5 Great Questions from a High School Entrepreneur

Hoby Youth Leadership

This past weekend I spoke on a business panel at the local HOBY conference. This time, the panels were a bit different, but still fun.

During one of the breaks, I met Abie, a high school student who had a few great questions for me, and entrepreneurs in general. I’ll include Abie’s questions below, and then my answers (which are a bit long-winded, and I’m sorry about that).

How have you been able to start so many companies and of the ones you started how many are still alive and profitable?

How old were you when you started your first start up?

Do you believe a web entrepreneur has to be a computer programmer?

According to Guy Kawasaki it costs $12,107 How much does it take to make a basic web 2.0 type site if you don’t make it yourself?

I am scared to put my money into a startup because I don’t want to create a failure not because of the financial loss, I know this fear is irrational but it is hard for me to shake. I always come up with excuses that stop me from actually going through with it and starting a company.

Thank you,
Abie

And here is my response:

Abie,

Thanks for taking the time to write. I’d be happy to answer any questions you may have. I appreciate the passion.

(1) Of the 11 companies I’ve started or helped start, only 5 exist today; 2 are brand new and have not released their products/services yet, 1 was sold, another is for sale, another is being run by one of the original founders. Of the 3 which have products/services running, 2 are profitable. The third, which is having trouble, is not, and probably will not be for a while.

(2) If you count “franchising” my lemonade stands to other neighborhood kids, I would guess I was about 12 or 13. As for creating a new entity (sole proprietorship) and paying taxes for my business, I was 17. I ran a computer store which did on-site repairs as well to local businesses. By the time I stopped running that business, I was doing over $500k per year in revenue (not profit, mind you), which was pretty significant. I stopped running it when I was 19 because I didn’t understand how to employ other people at the time, and I was feeling overwhelmed and swamped. I also recognized Dell and Gateway were going to kill everything I was doing, so instead of fighting them, I gave up.

(3) I do not believe a web entrepreneur has to be a computer programmer. It’s easier, because you can do a lot of things yourself and can start for less money. But, it’s not necessary. Knowing a web programmer would be as good, if not better. Get them involved in your business. You run the business side of things, and they run the programming. It’s a good pair because you don’t have to work in each other’s spaces.

(4) Guy is a pretty smart… well, guy. But, I have started businesses with much less than $12k. In fact, we’re starting one right now with probably about $500. The difference, when you or your business partners are doing the work, is that you don’t have to pay anyone else. Partners don’t take a paycheck until the business runs on it’s own. Guy is paying everyone for all the things he’s having done. There’s also one thing Guy has that most of us don’t, which can cost much more than $12k – publicity. He is Guy Kawasaki. He could get publicity by sitting on a park bench. We, young entrepreneurs, have a hard time getting publicity, which is why being successful at getting fast and good distribution methods early is probably the biggest success factor that I’ve noticed so far. Answer the question “How do I get this into the brains of the people who should be buying it?” Hopefully, you’re answering that with as little money as possible. To do that well, and with little money, you have to think outside of the box.

(5) Abie, failure in web startups is going to happen. It simply will. Failure happens in business and life all the time. Rarely does anyone get it right every time they try anything. The faster you accept this, the faster you’ll succeed. And when you fail, learn from it. You should be able to answer the question “Why did it fail?” with as much objectiveness as possible. Include yourself in why the business failed. Look at what you did right, what you did wrong. That’s the only thing you can control. Everything else may have to do with the partners decisions (in which case you should learn to choose better partners), the market timing, other things out of your control. But, if you look at yourself, and try to figure out what decisions you made that were wrong, and why, you’ll succeed much faster. Fail fast. And read “The Dip” by Seth Godin. That should help determine when to give up, and when/how to push through the down times.

Financial loss can be mitigated pretty easily too. Get partners. Share the risk. But you are young, so even if you put all your money into something and it fails, that’s ok. I have failed so many times at businesses. After each failure, I go get a job which helps me to figure out what I did wrong, and then I start a new business on the side. Once it gets to the point where it’s making a livable wage (however small that is), I switch to doing it full time.

As an entrepreneur, you have to get used to living on the cheap until one of your businesses makes it big. Otherwise, you’re probably spending too much money on yourself, and not on the business. It’s kinda like a plant in that way. Money feeds a business. The trick is to figure out how fast you can get the business to feed on itself, and then the next trick is to make that grow so you can live off it’s growth.

[tags]entrepreneurship, hoby, leadership, founding, guy kawasaki, seth godin, the dip[/tags]

Nate Ritter lives in the Pacific Northwest (U.S.), popularized the #hashtag and creates web applications for a living. He also does miles and point hacking to enable cheap travel for his family. More here →

4 Comments on "5 Great Questions from a High School Entrepreneur"

  1. chris.pund says:

    Just found your site for the first time in a while Nate. Great advice! Keep it up!

  2. nate says:

    Cool, thanks Chris. BTW, how did you find it again?

  3. chris.pund says:

    Mind Petals main page :-)

  4. nate says:

    Good to know. Thank you!

 
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