What Small Business Owners Can Learn From Top Forbes Entrepreneurs

By Nick Wharton on 7 February 2018 0 comments

Successful entrepreneurs come from a variety of backgrounds, and their journeys start at different stages of life. But nearly all have lessons about how to create success that we can learn from.

Forbes is continually shining the spotlight on individuals who have managed to overcome hardships and wind up on top. Whether you're starting out on your own entrepreneurial journey or just keen to know what goes into building a winning company, here are four lessons you can learn from top Forbes entrepreneurs.

Get your brand story right

Chris Pfaff, probably better known to MTV reality TV fans as "Drama" from his stints on two shows, followed an unusual path to entrepreneurial success. With no college education, no background in business, and no real idea of how to run a company, he started the streetwear clothing label called Young & Reckless. Launched on the TV show Rob Dyrdek's Fantasy Factory (Dyrdek is a professional skateboarder and Pfaff's second cousin), the line of T-shirts, tank tops, and accessories became profitable right away. (See also: 4 Best States to Start a New Business In)

Despite its rapid success, the company later experienced setbacks as Pfaff experimented with different marketing techniques. Customers had come to associate the Y&R name with the lifestyles of many of its early ambassadors: rappers, skateboarders, and BMX bike riders. But the company flubbed when it hired a celebrity who didn't have a story that fit the brand's carefree, "reckless" image. "There was nothing reckless to tell," Pfaff told Forbes. It taught Pfaff that the most important thing about marketing is making sure it embodies the spirit of the brand. (See also: How to Start Your Dream Business)

The take-away: Your customers buy into your story as much as the product or service you're offering. If a marketing idea doesn't embody the brand, don't do it.

Failure is part of the game

Adam Pisoni is a great example of someone who has picked himself up after stumbling. Pisoni, a high school dropout, says naive optimism led him to launch a web design firm called Cnation in 1995, when he was just 19 years old. That optimism, hard work — Pisoni put in 100-hour work weeks — paid off as the company grew to 30 employees and over $2 million in sales. Cnation made its name by designing websites for large brands like CBS MarketWatch, Fox Interactive, Nissan of Japan, and Honda, earning the latter a Clio award for interactive design in 1997.

But everything changed for Pisoni after the dot-com crash of the late '90s. As clients tightened their purse strings, he had to close Cnation — a devastating blow. But he used what he learned years later to co-found Yammer, a social networking service for enterprises. He helped grow the company, and in 2012 it was acquired by Microsoft for $1.2 billion. (See also: 8 Common Myths About Starting a Small Business)

Since then, Pisoni has continued to "bounce back," founding Abl Schools in 2015, a company that creates time and resource management software for secondary schools (and soon elementary schools). The young company has just raised $7.5 million in series A funding and has grown to 12 employees.

The take-away: Business and entrepreneurship comes with failures, but it's how you digest them that matters. Instead of allowing losses to consume you, take what you learn and implement your findings in future ventures. (See also: Top 7 Blogs for Entrepreneurs)

Generous, fair benefits policies help retain workers

While it's become common for tech companies to provide perks such as Ping-Pong tables, free food, and errand-running services to coders and engineers, few extend those benefits to the low-paid employees who work in their warehouses and fulfillment centers. One notable exception: Boxed, an e-commerce company that offers mobile ordering and bulk delivery of products such as toilet paper, pet food, and toothpaste.

Founder and CEO Chieh Huang treats all his workers the same. Not only do they get company shares and unlimited parental leave, Boxed also pays for employees' weddings and college tuition for workers' children. (See also: How to Hire Your First Employee)

Those unique benefits cost tens of thousands of dollars a pop. But they're important to Huang. His immigrant parents worked menial jobs when he was growing up, and he always promised that if he started a business, he would treat his employees well. There's a business reason for this largesse, too. Turnover is costly and common among warehouse workers. It can cost up to $28,000 to recruit and train one, according to Bloomberg.

The tactic may be working. Huang told CNBC that only 10 of Boxed's full-time employees have quit since the company was founded in 2013. That loyalty has helped build Boxed into a company worth over $100 million in revenue as of 2016. (See also: Best Small Business Credit Cards)

The take-away: Treating your employees well breeds loyalty that builds success for the whole company.

Bootstrapping is sometimes the best way to build a business

When starting a business, many entrepreneurs try to follow a familiar blueprint that they see as necessary for success. Come up with a unique idea, raise millions in venture capital funding, use that money to get the business on the map and, voilà, an initial public offering is just around the corner. But there are other ways to achieve this end goal, and not securing venture backing doesn't mean all hope is lost. (See also: 10 Smart Ways to Get a Small Business Loan)

Take Little Passports, the educational subscription service that delivers activity kits to kids. Founders Amy Norman and Stella Ma failed to secure any venture capital when they started the business back in 2009, yet they persevered. They bootstrapped the company with their own savings and contributions from angel investors. (See also: 35 Resources for Female Entrepreneurs)

Without generous venture backing, they were forced to be very disciplined about hiring, marketing, and facilities decisions. Now they believe this path was a blessing, as it allowed them to grow the business organically at a sustainable pace that wouldn't have been possible with millions of dollars in venture capital. Today, with millions of loyal subscribers and a revenue of $30 million, they've proved all of their doubters wrong.

The take-away: Disappointments can be blessings in disguise. Using your own resources and hard work gives you a scrappiness that can pay off as your business grows. (See also: 5 Business Lessons From Child Entrepreneurs)

 

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