The Minimalist Entrepreneur
by Sahil Lavingia
A manual for how to start a business by starting. An easy read that I quite enjoyed with practical tips for how to find problems to solve, how to get your first 100 customers, and much more. The last couple of chapters are more about managing a successful business so my notes are much lighter for that section. Hopefully, I will have good reason to revisit in the future.
Questions to ask yourself:
- What do you want to change?
- What small thing could you fix in your world?
- What kind of business do you want to build, own, and run?
A minimalist business should be sustainable. This allows for flexibility to take risks for the greater good. Being profitable allows you to focus on helping others.
A business is not the goal—it is just a tool to make or do stuff.
Start as soon as you can. Start before you feel ready. Start today.
You don't learn, then start. You start, then learn.
The beginnings of all things are small.
The Minimalist Entrepreneur
Being a minimalist entrepreneur is all about making a difference while making a living.
- Put profitability first. Create a business that is profitable at all costs. Aim to be profitable from day one—profit is oxygen for your business.
- Start with community. Build on a foundation of community. Be observant and cultivate authentic relationships.
- Build as little as possible. Only build what you need to—automate or outsource the rest.
- Sell to your first hundred customers. Educate people, don't try to convince them. Sales conversations are an opportunity to learn more about the problem you're trying to solve.
- Market by being you. Share your stories—from struggle to success.
- Grow yourself and your business mindfully. Own your business, don't let it own you. Don't sacrifice profit for scale.
- Build the house you want to live in. When hiring, find other minimalist entrepreneurs. The way you work won't be for everyone, but will perfect for some. Define your values and tell the world—they will find you.
Most people don't start. Many who start don't continue. Many who continue give up. Winners are the few still standing at the end. Don't give up.
Be laser focused on profitability from day one so you can serve your customers and communities.
Find pain points for people, places, and communities you care about. These are opportunities for a minimal entrepreneur.
Creator first, entrepreneur second
- Narrow down your ideal customer.
- Define the exact pain point and what a customer will pay to solve it.
- Set a hard deadline, build a solution, then charge for it.
- Repeat until finding a product that works.
- Make things.
- Charge audience for those things.
- Use that money to make more things.
Starting as an entrepreneur can be complicated and difficult. Starting as a creator is an easier path. And starting is how you learn.
You don't learn, then start. You start, then learn.
Start with community
The best communities are a group of dissimilar people with shared interests, values, and abilities.
You don't have to bring your whole self to the communities you join, but you must bring an authentic part.
Which communities are you part of?
- If I talk, who listens?
- Where and with whom do I spend my time, online and offline?
- In what situations are you most authentically yourself?
- Who do you hang out with—that you don't really like—because of something important in common?
Join communities, not networks.
- Work in public
- Teach everything you know
- Create every day
Before he moved on, he would teach everything he learned doing that project. ... He shared samples, he wrote tutorials about the code he wrote and any specific methods he went through. he did this with every project.
— Nathan Barry on how Chris Coyier had more success even though they had the same skillset.
If you've learned something, others will find value in learning the same thing.
Best way to win is to be the only choice. Find an underserved group with problems they would pay to solve. Once you know a group of people, the problems they need solving become evident.
There are more problems than businesses—you just have to find them.
Four types of utility
- Place utility. Make something inaccessible accessible.
- Form utility. Make something more valuable by rearranging existing parts.
- Time utility. Make something slow go fast.
- Possession utility. Remove a middleman.
What can you make easier to understand, faster to get, cheaper to buy, or more accessible to others?
Choose a problem with a clear, obvious path to charging people money for something of value.
Build as little as possible
Every founder knows nothing at the beginning, and learns from there.
Don't get permission. Just get started.
Start with process
If you want to make a movie recommendation service, start by telling friends to call you for movie recommendations. When you find a movie your friends like, they buy you a drink. Keep track of what you recommended and how your friends liked it, and improve from there.
— Derek Sivers
Document each step of the process—build a playbook for every consecutive customer. Don't go straight from problem to product without learning what and how to build.
Until you get through the process of solving a customer's problem (and getting paid for it), you won't know what they want and what they are willing to pay.
Creating a product is a process of discovery, not mere implementation.
— Naval Ravikant
Quick, profitable business models
- Sell knowledge and teach with digital content (videos, ebooks, podcasts, and courses)
- Sell a physical product
- Connect people for a fee (craigslist, jos board, paid communities)
- Software as a service
Many people are wrong the first time about what they are building. It's very likely you discover what you should be building as you are building something else.
Want to find a good SaaS idea? Start a business, literally any business. You will soon realize how bad every existing tool is that you have to pay for to run that business, and you will quickly become overwhelmed by the number of things you feel you need to build yourself.
— Adam Wathan
When testing a solution, don't ask "would you pay for my product?", ask "why haven't you been able to fix this already?"
Your solution should be provable at a small scale.
Quantum of utility: when there is at least some set of users who would be excited to hear about it, because they can now do something they couldn't do before.
— Paul Graham
Productize your process
Turn your process/solution into a product you can sell:
- Name your business
- Build a website and create an email
- Create social media accounts
- Make it easy for customers to pay
Constraints lead to creativity. When you want to build something new, ask yourself:
- Can I ship it in a weekend?
- Is it making my customers lives a little better?
- Is a customer willing to pay for it?
- Can I get feedback quickly?
Your goal should be to move away from being paid directly for your time.
Almost everyone feels awkard about telling their community what they're building, but it is a critical place to start.
Sell to your first hundred customers
If you wait too long to sell, you will endlessly iterate without letting the world see your work. You feel productive but are running out of runway.
Focus on the slow and steady jouney of selling to your first hundred customers.
There are influencers at all levels, connect with them for strategic outreach:
- Find your subject matter experts. Make a list of everyone who has written or shared anything about a business similar to yours.
- Contact them all personally. Offer to walk them through your product.
- Ask for their personal, candid feedback. Don't ask for reviews, shares, etc. Your goal is to improve the product experience, not go viral.
- Make it clear you massively appreciate their support/feedback.
Until you have a lot of customers (or some other ongoing force for momentum), there's nothign better than knocking on doors. Cold emails, calls, and messages.
Cold email example:
I saw you're selling a PDF on your website using PayPal, and manually emailing everyone who buys the PDF. I built a service called Gumroad, which basically automates all of this. I'd love to show it to you, or you can check it out yourself: gumroad.com.
Also happy to just share any learnings we see from creators in a little PDF we have. Let me know!
Best, Sahil, founder and CEO of Gumroad
Don't copy-paste your emails. Each email you write will refine your ability to write better emails.
Early stage growth is 99% one-on-one sales. Late stage growth is 99% word-of-mouth.
In 2020, Slack IPO'd at a valuation of $26 billion. Documents showed only 575 customers accounted for ~40% of their revenue.
Market by being you
People don't move from strangers to customers in one step. They slowly move from strangers to fans to customers to repeat customers. Start with making fans.
People don't care about companies, they care about people. Most founders aren't comfortable with putting themselves at the center of their company's story. But you need to.
How to get started on social media:
- Your goal is to provide value to strangers that find you
- Be authentic, but focus on acting out a set of core values.
- Your job is to give, not ask. This is not about selling.
- Build in public. Share what you learn and also share the process of building your business.
Educate, inspire, and entertain
- Educate. People on social media are in search of a better way to live, learn, and make money. Provide value for free, asking for nothng in return, repeatedly.
- Inspire. Take learnings from your skill/niche, apply them to life, and share them with a wider audience. Document your projects and your overall progress.
- Entertain. The most important but hardest to achieve. Companies like Apple and Nike don't sell computers or shoes—they sell on your emotion: make you laugh, make you cry, make you feel something.
Grow yourself and your business mindfully
When businesses fail, it's usually one or more of the same mistakes:
- overspending on inventory and office space
- hiring too quickly
- cofounder infighting
Don't spend money you don't have.
profit = revenue - costs
Are you default alive or default dead? If expenses and revenues stay constant, will the company live or die?
How to spend less: do less.
Pay yourself as little as possible to start
Treat yourself as the first employee.
- Don't take dividends
- Have an annual salary (even if it's $1) then increase over time
This helps you focus on systems required to run the business, not just sell the product.
Stay focused on what your customers want
Your customer don't want you to get bigger and grow faster. They just want the product to improve and your business to last.
Overcommunicate with your cofounder
Cofounder fights will drain your enthusisam.
The four horsemen of the apocalypse (communication styles that signal trouble in a relationship):
Approach the cofounder relationship like a mariage:
- Don't start unless you fully trust them.
- Introduce vesting so you earn stock over several years.
- Make sure you are aligned on values, what you want to build, and how you want to build it.
- One of you may want to leave eventually. Plan what a successful exit looks like
- Have the hard conversations as early as possible. The longer you wait, the harder they are.
Hard questions for potential cofounders:
- What does a happy relationship look like?
- What does success for this business look like?
- What does an exit look like?
- How fast do we want to grow?
- Why are we starting this together?
Schedule check-ins with your cofounder to reevaluate goals so disagreements don't fest silently. You must be on the same page with whichever path you are taking.
Build the house you want to live in
What's the one thing you can do such that by doing it everything else will be easier and unnecessary?
— Gary Keller
Define your values early and often. Good value stick in the brain, they're efficient and memorable.
Clearly defining your cultural values allows most folks to say, "This isn't for me," and a select few to say, "THIS IS EXACTLY THE JOB FOR ME!"
[The Peter Principle is] the tendency in most organization hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence.
— Laurence J. Peter
Where do we go from here?
We are born to wander through a chaos field. And yet we do not become hopelessly lost, because each walker who comes before us leaves behind a trace for us to follow.
— Robert Moor
Starting a business looks risky because it is risky—but it's the best way to make change.
If you're making the world better by selling a product worth paying for to a community that wants it, starting a company is worth it.
A healthy man wants a thousand things, a sick man only wants one.
The Japanese concept of ikigai is aligning these four things:
- what you love
- what the world needs
- what you can be paid for
- what you are good at
The longer it takes to win, the more prepared you will be. You will get better with every year it takes.