It took me 3 years, lots of money, plenty of stress, and some really scary moments, but I feel like I paid my dues and now have my own deep understanding of how successful companies are created from scratch.

I decided to write out everything I know for two reasons:

(1) It’s a good way for me to organize my own thoughts; and
(2) Hopefully this will be helpful to other aspiring entrepreneurs out there!

Thanks for reading, and I’d love to hear from you if you have any thoughts on what I’ve written. You can just e-mail me at josh.padnick at g m a i l . c o m. Okay, let’s get started!

The Executive Summary

There are lengthy academic books available from the Harvard Business School on theories of entrepreneurship. Um, no. Here’s my executive summary, totally unfit for publication in any magazine because it’s just three paragraphs long:

First, come up with a vision that excites you. Then translate that vision into a set of products or services that you actually offer. Then think about the basics of the operations you need to deliver those products and services. Do you have to buy equipment? Hire people? Hire contractors? Import raw materials? How do you deliver the product/service you want to deliver? Now that you know your process, create a rough budget to see how much it costs you to produce just one widget, 100 widgets, 1,000 widgets. See how many widgets you need to sell to break even, how many to make a profit, etc.

Now think about sales & marketing. How many widgets do you have to sell? How much money will it cost you to sell? Update your budget, re-calculate breakeven and profit points. Now iterate: what product/service will youoffer, how much will it cost to deliver the widget, how many widgets do you have to sell, will the market bear that amount? When you’ve iterated enough times that things look at least somewhat feasible, go out and do CHEAP market research to see if you’re ouf of your mind, or on the right track.

Get real-life market feedback, and iterate again. Finally, take the model you’ve got so far — the vision, the product/services offering, the operations, the sales & marketing plan, the budget projections — and do the second most important part of your planning (the first is coming up soon!): the personal reality check. How much money will it take to start this? Will you have fun doing this? Will you have a leisurely week or will you be working hours you’re embarassed to tell your friends about? Will you feel good about what you’re doing, or are you just out to make a buck? Iterate again. When you can iterate no more, you’re ready to start your business.

What You Just Did

You now have two very important things:

(1) A plan that tells you how you will succeed
(2) A set of assumptions on which the success of that plan depends

And now you ask yourself the absolutely most important question every successful entrepreneur has asked himself or herself:

When successfully executed, will this plan make me outrageously and wildly successful and happy?

If yes, verify your assumptions, tweak as necessary, and go start your business. If no, change your plan because what’s the point of trying it anyway?

Summary

I could fill in all the details about how to do visioning, how to do operations planning, how to do financial projections, how to hire people, management structures, business structure, raising money bla bla bla bla bla bla bla. Guess what, you won’t remember what I write anyway. Why should you learn how to file as a C corporation and divide your company into shares to be sold at bla bla bla until you’ve even got the basics down?

Bill Gates (world’s richest man) said it best: Business isn’t hard. Potentially complicated and full of pitfalls, maybe, but simply hard? Nope. It all just comes down to having a plan and being willing to execute on that plan.

Josh’s Guide vs. Society’s Version of Entrepreneurship

So, you may have noticed I dedicated a single line to “the idea.” That’s how much importance I ascribe to it. I started my company with the idea “websites for doctors.” My ridiculously successful uncle started his company with the idea “PR for technology companies.” As Paul Graham says, ideas are wortheless without execution and best way to recognize this is to observe that for anything of value there are markets to buy and sell things. If I had a great idea for a business, who wants to pay me for it? Exactly, it’s nothing until it’s well-executed.

Society perpetuates (and continues to perpetuate) that entrepreneurs are impassioned dreamers who dared to risk everything. Wrong again. Enterpreneurs are dreamers but they’re not risk takers; they’re risk mitigators. If you’ve mapped out your plan and, when executed properly, you will become outrageously and wildly successful, why would you not take every reasonable precaution to mitigate the risk of your plan going ary?

Finally, entrepreneurship is WONDERFUL when you execute properly. But as with all things that offer great reward, there’s also enormous risk: bankruptcy is not out of the question, losing your friends’ or family’s money, failing to deliver your service, hating the job you’ve created for yourself, working insane hours, the list goes on for a long while. If you’re of the opinion that “I’ll figure it out along the way” you’re in for a very rude awakening. Obviously, you can’t plan out absolutely everything, but you should have a guiding plan that, when properly executed, makes you outrageously and wildly successful. The fruits of success truly are wonderful, but it takes hard work, persistence, tenacity, and a thick skin.

To be perfectly honest, I’m pretty happy with where I’m at now, but knowing what I know, I don’t know if I could do everything I did again.

Thanks for reading and good luck pursuing your dreams!

- Josh