What I’ve Learned From A Decade Of Entrepreneurship: Expectations, Mistakes, Getting Started, Getting Investment, Obstacles
I’ve been an entrepreneur in one form or the other for the last decade. I’ve also made six figures as a pro trader and a corporate salesman. In that time I’ve had some success but also a ton of failure and made a ton of mistakes. The majority of what I learned came from those mistakes.
In this article I want to give you every thing I know so you don’t have to make those same mistakes. Instead I want you to use what I’ve learned to take a decade off your learning curve and avoid the 90% failure rate of most businesses.
The majority of this advice not for guys trying to build the next Facebook, but for guys 18-35 who want to get out of the rat race and build there own business. My goal is to get you to 6 figures a year (or the developing world equivalent), after that you can decide where you want to go.
If you do want to build the next great startup, I’ve included some advice for you based on my experience with my tech business, but that advice is for the truly exceptional (which I define below). For most guys however, building a startup is not the move (myself included), I explain why in the article below.
If you are exceptional, and want to pursue that $100 million business, I suggest you keep my advice in mind, but look to guys who have succeeded at that level to give you the roadmap.
Everything I’ve Learned From 10 Years Of Entrepreneurship
To succeed in business, the first you need to do is know what to expect:
What To Expect
Expect Building A Profitable Business To Be The Hardest Thing You’ve Done
You don’t know what hard work is until you’ve built a profitable business. You think you do but you don’t. The only comparison is being in sales. Succeeding in sales, and building your first profitable business, will be the hardest things you’ve done with your life.
School and regular jobs are a joke in comparison. Getting in shape doesn’t compare. Getting girls doesn’t compare.
Don’t let the entrepreneur porn fool you. Building a winning business is harder than you think, even if you think it’s going to be hard. You’re going to need to do 10 times more work than even your conservative estimates.
If you want to succeed in real estate, four calls a day won’t get you there, you’re going to need to do 400 a day for your first year. Plus emails, plus advertising, plus servicing your clients, plus learning your industry.
It gets easier, way easier, but that comes after work and experience.
Expect a tough grind your first two years that will stretch you beyond your limits.
What Not To Do
Don’t Go Into Debt For Your Business
Just don’t do it. Don’t go into debt for anything. The only good kind of debt is the kind you don’t have to pay back. If you’re the CEO of a billion dollar company, go ahead and borrow as much as you want because you’ll get your salary and bonus regardless.
For you, the small business owner, don’t do it. Going 100k in debt for a Subway franchise that might earn you 15% a year? Just say no. Save your money, master your skill, learn how to sell and throw it all into a low overhead/low expense business.
Don’t Start A Businesses With High Upfront Costs
In this day and age, bricks and mortar or franchise style businesses are definitely a no, but you probably know that.
You might however be looking at dropshipping, either through your site, through Amazon FBA, Ebay or Ali Express. While I know guys making money in all those areas, it’s important to understand the costs before you decide to jump in.
My Amazon FBA business cost us about $4k to get to market to find out no one wanted our product. Most guys need to take 2 or 3 shots to build a successful store, which is going to cost you about a 12K and a year of your time.
If you want to dropship on Ali Express you’re looking at between 3k to 15k of upfront advertising to find a winner, or even worse to not find a winner.
Neither of those models are a ton of money upfront if you’re rich. But if you don’t have much money, $12k is a lot. That could put you back in the corporate world for another two years trying to stack your cash and build a new business.
That’s why I think a service business is a better starter business. You can take shots on ecomm once you’ve built a six figure biz, especially if you’re geoarbitraging your income. And you can partner with someone to do the grunt work so you don’t spread yourself too thin, while you stay the money partner.
Don’t Get Into Businesses You’re Not Passionate About
I gave Amazon FBA and Ali Express dropshipping a go. They failed for a number of reasons, one big factor was that I hated both businesses. If I’d enjoyed it I would have gone back again a few times and probably hit a winner, but any time away from RLD felt like I was cheating on my wife.
Also, when you’re not passionate about what you do, you won’t be happy. If you want to be unhappy and do something you have no passion for, you might as well work a job.
If you’re passionate about E commerce, that’s a different story, just make sure you enjoy whatever it is you choose to do.
Don’t Start More Than One Business
I can’t do more than one thing at a time, and if I try too, that second thing will suffer. If you’re trying to run 3 business, it means you’re not sure enough about your first business. Instead you should be doubling down on your best idead instead of trying to hustle 3 mediocre ideas. Trying to do too much will burn you out.
You can have more than one business when you’re rich and can afford to pay people to do your grunt work. It’s easy for P Diddy to be involved in 10 different projects because he just tells people what to do. He’s not doing data entry or trying to solve technical problems.
Don’t Partner With The Wrong Person (If Anyone)
The reason my Vice magazine clone folded was because my partner wanted out and tried to ransom the domain to me. I brought him on to do the tech work, which was basically a wordpress mag setup. He barely did anything, and would take forever to add posts.
Eventually I just learned how to do it myself. He wanted to be “creative director” and voice negative opinions without contributing. Eventually he wanted out, and because the domain was in his name (dumb mistake on my part), he tried to ransom it back to us.
In my tech business, our developer partner went MIA 9 or 10 times. Each time we had to coax him back gently for him to come in and do maybe 2/3 hours work to pick up his living wage. He was a brilliant, rockstar developer with maybe the worst work ethic I’ve ever seen. Eventually he went no contact, and we we’re finished because no one else could make sense of his code.
In the same tech business, before my buddy brought me on board, his other partner stole $40,000 from him, money that he was putting up to fund the business. I’d warned him about this guy, but even I didn’t think he would outright steal.
Even if your partner doesn’t steal from you, if you’re a hard worker, chances are you’ll be putting more in than your partner, which is a frustrating situation.
You might get lucky and find a great partner, but the moral of the story is be very careful who you go into business with, if anyone, people are funny when it comes to money. It’s no coincidence that the business I succeeded with was the one I did by myself.
Don’t Waste Your Time Networking
No one at networking events has any money. The last thing guys with money want to do is go to a networking conference and get swarmed by a bunch of broke wantrepreneurs. Instead spend your time building a business that makes money.
Along the way you’ll meet many fantasy businessmen, or guys who dress up like businessmen, and speak in buzzwords, but either don’t execute or have delusional expectations.
You’ll meet them at networking events, at startup drinks, at entrepreneur meetings, at seminars, at digital nomad meetups and everywhere in between. I can’t tell you how many conversations I’ve had with guys that amount to nothing.
We had one guy at our accelerator who was there for years, with no revenue, and would bring up how much money he would make when the client of Japan signed on to his business. Literally the country of Japan.
Don’t Start A Business Where You Need To Manage People
Some experts say as much as 90% of business stress comes from having to manage people. Data and metrics are predictable, people are not. And it’s not just about the headaches, it’s about responsibility – having to meet payroll every month adds another layer to the already stressful situation of starting a business.
The truth is, you can do six figures (or the developing world equivalent) as a sole proprietor, without having to manage anyone. And the work that you do need done, you can just hire out on contract as necessary.
This especially true in the beginning, you can always expand more as you get more cash, or bring in a guy to manage all your contractors.
Don’t Get Into A Business With An Informational Disadvantage
In my tech business (as I mentioned above), when our programmer left, we were fucked. Even though we we’re paying the guy a living wage, not taking anything for ourselves, and treating his 4 hour work days with kid gloves, he still bailed.
You might wonder why we put up with him for so long, the reason is he could do anything, the kid had a $100 million brain, you can’t just find another developer like that. But he also had no work ethic or backbone and eventually bailed leaving us with nothing.
I will never get into another business where I’m at an informational disadvantage and neither should you. I could bring 10 guys on board for RLD and no how to do every single thing that I pay them do do for me. If there’s an informational disadvantage in your business, it should be tilted in your favor.
Don’t Start A Startup Unless You’re Exceptional
If you want to build a $40 million dollar tech company, you need to be exceptional, and by that I mean exceptional, quantifiable, measurable intelligence. Just being a smart guy and a hard worker is not good enough.
I’m talking about a 150 IQ and rockstar programming skills. My man Z and I had no business being in tech. This despite both of us being high IQ and exceptional in sales, neither of us could program a microwave, leaving us in a major informational disadvantage as mentioned above.
If You Choose To Start A Startup, Don’t Join An Accelerator (With A Few Exceptions)
An accelerator, if you don’t know, is a collective of successful entrepreneurs who help young startups launch in exchange for a % of the company.
In theory this sounds like a win/win proposition, in practice it’s a bit different. Our accelerator didn’t do a whole lot for us except introduce us to VCs, and potential mentors all of whom we could have met through cold calling and facetime – but in hindsight, woulnd’t have even bothered, because they don’t care about startups that aren’t making good money.
I hated working in the accelerator because the owner would come around and try and talk to us like we we’re employees and ask us for our sales targets. He would try and push us to pitch VCs, and would have us come to meet every dummy that he brought into the office, like we were a dog and pony show, when the vast majority weren’t relevant.
All this messing around with meetings would cost us 2 hours a day until I pulled us out of there. Not to mention the fact that they got 10% of our company without investing any money in it. Toronto had some more prestigious accelerators than ours, but I didn’t hear much better about them.
With that said, the big silicon valley accelerators are the real deal. Places like Y Combinator will not only give you money, but a ton of useful advice and connections. They’ve produced a ton of successful companies and are definitely worth it, but tough to get into. Any accelerator that’s easy to get into and isn’t giving you money for a percentage should be avoided.
How To Get Started
Start The Right Business
My first two businesses we’re online magazines. One was a Vice magazine clone (from when Vice was fun and edgy), the other was a fashion mag. In this day and age, most online magazines/newspapers are hemorrhaging money.
I thought I had it figured out because I was getting people to write for free, but the quality wasn’t there and neither was the accountability (not that I blame them).
The only companies still thriving have huge backers or run boring B2B publications selling overpriced ad space to insurance or financial services companies.
Starting the wrong business cost me 3 years of my life, don’t make the same mistake.
Build A Brand Not A Hustle
Don’t be a hustler, be a builder and build a brand. A brand that will be paying you 5 years from now for the work you did today.
To really get excited you need to be able to see the long term vision of building something great. Not some hustle that might be over next month.
When you have a brand, the work you’re doing now could be paying you for the next decade. The bulk of my traffic comes from articles I wrote 3 years ago. A quarter of my money comes from one book I wrote 3 years ago in 3 months. That’s the power of investing into your brand.
Think of yourself as a builder of something great, instead of a hustler trying to make a buck. I look at everyone who comes across my brand as a potential lifetime client and you should too.
Get To Market As Fast As You Can
If people don’t want your product or service, you don’t have a business. When you get to market fast, you fail fast, without spending a ton of time and money to find out no one wants your product, like we failed our tech business after a year of work.
I also failed slowly in my online mags. I failed mid speed on Amazon FBA, but still longer than I would have liked, or at least longer than I’d recommend to you, especially on your first business. It took a couple months from the decision, to getting the inventory, to getting the free samples out, to actually launching the business. By the time we launched our niche had been cannibalized by other dropshippers and no one was interested in our product.
2 months to market is relatively short in business time, but it’s still too long for my taste to find out if you have customers. If you don’t have customers you don’t have a business. You could get a personal training client tomorrow.
Getting to market is also about knowing there is already a demand for your product or service.
Know There Is Already A Demand For Your Product And Service
Demand means you already know people want your product or service. Ideally it’s something they need, but want is good enough, assuming the market is big enough.Reinventing the wheel will almost always cost you money, time and increase your chances of failure dramatically. I can’t think of one tech business in my accelerator that blew up.
Offline there is demand for selling:
- Real estate
- Any blue collar trade
Online there is demand for
- Marketing Services
- Design/Webmaster services
- AirBnB Management (my buddy Ry scaled up to 2k/m in a month doing this)
All those are proven markets with lots of money and lots of demand, and those are just a few examples.
A Service Business Is Your Best Starter Business
If I was 20, in today’s climate, this is exactly what I’d do. I’d learn an in- demand skill (as mentioned in the section above), learn how to sell, go into business and work like a demon for two years.
To see exactly how to start a service business, check out my article on how to start a service business. If you can’t sell and don’t have any money, check out my book How To Sell. In my book I’ll teach you how to get hired in sales, how to survive and thrive, how to sell, and how to build your exit plan out of the rat race and start your own service business.
Getting And Keeping Clients/Customers
Protect Your Brand As Priority #1
Money is important, extremely important, when it comes to business. But your brand is more important. No brand means no business.
To protect your brand the first thing you need to do is protect your assets. Get Sucuri to protect your site, get insurance if you need it, and use lastpass to protect all your passwords. Before I got sucuri involved in my site, it got hacked, that wasn’t fun and it will never happen again.
The other thing you need to do to protect your brand is be ethical. In today’s online age, it only takes some negative feedback online to tank your reputation. It might not happen today or tomorrow, but it will, and you’ll have to go to sleep living in fear that you’re going to get caught for being dirty.
More importantly though, being unethical in business takes all the fun out of it. At the end of the day, everything in self improvement comes down to creating a happier quality of life, and you can’t be happy when you’re a scumbag. Instead focus on your business like it’s your purpose in life to create happier realities and solve problems for your clients, because as cheesy as it sounds, helping people to achieve their goals is it’s own reward.
Make Revenue Priority #2, and 3
A successful business makes money, that should be priority # 2 and 3. Just because Twitter and YouTube can afford to lose money doesn’t mean you can. YouTube can afford to literally burn a roomful of money, you probably can’t afford a $10k hit.
You need revenue, revenue, revenue. That means getting and keeping customers or clients.
Which means you need to know who has your money, and how to sell to them.
And then you need to know how to keep those customers or clients.
Start with revenue and how you’re going to get it. You don’t need a fancy business plan, because you’re not reinventing the wheel, you just need to know who has your money and how you’re going to get it.
And when you’re getting, set those revenue targets every month and stay on it like your business depends on it, because it does.
Advertising Doesn’t Pay For One Off Products Less Than $100
We found this out the hard way in our tech startup, where it cost $60 in Google Adwords to get customers to buy our $60 product. In RLD, the same principle applies to my $40 products.
Compare that to my man back in Toronto who made $40k in a year from his car brokerage business in his first year spending only $500 a month on Google ads, with no outbound sales. That’s because his average deal was $700, meaning one deal a month would pay for his entire marketing campaign.
If you’re planning on advertising on Google Or FB you need a product that sells for over $200, assuming it’s a one off sale. The more expensive the product or service the better (on average).
With that said, if you have a recurring product, say supplements for example, you can afford to gamble on even or even take a loss, because you know you’re only taking a loss on that customer in month 1, but they could be buying from you for 3 years.
If it’s a monthly subscription or monthly service you’re in an even better position, because then you don’t even have inventory costs, and you know you’ll get 3 to 6 months from every customer, or whatever your metrics are.
Don’t Bet On A Deal A Until It’s Closed
This is something I learned every day in sales, in dating and in my tech business. You don’t have that clients money until it’s in your hand.
We had a verbal agreement for a buyout from a major Canadian media company for my tech company. Our advisor said we we’re looking at 3 milion between the three of us, plus a year of golden handcuffs.
We we’re talking to one of the top decision makers at the company, but after they ran the numbers internally again, they were out – c’est la vie.
You don’t have the money when they have interest, or when they verbally agree, or even when they sign the contract, you have the money when you get paid, and only when you get paid. And again this comes down to doubling or tripling your efforts, because even your conservative estimates won’t get you to target, you need to put in a lot more work than you to get deals done.
So this section primarily applies to exceptional guys trying to make it happen in a startup. Chances are no one’s going to want to invest in your personal training business. However, if you’re doing E-Commerce, selling your store is a possibility to a small investor, just not to the Venture Capitalists we’re talking about below:
Investors Don’t Care About Your Business Unless You Had Traction
Our acccelerator had us running around like retards selling our company until we found out 6 months later that VCs and angel investors don’t care about you until you’re doing 25k in revenue a month and growing. They want to see hockey stick graph of your traction so they can invest as your blowing up.
They don’t care about your dreams or what you think you’re going to do, they want to see hard evidence first. They have enough options that they don’t have to invest in something that’s not making money. They want blue sky and no risk, and they can get it, because everyone wants their money.
Of course there are exceptions, businesses like Twitter or Facebook, where an investor will buy into the potential, but this is still traction. Not revenue traction, but in your user base. If you’re the next Snapchat you can sell of hockey stick traction in your subscriber base, which investors will see as nearly as valuable as revenue.
When You Have Traction You Don’t Need Investors
The ironic think, as per the above point, if you have 25K a month in revenue, and you’re scaling up fast, you don’t need investors, you can fund your own marketing campaigns.
Again it goes back to priority #2 and 3 about getting revenue. When you have revenue you have a business. And you have money to fund your own marketing. And at that point investors will be coming to you.
I suggest if you’re doing a startup to get your money up before you even talk with investors, instead of putting half your year into selling deals that go nowhere. Also, the more money you have, the better bargaining position you’re in.
Get That Government Money
In most western countries, there are a ton of loans and grants for entreprenueurs, especially tech entrepreneurs. Take advantage of it by getting as many grants and loans as you can to get your business off the ground. A lot of those grants you don’t even have to pay back. You just have to be prepared to fill out a lot of paperwork – go get your gimmedat if you can.
How To Handle Obstacles
50% of people quit after their first business failure
75% after the second
90% after the third
90% of businesses fail
The people who power through failure get all the money. The ones that quit or never try, settle for mediocre jobs and mediocre money. It’s that simple.
Don’t quit just because things get hard. Go into the right business and don’t quit. Persistence is the most important characteristic of an entrepreneur – no ifs, ands or maybe.
Remember, if you truly have the spirit of an entrepreneur, working a job for the rest of your life isn’t an option.
Take Responsibility For Your Mistakes And Learn From Them
Eric Ries in his classic book on customer development says to treat failure as feedback. And he’s right, although at the time failure will make you want to put your head through a wall. Looking back I’ve learned the most from my mistakes. I also made sure to take responsibility for them, this is crucial, because as long as you blame someone or something else, you won’t be able to correct your mistakes in the future.
What you never want to do is make the same mistake twice. Instead of learning that the online mag model wasn’t the move, I went back it again with a fashion/lifestyle mag. This cost me 3 years of my business-building prime. Fool me once shame on you, fool me twice, shame on me.
As we covered already, it’s great to look at failure as feedback in hindsight, but ideally you don’t want to fail at all. In startup culture, you hear a lot about failing fast, pivoting, failure as feedback and not being afraid to fail. All useful concepts, but a lot of guys take them to far.
You shouldn’t be going into business to fail, and if you do fail, it should be taken with reluctant acceptance, and a massive intention to not make it happen again. Because I can tell you this, failing is not fun. Just like the first rule of investing is don’t lose money, the first rule of business is don’t fail.
That’s why it’s so important to pick the right business, where you know who has your money, where there is massive demand, and where you have a clear, simple strategy to get and keep revenue coming in.
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