Entrepreneurs share the lessons they learned in the first year of their startups.
Written By John Crawford
Illustrated By Jason Lee
The first year after launching a business can be a hair-raising, eye-opening, and mind-blowing experience. “I learned more in that year than probably any other year I’ve spent on this planet,” says Jason Jacobs, MBA’05, the CEO and founder of FitnessKeeper Inc.
Looking back on that critical time, entrepreneurs share the lessons they learned as they worked to lift their fledgling ventures off the ground. In their personal stories, they describe the challenges overcome, the customers found, and the wisdom attained.
PERLA BRITO CUEVAS ’05
Owner of TistiK, founded in 2008
TistiK is a retail company based in Cambridge, Mass., that sells handmade jewelry, accessories, and home-decorating products.
One of the first lessons I learned when I opened TistiK was that even if you can do everything yourself, it’s not good to do it all. If you try like I did in the beginning to be the manager, accountant, salesperson, architect, and buyer, you will be exhausted and left with little time to plan ahead. It’s best to delegate to others what you don’t have to do, and find experts to help with the accounting, designing, etc.
Another important lesson was to listen to what your customers want. In the original business plan, I had stated that most of the purchases would be for my clients. I did not expect that almost 90 percent of the purchases would be for gifts. I had to change a lot of things, such as offering gift receipts, gift certificates, and free gift wrapping, in order to provide a better service for my clients.
NIK BEISERT ’11
Owner of Earthworm Soil Co., founded in 2011
Earthworm Soil, based in Hamilton, Mass., provides organic fertilizer production services to businesses such as farms, composting facilities, and horse stables.
Sell, sell, sell. Being an entrepreneur and running a business is about being a good salesman. Exercising my sales skills allowed me to convert a vendor into my biggest client.
The vendor, one of New England’s largest composting facilities, was helping me process excess organic waste that I collected. By building a relationship with the owner, I was able to have detailed conversations with him about the organic fertilizer market and how I could help him set up his own operation.
Once he became a client, I decided to shift my business model from dedicating huge amounts of capital for building my own facility to a third-party franchise model, a much more profitable market. So be a salesman and consider breaking out into interesting tangents away from your original plan, especially in a startup’s first six to 12 months. You definitely can’t always plan for the biggest opportunities.
ANDREW KITZENBERG ’10
President of Memory on Hand, founded in 2010
Memory on Hand is a Cambridge, Mass., provider of flash-drive wristbands.
I had the idea for Memory on Hand as a senior, and I’m grateful for starting the business when I did. I quickly learned that many resources are available for student entrepreneurs, especially at Babson. As a startup, those resources have a tremendous impact.
Starting out, I had a few different markets where I could sell my brand, and my plan was to engage these markets and get the product to as many people as possible. After weeks of spreading my limited resources across these markets, I realized I needed to focus my time and efforts to gain a greater presence in one market, then expand to others. This was the most important lesson learned in my first year. The simple strategy of gaining depth in one market, rather than breadth across many, is how Memory on Hand established its core business the first year and developed strong growth thereafter.
JASON JACOBS, MBA’05
CEO of FitnessKeeper Inc., founded in 2008
FitnessKeeper is the Boston-based business behind RunKeeper, a mobile online health platform that helps people track and improve their fitness while receiving social support.
A few of the more important lessons:
One, just get going. Ideas aren’t worth anything. It is all about execution.
Two, don’t try to do it alone. Building a startup is hard, so find others to build it with.
Three, make sure it is something you love. No matter how hard you think it will be, it will be harder. If you don’t love it, you won’t have the mental and emotional stamina to make it through the ups and downs.
SEBASTIAN ABONDANO ’09
Owner of My Funky Planet, founded in 2008
My Funky Planet, based in Port Saint Lucie, Fla., sells MyWebRC, remote-controlled cars and helicopters that come with codes to unlock virtual replicas in an online game.
The most critical lesson I learned from the first year of business was that you can sell without a finished product to show. While at Babson, I took a class called “Marketing for Entrepreneurs,” in which I heard for the first time that tools were available for making promotional videos, radio commercials, print commercials, etc., and these all could be used easily by anybody who knows how to use a computer. Using these tools, plus Keynote, I was able to secure the sales necessary to get the company off the ground, even though my product wasn’t finished yet.
JASON WELLEMEYER ’08
Director of business operations of PrimeTime Lacrosse, founded in 2007 by Wellemeyer and Tyler Low ’09, PrimeTime’s director of business development
Based in Wellesley, PrimeTime Lacrosse runs lacrosse camps, leagues, clinics, and teams throughout New England.
Our first year was an eye-opening experience that would shape the future of our business for years to come. We started PrimeTime Lacrosse as students at Babson, and for the first year we had no idea where it would take us. Financially, we struggled with generating revenue while trying to fund the various marketing promotions we needed to find customers. But we learned to always spend money to ensure that we put out the best possible product. Short term, this hurt us because we didn’t turn a profit, but in the long term we established ourselves as a well-run company that prided itself on service and quality.
MIKE SALGUERO, MBA’10
President and CEO of CustomMade, founded in 2009
Based in Cambridge, Mass., CustomMade is a peer-to-peer marketplace that connects consumers with makers of custom projects.
I learned valuable lessons from my first year of business.
- Don’t hire your friends. They are hard to manage, and despite having the best intentions about growing the business together, this rarely happens.
- Don’t raise too much money. I have seen countless entrepreneurs with great ideas who are now just working for the capital providers who invested in them.
- Seek out mentors, and don’t be afraid to say, I don’t know. Lots of the best decisions we have made with CustomMade have been from talking with others.
- If you like your sleep or don’t want to be told no, don’t be an entrepreneur.
- Remember that faith, family, and friends are still important. While you are pouring yourself into your business, don’t forget all the people who love you because you are you. They will be with you even if this doesn’t work out.
- Skip the cocktail parties and opportunities to brag about your company. Channel this energy into being healthy, working out, and spending time with others.
ANUSHKA KAKKAR ’05
Co-owner of Divin-e-licious, founded in 2008 by Kakkar and her sister, Gayatri
Divin-e-licious is a bakery in New Delhi that offers eggless desserts, including photo cakes, cupcakes, and chocolates.
Establishing a brand with a niche concept did entail taking a fair bit of risk. We learned that having a personal connection with customers was extremely necessary. Listening to their suggestions and comments and, moreover, developing new products on the basis of their reviews was imperative.
Undoubtedly, we also learned in our first year that success is directly proportional to one’s level of passion and dedication to a product. Initially, it was difficult for me to accept eggless desserts since we would be limiting ourselves with our bakery items. But eventually, our zeal and love for our product has taken us to new heights.
ALEX MOAZED ’10
President and CEO of Applico, founded in 2009
Headquartered in New York City, Applico is a consulting and development firm specializing in mobile applications.
Applico started out making products. We made a best-selling mobile app which we sold directly to consumers. However, I learned that to have a product-based business I would need to raise a great deal of money to fund product improvements, marketing, distribution, etc. That was not an easy task for me then. It would have taken time that I didn’t have, and I wouldn’t have had much leverage when negotiating such a deal.
But there was a strong need for the services side of my business, and I anticipated that need for services to grow exponentially. A service-based business model does not require as much upfront capital, and it allowed me to grow the business the way I wanted to and still remain competitive in the market. At the end of the first year, I got NBC and Verizon as clients, and the trajectory for the business was crystal clear.
JOSH BOB, MBA’08
CEO of TurnStar, founded in 2008
Based in Brookline, Mass., TurnStar offers a service that allows patrons to sign up for a wait list, such as for a restaurant, using a computer or mobile device.
My first year in business taught me more lessons than I could have ever expected.
First, know the difference between a customer who buys your product or service and the primary user. You have to build for the users but sell the benefits to the customer. We had an issue with our first version where we were selling great benefits to restaurant managers, but the system was too complex for the hosts who used it every day.
Second, choose your features wisely, and because of this, also choose your early customers wisely. If you choose the wrong customers to pursue as early adopters, you may end up working on custom features for them that aren’t applicable to the majority of your market. There is such a thing as the wrong customer, especially in the first year.
Finally, learn to say no quickly and politely. I said yes to virtually everything in my first year—and most of the second year, too—and burned out pretty quickly, taking time away from building the business. It’s OK not to take an interview, coffee meeting, or speaking gig if it’s going to hurt your ability to grow and succeed.
ENRICO PALMERINO ’11
Board member of ThinkLite, founded in 2009 by Palmerino and Dinesh Wadhwani ’12, ThinkLite’s CEO
The Framingham, Mass.-based company provides energy-efficient lighting solutions to businesses, towns, and residential communities.
If someone asked whether we could provide a certain product or service, we quickly learned to always say yes. Most of the time when we were asked, we may not have had the product or service. But opportunities don’t come knocking every day, so we learned not to turn any of them down. It never hurt to at least give it a try. In most instances, if at least one person wants something, others do, too. At the end of the day, we were usually able to deliver what we promised, and if we couldn’t, we made sure to do whatever it took to make things right with the customer.
CONNOR LEMENZE ’10
President of EazyOn, founded in 2010
Based in Hawthorne, N.J., EazyOn offers a spray that helps skiers slip their boots off and on more easily.
In my first year, I found myself working countless hours, meticulously planning and researching my strategy for entering the ski market. Looking back, I realize my biggest successes came from getting out in the field and learning and working with end users directly. This allowed me to understand a broader viewpoint of my product and the skiing market.
Remember the line from The Godfather: Part III: “Your enemies always get strong on what you leave behind.” Unfortunately, I have learned this firsthand. Once people see you have a good idea, they will enter your space and take advantage of what you leave behind and the places you didn’t consider. When you see an opportunity, attack it.
At the same time, I learned to focus now and dream later. From the day I started thinking about launching EazyOn in the ski market, I already was brainstorming other potential uses for the product. Many times this creative mindset caused setbacks in what I needed to accomplish.
You have to focus on what is important today so you will have a tomorrow.