Why Entrepreneurial Success Requires 2 Soul-Crushing Years

"When I started thinking it would never happen, I remembered you told me I would feel this way," Mike said.

Mike is a tech entrepreneur. He started a software logistics company. He developed the software as Chief Technology Officer and lead developer of a tech products home delivery business. He was forward-thinking to negotiate full ownership of the software as part of his employment contract. When he left, the company received a royalty-free perpetual license. He got the software to resell in non-competing markets.

He had a vision for a software and services company. When we talked about his startup, I advised him to focus on the tech product home delivery market. I've learned that our highest market value is always based on our last gig. He disagreed. He thought the software he developed could be used in any product and logistics business.

Before ending that initial conversation, I left him with this.

Remember that it takes three years to get a business out of the ground. The first year you run on hope and vision. The second year you must fight through the doldrums, the constant rejection, and market apathy. And if you make it through the second year, the third year rewards you with revenue. It is slow at first in the third year, but it begins to come your way.

Off he went to start his company.

His first priority was to create his website. This was more difficult than he imagined. He discovered building a website is not a technical issue. It is a marketing communication issue. Since he decided to serve multiple verticals right out of the gate, the message of what he had to offer spoke to no one in particular.

When I saw this, I pressed him again. You really need to focus on the tech product home delivery business. Once again, he listened but disagreed. He was still convinced the software could be used in any vertical with product and logistics requirements.

His next step was to begin cold calling.

This was particularly difficult as selling was not in his wheelhouse. His strength was in building software systems for complex businesses. But like in every startup, the entrepreneur is the first salesperson. If he can't sell his product or service, no one else can. This is the first big test for an entrepreneur.

To Mike's credit, he made the calls. Every once in a great while, someone would agree to an executive appointment. He would spend a week preparing for the call. He would develop multiple layers of detailed PowerPoint slides. Mike is an expert and, as with all experts, they go deep really fast and assume they know the problem the prospect is aiming to solve. They want to show how much they know as a way to win the day.

He did this for a year. The result...no deals. None.

Nothing was working.

Mike was known in a very small circle of family and friends as a developer who could build software quickly. He was a quick study on a business problem and could automate a solution in days versus months. This got him a couple of paying gigs and even some equity in another startup. But it didn't get him what he wanted. He was frustrated people saw him as a software development shop and not a software platform.

The second year of the business seemed like an eternity. Mike was in the doldrums. He had a choice. He could stick to the original plan or give in and become the hourly software developer everyone told him he was. He chose to stick to the plan.

The original business plan worked but with a twist.

At the end of the second year, he won a small deal with a tech product home delivery company. But as the third year got underway, a sizable tech product home delivery company referred to him because of his reputation. Then another one. When he met with these executives, they were impressed with how well he understood their business. He knew the difficulties they faced because of the nuanced complexities of tech products combined with home delivery. They saw him as a zen master in their space.

When I asked Mike how he made it through the doldrums, he said, "I learned in life that I can get through any difficult period if I know it will eventually end. You told me the second year of my business would be hard, and you were right. Nothing seemed to be working. Nothing."

He continued, "Then I remembered what you told me before I started the business. You said if I made it through year two, year three would surprise me. Business will begin coming to me when I least expected it. I continued to believe this. I focused on the end of the second year. I could ride out the year, and then it would be over."

And that is what happened.

I learned something from Mike's journey. I learned why it takes two years of sometimes soul-crushing activities to get to year three and revenue.

I used to think, "It takes two years for the market to associate your company with the problem they are trying to solve."

Now I believe it takes two years for the entrepreneur to be humbled. To move from “I know best” to “the market knows best.” To move from provider to servant. To move from telling to listening. To move from entrepreneur to business person.