Wednesday, June 6, 2007

Time in the Trenches Part 1

University is a great time to dream. Big ideas. Huge opportunities. The ultimate issue is whether you will act to realize these dreams, ideas and opportunities.

It has been 2 years since the original founding team came upon our business idea and things have changed a lot since then. The purpose of this blog is to share with other entrepreneurs our experience in building our start up business. Many of the obstacles that we faced and conquered is not related to the core business but the surrounding elements that are required to keep it afloat (think pulling together an advisory team, drafting a formal shareholder agreement, recruitment people, and probably finding financing is the most tedious task of all).

I hope all of you will enjoy this "Time in the Trenches" series as a good read whether you are a successful, struggling or blooming entrepreneur. Please do share your insights, struggles, comments and suggestions with us as well, since WE are always smarter than just ME.

So the idea was "born" in an undergraduate class 2 years ago, and after receiving favorable feedback at several national and international competitions, the original team decided to give it a go and see if we could make it a reality. A few things I realized in hindsight:

1) None of us had any idea how to run a business.
2) We thought we had a cool idea but had no clear process on how to capitalize on it.
3) Part-Time commitment hinders on progress.
4) We lacked the knowledge of where to obtain advice on building a business.
5) We thought we knew more than we did. Everyone seems to have this "I'm smarter than the average entrepreneur" disease.

The remedies used to solve these issues:

1) Walk. Fall. Pick yourself up and try again. That's most of what it is - but the lucky businesses get advisors who self-identify and help you along. The key is knowing which advisors truly add value; just because someone says they'll help you for free doesn't mean it's always good. Crappy opinions/suggestions can be free as well - be selective.
2) Here are the steps we took:
  1. You know the importance of building a great team to drive the business forward. Do this first.
  2. Ask your potential customers what they want (DON'T, and I repeat, DON'T, try to build something and assume the world will come knocking on your door)
  3. Once you know what they want, build your product/service to tailor to those needs
  4. Get your customers to put their money where they mouth is, launch a testing phase to see if they actually PAY for your product/service. If they do - voila! They were telling you the truth about what they wanted! It usually doens't happen so easily and you will need to keep revising the product. Like Steve Jobs said in his book "People don't know what they want until you show it to them."
3) Come on. Common sense. How productive can a team be if they meet once a week to discuss key management decisions? What if a potential customer/partner emails you and says they need your response by tomorrow? Do you tell them your team has other jobs and can't get back to them until the end of the week? Wake up. In business there are two speeds - FAST or DEAD.

4) Network, network, network. An entrepreneur needs to love people. You will be amazed at the amount of knowledge you can pick up from talking to someone that has built their own business before; they can share this with you in about one-tenth of the time you would have to spend researching the same things yourself.

5) Humility. You will be amazed by how much people are willing to teach and share with you. Just keep in mind that every person you meet is teaching you something that can be applied to your business.

So these are the key lessons that I have learned from building PeerFX. Of course there's much more than this, but off the top of my head these are the most important ones. The following posts will be on the processes for the different milestones the business has achieved.

Cheers to our first post! Stay tuned!

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