Joost Wasch, Founding Executive Director at Increasive Ventures: “Entrepreneurs Are Often Lonely In Their Endeavors”
In the Business as Unusual interview series, RocketHub goes in depth with inspiring entrepreneurs from around the globe. What motivates them, how did they accomplish their success, and what business challenges keep them awake at night? Read what they think it takes to be an entrepreneur and, most of all, what it takes to succeed.
Joost Wasch is Founding Executive Director at Increasive Ventures, and he knows a thing or two about entrepreneurship. He has been involved in internet and web-sales companies since the late-nineties.
After starting his career in multinationals like Hewlett-Packard and Compuware, Wasch eventually assumed the entrepreneur's role and co-founded Increasive. From there he got involved in several commercially driven internet sales and marketing companies in educational software and technology products, of which SLBdiensten and slim.nl were his most successful. Wasch divides his time between the Dutch Caribbean and The Netherlands.
Wasch knows that if everything goes well and business is good, you'd might want to take the next step and maybe even sell your company. But what what is required to successfully take this next step? And how do you achieve that? We talked to Wasch about taking that next step and the challenges of entrepreneurship.
Why would you want to sell your company when business is good?
"Sometimes it's necessary. Maybe you borrowed money from friends, family or the bank and you need to pay them back. Or they suddenly want you to pay them back. In both cases you'll need to grow and generate income. Or maybe you have big plans. You became an entrepreneur; you have a vision and goals and you'll need to grow to get there. You need money, knowledge and people. If that's the case, you might want to consider taking that next step."
"But keep in mind that taking the next step isn't obvious at all. Globally over ninety percent of independent businesses has only one, two, or three people in their company. Small and medium businesses take the lead. Mom-and-pop shops, that sort of thing. For these people it's not logical at all to take the business to the next level. They are very good at what they do, they don't need other people to do it for them. They don't want to let things go and they want to do everything themselves. Most of the time this goes well, and there's no need to sell anyway."
"And actually selling your business doesn't have to be your goal as an entrepreneur at all. Maybe you are a specialist and you're very good at what you do. Your earning potential is as much money as your hands can generate. You'll have to make as much money as possible and save this. You're unable to sell this business because it's useless without you. You are the business, so you are responsible for the profits. Another possibility is that you are in a family business and it is not up to you to sell. In that case, you need to prepare the business for the next generation."
Letting go can be an issue when selling the business. How is it done correctly?
"You can only let go when you're ready – when you want to sell the business, or are actually willing to take the next step. The first piece of advice I always give is make sure your enterprise can run without you. Create a situation where everything keeps running smooth without you. Because when you talk to potential buyers the first thing they want to know is, can this business run without you? Eventually they won't want you there. Maybe the first few months to help take over, but after that you're out. The buyers will run the business their own way."
"I emphasize that because not enough entrepreneurs realize this. They come to me saying that they want to sell. When I ask them when, they tell me as soon as possible. But if you want to do it the right way, you need to plan. This could take three, four, or even five years. Build a management team and make sure they can manage without you."
"Like I said, the buyer does not want you there as the stubborn boss. The exception to this is if you have very specific trades that are useful to the business. In that case it could be that the buyer wants to keep you there to help grow their enterprise. Nevertheless, this doesn't happen a lot in small and medium businesses."
"You know what it is? I have learned that you should become an entrepreneur because you have a dream. A lot of people want to be an entrepreneur to become rich. But making lots of money is the wrong incentive and only few people succeed that way. Most entrepreneurs with that mindset end up leaving quickly. In fact, the desire to make money is not only the wrong motivation for starting a business, but I also think it's just not smart to sell quickly. It's way smarter to create a lot of value first and then leave."
What's important when thinking of starting your own business?
"I advise to talk a lot with people who have taken this step before. There are so many young entrepreneurs; I think it's amazing they have the courage to jump into the deep-end. The best ones didn't have a choice because they couldn't stand having a regular job. They're hard-headed, always having problems with their boss, getting kicked out, or just leaving the business. Usually these people make good entrepreneurs because you need to be a bit hard-headed. If you just lean back and let things happen you won't get anywhere."
"You need to go for it and always be involved in your business. The classic phrase is true: 'You'll have a lot of freedom, but no free time.' Even when you're at the beach with your girlfriend holding a Cuba Libre, you're still thinking about what you're doing tomorrow. Do I need to pay this client or call this person? It's always on your mind. Unlike people working a regular job, you can't just flick that switch at five o'clock. This is one of the things you need to realize. Even when you're on a holiday it's still on your mind; you need to make sure your enterprise is running smoothly. Most people underestimate this."
What other missteps do you see a lot?
"When people complain about their bosses, they lightly say: 'I'll just start something myself. Then I'll have freedom and become rich.' But often they don't know what entrepreneurship is really about. You see a lot of those people going back to working for a boss. And mind you, there's nothing wrong with that. A lot of people are completely fine working for a boss; they make lots of money this way. They are successful and happy, but they don't succeed at being an entrepreneur."
"You know, the danger is that sometimes things go well, sometimes they don't. Sometimes you get a paycheck, other times you don't. So it can be pretty insecure. But when you decide to start your own business and take it to the next level, you will have to make commitments to other people. And they'll expect to see their paycheck every month. And they want to go on holidays!"
"Besides that, you will have to leave certain things in the hands of other people – things that you might be perfectly capable of doing yourself, but you don't have the time to do them. In this, communication is key because if things go wrong they will cost you a lot of money. Imagine having a small business and mistakes are made by an employee. You will need to fire them, which is very taxing both financially and emotionally."
"It will take a lot of time so you need to be very careful. Make sure you know who you want around you and what your plan is. I am, and have been, an entrepreneur for a very long time, and I always surround myself with people who are better than I am. By default this makes me the smartest, because I have people who make sure things get done."
How difficult is it to leave important things to other people?
"You will always need to accept that others will do things differently. From the start you need to give them good guidance; be clear about what you want. You can tell them this is my goal, the way there is for you to decide. This way people will feel involved in their job. Instead of commanding them, you challenge them to think about how they do their job, and you'll see they will keep growing. When your business grows, you will select the people who want to grow with you. They feel involved in the business and will come up with ideas. I always tell people to come to me with solutions, not problems. I have a lot of experience working in the Netherlands for example. I built my business there from scratch. And now, because I spend a lot of my time in Curaçao, I have let go of my business there. It helps that it's 9,000 kilometers away."
Nine thousand kilometers from your heart as well?
"No, not yet. That takes a while."
Maybe you should talk to someone about that to help you.
"Actually, I do. I know a few older people who have done this and I asked them years ago. I said these are my plans, what do you think? About twice a year I have lunch or dinner with them and we talk about it. One of the things you need to realize is that entrepreneurs are often lonely. You can't talk about everything with your employees because it might make them insecure or anxious, wondering if the business is doing alright. You can only talk about these things with people outside of your business. These days there are various places you can go to gather with other entrepreneurs and even get coached for these issues."
Will you always be an entrepreneur?
"I think once it's in you it will never stop. However, I am taking the step to help other people. Helping them find financiers or even being a coach to them. I enjoy doing this – letting other people use the knowledge I hold, and the dangers I have seen, to guide them on their road to success."