Episode 119 – Founder Phase
After years of mentoring entrepreneurs, I can tell you there are four distinct phases of entrepreneurship: the Founder Phase; the Farmer Phase; the Tinker Phase; and the Thief Phase. Each phase requires a different mindset, different tactics and different types of help.
Today, we will be discussing the Founder Phase and what it takes to make it through this phase successfully.
The key to this phase is innovation. You either have a great idea or you have the ability to expose a new market to a great idea. There are many important goals of the Founder Phase. The first is to achieve “breakeven plus.” This means that the business needs to earn enough money to be in the black, including paying yourself. Additionally, you can expect to be working around 60 – 70 hours per week during this phase. Let’s be frank however, this needs to be vastly cut down as you advance in your business.
When I opened Catalyst in 2005, I didn’t have much going for me. I also had the burden of my family to feed and the mortgage to pay. These parameters however defined the limits of what I could do and to some extent helped narrow the path in which I was able to go down. One of the disciplines that needs to be developed in the Founder Phase is to make sure that you are able to take a paycheck from day one. This was an absolute must for me and I am sure it is for many listeners as well.
The Founders Phase has many challenges. In this phase you must define your niche and also define how many clients and what to charge. This can be difficult but there are many equations that include looking at your niche, number of customers, and what you need to earn to support the lifestyle you want to afford.
Despite all the challenges, there are many bright spots and attributes that can be brought to the Founder Phase. The first is excitement. You are an entrepreneur and you are pumped! Now you will be bringing a lot of energy to your own idea and build the life that you want to live. You are going to be hustling here and you are going to be grinding but you won’t be doing just for the sake of doing it. See my article: The Hustle is a Lie. Anyone who has been in business for a while knows that constant hustle is unsustainable and the goal should be to get out of this phase as quickly as possible.
Be sure to take good notes during today’s episode as we dig into the steps of the Founder’s Phase in more detail. For additional help you can always book a free call or come to see us at the Two-Brain Summit this June!
The Two-Brain Summit is coming up June 2nd and 3rd . This is going to be the most interactive summit yet where you will have the opportunity to improve your business while you are there! In addition, there is an entire component devoted just to CrossFit coaches so be sure to bring them too. Be sure to register here before time runs out!
3:57 – Introduction to the four phases of entrepreneurship
6:25 – My story of entrepreneurship
7:57 – The important goals of the Founder Phase
10:06 – The big challenges of the Founder Phase
13:06 – What are the bright spots or the key attributes that you can bring to the founder phase?
17:02 – The first step of the Founder’s Phase: Identifying your Niche
18:25 – The second step of the Founder’s Phase: Asking your niche what they want
20:35 – How many clients can your business reasonably serve?
22:45 – Generating cashflow for your new business
24:46 – The dark side of cashflow at startup: Taking customers from a previous employer
28:23 – Quitting your job and taking the full leap into your new business
30:53 – Replacing yourself in lower value roles