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The Minimalist Entrepreneur: How Great Founders Do More With Less

Sahil Lavingia tells a story of how he started Gumroad, failed in his initial goal to build a unicorn, and then finally discovered a sustainable and minimalist way of building profitable and minimalist businesses.

Start with community

Don’t join a community to exploit it. Instead, look for communities you’re part of, where you spend your time already, and where you feel authentic.

Joining a network is different from joining a community. The former is a set of connections you often have to start or build from scratch. The latter is an existing place that has its way of working and accepting new members.

Contribute, create, and teach in your community. You’re teaching as you’re learning along the way. It takes time. There is no overnight success, but it’s the only viable path.

Solve a problem for your community by finding a big enough niche. It has to be niche so that it’s viable to build by you or a small team in a reasonable time but also big enough to be financially sustainable.

Author’s questions for minimalist sustainable businesses:

  1. Do you love it? You’ll have to spend a lot of time on the product and the community.
  2. Will it be inherently monetizable? For example, can it pay from a small number of customers?
  3. Does it have an internal growth mechanism? For example, your customers have to share the product with others to use the product. You don’t have to spend too much on marketing and advertising if the product can grow “on its own.” For someone to accept a $1000 Paypal transfer, they must create a Paypal account (and they will). Product-led acquisition.
  4. Do you have a skillset to build it?

Build as little as possible

The most important thing is to try things out early and get feedback as soon as possible. Trying to learn everything up front and build something to perfection is doomed to fail.

MVP = Manual Valuable Process. Have a discovery document where you keep track of what’s working and what’s not. Here is an example from Derek Sivers. If you want to start a website for movie recommendations, let people call you first before building something. Then, when you see if you’re making sound recommendations and what kind of recommendations work, consider building out a product around those recommendations.

The best way to learn is to start building. Keep some constraints in mind:

  1. Can you build or test it over a weekend?
  2. Does it bring value to customers?
  3. Can you charge it? It has to be profitable from the start.

Consider no code solutions. Product Hunt started as a manual email list over the weekend.

Sell to your first hundred customers

Stories of viral success are primarily myths, and your small business is unlikely to get the viral lottery. You should start with friends and family.

Charge money from the beginning. Pricing is hard, and you won’t do it perfectly from the start, so you should iterate. Make pricing tiers later, giving more features and capabilities to people who need them.

Find subject matter experts in the niche in which you’re operating. Ask them to try your product and give feedback, but don’t ask for social media posts and endorsements. Instead, form a relationship and don’t force a sale.

Selling to your first hundred customers is “knocking on doors,” one by one, through emails and phone calls. There is no other way to keep momentum when nobody knows you. It’s uncomfortable but necessary. SEO and content marketing are methods with which many founders try to find a way out of these first awkward conversations; they will come later. There will be many “no"s.

Use a delayed launch as a way to thank your customers. Don’t launch without having any customers because you don’t know if your product works yet.

Market by being you

“Marketing is selling at scale.”

You have a product-market fit when you have repeated sales without a custom sales push. It’s still not the time for paid marketing (advertising) because there are several cheaper options that can get you to scale—for example, social media, SEO, content marketing, and email.

An audience is a network of people you can reach. Your audience is not your community; your community is smaller.

You should build your audience by sharing what you learn and building in public. People don’t care about companies. Instead, they care about people. Some of them will be interested in what you have to say, and then a subset will be interested in what you have to sell. (biggest) Audience > Fans > Customers > Repeat customers (smallest)

Always have two accounts for social media, personal and business. Your personal account should be about how you’re building your business and what you have learned along the way, while the business account should be about the business.

Levels of engagement with your audience:

  1. Teach
  2. Inspire. For example, a weight loss journey will garner more attention if you run a food supplements business than a simple how-to video.
  3. Entertain

Paid marketing:

  • Loyalty programs for your existing customers
  • Paid advertising to find additional customers, like using Facebook’s lookalike audiences

Grow yourself and your business mindfully

Your business should be profitable from the start. Don’t expect investors to come and save you when you run out of money. Watch your costs.

Types of costs:

  1. COGS cost of goods sold. A cost of materials and production of every widget created and delivered. COGS exist even for hosted software businesses because there might be processing and fraud prevention fees.
  2. Fixed costs. Infrastructure and people. To keep the fixed costs down, use software instead of hiring (for example, simple accounting software). You don’t need an office.

Pay yourself, but only as much as you need to keep yourself focused on solving the customer’s problem. When you start, it might be only $1, but that is better than not paying yourself at all.

Don’t focus on growth and glamour; they are an easy distraction. Instead, remember that your customers are the most important.

Watch out for business operations. Everything should run smoothly so that you don’t disappoint customers, employees, and suppliers.

If you need to raise money, there is an option in the US called regulation crowdfunding which allows small companies to offer and sell securities through crowdfunding.

Profitability and sustainability are the two main goals of minimal entrepreneurs, so always keep them in mind when making big decisions like raising or growth. If you sustain a profitable business, you can make your own choices and not be pressured from the outside. You don’t need to build a billion-dollar company (the author also says you don’t have any control over such an enormous endeavor anyway).

If you have a co-founder, have an honest conversation about values, how to exit, and how to set up vesting (maybe over several years). Nobody goes into entrepreneurship intending to separate, but it happens.

People imagine the life of an entrepreneur as two extremes: leisure at the beach or 100-hour work weeks. However, there are points between those extremes.

Build the house you want to live in

Set your company values early because fixing your culture is harder than fixing code.

The author lists several examples of Gumroad’s values and how he communicates them. The two most prominent ones are radical transparency and autonomy. Exposing company revenue and employee wages are two examples of the values.

Gumroad is a small and unconventional company. It strives to have fewer employees. It’s fully distributed and asynchronous (no traditional meetings for day-to-day work). There are no traditional career paths either, so if people want something more aligned with that, if they want to grow in ways not available in Gumroad, or if they are not a good fit, the employees are encouraged to find another company.

Book reference: Deep Work by Cal Newport

Articulating values early and often is critical to hiring well. Some fear that sharing will alienate most candidates; that is precisely the goal. You want people with whom your values resonate.

Hiring in the early days should feel like firing yourself. People coming in should take over aspects of your job and improve your vision, not just implement it.

Where do we go from here?

Parting thoughts from the author about what to do when you reach independence through your minimal business. You probably won’t be a billionaire, but you will have extra time. What do you want to do with that time?

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