Editor’s Note: This is the second in a two-part series. The first article, which can be found here, covers the first two concepts, while this one tackles the final three. Joe is head of Product at Automated Insights, he recently sold his side venture, startup network/news source ExitEvent, to WRAL TechWire parent Capitol Broadcasting. He is starting a new side venture focused on startup education.

DURHAM, N.C. – When I started ExitEvent back in 2011, my idea was to bring together working entrepreneurs in an effort to make them more successful. But my model always assumed “working” entrepreneurs, and I identified them only by their results. Sure, some of them were first timers, but they all had a product or customers or both.

But from the beginning, I was always fascinated by how an entrepreneur became an entrepreneur. It wasn’t too long before I started seeing common traits and skills. For example, they all had an obvious passion for what they were doing and they were all keen to take on and manage risk — two of the concepts I discussed in the first part of this article.

The author:

Joe Procopio is a serial entrepreneur, writer, and speaker.

He is VP of Product at Automated Insights and the founder of startup network and news resource ExitEvent and new venture Teaching Startup.

Follow him at @jproco or read him at http://joeprocopio.com

 

I never took a serious stab at adding an education directive to ExitEvent. The main reason being that startup education is a huge undertaking, still very undefined, and I wanted to keep ExitEvent’s laser focus on those entrepreneurs who were already producing.

With ExitEvent having been acquired earlier this year, I was able to turn my focus to startup education, starting by asking the question {a href=”external_link-6″}}“Are entreprenuers born or made?” and eventually helping out at the UNC Entrepreneurs Lab course taught by Ted Zoller.

I’m heading in this direction partly for selfish reasons. I have three school-age kids of my own.

As I mentioned in part one, this summer is their second summer of startup, when each of them run with a company of their own creation. One of them has decided to monetize content, one wants to monetize arts and crafts, and the third wants to build something using computer code.

These are vague business models and that’s on purpose, because in addition to introducing them to the concepts of passion and risk, I also want to make sure we cover what I think are the final three concepts of a startup education primer:

3) Pivot

The kid that’s monetizing content is already up and running and, in her own little way, is already A/B testing different types of articles to figure out how ad revenue works. On the other end of the spectrum, for the one that wants to code, there’s a learning curve involved, and he may not even get to an alpha phase by the end of the summer.

I hope he does, but in all fairness, he is the youngest and taking the biggest leap.

Anyway, I want them to launch with a loose interpretation of their idea so that they can hone and focus that idea as soon as possible, with real-world guidance as to what should change and how.

All startups pivot, sometimes in small ways, other times in large, public ways. Learning when, why, and how to pivot is one of the more subjective lessons in startup. If you don’t pivot enough, or too much, or at the wrong time, or for the wrong reasons, you’ll take two steps back for every step forward.

A pretty simple rule for pivoting is to follow the revenue, but even that can be nuanced, especially when dealing with concepts like sacrificing long-term sustainability for short-term growth.

A much better way to get this lesson across is to pivot based on achieving growth while staying true to the original mission of the startup.

To put it back into the kid version — Sure, you want to write articles about unicorns, but that’s a very limited audience. So ask yourself why you want to write about unicorns. What is it about relaying information about unicorns that you can apply to a broader audience that will keep the fire of your passion stoked.

“So… wait,” she says to me with a confused look. “What’s my mission?”

4) Culture

Another way to think about company culture is preparation for success. Once the initial startup idea takes hold, the entrepreneur needs to define what their company is about, in everything from the mission to the way the company is perceived.

This is more than marketing or sales strategy, and it’s also more than a statement that goes up on a wall. Setting the proper tone for the company culture will help the entrepreneur make decisions, take risks, pivot the correct way at the correct time, and ultimately build on success.

When I started ExitEvent, my very first mission statement was “Change the way entrepreneurs interact.” As ExitEvent went from passion to actual startup, that mission statement remained the impetus for change as I embarked on hosting a single event to building a database of startups to building a media website.

Before I made big, time-consuming, expensive decisions like launching ExitEvent news, I checked those decisions against the mission. Other parts of ExitEvent never saw the light of day, because they didn’t fit the culture that was growing around it.

Culture can pay huge dividends down the road. Automated Insights and Brooks Bell have a friendly rivalry over the Best Places to Work award. One of the reasons we do so well at this is because both companies are known for dedicating time and resources to maintaining company culture.

With an awesome culture in place, we get awesome people to come work for us, and their output makes awesome customers want to do business with us.

When you’re a startup, you need every advantage you can get. There are plenty of great products out there and great solutions that solve thorny problems. The ability to build great companies around those products and solutions is the determining factor in who makes it and who doesn’t.

5) Failure

Failure is not a land mine. Entrepreneurs don’t just wake up one morning and drive their startup off a cliff. Critical failure isn’t even the result of multiple smaller failures along the way. Well, it isn’t and it is. Ultimately, that final failure has everything to do with how the entrepreneur handles the series of smaller failures.

The four preceding concepts – passion, risk, pivot, and culture – all play a large part in surviving failure, both the big and small variety. But there are additional elements of failure, from recognizing it to owning it, that can turn failure into opportunity.

And those people who turn failure into opportunity are the ones who end up entrepreneurs.

Recognizing failure is more complex than it initially sounds. It’s not so much being able to look at something and say “Yeah. That sucks,” as it is to figure out why something failed, whether it was a component or the entire unit, and whether the fix is surgical or nuclear.

Owning failure is much harder still. I’ll admit to one startup that I just won’t let die. It sits in stasis after stagnating for years, which happened after some immediate and, yeah, I’ll say it, fun success. It still brings in revenue, on the order of a few bucks a month. I may let it go someday, I may not, but at least I’m not spending any more time on it.

In fact, I have a graveyard of URLs, purchased somewhere between idea, execution, and stagnation, that languish, costing me hundreds of dollars per year, that I still can’t let go of because I know the idea was right, I just haven’t figured out how to succeed with it yet.

Those failures are opportunities, waiting to be realized. And that perseverance is something we need to teach.