There are so many entrepreneurs in 2016 right now starting their own start ups and there are so many investors looking for a good start up to invest in. What defines a successful start-up and what kind of startups should investors invest in? In Startup J Curve by Howard Love, he goes very in depth about the founding of the startup to scaling of the company. As someone with a entrepreneur spirit in my heart, this book was one of the most interesting and practical books I read this year and I would recommend everyone looking to invest in a start up to read this book.
Everyone starts their business with an idea. Some people have a million dollar idea while some have a “billion dollar idea”.Many believe that ideas are what sets the start-ups apart. There’s a lot of myth to this Let’s take a look at one of the most successful tech startup, Facebook. Facebook was found by Mark Zuckerberg and has a evaluation of more than 33 billion dollars. If we take a look at the core idea of this 33 billion dollar company, it’s not anything complicated. It’s just a social media site with extra layer of protection added on to it. In fact, social media sites like Myspace existed before Facebook so we can see that start-ups aren’t all about your idea. Let’s also take a look at Dollar Shave Club that has an evaluation of more than 1 billion dollars. Is it that hard to come up with the idea to ship out razors to your customers every month? In fact, many men claim that they had this idea as well and how they should have started their business. What sets these men and Michael Dubin apart?
It’s all about the execution. No matter how good of an idea you have, it’s not going to get you even close to having a successful business. Unless you came up with the idea that can solve everyone’s problem, your idea itself isn’t going to be worth 1 billion dollars. You have to take your idea and build your brand and take your share in the market. A lot of people I know also think that they need to patent their idea before even doing any action or taking any action. Just keep this in mind, if your idea is that easy to copy, you will be copied nonetheless and there aren’t that many people in the world that are determined enough to take action in their ideas. I’m not saying that you shouldn’t patent your ideas, there are some industries where it is crucial to protect your ideas. But I am speaking to the general audience. Your focus shouldn’t be on how do I protect my idea, it should be on how to take your idea and finding investors and coming up with your map on how to grow your company. I want you to be different from the average entrepreneurs that make $50,000 a year. I want you to be the one reaching your goals and reaching the level of financial freedom and for you to reach that level, you need to understand this very well.
Almost every start up needs significant amount of money in the beginning. There are two types of people at this stage. The “average” entrepreneur that sees the money as costs and the “rain-makers” that see it as an investment. What sets these two apart, one perseveres during the most difficult and most unrewarding part of startup. The other gives up midway and fails to live the life they want and end up fitting into other people’s dream life. Now there are some people that go to an extreme on this. They spend all their money on a marketing plan or business plan that won’t ever make them a profit which is what all the idiots will do. You cannot put your money in something that won’t bring you profits. Just keep this formula in your mind. As long as you do this calculation correctly, you won’t have to worry about your company not functioning properly. Your CLV should be much greater than CPA. Your CLV is the life time value of the customer and CPA is the customer life time value. You do not want this to be too close as you want a margin of safety in case you make a blunder in your calculations. But as long as the amount of profit you make on your customers is greater than the cost of acquiring, you should do pretty well in business.
I only covered about 1/20 of what is actually in the book. Why? Because this is one of the best books I read on start ups and I encourage every one of you guys to go out and read this book on your own. I promise that you won’t regret it. Stay strong and see you guys on the next one.
Everyone starts their business with an idea. Some people have a million dollar idea while some have a “billion dollar idea”.Many believe that ideas are what sets the start-ups apart. There’s a lot of myth to this Let’s take a look at one of the most successful tech startup, Facebook. Facebook was found by Mark Zuckerberg and has a evaluation of more than 33 billion dollars. If we take a look at the core idea of this 33 billion dollar company, it’s not anything complicated. It’s just a social media site with extra layer of protection added on to it. In fact, social media sites like Myspace existed before Facebook so we can see that start-ups aren’t all about your idea. Let’s also take a look at Dollar Shave Club that has an evaluation of more than 1 billion dollars. Is it that hard to come up with the idea to ship out razors to your customers every month? In fact, many men claim that they had this idea as well and how they should have started their business. What sets these men and Michael Dubin apart?
It’s all about the execution. No matter how good of an idea you have, it’s not going to get you even close to having a successful business. Unless you came up with the idea that can solve everyone’s problem, your idea itself isn’t going to be worth 1 billion dollars. You have to take your idea and build your brand and take your share in the market. A lot of people I know also think that they need to patent their idea before even doing any action or taking any action. Just keep this in mind, if your idea is that easy to copy, you will be copied nonetheless and there aren’t that many people in the world that are determined enough to take action in their ideas. I’m not saying that you shouldn’t patent your ideas, there are some industries where it is crucial to protect your ideas. But I am speaking to the general audience. Your focus shouldn’t be on how do I protect my idea, it should be on how to take your idea and finding investors and coming up with your map on how to grow your company. I want you to be different from the average entrepreneurs that make $50,000 a year. I want you to be the one reaching your goals and reaching the level of financial freedom and for you to reach that level, you need to understand this very well.
Almost every start up needs significant amount of money in the beginning. There are two types of people at this stage. The “average” entrepreneur that sees the money as costs and the “rain-makers” that see it as an investment. What sets these two apart, one perseveres during the most difficult and most unrewarding part of startup. The other gives up midway and fails to live the life they want and end up fitting into other people’s dream life. Now there are some people that go to an extreme on this. They spend all their money on a marketing plan or business plan that won’t ever make them a profit which is what all the idiots will do. You cannot put your money in something that won’t bring you profits. Just keep this formula in your mind. As long as you do this calculation correctly, you won’t have to worry about your company not functioning properly. Your CLV should be much greater than CPA. Your CLV is the life time value of the customer and CPA is the customer life time value. You do not want this to be too close as you want a margin of safety in case you make a blunder in your calculations. But as long as the amount of profit you make on your customers is greater than the cost of acquiring, you should do pretty well in business.
I only covered about 1/20 of what is actually in the book. Why? Because this is one of the best books I read on start ups and I encourage every one of you guys to go out and read this book on your own. I promise that you won’t regret it. Stay strong and see you guys on the next one.