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).