I have been building side projects (SaaS, consulting, etc.) for a few years now. Doing this repeatedly has allowed me to detect some core principles of entrepreneurship. The realizations I made were quite shocking at first. I had to fail a lot to understand some of these things.
Many people want to be entrepreneurs, mostly for the money. While it is a fair motivation, it can be detrimental if it becomes an obsession. That is just my personal opinion. The entrepreneurial journey always starts with an idea, a dream. The soon-to-be entrepreneur wants to build something or provide a service. Some business ideas are quite classic and well-defined, like opening a restaurant or hotel. The advantage of classic business ideas is that everything is well-defined; you don't have to do much out-of-the-box thinking for them to work. In some cases, you need substantial initial capital to start, but sometimes you can start small and bootstrap. Even the margins of the business are often well known in advance. The hardest part for these businesses is often finding customers, which depends a lot on the location, the price, the product, and how it is promoted. For example, if you open a restaurant in the middle of the desert, don't expect many customers... unless you sell it as a luxury experience. Then the product and pricing will be different.
Take consulting, for example. Building an agency or consulting firm boils down to two things: perceived expertise and relationships. Perceived expertise does not always map with real expertise, but as long as you understand what society values as perceived expertise, you will succeed. This could mean having attended certain prestigious schools or worked for some prestigious companies. Most people use these things as proxies for expertise, so it is beneficial to have those credentials if you want to build a successful consulting firm. Then there are relationships. In consulting, relationships help you get the first client, keep that client, and then win more clients. Also, keep in mind that companies, especially the big ones, often hire consulting firms for political reasons or to bypass internal resistance. Therefore, expertise is often not the most important criterion you will be judged upon, as long as the relationship with the client stays steady.
For ideas that are a bit out of the box, things are less clear. The entrepreneur has to find innovative ways to present and sell the product. Sometimes they can learn from other companies or mimic their playbook, but the path is less clear than for classic businesses. Finding customers remains the most important part of building such businesses, just as with classic entrepreneurial projects.
Here is one thing about ideas: everyone can have a lot of them once they decide they want to be entrepreneurs. Most of these ideas are bad, either because of timing (they could be good in the future but not now for some reason), the business model is not sound, or the idea doesn't solve a core user problem.
Often, people have ideas and start dreaming about the implementation (in theory) and the money they will make and how people will applaud their business acumen. Then they start writing a business plan or a strategy. Strategy is easy. You can learn strategy at school (at least the theoretical part), you can learn how to write a beautiful business plan online, and you can even ask ChatGPT to write a business plan for you. You can ask consultants to write a beautiful slide deck. But what most people or aspiring entrepreneurs do not realize is that this is the easiest part. This is not what ultimately determines the success or failure of an idea. Execution does.
Ideas are cheap; strategy is easy. Execution is hard. The value is in the execution.
Why is execution hard?
Nothing ever works as planned. An idea or a strategy is a theory. You can’t be sure the theory is right until you test it. When you test it, you have a thousand potential variables to explain why the execution is or isn’t working, or was working and is no longer. You have to weigh all these possibilities constantly, iterate, try, fail, change your theory, try again, fail again, think, iterate, etc. That's why execution is hard. Most people don’t have the stamina to go through all the phases of failure and continue iterating and learning until it works, or they decide for sure that the endeavor is no longer worth pursuing. Execution is hard because failure is hard. You fail a lot at first, and it is hard, especially as an entrepreneur. Entrepreneurship requires taking a lot of risks, working harder than most people, and the rewards are generally not available immediately. So you have to have some long-term thinking and practice delayed gratification to ensure short-term pain doesn’t prevent long-term success.
Strategy and planning are easy. Execution is hard.
Strategy is a theory, and you need a theory for sure; otherwise, you would be navigating without a map. But as the saying goes, "In theory, theory and practice are the same. In practice, they are not." Execution is about facing the world as it is, not as you expected it to be. Execution is about constantly updating your theory of the world, and that can be painful because most of the time, we prefer staying inside our comfort zones, both material and intellectual.
Finding the customer
The customer is the cornerstone of every entrepreneurial journey. What’s funny is that most entrepreneurs think about the customer last and about themselves or their dream of changing the world first. Common and huge mistake. Nobody cares about your feelings, young entrepreneur; get over it. The only thing that matters is the customer and their willingness to pay. So, are you solving a true problem that people want solved, or are you creating a new set of needs people don’t even realize they want but will in the future (think Apple and the iPhone)? That’s the key. Finding the customers is a journey. People often advise conducting customer interviews. That can work in some cases but is not a panacea. You can start with an idea, then interview potential customers to understand the problem and need, then build a solution, or you can have an intimate knowledge of the problem already, start with an MVP, iterate, then talk to customers. There is no one way to do it. It depends on the problem, your knowledge of it, and the type of business you are building. Mark Zuckerberg didn’t conduct customer interviews before founding Facebook, and it is now valued at $1.2 trillion.
But one thing is true: you will have to talk with your users at some point in the journey to better understand their needs and wants.
Build something people want. Build something people need.
