2014-06-03 05:26:23
Alina Dizik
Long before Douglas Gan launched VanityTrove, a beauty sampling website for
Asian consumers, he started tinkering with a web-hosting company as a side
business.
As a high school student, Gan used his spare time to create a fledgling
internet business that helped him learn the ropes without the pressure of
needing to earn a living. While it was a less serious venture than VanityTrove,
which is now in seven countries, his experience working on the web-hosting
company meant he had exposure to successes and failures early on, the
30-year-old said.
Gan also got an early look at the demands of coding and monetising a website,
which paid off once he launched the online beauty site. I gained a lot of
insight into how [web entrepreneurs] think and how they grow their businesses,
he said.
Need to Know
Launching a business can be overwhelming, which makes it all the more important
to plan ahead and pick up the skills you need well before launch. Many of the
abilities you ll eventually put into practice including leadership, marketing
and strategic thinking, can be developed through side projects and by taking on
various corporate roles, said Julia Prats, an entrepreneurship professor at
IESE Business School in Barcelona.
Want to start a company in the next five years? Here s how to focus your time
before the launch:
Five Years to Go
At this stage, developing the skills needed to be an entrepreneur is critical.
If you re employed at a large company, hone your management skills by taking on
team projects where you re required to practice relevant skills on a smaller
scale, said said Julia Prats, an entrepreneurship professor at IESE Business
School in Barcelona. Or, volunteer to lead new work projects to create
ownership of your corporate role in a way that simulates entrepreneurial
thinking and decision-making, she suggested.
Use the next year or so to figure out what type of company you d like to build
by brainstorming ideas. Writing business ideas in an opportunity diary ,
sometimes helps you see things that could be a business opportunity, but you
are not yet at the position of attacking it, Prats said.
At this stage, start saving money to help fund the start-up costs as well as
living expenses while you are getting your company off the ground. Many venture
capital firms and other start-up investors want to see a product before
investing, Prats said.
The first $20,000 or $100,000 is going to come from your pocket, she
cautioned.
Checklist: Five Years Before
Focus on leading new work projects
Start an opportunity diary
Start a savings plan to cover initial expenses
Four Years to Go
Taking a role at another start-up can be a good way to learn what s expected of
you once you re on your own, said Jeffrey Paine, founding partner of Golden
Gate Ventures, a Singapore-based investment firm that invests in early stage
companies. Use your time at the start-up to carefully understand the demands of
the entrepreneurial life.
If possible, work in a start-up in a role that is close to the founders, he
said.
Start building a network in the industry because it can boost business once you
re ready for launch. A strong network can also help would-be entrepreneurs
make more genuine connections they can tap later.
Many entrepreneurs make the mistake of not building their network until they
have started their business, which can make it difficult to balance with
day-to-day demands. As a start, Prats recommends joining
entrepreneurship-related clubs or taking advantage of other in-person
networking opportunities regardless of whether they are specific to the
industry you want to start a business in, because many personnel or start-up
issues are applicable to any type of company.
Checklist: Four Years Before
Joining industry-specific clubs
Working for an existing start-up
Meeting other entrepreneurs
Two-to-Three Years to Go
Looking at the big picture early on can help you take smaller steps toward your
ultimate goal. Consider why should this product exist in the world and why
must it be you to do it, said Paine.
Marc Yeaogho Kim, 29, spent two years before launching AlarmMon, a gaming
alarm clock app with 10 million downloads in seven languages, looking for
cofounders. Kim, who is based in Seoul, was a college student at the time and
wanted cofounders with real-life experience. He partnered with Michael Hong, a
co-founder and advisor to the company with 30 years of experience in marketing
and business development who believed in the idea.
Marc Kim spent two years looking for cofounders for his company. (Courtesy Marc
Kim)
Before officially launching Malang Studio an app development firm that owns
AlarmMon Kim and Hong spent time learning the smartphone market and the
services offered by other mobile apps. The co-founders spent more than a year
developing prototypes in order to learn what features and services they wanted
to keep.
We tried to learn each time and kept trying new ideas, said Kim who left his
engineering PhD program to focus on the app full time after launching AlarmMon.
Paine tells entrepreneurs to do plenty of research before figuring out how to
position their company in the market. It takes about two years before you
realise your position in the market, said Paine.
Checklist: Two-to-Three Years Before
Develop a vision
Bolster your skills, seek further education and partner with cofounders
Fill in your skill by pairing with cofounders or more schooling
Break down your idea into smaller goals
One Year to Go
When working with budding entrepreneurs, Prats suggests they not quit their
full-time role until absolutely necessary. In the last year, working on the
business on nights and weekends is a common way to make progress.
Rather than taking on extra projects in your day job, it s possible to use
extra time before work to get your new business off the ground. Tasks like
creating a website or hiring the first few employees or contractors can be done
while you are still working in your nine-to-five role.
Extensive market testing the year before launch helped Jennifer Hill, who in
2014 officially launched Sixty Vocab, a New York-based vocabulary building
tool, understand what language learners hoped to achieve when starting a
foreign language course. Hill, a cofounder of the company, and her team also
spent the year working on prototypes of what the web-based tool would look like
when completed. .
Prior to launch, Hill, 38, got her husband on board. She, in part, set
expectations for the new demands on her time -- for instance, 12 hour days
and his role in doing more of the child care for their toddler. On the other
hand, Hill promised to be upfront about any setbacks and to be extra careful
about investing money from family savings to help build the prototype.
Financials were discussed up front.
We did some calculations as to how much money we could risk and how long I can
go without a salary, said Hill, who declined to reveal financial figures.
A couple of months before the launch, Prats tells her entrepreneurship students
to start working the rigorous hours they expect to when the company launches.
Additionally, founders need to get used to doing tasks that were never part of
their corporate job description. Anything from arranging travel reservations,
to purchasing coffee beans or toilet paper for the office, she said. Those who
ve held corporate jobs in the past may have enjoyed perks like have an
assistant or leaving in time for an early dinner, and it can take a few months
to adjust to a more humble work atmosphere.
Start doing those little things early, she said.
Checklist: One Year Before
Discuss time and financial demands with family
Develop an alternate schedule to allow for moonlighting
Conduct market testing prior to quitting your full-time job