What founders bring to a start-up can make a big difference in whether or not the new venture succeeds. When founders have the right kind of background, the start-up is more likely to thrive.
An example of this was in the October 11, 2021 Wall Street Journal article “Temp Pioneer Looks Back“ by Stuart Condie. The article tells about the company Drake International, which “helped pioneer the concept of temporary employment contracts when it opened in 1951.” Before starting the company, one of the founders worked selling bookkeeping machines. While making sales calls, he saw “seasonal productivity swings at companies he visited.” The article says, “After watching enterprises carry the cost of a full staff load even when business was slow,” Drake was founded “to supply temporary workers.”
In my view, based on my research, the founder’s prior experience gave Drake the advantage of being very familiar with the customer need that the start-up business would fill. Why is this prior background so valuable? It’s valuable because truly understanding the market is an important component of a successful start-up. Business start-ups can entail numerous unknowns since so many aspects of the business need to be put in place from scratch. Mishandling these unknowns can impede success. Granted, especially in today’s business environment, it may not always be possible to know what to do about all the unknowns, and companies may just have to do their best trying to figure it out. But, a founder’s prior experience can help eliminate many unknowns. Thus, Drake’s prior understanding of the need it would fill gave it the advantage of having fewer unknowns. This reduces risk and improves the likelihood of success.
Drake International is not the only example of this. There are other cases, even high profile cases, where an extremely successful venture is led by an entrepreneur who understood the business because of what he saw in his prior work as a salesman. Ray Kroc, the entrepreneur who built McDonald’s into a successful nationwide chain, had previously been selling milk shake machines to restaurants. In that role, he saw that a restaurant run by the McDonald brothers was buying many milk shake machines for their booming business. Kroc eventually got the rights to that McDonald’s restaurant and expanded it into a major restaurant chain.
Like Drake International, the McDonald’s chain built by Ray Kroc was able to eliminate many unknowns because of what Kroc saw in his prior role as a salesman. Eliminating these unknowns helped pave the way for McDonald’s tremendous success.
So, in conclusion, the lesson here is that knowledge from what entrepreneurs see in their prior role can eliminate unknowns and bring a tremendous advantage to their new venture. The examples illustrate that being in a sales role may be a place to observe the market and gain knowledge of potential opportunities. That knowledge can eliminate unknowns, thus reducing risk and increasing the odds of success.
