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Saturday 20 September 2014

The Dragon's 10 commandments for all wannabe entrepreneurs

Peter Casey walked away from a safe and steady job – to pursue the risky business of starting his own business

Peter Casey

Published 15/06/2014 | 02:30

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Dragons Den member Peter Casey
Dragons Den member Peter Casey

I'M a full-time entrepreneur and, for several weeks a year, a Dragon on RTE's Dragons' Den, bearing witness to the words, deeds, hopes, triumphs and errors of other entrepreneurs. Down from this twin-peaked mountain of experience, I bring you the Ten Commandments of Entrepreneurship.

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1 Get loved ones on board

Years ago, I announced to my father that I was leaving Rank Xerox to start my own business. He was beside himself and he couldn't fathom why I would walk away.

The difference between an entrepreneurial career and a hobby is commitment. Running your own business is life-consuming, and there will be times when you will have to put the business ahead of the family. Birthdays and holidays may have to be postponed or even missed. Joint bank accounts may have to be raided, credit card balances run up and belts tightened.

Planting one foot on the deck and the other on the dock can only lead to disaster. Make sure your partner is totally on board before you cast off.

2 Know thyself

I respected my father's feelings, but I knew I was right in leaving Xerox. He knew I was impulsive, but I knew I wasn't acting on impulse. I was acting on a dream.

You may think you want to go out on your own, but unless you dream about it and know you won't be happy until you act on your dream, don't do it. This is something you've got to want!

3 Do the right thing

Find something you're passionate about and connect it to some product or service you know some significant slice of the human race desperately needs or just as desperately wants.

At Xerox, I saw how much the headhunters charged for rendering what seemed to me little effort, and I knew I could deliver a much better version of executive search for a fraction of the cost. And since 1984 my firm has been doing just that.

In my case, I saw a profitable business I could do better. But that's not the only way to get started, and it isn't even necessarily the best.

Some of the most outrageously successful entrepreneurs start out by identifying the passion first and then working out a way to get paid for doing it.

The good news is that the passion comes easy. The bad news is that monetising your passion can be hard. The key is to test the market for your product or service thoroughly. Sell your idea to people who don't know you. Solicit their merciless feedback.

Next, research your competition. First, understand why they are successful. Second, create your differentiator – the innovative kernel that will draw your competition's customers to you.

4 Do the right thing at the right time

It's a lot easier to take business away from a competitor than it is to create an entirely new market. Innovation is always a better bet than invention. That's because the realm of business is populated by Initiators, Imitators, and Idiots.

Let me explain. The Initiators spend tons of time and money inventing something and then spend even more time and money educating the market to it. Sometimes this pays off big time.

Mostly, though, it's the Imitators who enter that market (after it has been educated on the initiator's dime), innovate a variation on the original invention, and then clean up.

Timing is everything. During my last year at Xerox, I had the franchise for fax machines, a technology in which Xerox was the major player. I spent that final year educating the market, telling customers that the venerable Telex machine was about to go brain dead and that a pair of Xerox 495s at $21k a pop would replace 50 Telex operators.

I was right. Unfortunately, I was also about three years too early. You see, the Idiots were still selling Telex machines – lots of them – to other Idiots, who were slow to change technologies.

5 Get fit, really fit

I've never met a winning entrepreneur who didn't exhibit off-the-charts energy. If you're not fit, get fit. My best ideas come when I'm in the pool or in the gym.

6 Discipline yourself

Draw up a daily to-do list, a quarterly set of objectives, and a 12-month plan. The daily list is the most important for cultivating discipline.

7 Get a mentor

Identify someone who knows the space you want to be in and is willing to give you some free advice and make some free connections. After your business grows, consider rewarding your mentor.

8 Prepare to fail (you will)

Like most successful businessmen, I've failed – twice. Figure your costs as realistically as possible – then double the number. Voila! Your budget.

Forbes estimated that 80 per cent of startups go broke in 18 months. A major reason is failure to understand exposure to some inherent risk. Know the risks – and understand that big companies sue startups just because they can.

9 Leave a little in your tank

Eight of 10 times, failure awaits. There's no shame in it. Failure is an option. Define it by drawing a bright red line dividing 'viable' from 'doomed' and pull out just before you cross it – while you still have enough fuel in your tank to start on something new.

10 Above all else, be happy

Peter Casey is a panellist on RTE's 'Dragons' Den';

Twitter: @TheDragonPeter

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