The Startup Bubble

There are few things any established industrial economy needs more of than new businesses, but I’m here to say that ‘startups’ might not be the answer. Firstly, there are a lot of businesses calling themselves a startups, when in reality, they’re really just new, small businesses. So, what is a startup?

Startup = A new type of business trying to uncover a business model which doesn’t exist yet. Often, they want to leverage a new technology and be a better solution to an existing problem. A startup isn’t just a small business trying to grow with an established method, like say, a café. It’s a new way of doing business in a certain arena.

This definition is why they can attract large sums of speculative investment – the prize of winning can be big.

– – –

The amount of technological innovation is providing scope for many great startups. But business, like anything, isn’t immune to getting caught up in fashion. Yep, business is massively influenced by what is fashionable. If you run a startup – here are a few things that are highly unfashionable at the moment.

  • To be profitable
  • To self-fund
  • To want to remain small or medium-sized
  • To enter an established industry and just do it better
  • To not try and change the world

The Silicon Valley ethic now runs deep – despite the current tech-lash. There’ll be a lot of startups that realise not everyone (in fact, nearly no one) ends up with a unicorn or gets bought out by big tech. And this is where the problem lies. No one wants to simply run a business, make profit and employ people. Everyone wants to change the world instead of their suburb.

Yes, every technology revolution creates new behemoths which redefine commerce, but the probability of being one of these is extremely low. In fact, it’s a really bad bet to even try.  I’m not trying to steal anyone’s dream. I’m trying to do the opposite and actually help you achieve it. Here’s why.

There has simply never been a better time in history to start a small business, be a freelancer and earn a well above average income by staying small and not aiming for all-or-nothing. Never before have we all had such an equal playing field to start anything. Access to knowledge, finance, manufacturing, promotional tools, distribution, logistics, publishing, you name it. It’s all possible for anyone with internet access, imagination and tenacity. We can literally invent money through organising the factors of production in a new manner, and we don’t need a venture capitalist to help us do it.

What every entrepreneur should remember is that when a startup raises capital, they end up with a boss, which is exactly the thing that most entrepreneurs want to leave behind.  If I see another so-called success story of some startup founders standing in front of a brick wall at a co-working space smiling because they just raised $x million in capital I might even scream… it seems to me so many people have forgotten what should be the biggest motivation of all – independence. Isn’t that why people chase money? For the independence it buys?

So here’s the kicker with all this: more entrepreneurs should aim to run business instead of a startup, to actually make a profit and grow organically. A successful business has options, the owner can stay in control, gain financial power and some wisdom along the way. If entrepreneurs do that, then they might have a better chance to scale and actually change more than their suburb.

Thanks for reading, Steve.

The Hustle Hoax

I came across this article recently discussing the Startup Hustle Bubble which is occurring in many entrepreneurial circles. The title said that working 9-5 is for losers. I tend to agree, but in the opposite direction than many of the Silicon Valley disciples espouse. They promote the 18 hour work day, I reckon that’s a better number for the week, only kidding, but not by much. To save you reading it, the proposition of the so called Hustlers goes like this:

  • Workaholism is a desirable life choice
  • To succeed you must give up everything (depends how you define success)
  • Out grind, outwork and out hustle everyone
  • A cottage industry of Hustle conferences are emerging
  • There’s even a Hustle Jesus – otherwise known as Gary V, that hustlers genuinely worship
  • Then there was some wonderful counter claims by the journalist.

Here’s a few things worth considering:

Firstly, there is no doubt work is required to get results in anything, but there is no evidence that working a crazy hours makes people any richer – if that’s the goal. I’d add to this that most of the people I know with incredible financial wealth, didn’t hustle all day and night, they used their brains, took calculated risks, saved, invested and compounded small advantages over time. But you know what they did more than anything else? They got others to work the hours for them and arbitraged their wages. It’s how capital works. Capital wins, capital always wins simply because each individual will only ever have 24 hours to give.

It’s also worth remembering that only thing we can never earn back in life is time. No amount of money will buy it back, your kids (if you have any) will only be young once and they’d rather have your time, than toys. We all know that money doesn’t lead to more happiness over a certain threshold. But mostly we should always be driven by our own personal objectives, when it comes to what we sacrifice. It’s vital we don’t get caught up in ‘fashion’ or the goals of others who a vested interest in the amount of hours we put in anything.

If you want more life hacks – then you’ll totally dig my new book The Lessons School Forgot. By the way, I went surfing on Tuesday, had a two hour nap today and I still got all my work done!

A little story about "A" players

'A' Players

No doubt you want your startup to be filled with ‘A player’ hackers and hustlers.

This is the common reason why we people talk up the importance of so called A players:

A Players attract A Players

while,

B Players attract C players.

Personally, I think we are all A,B and C players. What determines our quality of play is the culture we are immersed in. The people we are around, the tasks we are asked to do, whether this is the right industry or project for us, and maybe even the playing habits of those in charge.

I strongly believe A, B and C players are a function of the environment, not the person. We’ve all had periods and places where we’ve excelled and others where we have been the weak link. So in real terms, our job in any organisation should be about creating a culture where A players happen to emerge.

Follow me on SnapChat – search ‘Sammartron’ for more business insight.

What entrepreneurs can learn from my terrible cover band

Beatles tribute band

As a teenager I was in a cover band. Which is bit like selling imitation goods at the market for discount prices. We practiced a couple of times a week, for about a year. Sure we improved, but never thought we were good enough to start doing gigs. We never left the garage. What a waste.

Maybe we were good enough, maybe we weren’t. Whatever we thought didn’t matter because there was no feedback from the market, only voices in our heads and group think. (pun intended).

But worse that that, is this. We would much rather have played our own songs, but didn’t believe we had the talent. We didn’t even allow ourselves the privilege of doing what we believed in. We ended up hidden away playing ‘songs we liked’ and never sounded as good as the originals. Which no one ever can. Our fear from ourselves killed our dream before we even started. Our net results was worse than if we tried to do originals and failed.

When starting anything, here’s a few things to remember:

  • We’ll never be ready.
  • Copies get compared to who came first, and always make less money.
  • It’s harder to compare, when you make original stuff.

Get out of the garage and be original. It is better to fail being you, than fail by not quite being them.

You should totally read my book – The Great Fragmentation.

Entrepreneurs, it's ok to copy

DNA

There’s a tension in our connected world about being the originator. Apparently those who invented it first always win. It is said that the best entrepreneurs are those who change things. It turns out though, those that win reinterpret that which is already here.

Here are a few examples of things that weren’t invented by who you think:

Some break dancing way before it ever appeared in the Bronx.

A graphical user interface & mouse way before Apple.

The first automobile from China in 1672, way before Carl and Henry.

So the next time you get accused of copying someone, just tell them they copied their DNA from their parents. They copied their language from their community and they should also start copying their ideas from the giants who came before them. We first must copy before we can create. Go forth and copy.

You should totally read my book – The Great Fragmentation.

What I always tell door to door sales people might surprise you

Screen Shot 2015-05-04 at 5.21.58 pm

Whenever a door knocker comes to my home to sell me something I probably don’t need, or already have – like electricity, I always tell them the same thing:

Congratulations – you’re going to be rich!

Yep, I give them praise for what they are doing (one of the most difficult jobs there is). I then go onto tell them about how the skills they are gathering will give them a massive life advantage in any developed economy. I remind them what these skills include:

  • Dealing with rejection. (Yes, I politely tell them I am not going to buy upfront)
  • Learning how to sell to a stranger.
  • Learning to sell products which are homogenous, boring, commodities & even unwanted.
  • Learning how to talk and pitch – their pitch time is at most a few seconds.
  • Understanding body language.
  • The power of persistence.
  • How much courage they have and their willingness to work (I’m guessing it’s job you only take out of desperation)

There’s more but you get the picture.

Most often they are pleased I’ve noticed this, and sometimes the hardworking sales person doesn’t even realise what a terrific opportunity this ‘horrible job’ turned out to be. I tell them it only gets easier from here. And if we happen to get into a conversation I give them some tips on selling, recommended some great sales trainers they can listen to; like Brian Tracy and Jim Rohn, and even some books worth reading. Lastly I explain to them that all CEO’s simply have to be Sales Rain Makers.

Even when we choose not to buy, we can still create some value for the seller.

New Book – The Great Fragmentation – out now.

You don't need an investor

Venture Capitalist

Yesterday I got an email from Sam Birmingham from Pollenizer, and it’s message was so compelling, I had to share it here:

It is something we hear all too often… “I was wondering if you could help me find an investor?”

You don’t need an investor. You need customers.

You don’t need an investor. You need to prove that you are developing a sustainable business model.

You don’t need an investor. You need to focus on learning as much as you can with the finite resources at your disposal.

Sometimes having limited time / money / people can be an advantage. Do the best you can with what you’ve got. Stop making and start answering the most important question in entrepreneurship – what comes next? 

For more startup goodness be sure to check out the Pollenizer blog. 

New Book – The Great Fragmentation – out now.