Learning to become an entrepreneur
Murray Newlands (United Kingdom) is an entrepreneur, investor, business advisor, and speaker. He has founded a number of interesting startups and has been named as one of the 50 most influential marketers in the world by Entrepreneur magazine.
Murray Newlands lives in the United States but is originally from the United Kingdom. He gained his green card by being recognized by the US government as an “alien of extraordinary ability,” and that alone made me interested in understanding how this very successful entrepreneur and speaker thinks and acts.
How has Murray Newlands managed to become such a good entrepreneur, and how do you go from being a lawyer in a well-paid but pretty ordinary job to being recognized by Entrepreneur magazine as one of the top 50 most influential marketers in the world?
In The GuruBook, you can read about impressive startups turning into billion-dollar companies, but let us be honest: Most startups actually fail. Is there a way to learn to become an entrepreneur?
When you startup a business, statistically it’s very unlikely to work. Just look at how venture capitalists view their investments. They know that if they’re lucky, 1 out of 10 of their investments will become a big success. So it’s in the DNA of ambitious startups that not all of them are going to work out.
I think a lot of people are attracted to entrepreneurship because they don’t like their job. However, starting up a company is not a quick way to have a more interesting everyday life. It can indeed be very stressful in the beginning. Lots of worries, lots of failures, and so on.
That is why I suggest training to become an entrepreneur rather than creating an ambitious tech startup from day one.
How do you train to become an entrepreneur?
When I started my first company, I had very little money and experience. My business was a consultancy firm, so I was selling my time. That meant that I didn’t need a lot of capital investment, and if it failed, it would not be the end of the world for me.
When we talk about training to become an entrepreneur you can actually do that from a very early age. Kids do it all the time without thinking that they’re learning how to build companies. A kid might open a sweet stand and realize that it’s both fun and brings in a little money. Then this kid might open two more sweet stands, and now he or she is turning into an actual entrepreneur. In this process, the kid will make a lot of mistakes, but when you still live with your parents, you don’t have to worry about not being able to pay your rent. The same is the case if you start up a small business, while you’re still studying.
But what if the job that you’re able to create, while you’re still studying, is not your dream job?
It probably isn’t. That is why I talk about learning to become an entrepreneur. With your first company you might know that it will not deliver everything that you want. But it’s an investment in learning how to start up businesses.
Imagine that my dream is to build a sharing economy app within the industry of cleaning buildings and private homes. Should I then start by doing the actual cleaning in these homes?
Yes, that is a great idea, because through this experience you will understand much more about the customers’ needs, their pains, worries, and so on. You get to know your target audience, so you’re much better equipped at the next big step of trying to digitalize some of this industry.
In fact, I’ve written an article with 75 ideas for businesses you can launch for cheap or free. This is also a signal that entrepreneurship doesn’t have to start with trying to build the next Uber or Amazon. Oftentimes, it’s best not to aim that high the first time.
Today, many people are looking to leave the daily grind for something that feeds their passion. People do not want to retire at the age of 60 only to look back on life and feel they have wasted it. Luckily, it is now increasingly easy to start a business from scratch without spending a fortune.
In the article that I mentioned, I’ve highlighted 75 varied business ideas you can start cheaply from the comfort of your own home. Some of the business ideas require nothing more than an internet connection.
Can you give a few examples?
If you’re great with numbers, you could become a freelance bookkeeper, because you do not need to be a certified public accountant. There are lots of free-to-use online invoicing tools such as Sighted.com and online payment tools like Due.com. Some services you could offer include creating balance sheets, providing income statements, and creating various monthly, quarterly, or annual financial reports.
Another example could be offering remote secretarial services. All you need is strong organizational skills, good communication skills, good time management, and a high level of autonomy.
Your day-to-day tasks as a freelancing secretary would then typically include booking meetings, organizing calendars, replying to emails, putting together presentations, and answering phone calls.
A third and increasingly popular opportunity is becoming a YouTuber, blogger, or vlogger. If you’re an expert in a specific field—for instance, travel, fashion, cooking, and so on—or if you know how to do something particularly well, why not tell the world through a blog or vlog? All you will need is a computer and a good-quality camera. You can make money by offering advertising space and reviews of products on your platform.
This also answers my question about whether getting funding is critical for every entrepreneur.
That always depends. If you can launch a company and grow without funding, of course that leaves you with the entire ownership of your business. That is good both in the many situations where you don’t actually need funding, but it can also be an idea if you choose to grow organically and bootstrap your business.
However, there are also many startup ideas that need lots of capital to grow and succeed. In these cases, remember not to lose focus on making your business and products great. Getting an investment in your business is a very time-consuming thing, and you see a lot of startups forgetting about building their business when they’re out there searching for money. That is very dangerous.
What is your best advice on how to get funding?
If you decide that your business is ready for funding, then read about how to find and pitch to investors. Build a great story around your product and remember that investors hate product details and features. They fall in love with a combination of story, numbers, and you.
If you approach rich families or individuals that invest in startups, they often don’t just focus on the return but also want to help out within sectors such as education, environment, and so on. So if your business is within one of these sectors, it could be a good idea to approach these kinds of private investors before going to the more professional business angels and venture capitalists.
You have to think of investment as selling something. Study how to make that sales pitch. Have the right material in hand. If someone walked up to you in the street with a great idea and wanted a million dollars, you wouldn’t give it to them. This is also why one of the best ways to get investment is to be referred to the person by someone. Before you want funding, get to know people within the investment opportunity. Make sure that they know about you and your project in advance. That will hugely increase your odds of success.
How do you build such an investor network?
Lots of entrepreneurs call or email potential investors out of the blue. They very rarely succeed, because these investors get so many requests and almost automatically turn away people that they don’t know or have never heard about.
It’s really important to get to know these people face-to-face. Go to events within your niche and network with investors. Ask good questions such as, What are you looking to invest in?
Remember that if they’re not interested in your particular area, they can still be a very important connection for you. You can help them out by finding other startups that match their criteria, and if you start doing so, you’ll find out that they will also connect you with relevant investors from their own network.
Referrals is the most important thing in investing. I’ve interviewed a lot of venture capitalists, and they say that they don’t invest in a company unless it is referred to them. Sometimes there is an exception, but around 95% of their investments come from referrals.
As Robert Foster Bennett once said, “In sales, a referral is key to the door of resistance.”
Exactly.
When you cease to dream, you cease to live.
Malcolm Forbes