Award-winning journalist and NPR host Guy Raz has interviewed more than 200 highly successful entrepreneurs to uncover amazing true stories like these. In How I Built This, he shares tips for every entrepreneur’s journey: from the early days of formulating your idea, to raising money and recruiting employees, to fending off competitors, to finally paying yourself a real salary. This is a must-read for anyone who has ever dreamed of starting their own business or wondered how trailblazing entrepreneurs made their own dreams a reality.
Be open to ideas
“One withstands the invasion of armies; one does not withstand the invasion of ideas.” – Victor Hugo
Open to inspiration from all angles while identifying the next big idea before anyone else. Make the decision to embrace daring ideas and be willing to charge into a new market all from the front.
Is it dangerous or just scary?
The word ‘entrepreneurship’ comes from French, and is still fairly new in the world of business. Founders today identify themselves as ‘entrepreneurs’ in a way the generations who came before them struggle to understand. But fundamentally, they were doing the same thing. They were taking the detour, the big leap away from the grind of office job they didn’t want and toward something new on their own.
“When entrepreneurs think back to the moment, they look the leap – when swinging on the monkey bars of life, they finally took one hand off the bar behind them and swung forward to reach for the next bar in front of them.”
Almost every entrepreneur talks about the initial uncertainty and the scariness of the unknown. But those uncertainties and fears melt away as they reflect on the even greater dangers of regret and squandered opportunity.
Leave your safety zone… but do it safely
Before you decide to burn the bridges, have a fallback plan even if it means sticking with your nine to five income. It’s the key to give another shot at something you want to do without giving broke. By taking a smart and safe approach, you’ll give yourself more time to try and more room to breathe, while simultaneously reducing the chances that mistakes can ruin your whole life.
“Having a fallback plan does not mean you’re building an escape hatch from your dream. It just means you’ve given yourself a cushion at the bottom of your entrepreneurial leap of faith, so that if you do crash, you can bounce back to fight another day.”
Do your research
Do your homework to fill in the gaps in your understanding. Don’t make the mistake of skipping this step, just so things you set out to build eventually topple for the lack of a sturdy foundation. Research is your ultimate tool to build confidence and trust your vision when it comes time to decide exactly what kind of product you want to build.
“It’s one any of us can commit to when we set out to create something new – when we decide to take our own leap off the cliff of entrepreneurship.”
Gates and Allen went to high school together. Wozniak lived across the street from Job’s only friend at the Cupertino, California, high school Jobs attended. Charlie Munger worked in Warren Buffet’s grandfather’s store. There are countless partnerships at the center of the founding of great brands.
Starting a business is lonely, especially with full of ups and downs. It can be too hard to stomach if you’re on the roller coaster by yourself. Even if you could do all the work yourself, you need someone different to brainstorm with, challenge your assumptions and cheer you up when things go awry.
“Partnerships don’t just help your idea survive the fickleness of customers, ruthlessness of competitors and the security of investors. They help you survive and become a real business.”
Bootstrapping your business
Can it be scary rack up pile of debts and risk your bank account while trying to start a business? Sure, it is. But it’s not as scary as not trying to start a business at all. If things don’t work out, it’ll definitely leave you salty but not unbearable. You’ll always have a soft spot to land if you have a fallback plan or another marketable skill.
“If Airbnb founders teach us anything, it’s that if you work fast, smart, hard and together, you can meet the rising challenges of starting a business before it meets you. Face first.”
Get your story straight
Knowing your story and being able to articulate to the world why you exist should be on top of your mind as an entrepreneur. Articulate not because it helps you sell more or build a brand or make money. Articulate because it helps you do all those things.
“The basic story that answers the big ‘why’ is the one that creates loyal customers, find the best investors, builds an employee culture that keeps them committed to your vision. Your job is to give them one of the few reasons – to tell them the story – that gets them to keep listening and say yes.”
Funding the business, with other peoples’ money
Raising early money from your friends and families can be difficult. But you can make it easier by learning how to tell a story. Make your idea razor-sharp before you present the story. Get to know your community better that if you do it right, you don’t find a customer base, you also find a home.
“If you can raise money from friends and family early on to take your idea from zero to one, all without sacrificing too much of your equity or your vision, then you’ll be well positioned to grow for a long time to come.”
Iterate, iterate, iterate
Stay long enough in the initial stage of prototype without staying too long or even forever. Move into the second phase of customer feedback and put your best foot forward. If possible, share a version of your idea with the world and invite criticism. This is the real recipe for success in the iterative process of product building, and one every entrepreneur must get it right if they want their conceptual ideas to come to life.
Go in through the side door
Taking the third door can be amazing and sometimes necessary. But it can also pose a threat and get you a lot of trouble. The third door is a double-edged sword. Do everything you can to find the best and smartest way into the market that you’re most likely to have success. Just make sure when you’re inside, don’t let complacency stop you from turning your business into a reality.
If you take that leap off the cliff while attempting to build your own plane on the way down, you deserve the headlines. But as the builder of that plane, it’s your job to make sure people can hear the buzz from the engine of your planes.
It’s usually not easy to generate buzz and get attention for the product you’re bringing to the market. That’s why you’re going to need help from all forms of network and media to make it happen. And it’s doable especially when you learn to engineer word of mouth among your existing ideal customers.
Engineering word of mouth
“Whatever you do, do it well. Do it so well that when people see you do it, they’ll want to come back and see you do it again, and they’ll want to bring others and show them how well you do what you do.” – Walt Disney
Every successful founder counts world of mouth among the principal reasons for their success. Each of them made something great, really special that they became the signal that broke out of their competition and reached farther than they could have ever imagined.
Protect what you’ve built
One surefire way to know you’ve built something great is when your competitors start either complying or suing you or somethings both. As a founder, it’s your primary responsibility to keep out on the balcony and look down on the dance floor to know what needs to be protected and how to best protect it.
“You need to know when to pull the trigger and you need to know when to holster the weapons at your disposal. It’s not easy but neither is building a great brand. If you can figure out the former, you can figure out the latter too.”
When catastrophe strikes
Whether it’s a multi-million-dollar conglomerate that has been around for decades or a scrappy start-up that is just gaining traction, the only reliable way through a catastrophe is through quick, decisive, transparent actions that puts people first and public perception second.
The art of the pivot
It takes immense amount of emotional maturity no matter how old you’re to recognize the business you’re leading is more important than your idea on which the business was originally built. And it takes even more humility to accept that the idea itself isn’t what you thought it was, or that it has evolved with time.
“It takes real courage to move away from the familiar and toward the unfamiliar – especially when things start to look not so good.”
It can’t be all about money
Knowing where you’ve been and where you’re going is the essence of deeper purpose that keeps you doing what you’re doing. It’s easy to fall prey to money on your way up to the summit of entrepreneurship. But just like a mission-guided monk, having a larger and meaningful mission is your ultimate weapon against the endless pursuit of material possessions and social status.
Build a culture, not a cult
Knowing and communicating your value gets your employees on the same page with you. They also get you on the same page with your customers and more importantly your bigger purpose. Without your guiding values and purpose, you’ll end up making inconsistent decisions throughout your entrepreneurial journey.
“There’s nothing more consistent than a set of clear values written down on the page for everyone to see. Just ask Reed Hastings – or, better yet, ask his 7,000 employees.”
Think small to get big
The stories of Levi Strauss, Eli Janney, Chet Pipkin and even Herb Kelleher of South West Airlines are testaments to the profitability of a small niche that can like a vein of gold appear only an inch wide but run a mile deep.
Manage partnership tensions
Thinking like a parent and a partner is a skill every aspiring founder should cultivate in preparation for the challenges coming to their way. You need to pour as much of your heart, energy and money into building your business as much as you do to starting a family. If you’re ready for some sacrifices and do whatever it takes to protect your family, why would you not do the same for your business? All great entrepreneurs have gone through periods of profound difficulty with each other. So many of them recall how those challenging periods enlightened and empowered them to stay in the game and climb even further.
Whatever your choices as a founder, a robust set of ethics should sit at the foundation. Beyond the foundation, there’re only two things necessary to build a caring and sustainable culture. One, things you do advance your mission and align your values. Two, you do them from the beginning, precisely because values generally are so hard to change.
“You’re the mission maker, values setter and the morale booster. You’re responsible for creating an environment in which your employees can thrive, work can get done, customers’ needs get met and you can be proud of what you and your team achieve at the end of each day.”