AA 002: What is your advice for new entrepreneurs?

Welcome to the second podcast of the Ask Alex show! Today the question is “What is your advice for new entrepreneurs?”

The key is FOCUS!

In this podcast, we cover 10 other pieces of advice that are highly worth considering implementing and internalising.

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Hey guys! Welcome to episode 2 of the AskAlex podcast. Today we’ve got a fantastic question which I think will be applicable to everyone. It comes from Steve in London, who asks “What is your advice for new entrepreneurs?” Thanks for that Steve! Now, if you want one piece of advice it’s this; Focus. I know you’re going to ignore me and learn that lesson yourself the hard way though! No matter how much you think you’re focusing, you are still not focusing enough. You can still reduce all your plans down by a factor of 10.

Do not create construction sites, anything you start you have to actually finish. If you ask yourself I only have one day to live and I need to ship the absolutely most critical things to validate my start-up, what should I actually be doing? My guess is it’s not one of the 200 things that you would like to do and maybe trying to do concurrently. You need to be more aware of your own mortality. It’s likely that you’re going to live longer than your start-up is, so you don’t internalize how short of a lifetime your baby has.

You’re default dead when you’re not profitable. You have at most about a year to live, even with VC funding, so you have to focus, and deliver real results. Now, If you want some other advice? Let’s go with it! One; the market always wins, it doesn’t matter what you do if you’ve got a crappy market. Pick a big market that’s growing fast or will grow fast and assuming that you’re perfectly positioned for that. But you need to have a big market that’s why VCs always want you to have like a billion dollar plus market. Because what’s the point of having a 100% ownership of a million dollar market? I mean it’s great if your bootstrap or your lifestyle business but that doesn’t move the needle for VCs.

So, start small but have a big vision of where you’d like to go. Facebook, Mark Zuckerberg started in a dorm room in Harvard and Facebook’s now one of the biggest companies in the whole world. You know he started small just on one campus then went small campuses and then progressively ended up with billions of people online but just start small and make those people really happy. So, it’s better to have a hundred people who think you are just totally dope than a hundred thousand people who are sort of ambivalent and would easily just change your product of something else it’s not defensible, right? But start small, figure it out, and build bigger.

Listen, especially if you’re really bright, you’re really smart. The people who are the brightest tend to listen the least. You know, they say you have two ears and you’ve got one mouth.

Look, arrogance can kill you, just act like you’re really dumb, you don’t know anything. Ask questions, pay attention and listen. You’d be surprised by what you learn but you have to keep challenging these assumptions that you held. Lets say, strong opinions loosely held. Right? Killed your darlings.

Now four, get shit done. At Groupon we used to say “Don’t think, just do.” You need to ship things and get it done and don’t intellectualize too much. I think it’s best to figure out your plan once and then just execute it. Just keep getting things done until you reach a new milestone and then question “Are we really rowing in the right direction?” But don’t over complicate things.

A lot of people give a shit about Uber and Zenefits being madhouses, crazy places to work. But, what do you think it takes to build a big company? You need to do things even if it’s not perfect. Clearly, as you evolve you get to a later stage, sure you can have fancy bureaucratic processes but when you are starting out you just need to get things done.

Five; ship earlier. You make money from customers you don’t know if you’re doing well if your customers are not having the opportunity or ability to actually pay for it. Now, another 6 months of making something better doesn’t actually give you the feedback or insights you need. Someone once said you need to launch when you’re embarrassed about the product and if you’re not embarrassed by your product, you launched too late.

Now I’ve written a useful blog which talks about some other reasons to launch faster that people don’t talk. I’ll put a link to that down below. Now six; VC does not solve problems. If you have problems then taking VC money is actually just gonna make them worse. It’s gonna exacerbate the situation and you will also lose control of your company. The processes, the fundamentals of your business model are fundamental not going to be solved by taking on more money. Right? And you gonna have added pressure were you gonna need to grow and you don’t want to put yourself into that situation until you ready for it.

Now seven; understand the problem, do not fight the solution or technology and then go looking for a problem to solve with it. That’s a terrible idea, you’re gonna fail. You have to truly understand the problem that you’re your customer really deeply has. Ideally, you want to be your own customer, you want to be solving a problem you have, scratching your own itch, then you actually truly understand that problem you can name it. You need to know who your customers are and go talk to them. You have to get out of the fucking building as Steve Blank would say.

Eight; team, team, team. You’re team matters so start with the right people and it’ll make it easier to continue to build a quality team. Say, A players hire A players, B hires C, C hire D. That’s what I call a bozo explosion or death dumb spiral. Finding amazing co-founders will likely be the biggest pain in the ass and the better for you to really get started. It’s rare for this to truly be easy and nothing will kill you or start-up faster than co-founders that don’t trust each other. That founding team is really the foundation of your start-up and it will set the tone for what you build in the coming years.

Now second last one, number nine; learn every day but for the stage that you are at. Now, as a workaholic I can tell you that there is never going to be time tomorrow to read that really interesting research report that you got that will really give you fascinating knowledge and insights. You will find another interesting one the next day and the next day and it will end up piling up into downloads folder that you’ll never actually read.

Now, that knowledge is not in your head so don’t be perfect if you find something that’s interesting just skim through it get that learning and then dispose of it. But be okay with that sunk cost, the difference between a new entrepreneur and an expert is years and years of reading and learning and doing to get smarter. You’re only smarter if you put that working today. If you’re just starting out and you don’t know how to hire a VP of sales, then you need to learn how to do basic sales yourself and how to sell the product so that you can actually teach that VP of sales if you get to that stage.

Knowledge is only useful if it helps you solve a problem you have today because you may be dead tomorrow. So, learn every single day of what you need to. Don’t, you know, figure out how to scale your architecture 25 million users when you don’t even have two yet. Now the last piece of advice is your business model and your strategy are critical. The difference between an amazing start-up and whatever is this; there are only a few variations of models you’re unlikely to invent something special. The answer is already out there, it’s just a matter of figuring out what business model and strategy applies to your startup, your circumstances it really doesn’t matter how much you wave your arms around if you’re not working in the right direction, otherwise, you’re just lost. But in a right strategy with the right business model can really make your business pop, I mean Zenefits is a fab example of that.

If you don’t know Zenefits it has been in the news for a couple of bad reasons including the exit of a founder. But they’ve dealt with getting insurance for companies and that may sound like an old boring industry. Where they really innovative was in providing free awesome software and then monetizing them on the brokerage on the back end and that was just like an amazing business model that was so unfair that they got fought state by state and even banned I believe in the state of Utah. Thanks a lot for your questions, Steve. And thank you so many guys for listening to me today, I know that there are a hundred other things you can be spending a time on and I’m just so blessed that you chose to spend it to me! Thank you very much. I look forward to… again next episode guys. Bye.