On a particularly gloomy day in New York, the only sun that’s shining is the simple sunburst logo hanging above Paulie Gee’s, a “Greenpoint pizza joint” nestled in a Brooklyn industrial corridor close to the East River. Businesses on the block have cashed in on the area’s polished grit, giving off a studied cool.
It’s exactly what Paul Giannone, the restaurant’s owner, was looking for when he decided to open his own pizza place. “I saw everything that was happening here," says Giannone, a Brooklyn native, "and wanted to be a part of it."
After nearly four years of perfecting his Neapolitan-style pizza and securing funds from friends and family, Giannone opened up Paulie Gee’s on March 9, 2010. Food blog Eater named it one of the 38 best pizza places in the country, and pizza cognoscenti waxed rhapsodically about his pies, including the Monte Cristo with mild gouda, Canadian bacon and maple syrup, and the Hellboy’s dry salami drizzled with honey infused with chilies. The restaurant doesn’t take reservations and the line can go right out the heavy barnyard doors.
Three years into running his business, Giannone is already looking at the kind of success usually reserved for much more seasoned restaurateurs and corporate chains: national expansion. There’s talk of Paulie Gee’s opening in Baltimore, Chicago, Las Vegas, Los Angeles and Portland, Oregon. Giannone plans on training pizza aficionados at his Greenpoint restaurant to run each new location.
“I’m home with this restaurant,” he says. “I know I can expand what I’ve done by helping other people do the same thing.”
Not bad for a guy without any traditional training in the pizza-making business… or business in general, for that matter.
A 33-year IT industry veteran, Paul Giannone decided to make the jump into entrepreneurship after years of working for other people. And he’s not alone. In 2007, the most recent numbers for which Census numbers are available, business owners who had never owned a business or been self-employed before outnumbered serial entrepreneurs, almost 12.7 million to about 7.4 million.
Part of this difference could be fallout from the financial crisis. “Whereas in 2001, one in 10 early-stage entrepreneurs reported to have no better option for work, this amounted to as much as one in three in 2010,” according to Babson and Baruch Colleges’ Global Entrepreneurship Monitor report. “It is no coincidence that the peak of necessity-driven entrepreneurship occurs in the same year as the peak in the unemployment rate.” (In 2013, one in five early-stage entrepreneurs reported being “driven out of necessity.”)
The number of businesses created due to want, not just need, also increased: 47 percent of Americans said that entrepreneurship offered “good opportunities,” the highest level in the report’s 15-year history. “In all, entrepreneurship activity is stable and popular in the United States with favorable conditions in the environment for this activity,” it stated.
That optimism has given some entrepreneurially minded people the courage to start their own companies—even if they don’t have a traditional background in business or the industry they’re looking to break into. (Giannone’s first pie? Naan with sauce and cheese on it.)
“Formal business training isn’t requisite for launching a successful company,” says Wendy Torrance, director of entrepreneurship at the Kauffman Foundation. “It’s important that you have identified a compelling market need and that you have a product that really solves a customer’s problems … Going through that process doesn’t require that you have formal business knowledge, but that you understand the product you’re offering, who you’re offering it to and why they would want to buy it.
“Sometimes someone who doesn’t have a business background [but] has training of analyzing problems from a particular angle may indeed have an idea that’s really compelling to customers,” she adds.
While it’s hard to beat the knowledge and skills acquired from being a business owner in the past or working in a field for years, rookies come to the business world with a few advantages that can help put them on the path to success … and perhaps, eventually, serial entrepreneurship.
Rookies as Lean Startups
These days startup founders want to be leaner, following the business management methodologies described in serial entrepreneur Eric Ries’ The Lean Startup. Rather than pouring valuable time and money into creating a product, founders should release a “minimal viable product”—their idea at its most basic form—to get immediate customer feedback. This feedback, Ries posits, lets companies make faster and more informed decisions about their products, leading them to be “less wasteful and still [do] things that are big,” he told The Wall Street Journal. Some of the biggest startups out there credit the Lean Startup method to their success.
While this line of thinking about product development has to be taught to more established business owners, it’s something rookies do instinctually.
Cassie LaCourse was a jewelry designer, and her husband, Jay, was a graphic designer when they started Austin, Texas-based natural charcoal company, Hot Bambú. Their business was the result of a pivot made when their original minimal viable product proved to be less feasible. Longtime advocates of bamboo as a sustainable replacement to wood products, “we began with an idea for a bamboo shipping pallet,” she explains via email. “We built prototypes and had them tested at the Center for Unit Load Design at Virginia Polytechnic.”
The pallet held up, and the couple even patented their design, but had a hard time finding financing. “One of the ideas in the business plan was to take the waste of [the] bamboo used to build the pallets and produce charcoal for grilling,” LaCourse writes. “The footprint for a charcoal company was much smaller than the pallet company, so we chose that path.” The LaCourses tested their product with a Whole Foods audience, proving consumer interest in their line of natural charcoal. Founded in 2008, Hot Bambú has since been endorsed by local and celebrity chefs and was an official selection in 2013’s South by Southwest EcoTech startup showcase.
Paul Giannone of Paulie Gee’s in Brooklyn unknowingly followed the tenets of Lean Startup as well. He decided in 2007 that he was ready to open his own restaurant, but says first, “I had to prove to myself that I could make pizza, and then I had to prove to myself that I could make pizza that was good enough to serve to the public.”
Giannone found the plans for a wood-burning pizza oven online, and with the help of a friend, built an oven in his garden. Along with his family and friends, Giannone invited his “online pizza friends,” well-known bloggers in the pizza world, to try his creations. When one especially prominent pizza blogger wrote how jealous he was that his friend had “scored a pizza tasting at Paulie Gee’s house,” Giannone knew it was time to find a restaurant space.
Rookies as Eternally Optimistic
Experiencing past business success or failure can create a set of expectations that affect entrepreneurs in the ideation and development process. Rookies are freed from these preconceived notions, adding a dose of confidence to help them continue down paths serial entrepreneurs might avoid.
Cassandra Droogan knows this firsthand. The founder of shoe company Pysis (pronounced like the astrological sign, it stands for “protect your shoes in style”) worked in corporate banking for 10 years before she was laid off in 2007.
“One day I was watching women walk by on the street, and it hit me like a lightning bolt,” she says. “It was raining outside and there were some women walking in rain boots that didn’t match their outfits, or just ruining their shoes in the rain. Rain boots have become popular for women in cities, but there was still no great solution for when you need or want to wear dress shoes in bad weather. That was the moment where I was like, ‘OK, I have to figure out how to get this done.’”
Google searches and conversations with friends brought her to a custom shoe maker in Manhanttan’s garment district—“I literally took a plastic bag and some cardboard because I can’t draw and made a little proof of concept”—and eventually to China to manufacture her overboot concept. Not versed in the language or the cultural differences of doing business in China, the learning curve was even steeper for Droogan. Her background in banking did not prepare her for the nuances in shoe manufacturing and waterproof seam construction or the Chinese manufacturers' tendency to say “yes” to everything—even when they knew they couldn’t execute her vision.
“The first product from an actual factory that could do production was in early ’09,” Droogan recalls. “And it took until 2012 to find the one that could do it.”
After four trips to China (one involved her camping out for three weeks in the factory’s sample room), Droogan has come a long way from her original cardboard prototype. Pysis is now sold in 26 states, in Vancouver and Toronto, and online at ShoeBuy.com and Amazon.
“In the beginning it was scary to think about actually doing this,” Droogan says. “You just take baby steps, and suddenly something that felt so uncomfortable totally becomes comfortable.”
Rookies as Masterful Team Builders
Even with the advantage of being optimistic, lacking preconceived notions and finding a product-market fit quickly, rookies' lack of business experience can make for a more circuitous route to success. Something that all founders need is a solid team to help them build and grow their companies.
“There’s something exciting about being a first-time founder, but you need to go in with your eyes open,” says Wendy Torrance of the Kauffman Foundation. “One of the really important things for any first-time founder to do is to assess their knowledge and skills. [They should] understand where the gaps are, and either seek education to fill those gaps or identify people with the experiences that they lack [to] create a founding team that’s really strong in as many dimensions as it can be.”
The rookies we spoke to agree. “You can and should find and surround yourself with people whose expert opinions you trust and research until you are blue in the face about your next step,” emails LaCourse of Hot Bambú. “If you use your vision and perseverance, you can find the people who balance the skills you do not have and build a great business."
“I had never worked in a restaurant before,” Giannone says. “I always heard how hard it is to work in the restaurant business, but I was so focused and so determined, I forgot about all that. I knew how to make pizza; the back of the house was just instinct.” When it came to the front of the house, Giannone found a pair who set up many of the management processes Paulie Gee’s still uses today. “I was able to lean on them for that.”
Past work experience is valuable for rookie entrepreneurs, even if it isn’t applicable to the business they start. According to a Kauffman Foundation study, 75.4 percent of respondents “had worked as employees at other companies for more than six years before launching their own companies,” while 47.9 percent started their first companies with more than 10 years of work experience. The average age of first-time founders was 40, the study found.
Being an experienced beginner is something even our most seasoned and revered entrepreneurs respect. In his famous speech to Stanford graduates in 2005, Steve Jobs himself said he felt the power of being a rookie when he was fired from Apple in 1985: “The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything,” Jobs said. “It freed me to enter one of the most creative periods of my life.”
No matter what their prior education or experience, one thing is certain: Rookies don't stay rookies for long.
“Neither of us have a formal business education,” La Course says. “[But] we do count the business acumen we have developed out of pure necessity. We have successfully bootstrapped our company to the point we are today. The value of that experience is tremendous.”
Photos: Getty Images, Thinkstock, Paulie Gee’s, Hot Bambú, Pysis