It Can Take 8 Months to Learn a Business, What About Building It?

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It Can Take 8 Months to Learn a Business, What About Building It? post image

Of the more than 500 posts we’ve put up on this blog over the years, the one I hear most about is “the 1,000 rule.” I can sum it up like this:

It’s really, really hard to grow a meaningful business. You’ll probably be poorer three years after you start than if you’d stayed in your ‘real’ career.

A lot of people have asked us, since we sold our first business, are you going to start another? And the answer, precisely because of the above, is “not right now.” We’ll either buy one or invest in some. Starting them is too hard.

Even if you’ve been doing everything right, you could easily find yourself waking up, two years after starting your business, in the shit. With complaining customers. With a shared apartment that’s late on the rent. With people threatening to sue you. With a lack of clarity about if it’s going to work out at all. And that’s even if you are doing it right. Even if you are onto something.

It’s easy to forget, even in this day and age where you can have a ‘7 Day Startup‘, create a productized service in a weekend or open an ecommerce store in just a couple of days, that having a few customers within your first few weeks doesn’t necessarily equal success, or even proof of concept.

It just means that you’ve started. And getting started, although 99% of people who think about doing it never actually get round to it, is the easiest part of all.

For those of us who have ‘made it’– whatever that means– but I guess it means the rent is paid well in advance, we just kept plugging along. Making things that were once complicated more simple. Hiring people. Sometimes letting them go. Writing down processes and paying the bills. Coming up with plans and trying to stick to them.

I was reminded of all the difficulties of building a new business during its first three years by Phil Knight’s excellent new book Shoe Dog, and listening to something that the buyer of the business that Ian and I sold said in her recent interview on our podcast.

When asked if she immediately started giving the team direction, or not, she said:

“[I started by] taking time with each employee, just listening to what they do and just combing through all the information that was available on the products … and the financials to see where things were, getting to know who the suppliers were, that kind of thing. I think it took me about a good seven, eight months to start to feel like, okay, I really know a lot now of what’s going on. Now I can give direction more.”

It took a highly experienced CFO seven or eight months of hanging around her new business, full-time, just to understand what was going on.

Sometimes when we’ve just gotten started, found a few customers and the money is coming in, we underestimate what is still ahead of us. Years of full-time effort, turning the complex into something more simple, turning interest into customers and capturing as well as maintaining momentum.

So how long could it take? Three years of full time effort, but probably more.

Plan accordingly! (And read Shoe Dog).

Cheers,

Dan

Published on 09.20.16
  • https://www.storegrowers.com Dennis Moons

    Nice post Dan, I really enjoyed Shoe Dog as well.

    I was amazed by the struggle it took to get that business off the ground and to keep it running long afterwards.

    I never saw the Nike I thought I knew.

    And I guess that’s one of the big lessons from the book. When you’re on the inside and you’re building a business, things will always be messy. Things never go to plan and always seem to be out of control.

    The other reminder I took away is to have enough moments where you pause and look at where you where 6 months or a year ago. It helps to put things in perspective.

  • http://www.tropicalmba.com/ Dan Andrews

    true, agree. was stunned as well at what a slog and how many years it took him to (at least seemingly) achieve some kind of ‘cruising altitude’ … perhaps they added struggle to make the story interesting? because even though he was going through a slog, i was turning pages!

  • ryannagy

    I am really like the written blogs posts that you are doing. Let’s me get my TropicalMBA hit without listening to an entire podcast. Kind of like when I used to freebase methamphetamine back in the 80’s. But with less side effects. Or maybe just more positive side effects. Very intense.

    You are reminding me of one of the benefits of starting a business while living abroad. The ups and downs that you mentioned can be easier to deal with when (for example) earning dollars and living in pesos. When I wanted to change my business and focus, I was able to downgrade my lifestyle in Mexico for about 18 months, do my thing, and then jump back up to living like a king when my new business started to take off. It would have been impossible for me to do what I am now doing had I stayed in the U.S.

    Also – to be honest – coming from an academic background it has taken me 10 full years to learn the ropes. I have been making money since day one, mainly doing SEO and side gigs. But the real money and real mastery only started happening for me at year 10.

    Peace out! – Ryan

  • Carl M

    Hi Dan – first time reader. I’ve read several books about making your millions on the Internet, but they all make it sound so easy. Thanks for being realistic and telling like it is. These are actual businesses that we endeavour to start. As someone who has tried before, it’s not easy. It takes hard work every day.
    -Carl M

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Ryan, happy to be dealin’ the entrepreneurial drugs :) I hear ya on the 10 year thing too, many conversations I get into me and friends are spitballing completely new ideas to get into but we often fall back into the skillsets we’ve cultivated for decades

  • http://www.tropicalmba.com/ Dan Andrews

    cheers thanks for stopping by Carl. if you figure out how to make a million bucks the easy way do drop by and share the news :)

  • Bo

    Hey guys, I’ve been following your blog (lurking, really…) for a few years now and I’m finally getting to the point where the urge to create has outweighed the urge to wait. I’ve had a few ideas and started a few small things, but haven’t really gotten anything off the ground, and since I don’t think you guys have a centralized spot for discussion, I’d like to pose a question here, if I may.

    I have an idea and would like it if you guys could chime in with your thoughts. The premise is this: you want to start a new online business. There are several services you need to sign up for and set up before you can get started. Things like:

    A website (the obvious one…)

    Email

    A contact phone number

    If you’re selling things you’ll need the products set up on your website and/or Amazon and/or Ebay

    An online bookkeeping sevice

    If you’re going local you’ll want local SEO services, Google, Yelp, etc.

    Google Analytics

    Social media accounts: Facebook, Instagram, Twitter, etc.

    My service would productize (excellent turn of phrase, Dan!) these into a few packages (three, probably?) and after a client purchases and the services are set up, they will be handed the keys to a fully-functioning and deployed business ready for action. We could generate cash flow by handling some backend support for the client like social media management, Amazon/Ebay item listing support, SEO, and possibly others.

    I know many (most?) of you in here are pretty tech-savvy so this might not be of interest to you at first blush. However, as is often said, “your most valuable asset is your time,” and this service would free up quite a bit of your time in the earliest stage of your startup.

    Anyone able to chime in on the validity of this idea? I know some places like GoDaddy have a suite of services available in one spot, but I think this would be more flexible and broader, as well.

    And sorry if this really isn’t the appropriate place for this…I’m just excited about the idea and want to get some feedback! Thanks in advance, and keep up the great work, TMBA team!

    Edit: I meant to add, this is actually an idea I borrowed from one of your posts a while back. I can’t recall which one, and I don’t have time to search as I have to go to my “real job” right now. :(

  • http://www.tropicalmba.com/ Dan Andrews

    I’ve actually seen this service a few times in the past, not sure if/why it did or didn’t work out or whatever but I don’t really have a firm opinion on it… it would take one full day of work to ‘launch’ a service like this so if you’ve got the idea I don’t see any downside to giving it a try and trying to sell it.

    thanks for the lurk!

  • Bo

    The pleasure is mine, Dan! I’ll carve out some time in the next few days and put something together with a big fat “BUY NOW” on it and let you know how it goes.

  • http://www.tropicalmba.com/ Dan Andrews

    sweet!

  • Matthew Newton

    Am at 2 years right now with TourismTiger… and struggling to pay the rent. :)

    It’s hard sometimes, really is.

    Not saying we’re going to shut down (our year on year numbers are heading in the right direction) but reading this kind of thing is encouraging.

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Mat, I remember the second year of our business was the hardest…. 2009….. ugh

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