Entrepreneurship 101: Alexa’s Top Tips to Start Your Own Company

Alexa von Tobel
Posted

Two years ago I had an idea for a website. I decided to leave a steady job, invest all of the money I had made after college, and begin the terrifying journey of building a company. I started at a time when the economy was at its worst and capital was scarce, so it was empowering to realize that I could make my vision a reality even under difficult circumstances.

Whether you’re considering opening your own shop on Etsy or starting a full-blown startup, I’ll share the ten most powerful things I’ve learned about starting my own business.

Many of these tips were passed down from others who were kind enough to share their experiences and insight with me. Feel free to share your own thoughts on what works and what doesn’t in the comments section below.

How to Know Whether This is the Right Time for You

Starting a company requires time, money, and expertise. Do you know enough about the field you’re interested in? Is there a certain kind of experience you might need in order to make your business a success, like taking a course or learning a new skill at your current day job?

Get Skin in the Game.

Investing your own money will make you (even more) focused. In December 2008, when people were hiding cash under their mattresses, I took a leap and invested most of what I had saved since college into starting LearnVest. Of course, it’s important to have an emergency fund for at least eight months so that you’ll have your basic expenses under control if you get off to a rocky start, but putting your money on the line makes this personal.

Enlist Support

Anyone who tells you that you can go it entirely alone is wrong. If at all possible, rely on friends and family for support, but not for funding. First, mixing friends and money is complicated, and you don’t need the (additional) stress. Plus, when the time comes to seek additional funding, investors will prefer to see that you’ve been able to convince people outside your immediate network about the validity of your idea. When starting LearnVest, I only accepted money from people who could also provide invaluable strategic advice. If you’re looking to found a full-fledged startup, start by creating an advisory board composed of successful people, and don’t be afraid to give them stake in your company. They can help you with advice and connections to other experienced people.

Hold Tight to the Big Idea, But Be Willing to Adapt

You’ll be able to get other people on board if you have a clearly articulated business plan that supports an unmet need, but it might take longer than you expect to get off the ground. Don’t compromise your big idea, but be willing to adjust the details. Always get lots of feedback and be willing to tweak your game plan if you see a better way to achieve your end goal.

Know Your User

At the end of the day, your user is all that matters. How does your product make her life easier? Better? More efficient? Figure out what matters to your user by understanding who you’re targeting—kids? Young women? Middle-aged men? Keep that vision in mind at all times when making critical decisions.

Be a Customer Service Whiz

This is a challenging goal that LearnVest struggles with every day, but nothing gives me more joy than a reader telling me that LearnVest changed her life for the better by helping her confront a financial issue. Plus, happy customers are the best way to find new users. If your product makes their lives better, they’ll want to share it.

Spend $0 on Marketing

Embrace social media by using resources like Twitter and Facebook. They’re cheap, efficient, and probably more effective than a lot of other marketing techniques. Another way to get free PR is to go after awards (for example, we were fortunate to be selected as a Tech Crunch 50 company and a top website by Forbes). Try creative ploys to get new users, like launching an invite-a-friend sweepstakes. Social media is always changing, so stay in the loop.

Identify Your Metrics

LearnVest gets tangible confirmation that it’s moving in the right direction from looking at data like the number of visitors to the website, open rates for the LV Daily, and survey results. Think about ways that you can measure success in your own business, aside from profits. How are people interacting with your products? Clearly articulate specific weekly and monthly goals.

Be Scrappy (Read: Cheap)

I’m not just saying this because I started a personal finance company in a recession! Here are some things I learned:

  • When you first start, it’s cheaper to use your own cell phones instead of having an office phone.
  • Power your company email through Gmail. It’s easy, intuitive, and means you can use intra-office Gchat.
  • Never print in color.
  • Buy furniture at places like Ikea.
  • Spend wisely on office space. For example, we share space (and rental costs) with Easybib.com, an awesome bibliography company led by great entrepreneurs.

Never Get Demoralized

Take time to find the joy in each day of the journey. Taking at least twenty minutes of quiet time each day never fails to provide me with greater clarity. Two years after I came up with the idea for LearnVest, I’m proud to say that we’ve raised two rounds of funding from investors, enrolled an incredibly devoted and caring team, and provided financial guidance to tens of thousands of women every day.

  • http://twitter.com/kclmoneycoach Kelley C. Long

    Congratulations, Alexa! Your post gives me encouragement to keep at it with my small business – I’ve done pretty much all of the above and am about 18 months in…. I feel like things are just about to “pop” into more than I ever imagined any day now!nnI love LearnVest, the variety and advice and use it as a resource for my clients.

  • http://absolutlyfit.blogspot.com Laura

    Alexa, just wanted to say how much I love LearnVest and how much it DOES make my life easier – thank you so much for everything you risked to create it :)

  • JackieAU5

    This is so great! Alexa, you really are an inspiration and very impressive since you are so young. I would love to have my own business someday and when I’m ready, this advice will be at the top of my list. Female entrepreneurship is something great and having a forum like LearnVest to share ideas and advice is truly important. Keep up the good work!

  • Amanda P.

    Thank you for starting this site. Anytime I know someone who is needing free financial advice I send them to links on LearnVest. They are so responsive to the help. It’s even helped me sound financially savvy; friends come to me for financial advice :) Always a good thing! Thank you again.

  • Anonymous

    I was so glad to get this in my inbox today! I absolutely love LearnVest and would be so excited to see more content on entrepreneurship! Owning my own business can sometimes make creating a financially stable lifestyle a bit difficult. Not getting a steady paycheck, unfortunately makes a lot of the advice on the site harder to put into practice. I would love to read more about responsible business finances! Although, I do find tons of ways to adapt everything you guys post! This site is amazing and every woman should know about it! :) Thank you, Alexa!!

  • http://www.aviewfromtheedge.net/ Nicole @ A View From The Edge

    This is some great information for entrepreneurs.nnHowever, instead of buying new, mass-produced furniture for your office from Ikea, consider buying second-hand furniture from Craigslist or a local consignment store. You can probably find better quality goods or the same stuff at Ikea – just less expensive and already assembled.nnhttp://aviewfromtheedge.net/blog

    • eB

      Great idea! “Green,” too!

  • Alexa

    Hi all! Thanks so much for all these incredibly insightful comments! It means the world to me to see that you believe and support what we are building. You ladies made my day! Here if you ever need anything -Alexa

  • Kodemonki

    Another thing I would highly recommend, depending on your business, is utilizing local colleges for their skill set. For example, if you are creating a website or a mobile app, have an HCI/UX/UI person look at it. My school (U of M School of Information) currently has a class that takes a semester to evaluate web pages or software and most of the other classes are about designing and evaluating software. Basically you have hundreds of people wanting to add to their resume who’ll work for beans and (in my experience) do an excellent job. You might have the greatest idea ever, but if it’s not implemented appropriately, good luck getting people to use it. See this on Dropbox: http://www.quora.com/Dropbox/Why-is-Dropbox-more-popular-than-other-tools-with-similar-functionality/answer/Michael-Wolfe

  • Marie

    This is really cool. Alexa, you are such an inspiration and I LOVE LearnVest! It has great information, is fun, and I can tell that the team behind it really cares about helping LV users take charge of their finances and improve their lives. Thank you!nnIn terms of metrics, my office uses Google Analytics for our websites, which is free, easy to use, and provides tons of data. It’s amazing what insights you can get from it.

  • MegMoyn

    Great article! But I must say my heart sank at Number 7. I’m currently considering a freelance PR career and was pumped to hear what you had to say… but if small businesses have $0 marketing budgets I’ll be out of business before I start!

  • Jacqui

    Great article! I’ve had an idea for a business that I’d like to start and it’s great to hear good stories and tips from your experiences. I agree with Maiautumn, I’d LOVE to see more content about entrepreneurship. Perhaps even interviews of women who have successful startups? How did they get started? Did they go to a business school to learn more about how to run a business beforehand? I have tons of questions.

  • Bouvier

    your advice was preschool. Investors? ok great how do find an investor? that would be helpful to know? create a board? I want to open a photography studio do I need a board of directors ? how much money is all your savings money? ball park? all that you are saying is so blah .. no detail, no reasoning behind your point. Is this website your business? You got an office for an website? you missed few points like rich husband or rich investor friends… you don’t go walking on the street looking for board members and investors.. if you want to helpful be more specific in you advice.. because this is 3rd grade crap, and you’re insulting your readers by writing this and calling it advice… my 12 year old sister would do a better job. thanks

    • tp/maine

      I have to disagree. Giving basic information is not preschool, and the format is so accessible that it offers a huge benefit to users who may be struggling with their finances for the first time. For women this is often the case: the divorce or death of a spouse who handled finances suddenly rockets us our of our comfort zones. Quite honestly, if your 12-year old sister is doing a better job, good for her, and I’m happy you have her support. I had no one’s support and I’m really enjoying learning more about my finances from this site.

    • KT11

      Obviously you are missing the point of LearnVest. It’s a website to point you in the right direction, not act as a personal finance adviser. If you want more specific information, you’re going to have to put more effort in than just surfing online and expecting one site to give you the magic formula for success.

  • Woodwigs25

    Thanks Alexa. I appreciate your sharing your experience as a self employed (?) woman. I’ve been one for over 30 years, and several of my friends have too. One has been in store front retail, and Tea Room for over 15 years. The entire buck stops with each one of us, there are no board of directors etc. It isn’t easy, and the recession has had its impact, but when it is in full swing, and we are swamped I’d rather work for myself than anyone else. Keep up the good work.

  • Mary Kuykendall

    I so needed this today…. I am about to purchase a spa/Salon. It has been established for over 30 years, and has a great reputaion. I’ve been a cosmetologist for over 13 years, and have worked for myself before I moved out of state 18 months ago. The people I work for are great, and when I jokingly said I wanted to buy the business, they said YES!!! It seems everything is falling into place, so I know it’s right. I’ve never had this many employees before however, but the owners are going to work woth me to help me along with the transition….I’m like a sponge right now taking it all in. And what’s great is that my husband, who ran a successful custom home business for many years, is going to be my partner. He truly understands how to rrun an office, so I have great support all along the way!!!! Good luck to all of my fellow entrepreneurials out there, and wish me luck, I’m stepping off the straight and narrow and blazing my own trail!!!!

  • http://www.williamhowardhome.com Caren

    Great tips! I started my biz in November 2008 and it has been 2 years of ups & down & ups.nWhen it’s bad, it’s bad but when it’s good it is really, really, really good and knowing you are in charge of your own destiny is exhilarating. One just has to “keep on truckin”….n

  • Viki

    Just reading this article now . . .but definitely good stuff (and yes, to a previous poster, it IS generalized, but this isn’t a site devoted to entrepreneurship specifically, either–lots of them out there if you want to look). My biggie to add would be to use Vistaprint for business cards, letterhead, etc. They have great specials, a relatively easy design site with plenty of great templates and lots of FREE stuff. “Free” helps a lot with keeping the bottom line in line! Just started my own assistant services business (not yet virtual, but built on that concept) this past fall; glad to read that I’m already doing a lot of what our intrepid LearnVest founder recommended!

  • Ciavyn

    Excellent article and insight. Thank you!

  • Guest

    Just finished listening to Ms. Von Tobel on the Nate Berkus show.  She needs to take grammar lessons.  If her financial advice is like her grammar, I’m not sure I want her for an advisor.  (An example of her grammar is something along the lines of “Her and her husband…”  which should be “She and her husband….”  If in indeed she attended Harvard, we are going to be in a real pickle with someone like her giving advice.