LESSONS
- Get experience first
- Working for another company in the industry is a free way of learning the business.
- Investors like experience – so do customers.
- Even if your experience is from another industry you have probably learnt important lessons, for example, about how organizations work.
GET A JOB BEFORE CREATING ONE
TRIAL AND ERROR BEFORE SUCCESS
Many successful businesses start out doing something completely different than what they end up doing. For many entrepreneurs the first step is usually trial and error. Equally many entrepreneurs try time and time again to set up businesses in the area they love working with. For a variety of reasons many of these ventures are destined to fail. Perhaps the timing was wrong and the market was not ready or the people involved did not yet know how to run a business.
However, not all businesses arise from the ashes of failed ventures. Many successful small businesses are founded by people who worked hard for someone else before going it alone.
As we shall see later: Michael Ivarsson had years of experience of different parts of the music industry before turning around the music festival Sweden Rock; Terje Røkke worked for years at Norsk Filmstudio before founding his TV and film lighting company Stigebilen; Sarita Christensen and Anders Morgenthaler worked together at Zentropa before they decided to start up on their own and concentrate on the kind of content they were especially interested in.
So before creating a job for yourself consider getting one with someone else first.
Indeed, starting your business by getting a job can have several benefits:
- Your experience of somebody else’s business will help you know what to do with your own and help you act faster and more effectively when you start your own.
- You will have a network that will know you and hopefully trust you from day one.
- Your business plan will be more accurate since it will be built upon industry experience. Potential investors will look favourably upon this and will perceive you as having a track record, even if not as an entrepreneur.
- You will earn some money (investment capital) and buy yourself some time to prepare for the start-up phase.
Starting your business with a job is common. The founders of fashion firm Whyred worked for H&M for several years. Co-founder Jonas Clason points out that in addition to the experience, they had the opportunity to collect lots of favours from suppliers, grateful after having gotten important contracts with the giant H&M.
The advantages are more obvious when sticking to the same industry. But there is always something to learn and a business is always a business. Putte Svensson, co-founder of Rockparty, first worked in manufacturing but the lessons from organizing projects dealing with water, electricity and construction have been important in his job as area manager of the Hultsfred rock festivals. As Putte Svensson says, experience of all sorts of types of activities can directly help your new venture:
Besides, we all had experience from sport clubs. This experience was important when we organized our association.
START AGAIN
Perhaps your first attempt did not work out as well as you expected?
But at least you have some more experience and can ask yourself: What did I do well? What did I do badly?
Even if the experience does not come from another company or another industry, don’t be afraid to regard your first attempt as a lesson learned and move on and start again. Just as people quit jobs they are not happy in, people need to understand when it is time to restructure or wind down firms they are not happy with.
In any case, you should not expect that the road ahead will be smooth and straight. (Read more about this in the next Axiom.) Rather, expect everything to take time and be ready for frustration. Don’t forget that you will at least get something important out of it – experience.
Another aspect of industry expertise is that you know what you don’t know. This kind of experience will enable you to realize that you have to strengthen capabilities with employees, consultants or partners. (Read more about this in Axiom 3.) Through experience you will learn a little more about what your core competences are: what you are good at and what you really need help with.
Experience will also reveal to you whether you should avoid certain activities. Don’t try growing strawberries if you don’t have the right soil or enough water. Don’t sell fresh juice if other juice companies already have exclusive distribution rights with the most important stores. Don’t sell anything if your profit margin is worse than the industry average.
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This is the seventh part of Volante’s series Creative Business. The series is a complete version of the book ”Creative Business: 10 lessons to help you build a business your way” (Volante, 2010). The book is available for purchase in an ebook version on Amazon or Lulu (Kindle, ePub or PDF), a paperback version distributed directly from the publisher and soon also a print-on-demand version distributed globally.
