Another advice on starting a company
Since posting the article “Starting your own company” I have received many emails asking for additional information and advices. As I have written previously, you need three things: Good idea that people are willing to pay for it; good people with technical and business skills; and enough money to keep your company last for a year.
A person wrote: “It is easy to say about having good idea but in fact, it is impossible.” Develop good idea is not difficult as you think. Following is something that you can do: You start by examine your daily activities. Is there anything that you do that could be made easier? Is there anything that can be automated? Is there anything you cannot do but wish that you could? Are there activities that you wish that somebody else may do for you? Ask your friends about things that they wish too. Write them down then ask questions: Are you willing to pay for it? How much are you willing to pay? If someone who could do that for you, would you willing to pay them? Every problem that you face is a potential opportunity. If you can develop solutions for their problems than you have a good idea already.
Begin with this concept, you can start explore the market opportunity that people need. You do not have to go far. Look at your school, the school environment, the place near you home, and the place that you pass through every day. Ask yourself what problems do these people need to solve? What do they need? What do they want? Are they willing to pay for a solution? There are many opportunities surrounding you. If you pay attention then you can discover them.
Few years ago, one of my students has the idea of renting textbooks to college students. Textbooks in the U.S are very expensive; on the average it costs fifty to hundred dollars per book so most college students have to spend about five hundreds to seven hundred dollars per semester on textbooks. He brought a lot of textbooks then rent them for students at a third of the selling price. Students gave him full price for the book. At the end of the semester they returned the book, if it is in good condition, he refunded them two-third of the price. He set up a website advertised his rental idea and did very well. After few years, his company grew from three persons to hundred persons as he expanded the business across the U.S.
A person wrote: “How do I find people with good skills to work for my company?” Today, 85% of starting companies in the U.S begin near university. The simple reason is students like to share new ideas and have the technical skills to do it. As student, you could start with your college friends that you know. Share ideas with them, discuss the business opportunity with them. You may start by analyze your skills and experiences. If you are very good in technical, you may want to find someone with business skills and vice versa. Analyze your collective strengths. You have to ask yourself: what kinds of products that we can build with our collection of strengths? What kinds of businesses can we start? Is our idea good enough? Who are willing to pay and how much? Are there enough customers to justify my efforts to start a company? Remember that you do not need a brilliant idea to do something big. You can start with a simple idea, grow your customers, make money, then improve on your product and expand. Many people want to do something big and fast. It does not happen that easily. Be conservative as you need time to grow your company.
Look at all the good ideas that others have started and succeed. Look at the products and services at other countries and consider how they could be “copied” back to your country. The virtual world is full of ideas that you can copy and adjust to fit your market. Remember that you copy an “idea” not the “product” so you do not violate copyright laws. You are looking at an idea and adding new things and adjustments to it.
Starting your own company is not easy. There will be a lot of problems and obstacles. You must be strongly motivated to do it. If you face a problem then give up then you do not have the passion to go on. You do not have the “entrepreneurship spirit” to start your own company. As I mentioned early, having good idea is only the beginning. Successful company must have customers who are willing to pay for the product or service. If you do not have enough customers, then you must focus on satisfying the few customers that you do have. Do the best you can to support them. Happy customers will help you to improve your business; they will recommend friends, relatives to you. In business, you must learn how to satisfy your customers as you need them more then they need you.
If you do not make enough money then you must operate frugally and be extremely careful with your expenses. Many people failed because they do not know how to be financially conservative. You should not spending money before making a lot of money. Starting a company requires passion, motivation, determination. It is not easy but if you are successful, it will be the most rewarding experience that you can have.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
