How to start a business you don't work in

I love incubating businesses.

On paper, it sounds easy. You bring the idea and the money, and let someone else do the work.

But it's not easy. Even after 25 years of doing it, I'm still learning things.

(If you're not familiar: "incubation" is basically building from scratch with an operator who will run it, rather than writing a check into someone else's idea.)

It's tricky because you need to get three different things right:

The right idea

This one's obvious, but still: build something people want (ideally, REALLY want!). This one is the same whether you're incubating with someone or going solo.

The right structure

Wrong structure, wrong outcome, almost every single time.

Misaligned incentives, someone getting a raw deal, no clear milestones for renegotiation — your business is going to fall apart sooner or later.

The right person

Big mistakes here: picking someone who wants a job, rather than to be a business owner. Picking someone who's not ready. Picking someone who's not the best fit for what you need.

—

It's a three-legged stool. If you're missing any one of these, you're tipping over.

My most recent incubation is Bedrock Quality of Earnings.

We picked the right idea. It's going great.

We structured it in a way I'm proud of, with multiple owners who each bring something to the table, plus coaching and stability from us.

But none of that would matter if we'd gotten the person wrong. So we ran a hardcore process until we found our dream candidate, Will McCurdy — an expert (ex-RSM, ex-PwC) ready to sit in the driver's seat. Then we made sure to win him over.

I write about this topic a lot. So if you're interested, here are a few places to start:

Or: let's do it together.

Want to incubate something but don't know where to start?

I'm hosting two in-person seminars, one day each, limited to 15 people.

We'll get into the nuts and bolts, and the goal is you walk out with a serious business plan.

Join the waitlist, and I'll let you know right away when we open up spots.

Thanks for reading.

Michael

P.S. By the way - that incubation I mentioned, Bedrock Quality of Earnings, is getting tons of business. If you know any accountants with experience in QoE who might be interested in some contracting / moonlighting, hit reply and let me know!