When I started on the entrepreneurial journey over thirty two years ago, I had this naive notion that I could do everything on my own and that the USA was fair for business opportunity. That I could succeed without designating firms MBE this or minority that.
Multiple businesses later, I learned some lessons I wish I knew at the beginning as an entrepreneur. Even in the last ten years I have evolved from GTF America to King George Advisors to American Security Trust,SA and have been involved, grown or sold everything from food services to real estate development to financial services, with general consultant services thrown in. Some good, some bad but all fun.
Lesson #1: An idea is worth nothing. Action is
A company consists of many moving parts at any point in time — an idea is simply a starting point. Given an idea, it snowballs into many different ones and you can go in a 100 different direction. The outcome depends on many variables, akin to what makes predicting the weather an inexact science. Imagine you have an idea for a building — the HOW, WHERE, and the CONTEXT are much more important than the WHAT. It’s very easy to have ideas — you can have a 100 ideas a week.
There are almost seven billion people in the world. The chance that your idea is original is virtually zero.
This is why an investor like American Security Trust, SA will never fund a startup simply based on an idea, but examine other factors such as the team (ability to execute), the competition, and early traction. In fact, some investors don’t consider anything else except for traction (# of users, paying subscribers, etc.)
When a company becomes successful, you often hear people say “I had that idea too!” But that’s like saying “I had the idea for building a resort in Vegas too!” Share your ideas and find that others will shed a different light and foster new ideas to lead to something you haven’t thought of. It’s people, not ideas, which make a successful company.
Lesson #2: Don’t fall in love with your ideas or your product.
If you’re looking for funding, traction is everything (unless you have built a successful company before). Investors could care less about your product as they see thousands of them every month. They do care about your product, indirectly, through traction. Do fall in love with sales. Remember, you have to have sales to have profit. Its even better to sell products before you acquire them.
Ideas are not worth anything, and being able to build things is not enough. So don’t worry about adding features and making them perfect. Keep launching and see how the features “take.”
As Thomas Edison said, “Vision without execution is [delusion].” The best business people are delusional yet completion focused.
Lesson #3: Maintain optimism and patience, but be wary of unrealistic expectations.
Entrepreneurs start out on our ventures because we think we have a good chance of succeeding. We hear of many stories of perseverance and success like those of Tony Hsieh of Zappos and of AirBnb and think that if we persevere, we will succeed like they did.
There are about 20,000 failures for every success story. We never hear about the failures. Beware of false encouragement. People are skittish about telling their acquaintances that their boyfriends/girlfriends suck. Same with startups. Take a moment every so often to step back and reflect so you see a better bigger picture of how much users like it and where your startup is going.
Lesson #4: Be prepared to work at least two years with a very small salary.
You must have a personal financial runway to work on your idea without a salary and still be able to eat and live under a roof. Get the rent paid. If you don’t, then be prepared to couch-surf.
Lesson #5: It takes a village to build a company.
It’s all about the division of labor at a startup. Seek people that complement your talents early on. Bring in the right people who are passionate about the problem your startup is trying to solve. Get people that have talents that you dont, like governmental relations, technology, management, accounting and law.
Mark Zuckenberg started Facebook and seems to get all the credit in the media for its success, it’s highly likely that the key sticky and viral features such as status updates, photo tagging, and notifications that left all other social networks in the dust came from the team, not him.
Lesson #6: Make sure your founding team includes someone with a strong product sense and MONEY.
Engineers are not the most gifted in common sense. This is why having diversity and having different perspectives is an advantage.
Lesson #7: “UI is the new IP”
According to one prominent angel investor, user experience is the new intellectual property. It’s no longer about algorithms, but user experience.
Lesson #8: Surround yourself with a strong support network and MONEY.
The emotional highs and lows of a startup are incredible and they can happen within a few hours of each other. Just remember, “this too shall pass.”
Reach out to as many entrepreneurs and funders as possible. They are in the same boat as you and they know how difficult it is, so you will find a lot of support and help from your network of entrepreneurs.. I have also found a few entrepreneurs who I didn’t even know that well who were so very helpful in making introductions and taking the time to meet with me even though they are really busy with their own companies. Remember, ask for the money. All they can do is say no.
Lesson #9: You must be comfortable with uncertainty .
This is one of the reasons we find so few African American men entrepreneurs. Failure is a contant companion and that fear of embarrasment and I told you so's from Family and companions. Black women will not put up with your scatterbrain genius. Everyone told you to get that good government job at the post office. Building an international organization takes travel and not all of it comfortable I have been staying with my lawyer and friends for for months in the USA as I connect the peices in Central and South America. The best part is the organization in Central America has matured without my presence while I build in the USA. Once the dots are connected, I may get a moment to rest. As one person said, “Entrepreneurs have to live like a cockroach.”
#Lesson 10 On being a African American Entrepreneur
It’s a really great time to be a global African American entrepreneur. I love seeing my brothers step outside of the borders of the USA because we are so under-represented in technology and global business. I know of one team who suddenly started getting investor meetings because they made the expanded
#Lesson 11 Be a Business person of African American heritage - not an African American Business person. Do good business and business will do good by you.
To investors who are used to seeing endless streams of white guys coming in their doors with limited vision, they welcome black-led international teams as a refreshing change in landscape but also see it as a great opportunity to better tap into the more than half the population of the world. The number one export of the United States is HIP HOP culture. There’s a “cool” factor in funding a company with a African American founder. That why I took American Security Trust to Costa Rica. Its a multi cultural utopia where capital flows from China and South America that looks for African American experience and business acumen. Our only soft point is the USA. Its still the land of opportunity but access to capital is close to non existant.
There is 1 African American out of 1000 entrepreneurs in technology, or fewer. The chance of getting into a startup accelerator is about 1 in 10,000 applications. That means the chance of having 1 African American founders in a startup accelerator is roughly 1 in 100,000 aspiring startups! That’s why you rarely see African Americans anywhere amoung Google, Facebook, Apple or Intel staff
I think reasons why there are so few blacks in the business startup scene are twofold. First, African Americans don’t think business is as sexy as sports or music, so they don’t choose it as a profession. Second, African American have virtually zero access to capital in excess of five million dollars. in the USA. American Security Trust, SA is in place to change that. We are here to work with the next Warren Buffet, Donald Trump and Richard Branson.
50% of black college students drop out for perfectly logical reasons — because a traditional college education path helps black people get the jobs, and the jobs available to blacks do not lead to wealth and add in the growing gay rights movement that will take even more jobs from straight black men and outside of government and education, black men and women will find the glass ceilings being lowered. Don Lemon is the new face of CNN and black professional men.
This time, SUCCESS BY GEORGE stand ready to incubate, advise and fund these startups.
George Farrell
with help from many others.
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