On picking a business:
- If you aren’t rich yet, your first business should be profitable in the first six months.
- Your preparation time should be correlated with the amount of risk you are taking.
- The less fun a business is, the more money there is to be made.
- You want a business with low status because this will attract less competition.
- If you do not have experience running a company and you are not already wealthy, I personally believe these opportunities are a horrible place to start:
- If you need to raise venture capital to start said business.
- If you have a new idea, and the model does not exist today.
- If the model involves manufacturing and selling a physical product.
- Is your business in the gaming industry? The health industry? The sports industry? The odds are it is highly competitive and most people don’t make much money. If you don’t have a competitive advantage here, ignore these opportunities.
- If you want to build an app, your competition will be Stanford graduates with millions in venture capital. The margins are non-existent for the first several years. And 99.9 percent of apps die before they make a single dollar.
- Everyone loves the idea of being able to work from anywhere, sell to anyone, and achieve unlimited scale. But the thing about online businesses is that your competition is worldwide. In a real-world business you can pick and choose where you want to compete. You can analyze your local market. There are barriers to entry, and only somebody in your town can decide to compete with you.
- Marketplaces in general are very hard because you are solving for two sides of an equation - customers and providers. In my opinion a marketplace is a brutal business and not a good opportunity.
- Answer the following three questions:
- How would I run this business more efficiently if I were the owner?
- How would I create more revenue or reduce costs?
- What could I do to make this business just a little bit better? What technology could I use, or how could I find a better way to do things?
- Level 1 Opportunities: If you have very few skills, no experience running a business, and very little capital. Lawn mowing, cleaning services, photography, mobile bartending, car detailing, power washing, window cleaning
- Level 2 Opportunities: You have some skills and a bit of experience. You have some capital to invest, $5,000 to $20,000 and some money saved so you don’t need to be profitable on day one. Niche videography, wedding DJ, restaurant cleaning, mobile pet grooming, Airbnb property management, holiday decorations
- Level 3 Opportunities: You have more skills, more cash and a better network. Dumpster rental business, tree trimming/removal, niche carpentry, mobile car mechanic, surveying
On running a business:
- The owner or CEO is not doing the thing. They are operating the company.
- When you are starting and growing a business, your job is not to rethink a business model and do twenty things differently. It is to figure out what is working, copy those things, and then do the little things well. The fundamentals. That’s it.
- If you don’t like sales, I suggest you give up now and go get a regular job. You’re wasting your time. Life as an entrepreneur is sales. You’re selling your employees on trusting you and following you. You’re selling your partners on coming along for the ride and on what you bring to the table. You’re selling your investors on giving you money. Hell, you’re selling yur vendors on selling to you.
- If you’re closing 70 percent of your leads, your pricing is too low.
- We got our entire business off the ground through guerrilla marketing. I got up every day at 6:00 am to write chalk advertisements in high-traffic areas on campus where we knew our customers would walk. We didn’t spend a dollar on mainstream marketing until 2007, six years after we began. By then, we were doing more than $2 million in annual revenue.
- I sat down with more than a hundred potential investors. Ninety-five of them turned me down, but five said yes.
- If you can unlock and master the art of dealing with people, you will have the ability to build companies, and you will become wealthy.
- In order to network effectively, you have to bring something to the table. How did I do it? I became somebody worth knowing. I built a company. I sold that company. I became an expert in the self-storage business and the international hiring business. I made money. I became somebody people thought they ought to know because I could probably help them out.
- You want to be able to bill a customer two to three times what you are paying an employee to deliver the work. It may feel like a lot, but between employment taxes, benefits, overhead, and lost time due to training, vacation, idle time and travel, three times is often the multiple to maintain healthy margins.
- About 80 percent of the 300+ employees across my portfolio are located in Latin America, South Africa, Eastern Europe, and the Philippines. In my companies, overseas employees do anything that can be done from a computer.
- Employees want structure. Ninety-nine percent of people prefer to be told what to do and how to win. They don’t like dealing with ambiguous situations or uncomfortable conversations. If they wanted chaos, they would be entrepreneurs. The truth is that people who have jobs want to be set up to succeed. They want to know what to expect. So establish structure and rules. Tell people what to do. And then hold them accountable for doing it.
- Your company’s performance will fall to the level of incompetence that you tolerate. Fire your low performers or watch your high performers walk away.
Nick Huber represents a different school of thought compared to tech entrepreneurs. I don’t agree with everything he says in the book, but it was interesting to view entrepreneurship through a different lens.
