A common question I get all the time: what is the biggest mistake young entrepreneurs are making?
They’re building businesses that only work during the best-case market scenarios.
Let me back up and explain a bit.
There are also so many incredible young entrepreneurs out there right now. I don’t want to sit up here and be that old dude who preaches about back in the day, or kids these days. That guy sucks. Nobody likes him or listens to him for advice on business problems.
But I do want to make sure young entrepreneurs have everything they need to succeed. And for that, we need to talk about the “biggest mistake” you are all currently making.
Quite simply, market conditions right now are not allowing for young entrepreneurs of today to cultivate strong business discipline.
So I guess in a sense, it’s more about what they’re not doing, rather than what they are doing.
The fact that it is so easy to create a startup right now and raise money to get it started is, in part, an enormous cause of this. Think about it. When you are twenty-one years old today, the last real hardcore economic issue was in 2008…when you were fourteen. That, to me, is insane.
This is the reality of the market right now.
But you can be on the offense with this. I always preach that being defensive in business is the wrong way to go; you need to pinpoint this issue of business discipline now, and work on it before it affects you.
Because when you get down to it, the weakness is this: you are all peace-time generals. This is a great time to be starting a business and trying to sell it, but what happens when the bad times eventually roll around again? To be a great business person, you can’t just be a peace-time general. You need to be a wartime general too.
Look forward in time to all the possibilities of what could happen: stock market collapse. Money is not flowing and some geo political event is changing the landscape. In those situations, a huge amount of people aren’t thinking about investing in the next Facebook and Uber. They want to be more careful with investments. Without all the opportunities, only the true entrepreneurs with the grit and ability to build businesses will rise to the top.
So what is my advice? Well, there are three key things young entrepreneurs should focus on to weather every storm.
This should be a no-brainer, but you may not realize in the middle of rapid growth that a team isn’t being formed for longevity. Set up your team for success by listening and taking the time to celebrate victories. I wrote more on how to be a good boss and build your team successfully in this article here and another article here. Check them out.
Building good products
The question I ask young entrepreneurs: are you building a business, or a toy? Here is what I mean by that.
You can make the best cup of coffee in the world, but if you can’t sell it, you’re out of luck. Cash is oxygen. Money is what will take you to the next level, so if you can’t get it, you won’t move on. Be a good salesperson and curate your sales department with great care.
These three things that have been thematic for a long time now. They may sound very familiar, but really evaluate where you are with each of them. Really self audit.
Young entrepreneurs need to come out this mistake by realizing that they are currently operating in a very specific moment of time. Don’t let your skillset be limited by it.
Because bad times are coming. Then there will be good times again. Then bad. Then good. Get it?
Be ready for every possible outcome. Don’t lose sight of what is ahead.