You Will Fail At Building a Software Company

The term entrepreneur has become synonymous to me with the trophies handed out at your kid's sporting events. Everyone has been – or at least claims to have been – an entrepreneur at some point in time. We all desire to be the hero in our own stories, so we cling to buzzworthy titles that we hope can land us acclaim, respect, or cold hard cash if the opportunity presents itself. 

The fact is that being an entrepreneur is easy - but being a successful one is hard. Before you lose all hope, check-out on your dreams and binge your favorite feel-good show - let's dig into what makes it hard and how to avoid some of the common pitfalls people make on their path to successful entrepreneurism. 

The Mindfulness of Building a Business

The truth for most of us is that starting anything is the first half of the battle, and finishing it takes one-hundred times more effort than we thought. We believe that our time's greatest success stories are self-made and possess the superior skill, talent, position, or intellect to propel them to the top. We perpetuate this belief every time we experience failure and at every rejection we get when building a business.

Reality teaches us that no person who has ever lived is self-made. They learned what they know from someone, somewhere at one point or another. Reading a book on a particular subject-matter doesn't make you self-taught when an author did all the research to write it - it makes you self-motivated. Before you make the mistake of thinking I am a self-help guru, let me get to the point. 

The single most significant factor in determining success or failure in life is how you mentally frame every single thing that happens to you. I chose the word "significant" for a fundamental reason. Something that is significant is important over a longer period of time. What is important today isn't necessarily important tomorrow. What is significant today, will still be just as significant tomorrow. Entrepreneurship is a journey of a thousand miles - so what and how you think about things will shape where you end up.

Now that we are aware of our thoughts and realize how important they are to our success - let's look at a couple of crucial points around success thinking.

You Are Going To Fail Often and Regret Ever Having Tried - Or Not.

Stop. Get out of your head that failure is some ending or epic disaster that leaves everyone and everything around you in a burning pile of rubble. Failure is part of life. It doesn't bother me that I fail on a daily basis. My failure doesn't define my worth, ability or change my overall outlook that eventually I will succeed.

Failure is defined as "the lack of success". Failure is relative. Failure is only achieved by trying to reach further than our current abilities allow. It is out of failure that we can understand what we need to change or improve in order to reach success.

I have the opportunity to talk with aspiring-entrepreneurs reasonably often. One of the biggest missteps many of them make is not taking time to evaluate where they are and where they want to be. By not aligning themselves between reality and the desired future, it is impossible to know what small changes to make in either process or habits to get one step further from what isn't working and that much close to what will work.

Just Because You Can - Doesn't Mean You Should

We live in a DIY, bootstrapping, get er' done world full of doers, makers, and shakers. I have done my fair share of DIY projects. Some have turned out as epic reminders of human ingenuity and resourcefulness while others are fodder for Pinterest failures or the highlight reels on Netflix's "Nailed It."

Building a business is not a do-it-yourself kind of thing. As an empire-builder, you need a certain amount of self-reliance to get to where you want to go, but you shouldn't go at it alone. I am not advocating that you need to have business partners or even that you need employees. I am telling you that you need mentors and coaches if you want to grow and succeed faster and more than you probably thought you could. 

I am a consultant who spends a fair amount of time coaching others. I am not telling you that you need me as a coach - just that you do need one.

Dave started his first landscaping business when he was 25, just married and looking for a way to build a future somewhere other than behind a desk. He was quite talented and loved making homeowners yards look amazing. He had an eye for plants and colors, with a work ethic that stood out. Dave had no issue taking on projects that others wouldn't. By 30, he was out of business.

Not letting failure define him, Dave started a second landscaping business. This time Dave decided to make a single change - he hired a business coach. After the initial kickoff call and an in-person session with some other clients of the coach, Dave started making changes based on solid advice, his own goals, and things he started learning from the group.

When I finally met Dave through a recommendation, he again had made a name for himself and continued doing great work. This time around, he was taking steps that were doubling his business year-over-year. Recently, when I caught up with Dave, he was not only growing his business exponentially - he started selling and installing pools. And if I know Dave, he's just getting started. If you ask Dave what he changed to make his second attempt a success, he will refer you to his coach.

A great coach, or at least one worth paying isn't always going to tell you what you should do - they are going to guide you towards figuring out the right mindset to achieve your goal. I am a coach - and I have a coach. Coaches help you define, refine, and work around problems through their experience and insights from others' failures and successes.

The Field Of Dreams Has It All Wrong

When Iowa farmer Ray (Kevin Costner) hears a mysterious voice one night in his cornfield saying, "If you build it, he will come," he feels the need to act. Despite others suspecting lunacy, Ray builds a baseball diamond on his land, supported by his wife. Afterward, the ghosts of great players, led by “Shoeless” Joe Jackson, start emerging from the crops to play ball. But, as Ray learns, this field of dreams is about much more than bringing former baseball greats out to play.

Despite the thousands of articles online warning of this, many people still believe customers are like the baseball players in the field of dreams. They wake up one day with what will be a world-altering business concept and jump in on bringing it to life. With months (sometimes years) of toil, thousands of dollars, and a distant memory of the last time they slept a full night or took a weekend off - LAUNCH DAY has arrived.

Crickets.

After all the hard work and planning done toward creating the perfect product, no one signs up. The only activity seen on the site is from spam-bots trying to send them helpful products through the contact us form. Dreams in ruins, they usually go back to a "day job" wondering what went wrong.

"I built an MVP (Minimum Viable Product) just like everyone on the internet said I should - I just couldn't get customers." they will tell me. The first step to building a Minimum Viable Product, what I like to call a Minimum Sellable Product - is to find your market. 

Finding your market is not writing up the personas of your ideal customer. Agencies will be happy to charge you to start there, but that's not helpful if you want to get something off the ground. I know plumbers exist and I understand what services they provide. I can't build a product that will appeal to plumbers and get them to trust me with their hard-earned money on just this understanding alone. Any business-building exercise that exists primarily in your thoughts is virtually worthless.

One of the first steps in the Monthly 1K program run by Noah Kagan and his wildly successful company AppSumo, is to go out and socialize your idea. You have to go and talk to your prospective customer to know what they need. You can't build a product to solve a problem you don't know about from experience. Making a laser-based pen to stop running out of ink is excellent, but I will probably just use a pencil.

A Day Late and A Dollar Short

Another way of saying this common idiom would be "Too little, too late." When you're looking to start a business, timing can be just as essential as planning. Without the right kinds of planning ahead of time, you can end up on the wrong side of an opportunity with nothing left to get you to where you want to be.

One of the first things I encourage people to do is create a simple budget for their business. Oh no, I said the "B" word. It's okay - if you aren't comfortable with budgeting or aren't sure how to budget for a business, there are plenty of resources online to help you learn. If you don't budget in your personal life, I would strongly encourage you to start if you're going to venture down the entrepreneurship road.

In creating a budget for your business, you should make a profit. Lesson over. Yes, to build a profitable business, all you have to do is budget for it. Of course you need to start making sales and getting customers. Ultimately, you're not running a business if you don't have customers. But, to profit - you need to spend less than you make. It is that simple. 

People often go wrong because they buy into the hype we discussed earlier regarding overnight success stories and self-made gazillionaires. Growing a business, you may need additional capital or take on debt - but at that point, you hopefully understand your business's sales lifecycle enough to ensure it doesn't sink you.  

Most of the failed startups I find in the tech world failed because someone forgot to tell the founders to make sure profit existed before focusing on user acquisition. Acquiring customers without considering cost is one of the fastest ways to dig your own companies' grave.

Better yet, don't talk to the founder. Instead, speak to the family and friends of the other people who do a lot of the work to build the company and end up without a job and little reward for their efforts. 

The Buck Stops Here.

President Truman was known for the sign he kept in his office that stated:  "The Buck Stops Here". You are ultimately in charge of what happens next. You can continue to do things the way you always have and expect a different result - or you can make changes. 

A critical skill in anyone looking to venture into starting a company is making decisions confidently. A key element to making decisions is knowing when another can undo it. If you don't know the answer to that, take a breath and think about it, if you do - just act. 

In addition to knowing when to act and when to wait, there's the option to defer. If you don't have to decide on something because it's not blocking something else from being done or holding anything back - put it off. A great resource to learn the art of procrastination would be to read Rory Vaden's book "Procrastinate on Purpose: 5 Permissions to Multiply Your Time".

In Review

• What and how you think will determine what you achieve.

• Failure is nothing more than an indicator or what isn't working and can point us in the right direction to what will.

• Mentors and coaches are essential when it comes to building a business.

• You have to start by talking to your actual customers.

• Your business's budget, not potential sales, determines your profit.

• Taking action is up to you, but knowing when or when not to is equally significant.