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3 Types of Experiences That Will Help Your Startup Succeed

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I recently rode my bicycle 4,000 miles across America to interview 100 remarkable entrepreneurs. These people have successfully merged livelihood and lifestyle in places they want to live. As I interviewed these unique business builders, I learned they had three types of pre-launch experience that helped them succeed: 1) they had worked in the same industry as their new business, 2) they had worked in a related industry, or (3) they were serious and frequent users of the products.


Obviously, if you have worked in the same industry or a related industry, you know the products, customers, suppliers, competitors, channels of distribution, and opportunities. This gives you a real advantage: you don't have to learn everything by trial and error. If you are a frequent user of the products, even if you have not worked in the industry, you know the market from the customers' perspective – you know the opportunities and pain points from personal experience. An interesting study by the Kauffman Foundation suggests that 46 percent of companies that last five years or more have been launched by "user entrepreneurs," which highlights the importance of knowing your market as a customer.

Here are examples of successful entrepreneurs I feature in my book Main Street Entrepreneur who had each type of experience prior to launching their venture.

Same Industry.

Steve Sullivan is the founder of Stio in Jackson Hole, Wyoming. The company makes and sells outdoor clothing that is both functional and fashionable—the kind of clothes you want to wear every day. The product line includes jackets, vests, shirts, pants, sweaters, tees, hoodies, hats, and scarves. Steve moved to Jackson Hole in 1989 to be a "ski and climbing bum." After working in outdoor retailing for a number of years, he started his first venture, Cloudveil. The company sold outdoor products through wholesale channels to various retailers around the country. Steve started Stio with a different business model—he wanted to sell directly to consumers. He stayed with outdoor apparel because it's what he knows best. Not only does he have tremendous knowledge of the outdoor industry, but all of his team members are active users of the products, which gives the company a strong competitive advantage.

Related Industry.

While working as a sports scientist and coach for professional cycling teams, Allen Lim spent a lot of time trying to keep his riders from "moaning about their upset bellies." With a Ph.D. in integrative physiology, he knew that pre-packaged sports bars and drinks were full of artificial ingredients and high levels of sugar, which was a big part of the problem. Allen started making natural foods and drinks from scratch to keep his riders from getting sick and to sustain them through grueling events like the Tour de France, the Tour of Italy, and the Tour of California. From this experience in the cycling industry, Allen and several friends launched Skratch Labs, a company which produces and distributes hydration drinks, fruit drops, cookie mixes, cookbooks, and merchandise to active individuals in a variety of industries.

User experience.

Sara Blakely had a problem in her personal life. She didn't like the bulge that panty hose caused under her skirt. In addition, she didn't like the muffin-top that formed above tight panty hose that end below the stomach. She just wanted to look better. Knowing little about the shapewear industry, she spent hours in the library and in hosiery shops. She learned all about the products and manufacturers, and then designed something she would love to wear – a seamless panty hose with a higher waste. It was a simple solution to a problem she and all of her friends were experiencing. She made a cold call to Neiman Marcus and they loved her product. She didn't quit her day job until she had nearly $1 million in orders. Today, Spanx offers 200 "problem-solving products for every body type and budget," including hosiery, bras, panties, bodysuits, and swimwear. As a user of the products, Sara has completely revolutionized the shapewear industry.

In sum, building a business on what you know is a key factor for success. Your knowledge can come from working in a specific industry, working in a related industry or from personal experiences with the products and services in an industry. You might be thinking: But I know this woman who has built a really successful company and she had no experience in the industry whatsoever. You may also be thinking: I know this guy who had tons of industry experience, but his business failed anyway.

It's really a matter of probabilities. The more experience you have in your industry, the more you know about the products, services, competitors, customers, and opportunities. The less you know about your industry, the more you have to learn things through trial and error. And with limited experience, you often burn through your passion, tenacity, relationships, and money before you gain traction. Hence, building a business on what you know will significantly increase your chances for success. Plain and simple!

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