of Winning. The Startup Guide
Yury Yavorsky
Translator Irina Nikitina
Illustrator Vitalij Blohin
Project manager Alexey Perevedentsev
© Yury Yavorsky, 2017
ISBN 978-5-4485-6953-1
Created with Ridero smart publishing system
All rights reserved. No part of this book may be reproduced in any form or by any means, including posting on the Internet and in corporate networks, for private and public use without a written permission of the copyright owner.
Author’s website: http://yavorsky.biz
TO MY SONS
Unless you reach at least a dead end in the direction you have taken,
it will always seem like a tunnel!
Y&Y
To an aspiring entrepreneur
Recipes for success are innumerable. But it is not my intention to try and convince the reader that my speculations and conclusions based on personal experience (which is, by the way, one of those things that money cannot buy) are bound to work in any situation.
What I do know is that the most difficult thing is to be honest with yourself. This is why everyone, who is thinking about becoming an entrepreneur, should not look inside their wallet, but rather – inside themselves.
Start-up money is not the most important thing in business
An ear for music, a sense of rhythm, inner musicality – such things are not naturally given to everyone. Nevertheless, a huge number of kids enter music schools every year: their parents want them to become musicians.
After that the selection process begins: the first to drop out are those who are not patient and hardworking enough; some skip classes, others break down and quit; the next to leave are those without a musical talent; and finally – those who cannot meet internal competition. Very few actually reach the finish line – the most talented, interested and persevering. The same is true about business.
The most challenging question for me was this: do I want to become an entrepreneur or build a career of a top manager?
Ask yourself, why do you want to become an entrepreneur? What drives you – desire to earn a lot of money or to prove something to someone? Such goals are not just false, but also extremely risky. The eagerness to earn a lot of money, preferably quickly, is more treacherous than gambling. Substituting the strive for self-fulfillment with the trivial intent of becoming rich can play a low-down trick on a person. In this situation an aspiring entrepreneur risks losing everything and first of all – their time and confidence in their own abilities.
Ideally, the money stimulus would be secondary. It emerges and gains importance only after the actual results of entrepreneurship are seen: the hairstyles that the clients of your private salon are happy with; the scones in your family bakery, for which people line up every morning; the design of an apartment that you decorated with your own hands and that you are not ashamed to show to a most fastidious customer.
It is only when the market starts to recognize you and pay you back, that the money stimulus starts working as a motivation to expand your business. Profits and revenue are only the future criteria of success. As soon as you get your first results, close your first deal, complete the design of your first technological or manufacturing process, sell your first goods, you will turn that process into a continuously functioning profitable business.
– Business case —
…In 1994 I met an entrepreneur who opened a butter packaging business. She was working at a plant producing butter in huge pieces, where once she witnessed a sharp and unpleasant conversation between one of her superiors and a customer. The client was begging them to sell him only a part of a large chunk of butter, and was ready to pay the price of the entire piece, but the manager gave him a flat “no”, since the plant had no equipment to cut the big piece in two. Then the future entrepreneur called her husband and together with the client they cut the huge chunk of butter (which had already been bought by the non-local client) by hand, whereupon each of them took their half. The next day a butter packaging business was born in the city.
At that time this seemingly simple business – butter packaging – started developing faster than the Internet. First butter was pre-packed by hand, and then special equipment was bought. After a while they started pre-packing butter not only for shops, restaurants, and tourist kits, but also for export.
Later I watched a number of similar businesses develop in different cities across Russia: packaging of coffee and tea, spaghetti and dumplings, sugar and pepper. Think about it: we always buy prepacked fruit and vegetables more eagerly, even though they are more expensive. So, why not prepack nuts and raisins, and do it like nobody else has done so far? Entrepreneurs in Turkey, Jordan, China and other countries make good money on packaging. And there is always place for new brands.
– Business case —
…An English businessman offered an old coffee packaging line and a 50% share in his business to a former track-and-field athlete from Russia. The Englishman had been trading large batches of coffee for years, but in order to find a way into the Russian market he needed a partner. Our protagonist accepted the offer: no need to invest any money, nothing else required but a good name, decency and a capacity for work. Having received the first batch of coffee from his English partner, the burgeoning entrepreneur packed it slowly and carefully, thoroughly exploring the subject. After that he visited similar enterprises abroad, familiarized himself with the technology. After about fifteen years of hard work, studying the basics of business and refinement of the manufacturing processes, the company of this successful entrepreneur has become one of the biggest in Russia with the staff of over 300 people.
Unfortunately, in many cases a start-up ends in a failure. Opening a new business is an endeavor taken up by entrepreneurs, already successful in other areas, as well as top managers and common people, who know nothing about the basics of business. The reason is usually the same – the wish to earn money. And yet, I repeat: money is secondary.
Start a business in an area that you are familiar with, so that you will not have to build your competence from scratch, but as an addition to what you already know.
Remember: you should not only know a lot about what you want to do, but also be very passionate about it. You have decided to open a restaurant, but you do not know a dozen different fried egg recipes and do not constantly effuse about it talking to your friends? Better not even start.
You should sincerely love your first restaurant, small cybercafé, massage parlor or bakery.
Naturally, resources are an important aspect for building a business, and at times they can be the backbone of the technological process you are creating, but the crucial things for a start are your willingness and your skills.
– Business case —
…Once my foreign guests and I went to a restaurant called “Vitalich”. I had no doubts that my international colleagues would enjoy the cuisine offered at this restaurant, quite popular in our city. But how surprised all of us were, when we saw the owner himself come out not just to greet us, but also to give us a huge dish of aspic