Top 10 Mistakes Made by Entrepreneurs (Full Transcript)

Full Text of Top 10 Mistakes Made by Entrepreneurs – Part of 2010 Conference on Entrepreneurship at Stanford GSB.


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Question-and-answer session

Interviewer: So, the first question why did you become an entrepreneur? And anybody can go first, Jay?

Jay: Well, I started my entrepreneur journey unconventionally, I actually dropped out of high school when I was 16, so. Actually what caused me to become an entrepreneur was a little bit different. My family was going through little hardships, I was trying to go ahead and help out. And basically, try it out my first job, and only job was trying out for McDonald’s and, they rejected me. So, I realized, hey, there’s something called the internet and looked at what was going on. I mean just the euphoria of it and fell in love with the whole online advertising space. And the beauty of the internet is you don’t need the stigma that’s attached to kind of business as it was probably 50 years ago. I mean, you can be a 16 year old in a bedroom, and start a business that two years later, you can sell for $40 million. And that’s probably, was impossible 50 years ago, so, partly survival helped me become an entrepreneur, but on top of that, I love building stuff out of nothing. So, I’m passionate about it, as long as you have it in your DNA, you can be successful.

Carol: So I became an entrepreneur pretty much out of necessity. I had been working at a public accounting firm. Been passed over for partnership two times and I could see that the third was coming up. And the only reason was because I was a woman. And at this point, there were zero women in the partnership across the world. And that just wasn’t okay with me. But I had butted my head up against the glass ceiling enough times. And at this point, had enough visibility across the whole firm to know that I wasn’t personally going to be able to change this organization from the inside. So I left and turned around, and offered them my services for basically the exact same thing that they would have had if I had made partner within their structure. And asked them to pay me three times as much. They agreed which was the amazing part. Provided me an office and let me keep my administrative assistant for the first six months and I was totally billable from the very, very first day. And that grew into an organization that had employees across the world. And then, kind of once you get the bug, it just kind of starts taking over. And so it’s sort of like, well, there’s a problem here. I can solve it by doing this. And there’s a problem there, and I can go solve that by doing this. And I love it.

Entrepreneur3: Yeah. So I guess the best answer that I can give is that I didn’t decide to become an entrepreneur. And I mean that in two ways. One, I’m actually not quite an entrepreneur. I don’t really deserve to be called an entrepreneur, unlike all the other people up here. I’ve always sort of helped entrepreneurs. I joined the LinkedIn and Facebook before we raised venture funding. Before the companies were built and so on. So, very, very, very early in those companies.

Entrepreneur3: But, surely but always sort of liked helping entrepreneurs. They used to call that being a venture capitalist, but that means something else today, I guess. So the second way in which I mean that, and just really amplifying what Carol just spoke to is, I think a lot of the time people who end up being entrepreneurs, don’t really exactly decide to become entrepreneurs. It’s not like being an accountant, where you say, you know, I’m going to go out and take a test, and get a license, and go become an accountant. I’m going to go to entrepreneur school, and become an entrepreneur. It’s a little bit more organic than that, a lot of the time in my experience. And it’s something that almost happens to you, or that you get the bug for, like you said, usually because something’s broken that you want to fix. Or because something doesn’t exist that you think should exist. And you just decide, I’m going to do it. And that can take lots of different forms. But I think it’s a more organic process than a lot of other so-called career paths.

Entrepreneur4: I actually never aspired to become an entrepreneur. I was working as a research scientist, and I thoroughly enjoyed that, so I never aspired to become an entrepreneur, working as a manager, or working in business in the first place. But the thing that made an impact on me was that, I was actually reading the specification for Netscape 2.0 some years ago, somebody may remember the browser Netscape. But I was reading the whole night, and I was really taken by this, and it had an enormous impact on me. So the next day, I actually quit my job, and started my first company. And I had no idea what kind of business idea I was going to pursue, I really didn’t have so much of a plan, but it was more this incredible passion I felt for internet. I could just sense that internet was going to be really, really big. And I felt this was too big thing — too big of a thing to walk away from, so that’s actually why I started.

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Interviewer: So in the life of an entrepreneur, now you’ve been all living the life of an entrepreneur, what is it you like about the life of an entrepreneur, and what is it you don’t like about the path that you have chosen? Anybody, or you can just go to in any order you like.

Entrepreneur1: I guess what I love about it is – yeah it probably goes both ways. I love creating something out of nothing, and seeing that impact, it’s almost like you can see it nurture. And you can see the positive result as quick as you can, kind of make it, make it happen. The downside of being an entrepreneur is that it’s not as posh and stable as a typical company where you have enough things in place, where you don’t have to worry about the revenue. You don’t have to worry about profitability. You don’t have to worry about the individual things, so you end up losing a few hairs almost every day. So, part of being in a startup is, you have your good days and you have your bad days, but, you know, you fall down and you get up, and you keep going.

Carol: So in the corporate world, I used to be called a workaholic. And I’m a pretty passionate person and when I’m on a project, or working on trying to get something done, I pretty much stay focused on that. And that used to be considered a bad thing. And when I became an entrepreneur, everybody just started saying, oh, but she’s an entrepreneur, it’s okay. And so, I suddenly became socially acceptable, about the fact that my work life and my personal life had a very, very blurry line.

Entrepreneur3: Yeah you know, the best thing about it is that it’s amazing and all-consuming, and exhausting, and crazy, and the worst thing about it is that it’s amazing and all-consuming, and exhausting, and crazy. It will become your life, if you’re lucky, and you’re doing it well. And there’s trade-offs in that, but I feel like the last ten or so years of my life are more or less this vortex of non-stop startupness which is great. I wouldn’t trade it for anything. But I think it almost becomes an either/or decision, at some point, if you’re lucky enough to be facing that problem.

Entrepreneur4: I think for me the biggest is the dream, that you can allow yourself to dream. You can allow yourself to, you’re going to create a company, you’re going to have an impact on the world. And at the end of the day, it’s really all up to you. I think of that as a fantastic luxury, that there’s really no limitation. It’s all about your capability, your creativity, and your hard work. That at the end of the day, hopefully, you will be able to accomplish what you set out to do.

Carol: But one of the things that all of us are talking about is that we’re doing it because we have some passion about what we’re doing, and with whom we’re doing it. And one of the things that you’ll hear people give you advice about over and over again is stay focused on your passion. And the reason is, if you hate what you’re doing, you won’t be successful as an entrepreneur, because it requires too much extra effort. And you have to really love it to make the sacrifices that are necessary to be successful.

Entrepreneur2: You also have be a little bit crazy to enjoy the ups and downs of it. Because there’s a lot of ups, there’s a lot of downs along the way. But I think the other key thing is like, if you look at just how the business world works, big companies get to run it. But, in the startup, you get to change it. And if you look at companies like Facebook, Twitter, and just social media in general, that’s really transpired the way we communicate. Big companies are now following onto that, so I think that’s the highlight of being an entrepreneur, is when you can make that big of an impact, and if you’re part of that genre, you can really go ahead and see why, you know. You’re passionate about it, you’re making a change and it’s a lot of fun.

Entrepreneur3: I think that you have a phenomenal luxury when you’re an entrepreneur. And that is to pick the people you actually are going to work with. And I think that really makes a big difference. You know, one thing is to have this objective, or dream or desire. But you can actually work with people that are phenomenally inspiring. People that are fun to hang out with. People that you really care about. And regardless of where you want to go with the company, regardless what you want to accomplish, just a luxury that everyday you will go to work, you work with people that fundamentally are people that you like, and you want to hang out with. I think that is a phenomenal perk, if you can put it that way.

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Interviewer: So it’s a great segue to the next question and so we have some both pure entrepreneurs, and we have some venture capital experience here. So, you can answer it from either perspective. Do you think it’s better in the construction of an entrepreneurial company, to partner, to have a partner with someone that maybe has complementary skills, or vision, or whatever, or is it better to go it alone?

Entrepreneur2: Well, I think it’s a frustrating answer, but it depends on the person. And there are people who are absolutely solo creators who have a very individual drive, and that’s the way they function. There are people who thrive and need a partner. I think the funny thing about, about startups is, this whole thing is driven by exceptions. You know, you can create any rule you like, you know, oh, you know, startups where the husband and wife are the founders together.  That always fails, well except for Cisco, you know, startups — I mean, no matter what you pick, there are always exceptions. So, it’s very hard to generalize out of those things. I’ve been involved in companies where there were kind of co-founders, and a founder and co-founders, and just a founder, and I think all of them can work. The most important thing, if you’re starting something yourself, I think it’s to ask yourself what’s the right thing for you? And just like with a lot of the other things that we’ve been talking about, it should really be a sort of organic process, I think. If you sit down and say, all right, today I need to go out and find myself a co-founder, that’s probably not going to succeed.

Entrepreneur3: I think it’s all about — it’s a couple of ways to look at it. Part of it is finding your dream team, and they’re all your co-founding employees, and that’s really essential for any startup. Your first five people, make it or break it to actually seeing if it’s going to survive. Your first 20 people, make it to see if it’s going to be a large company or not. And when you get to that standpoint, you got to go ahead and realize who your right partner’s going to be, and partner can be beyond co-founder, it’s really VC. And you know, just a short plug for Stanford. Stanford’s actually an investor in gWallet. So, I think we got — we picked the right investors for the right reasons. And partly, it’s because they can actually add a tremendous value. I mean, if you look at my first company, I actually took no funding whatsoever. I bootstrapped it. Mainly because nobody wanted to fund me. I was 16, 17, 18. So, no offense on that. But what I learned on the second time around is when I actually raised venture capital is it matured me as an entrepreneur. It actually brought a different perspective on how to grow a large company, how to actually sustain certain things that you do, international expansion and so forth and picking that right partner is key, because if you pick the wrong one, VCs can either add a lot of value, or they can take a lot of value out. So, that’s the caveat, no offense, but that’s the big formula into finding the right magic in that partnership.

Carol: Yep. So, the other part is whether or not to do it alone or in a team is also based on – if you need outside money, how are you going to get it? And in the venture world, one of the conventions is basically, never invest in a single entrepreneur. And the bottom line is, if the entrepreneur gets hit by a bus, what do we have? So, if you have at least two people on a team then, and one person gets hit by a bus, then at least, theoretically, there’s somebody to kind of go forward. And so typically, by the time you see them any entrepreneur company coming forth to a venture capital firm, you’ll see that they have gotten to a point where they have at least the outward appearance of being a team. Angels kind of go back and forth. And since I happen to straddle both communities, there are lots of angels that will fund a single entrepreneur. And then tell them, you have to go find other co-founders. But it depends on how much money you need.