Ask the entrepreneurs advice
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I would probably be competing on price initially
Be careful of that. I am not saying that it cannot be done, but you are starting out at a disadvantage with less money per unit coming in the door. That is less money that can be spent on development, advertising, capital reserves, etc.
I guess I need to find something Unity can't do
I think that would be key. I am not a gamer, and I am not even really familiar with Unity, so I cannot offer suggestions. Ask yourself and others who use Unity, "What is it missing?" If you can find that magic key, you have a much higher chance for success.
I've been wondering whether sites like kickstarter and indiegogo might be a good place to launch something...
No clue. It seems to work for others. Hell, a guy got over $50K to make potato salad. I have been very vocal about likening sites like that to digital panhandling, but if it works for you then the hell with what I think. ;)
All that being said, if the only way you can get in to the market is by competing on price, you should still make a go of it. The only thing worse than failing is not attempting it at all. If you ever feel motivated, there are two great books you should read.
I found both of them to be absolutely fascinating reads. They did an extensive case study of millionaires and deca-millionaires and looked for common characteristics between them. One thing they found is that the average wealthy person went bust three times before they made their success. I hate to sound like a motivational speaker, but I failed miserably once and when I did I thought back to that statistic and thought to myself: "Well, the average is three. Just two more to go."
All your advice so far is pretty reasonable btw :)
Thanks. This thread is going better than I had thought it would...
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Haven't reached the point of dread yet
I was there once. I started a job that I loved. I was running an entire division of a medium-sized business. I was overseeing approximately $15M worth of work per year. I had a good team, fun work, great pay, etc. Then the economic downturn hit. Most of my pay was tied to bonuses. Those were gone as we were no longer profitable. The best people had left to work elsewhere. Those of us who were left were fucking miserable. Every day was an uphill slog.
When I started that job, I woke up every single day before my alarm went off, I got to work early and went in and had coffee made. At the end I hated the sound of my alarm clock, I would get to work just a few minutes before I was supposed to be there and would sit in my vehicle until the last second. I was even lippy in meetings as I had grown to hate the general manager as I knew he was siphoning off all the profits he could before we went bust, which also cut in to my bonuses.
Never again.
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I feel I should expand a little on this:
Be careful of that. I am not saying that it cannot be done, but you are starting out at a disadvantage with less money per unit coming in the door. That is less money that can be spent on development, advertising, capital reserves, etc.
Always keep "The Snowball Effect" in mind and how it works both ways.
If you sell at a lesser price, you have to sell more units to get the same amount of cashflow. More units equals more support costs, with less cashflow per unit to support them. Also, if you think that you can start with a lower price, to gain capital and traction, and then raise your price later on, you never really know how that will go and how many people are only using your product because it is cheaper.
Again, not trying to dissuade you. I just want to make sure you know all that you can.
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As a result of this, my credit score is not able to be calculated.
Is it a "FICO just tried to divide by zero" case, or merely a case where they see you as having no credit?
There were businesses that would not use my IT services because I was too cheap. I raised my prices, and started making sales again. Markets can be mystifying.
They're the folks who wonder what you're leaving out.For example, IBM and Oracle. They are popular not because they sell good software, but because they sell expensive software.
But...buying IBM and Oracle leaves you wondering where all your money went.One thing I always do when I face adversity is to quantify exactly what the worst case scenario is. If you don't do that, your mind runs wild. When you actually say, "The worst thing that could happen is...", you can look at that and realize, "I can recover from that. It will suck, but I can deal with it." If you don't quantify the worst case, everything looks like you are staring down Armageddon.
QFT. Not quantifying the worst case is a great way to get into analysis paralysis.
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If you sell at a lesser price, you have to sell more units to get the same amount of cashflow. More units equals more support costs, with less cashflow per unit to support them.
Which brings us to another point. Cashflow. Everything I've read (in the area) indicates that cashflow is critical, since that's what you use to pay wages and bills. Businesses with good cashflow can survive a long time (especially if it's from diverse sources) yet without it, even otherwise fundamentally sound firms go under rapidly.
I'm no entrepreneur; don't have the
stomachappetite for risk for it…
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Is it harder to get approved for a loan/mortgage?
If you are in the US and you have your own business, you will need the last 2 years1 of tax statements showing an acceptable level of income/profit for whatever size of loan you are applying for. This goes for refinances too.
1. If I remember correctly - I know it is 1-2 years minimum.
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Is it a "FICO just tried to divide by zero" case, or merely a case where they see you as having no credit?
Those two are basically the same thing. If you try to pull my credit score, their program just shits itself. I kid you not, if you go long enough without borrowing money, the FICO company says that you are likely dead. It actually says that on the report. Paraphrasing: "We were unable to calculate a credit score for the person that you requested. Likely cause of this is that the person you are attempting to obtain a credit score are deceased." They apparently have no concept that you can just...pay money for things.
The only thing on my credit score is a mortgage. They cannot calculate a score from just one value. Their algorithm requires more information than that. Kind of amusing when you think about it.
They're the folks who wonder what you're leaving out.
Meh, those were straight hourly rate bids. Kind of hard to leave anything out.
Everything I've read (in the area) indicates that cashflow is critical, since that's what you use to pay wages and bills. Businesses with good cashflow can survive a long time (especially if it's from diverse sources) yet without it, even otherwise fundamentally sound firms go under rapidly.
This is basically true, but vastly oversimplifies the concept and I think you are confusing cashflow with profitability. The more correct term that I should have used earlier was "profits", not necessarily cashflow.
1. If I remember correctly - I know it is 1-2 years minimum.
My banker told me three years. I would imagine that varies based upon the bank. Of course, looking back, I believe she said that "after three years there would be no difference". So, maybe she was saying, "2 years as a general rule, after three there is no difference."?
Regardless, talk to your banker. They can tell you for sure. Some banks are known to be more friendly to business owners/self-employed. That could make a difference also.
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...the "indie game engine" market is a little crowded. I guess I need to find something Unity can't do...
Make sense.
Have an IDE for not-Windows. (Unless Unity finally pulled their thumb out and made one)
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Have an IDE for not-Windows.
So now you want him to develop a game engine, and an IDE to go with it?
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IDE
IDE
I've been thinking about it, some of the main drawbacks being:
- I don't have much experience writing UI's.
- UI's are traditionally considered a massive timesink.
- Crossplatform UI's generally end up looking equally non-native on all the platforms.
Hypothetically speaking, if I had some crude editor made out of FLTK would you even take that seriously? It'd be functional, of course, but no niceties like dockable windows or anything like that... (Also I'm not sure I want to do much more than give you notepad-level editing allow you to shell out into your text editor of preference, for reasons of scope).
I'd proably also ban modal dialogs and make sure to give keyboard shortcuts for every user action, but that's more my own personal preferences for UI interaction...
I was also pondering writing some Eclipse plugins instead of a full IDE.
I can probably spin off into a new topic if I start generating too much noise here...
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Unity actually does have its own IDE, in a manner of speaking. You can work around it by just making calls to the relevant libraries etc, but Unity falls somewhere between game engine and map editor.
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At the request of the OP, I moved 2 posts to a new topic: New Masters Program in Software Engineering
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What do you value most from your own education background? What do you value most, or specifically look for, in potential employees educational background?
For me, it was the math.
Clarity and breadth of thought is crucial. If you know enough math, you can breeze through reading and understanding almost all business theory. You already did that math (optimization, probability and statistics, decision theory, game theory, etc).
Plus, I learned how to shoot my own opinions down until I found the (provably) right one. This is a hugely valuable skill. Nobody is always right, but you can learn to be right a lot more often than you are wrong if you can critically evaluate your own ideas. This is the essence of problem solving, and we make money by solving people's problems.
So, as an employer, I look for degrees in hard topics that you can't fake your way through.
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I think you are confusing cashflow with profitability.
No. Both are important, but without cashflow you're in severe danger as a business. Many small businesses fail because of large customers persistently paying their bills late, a phenomenon that is hard to understand purely from the basis of profitability. It's cashflow that actually pays the bills and keeps creditors off your back; profits are what makes it worthwhile as an owner.
Of course, it isn't trivial to define what the right level of cashflow for a particular business is. But get your cashflow wrong and you'll be hiding your servers in the shared executive toilet…
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shared executive toilet
I have a new aspiration in life...to have an executive toilet. Mine is anything but "executive".
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UI's are traditionally considered a massive timesink.
They are, and it is a fair assessment. To be exact, you can make a bad UI very quickly — there are some good tools to help you — but the slog from there to a good UI is very irksome. I try to avoid making UIs these days; I'll get a minion to do it instead; throw a rock and you'll find plenty willing to do so on some mobile device…
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I recognize that this question betrays that I may not have "The Right Stuff", but.
Discuss whether and/or how to pay yourself as you start out.
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I recognize that this question betrays that I may not have "The Right Stuff"
Nonsense. I believe it is something that nearly anyone can do and just because you do not know something it does not make you an idiot. You just don't know something. As you are on these forums, I assume you have a propensity for learning (and possibly an appetite for abuse), so you can learn this also.
Discuss whether and/or how to pay yourself as you start out.
Well, that would depend a lot upon what you are trying to start? Though it would always start with "How much money do you need to meet your obligations?" Next up, "How much money do you have in savings that you can afford to part with?" (hopefully temporarily)
If you are wanting to do freelance work, you could likely work your way in to that job and never have a gap in income, but you still need to know that minimum income number. Once you reach that from consultancy/freelance income, you could at that point then switch over completely. I say "could" because I probably would not yet. I mentioned the "snowball effect" before. On any new venture, it is always best if you can let any money ride. Use profits to fund advertising, development, sales strategies, etc. Now, at some point you have to start pulling money out. The longer you can put that off though, the farther you are ahead of the game. The downside of it is, to be quite frank and honest, you are going to spend a lot of time working and you are going to see no tangible benefit from it. No increased pay, no ivory back scratchers, no increased income. Just a lot of extra work.
If you are wanting to start something that you absolutely cannot work your way into, the strategy becomes a lot different. You need savings and/or funding. You need to have a reasonable timeline on how long it will take you to replace your income. You need to cut your personal expenses as much as you possibly can.
If you have funding (loans, angel investors, etc.), the pressure is off some, but not entirely. You still can never be sure when you will become profitable. You can make estimations, but as you can guess, those can be off by a fair margin. Manage your costs and personal expenses and keep them as low as possible. Every dollar that you spend foolishly is one less dollar that can be spent productively. Set yourself a timeline with a definite goal or end date.
Expect success, be prepared for failure. Earlier I quoted from "The Millionaire Mind" how most truly successful people went bust an average of 3 times before they made it. If you do fail, don't dwell on it. Tell yourself that you are one failure closer to success. Take stock of the situation and after the smoke has cleared make an honest assessment of what went wrong. Make a plan for how to do it differently next time.
Also, even if you cannot work your way in to your new project or venture, you can keep the timeline as low as possible. In anything, there will be prerequisite work. Get all of that done that you possibly can before you cut yourself off from a regular paycheck. You may need a business license, get it before you quit your dayjob. File for a fictitious business identity, work with your lawyer to get any contracts worked out, LLC filed, etc. Meet with an accountant and discuss what records you will need to keep. Drum up business, find whatever work you can. Network with people. Get every possible thing done that will only take up your time later, time that you could spend bringing in revenue.
I know this was a lot of rambling, but it is a pretty broad-based question. If you could give me some idea of what sort of venture you are looking at, I could hopefully tailor it a little more closely to your situation.
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most truly successful people went bust an average of 3 times before they made it
A question has just occurred on this - Is it because:
- successful people have the drive to keep trying after going bust or the confidence that the next idea will be the big one
- you need to take risks to get truly big, and hedging your bets will never lead to the stratosphere?
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A question has just occurred on this - Is it because:
- successful people have the drive to keep trying after going bust or the confidence that the next idea will be the big one
- you need to take risks to get truly big, and hedging your bets will never lead to the stratosphere?
A little of column A, a little of column B?
I cannot speak for certain, as I am not yet to the level of person that would qualify to be interviewed for that case study I quoted. I hope to be some day. As I said in the beginning, I don't know everything. I am not Mark Cuban. ;)
You should read "The Millionaire Mind" and "The Millionaire Next Door". They really were fascinating reads, for me at least.
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What if I don't want to be a millionaire. What if I want to just maximize income for unit of work.
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What if I don't want to be a millionaire. What if I want to just maximize income for unit of work.
Well, would you want to do so as an employee? Or would you want to do so through more entrepreneurial ventures?
Those two goals (maximize income per unit of work and becoming wealthy) would be unlikely to be in opposition of each other and would likely be closely aligned. Either way you are going to want to build residual, passive income.
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Well, would you want to do so as an employee? Or would you want to do so through more entrepreneurial ventures?
Whichever lets me maximize income per unit of work.
Those two goals (maximize income per unit of work and becoming wealthy) would be unlikely to be in opposition of each other and would likely be closely aligned.
Becoming wealthy via enterpreunship, or however you spell that bullshit French word, requires a lot of years of earning basically nothing (working very hard with zero or near-zero income) and then if you're lucky you get a big spike of income-per-unit-work and if you're not you go back to being an employee at some drudgery job.
Anyway, I guess my point is, I don't want to be wealthy at all (who gives a shit?) I just want to live a comfortable life and work less. That seems completely incompatible with starting your own business, unless there's some strategy I'm missing or you're extremely lucky (think: guy who invented Flappy Bird.)
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Whichever lets me maximize income per unit of work.
Well, the two strategies are going to be quite different. When I was working for other people, I always took a lower base salary in trade of a bonus schedule based upon profitability of the work I was involved in. That is definitely not without its pitfalls as I have mentioned before. If your sector of the economy stops making money (2007-2008 crash for example), it sucks and there is little in your control you can do about it.
Becoming wealthy via enterpreunship, or however you spell that bullshit French word
I am going to assume that you came in to this thread in order to ask questions and gather information that may be outside of your realm of experience. If you want to continue to do so, leave the persona at the door please. I will talk to the real you, please leave @blakeyrat in the other parts of the forum.
requires a lot of years of earning basically nothing (working very hard with zero or near-zero income) and then if you're lucky you get a big spike of income-per-unit-work and if you're not you go back to being an employee at some drudgery job.
That seems to be the common view of how it works, but it does not have to be. I had money coming in the door within 30-60 days of starting. I knew a lot of people that I could contact for work though, people that I had worked positively with for a long time. That was key for me. What I started was also a lot easier to get going. If you are talking about building the next big internet startup where you are going to gain a lot of users and sell advertising to them, yeah it can take a long time. Know your limitations and work within them.
It sounds all "self-help bullshit", but you really can make your limitations a positive. When I started out, I was small. It was just me. I did not sell "I have tons of people behind me", I sold "Personalized service, and when you call you do not get some secretary who will put you on the schedule, you get me. You know me, I have always taken care of you before." I have always kept the barrier to entry low. We have no long-term contracts. Any client can leave us with 60 days notice, so they were not signing a long-term commitment to an unknown.
Think about that in how it might pertain to whatever you want to do.
We are about to roll out an online data backup service to businesses. Can I compete with the infrastructure that Mozy and Carbonite have? Hell no. But, in the event of total failure I can have their data to them a lot more quickly. The big guys may ship you out a hard drive on FedEx overnight, I can load it up and drive it over to them. It may only be a difference of 4 hours versus 36 hours, but it is something to sell. I do not have the sales staff that the big guys do, so I plan to approach other MSP's and offer them 20% commission to sell my product. One of those sales will be 10-100 or more other sales coming in and that income is largely passive.
There is where the strategy lies. My passion has always been business, so my products and services are in that realm. Yours are in gaming, etc. The barrier to entry can be a lot higher, I get that. But just look at how you can get started and then do it.
you're extremely lucky
Luck can help, but you can also make your own luck.
(think: guy who invented Flappy Bird.)
Yeah, that was a flash in the pan and most people have no freaking clue why that was even a success. That game was horrible. Forget about stuff like that. It is not reproducible. It is an anomaly, that people were apparently willing to kill their family members over.
You have the skill set. You obviously know how to code. You understand technology. Find a need that you can fill and get to work solving a problem and let the servers do the work for you. Technology is a great multiplier of effort. You can write a program or set of programs that can sit there in a datacenter and generate income for you. Yes, that is oversimplifying it, but you get the idea.
As for maximizing income per unit of work, let me tell you a little anecdote about a friend of mine: Back in college, he wrote some software that was really nothing more than a specialized chat program for a specific sector of the economy. He made a successful business of it and it lasted for quite a long time. At some point he realized that chat software was dying, so he just stopped working on it and did something else. I had no idea that he had ever even done this as I met him after he had stopped development. One day I am helping him swap some servers around in his datacenter space and I saw these ancient machines (P3's) at the bottom of the rack. I asked him what they did and he told me. I asked him why they were still there and he said that even though he had all but stopped work on that project they still made him income, about $80K/year, so those P3 machines could just continue sitting there whirring away and he would keep popping drives in them if they fail, etc. When they stopped being profitable, he would pull them.
In 2015 he is still making $80K/year off of chat software. Now, this chat software was initially tailored to an industry that is highly resistant to change, and moves at a very slow pace, but still. Software and technology is one of those interesting animals where initial sales might be difficult, but the loss due to attrition can be very low. That is residual income. I work with businesses all the time that use shitty CRM's or outdated ERP's, simply because they have been using it for forever and it is so hard to change over.
I am not saying that is the right way to do things. I would never advise someone to make a great product now with the intention of getting people in to the ecosystem with the intentions of letting it go to shit just because you know they would not leave. You have seen a lot of shitty software that does exactly that, find a market and do it better. Give them a reason to change. Find a need and fill it. Find a problem and solve it. Do so in a way that generates residual income whenever possible.
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For what it's worth, I'd really like to start my own business and be my own boss, but I don't see how I could possibly accomplish that without increasing my workload significantly. I also think that some people just simply don't have the mind for business, contrary to what you believe. But whatever. I'm fine working and I make decent money. I just think I already work too many hours in the day, and the independence isn't worth working more.
I'm just pointing out that the end-goal should be "work less" not "become rich". Fuck people who want to become rich. How morally-bankrupt is that.
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Fuck people who want to become rich. How morally-bankrupt is that.
Not at all. And it's a great engine for good in the world.
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For what it's worth, I'd really like to start my own business and be my own boss, but I don't see how I could possibly accomplish that without increasing my workload significantly.
In the short-term, yes. But you have to have a goal in mind. Starting a business just to start a business can be a shitty motivation. We will come back to this...
I also think that some people just simply don't have the mind for business, contrary to what you believe.
In some ways, you have a point. No doubt about that. But, you know how to write code really well, which makes me inclined to believe that you also have a propensity for learning very well if it interests you. Does business interest you? I find it fascinating. I chose my new username because I geek out on a lot of things, business is one of them.
If it does not interest you, learn what you can about it, have a really good idea and bring on someone else who that is their aptitude. No matter what, you can get there if you apply yourself. I said it earlier in the thread, but in case you did not read all the way through:
I hate those stupid, self-help quotes, but one always rings true to me: "Whether you think you can, or you think you can't, you're right." As soon as you say that you can't do something, you stop thinking of ways to accomplish it. Thoughts and speech can be very powerful. You have to change the way you think to become successful.
But whatever. I'm fine working and I make decent money.
Then maybe investment of your income would be a better fit for you? There is more than one way to achieve any goal and yours is to work less and play more and there is nothing wrong with that.
I just think I already work too many hours in the day, and the independence isn't worth working more.
As I said, in the short-term you will end up working more. You have to have an end-goal in mind. I said we would come back to that, right?
I'm just pointing out that the end-goal should be "work less" not "become rich". Fuck people who want to become rich. How morally-bankrupt is that.
I would not call it "morally bankrupt", I would ask, "What's the fucking point?" People who earn just to earn are missing the point in my opinion. You need to have an end-goal. What do you want to do with this venture or these earnings? I want to have more time to spend with family and friends. I want to travel more. I want to be able to work on my own schedule and vacation more. That is why I am moving from getting paid to be businesses IT department and CIO to more passive and residual income. I have people working for me, so they get good employment, they learn a lot and I profit from their labor. We are rolling out the new data backup service as that has a massive gross profit margin and requires very little hands-on time after it gets going. There is a plan.
I also want to move at some point, probably to the Carolinas. Right now if I did that, I would lose all income. I could either get a J-O-B, or start over. It would be easier the second time around. I could hire someone to help run things here, but that would just mean a massive hit to my income. I could try selling the business, but if you know anything about business valuation you would know that it is worth next to nothing.
To amass wealth just to amass wealth...seems pointless to me. To build income, so that you can work less and enjoy life more, that is my end-goal. If that is what you want to do, stop finding reasons why you can't and start asking yourself, "What do I need to do so that I can...?"
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I'm just pointing out that the end-goal should be "work less" not "become rich". Fuck people who want to become rich. How morally-bankrupt is that.
You are already rich compared to most people.
To amass wealth just to amass wealth...seems pointless to me.
If this is what was meant, then I suppose I agree. There's no point to money you won't spend.
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There's no point to money you won't spend.
Meh, there can be. Everyone has different priorities and goals. For some, money is security, but how much money do you need? For others, a mass of cash is inheritance for their children so that they can have a good start in life. There are many possibly good reasons for it.
I think most of us can agree that the line is somewhere between where we are now and what the Enron/Tyco assholes did. ;)
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I know this was a lot of rambling, but it is a pretty broad-based question. If you could give me some idea of what sort of venture you are looking at,
Academic interest, mainly. Entrepreneur-curious ;)
But I'll try and hem you in a bit more... (mostly) would you advocate paying yourself a salary[1] during, say, the first year of your venture[2].
[1] That covers mortgage, utilities, food > ramen, haircuts[3]. Little else.
[2] Let's assume one is selling an existing product or service.
[3] By definition you're in Sales, gotta look good. ;)
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To amass wealth just to amass wealth...seems pointless to me.
Give people a number associated with them, and a way to compare their number to other people's number, and some percentage of those people will do whatever they can to have the biggest number...
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But I'll try and hem you in a bit more... (mostly) would you advocate paying yourself a salary[1] during, say, the first year of your venture[2].
Like so many other things in life, it depends. If you can pay yourself a $1M salary in the first year (unlikely), then you should. It all depends upon how quickly things build and how strong your growth is.
It is all a balance. Yes, I said that you should "let it ride" as much as possible. But, you also have to know when to cut loose a little. If you spend too much time pinching pennies, you will find yourself asking "What's the point in doing all this if I don't have a good income from it?" The ideal ground is somewhere in between paying yourself every dime that comes in the door and living like a pauper so that the business can grow. That ideal ground is different for everyone and every business.
Are you familiar with the concept of "capital reserves"? If not, the concept is that you take a percentage of profits (every week, month, quarter, whatever term you decide) and just save it to fund future growth. When you start, you need to plan for a time when you can pay yourself the minimum salary while also putting X% of money in to capital reserves. Once you pass that point, you can usually say, "After all expenses are paid, and X% is put aside in capital reserves, the rest is mine." Then you can (relatively) safely grow your income with the business without causing yourself cashflow issues.
Now, don't just let the capital reserves account grow forever. It is there to fund future growth and other ventures. You need to keep enough in there for an emergency fund, but the remainder is to fund growth without debt.
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Now, don't just let the capital reserves account grow forever.
What like
?You have evaded my trap yet again.
I'll simplify by adding the assumption of a primarily service-based venture.
Brass tacks: advising people you know IRL, which approach have you mostly advocated:
- a zero-salary,
- low-salary,
- competitive-salary, or
- buy-bling-with-every-customer's-payment-salary?
I'm good at the "depends" (watch it..., kids these days, no respect)
... what's actually worked?Signed,
Curious, but not rankled
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Brass tacks: advising people you know IRL, which approach have you mostly advocated:- a zero-salary, - low-salary, - competitive-salary, or - buy-bling-with-every-customer's-payment-salary?
You will start out with zero salary, as you have zero revenue coming in the door. Move that up to low salary when you can (enough to cover bare minimum expenses, zero entertainment in your personal budget, become friends with red beans and rice and pasta as a staple), use whatever is left over to fund growth. When you have strong growth, bump up your salary to make it worth it.
How long these milestones will take is not something I can even say. Without knowing you, or what you want to do, it would not even be an educated guess. You can also truncate that timeline through careful planning, etc. Go into it half-baked and you may never get past the "zero salary" portion of the discussion.
Competitive salary right out of the gate is just not going to work. Not even with angel investors, etc. They are going to want to see you sacrifice if you are going to be spending their money.
Buying bling is a good way to end up failing, that will never work.
I think I have answered your question? If not, I am not being intentionally obtuse. You might need to clarify a bit more.
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If not, I am not being intentionally obtuse.
See "not rankled"... but I am attempting to (w)rangle particular examples from you
(or maybe I should offer
?)Unfortunately COB here - heading offline. Will agitate this bucket further on Monday..
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ee "not rankled"... but I am attempting to (w)rangle particular examples from you
Oh, you wanted specifics. I cannot speak for others, as people tend to speak very optimistically about themselves for fear of looking like a failure when they branch out on their own.
Personally, I was bringing in enough money to pay myself the minimum within 60 days. I had a lot of people to look to for work when I started though. It gradually grew from there and I was doing pretty well inside of a year. I don't know if I could call my salary at that point "competitive" for a person doing my many jobs as a salaried employee at an established small business, but I was no longer eating Ramen.
Now I am ~7 years in and things are going really well. There is definitely money to explore other ventures, as I have mentioned. I have employees. I have very steady work and I can take vacations when I want to (say goodbye to those for at least the first year, not necessarily because of income but because there will be no one there to do the work that you should be doing and your customers will not be happy and go somewhere else).
As for the salary, it is still variable ~7 years in. Not because I cannot put it in the budget, but because I don't put it in the budget. Once a month my wife and I sit down and we look over personal expenses, etc. By the end of it, we work out how much I need to bring home and so I do. That number is no longer "bare minimum", it encompasses everything a normal household does and includes some money to blow. But the rest of it remains in the business until it is needed.
Why? Well, because it is a lot messier to put money back in to a business than it is to take it out. It has to be recorded in such a way that it does not get taxed again when you pay it back out.
Is that the sort of answer you were looking for?
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Anyway, I guess my point is, I don't want to be wealthy at all (who gives a shit?) I just want to live a comfortable life and work less.
That's called being wealthy.
If all you want to do is work less, save money while you can (by living frugally) and then retire early. Duh. Or go on welfare.
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^ What he said.
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Money is like oxygen—it's only ever a big deal if you don't have enough of it.
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Do you think there's a particular type of person who's best suited to entrepreneurship? What are the most important character traits, or the ones that make it harder?
Something that just came to mind to add to this: You should be good with rejection. As humans, and especially so with male humans and our egos, we tend to think of rejection as a personal insult. But it will happen. One thing I learned about sales early on is that there will be a certain percentage of sales that you will never be able to make. Period. They won't like you, they won't like your product or service, they want to keep doing things the old way because they are averse to change, etc. There will be nothing you can do to close those deals.
Think of trying to sell Discourse to the majority of this crowd. Just because of the man who started it, even if it were flawless they would still find something. I include myself, mostly, in this camp. (I sometimes like to point out my own hypocrisy)
You have to take those non-starts and dismiss them for what they are when you recognize them.
Business is a game of numbers. When I first started, after I had exhausted the low-hanging fruit and needed to branch outside of the business I gained through nepotism...it was time to start cold-calling. I did not have money available to do much in the way of advertising, so it was just making cold calls. Nothing will kill your spirits quite as much as that. But it had to be done. Out of every 100 phone calls I would make, I would be doing good to get 5 meetings. That is a 95% rejection rate. Imagine trying to strike up a conversation with 20 different women and the first 19 are going to tell you to fuck off and never speak to them again...the moment you open your mouth to speak. That is cold-calling. But it had to be done to grow.
Did you read what I wrote about the average wealthy person goes bust 3 times before becoming successful? I printed out a sheet every day to keep a tally of successes...but mostly failures. It might sound silly, but when I would start to get around 20 rejections, I would become optimistic that statistically speaking I was due for a win. It helps keep your spirits up.
Which brings me to another point: Measure anything that you want to improve. If I had not started keeping a tally of calls I made, at the end of every day it would just seem like a 100% failure. Like I was wasting my time and spinning my wheels. As I started to measure it, things improved. I have no idea why, but it always seems to me that anything measured will improve. I assume it is because if you are measuring it, you are paying attention to it and you concentrate your efforts and attention. That is speculation though.
Now, as it is end-of-year paperwork time, you should also prepare yourself for tons of paperwork. It sucks, but it is necessary. It is a good and bad sort of thing. Bad because I hate paperwork. Good in that as a business owner you get to pay for tons of stuff with pre-tax dollars and you get to write off lots of other things as expenses. If you take two people with equal "taxable income" and one is an employee and the other is a business owner, I can guarantee you that the business owner has a significantly higher standard of living. Qualified business expenses become your friend.
Anyway, just a few more things that came to mind this evening as I was getting everything in order to meet with my accountant tomorrow morning.
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You should be good with rejection.
It's the same if you're applying for grants from some fund. There's a good chance you'll be rejected, and for reasons that aren't really anything wrong with what you've written. Perhaps the funders wanted something else this time. Perhaps you just got the explanation slightly wrong.
You've got to pick yourself up and keep going: winners persevere.
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when I would start to get around 20 rejections, I would become optimistic that statistically speaking I was due for a win
but was there a goat behind the door?
Seriously though, you do realise that's the gambler's fallacy, right?
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Seriously though, you do realise that's the gambler's fallacy, right?
Pretty much the definition of it. It worked though. ;-)
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As I started to measure it, things improved. I have no idea why, but it always seems to me that anything measured will improve. I assume it is because if you are measuring it, you are paying attention to it and you concentrate your efforts and attention. That is speculation though.
Similarly, Pearson's Law:
"When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates."
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Imagine trying to strike up a conversation with 20 different women and the first 19 are going to tell you to fuck off and never speak to them again...the moment you open your mouth to speak.
You don't have to imagine. Just open an okcupid account and put up crappy pictures taken from a cheap phone on your profile.
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but was there a goat behind the door?
Seriously though, you do realise that's the gambler's fallacy, right?
Now that I am done with the accountant for the day: Yes, it is in a way a gambler's fallacy, with one exception: In this case if you play the odds long enough you will win. In a casino, or card game, or any other type of gambling...the odds are not in your favor and skill rarely comes in to play overall. If you play long enough, you are guaranteed to lose.
In business, if you play the odds long enough, you are almost guaranteed to win. (provided your product or service is not rubbish and is capable of turning a profit. In gambling, if you play long enough you are guaranteed to lose. In business, if you play long enough you are guaranteed to win. (insert a shitload of qualifiers for that last statement right here...)
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You don't have to imagine. Just open an okcupid account and put up crappy pictures taken from a cheap phone on your profile.
Funny enough that you call me out on that exact statement: When I was still in my dating years, I had a reputation for dating really attractive women. I can assure you that it was not because I have any chance of winning a "Brad Pitt look-alike contest". Pfffffbt. Far from it. My secret was...I would go and talk to women. Usually women way out of my league. You never knew until you went and talked to them. Lots of misses, an occasional win. You never know until you actually try though.
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My secret was...I would go and talk to women.
That is the correct answer. I have a lot better luck in person.
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In gambling, if you play long enough you are guaranteed to lose.
Unless you're the house, but then the house is a business…
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Amazon.com
Snowball effect - Wikipedia
