Build a Business With Growth in its DNA

1. Profit Margin It’s easy to work out whether or not your business has profit margin, or to at least estimate it early on. Imagine not being involved in your business at all—everything the customer experiences gets handled by a team of people or systems. How much does it cost you to keep that customer and how much revenue do they generate?

The actual, acceptable percentage will depend on a lot of things, but obviously you have to be making more than it’s costing you to service each customer. For our services startup I decided a reasonable figure was double. That is: half of our revenue is costs, half is profit, so I’d have a 50% margin. If it costs $50 / month to service a customer, I would price the service at $100.

I solved this problem by cutting out 99% of what I offered and only offering a service that I knew affordable contractors could excel at it. This enabled me to have an acceptable margin in the business of around 50%.

2. Large Market I’m not into niches. I want to make sure whatever I start could be a $1,000,000 business in a few years, ideally more. I hope you are the same. If you want something that grows, it has to have something to grow into, and the last thing you want is to kill your momentum by hitting a ceiling. I’ve mentioned serving a large market previously, but since it’s such a big growth inhibitor, it bears repeating here.

3. Asset Building When I sold my business, I learned that project clients were worth very little. The website and the recurring clients were transferable assets. The historical revenue from project work wasn’t worth much at all.

4. Simple Business Model Having a simple product and a simple value proposition makes everything else easier. From elevator pitches to growth tracking to hiring—the more complex a model, the harder it is to know when things are going well. If you can’t measure it, you can’t manage it.

5. Recurring or Predictable Revenue Having a simple MRR model makes everything easier. There are other benefits like predictable revenue, simple metrics, simple goals, easy-to-see growth/growth sources, easy resourcing/scaling, and constant sources of motivation. A year in and I am still manually updating the MRR on a daily basis and giving my team members virtual high-fives.


The 7 Day Startup: You Don't Learn Until You Launch

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The basics of starting a business are very simple; you don’t need an MBA (keep the $60,000 tuition), venture capital, or even a detailed plan. You just need a product or service, a group of people willing to pay for it, and a way to get paid. This can be broken down as follows: 


1. Product or service: what you sell 
2. People willing to pay for it: your customers 
3. A way to get paid: how you’ll exchange a product or service for money

To make this clear let's say it again; 
To start a business, you need three things: 

a product or service, a group of people willing to pay for it, and a way to get paid. Everything else

The hard way to start a business is to fumble along, uncertain whether your big idea will resonate with customers. The easy way is to find out what people want and then find a way to give it to them.

the problem: Many businesses are modeled on the idea that customers should come back to the kitchen and make their own dinner. Instead of giving people what they really want, the business owners have the idea that it’s better to involve customers behind the scenes … because that’s what they think customers want.

As you begin to think like an entrepreneur, you’ll notice that business ideas can come from anywhere. When you go to the store, pay attention to the way they display the signage. Check the prices on restaurant menus not just for your own budget but also to compare them with the prices at other places. When you see an ad, ask yourself: What is the most important message the company is trying to communicate?


The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future

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As you begin to think like an entrepreneur, you’ll notice that business ideas can come from anywhere. When you go to the store, pay attention to the way they display the signage. Check the prices on restaurant menus not just for your own budget but also to compare them with the prices at other places. When you see an ad, ask yourself: What is the most important message the company is trying to communicate?

When thinking about different business ideas, also think about money. Get in the habit of equating “money stuff” with ideas. When brainstorming and evaluating different projects, money isn’t the sole consideration—but it’s an important one. Ask three questions for every idea: a. How would I get paid with this idea? b. How much would I get paid from this idea? c. Is there a way I could get paid more than once?

If you have an existing business and are thinking about how to apply the concepts from this book, focus on either getting money in the bank or developing new products or services. These are the most important tasks of your business—not administration, maintenance, or anything else that takes time without creating wealth or value.

Friedrich Engels said: “An ounce of action is worth a ton of theory.


The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future.

The concept of the MVP is (in Eric Ries’ words): “The first step is to enter the Build phase as quickly as possible with a minimum viable product (MVP). The MVP is that version of the product that enables a full turn of the Build-Measure-Learn loop with a minimum amount of effort and the least amount of development time.” What this means: Rather than spending six months creating a product or service, do only the smallest amount of work required to truly test it.

In practice, this is interpreted in a lot of ways that prove to be detrimental to bootstrapped startups. They create a really crappy version of the product or service without enough features to make it desirable enough for someone to pay for. Or they don’t create anything, and instead put up a landing page and base their decisions on email opt-ins. Or they realize it will take too long to create their actual product, so they create something else.

Most of these interpretations go wrong when they get away from effectively measuring what needs to be measured.

A common MVP mistake is over-emphasizing the “minimum” and under-emphasizing the “viable.”

A much better MVP would have been: 


1. Put screenshots up of an analytics report and explain what the product does. 
2. When someone signs up (pays), get them to click on a few logos to select the services they liked. 
3. Tell them their report will be ready soon. 
4. Call them up and talk them through what’s being done, build the report, and give it to them. 

This would have taken me one day.

The 7 Day Startup: You Don't Learn Until You Launch

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Before we get started, let’s define what traction is. Traction is a sign that your company is taking off. It’s obvious in your core metrics: if you have a mobile app, your download rate is growing rapidly. If you’re a search engine, your number of searches is skyrocketing. If a SaaS tool, your monthly revenue is blowing up. If a consumer app, your daily active users are increasing quickly. You get the point.

“A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of ‘exit.’ The only essential thing is growth. Everything else we associate with startups follows from growth.” In other words, traction is growth. The pursuit of traction is what defines a startup.

Startups get traction through nineteen different channels;

We discovered two broad themes through our research: Most founders only consider using traction channels they’re already familiar with or think they should be using because of their type of product or company. This means that far too many startups focus on the same channels (search engine marketing, public relations) and ignore other promising ways to get traction. It’s hard to predict the channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now.

Each traction channel has worked for startups of all kinds and in all different stages. 

• Viral Marketing (Chapter 6)  Viral marketing consists of growing
  
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• Public Relations (Chapter 7)  Public relations (PR) is the art of getting your name out there via traditional media outlets like newspapers, magazines and TV.
  
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• Unconventional PR (Chapter 8)  Unconventional PR involves doing something exceptional (like publicity stunts) to draw media attention.
  
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• Search Engine Marketing (Chapter 9)  Search engine marketing (SEM) allows companies to advertise to consumers searching on Google and other search engines.
  
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• Social and Display Ads (Chapter 10)  Ads on popular sites like reddit, YouTube, Facebook, Twitter and hundreds of other niche sites can be a powerful and scalable way to reach new customers.
  
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• Offline Ads (Chapter 11)  Offline ads include TV spots, radio commercials, billboards, infomercials, newspaper and magazine ads, as well as flyers and other local advertisements. These ads reach demographics that are harder to target online, like seniors, less tech-savvy consumers and commuters.
  
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• Search Engine Optimization (Chapter 12)  Search engine optimization (SEO) is the process of making sure your website shows up for key search results.
  
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• Content Marketing (Chapter 13)  Many startups have blogs. However, most don’t use their blogs to get traction.
  
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• Email Marketing (Chapter 14)  Email marketing is one of the best ways to convert prospects while retaining and monetizing existing ones.
  
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• Engineering as Marketing (Chapter 15)  Using engineering resources to acquire customers is an underutilized way to get traction. Successful companies have built micro-sites, developed widgets, and created free tools that drive thousands of leads each month.
  
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• Targeting Blogs (Chapter 16)   Popular startups like Codecademy, Mint, and reddit all got their start by targeting blogs.
  
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• Business Development (Chapter 17) Business development (BD) is the process of creating strategic relationships that benefit both your startup and your partner.
  
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• Sales (Chapter 18)  Sales is primarily focused on creating processes to directly exchange product for dollars.
  
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• Affiliate Programs (Chapter 19)  Companies like Hostgator, GoDaddy and Sprout Social have robust affiliate programs that have allowed them to reach hundreds of thousands of customers in a cost-effective way.
  
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• Existing Platforms (Chapter 20)  Focusing on existing platforms means focusing your growth efforts on a mega-platform like Facebook, Twitter, or an App Store and getting some of their hundreds of millions of users to use your product.
  
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• Trade Shows (Chapter 21)  Trade shows are a chance for companies in specific industries to show off their latest products.
  
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• Offline Events (Chapter 22)  Sponsoring or running offline events – from small meetups to large conferences – can be a primary way you get traction.
  
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• Speaking Engagements (Chapter 23)  Eric Ries, author of the bestselling book The Lean Startup, told us how he used speaking engagements to hit the bestseller list within a week of the book’s launch, how he landed these talks, and why he chose to use this channel to generate awareness and book sales.
  
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• Community Building (Chapter 24)  Companies like Zappos, Wikipedia, and Stack Exchange have all grown by forming passionate communities around their products.
  

Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished.

Traction: A Startup Guide to Getting Customers

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IT TOOK THE OIL tycoon John D. Rockefeller 46 years to make a billion dollars. He clawed his way to the top of the 19th-century business world. Starting with a single oil refinery in 1863, over two decades, he constructed oil pipelines and bought out rival refineries until he’d built an empire. Seventy years later, the 1980s computer baron Michael Dell achieved billionaire status in 14 years; Bill Gates in 12. In the 1990s, Jerry Yang and David Filo of Yahoo each earned ten figures in just four years. 

It took Pierre Omidyar, founder of eBay, three years to do it. And in the late 2000s, Groupon’s Andrew Mason did it in two.

Sure, there’s been inflation since Rockefeller, but there’s no disputing that we’ve decreased the time it takes innovative people to achieve dreams, get rich, and make an impact on the world—and this has largely been due to technology and communication.

“A serious assessment of the history of technology shows that technological change is exponential,” writes the futurist and author Ray Kurzweil in his famous essay The Law of Accelerating Returns. “So we won’t experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress (at today’s rate).” 

At the same time, many industries remain decidedly stuck in the past. Most large businesses stop growing after a few years. Formal education, in many cases, is so slow or out-of-date that venture capitalists pay bright people to skip school and start Internet companies. Conventional wisdom—outside of the technology industry—on innovation and career building has hardly evolved since the 19th century.

This dilemma is an exercise in lateral thinking. It’s the kind of puzzle in which the most elegant solution is revealed only when you attack it sideways.

New ideas emerge when you question the assumptions upon which a problem is based (in this case: it’s that you can only help one person).

Lateral thinking doesn’t replace hard work; it eliminates unnecessary cycles.

The law of the lever, as shown by the Greek mathematician Archimedes, says the longer the lever, the less force you need exert. This is the smart way. Leverage is the overachiever’s approach to getting more bang for her proverbial buck.

These principles explain how rocketeers and makeup artists defy expectations and become world-class icons. They’re how tech geeks save lives and community college flunkies catalyze global change.

Momentum—not experience—is the single biggest predictor of business and personal success.

Throughout history, fast-rising companies, rock-star executives, “overnight” movie stars, and top-selling products have outrun their peers by acting more like ladder hackers than ladder climbers.

"This example" illustrates an interesting fact: people are generally willing to take a chance on something if it only feels like a small stretch.

This is like an intern applying for a CEO job, or a brand-new startup bidding on a NASA contract. The players eliminated resistance by breaking the big challenge (acquire something valuable like a TV) into a series of easier, repeatable challenges (make a tiny trade).

Researchers call this the psychology of “small wins.” Gamblers, on the other hand, would call it a “parlay,” which the dictionary defines as “a cumulative series of bets in which winnings accruing from each transaction are used as a stake for a further bet.”

“By itself, one small win may seem unimportant,” writes Dr. Karl Weick in a seminal paper for American Psychologist in 1984. “A series of wins at small but significant tasks, however, reveals a pattern that may attract allies, deter opponents, and lower resistance to subsequent proposals.” “Once a small win has been accomplished,” Weick continues, “forces are set in motion that favor another small win.”

But the key to success was not just rapid cycle time, it is alsothe direction they traded: sideways

The players didn’t simply parlay toothpicks for pieces of wood of increasing size; they traded toothpicks for pens and mirrors for old bikes. They didn’t wait around for the owners of a vacant house to show up, so they could ask for a trade, and they didn’t knock on the same door over and over until a “no” became a “yes.” When a door was shut to them, they immediately picked another one. When the ladder became inefficient, they hacked it. And that is what made them successful so quickly. The key to Bigger or Better, in other words, is the “or.”

But, according to behavioral biologists, speed is not the cheetah’s biggest predatory advantage. As science writer Katie Hiler puts it, “It is their agility—their skill at leaping sideways, changing directions abruptly and slowing down quickly—that gives those antelope such bad odds.”

Business research shows that this kind of ladder switching generally tends to accelerate a company’s growth. Companies that pivot—that is, switch business models or products—while on the upswing tend to perform much better than those that stay on a single course.

The 2011 Startup Genome Report of new technology companies states that, “Startups that pivot once or twice raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely.”

Smartcuts: How Hackers, Innovators, and Icons Accelerate Success

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Greek philosophers were so adamant about character that they believed it defined one's value as a citizen. Heraclitus said that "character is destiny," and Aristotle told us that "to enjoy the things we ought to enjoy…has the greatest bearing on excellence of character" and "no one who desires to become good will become good unless he does good things." More recently Ralph Waldo Emerson advised that "character is higher than intellect," and Albert Schweitzer said that "example is not the main thing in life…it is the only thing!

In a business case, a breach of trust can cause a transaction to fail, degrade one's reputation, and increase costs. Personal and team trustworthiness must be placed on the highest priority list, measured, and practiced. But how? 

Here are five simple steps:

• Always meet your commitments. 
  
• Do more than is expected of you. 
  
• Do things faster than expected. 
  
• Achieve better results than expected. 
  
• Do all of the above with integrity and with little fanfare.
  

Unbeatable Mind: Forge Resiliency and Mental Toughness to Succeed at an Elite Level

Here are the 8 key business trends affecting us all today: 


1. Global marketplace gets personal

To take advantage of this you will need to excel at producing specialized products and services to meet the personalization demands of customers. This means catering to your target audience with specific language and location-based features like Viewsy, a location analytics solution for the physical stores to better understand their foot traffic.

2. The rise of the entrepreneur 

Small businesses are already taking advantage of web and mobile technologies that allow them to take on the corporate giants, with customers no longer knowing, or even caring about the size of the firm that provides their goods and services.

3. Virtual workforces explode 

We have already shifted towards a flexible, on-demand workforce that enables businesses of all sizes to get more done with less. This mobile and virtual workforce can scale according to your needs and demands.

4. Mobile domination is calling

As technology prices fall, the adoption of sophisticated mobile technologies will continue to permeate our everyday lives. In time, smartphones will replace or bypass desktops and laptops and will emerge as the new standard for both businesses and consumers.

5. Consumers are the new CEOs 

From our reliance on (and increasing addiction to) mobiles, and with smartphones becoming smarter, our ability to have real influence as consumers grows. We can make more informed decisions about what we purchase and why.

6. Social is your business foundation 

Social media has transformed the way we market, sell and serve our customers. Platforms like Facebook, YouTube and Google Plus have made this consumer power even more possible.

7. Digital currency is king 

It’s becoming easier and more accessible to do online banking and to make mobile payments. Digital wallets like Google Wallet and smartphone apps from major banks are opening the door for us to manage our finances from anywhere and to make payments from anywhere. As consumers become more trusting, we will find ourselves in an increasingly cashless society, turning to tools like Trustev. This is a real-time, online verification for shopping online that uses social fingerprinting technology to create a real and visible relationship between consumer and retailer.

8. Crowdfunding is the new angel investor 

You don’t need to hit up investors anymore and give away large chunks of control of your company, instead you just need to turn to one of over 500 crowd funding sites to finance your dreams. In fact, it’s such an important trend, that I wrote a book on it: How to Fund Your Dream Idea on Kickstarter.

“It’s not about how you work 10 times harder. It’s about how you work 10 times smarter and everything to do with how you find a wave that’s 10 times bigger. It doesn’t matter what kind of business you’re in, there’s going to be a way for you to leverage waves.” ~ Roger Hamilton, author of Fast Forward Your Business. The trick to taking advantage of these “waves” is to pick the ones you can ride most effectively. Imagine you’re a surfer. You want to catch these waves early and then ride them all the way to the beach. But first you need to learn how to catch the wave and get up on the board. So let’s start paddling.

The Suitcase Entrepreneur: Create freedom in business and adventure in life

Excellence is a matter of steps. 

Excelling at this one, then that one, and then the one after that. Saban’s process is exclusively this—existing in the present, taking it one step at a time, not getting distracted by anything else.

The process is about finishing. Finishing games. Finishing workouts. Finishing film sessions. Finishing drives. Finishing reps. Finishing plays. Finishing blocks. Finishing the smallest task you have right in front of you and finishing it well. Whether it’s pursuing the pinnacle of success in your field or simply surviving some awful or trying ordeal, the same approach works. Don’t think about the end—think about surviving. Making it from meal to meal, break to break, checkpoint to checkpoint, paycheck to paycheck, one day at a time. And when you really get it right, even the hardest things become manageable. Because the process is relaxing. Under its influence, we needn’t panic. Even mammoth tasks become just a series of component parts.

I know that seems almost too simple. But envision, for a second, a master practicing an exceedingly difficult craft and making it look effortless. There’s no strain, no struggling. So relaxed. No exertion or worry. Just one clean movement after another. That’s a result of the process.

Do that now, for whatever obstacles you come across. We can take a breath, do the immediate, composite part in front of us—and follow its thread into the next action. 

Everything in order, everything connected.

The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph

You will come across obstacles in life—fair and unfair. And you will discover, time and time again, that what matters most is not what these obstacles are but how we see them, how we react to them, and whether we keep our composure.

You will learn that this reaction determines how successful we will be in overcoming—or possibly thriving because of—them. Where one person sees a crisis, another can see opportunity. Where one is blinded by success, another sees reality with ruthless objectivity. Where one loses control of emotions, another can remain calm. Desperation, despair, fear, powerlessness—these reactions are functions of our perceptions.

We can stop seeing the “problems” in front of us as problems. We can learn to focus on what things really are.

There are a few things to keep in mind when faced with a seemingly insurmountable obstacle. We must try: To be objective To control emotions and keep an even keel To choose to see the good in a situation To steady our nerves To ignore what disturbs or limits others To place things in perspective To revert to the present moment To focus on what can be controlled This is how you see the opportunity within the obstacle. It does not happen on its own. It is a process—one that results from self-discipline and logic. And that logic is available to you. You just need to deploy it.

Choose not to be harmed—and you won’t feel harmed. Don’t feel harmed—and you haven’t been. —MARCUS AURELIUS

We decide what we will make of each and every situation. We decide whether we’ll break or whether we’ll resist. We decide whether we’ll assent or reject. No one can force us to give up or to believe something that is untrue (such as, that a situation is absolutely hopeless or impossible to improve). Our perceptions are the thing that we’re in complete control of. They can throw us in jail, label us, deprive us of our possessions, but they’ll never control our thoughts, our beliefs, our reactions. Which is to say, we are never completely powerless.

The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph