- Never sell anything you’d NOT buy yourself (h/t Charlie Munger)
- Use the litmus test: “If I was a customer, would I buy this myself instantly?”
- Audit products/services you’ve paid for (more than once in the year) and look for any that you can build alternatives to
- The best products were those where the founders scratched their own itch. This is key to survive the rough days which are inevitable.
- B2C education and fitness are 2 of the toughest businesses
- Where the customer has to pay money and ALSO do the work
- Unlike a service where customer pays the money and you do the work (think: hiring a painting contractor to paint your home)
- Outcomes are not 100% repeatable and reliable because it depends on the customer’s interest and life circumstances in general
- No one enjoys learning, the ones who do are generally self taught or leverage the Internet
- Think 10 times before entering a business without a recurring component (MRR)
- Avoid marketplaces (which have 2 sets of customers which means you have to persuade both) and also the activity may or may not be monthly recurring
- Avoid one-off purchases like info products unless they are for fun. They are VERY hard to predict and build a sustainable biz.
- Avoid community and membership businesses where the final offering is out of your control. You can only control so much of people’s behavior and can’t always 100% deliver on the promise. Great communi Also, the vast majority of people UNDERVALUE community.
- Think 10 times before entering a business that doesn’t have healthy cash flows
- Your bills are recurring (rent is due 1st of every month and doesn’t care about your sales cycles)
- Make sure you have cash flow that covers at least 2-3 months in advance. Without this, you are playing a dangerous game.
- The best cash flow generating activity is .. sometimes just a job
- Notes on a job
- Join a company where there is a CLEAR need for you (proven through a job listing and a budget allocated)
- Work with A-players only
- Work in a high-trust culture so you enjoy the process
- Work on actions that energize you (they feel like fun)
- Notes on business ideas
- Every business idea is like an experimental chemical reaction
- You can plan all you want but ultimately the result can surprise you. Be open to embracing failure and learning from your mistakes.
- Never get cocky and think you know the outcome before you test it, doesn’t serve you well in the long run.
- Even the best founders can fail if they are in shitty markets
- Not much you can do if you’re in a market where you mis calculate buyer psychology
- Great decision making accounts for 80% of the success. The other 20% is great execution. I used to think the opposite. Warren Buffet and Charlie Munger taught me to appreciate the quality of my decisions.
- If you find yourself in an untenable market, cut your losses and carry on. Be grateful for your distinguished MBA degree from The School of Hard Knocks.
Takeaways:
- Find a job or start an agency for cash flow and aim to stay in the game for 5 years
- Build a SaaS that solves a real pain point (that I’ve paid for myself in the past)
- Take it slow and grow it over a course of 5 years to $10k-15k MRR
- This gives you optionality. Either you can sell it for a great exit.
- Or you can quit your job and join full-time and still preserve cash flow