Guys. GUYS. My first business has been sold. It’s an incredible feeling.
It wasn’t the sail off into the sunset that my business partner and I imagined when we started. But it was something. And we learned a heck of a lot along the way. Just like everyone reading this has learned a lot from their experiences over the past five years. What I mean to say is, I don’t want to give the impression that I think anyone has a lot to learn from me. These are just things I learned that I hope to benefit from.
First, some background info. A great friend of mine came to me at the beginning of 2007 and said we should start a business. I was a sophomore Latin American studies major at BYU, and was teaching Spanish to Mormon missionaries part time. I was planning on going to law school, but had always dreamed of doing my own thing so I signed on immediately. We decided we were going to make cheaper, better screen and full-body protectors for iPods and mobile phones. We called it iWrap. (When I first ran the name by my wife, she thought I was proposing the name of our firstborn. Nope. I did not, in fact, want to name our kid iWrap Chaves.)
So here it is.
Choose the right business partner
First things first. I once asked an accomplished entrepreneur what he looked for when choosing a business partner. He simply said, “You marry ‘em.” He was right—just like in a marriage, you better be sure, and I mean sure, you know what you’re getting into before you start a business with somebody. Above all else, don’t go into business with somebody you are not 100% confident you can trust. I couldn’t be more grateful that I had a business partner whom I knew would always act with absolute honesty. There’s a ton of opportunity for a partner in a business to be dishonest, and if I’ve learned one thing, it’s that for most people, integrity takes a backseat to financial gain. This could not have been less true of my business partner, who I never had to doubt would treat me fairly and honestly even when given opportunities to do otherwise.
I mentioned that he came to me with the idea to start the business—the question is, was I the right business partner for him? I’m not sure. I’m honest, so I met that first qualification. But I have to wonder if he wouldn’t have done even better with a business partner who wanted to sell. We both have unique and valuable skill sets, but neither of us are real salespeople, and I think that hurt us in the long run. Second only to the trust issue, make sure that when you choose a business partner that his or her skill set complements yours. If you have a partner that’s just like you, what’s the point? You’ve already got you. Find somebody you can trust who can do all the stuff you don’t like doing or aren’t good at (and those things shouldn’t be too hard to find).
Debt is debt, even in business
It’s common (and in some cases, good) advice to go to friends and family for early funding. It’s easier, and usually cheaper. This is the path we took (straight debt), and never raised any other money. It worked out fine. But there were times that I didn’t know if it would work out fine. And believe me, that can keep you up at night. When you own a business, any debt you have hangs over you just like personal debt would. I understand that there are differences, and generally the debt is offset by an asset (assuming your business has some value). Just realize that you probably think that asset has significantly more value than potential buyers (or even objective observers) do, and that that money you borrowed has to get back one way or the other or it’s gonna get ugly.
Be careful about sacrificing “now”
I went through the ages of 22 to 26 thinking that I would just sacrifice “now” for a better life “later”. Real life hasn’t started yet, said I. So I might as well work endless hours and weekends and do stuff I don’t like for basically no pay because it’ll all work out in the end. But you know what? Real life has started. I don’t care how old you are right now, don’t get caught thinking that you’ll change your habits later. Enjoying yourself now, spending time with family and friends, and everything else that makes life sweet and gets a smile on your face may seem frivolous to some. But it’s neither frivolous nor temporary. The sum of your experiences make up who you are. So make those experiences sweet. ”Now” has a ton of value.
By the way, work can absolutely be a sweet experience in and of itself. Just realize that the life you’re living now is setting a pattern for the future.
It’s OK to not be a startup person
I started out (at 22, cut me some slack) believing the incredibly naïve notion that anyone who didn’t want to be an entrepreneur/startup person was either lazy or shortsighted. I am an entrepreneur, and most likely, I’ll be one forever. But there is a ton of value in steady paychecks, time with family, and contributing to a large organization or even a small one that you don’t own. Startups often don’t provide certain things that employment often can, and vice versa. Entrepreneurship has pros and cons just like any career choice. There’s a lot of upside, and there’s a lot of downside.
Thanks for listening. Part 2 to come.