A few months ago I was clearing out some stuff from my parents storage facility and came across a few old documents relating to my first entrepreneurial ventures with my brother dating back to 1989 (27 years ago). As I went through the boxes it brought back a flood of great memories and reminded me of how influential my parents were in our early development of our entrepreneurial spirit. For that I’ll always be grateful.
As a 2nd generation entrepreneur, starting companies and operating them is in our blood. And as you can see from the lessons below, these early entrepreneurial ventures helped teach us some of the most valuable lessons founders can learn very early in life career. I was pleased to see how we learned our lessons early and therefore have been able to avoid several challenges other Founders typically face in their career.
Set The Ground Rules Early Between Founders
Below is the very first operating agreement we signed which covers all the basics of any operating agreement would have today. We clearly outlined the ownership structure, profit sharing split, and even covered the buy/sell agreement in case we decided to part ways. Additionally, we included specific language related to the ethics that would govern our company (I’m sure that section was heavily influenced by Mom).
That venture was extremely successful and truly gave us our first taste of entrepreneurship and the freedom that it brings. We started spending our weekends attending baseball card shows hunting for new cards and figuring out how we could trade up our cards to buy better ones. Then we realized that what we needed was more money in order buy the cards we really wanted. This lead us to our next lesson of understanding the market.
Understand The Legal Issues Of Your Market
Our game plan was simple, bundle the cards up into packs, bring them to school and sell them to other kids at school. We made sure to sell the cards at school for more than what we paid (profit) and then take that money and reinvest in buying more or better baseball cards. I even remember our first marketing campaign where we found the biggest “talker” in school and we made sure to give him a bundle of cards that had a real gem in them and he would then tell everyone about what a great deal it was.
It worked and from what I remember business was good until we ran into legal issues that ultimately forced us to cease operations. I still remember being called to the Dean’s office and getting in trouble for selling cards at school after some parents had found out lunch money was going to baseball cards instead of buying lunch. After laying low for a while and no additional market to sell to we decided to liquidate our inventory and split the proceeds 50/50 just like the contract says.
Understand Your Total Addressable Market
It would take another 3 1/2 years before my brother and I would launch our next venture and try to take the Live Bait Fishing market by storm.
This venture was met with several challenges but the main one was not a big enough market since we only sold to my father and one neighbor. We understood our cost structure (free boat & gas paid for by Mom & Dad) and we knew how to get our inventory. In the end the lack of a Total Addressable Market proved to make the business unsustainable. Plus after school sports and homework got in the way of our time to gather inventory.
We Got Hooked On Being Entrepreneurs
Brian and I did not let the experience of starting and closing these initial two ventures deter us from pursuing our dream of being entrepreneurs and having control of our own destiny. But we decided it was time to focus on our education and get some work experience before we would formally launch our next venture some 15+ years later.
It was a lot of fun to come across these and I’m really grateful to my parents for teaching us these lessons and fostering our entrepreneurial spirits so early in life.