Yu Minhong: There Is No Perfect Time to Start a Business—but Do Not Start Blindly

#YuMinhongOnEntrepreneurship Entrepreneurship has become a popular topic. Unless the broader environment changes, it will remain so for the next twenty or thirty years. The reason is simple: mobile internet and the age of intelligence bring more opportunities for innovation and new ventures. --- When is the best time to start a business? I do not think there is a single best time. Any day can be the best day. When young people should start, however, deserves discussion. Starting a business must not be an impulse, or something you do merely because others are doing it. It demands substantial investment of time and money and the sacrifice of other opportunities. It therefore requires great care. Deciding to start a business is no less difficult than other major life decisions, such as whether to marry or which city to settle in. Before committing—especially before leading others as a founder—you need to think things through thoroughly. Joining as a supporting partner is relatively easier to decide. Why? When you follow someone else, you are not providing the principal resources. You do not have to invest large amounts of money and other assets; your contribution is time and energy. Failure will hurt you less, making the decision easier. --- What should you pay attention to when starting a business? First, you need a genuinely good project. Think clearly about how to execute it, and choose something that excites you. You need not ask whether others have done the same thing. Ask whether you can make it succeed. When I started New Oriental, China already had tens of thousands of training institutions. I still wanted to enter education for three main reasons: First, I liked students. Second, I taught reasonably well, and students liked my classes. Third, running training courses would earn me more than working at Peking University. In short, I had a degree of confidence. I did not set out to make New Oriental enormous; I simply thought I could succeed, so I founded it. Today, businesses at the technological frontier with models nobody has tried may have more opportunities, but there are not many such projects. What matters most is making a project credible, gradually working through its commercial logic and business model, and producing a strong business plan. Second, you need financial support. If you have 500,000, should you start a business or buy a home? I think anyone facing that dilemma has not adequately addressed two things: First, they do not really know why they want to start a business. Second, they have not found a project that truly excites them. If a project genuinely excites you and you believe building it is deeply meaningful, you will pursue it whatever it takes. Moreover, a genuinely good project should, in principle, not require too much of your own money. Today's environment differs from the one I started in. Back then, I had neither venture capital nor angel investment. Every cent came from my own pocket. Today, angels, seed funds, and incubators are willing to help sound projects. You can obtain at least some investment and no longer need to finance everything yourself. Begin by putting tens of thousands into a model. There is no need to invest 500,000. Conversely, if the project is unsound, you can quickly exhaust even 500,000. Without an angel investor taking over funding, the venture will reach a dead end. Starting entirely with your own money today is relatively unwise. Avoid doing so where possible, lest your hard-earned savings go to waste. Third, you need a very good team. Several dependable people must join you. In a rapidly changing era, technology evolves constantly, and one person cannot think everything through. You need a team, and how you assemble it matters enormously. Many ventures begin with a few good friends getting together. As the business develops, conflicts multiply, and team disputes eventually ruin a promising project. This happens frequently. When deciding whether to invest, investors assess not only the founder and project but also the team as a whole. When assembling a founding team, first establish a real leader with authority to make decisions. Second, distribute rewards fairly, define responsibilities clearly, and ensure reasonably consistent expectations about the venture's prospects. Everyone must also be mentally prepared for long, difficult work. Such a team can build something better and more enduring. Fourth, the founder must be a genuine leader. Leadership develops through practice. Your company may begin with only a few people. New Oriental started with two or three and, through gradual experience, has grown to forty or fifty thousand. Even at the beginning, however, founders need leadership qualities: strong judgment, teamwork, the ability to mobilize social resources, and a thorough understanding of the project and business model. Someone must negotiate with investors and deal with government. Successful founders are therefore often not specialists in one field, but people with strong all-round capabilities who can bring specialists from different fields together. China differs somewhat from other countries in this respect. Bill Gates, Steve Jobs, and Mark Zuckerberg are all specialists in particular fields and scientists themselves. Personnel and social relationships overseas are also relatively simpler. In China, those who deploy people effectively and integrate social resources are generally the ones who succeed. Jack Ma, for example, did not come from the internet industry but built a highly successful internet company. Chinese companies are also gradually becoming more expertise-driven. Many specialists, including Ma Huateng (Pony Ma) and Robin Li, have successfully founded businesses. Their technical backgrounds are complemented by strong all-round foundations and business-model design skills. Future entrepreneurs should pay attention to this. Life should offer several opportunities for wholehearted commitment, allowing us to experience it to the fullest. I encourage entrepreneurship, but not blind entrepreneurship. I favor accumulating some experience first. Starting before or immediately after university raises the probability of failure substantially. After several years of work, greater experience, maturity, interpersonal skill, and understanding of society and the proposed project make success somewhat easier. In short, entrepreneurship is exciting but extremely challenging. Prepare thoroughly before committing. #YuMinhongLetGrowthCarryYouThroughConfusion