most frustrations with in the corporate world was the speed at which things sort of came about so you’d hear of a project and maybe three months later if you are lucky you’d be starting the project. In some corporate environments, may be years before you actually finish the project, but typically what happens is you come up with an idea and it needs to be implemented tomorrow and you’re not given the resources to really get those done.
What happens there is you end up cutting corners and creating products that are inferior and for me, that’s a big no-no. That’s just one thing I can’t do so for me, I have to put out quality products and I have to do them right and if that takes an extra week to do it, then so be it. Part of my entrepreneur spirit was to identify that and be able to go out on my own and sort of execute in the way that I knew needed to be done.
Robert: Yeah, I think the other thing that I didn’t like about the corporate world is there’s so many different levels, a lot of times you didn’t get to work directly with the customers. It was requirements passed through multiple people and so by the time you implemented something, you’re done and it wasn’t really what the customer wanted, and so that’s really the thing I like about owning my own business is that I get to network, I get to interact directly with customers, figure out exactly what the problem is and then develop products that actually solve those problems.
It’s not going through a middleman. It’s not a filtered response from the customer. It’s actually something they need and a lot of times, a lot of the products I’ve developed over the years, when you get to the end, the product’s done and then it doesn’t fit a need and the customer doesn’t use it. That’s the thing that really, really bucks me because there wasn’t that communication up front to really outline what they needed.
Scott: Yeah, I agree. I’ve seen that many times. Another benefit of being an entrepreneur and like you said dealing with those customers one-on-one is the connections that you establish with people. I don’t necessarily just mean from a business perspective. You make friends, you have great acquaintances and they lead to opportunities, whether they’re business opportunities or, "Hey man, I got an extra ticket to the World Series. You want to come with me? I mean, those are real-world things that come out of these types of relationships.
You don’t really get that in the corporate world because the people at the top of the food chain are getting those connections so that’s just an added benefit for me. When I was doing ads for sports teams, I got lots of cool memorabilia. I got to hit batting practice. I got to do all these fun things that I would’ve never have had an opportunity to do if I was going through a corporate structure.
Robert: Those kind of things are the way you really grow your business by developing those friendships and those connections. It’s not just cold calling someone up. It’s that relationship over the years that really helps you grow your business because you want to work together with each other. You want to help each other out and so that’s, it really helps you grow and it really helps them grow. It’s a mutually beneficial relationship there.
Scott: Sure. On top of that, it makes it enjoyable to know that you’re working with people who appreciate what you’re doing and you’re doing everything you can to fulfill their needs and these extra benefits that may come are awesome. A lot of times, what I’ve found, is if you do good work for people you get this word-of-mouth business that comes later. “Hey, who did your app?” “Oh, Scott did. Go talk to him,” that’s how the real world works and if you’re creating these positive relationships and doing good work, it just comes naturally.
Robert: Yeah, I think that’s something, all the stuff we’re talking about is something that’s … even for me personally, I did a poor job of over the years, especially when I started out, that I would just focus in on the development aspect of things and not really open my eyes to all the other things that are happening. That’s really something I’m really more aware of now and really trying to focus on trying to grow my own companies is to make more connections and grow that network.
The other thing that I want to talk about of what do you want from your business is, I want my business to work for me and this is something, I was reading the E-myth by Michael Gerber and he talks about working on your business, not in your business. I think that’s a subtle difference there and something that when I first started out I was trying to do everything. I was trying to do development, all the different things within the business and when I shifted my mindset to working, “How do I want my business to work for me,” that’s when I started hiring people and trying to grow it and trying to offload everything for myself.
I think that’s you something to think about of what do you want for your business and how do you want it to work for you? It’s not necessarily a job for you. It’s this entity that provides opportunities that provides more freedom and responsibility and also helps you develop these new products which I really like that aspect of entrepreneurship.
Scott: Yeah. That all comes with it and that’s something I still struggle with. A lot of times people will come to me and, “Hey, Scott can you build this app for me?” Well, the first thing I think about is, “Okay, how am I going to write this?” Not, “How are we going to write this,” and that’s a mentality shift that you have to be able to make. You have to be able to find people that are, that you can trust. That’s probably a topic in its own for a podcast episode.
Scott: Yeah, but I agree with everything you said. I think that’s all something that people need to be thinking about.
Robert: The reason … I’m very similar to what you just said is, I always think about how I would do it, how it’s challenging for me, how this idea is fun. You kind of start laying out how you do it and you’re like, “Okay, as the owner, I got to step back a little bit and really look at a high level and get somebody else to kind of do this sort of thing.”
Scott: I wonder, so we’re technology entrepreneurs and this podcast isn’t strictly for technology entrepreneurs, but I wonder if the same mentality and the same problems as it pertains to what you just said occur. For me, when I create software, I’m creating with my mind and my fingers. If you’re in a manufacturing business where you’re creating products, I imagine that those problems are somewhat the same. You’ve got a hardware background. Is that the case? When you think of creating a new prototype of something, is it you’re looking to offload or you’re looking to design it all yourself? Is it the same across both spectrums?
Robert: Yeah. I always have gravitated towards more of a feature oriented type thing. It’s like, “What features does this widget have?” So yeah, you kind of get wrapped up in those things. I think even across other disciplines like sales and marketing, I think people with those skill sets think about their business of, “How do I sell this? How do I market this?” They really focus in on those areas of interest and so you kind of have to take a step back from what your focus, what your passion is and how you can use that in a manner that helps grow your business but you’re not doing that own, you’re not doing that soul thing all the time.
Robert: The second question we wanted to talk about is, “Are you passionate about this idea about this business?” The reason that I want to talk about this is it really takes years and day after day work, sweat and grime, to get your idea to get your business going and so I think that having that passion, that interest, is a way that’s going to keep you going even in the hardest days when people are saying that your product is crap or they don’t like it or this idea is never going to work. You really to have a passion for that area to be able to push through those hard days.
I know, I listen to the Seeking Wisdom podcast a lot and they really say, “It’s all about the hard work. There’s no easy outs. You know what you need to do to get this done,” and I agree with that but I also think that with your passion, this journey as an entrepreneur and starting your business has to also be fun. It’s something that I enjoy doing every day. If I didn’t enjoy it, I wouldn’t be doing it.
Scott: Yeah, and that’s for me why I couldn’t do the corporate world anymore. Just, I don’t know, just answering to somebody else and having them shape products that I don’t believe in just don’t make a lot of sense. You lose your passion so that’s something people have to ask themselves. There’s other pieces to the passion puzzle though and if you’ve got employees, one of those pieces is selling your vision to those employees. You don’t want them to become stagnant and hate their job, which is the reason you created your job to begin with. You want them to share in that passion and that vision so you have to be able to sell others on that vision, including in some cases, your spouse or significant other.
Robert: Yes, that is key.
Scott: There’s a lot of sacrifices, a lot of late nights, a lot of early mornings, skipped lunches and dinners. That all comes with it, but the upside is that you’re happier. Hopefully you’ve got more money. Hopefully you’ve got more flexibility and the passion really continues to grow as you realize all of those things. Once you’ve been like, “Man, I can actually go outside and play basketball right now for an hour if I wanted to,” but the bottom line is there’s a trade off.
You’ve got to get that work done, at some point, but the passion for me is all about waking up every day and I can’t wait to get to work. Maybe I’m sick, maybe I shouldn’t feel that way, but that’s how I am. I think about what I want to do and I can’t wait to get to the keyboard every day and create new products.
Robert: Yeah, I do too and every day is so much different. There’s different opportunities every day. There’s highs and lows like every day, even in the morning and the afternoon. In the morning, you could be, get this great email in the morning and then in the afternoon, everything falls apart so it’s this up and down type thing which is these crazy swings so I think-
Scott: Yeah, I remember … Go ahead.
Robert: I was just going to say, I think if you’re not passionate about it, you’re not going to be able to ride through those swings.
Scott: Absolutely yeah. I remember a few years back, I guess it was five years ago now, I had like 10 apps launching on opening day of baseball season and due to the Apple approval process at the time, which was anywhere from 5 to 10 business days, these apps may or may not make it out. To me as a baseball fan, that was devastating but also as a business owner not being able to hit the deadline was also devastating, but I submitted those apps probably 3 weeks ahead of time and it just so happened that there was a lot going on and the approval queues were really slow.
Long story short, those apps were approved hours before that first game for all of those team so what was like the worst low for like a week of my life turned into like the greatest adrenaline rush ever when I realized that these apps were going lot for the game and the teams were able to push it out to their fans as they walked in the gates. That was huge and I’ve had numerous moments like that since then, but that’s, I’ll never forget that. I was like, “Man, I actually did it,” and that passion kept me through the tough time as you said.
Robert: Yeah, I’m sure you were playing crisis control at that point-
Scott: I was and yeah, it was like, “Hey.” I actually got on the phone and called a couple of the GM’s. I’m like, “Hey, the apps live. Go download it.” They of course were ecstatic too because at this time in the mobile space there weren’t a lot of teams with mobile apps but yeah, passion, man it’s important. If you can’t be behind your own idea and motivate that train to get moving every day, you’re probably not doing the right thing.
I think it was Steve Jobs who said something during his commencement speech to … Who was it Berkeley, Stanford? I don’t know. One of those schools. Go Google it. It’s on there. He said every day he would look himself in the mirror and ask himself, “Do I like what I’m doing,” and if for too many days in a row that answer was “No,” he knew he needed to make some changes. I think that’s sort of something that you can kind of go with as an entrepreneur.
If for five months you’re answering “No,” to that question, you’re probably not doing the right thing, whether it’s a product idea or just your business in general. I don’t know, but that’s something you need to ask yourself. Are you enjoying what you’re doing or is it rewarding and what are you getting out of it?
Robert: Yeah, I think that applies both to if you’re in the corporate world and you want to start a business, but also if you’re already in a business pivoting to figure out what makes sense with your business. If you’ve taken the passion of that idea, how do you then pivot to put it in a place where you’re more passionate about it where you can continue to grow?
Robert: The last question we wanted to talk about is do you have the experience, connections and capital to get started? This is a big one as to why you want to start your own business because all three of these things, it really boils down to whether you’re going to be successful or not. I think the experience, if we just want to talk about that, I don’t think you have to be experienced in every aspect of what you’re trying to do, but I think it’s important as a leader that you’re able to identify and hire people in or even just find people that are mentors that can help you with that experience because from what I’ve found, you don’t have to know everything but you have to have a learning mindset where you want to connect with people that do know those things and you can use those people to help you.
Scott: Sure and I think the key word that you said is “learning”, whether you need to learn something yourself like QuickBooks to manage your finances or just the ability to learn new skills in general, like how to manage people, for example, but you’re right. If it’s not something that you can do or you desire to do, that’s what other people are there for. Learn from somebody else, a mentor or learn from somebody that you hire. Hire them for a specific skill set and trust them to do their job and learn from it and make yourself better, but you’re right.
Experience helps, it gives you confidence. Do you necessarily need it in this day and time? I would say no. You can outsource things, you can reach out to friends, reach out to business colleagues and connections that you’ve made or you can go about it by yourself.
Robert: Yeah, I think it’s important that you don’t let that stop you. You always need to be learning about new skills. I think it’s fun, I’ve enjoyed being in technology. I’ve enjoyed learning about marketing, about sales, all these things, there’s such a deep knowledge base of all these things that it’s fun to kind of scratch the surface and start learning for yourself but it’s also important to identify when you have weaknesses that you need to bring someone else in.
The next part of the question was the connections to get started, and this is also really important. If you have deep connections through a previous business through the corporate world, definitely think about leveraging those connections because it will make it easier to sell into those, to create opportunities and sell in those connections instead of trying to build up a whole new customer base that you then have to sell onto. You’re building a product and you’re building a whole new customer base to get started. That’s pretty difficult.
Robert: Then the final thing is the capital to get started. This is always the hard part is how do you get started and you might’ve saved money to get initially over the hump but then how do you keep it going once you start getting customers? This is really something to think about. For me, I’m really risk-averse and so this is an area that I’m trying to save up money and make sure that I have enough capital to keep going and that you build the features that are only necessary and you really try to look at what you’re building and figure out how much it’s going to cost.
If we’re talking about a software product, a hardware-based product, there’s an endless supply of bugs and features and it’s going to be ongoing. It’s always going to be [some 00:21:28] development so you really have to think about how long it’s going to take you to build your product and probably double that estimate and double the amount of money that it’s going to cost you to do it.
Scott: Yeah. The thing is depending on what type of business you’re doing will dictate your cash flows and how they operate. If you’re a retail entrepreneur, you’ve got seasonal influx. If you’re a software developer, depending on how you do your invoicing, you may get 50% upfront, you may get 50% on completion or maybe not. I don’t know how you’re going to get your money but there are cases where people don’t pay in that scenario. Right now as we speak, I have five months of unpaid invoices from my customers and that’s something you have to struggle with because I’ve got people that need to be paid.
When cash flows are low, I don’t pay myself. I pay my people and I do that so that they never have to worry but also I try to keep my cash flows where my guys are paid for at least six months no matter what. If that number is satisfied, I pay myself. If it’s not, I don’t pay myself until the money that I’m looking for comes in, so for me I don’t have a regular income in terms of like, “Am I going to get a check every month,” but my employees do and they don’t know any different because they’ve never missed a paycheck so that’s something you have to think about, but capital to start up a business, it depends on what you’re doing.
If you’re a software guy, hardware guy, maybe you’ve got the resources to start on your own, maybe not, but for me, I always bootstrapped. I always did the minimum I needed to to get things going and I rolled my revenue into the business and then once I had enough revenue to hire people, I did that. That may not work for you, but that’s worked for me as a software developer but what have you done in your experience?
Robert: I’ve done the same thing as you’ve done is where I boots- … They sell the companies that I’ll bootstrap so it starts as kind of a nights and weekends type business. Once I get customers onboard, then I do the same thing is I take that revenue and put it right back into the business. With Mapout, I started myself, growing it and then I started hiring people on. Rob Walling on the Startups For The Rest Of Us talks about, the stair step mentality is where when you’re bootstrapping things like that you need to start off kind of small.
That’s what we did for my first business, Geowake and we sold it. Then I used the money from that to put into my next business so then I had some more money up front to actually go hire developers and start out, start Mapout out kind of on a better starting point where I could bring people on sooner instead of doing everything myself. Think about that too when you’re starting a business that maybe to start out, you start out with a smaller idea and just kind of grow it and as you get customers and as you start making revenue, you just keep pumping that back into the business.
I think it’s important what you said too is that the owner is not really getting this huge paycheck. You’re pumping this money back into the business to keep it growing and so you really need to think about that too as you start your own business.
Scott: It’s a long run payoff though. You’re doing that for a reason for the hopes that it keeps generating cash. Yeah, it’s a good point to be made.
Robert: Yeah, you’re building up this asset, you’re continuously investing in this asset and taxes is another thing too, is that you don’t want to take all this money because you’re just going to pay a bunch of taxes so you want to put it back into your business. It’s sounds counterintuitive but you’re basically delaying your taxes by growing your business by putting that money back into your business.
Robert: I hope in this podcast we’ve given you some thoughts so let’s just kind of recap some things to think about is what do you want from your business. Really think about that in detail as you’re thinking through your ideas, what do you want in your life that your business is going to help you achieve? Are you passionate about this idea that you’re working on and really think is this something that you want to work on day after day, year after year and really put your heart and soul into?
The final thing is, do you have the experience, connections and capital to get started? It might be good to just kind of outline some of these things, the pros and cons and figure out how much money you need, you think you need, to get started. Maybe talk to some of your connections, people that have already been there and see if that’s realistic, and then figure out if your existing network will help support the sale and development of that. Maybe start talking to new people in the areas that you’re interested in to figure out what their challenges are and learn from that before you get started.
Scott: Absolutely and feel free to send us some questions. We’d be happy to lend our expertise and you can always find us on Twitter, LinkedIn and various social media outlets.
Robert: Yeah and if you like this podcast, give us a five-star review and send us your feedback. We’re always looking to improve and look forward to talking to you next time.
Scott: Thanks for listening to this episode of The Stretch Goals Podcast. You can access the show notes for this episode and listen to other episodes by heading over to stretchgoals.fm.
Robert Dickerson is the Founder and CEO of Mapout a mobile learning platform that uses video courses to educate customers and train employees. He helps companies develop and launch their products.
Scott Davis is the Founder and CEO of MobX, a mobile development software agency. He has 20 years of experience developing software for Government, Finance, Sports and the Telecommunications industry.