25 Rules For Being An Entrepreneur

I quit my job last summer. I wasn’t really sure what I would be doing or where I would see myself within the next five years (the stuff headhunters and interviewers or your parents will ask you over and over again). Right now I tell people that I write books, have a blog, hold presentations and workshops for people interested in starting a company.
I consider myself an entrepreneur. Maybe not a tech entrepreneur. Maybe a lifestyle entrepreneur. Hell, I don’t know. Does it even matter? I don’t think so. You can call yourself whatever you want… This is a free country, right?

So what will I be doing next year? Where will I be living in 2015? I have absolutely no clue. Maybe Africa? Maybe the States? Maybe I will be cleaning toilets or living on the streets somewhere on this planet. Maybe I might have settled down and started a family. I really don’t know, but time will tell…

And who’s able to answer this stupid question anyways?

If someone told me 5 years ago that I would live in China for almost two years and start a company there I would have said that they were absolutely crazy. If someone told me two years ago I would write books about startups and publish my thoughts online I would probably have said the exact same thing.

Same holds true for holding presentations at some of Germany’s biggest universities and travelling by bicycle from one university to the other (I actually covered +500km).

But as most of you know that’s exactly what I did. And if I predicted my future a few years ago those things would probably have been the last things on my mind. They would probably never ever even have crossed my mind at all…

If you were to ask me right now where I would see myself within the next five years and what my plan was, I would probably tell you that I’ll try to grab every opportunity along the way, as long as it sounds interesting and I can learn a hell lot.

Having plans usually holds me back from experiencing and trying out new things. So I just stopped having specific plans a long time ago. For me, plans never really worked out anyways. I just go with the flow…

It’s been now more than a year that I quit my job and do what I do. And I learned a hell lot of stuff about being an entrepreneur. I feel like these lessons or rules might be valuable for some of you out there. That’s why I’ll share some of my best ones right here. I’ll try to focus on the things you would usually not read on any mainstream media.

It’s the stuff that I had to learn the hard way myself out in the fields. It’s not some stuff you would come across while researching for an article. I figured all of this out during the last four years doing what I’m doing. Whatever that is. Feel free to add some more…

#1 If you suck at sales don’t build a startup (or learn it first)

Today, the challenge isn’t about building products anymore. Everyone can build products. You can outsource it for cheap, code stuff with a bunch of friends, conveniently order physical products from China and so on.

The real challenge today is about finding a real market need and having the necessary skills to sell them. If you have no clue about sales don’t build a startup. Please learn how to sell first…

#2 You need to train your entrepreneurial muscles every day

If you don’t train your entrepreneurship muscles every day, they will start to atrophy. These include your sales muscle, your opportunity muscle, your story teller muscle, your networking and your giving muscle. And you don’t even need to have your own company to start exercising them.

Read more about the muscles and how you can train them in real life here.

#3 Start building your demand before you have your product

If you don’t have a demand already lined up before you start selling your product you’ll be screwed. Most company sales (80%) come from customers a company interacted with 7+ times. And interacting with a customer more than seven times needs a hell lot of time. It will probably take longer than your funds will last. So start with building up your demand…

#4 Only an incredibly small number of people will buy your product

Even though 100 people told you they would buy your product or signed up to your newsletter you will only be able to sell your product to round about 3 people. The rest will not buy your product. Accept it, act accordingly and increase the number of customers you’re talking to to at least 10x right now. That’s what I call The Rule of 97%

#5 Validate & sell your idea first

We all have many ideas but we usually don’t know how to make sure which idea is worth building. What we do today is that we write business plans, research numbers, ask a few friends or strangers on the streets and start building our product.

And then, after a few months we figure out that no one really needs our product. Hence, it makes a lot more sense to validate our ideas upfront by trying to sell our idea/product to a few hundred people (see #4).

In case we find people willing to transfer money to our bank account we can start building the product. We validated our idea. It’s pretty much about flipping the entire value chain around. You should start with sales and marketing instead of building your product…

#6 Start fundraising only once you have a proof-of-concept

A lot of people these days try to raise funds from business angels or VCs before having a proof-of-concept. Unfortunately, today this doesn’t work anymore (we’re not Facebook or Twitter!). If you don’t have the proof that people are willing to pay for your product, it’s a waste of your and other people’s time and resources.

Focus on building a product the market needs and is willing to pay money for. Once you got this thing right, go out and raise funds. And then it won’t be about you finding people, but it’ll be about people finding you…

#7 Know your cost per customer acquisition

You need to know your KPIs (key performance indicators). You need to know how much your business is able to generate if you put in one dollar. If you put in one dollar and at the end of the day you get back more than one dollar in return you might be in business.

#8 You won’t go viral

When we start working on our companies the last thing we think about is how we will actually find customers. We don’t have a proper plan on how to acquire them, where to find them and what tools we need to be able to use.

In our business plans we simply write down an amount x for marketing and that’s about it. Unfortunately this approach never really works. And going viral isn’t a proper go-to-market strategy either. Want to know more about how to go viral? Then continue reading here.

#9 You need to own the customer relationship

If you don’t own the customer relationship you have to pay for every interaction with your customer. Remember, the more you interact with your customer the higher the probability of a successful sale. Hence, you need to interact more often with your customer.

If you don’t own the customer relationship and go through platforms you don’t own (e.g. Facebook, Twitter, etc.) you will have to pay a hell lot of money to reach your customers over and over again. Because platforms, such as Facebook are monetizing their reach.

That means that you’ll only be able to reach all of your potential customers if you are ready to pay each time. If you don’t you will only reach a small fraction of your customers, which leads to very few sales and ultimately to the death of your startup…

#10 It makes sense to copy your own products

Many people are afraid of copycats. In case you’re one of them consider copying your own products. You simply open up a new business, use your existing suppliers, backend or whatsoever, replicate it (use lower quality) and offer it for a cheaper price.

That way you will be able to control a bigger chunk of the entire market, decrease the margin of a potential copycat and most importantly there will already be a copycat on the market.

Win-win, right?

#11 Your customers buy when they want to, not when you’re ready

For months and months we work towards the release of our products. And then we figure out that no one buys our product. What happened? People were telling us that they loved our product. Unfortunately people buy only when they feel like buying and not when we feel like selling…

#12 Lean Startup is great, but it needs some major tweaking

In case you don’t know what Lean Startup is, here’s a one sentence summary:

Build experiments, measure results, analyze them and learn what works and what doesn’t. Then adapt your offer accordingly. Do the same thing over and over again until you get satisfying results and customers are pulling in.

But the truth is that this approach works from an engineering perspective, but it completely leaves out the part of marketing and selling your products. After having read Lean Startup I had the impression that my products will sell automatically. But they won’t.

Read more here: The Lean Startup Hype: 10 Things Lean Startup Didn’t Tell You

#13 You need to be more human

After all, your company’s success highly depends on you. If you know how to market yourself it will be so much easier to win over partners, investors and everything else. After all, it’s not B2B or B2C. It’s H2H (Human2Human). Every business transaction is about interactions between real human beings.

#14 Do it like the pros: Start selling simple products

We all dream about building the next big thing. Building a scalable tech company is something everyone is trying to do these days. But only a few of us have ever built, sold and marketed a product that we’ve built from scratch.

We don’t have any experience, yet…

Starting off with the most complicated thing, a tech startup won’t work for most of us. It’s just too damn hard. So instead do it like the pros and start selling less complex products first. Richard Branson for example started off by selling Christmas trees… More on why you should sell less complex products here.

#15 It’s about decreasing risk

Fear rules the world. Be it the fear of losing your job, losing a lot of money or not being able to pay rent. Everyone you interact with is afraid of losing things. So take that into consideration and try to decrease the risk involved for everyone you interact with.

#16 Your products won’t sell automatically

Being exposed to news about products from Apple, Facebook, Twitter and all these crazy successful companies we feel like this is the only way. We build a bad ass, good looking and cool designed product and believe that our products will be sold out as soon as they hit the shelves.

Sad truth: this is never ever going to happen… and if it happens it took many years to get there.

#17 It’s no big deal if you suck as entrepreneur

No one is perfect at anything right away. We all have to start at some point and most of us will suck in the beginning. I feel that I still suck as entrepreneur, but I’m willing to work on improving my game every single day. And that’s what really counts when you want to become a better entrepreneur.

#18 Not having a bad ass blog

One of the most important tools to acquire potential customers is your blog. Your product won’t go viral. Your product description won’t go viral. The only thing that might help you to get the word about the stuff you’re doing out there is incredibly valuable content for your readers on your blog.

#19 Early adopters don’t exist

Everyone tells us that we should find early adopters. But the truth is that there are no early adopters out there. And even if there were early adopters it would be impossible to find them. Most importantly, most people might not even know that the problem you’re trying to solve is a real problem for them.

So instead, educate people interested in your product into people paying for your product. Those people will become your early adopters. Don’t get out on the streets and ask total strangers for feedback. That’s just pointless and highly untargeted…

#20 It’s about trust

The only question you need to ask yourself:

“Do they trust me enough?”

It’s not about whether or not they like this or that feature, if she still loves you or if he will break up with you. All of this doesn’t matter. At the end of the day it all comes down to trust…

#21 You need to show up

The more you show up, the luckier you will be. It’s as simple as that. If you don’t show up you’ll never be lucky. A lot of successful people will tell you that they were at the right time at the right place.

But what they usually don’t tell you is that they were pretty much all over the place and therefore tremendously increased the probability of being lucky. It had to happen one day or the other…

#22 Stop worrying about copycats

A lot of people will tell you that they don’t want to talk about their startup ideas. Some might even tell you that it’s a stealth project. That’s complete BS. If you’re not successful, don’t generate a hell lot of cash already or don’t have millions in financing already, no one will ever copy your product.

Only products that have proven to be successful on the market will be copied… Ideas are worth nothing. Not convinced yet? Then read this!

#23 If you can’t find co-founders your idea might suck

Going out there and finding a CTO, CEO or whatsoever is the first test whether or not you have a good idea. If you can’t find someone willing to work with you on your project it might be a first indicator that your idea sucks.

Or that you might suck at selling and pitching your idea. But that pretty much comes down to the same thing. Working on your idea might not be worth it…

#24 An investment is not a proof-of-concept

There is a lot of dumb capital out there. Capital that gets thrown at you despite the fact that you don’t have a proof of concept yet. Now this is not a big deal you might think. Money is money, right?

But the truth is that once you have money on your bank account you’ll start to get lazy and never really try to validate your idea.

Why? Because you don’t need to generate revenues anymore. You don’t struggle enough with rent, food and so on. Dumb capital makes a lot of us fat, lazy and inactive. So don’t become one of them…

#25 Scarcity will make you more creative

The less you have, the more creative and innovative you will be. Think about packing for vacation. If you take a big suitcase you mindlessly pack things you don’t need. The smaller your suitcase the more creative you get and the more focused you are on packing things you really need…

Summing up:  After all, these are just a few things I came up within 20 minutes. There are no universal rules for being an entrepreneur. They might be different for you and they might already be different for me by noon tomorrow.

Being an entrepreneur is chaotic, anarchic and you need to be highly flexible.

The biggest enemy of being flexible is falling in love with your business. The moment you believe your business is great you will ultimately kill your business. You will start tunnelling and you won’t be flexible anymore.

You will forget about all the stuff you just read or read in any other article. You will believe that all of this is BS and believe that it doesn’t apply to your business. From now on you will only believe one thing:

MY BUSINESS IS AWESOME…

 

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