3 Popular Trends Young Entrepreneurs Can't Afford to Follow
Do you know when you’re getting old as an entrepreneur? Young entrepreneurs ask you how you succeeded “back in the day.” I’ve been getting that a lot lately. At first, I was depressed. Is my life really half over? Then, I allowed myself to be flattered. I’ve done well enough for myself and now others are seeking my advice.
Interestingly enough, some young entrepreneurs haven’t liked my answers to their three favorite tactics of the moment...
1. Growing your first business too fast.
The eternal entrepreneurial question is: Do I recruit investors or go it alone? The pros and cons are well known: Investors inject immediate cash but demand immediate results and control, while growing organically can work but take years.
Here’s what isn’t well known, but I learned: Grow your first business yourself, learn from that slow experience, then launch another business faster the next time.
At least, that worked for me. I quit my job as a CPA for a national accounting firm and launched a credit counseling agency. How slow did I start? My first office was a converted janitors closet in an old office building. I had one dented file cabinet behind one broken desk. At the time, it was depressing. Looking back, it was the best thing that happened to me. My mistakes didn’t cost much because I didn’t have much, and I didn’t have to explain those mistakes to skeptical investors.
Many years later, I surrendered control of that business to launch a more speculative one. Debt.com is a one-stop-shop for debt solutions. I sunk a lot of cash into it so I could grow it fast. That took nearly five years to build out and make profitable. It worked because I learned when to be patient and when to pull the trigger on change. Best of all, I didn’t need investors, because I had made enough in my original business to fund this one.
Bottom line: Your first business is like going back to college. It’s about education more than remuneration.
2. Obsessing about a personal brand.
I’ll certainly be accused of being old-school here, but I’m not keen on entrepreneurs who spend more time on themselves than their businesses. In this sense, Elon Musk has been a poor role model for a new generation of gutsy entrepreneurs.
It’s not Musk’s fault. He’s already a raging success, so if he wants to pump up his personal brand, he has the money and time to do that. Sadly, I see too many new entrepreneurs mimicking Musk’s approach. My advice: Don’t.
While Musk has created a huge social media following and has massive name recognition, he’s also been in trouble recently for his controversial remarks. So far, he’s survived those controversies, but ask yourself: “Could I recover from saying something stupid online?” Let’s face it, the more you post, the more likely you’ll put your foot in your mouth.
More importantly, launching a business consumes not only your time but your thoughts. Do you really need to split that time and brain space with building a persona? Once you make money, the persona will grow organically.
Bottom line: When you launch a new business, it’s akin to raising a child. An infant is much more vulnerable than a teenager. You simply can’t afford to expose your young company to controversy.
3. Exessive networking.
Networking is a means, not an end. You network to meet potential customers, suppliers, affiliates and partners. Sadly, I’ve seen too many young entrepreneurs over-network because it becomes their social life. Let’s be painfully honest: Being an entrepreneurs means making sacrifices -- initially. Once you’re successful, your hard work pays off and you can lead the life you’ve always dreamed. However, if it was easy to do, everyone would already have done it.
Bottom line: If you’re not prepared to sacrifice a social life when you’re young, you might not be a successful entrepreneur when you’re older.