If you Google
“entrepreneur” you get a lot of mindless cliches like “Think Big!” For
me, being an “entrepreneur” doesn’t mean starting the next “Faceook”. Or
even starting any business at all. It means finding the challenges you
have in your ife, and determining creative ways to overcome those
challenges. However, in this post I focus mostly on the issues that come
up when you first start your company. These rules also apply if you are
taking an entrepreneurial stance within a much larger company (which
all employees should do).
Here’s the real rules:
A)
It’s not fun. I’m not going to explain why
it’s not fun. These are rules. Not theories. I don’t need to prove
them. But there’s a strong chance you can hate yourself throughout the
process of being an entrepreneur. Keep sharp objects and pills away
during your worst moments. And you will have them. If you are an
entrepreneur and agree with me, please note this in the comments below.
B)
Try not to hire people. You’ll have to
hire people to expand your business. But it’s a good discipline to
really question if you need each and every hire.
C)
Get A Costumer. This seems obvious. But it’s not. Get a customer before you start your business, if you can
D)
If you are offering a service, call it a product.
Oracle did it. They claimed they had a database. But if you “bought”
their database they would send in a team of consultants to help you
“install” the database to fit your needs. In other words, for the first
several years of their existence, they claimed to have a product but
they really were a consulting company. Don’t forget this story. Products
are valued higher than services.
E)
Its Ok To Fail.
Start over. Hopefully before you run out of money. Hopefully before you
take in investor money. Or, don’t worry about it. Come up with new
ideas. Start over.
F)
Be profitable. Try to be profitable immediately. This seems obvious but it isn’t. Try not to raise money. That money is expensive.
G)
When raising money: if it’s not easy then
your idea is probably incapable of raising money. If its easy, then take
as much as possible. If its TOO easy, then sell your company (unless
you are Twitter, etc).
H)
The same goes for selling your company. If
it’s not easy, then you need to build more. Then sell. To sell your
company, start getting in front of your acquirers a year in advance.
Send them monthly updates describing your progress. Then, when they need
a company like yours, your company is the first one that comes to mind.
I)
Competition is good. It turns you into a
killer. It helps you judge progress. It shows that other people value
the space you are in. Your competitors are also your potential
acquirors.
J)
Don’t use a PR firm. Except maybe as a secretary. You are the PR for your company. You are your companys brand. You personally.
K)
Communicate with everyone. Employees. Customers. Investors. All the time. Every day.
L)
Do everything for your customers. This is
very important. Get them girlfriends or boyfriends. Speak at their
charities. Visit their parents for Thanksgiving. Help them find other
firms to meet their needs. Even introduce them to your competitors if
you think a competitor can help them or if you think you are about to be
fired. Always think first, “What’s going to make my customer happy?”
M)
Your customer is not a company. There’s a human there. What will make my human customer happy? Make him laugh. You want your customer to be happy.
N)
Show up. Go to breakfast/lunch/dinner with customers. Treat.
O)
History. Know the history of your customers in every way. Company history, personal history, marketing history, investing history, etc.
P)
Micro-manage software development. Nobody
knows your product better than you do. If you aren’t a technical
person, learn how to be very specific in your product specification so
that your programmers can’t say: “well you didn’t say that!”
Q)
Hire local. You need to be able to see and talk to your programmers. Don’t outsource toPakistan.
I love Pakistan. But I won’t hire programmers from there while I’m living in the US.
R)
Sleep. Don’t buy into the 20 hours a day entrepreneur myth. You need to sleep 8 hours a day to have a focused mind.
S)
Exercise. Same as above. If you are unhealthy, your product will be unhealthy.
T)
Emotionally Fit. DON’T have dating problems and software development problems at the same time. VCs will smell this all over you.
U)
Pray. You need to. Be grateful where you
are. And pray for success. You deserve it. Pray for the success of your
customers. Heck, pray for the success of your competitors. The better
they do, it means the market is getting bigger. And if one of them
breaks out, they can buy you.
V)
Buy your employees gifts. Massages.
Tickets. Whatever. I always imagined that at the end of each day my
young, lesbian employees (for some reason, most employees at my first
company were lesbian) would be calling their parents and their mom and
dad would ask them: “Hi honey! How was your day today?” And I wanted
them to be able to say: “It was the best!” Invite customers to masseuse
day.
W)
Treat your employees like they are your children.
They need boundaries. They need to be told “no!” sometimes. And
sometimes you need to hit them in the face (ha ha, just kidding). But
within boundaries, let them play.
X)
Don’t be greedy pricing your product. If
your product is good and you price it cheap, people will buy. Then you
can price upgrades, future products, and future services more expensive.
Which goes along with the next rule.
Y)
Distribution is everything. Branding is
everything. Get your name out there, whatever it takes. The best
distribution is of course word of mouth, which is why your initial
pricing doesn’t matter.
Z)
Don’t kill yourself. It’s not worth it.
Your employees need you. Your children or future children need you. It
seems odd to include this in a post about entrepreneurship but we’re
also taking about keeping it real. Most books or “rules” for
entrepreneurs talk about things like “think big”, “go after your
dreams”. But often dreams turn into nightmares. I’ll repeat it again.
Don’t kill yourself. Call me if things get too stressful. Or more
importantly, make sure you take proper medication
AA)
Give employees structure. Let each employee
know how his or her path to success can be achieved. All of them will
either leave you or replace you eventually. That’s OK. Give them the
guidelines how that might happen. Tell them how they can get rich by
working for you.
BB)
Fire employees immediately. If an employee
gets “the disease” he needs to be fired. If they ask for more money all
the time. If they bad mouth you to other employees. If you even think
they are talking behind your back, fire them. The disease has no cure.
And it’s very contagious. Show no mercy. Show the employee the door.
There are no second chances because the disease is incurable.
CC)
Make friends with your landlord. If you
ever have to sell your company, believe it or not, you are going to need
his signature (because there’s going to be a new lease owner)
DD)
Only move offices if you are so packed in that employees are sharing desks and there’s no room for people to walk.
EE)
Have killer parties. But use your personal
money. Not company money. Invite employees, customers, and investors.
It’s not the worst thing in the world to also invite off duty
prostitutes or models.
FF)
If an employee comes to you crying, close
the door or take him or her out of the building. Sit with him until it
stops. Listen to what he has to say. If someone is crying then there’s
been a major communication breakdown somewhere in the company. Listen to
what it is and fix it. Don’t get angry at the culprit’s. Just fix the
problem.
GG)
At Christmas, donate money to every customer’s favorite charity. But not for investors or employees.
HH)
Have lunch with your competitors. Listen and
try not to talk. One competitor (Bill Markel from Interactive 8) once
told me a story about how the CEO of Toys R Us returned his call. He was
telling me this because I never returned Bill’s calls. Ok, Bill, lesson
noted.
II)
Ask advice a lot. Ask your customers
advice on how you can be introduced into other parts of their company.
Then they will help you. Because of the next rule…
JJ)
Hire your customers. Or not. But always
leave open the possibility. Let it always dangle in the air between you
and them. They can get rich with you. Maybe. Possibly. If they play
along. So play.
KK)
On any demo or delivery, do one extra surprise thing that was not expected. Always add bells and whistles that the customer didn’t pay for.
LL)
Understand the demographic changes that are
changing the world. Where are marketing dollars flowing and can you be
in the middle. What services do aging baby boomers need? Is the world
running out of clean water? Are newspapers going to survive? Etc. Etc.
Read every day to understand what is going on.
LLa)
Don’t go to a lot of parties or “meetups” with other entrepreneurs. Work instead while they are partying.
MM)
But, going along with the above rule, don’t
listen to the doom and gloomers that are hogging the TV screen trying to
tell you the world is over. They just want you to be scared so they can
scoop up all the money.
NN)
You have no more free time. In your free time you are thinking of new ideas for customers, new ideas for services to offer, new products.
OO)
You have no more free time, part 2. In your
free time, think of ideas for potential customers. Then send them
emails: “I have 10 ideas for you. Would really like to show them to you.
I think you will be blown away. Here’s five of them right now.”

OOa)
Depressions, recessions, don’t matter. There’s $15 trillion in the economy. You’re allowed a piece of it:
PP)
Talk. Tell everyone you ever knew what your company does. Your friends will help you find clients.
QQ)
Always take someone with you to a meeting.
You’re bad at following up. Because you have no free time. So, if you
have another employee. Let them follow up. Plus, they will like to spend
time with the boss. You’re going to be a mentor.
RR)
If you are consumer focused: your
advertisers are your customers. But always be thinking of new services
for your consumers. Each new service has to make their life better.
People’s lives are better if: they become healthier, richer, or have
more sex. “Health” can be broadly defined.
SS)
If your customers are advertisers: find
sponsorship opportunities for them that drive customers straight into
their arms. These are the most lucrative ad deals (see rule above). Ad
inventory is a horrible business model. Sponsorships are better. Then
you are talking to your customer.
TT)
No friction. The harder it is for a
consumer to sign up, the less consumers you will have. No confirmation
emails, sign up forms, etc. The easier the better.
TTA)
No fiction, part 2. If you are making a
website, have as much content as you can on the front page. You don’t
want people to have to click to a second or third page if you can avoid
it. Stuff that first page with content. You aren’t Google.
UU)
No friction, part 3. Say “yes” to any opportunity that gets you in a room with a big decision maker. Doesn’t matter if it costs you money.
VV)
Sell your company two years before you sell
it. Get in the offices of the potential buyers of your company and start
updating them on your progress every month. Ask their advice on a
regular basis in the guise of just an “industry catch-up”
WW)
If you sell your company for stock, sell the stock as soon as you can. If you are selling your company for stock it means:
- a. The market is such that lots of companies are being sold for stock.
- b. AND, companies are using stock to buy other companies because they value their stock less than they value cash.
- c. WHICH MEANS, that when everyone’s lockup period ends,
EVERYONE will be selling stock across the country. So sell yours first.
XX)
Ideas are worthless. If you have an idea
worth pursuing, then just make it. You can build any website for cheap.
Hire a programmer and make a demo. Get at least one person to sign up
and use your service. If you want to make Facebook pages for plumbers,
find one plumber who will give you $10 to make his Facebook page. Just
do it.
YY)
Don’t use a PR firm, part II. Set up a blog. Tell your personal stories (see
“33 tips to being a better writer”
). Let the customer know you are human, approachable, and have a real
vision as to why they need to use you. Become the voice for your
industry, the advocate for your products. If you make skin care
products, tell your customers every day how they can be even more
beautiful than they currently are and have more sex than they are
currently getting. Blog your way to PR success. Be honest and bloody.
ZZ)
Don’t save the world. If your product sounds too good to be true, then you are a liar.
AAA)
Frame the first check. I’m staring at mine right now.
BBB)
No free time, part 3. Pick a random customer.
Find five ideas for them that have nothing to do with your business.
Call them and say, “I’ve been thinking about you. Have you tried this?”
CCC)
No resale deals. Nobody cares about reselling your service. Those are always bad deals.
DDD)
Your lawyer or accountant is not going to introduce you to any of their other clients. Those meetings are always a waste of time.
EEE)
Celebrate every success. Your employees need
it. They need a massage also. Get a professional masseuse in every
Friday afternoon. Nobody leaves a job where there is a masseuse.
FFF)
Sell your first company. Don’t take any
chances. You don’t need to be Mark Zuckerberg. Sell your first company
as quick as you can. You now have money in the bank and a notch on your
belt. Make a billion on your next company.
GGG)
Pay your employees before you pay yourself.
HHH)
Give equity to get the first customer. If you
have no product yet and no money, then give equity to a good partner in
exchange for them being a paying customer. Note: don’t blindly give
equity. If you develop a product that someone asked for, don’t give them
equity. Sell it to them. But if you want to get a big distribution
partner whose funds can keep you going forever, then give equity to nail
the deal.
III)
Don’t worry about anyone stealing your ideas. Ideas are worthless anyway. It’s OK to steal something that’s worthless.