Failure, it is said, is not an option. So why do entrepreneurs make so many first year mistakes? In this Tough Things First podcast, Ray Zinn takes a question from a San Jose State Zinn Starter student.
Rob Artigo: Ray, we have a question from one of your awesome ZinnStarter students, this one over at San Jose State University. And he asked the question, “What are the most common mistakes solo founders make in the first year?” Let me phrase this this way is by saying statistics show that a huge percentage of startups fail in the first year or two. And this question’s particularly apt when you think about how brutal those first 12 months can be.
Ray Zinn: The first mistake that a solo entrepreneur makes is being solo. It takes a team to run a company. It’s just like the two heads are better than one. And so if you’re going to be one head running a company, that’s going to get you circular reasoning and you’re not going to succeed. So, the biggest mistake you can make is being a solo entrepreneur.
Now, I know some of you don’t want to share your idea. You’re afraid somebody else will steal it and take off with it. And if that’s your case, then you’re already set for failure. So that’s mistake number one, is trying to be a solo entrepreneur.
Rob Artigo: It’s funny, Ray, that you mentioned it that way is to say that as solo founders, the first mistake is being solo. I wonder if there’s a way to encourage people to think of yourself as solo, but think of yourself as solo as a team that’s working together solo. Is that an oxymoron or does that make sense?
Ray Zinn: That’s an oxymoron. In fact, I’m encouraging now all the schools that have the ZinnStarter program, there’s about seven of them, that as part of the selection process for people to be eligible to be in ZinnStarter is that they have to have a team, meaning they have to have at least one other member of the team. And I’m requiring that now going forward. So, no more solo entrepreneurs.
Now, it doesn’t mean you can’t run a company as a solo entrepreneur, but that’s a big mistake. Okay so mistake number two, as opposed to just being solo, is not having enough money to take you to profitability. Just because your idea is great and wonderful and you think you’re going to make millions of dollars, don’t assume that. Make sure you have enough cash. And if you’re going to do this part-time, that’s another bad mistake. So if you’re going to be at it full-time, make sure that you have the resources to not only run your company, but also provide for your family.
I would say whatever amount of money that is, it’s enough to take you to profitability, whether that be within one month or within three years. Most companies fail within the first three years. And the reason they fail is they run out of money. And then they spend all their time looking for money and then they don’t run their company.
Rob Artigo: And that can get exhausting too. Have you ever seen a situation where the entrepreneur burns out before the money or the company does? They just are just-
Ray Zinn: Oh, yeah.
Rob Artigo: … they’ve worked themselves right into the ground?
Ray Zinn: The average life of a CEO is about three years and that’s for the exact reason, that there’s burnout. I lasted 37 years and that’s why I’m the longest serving CEO. And that’s like 10 times longer, more than 10 times or almost four times, almost 20 times longer than most average CEOs.
Rob Artigo: Yeah. Yeah. And you did that because, well, I mean, obviously you began by doing the tough things first. But you also made sure that the tough things that you did were balanced by family and time away from work and not working. One of your famous quotes is, “You don’t have to work 80 hours a week to be successful.” Right?
Ray Zinn: In fact, if you work 80 hours a week, you won’t be successful.
Rob Artigo: Yeah. So but you-
Ray Zinn: What I mean by successful, you’ll be maybe successful in your company, but you won’t be successful as a husband or a father or a spouse or mother or whatever. You’re not going to be successful in that way. You can’t spend 80 hours a week and still have a family.
Rob Artigo: Yeah. And dollar signs don’t mean you’re winning at life.
Ray Zinn: Oh, thousand percent. I mean, that probably is the least aspect of being successful is dollar signs.
Rob Artigo: Okay. Well, thanks again, Ray. Good stuff there. I’m sure that you’ve saved a lot of listeners painful lessons that they would otherwise face. And some of them are still going to make those mistakes. But thanks again, Ray. I’d like to say thanks to the listeners who tuned into The Tough Things First Podcast.
If you’re a solo founder, maybe you better rethink that and join in with some other people and become a team founder of something that your chances of success are better. Think about it. Drop your biggest challenges in the comments. If you are solo and you challenge that idea, also do that. Subscribe and share this episode with someone who needs it and we’ll see you next time where we do the tough things first here at the podcast. Right, Ray?
Ray Zinn: Exactly.
