This is email 4 in a 5 part email series outlining how professionals discover startup opportunities and become full-time entrepreneurs. Sign up to receive the complete email series here.
In this article I describe how you can expand your network to find entrepreneurial peers, opportunities and a co-founder.
You are what you eat
Look back at anything you’ve been successful at in your life to date, and chances are it’s involved other people: either as teachers, coaches, mentors or team mates. Entrepreneurship is no different. Even if you aspire to be a sole founder, no man is an island: you will need to draw on the advice and support of your entrepreneurial peer group and wider network many times along your entrepreneurial journey.
Make no mistake about it: transitioning from employment to entrepreneurship is a career change like no other. Not only are there the direct practical aspects you need to learn (finding opportunities while learning how to make ends meet), there are also the indirect psychological aspects (how not to feel crazy for what you’re attempting).
Becoming an entrepreneur requires a mindset shift that you cannot make if you continue to surround yourself with employees. If you’re the sum of the 5 people you spend most of your time with, you better make sure at least some of those people are entrepreneurs.
Unknown unknowns: expanding your network
But, who are the people who can make up your entrepreneurial tribe? We have a tendency to look to what we already know, to our existing peers, colleagues and contacts. Perhaps you already have a strong entrepreneurial network, but chances are that the people you’re searching for are not already in it.
This sounds obvious, but it’s actually a difficult mindset shift to grasp: we’re talking about unknown unknowns. People you can’t even imagine! Your view of the world now is limited by what you’ve already experienced and the people you already know.
Expanding your circle of people is also how you can expand your circle of potential opportunities. You expand your knowledge of what is possible.
I had a sense for the possibilities of making money online, but it wasn’t until I met people who were regularly earning $50k+ a month that this became a viable option for me too.
Serial entrepreneur Jason Roberts talks about increasing your “luck surface area”:
“The amount of serendipity that will occur in your life, your Luck Surface Area, is directly proportional to the degree to which you do something you’re passionate about combined with the total number of people to whom this is effectively communicated. It’s a simple concept, but an extremely powerful one because what it implies is that you can directly control the amount of luck you receive. In other words, you make your own luck.”
As you explore for business opportunities, the number of (quality!) people you tell about your search will have a direct impact on your success.
Getting started: the highest value activity you can do
Building your entrepreneurial network is complex and takes time, but here are some quick principles to get you started. If this is your first time networking, then I recommend you read some primers online.
Entrepreneurship and startups are “hot”, which means that there are lots of people who aren’t worth your time speaking to, so you need some sort of filter. The easiest way is to stick to a small number of high quality startup events and communities, then leverage your existing network for introductions.
- Events & communities: events like Startup Weekend, online communities like Innovators Room Slack group, programs like Entrepreneur First, or Y Combinator cofounder matching. Don’t underestimate the usefulness of these events for introducing you to concepts and people you haven’t yet encountered, but bear in mind that they are very much an entry point
- Existing network: networking via your existing network introduces a natural quality check: ask people you respect if they know entrepreneurs or people they respect considering entrepreneurship. If you can get good connections to VCs then they can introduce you to their founders, who themselves will have many potential/founder peers
- Mentorship: throughout your journey, you will encounter some people you bond with more easily than others. Nurture these bonds into natural mentorship type relationships
- Messaging: it pays to have some sense for what you’re looking for and how you can help. Networking becomes easier when you are interested in certain topics or opportunity spaces beyond just “entrepreneurship”, however at the start of your search it is natural to want to cast a wide net. As early as possible, ask a VC or founder you click with for their opinion on how to position yourself
- Working with other entrepreneurs: a likely result of this networking will be the opportunity to work with other entrepreneurs, in the form of a trial period testing their ideas or working together as potential co-founders (see below)
There are many intangible benefits from this work for your exploration: as well as expanding your network and discovering new types of opportunity, by speaking with so many founders you learn about different types of business, how businesses are making money, getting funded and finding talent. At this stage in your entrepreneurial journey it’s the highest value activity you can undertake.
Finding a co-founder
The above can be used to find all types of people, but one worth calling out at this point is a cofounder. This is obviously a special relationship as you’ll be working together, ideating together (see finding ideas) and sharing the same (often emotional) journey.
You can indirectly find a cofounder by searching for opportunities and expanding your network. In many ways this approach is the best one, where you gradually get to know someone organically, perhaps both working on separate but similar projects or becoming friends due to overlapping entrepreneurial interests.
But, a more direct approach to finding a cofounder can work too. Even with someone you meet more deliberately you can engineer getting to know each other. For example, Entrepreneur First put 50 aspiring entrepreneurs together in a room for 3 months and just under half of them tend to end up in VC funded pairs as a result.
The cofounder you’ll look for will be dependent on the types of opportunity you’re looking for and your skillset. If you’re interested in certain types of opportunity then you probably know the skill set of a cofounder: for instance, if you’re a business person excited about building SaaS products / a biotech product, then you’re going to need a technical / scientific cofounder.
There are so many sources of potential co-founder, ultimately you’re going to have to get creative here. There are challenges in finding them (from networking to niche job boards, direct messaging, online communities), convincing them to talk to you (here is where a warm intro helps) and ultimately assessing if there is a good fit to work together.
Assessing compatibility
Interview stage: If you’ve met a couple times and feel a personal connection, do [cofounder test] and ensure you align on values and the type of business you want to build. Be careful not to overlook red flags at this stage and be aware that you might be inclined to do so: this is a relationship that you very much want. If you have any reservations, I advise talking it out with an entrepreneur or coach you trust. Ultimately, you need to trust your gut feel, even if it goes against all logic.
Assessment stage: there is no substitute for hands-on experience working alongside someone. Before committing to building a business with someone, you should first work on a project together, committing to a time period or key milestone. As soon as you begin to work together more seriously, you should put a founder agreement in place. This is a rough agreement (I share mine with clients) that covers major terms like equity split and vesting.
Talking turkey: I recommend having a discussion about equity split as early as possible in the relationship. Perhaps you don’t need to agree on a precise split on your first date, but you should ensure that expectations are roughly aligned before even starting to work together.
Entrepreneur First is always a 50/50 split: their founders ideate together from zero. I disagree that this 50/50 split makes sense in the wild. I lean more toward the view of Jonathan Siegel (serial entrepreneur and author of The San Francisco Fallacy), who argues that there is always one founder who leads the idea, and starts from the basis of a 60/40 split. This aligns with my personal experience in every venture I’ve been a part of. Everyone has a perspective on this: ask around and hear the various arguments, but, ultimately, it’s your call.
Still unsure about starting your journey to become an entrepreneur?
Keep an eye out for my next email where I describe some of the typical challenges of deliberate entrepreneurship and how you can prepare to overcome them.
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