When do you get to call yourself an entrepreneur? Is the qualification success or failure?
Recently, I’ve been trying to figure out where my entrepreneurial mindset developed, and the next few blog posts will be a look at that process and the lessons I’ve learned so far. I’ve always been exposed to the entrepreneurial lifestyle. My parents have started and owned a bunch of companies (mostly small and local, but sometimes bigger), and throughout my life I’ve always seen them working hard to build something out of nothing. It was probably inevitable that I’d start something, and watching their successes and failures has certainly shaped my perspective on what it means to be an entrepreneur.
I’m not sure I remember my very first venture, but by the age of ten I had a Kool-Aid stand on the side of California Highway 20E, in Lake County, California. Not every kid who sells refreshments is eyeing a future as a CEO, but I certainly felt like I was on that path. A Kool-Aid stand on the side of a rural highway has a pretty small market, so when you do see customers, you’ve got to make sure they buy. I realized early-on that variety was key, and I tried everything: more sugar, less sugar, free refills, lemonade, water, crackers, cookies, and anything else I could find in the kitchen when mom wasn’t paying attention. The stand was as short lived as the candy I bought with the profits, but the rush of receiving money directly for my efforts planted a seed. The next year our family left California and moved to Alaska, the last frontier.
Alaska was less of a last frontier, and more of a move into the past. No franchises, no roads, no competition, and nothing for a 11-year-old kid to do (at least that’s what I told my parents…I guess little league, boy scouts, 4H, and youth group didn’t count). It was 1994, the Internet was new, the only ISP that worked in our little town was AOL, and I wanted in. Our family had a 386, but I wanted a Pentium with a modem. At the time, my mom worked for a small social service non-profit and my dad was running a marine service center, good jobs, but a new computer was pretty low on the household priorities list. If I wanted a new computer, I needed to earn it.
I was lamenting this to friend from school, and he suggested we go into business together. He needed money too–his parents hadn’t recognized how much he needed a mini-bike–and so our partnership began. We racked our brains, and decided to go into the snow shoveling business. We knew that his neighborhood association had a rule that didn’t allow more than a few inches of snow to accumulate on steps or walkways, and that most people didn’t like to shovel snow. We shovel, you pay—this was our mantra. For most of November and December it worked like this: we’d go door-to-door, I’d ask if they needed their driveway shoveled, remind them of the snow shoveling policy, and If they said yes, I’d start shoveling from the front door, and he’d start at the street. Equal work, equal pay, Right? When we were done, I’d collect the money and he’d put it in his locking cash box and we’d move along to the next house. Some days we made $150; a lot of money for a couple pre-teens. By December 20th, we had $1150, enough for a mini-bike—so he bought one! He gave me what was left–about 100 bucks. “Next winter we can get your computer!” He said. I moped for a few days, and swore he’d swindled me. My parents were sympathetic, but they pointed out an important lesson I’d just been taught: If my friend and I had never talked about how to split the money, I should be as mad at myself as I was at him. In the end, I got a computer for Christmas, and $100 was enough to buy a modem, but the lesson stung none-the-less.
Lesson #1: Pay attention- To the customer, to market conditions; don’t get surprised by something you should know. I found out that my primary market at the Kool-Aid stand (neighbors and parents of friends) didn’t actually like Kool-Aid, and would gladly pay 50 cents for glass of ice water, long before water bottles were at every check stand.
Lesson #2: Have the hard talks early- One of the reasons you’re working with someone else is that they don’t think like you do. Don’t expect anyone to read your mind. Openness and honesty go a long way when the money doesn’t.
Lesson #3: Money makes people weird, so get important stuff in writing- I think this one speaks for itself, and it should be a no-brainer for everyone involved. If someone isn’t willing to write it down and sign it, maybe you should not be working with them.