This chapter is a free excerpt from Confessions from an Entrepreneur (Volume 1).

Steve Mednick: Professor, Venture Capitalist & Business Coach

We learned rules in school. We learned rules when participating in sports. Well, guess what? There are also entrepreneurial rules. You will face each of them early and often in your inaugural entrepreneurial journey. You may choose to learn about them or ignore them—it’s your decision. For those of you who wish to learn about them before facing them, please continue reading.

Rule 1. Entrepreneurs live by the 11th commandment—Thou shall not “B.S.” thyself. In other words, it is what it is and you are who you are. The sooner you embrace your reality—money, time, network, industry/market expertise, and more—the sooner you will be on the road to success. Get over your perceived shortcomings and find ways to get things done with what you have. Remember, the glass is half full, and successful entrepreneurs find ways to “beg, borrow, and steal” additional liquid in order to fill the glass.

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Steve Mednick: Professor, Venture Capitalist & Business Coach

We learned rules in school. We learned rules when participating in sports. Well, guess what? There are also entrepreneurial rules. You will face each of them early and often in your inaugural entrepreneurial journey. You may choose to learn about them or ignore them—it’s your decision. For those of you who wish to learn about them before facing them, please continue reading.

Rule 1. Entrepreneurs live by the 11th commandment—Thou shall not “B.S.” thyself. In other words, it is what it is and you are who you are. The sooner you embrace your reality—money, time, network, industry/market expertise, and more—the sooner you will be on the road to success. Get over your perceived shortcomings and find ways to get things done with what you have. Remember, the glass is half full, and successful entrepreneurs find ways to “beg, borrow, and steal” additional liquid in order to fill the glass.

Rule 2. There are no bad ideas, only poor execution. Many first time entrepreneurs spend too much time trying to determine if their idea is “good.” However, if a business fails, it’s usually because it did not execute in the market, not because it was a bad idea. We’ve all seen dumb ideas succeed and great ideas fail. Get out there. Get physical.

Rule 3. Tell me what you know—not what you think. Typically, when inexperienced entrepreneurs are asked about their early stage business, they speak in terms of what they think. Conversely, experienced entrepreneurs describe their business start in terms of what they know. What’s the difference? Personal opinion typically clouds customer truth.

Customer/supplier/distributor feedback, expert analysis and market/industry research support what you know. Which is more valuable? In other words, unless you are an industry expert, your opinion doesn’t count. Your customers’ opinion counts. Imagine a time not too far away when someone asks you about your business and you respond: Let me tell you what our customers say about us… NOW you are talking!

Rule 4. Uncertainty ahead. Entrepreneurial journeys encompass many twists, turns, starts, and stops. If you fight it, you will fail. If you embrace daily change (hourly change in some instances), you have a chance to find business sustainability. It’s a mindset of exploration, testing, revising, testing, revising, and leading to eventual execution.

Rule 5. Embrace failure. We learn more from failure than success. Not that we try to fail, but we should (and must) constantly test the limits of things. Intelligent failure is good—make bets that you can afford to lose. Analyze the results and test again. Each failure gets us closer to long-term sustainability and the opportunity to fail again.

Rule 6. There’s no place like home. 92% of business start-ups never receive funding from folks that don’t love you and/or know you. In other words, spend time working on your business rather than seeking outside funding from strangers. Time is of the essence. Spend time with customers, not with angels or venture capitalists.

Rule 7. Entrepreneurship is not a formula. Prior success in school and in business does not necessarily correlate with entrepreneurial success. Moreover, formulas learned in the past that led to success rarely apply to entrepreneurial success. Remember, we are dealing with customers in a dynamic world of constant change. However, for those of you that like formulas, if entrepreneurship was a formula it would look like this—E=f(e).

Simply stated: Entrepreneurial success is a function of you—the entrepreneur. It’s easy to blame others. It’s hard to take full responsibility for your journey. Nothing occurs as planned. It’s your ability to recognize the signs along the way and make timely and necessary changes in your business that makes the difference.

Rule 8. Cash flow is everything. Cash flow is like the blood that flows in our veins. Without it, we are dead! It's as simple as that. That’s why happiness is positive cash flow. Manage your cash flow on a daily basis to ensure that your life-blood is sufficient for your short-term survival. This means setting aside the big opportunities while you complete small deals with a short sales cycle and recurring revenue. Know when you will get paid.

Rule 9. Entrepreneurial Selling. For your business to succeed you have to persuade people to give you what you want (i.e. a sale), and you achieve this by convincing them you're offering something that benefits them. As an entrepreneur, you're always selling—whether you are marketing your product, recruiting talent, or raising capital.

Rule 10. You will encounter many more rules along the way. Get over it. Listen. Learn. Ask questions. Adapt.

Good luck and good venturing.

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Steven Mednick is an expert in entrepreneurial start-ups, complex sales, and the funding process. He has over 25 years experience working with early stage ventures to large, complex global enterprises in the areas of corporate ventures, business development, sales leadership, and corporate law. Professor Mednick currently teaches in the USC Marshall School of Business MBA and EMBA programs and is a two-time winner of the Marshall Golden Apple Award. Steve’s selected accomplishments include the establishment of the corporate ventures office for a Silicon Valley headquartered $2.3 billion global company in the IT industry which contributed $80+ million in revenue through investments, strategic sales, and alliances.
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