The National Center for Education Statistics (NCES) projects 1,606,000 students at the bachelor’s degree level will graduate as the college Class of 2014. This year many of those students will choose to start their own companies, as entrepreneurship has become a popular career option across the United States. Research from the Global Entrepreneurship Monitor (GEM) found that 13 percent of Americans are involved in early-stage entrepreneurial activity, the highest level since GEM began tracking these statistics in 1999.
While every entrepreneurial situation is different, the failure rate of college startups is significantly high.
Simply put, it’s hard to build a successful company from scratch. However, there are ways to increase your chances of success. To all those entrepreneurs who have recently graduated in the class of 2014, here are three keys to help guide you:
Key #1: Gain insight into a real problem.
Successful startups all begin with a real-world problem, one with which the entrepreneur is very familiar. Familiarity empowers the entrepreneur to deeply understand a problem and create a novel and compelling solution to that problem. This is why so many recent grads start consumer-facing businesses; students are early adopters of consumer technologies and are at the cutting edge of what’s possible. They recognize the current shortcomings in the market and have insight into the solutions that will work.
But business technology is ripe for disruption too, and there are plenty of lucrative opportunities for smart entrepreneurs in the $4 trillion enterprise IT market. However, solving business problems requires an understanding of how a business operates. To increase your chances of success on the B2B side, go to work for a company for several years after graduation. If you work in a few different roles over the course of four or five years, you’ll gain insights into the types of problems that need to be solved. Aim to gain a deeper understanding into the current processes and problems, and you will ultimately discover where you can make a difference.
Key #2: Consider mistakes as valuable learning experiences.
To quote Oscar Wilde, “experience is the name everyone gives to their mistakes.” No matter when you decide to embark on your new venture, you will make mistakes – some large and some small. There are strategies for minimizing your missteps (see my point on advisors below), but you shouldn’t fear them. As a young entrepreneur, the learning curve was steep and I made a lot of mistakes. But those experiences taught me a tremendous amount about myself and how to be a leader. I found that those lessons were more valuable to me than those I learned in the classroom when studying for my MBA. There’s no substitute for real-world experience. So always remember to be bold and confident; don’t live in fear of the mistakes that will certainly befall you. Know that this real-world experience can’t be found anywhere else, and that it will play a crucial role in your personal growth.
Key #3: Recruit a strong team of advisors.
When starting a company, everyone knows how important it is to assemble the right team. But what’s less obvious is the key role that advisors play in rounding out this team. As a young entrepreneur without much experience and scar tissue (from the mistakes that you will one day make), it’s absolutely critical to access the experiences and wisdom of those who have come before you. Fortunately, there is a large community of former entrepreneurs and business leaders out there eager to help the next generation. Find a group of advisors who resonate with you and complement each other and your founding team. Build strong, trusting relationships with them and you will be amazed at what they can offer you. This is a surefire way to accelerate your growth as an entrepreneur.
Success is not a formula; there is no age or background that guarantees or prevents a startup from achieving great things. If you haven’t heard it already in your alma mater’s commencement speech, the world is ahead of you. Dream big, keep learning, and make the most of it.