7 Key Lessons from The $100 Startup
I've spent the past 10 years traveling the world, initially on a quest to visit every country (all 193!) and then on an extended journey of research for my book, The $100 Startup. Along the way, I often meet with entrepreneurs and small-business owners, seeking to understand how they've built their projects.
I'll admit a bias: My favorite stories are from people who didn't go to business school and didn't go into debt. Instead, they hacked away at a project until it proved fruitful.
These “unexpected entrepreneurs” came from many different backgrounds, yet they were all able to earn a good living for themselves while making something valuable for others. How did they do it? Here are seven lessons we can learn from them.
Follow some passions (but not all). Can you do everything you love and make it into a business? Probably not—I've yet to find someone to pay me for surfing the Internet all day and eating pizza at night, two skills I've been developing for a long time. Yet when you look at successful entrepreneurs, you do see a common theme of passion and excitement. They love what they do—and they love how it's not only good for themselves, but also valuable to others.
In other words, they've found convergence between passion and value. Successful people focus on the blend between what they love and what other people care about.
If you’re good at one thing, you’re probably good at something else. One of the $100 Startup case studies was a waitress in London. She was good at her job, often receiving compliments and big tips from customers. One day someone said to her, “You’d be good at PR.” She didn’t know much about PR—at first, she didn’t even know it stood for public relations—but later she learned that she could use the same skills from her low-paying job in her own business helping clients succeed.
Divide your time between work and talk. Yes, you should work hard on creating products and services—but you also shouldn't hesitate to get the word out. I called this “hustling”—the art of gentle self-promotion. Every day, I keep two lists in front of me: what I need to accomplish, and who I need to keep up with. Communicating with customers and readers is part of the job, not something to be delegated.
Bootstrap and fast-track … always. Failure is overrated. Many of the unexpected entrepreneurs I met had experienced numerous false starts and made plenty of mistakes. But because they didn't invest a ton of money in the beginning, and because they started quickly, the false starts and mistakes weren't crippling. In event of initial failure, they were able to regroup and give it another go.
Invest in winners. The time to invest in your business is after you've seen the initial success. Once a project is up and running, that's when you look to see how it can become even more successful—not before.
Focus on organic growth over traditional advertising. Almost none of the success stories in the three-year study grew their business through traditional advertising. Instead, they focused on making a great product or service and then growing the business through word of mouth. Relationships came first, then growth. Only rarely did they then choose to invest in paid ads.
Choose lifestyle. It's your life! You make the rules! As a business grows, the founder can find herself spending more and more time doing things she didn't plan on. Not every business has to scale. Some people deliberately choose to operate as a lifestyle business, earning a good living and serving clients well, but without trying to create a huge company.
Since the publication of The $100 Startup, we've heard hundreds of additional success stories. All over the world, people are asking themselves how they can truly create the kind of work they love—and then they're doing something about it.
It's a microbusiness revolution, and we're still in the early days.
Wherever you are, there's never been a better time to start or grow a small business. Take the leap! Forge ahead!
Photos from top: iStockphoto, Thinkstock