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You need to start your business using the processes that work for that type of business. There are different types of businesses. They all have different characteristics and unique needs.
Then you have lifestyle businesses. That’s what I do. I’m a writer. I’m a digital pimp. I create eBooks. I create audio books. My big thing is freedom. I believe in creating things that make money when I’m not around. I spent all day yesterday working on some personal things, and I came home to money.
Then you have the service business. This type of business can work for people who have no clue about what they want to do. They don’t know what their talents are. What’s a service business? You help people out. Services like carpentry, washing cars and cleaning houses are huge businesses.
Then you have the physical businesses which include Walmart and Macy’s. This is a very different business with a very different behavior. It is nothing like a venture business.
Take a venture business. That’s Amazon, Uber and Facebook. These are businesses that people with very deep pockets said, “Hey, this is going to win.” They opened up those deep pockets and put coins all over the table. The thing is most of those businesses fail and a lot of money is lost. We tend to look at the winners and ignore the fact that most of the businesses never get off the ground.
While most of us won’t start the next Facebook, many of us can start a business that sustains us. That’s the most important thing to remember. There’s not going to be another Facebook for a minute, because the conditions were just right for it to get started. When I say that, people say that I’m hating. But, Facebook had no competition. The idea was grand and the execution was brutal. But, they had no competition.
When YouTube started, they had no competition. Facebook wasn’t the first to market with social network; Myspace was first. Facebook just had better execution. Uber didn’t invent taxi service, they just executed better. What makes these companies successful is timing, execution and vision.
My thoughts are you should do as much as you can to start a business before you ask for money. Bootstrap the hell out of what you’re doing because when people open up their wallets, they’re taking equity in the company.
I’ll give you a story about how things get real when the money hits the table. There is even a video about it on YouTube. I had this partnership with this dude and things were cool. Then we had some big sales and the money started rolling in. He had a lot of bills, so he wanted me to subsidize his life. That’s when the partnership ended.
When Gates, Cuban and Zuckerberg got started, they didn’t go out seeking money. They wanted to serve the world. I think Google’s mission was to index the world. That’s pretty heady stuff.
The venture business model does not work for everything. Anytime you asked for money, you become beholden to them. You become their bitch.
When I was broker than broke, I could not ask for money. I just couldn’t. It turned out to be one of my better decisions. When you use other people’s money, it can be very expensive. So, if you are a founder, I suggest you do as much as you can before you ask for money. Many businesses are expensive to build because people make them expensive.
Part of the issue is a lack of foresight. What I mean by this is the decisions that you make today are going to determine your tomorrows.
Let’s say you’re 25 and you have this idea for a business, but you’re doing it the regular way. You’re going to get all of your ducks in a row. You’re going to make sure you don’t have any debt. You’re going to do all this planning and by the time you’re ready, you have money in the bank. But you have one problem. That idea that you have, the conditions have changed. You realize that you can’t wait a year or two years or three years while you get your shit together, because conditions continually change.
If you have an idea, get started with what you have right now where you are. As you build, you’re going to learn some stuff. When you’re building a business, your most successful days are your ugliest days. That’s where the success happens.
It’s in those ugly moments when there is nobody around and people are laughing at you. You’re not going to the party or the beach because you’re at your office. That’s where success is built. This is why. When you can endure all of that bullshit, you have made yourself a much stronger person.
One of the reasons so many businesses fail, is because the minute things get janky, they give up. Believe me, things will get janky. People just freak out.
I had a client who got into this business and the money was flowing. They reached out to me because the money stopped flowing and they had a really bad day. They called me up and they were freaking out. I told the guy to take his phone out and take a picture of the wall. He thought I was being silly, but he took a picture of the wall. He asked me, “What does this do?” I reminded him that today was just a snapshot. I said, “You’ve got an obligation to yourself.” I continued, “You can hold on to this day and put it in your fucked-up album or you can delete it and move on.”
That’s what many people do. They take a snapshot and put it in the fucked-up album. Then when the fucked-up album gets so big, they decide they can’t look at it anymore. Then they stop trying and that’s when they fail. If you keep going, then you will win.
I’m going to give you a hard number here. It’s eleven. Eleven years is the average time it takes an entrepreneur to make their first million. I’m not talking about their first million-dollar year but their first million dollars collectively. Why? Because there are a whole lot of things that go wrong. It’s ridiculously hard at times. But, if you serve enough people, you will be successful.
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