Is it true? Can you learn anything in about a year?
Rod Drury, CEO and Co-Founder of Xero says you can. It’s hard to doubt someone who has built a large and fast growing company with over 300,000 customers and oh by the way, Peter Thiel invested (yes, the first investor from that Facebook movie and Co-founder of Paypal).
It’s a shocking idea, especially in accounting. I mean, don’t we have to go to school for 5 years? What about “paying my dues”.
I’m not saying Rod’s belief is always true, but consider it for yourself. If you could learn anything by July 2015, what would it be? Who would you be?
When I quit my job a year ago, I had no idea how naive I was. And I’ve paid for that naiveté with many many mistakes. But to illustrate the power of reinvention and how much you can learn in one year, here some of what I learned the hard way in a little less than a year of being an entrepreneur:
Some things I learned
Price is almost never the most important part of sales.
In an acquisition, the price of the sale, and any subsequent negotiation are separate parts of the deal and should not affect one another.
In general, the more automation in your business, and the more recurring revenue, the higher the multiple you will get from any sale and the more valuable your business will become.
It’s easier to sell to people who know they have a problem rather than having to explain their problem, then sell.
In a marketplace business, you don’t have control over your product, and that’s a huge challenge.
You should pay about 1 years revenue if you buy a website from someone. If you sell your site, you should sell it for much more and to an established company, than any another person.
There is very little to loose in quitting your job (couple hundred thousand bucks) and a lot to gain.
Whatever you can talk the most about, start a blog on it. You will meet thousands of people and it will make you money, even if it’s something ridiculous like a love of cheese. There are cheese blogs out there that make serious cash. Seriously, ANYTHING can work if your passionate and know a shit ton about it.
Most people have no idea what they’re doing, even the rich people and especially the politicians.
You can literally reach anyone in the world with a great email or tweet.
Patience is incredibly important (even though I still don’t have it, I know it’s important). Any day right around the corner, everything can change.
Business plans are worthless unless you’re trying to raise money.
You don’t need to raise money to make money.
Ideas are a dime a dozen; execution, bold action, and discipline are everything.
It’s invaluable to have a partner who has experience as an entrepreneuer and who has raised money and sold a business.
If possible, don’t give up any equity in your business. If you do, make sure it’s for a technical skill (could be web development or very technical internet marketing skills like SEO or pay-per-click, or engineering a physical product).
When you create content, more is better. You honestly don’t even need everything spelled right (although it’s best to give an honest effort).
Done, is always better than perfect.
Sales heal everything.
Pissing people off is better than not getting what you want, or not doing what’s best for you.
There’s a difference between know your idea, and knowing your business. For example, if I want to sell a black trash can to consumers, that’s an idea. What the production cost is, wholesale price, retail price, how many customers can I reach online, how many do I have to sell to break-even, what could my company exit price be in 3-5 years, etc. That’s all about knowing your business.
Some things I wish I’d done
Find a great mentor who I would actually want to be and who had achieved the same success I want.
Built up a base of income and cash flow in a side business before quitting my job. I went about 3 months with virtually $0 of income after quitting.
Read the Ultimate Sales Machine by Chet Holmes and Reality Check by Guy Kawasaki.
Read the Gary Halbert Letters.
Listened to hundreds of Mixergy interviews before leaving my job, seriously, talk about an MBA being overpriced. The information their is far more valuable and relevant, and CHEAP.
Saved like crazy while I had a job. I mean seriously, where did all that money go. Just wasted. I’ve made and saved way more money in the last six months then my three previous years of work.
Thought about what type of business model I want. Trying to sell a real estate practice that makes $10m in sales and trying to sell a $10m in revenue subscription based SaaS business will get you a very different acquisition sales price.
Questions? Email me at andrew@thebeancounter.com.
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