Go It Alone - Bruce Judson
22 February 2007
This post contains my personal notes about the big ideas in Go It Alone by Bruce Judson. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Enjoy!
Year after year, surveys show that “owning my own business” is a goal for over half of the working adult population. Despite that, very few people actually muster the courage to actually start a business. That’s a shame: starting and running a business can be much easier than you think.
The premise of Go It Alone is simple: you can create a profitable business all by yourself, without employees, loans, or venture capital funding. Even better, your new business doesn’t have to be “small”: with some smart thinking and advance planning, there’s no limit to your potential profitability.
Notably, the full text is available free, so there’s no excuse not to read it. I do recommend purchasing a copy, however – I refer to it regularly.
Businesses can be created with minimal capital; startups do not need employees; startups can be created to have high chances of large revenue potential.
- Personal Leverage – focus on the highest leverage part of your business idea.
- Extreme Outsourcing – outsource all functions of your business that are not highest leverage for you to free up your time and energy to focus on activities that are higher leverage.
Fundamental new class of entrepreneur is emerging: the “go it alone” entrepreneur, characterized by the following:
- Business is started with minimal investment, and founder/founders retain full ownership and control of the business.
- Business is run entirely by small number of people, generally 1-6.
- Founder does not set out to create a “small” business; works from premise that business has potentially unlimited revenue potential.
Key is building a firm foundation; applicable to a wide range of business activities.
Business strength is achieved when you become the fulcrum, and the business system you establish is the lever. It is possible to amplify your own power by creating an effective business system.
Do what you do best – let others handle the rest. Spend the vast majority of your time on value creation, and hand off low value creation jobs to someone else.
John Maxwell: “Switching from task to task can cost up to 40% efficiency.” To create a working system that allows you to focus, you must create free time by limiting the sheer volume of things that need to be done.
Repeatability is the ability to create processes and systems that determine exactly how the business will work.
Solve a personal problem. “In the last few weeks, when have you said to yourself, ‘I wish there was an X so that I would not have to do Y.’?”
Principles for Success
Focus on reducing risks associated with a potential failure. “How can I limit the damage if this doesn’t work?” Reduce risk by (1) gaining as much experience as possible with paying customers and (2) avoid putting pressure on the business for fast financial success by keeping your day job. Research is never as valuable as actual experience with customers. You need to find a low-cost, low-risk way to get out there and see what works.
Never get too far ahead of your customers. Products and services sell when they are just new enough to fulfill an unmet customer need without reinventing every other aspect of the customer’s life. Don’t demand excessive change from the people who are paying your bills. Build a paying customer base quickly – this means that requiring dramatic shifts in the behavior of customers, suppliers, or service providers is a bad idea.
Make a rigorous commitment to flexibility and ongoing innovation. Build infrastructure through low-cost outsourced services that charge monthly subscription rates. The new venture must be set up to capitalize on inevitable unexpected opportunities and avoid being hamstrung by infrastructure/failed efforts. Continuously launch new products and services systematically. “Do you do this” phenomenon – customers tell you where to expand. Be sure to set profit targets to separate valuable activity from less valuable activity. Stay in direct contact with your customers. Develop quick, inexpensive processes for discovering what new products/services potential customers will buy. This (1) reduces wasted dollars on failed launches; (2) limits time devoted to unsuccessful initiatives; (3) maintains competitive edge by encouraging view of business as evolving, flexible, and competitive.
Create the ability to scale. Scale allows you to grow revenues without expanding infrastructure/costs. A substantial portion of the founder’s time must be spent working on the business, not in the business.
Maintain an experimental attitude. Assume that if you are a success, someone else has noticed and is now competing with you. Competitors can – and are working now – to reverse-engineer what you’re doing. To keep ahead, constantly live test a portfolio of potential improvements in your core business. (5-10) Measure the time spent doing this daily; it should be at least 1 hour. Keep your curiosity and willingness to experiment alive. All experiments are valuable, regardless of outcome.
Take yourself off the clock. Central question: how can you get the greatest benefit from the use of your time? Practically, this means not linking time to compensation – time-dependent businesses kill leverage.
Master the potential of new technologies. The internet makes many things possible; unbundling and outsourcing.
Develop a bias toward action, starting with small steps. Go! Do it now! The big rewards in life only materialize when you start doing. Ready, fire, aim. Talking/planning doesn’t cook rice.
Affirm your determination – make a commitment to find a way. The will to make something happen is an essential quality. A good entrepreneur will find a way. You must be determined enough to find a way to succeed. Tenacity is a necessity. You must be passionate about what you sell: choose a business that ignites your passion.
Only use off-the-shelf products and services. Start-ups can inexpensively tap sophisticated, state-of-the-art capabilities that were previously available only to larger, wealthier entities. Most critical business functions can be handled through extreme outsourcing.
The Great Shift in What’s Possible
Extreme Outsourcing. Services allow your business to outsource major functions by (1) automating specific activities; (2) providing communications, sales, or marketing capabilities; (3) reducing the effort involved in formerly time-consuming activities; (4) managing complex tasks that would otherwise take up large amounts of time. Sometimes specific activities are outsourced to individuals.
You need the freedom to focus daily on improving your business. The main reason most people struggle professionally and personally is lack of focus. Focus on the ideas you do brilliantly, and from which you produce extraordinary results. If you don’t, you’ll probably create high stress levels and ultimately burn out.
Be goal oriented – be clear about what you are striving for. Don’t simply react to developments as they arise or fall into routine.
Intentionally channel all activities toward achieving the goal, including reflection. Be willing to choose what you will and will not do each day.
Develop personal discipline. Protect yourself from the noise of everyday demands or other exciting opportunities that will distract you. Don’t allow resistance to develo Hit singles and doubles every day.
Have a SINGLE BIG OBJECTIVE. One. Uno. Concentrate on what really matters.
Set up the business so you can focus. Outsource to the extreme. If you’re going it alone, you can not afford to burn out. There’s no boss watching how much you work – measure progress via business results, not time spent. You must establish a sustainable routine through which you can do your best work and flourish long-term.
Personal energy waxes and wanes. You must build in the time for business analysis and reinvention daily, or rapid change will kill you.
Outsourcing: even if a function is critical to my business, can it be handled as well or better and cost-effectively by an available service? Outsource everything you possibly can. Be dedicated to making continuous, small improvements to efficiency and productivity. Test and test, then test some more. Test every day. Do something instead of thinking about doing something. Mistakes are part of the game.
The Rule of Decreasing Support Costs: services that are available today at high expense for large businesses will be available in 12 to 18 months on a plug-and-play outsourced basis to small companies at low monthly usage fees. Application Service Providers (ASPs) make products easy to use, instantly available over the internet for monthly fees. (Like 37signals.) This allows for fast ROI, zero required infrastructure, unbeatable affordability, and unlimited scalability. New ASPs are being created every day. When an ASP adds a new feature, think “Now I can use this to X at no additional cost, and my total time investment will be Y.”
The internet has allowed the economy to become even more specialized. (The Long Tail) Corporate unbundling of functions are shifting which tasks occur inside and outside of the corporation. This leads to more specialized businesses. It is now possible, though low-cost, easy-to-use, plug-and-play services, for any business to effectively interact with suppliers, partners, and customers across the globe.
Before you create a custom solution, think creatively about ways to simulate something that takes time or money to build. Small companies can be nimble. It’s not the big that eat the small; it’s the fast that eat the slow. Custom-designed solutions kill your speed advantage. They also lock you into a single supplier, removing your ability to switch technologies or negotiate prices.
You can now create and test businesses quickly – and find out if they have a chance of succeeding with limited investment.
Do What You Do Best
Make a note every time you are confronted with a problem that seems ridiculous, either because it’s frustrating, it’s wasting your time, or your intuition tells you that there has to be an easier way. If you solve one of these problems for yourself, you may also have invented your next career.
Business models that are successful in one industry may also inspire successful innovations in other industries. Can unbundling occur? Most new products and services are, in reality, incremental improvements to existing ones. Focus on a dysfunctional industry – find a way to improve it. Find a very specific, meaningful problem, then focus on developing a useful solution. Imagine potential pricing innovations – the goal is to create a pricing system that makes sense to the customer and permits a far easier yes than what already exists.
Look for opportunities deemed “too small” by large companies. Consider turning a product into a service. Look for opportunities to provide outsourcing for someone else.
Focus on your core competence – what you do best that allows you to create something valuable to a customer. Must meet three tests: (1) must be a central reason a customer chooses your product/service; (2) must be a capability that helps differentiate from competition; (3) should lead the firm to imaging an array of new products/services related to the competence. The core competence will allow you to attract customers and provide value to them; it will also be what your system of ASPs will work to leverage.
Make sure your business idea leverages your core competence. To succeed, you must leverage what you do best – superb execution is absolutely critical to the success of a go-it-alone venture. You are more likely to succeed if you superbly execute a mediocre idea than if you execute a superb idea in a mediocre way.
Methodologies to find your core competence
Find your greatest strength. Now, Discover Your Strengths: (1) can you fathom yourself doing something repeatedly, happily, and successfully? (2) you do not have to have strength in every aspect of your role in order to excel; excellent performers are not well rounded – they are sharp; (3) excellent performers find ways to manage around weaknesses, freeing them up to hone their strengths to a sharper point. Pay attention to spontaneous top-of-mind reactions, yearnings, rapid learning and excitement, and personal satisfaction. Capitalize on strengths and manage around weaknesses, whatever they may be.
Pay attention to whatever energizes you. Whenever you do something that makes you feel great, that releases energy; you have tapped into what you should be doing. Think back on the times you have done something that released a surge of energy – it somehow accessed your core competence. Working in the area of your core competence is likely to generate the energy and passion that will further drive your new business toward success.
You don’t have to be an expert to start the business, but you do need to be an expert for the business to move forward. Launch and learn quickly. Natural talents and core competencies make you an intuitive learner in your business if you choose the right business to start.
How to Create Your Business System
Leverage your core competence through relentless repeatability. Four central problems that all service businesses must deal with: (1) unpaid time and effort selling the service; (2) balancing custom expertise with time involved; (3) getting and keeping happy customers while limiting number of customers who will never be satisfied; (4) the customer’s desire to pay a flat fee.
Identify the important metrics. There are typically very few relationships that determine the overall success of the business – find them and measure the heck out of them. Jim Collins in Good to Great: the concept of the single denominator – “if you could pick only one ratio (profit per X) to systematically increase over time, what would have the greatest and most sustainable impact on your economic engine? If you can’t yet identify these points, you’re not ready to start yet. Prioritizing time is of major importance – you’re far more likely to spot a budding problem faster through one of these metrics than through overall profit measures. If you don’t get these metrics right, you’ll lead your startup to ruin. You need to focus on doing the right things that will have a major impact on profits.
Make time work for you instead of against you. Most businesses don’t fail – they simply run out of time. If you can create a business that is profitable from the start (or very quickly), you have taken the greatest enemy of any startup – time – and turned it into an ally. The basic formula of limited investment, extreme outsourcing, and live customers before you give up your day job is geared toward making the business cash flow positive as quickly as possible, which is the first real step in establishing long-term viability. Find the shortest possible path to profitability. Sometimes the only way to know your industry and competition is to invest time; profitability makes doing this easier.
Take advantage of the benefits of scale. Benefits of scale are extra values businesses realize when they reach a certain size. You want to set up a business that is big enough so that your company really matters to other people in your business chain.
Scale means better access to anyone who matters to your business.
- Achieving scale means that you will earn more.
- As you grow, wholesalers and suppliers start to approach you.
- As you grow, your per unit cost decreases – via volume discounts and greater efficiency.
- Marketing benefits from scale. Bigger companies are more likely to be profiled in magazines, etc.
- As you grow, new and often unexpected revenue opportunities start to appear. (Email newsletter sponsorships, etc.)
- With growth, other businesses care about your success. You become a valuable asset to other firms, and can negotiate more favorable terms, faster payments, financing, etc.
Follow the 60% rule. The best solution is to automate everything except the core focus of your business, using inexpensive plug-and-play services, even when these services only provide 60% of the functionality you want. This saves tremendous amounts of time and energy you can use to build the business. The 60% rule requires discipline. If the basis for your firm’s success exists in one area, it is absolutely essential that you find the time and energy to focus on this area, even if that means that other areas are handled less well. (Important: when customers are involved, it’s important not to let anything slip through the cracks.) Good customer service and follow-through are essential for the success of any business.
The value of getting your business started is enormously high – the learning associated is very valuable.
- Speed to market is itself a virtue.
- Mass customization will probably eliminate your problems over time.
- Over time, almost any function can become routinized – part-time workers can take over core functions, freeing up your capacity.
Build for Flexibility. A plug-and-play infrastructure is inherently flexible. Flexibility allows you to rapidly respond to competitors and changes in the market.
Make your own luck. “Chance favors only those minds which are prepared.” – Louis Pasteur. The more you plan for contingencies, the luckier you’ll be. An experimental attitude combined with flexibility is a sure source of increasing the odds of positive luck. Build a business that offers real value to meet the needs of your target market, and other customer groups may follow; also, be in a position to quickly solidify and capitalize on any interest you see from potential customers who are part of a different target market than the one you’re currently serving.
Myths about Startups
It can’t exist, because I haven’t seen it in the newspapers. One of the main goals of successful individual entrepreneurs is to stay beneath the radar of potential competitors; media coverage invites competition.
Some entrepreneurs focus on preventing potential competitors from becoming aware of their success – launching multiple websites with different targets, etc. Also, appearing “professional” is easier when it is not known that you work from home or have very few employees. Being privately owned is a huge advantage – protect information rabidly.
Extraordinary risk is essential to success. It is possible to intelligently and quickly mitigate risks through rapid testing with live customers. Repeatedly ask, “how can I minimize risk associated with this new activity?” and “is the risk associated with this proposed venture actually greater than the risks involved in this way I earn my living today?” It may be that earning your livelihood through your own well-tested business is less risky than working for someone else.
The size of the employee parking lot matters. Collectively, people tend to hold in awe those who have power over a lot of people – it’s a throwback to the Middle Ages. But we have entered an era in which the old measures of success do not always apply.
Real businesses are funded by venture capital. VC funding seems to grant “instant credibility” to firms that obtain it. This is a false notion – it is possible to build a substantial business without raising and spending large amounts of capital and selling part of your business.
Why You Don’t Want to be a Free Agent or Franchisee
Free Agent – free agents are subject to the ups and downs of the employment market, and inevitably experience a boom-and-bust cycle. You’re at the whim of others who make the ultimate decision of whether or not to hire you.
Advantages of being an independent entrepreneur vs. being a free agent:
Ownership of a business allows the entrepreneur to capture the full value of his or her ideas. If you work for someone else, you will never be paid full value, and temporary workers typically can’t negotiate a percentage of the rewards of the work.
The independent entrepreneur is building capital. Businesses are assets that can potentially be sold; the owner has a tangible value as a result of his/her efforts.
In bad times, the entrepreneur still has a livelihood. The business environment may be difficult, but the infrastructure can still provide positive results instead of forcing you to look frantically for work elsewhere.
Franchising – there are benefits: (1) proven business model; (2) systematized by nature; (3) pre-created marketing and national marketing scale; (4) economies of scale in purchasing; (5) training and support.
Downsides to franchising:
- Loss of independence – inherently about following someone else’s business ideas and rules;
- Many rules – you’re trading one boss for another;
- Inherently little flexibility, resulting in limited opportunities for creativity;
- Require more upfront capital investment, so you need more money to start;
- Little psychological reward for success – most franchises involved very basic retail and service skills – large chance you’ll be bored after a few years.
Managing Extreme Outsourcing
- To appropriately leverage what you do best and achieve the necessary focus to create value, how do you decide what should be outsourced and what should be handled in-house?
- Are there specific ways to operate your outsourced effort so that you realize the greatest possible benefits from this system?
- Are there specific types of business strategies or innovations that are particularly effective when combined with extreme outsourcing?
Extreme outsourcing requires the ability to delegate. You are giving up control, and that’s okay – it’s essential. Avoid the control trap at all costs – you get bogged down in the paperwork and non-value-added activities as your business grows. The business must be established so that you avoid even the smallest essence of the control trap. Success is achieved through focus on a minimal number of high leverage activities, and the outsourcing of everything else.
Start with a bias to outsource everything, then ask these questions:
- Do you trust the third-party business that will be handling the outsourced function? (Counterparty Risk)
- Will the outsourcing function make it easier for you to coordinate your overall business system?
If answer to both is yes, outsource. Define outsourcing broadly to achieve maximum possible benefit – ASP, part-time workers, call centers for phone operations, contracting with other firms for warehousing/mailing/delivery, etc. Also use productivity-enhancing software to increase your effectiveness on what you spend your time on.
“The most successful businesses have the discipline to focus on one skill… and practice that obsessively.” – Michael Loeb, CEO of the Synapse Group
You want to in-house the “brains” of the operation. Outsource the arms and the legs to third-parties whose systems you trust to make your life easier. Map your entire business process from beginning to end – outsource everything that isn’t a unique function that creates value / differentiates from competition / creates or increases profits. Periodically analyze your outsourcing strategy to ensure you’re on target. Analyze how you’re spending your time and determine if additional work can be outsourced.
Once the business is running, administrative tasks should take no more than 1 hour per day. (Not part of core competence or business reinvention.)
Build in feedback loops with a focus on customers. Outsourcing contact with your customers is a bad idea – it’s easy to become out of touch quickly. Customer interactions are the best source of ideas for improving your products/services and creating new ones.
Expect and plan for business evolution. Have a plan from the beginning for how and when specific activities will be outsourced once you have more information and reach critical mass. The experience curve of your business will help you create systems to handle routine processes – once you understand how to perform a task well enough for it to be systematized, outsource it.
Simplicity always wins over complexity. Keep the business proposition straightforward and flexible. The acid test is whether or not your business is simple to operate. Beware of feature creep and over-analysis – they create complexity. Use your intuition – is it really simple, or are there too many moving parts? Start simple and stay simple!
Always monitor competitors. Study their offerings; buy their products; visit their website; understand how they are positioning themselves against you; understand how they are outsourcing functions.
You must maintain discipline. Lack of discipline will kill your business.
Lessons From Inventive Companies
Extreme outsourcing allows you to be quicker and more efficient than other (larger) companies.
- Present a high degree of professionalism.
- Maintain your flexibility – it will allow you to outmaneuver competition.
- Learn how to use something people consider value-less to create value.
- Do whatever it takes to get going as fast as possible. You don’t have the luxury to deal with non-critical issues.
- Get going without high levels of investment to minimize risk.
- Don’t be afraid of failure – plan for the possibility; learn from it if it happens.
- Make it easy for partners to say “yes” without bogging you down in analysis. (Flat fees vs. percentage cuts.)
- BIAS FOR ACTION!!!
- Focus on high leverage processes – outsource the rest.
- Follow the right metrics: the ones that play into your profitability. Develop an analysis process that improves the returns of your decision-making.
- Provide a professional, extremely high-quality experience.
Evaluating Your Proposed Business
11 tests for your business proposal:
- The “Elevator” Test – can you tell me how your business will make money in roughly the time it takes for an elevator ride – using a maximum of two short sentences? (This ensures laser-like focus.)
- The “Three Rules Maximum” Test – What are the 1-3 things that are going to determine whether or not I succeed here? Do I have the essential expertise to execute well within this focus? (If not, can I acquire that expertise?)
- The “You Are the Customer” Test – with the range of possible products/services, would I buy the new offering? Why/why not? Am I unique, or are there many competitors like me? Would I buy the product/service at the full price currently planned? How quickly would I buy the product/service immediately, or do I need education? Do the current plans allow for the appropriate amount of time and effort?
- The “Differentiation and Market Hegemony” Test – With many existing entrants in the market, it is essentially impossible for a company without a highly differentiated product/service to succeed, even if the market is huge. Define your market – even if it is a small segment of a much larger market – so that you have something distinctive that will attract customers in that segment and allow you to dominate that arena.
- The “Can I Be Circumvented?” Test – Can a supplier or partner replicate your business and eliminate the demand for your service/product? Structure your business so they can’t take away the value you provide.
- The “Double Your Costs” Test – How much room do you have for error? If your costs doubled or revenue dropped by 50%, would it still be a good business? The best businesses leave a lot of room to make mistakes; remember to leave room for experimentation.
- The “Dependency” Test – is it too dependent on one supplier or customer? No single customer should account for more than 35% of a firm’s sales. If the firm is dependent, can step be taken to reduce this dependence? Will the dependency allow the firm to squeeze my profits? What happens if the firm I’m relying on goes out of business or chooses to stop doing business with me? Do I have a contingency plan?
- The “Can It Survive Without Me?” Test – are you building a terrific go-it-alone business that will have the potential to be sold? Is the business an asset that can be liquidated if necessary? This is upside potential only – businesses change so rapidly that buyers would be purchasing a platform that must be constantly revitalized, not a sure thing.
- The “Multiple Streams of Income” Test – multiple streams of income reduce risk via diversification; diversification adds to a firm’s potential value.
- The “Vulnerability” Test – once I’m up and running, what could happen that could kill the business instantly? How likely is this to occur? How will existing and potential competitors react to this business? Do competitors have the ability to deliver an immediate knockout blow? Why won’t existing competitors respond to my market entry?
- The “More Than a One-Trick Pony” Test – do you have any ideas of ways to expand your offerings? You’re more likely to succeed if the firm has room to move in more than one direction.
When to Quit Your Day Job
An individual business is about investing a limited amount of capital ($2,00 – 20,000) in start-up costs, establishing a home office, and figuring out how the founder is going to live during the period in which he/she builds the business. The associated risk should be much lower than building a business with VC funding – by the time the founder reaches the point of making the business operate, he/she should already be well along in developing the product and testing its viability with paying customers.
You never know what’s going to work and it may take two or three separate tries before you hit on the right idea – keeping your day job allows you to retain the ability to test each of these ideas from the dispassionate viewpoint of someone who doesn’t need them to work. Tradeoff: work hard, lose some sleep, get your new business off the ground, and in return you won’t put your livelihood at risk. If you have the desire and determination, find the time. If you have an idea, it represents an opportunity to change your life. Grab it.
What to tell your boss. Don’t talk about your private business ceaselessly at the office. Comply with disclosure policies, but no more. If your private life includes a go-it-alone enterprise, you don’t want to actively keep it a secret, but you shouldn’t go out of your way to make it a part of your work persona. Skills learned building a firm are very valuable, even if you ultimately keep your day job.
Other ways of getting going. Severance pay from layoffs, etc. can be used as money to pay expenses while you build the business. Savings can be used in a similar way. Find ways to stretch it out to reduce risk. Husband/wife teams can cover expenses while one of them builds the business.
Why Venture Capital is Not for You
Venture capital funding is about managing fast growth with many employees, founders sharing control with investors, and rapidly achieving a liquidity event.
Go-it-alone businesses are oriented towards fast positive cash flow, growth driven by increases in cash flow, founders retaining control of the business, and focus on a limited number of employees doing what they do best.
If you need a huge amount of up-front capital, you may need VC funding. Otherwise, skip it.
Mistakes Happen – Learn From Them
Learning is critical. Focus allows you to learn as much as you can as quickly as you can. Try, stop and think, adjust, then try again. Maintain an experimental and learning attitude at all times. Just ensure your mistakes have limited consequences and you’ll learn a lot from them.
You need to constantly reinvent the business and understand the real reasons the business creates value.
Why businesses fail: warning signs
Complexity – complexity creates bigger problems than it solves.
Success leading to complacency – when things are going well, the drive to improve is diminished; you let your guard down. When the environment changes, the complacent will be far behind the curve. Success also invites and intensifies competition. You need to reinvent the business even when everything is terrific – be a little paranoid.
Not Recognizing, Acknowledging, and Correcting Mistakes – do everything you can to validate your assumptions, monitor competitors, establish and evaluate your metrics, etc. Constantly ask “what if?” and test your assumptions. Only you can ask yourself the hard questions.
Attempting to Expand from Focused to Comprehensive Services – there is a natural tendency to drift over time; fight to maintain your focus on dominating your niche. Diversification is valuable, but only if it requires little/no new infrastructure and doesn’t add a higher degree of complexity.
Suddenly, Just Me
The sudden adjustment from working in a large company to operating solo can be wrenching. Guidelines for making the transition:
Know that nothing happens unless you make it happen – the business infrastructure will only exist after you create it; no one else will.
Recognize that there is no A for Effort – you must own risk completely; the startup world is more Darwinian. Mitigate risks as best as possible, but failures will happen. You are completely responsible for what happens to the business; claim responsibility for mistakes, then fix them. Don’t blame – take responsibility. “No excuses allowed.”
Be prepared to sell – you must be ready to convince people that your business has merit, either as partner or customer. Engage and enroll others in your vision.
Be prepared to demonstrate credibility – confident attitude in handling whatever you are discussing with a potential customer, client, or supplier will go a long, long way. You must trust yourself in order to convince others to trust you.
Be absolutely focused on getting paid – cash flow is an essential concern; you must ensure the money is coming in.
Think through your own support system and the extent of your need to stay connected to other people – you need outgoing connections to balance what will be a life of greater solitude than a corporate job; you need people to discuss and share your ideas with. (Personal board of directors.)
Never be afraid to ask others for help – there is no shame, loss or honor, or disgrace in asking another person for a favor; people tend to like helping other people out. When someone assists you, it can help cement an ongoing relationship – they start to take an interest in seeing you succeed. Make it easy for people to help you – always be specific when asking for help. Ben Franklin: “He that has once done your a kindness will be more ready to do you another than he whom you yourself have obliged.”
Fear is a major obstacle. Tips to overcoming it:
- Recognize the fear is healthy – it’s your intuition telling you to look hard at something. Turn it from a negative to positive influence by using fear to guide you to areas that need to be addressed.
- Fear is unhealthy if it manifests physically or becomes a driving force in your life.
- Visualization of success and pursuing your passions can help overcome fear; the resulting energy will propel you forward.
- Build confidence: (1) believe in yourself; (2) associate with confident people, and stay away from negative, fearful people; (3) work on developing your self-confidence; (4) face your fears head on – be the master of your domain; (5) keep busy – fear and self-doubt will have little time to develop.
- Face the fear head-on, with the confidence that “I’LL HANDLE IT”
Beware easy access to resources; it can prevent you from developing your business as strongly as possible. Excess funds can, even in small amounts, encourage habits that make you less creative, innovative, and determined. If you can launch and maintain your business with a bare minimum of resources, your likelihood of long-term success is high. You have demonstrated that you can handle anything; that you can create value while maintaining an attractive cost base, so your pricing is attractive; that you have great flexibility to adjust to changes in the market; and that you are not dependent on anyone else for additional funding.
I thought this was a fantastic book – very well written, insightful, and includes a great deal of useful material. I thought the sections on extreme outsourcing and use of ASPs were particularly helpful. I recommend reading the entire book for additional examples and stories. This book has helped me greatly in planning the future of the Personal MBA as well as other entrepreneurial ventures, and it’s earned a permanent place on my business bookshelf.
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