The Five Steps I took in Life to Start a Successful Company

1. Education

Ideally a degree from a top school, like Stanford, MIT, IIT or Cal Tech will open doors for you. However, only very few hard-working and lucky individuals are able to become admitted to those schools. For those who aren't in a Top Tier school, it is essential you learn all the fundamentals in your discipline before graduating in order to create your own opportunities. Though I didn't go to a top Tier School, I did go to a great one in Cal Poly Pomona and came out with the basic knowledge to grow into an awesome engineer in the Electric Vehicle space.

In the event you didn't get a chance to go to college, you can still get on-the-job training. With YouTube and other self learning courses, college is not as needed as pre-internet days. Unfortunately for those without a degree, in today's world, there will be more hurdles as a diploma is a litmus stamp of approval.

2. Specialize In a Marketable Skill

A jack of all trades, has no market desirable skills when they are older, unless he/she comes with huge success stories. Too many people go into people management roles too early in life. Skills build up as an individual contributor, not as a people manager. Because of this, stay as an individual contributor until you have become the go-to-person in that specialty area, within your company. I learned everything about battery testing at Honda R&D when I was young, and then I became an amazing software developer after I left Honda during the ".com" boom. I had individual contributor roles for the first 20 years of my career. Because I stayed as an individual contributor for so long, guess what happened to me? Tesla recruited me in to their organization in 2007 to lead their Battery Management software development. Had I been a people manager, I would have had to seek Tesla out, not the other way around.

3. Join a Successful Company (for at least 2 Years)

If you are an engineer, work for a tech giant like Tesla, Google, NVidia, etc. If you are not in technology, no problem. Get experience for a reputable company like Estee Lauder, Proctor and Gamble, GE. You will get a role at a prestigious firm if you are determined, educated and hard working, because they need people with those positive attributes. In my case, I worked at three well known companies for about 6 years each, before I founder my company: Honda, AeroVironment, and Tesla. I was an older founder than the typical person. You don't need to wait as long as I did. Just get experience at least in one major company for three major reasons:

a. You can easier identify industry (and organizational) problems.

b. You will be empowered because co-workers will trust your decisions and have more faith in you. Experience at a reputable company is like getting a college degree from a top tier university. In my case, Venture Capitalists took my phone call, even thought I didn't have a degree from MIT, but because I had "Tesla" on my resume.

c. They pay well and you are more likely to build up a savings to take a chance later.

4. Build Working Relationships

Name a famous scientist and pause before reading the next sentence....that scientist you thought of in your head is no longer alive. To do something great, in our modern age, requires complicated feats that can only be accomplished by a team of bright and creative individuals working together. I was very lucky that my brother in law, Michael Rice, had the complete opposite skills and personality than I. He was in marketing and introverted. He co-founded AMP with me. You need someone complimentary to be your right hand person and who can execute your vision. I also had a network of engineers that I have worked with in my past. I didn't write one line of software at AMP and am grateful for those who helped me.

5. Build a Nest Egg

You will need many months to get your startup going before you can take home a salary. Don't waste your money on a down payment on an over-priced home. You will need to quit, what can be described as another person's dream job, and support yourself for some time. Don't worry if your startup fails. If you got this far in life, you already have the skills and the resume, for a backup plan, to get another high profile job. Make calculated risks in life and chance of success is higher. You cannot start a company with a mind thinking of failure and personal finance pressure. Make sure you have at least 12 months of savings that you can live off of.

You are Now Ready to Start a Company

Just file legal docs and go. The first two mistakes I made was to not engage with a reputable lawyer to draft up the corporate docs in the correct state (Delaware) for venture backed startups. Don't worry if the business plan isn't right. It actually took me about 6 months after founding AMP, to identify our focus. Plans will shift and change. AMP started out in the autonomous driving space. But I had forgotten my specialty was battery management. Once the market pushed me in the needed direction, we came up with a plan that investors could back. After fund raising you can pay myself and take home a salary.

So remember it's not the answer to the question that is important, it is the problem. Identify a need in society, that is in your realm of experience, that is so unique that you theoretically could have no competition. Trust me, there will be fierce competition. But if you cannot imagine how your startup cannot dominate that space you are in, your startup will likely fail. Think of how Rockefeller, Microsoft, ARM, Ferrari, etc. became successful. They had no competition.