18 AM
The first issue is one of timing—if you’re broke and without a job, I can’t recommend starting a business. Go find a Day Job first. I always tell entrepreneurs not to quit their Day Jobs.
The reason is simple—you don’t need to quit your Day Job because starting a business is not a full-time job contrary to what Venture Capitalists and others would have you believe.
The short answer for why that’s true is that you need to find your audience first and get to understand them. The process for doing that does not require full-time.
I give the full details on not quitting your Day Job and how it will actually increase your odds of success considerably in this article:
Now if you’re intrigued by the idea of not quitting your Day Job, my next suggestion may also surprise you:
Don’t take any investors.
Yes, even though I participated in 6 venture capital startups and have spent most of my career in that world, I strongly recommend against it.
The reason why is simple—it dramatically lowers your likelihood of success.
That’s got to be a real shocker too!
Doesn’t taking millions of investment dollars radically increase your likelihood of success?!??
Sadly, the answer is a definite, “No!”
The reason is that the VC’s need billion dollar unicorn successes to make their investment fund economics work. Those are extremely risky businesses. There are lots of businesses you or I would consider wildly successful that the VC’s would view as abject failures.
And they will do everything in their considerable power to put you on the Unicorn-or-Bust treadmill. I had a group of VC’s one time tell me and my partner to walk away from an offer to buy our 10 month old startup for $45 million. It was a 13 to 1 return on their investment and seriously life changing money for my cofounder and I but they threatened us with never working in Silicon Valley again if we pursued the deal.
Trust me—if you just want a wonderful and lucrative online business, skip the venture capital. If you need your own jet, yacht, and zillions of dollars, you probably need venture capital to pull that off.
More on that whole topic as well as the real odds of succeeding by starting a business here:
OK, two controversial recommendations down. Are you doubting my sanity yet? Just remember, I’ve enjoyed a lot of success across a lot of startup businesses.
If there’s one constant it’s that the road to success is never very obvious. If you’re doing exactly what everyone else is doing, you’re following the average. You’re likely to get an average result. I don’t know about you, but I want an above average result!
So my last controversial recommendation is to forget about products. Just put them right out of your mind. I know your instinct is to focus on products first.
“What can I sell that people will love to start my online business?”
Folks, that’s totally the wrong way to look at it. Turn the telescope around and look through it backwards. The reason is simple:
Business seldom fail for lack of products. They often fail for lack of customers.
Right now you’re assuming all you need is a great product, a product that customers love, and you will never have a problem with lack of customers.
Nope. Sorry. Not true.
I have to repeat an old chestnut which is that the world will not beat a path to your door just because you have a great product. You see, they don’t know about your great product. Just having that great product doesn’t tell them about it either.
Yes, Virginia, you have to learn the art of marketing. It pains me to say this, because I’m an Engineer and a Product Guy, but Products are not the most important thing by a long shot.
This is why you’ll read all over Quora that ideas aren’t worth much. Products are worth a little more, but still surprisingly little.
My first startup was acquired by Borland way back when for very little cash in the scheme of things. I made good money in the transaction, but it was a pittance when we saw what happened just a year later.
We updated that product, changed its name, and launched it as Borland’s Quattro Pro. It was some insanely good (if I do say so myself!) spreadsheet software, and we sold over $100 million worth of it that first year.
The company was acquired for less than 1/10th of that. Why? Because it mostly just had a product. The product was only worth about 10% if you think of it in those terms. 90% of the value was the customers, and Borland had those in spades. It made 10x its investment in 24 months as a result, and we went on to make a lot more than that over the product’s life.
So, your first task is to find your Audience, get to know them, and prove you can build your own Tribe from that Audience. That means getting them to join your mailing list because they like and respect what you have to say and don’t want to miss out on it when you have more to say.
Much more detail here:
Now that’s as far as I can take you in this brief Quora post, but it really is the bones of what you’ll need to get your online business started. It doesn’t begin with product. It doesn’t need an investment or even for you to quit your Day Job.
It starts with you thinking about your interests, discovering where audiences with similar interests hang out, going there, and starting to build your own Tribe.
That Tribe will ultimately tell you everything you need to know to succeed. Your job is to build it up to critical mass and to develop a good ear that can hear their voices.
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