Cheat-sheet: A Guide To Starting And Building A Business(Part 1)Kehinde LAWAL
I will be sharing a series of frequently asked questions(FAQ) on how to start and build a business.
To start with, this information is an excerpt from James Altucher’s book titled “Choose Yourself Guide To Wealth.” For those who don’t know James, his an American Hedgefund Manager and Investor. The anecdote of his story was how he made millions of dollars and lost it all three times in a roll. I’m sure you would definitely want to learn from his mistakes.
This just the first part, part two will be available at the same time tomorrow.
This chapter includes the nuts and bolts, and FAQ on starting a business. And depending on your business, some of these questions won’t apply. All of them come from questions most people have asked the author.
Frequently Asked Questions About Starting And Building A Business
• Should founders vest? Yes, over a period of four years. The vesting speeds up on any change of control.
• Should I go for venture capital money? First, build a product, then get a customer, then get friends and family money (or money from revenues, which is cheapest of all) and then think about raising money. But only then.
• Should I patent my idea? Get customers first. Patent later. Don’t talk to lawyers until the last possible moment.
• Should I require venture capitalists to sign NDAs? No. Nobody is going to steal your idea.
• How much equity should I give a partner? Divide things up in equal portions into these categories: manages the company, raises the money, had the idea, brings in the revenues, built the product (or performs the service).
• Should I have a technical co-founder if I’m not technical? No. If you don’t already have a technical co-founder you can always outsource technology and not give up equity.
• Should I barter equity for services? No. You get what you pay for.
• How do I market my app? Friends, and then word of mouth.
• Should I build a product? Maybe. But first manually see if your product works. Then think about providing it as a service. Then productize the commonly used services. Too many people do this in reverse and then fail.
• How much dilution is too much dilution? If someone wants to give you money, then take it. The old saying, 100 percent of nothing is worth less than one percent of something.
• Should I listen to venture capitalists? Yes, of course. They gave you money. But then don’t do anything they ask you to do.
• What if nobody seems to be buying my product? Then change to a service and do whatever anyone is willing to pay for.
• If a client wants me to hire their friend or they won’t give me the business (i.e., like a bribe). What should I do? Always do the ethical thing—hire a friend and get the client’s business.
• What do I do when a customer rejects me in a B2B business? Stay in touch
once a month. Never be angry.
• In a B2C business: release fast. Add new features every week.
• How do I get new clients? The best new clients are old clients. Always offer
• What if my client asks you to do something, not in your business plan? Do it, or find someone who can do it, even if it’s a competitor.
• Should I ever focus on SEO? No.
• Should I do social media marketing? No.
• Should I ever talk badly about a partner or an employee even though they are awful? Never gossip. Always be straight with the culprit.
• I have lots of ideas. How do I pick the right one? Execute on as many as position. The right idea will pick you.
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