The glitz and glamour of doing well in a University can make you feel like you can take on the world. When in reality, most college students have a lot to learn before they’re ready for entrepreneurship.
In a college classroom, you’re competing against 40 or 50 people. In entrepreneurship, you’re competing against 6.8 billion people. No matter what business you start, you need to be able to become the best in the world at what you do.
I’ve talked to hundreds of college entrepreneurs since I graduated last year and they all seem to be making the same three big mistakes that destine their startups for failure.
Don’t Look for the Big Idea
College entrepreneurs are looking for that next big thing, and so are their professors. Stanford and Harvard get a lot of props for pumping out Google and Facebook. Who doesn’t want to be part of something like that?
However, Sergey Brin, Larry Page, and Mark Zuckerberg were programmers by trade and business people by circumstance. They didn’t just come up with those ideas, they built them. Unless you can create the next game-changing website yourself, don’t waste your time looking for that idea.
Instead, focus on building your skills and starting something manageable. It’s the little ideas that become the next big thing.
Don’t Start with a Business Plan
Business plans are a waste of time when you're first starting. They don’t raise money, they don’t guide you on your journey, and you have no idea what you’re planning for until you actually get started with your business.
I wrote my 35-page business plan with five years of pro forma financial statements. I compared my website growth to the early days of Facebook. And now my only reason for reading it is to get a good laugh.
Instead of writing a business plan, start with a customer. Then get another customer, and another one, and another one. They’ll tell you where your business needs to go and you can plan accordingly.
Don’t Focus on Funding
Funding comes later. If you look at Foursquare, Tumblr, and 99designs, each of those companies were funded because they’re already successful.
According to Ted Stokes, CEO of Early Stage Capital and Coaching, VC’s invest in less than 1 percent of the companies they see. Angel investors, on the other hand, might listen to you but they’re not going to invest in a college kid with an academic assignment comparing their idea to Facebook. And most banks are out of the question.
If you need funding to start your business, then it’s too complicated.
Instead of looking for funding, simplify your idea until you can start it this afternoon with the money in your back pocket.
Big Companies Start with Little Ideas
Bill Gates and Paul Allen were freelancers for seven years before they founded Microsoft in 1975. Then Microsoft was a service for another 12 years before they sold their first copy of Windows.
FedEx started with a business plan, but the company didn't get started until five years later. Coca-Cola started by selling a syrup to a pharmacy. General Electric started because Thomas Edison needed to create a company to sell his inventions. And Nike started with Philip Knight peddling shoes out of the back of his car at track meets. None of these companies started with a business plan.
Steve Jobs bootstrapped Apple by taking Steve Wozniak's Apple I to a local computer store. The store owner bought 50 computers for $500 each on delivery. Then Jobs took the purchase order to an electronic parts distributor and told them it would take 30 days to build 50 computers, at which point they could pay for the parts.
Successful entrepreneurs start with manageable ideas, customers not plans, and bootstrapping founders.