In life and business, there are certain guidelines we must abide by. Some of those are written in stone and some of those are passed down from generation to generation. My friends, today we are passing down our own 10 Commandments of Entrepreneurship. We put these together from the learnings we’ve gathered running our course, Monthly1K, on AppSumo over the years. Each one of these lessons came from trial and error – and we encourage you to keep them handy as you start a business!
1. Validate your idea before anything else
If you are like most entrepreneurs (myself included!) when you get a business idea in your head, you immediately start going through the steps of how to bring it to life. You might think, “I need a logo and a website” or “I need some business cards”, or “OMG, I need to form an LLC right away.”
Stop it. Stop right there.
Sumo-lings, spending money before you’ve actually started making money, is the wrong approach.
Why create a website for a business that you don’t know will work? Why form an LLC for a company that may not last a single month? (Sorry to get all Negative Nancy here.)
The first thing you need to do after coming up with a new idea is to validate it. You’ve got to make sure people actually want your product or service before you put any money towards it. So instead of heading to GoDaddy to start building your website, reach out and talk to the people you intend to target with your business.
For example, if you want to start a new SAAS platform for Human Resources professionals, reach out to the HR people in your network and tell them about your idea. Ask them what they think about it, how they would improve it, and most importantly, would they actually PAY for a service like that? Once you’ve gotten people to agree to pay for your services, then can you start building your business!
2. Keep it simple
Dear perfectionists, I hate to tell you this, but sometimes in business, done is better than perfect. Yes, it’s true. I’m sure you’ve heard of an MVP before, it stands for a minimum viable product. An MVP is usually the first draft of a product or service and is far from perfect. It’s necessary to put out an MVP so users can start testing it out and giving you feedback. With that feedback, you can continue to iterate and create a product that users can’t resist.
3. Don’t create solutions for problems that don’t exist
Entering a crowded market can be tough, we get it. BUT if you come up with an idea that you think nobody has done before, we’d encourage you to peel back the layers a little more on your idea. Perhaps no one has done it because there isn’t a market for it. Sad but true: not all of our brilliant business ideas are actually brilliant. Some ideas may be solutions to problems that don’t exist or solutions people are not willing to pay for.
Here’s a perfect example, we know a guy (cough, Noah Kagan, cough) who once spent $50k of his own money to create an online site for fantasy sports betting and because he didn’t take our advice (see #1). He hadn’t validated the idea that fantasy sports players wanted a service like that.
His site, though great in theory, wasn’t something that they were interested in. So when it launched, it flopped. This was an expensive lesson to learn, but that’s why we are telling you this story. We don’t want you to create products and services that people just don’t need in their life.
Instead, start a business that people NEED so you can make it through different cycles of trends and potential economic downturns, and come out on top!
4. Find your place on the totem pole
As entrepreneurs, we’d like to believe that people love our product so much that they absolutely could not imagine life without it. And while that may be the case for some of our customers, it also may not be true.
A simple way to find out where you stack on the customer’s totem post is to ask your them, “If my company were to go away overnight, how disappointed would you be?”
If their answer is “very disappointed” or “slightly disappointed” you know that you have some dedicated customers. But the true opportunity lies with the people who answer, “I wouldn’t care” or “not disappointed at all.” At that point, it gives you the opportunity to reach out to those people and ask how you can improve your product to make it a ‘must have’ in their life instead of a ‘nice to have.’ With that feedback, you can improve the product to suit the needs of your customers.
5. Don’t be needy
When it comes to launching your business, you are going to need a lot of things. You may even need a lot of people. But waiting on a lot of things—or people—can slow you down. Instead, you are going to need to be extremely resourceful and nimble. You’ll want to do as much as you can on your own so that you can move at your own pace. If you do need help, find the right person for the job and let them do what they do best while you focus on other aspects of the business.
6. Focus on the small wins to maintain momentum
In business we’re told to have our eye on the goal and depending on what that is, our goal can seem daunting, unachievable, and downright scary. If you are new to business and aren’t sure what steps will get you there, you can easily become discouraged. But while you are working through your entrepreneurial journey, you have to learn to embrace the small wins.
The small wins are milestones that your business achieves towards your goal. For example, if you are looking to bring on 100 new clients this year, every 10 clients you get it brings you 10% closer to your goal, and this is cause for celebration! If you spend your time focusing on the fact that you’ve got 90 more to go, you’ll never be able to enjoy the work that you’ve put in and the progress you’ve made.
7. Use time limitations
There’s a thing called “Parkinson’s law” which states that “work expands so as to fill the time available for its completion.” Which means if you give yourself 2 hours to finish a blog post or 2 weeks to finish a blog post, that’s how much time it will take you.
If you are trying to grow your business, it’s important to be productive. And you can’t be productive if you are giving yourself more time than is necessary to complete tasks. In our example, if you gave yourself 2 hours to write a blog post, you’d be able to complete 80 blog posts in two weeks whereas if you gave yourself 2 weeks to complete a blog post, all you’d have is a single blog post. (One sad, lonely blog post.)
8. Do what it takes to get that first $1
Before you spend money, we want you to make money, which means you need to do whatever it takes to make your first dollar. Reach out to your network. Call your college buddies. Approach people in the checkout line. Try to sell your idea to people and get them to give you money. Some of the best businesses were started as MVPs (Minimal Viable Product) — read: it doesn’t need to be perfect to be selling!
One of the ways that Noah Kagan recommends earning your first dollar is to send out an email to your network with a basic pitch for your business. Tell them that you are opening up this offer for a short period of time and if they are interested, to Paypal you the money for the product or service. Inevitably, you will have at least one person on your list that you can convince, and boom! you just made your first dollar. You are now officially in business.
9. Plan for adversity
Running a business is not for the faint of heart. Some days you will be on cloud nine and other days you’ll have to will yourself out of bed just to get on with the day. Because of this, you will need to have a strong mindset to persevere.
You will likely run into obstacles in your business. AppSumo founder Noah Kagan, was once sued by a well-funded competitor for his social gaming platform. (I’m guessing this is was a day that was particularly hard to get out of bed for Noah.) But instead of throwing in the towel, his company handled the lawsuit and continued business as usual.
Whatever obstacles you encounter (and you will undoubtedly encounter many), you must have your larger goal in mind and a strong dedication to that goal. Otherwise, without strong conviction, you will likely quit or walk away at the first sign of adversity.
Bottom line: Know that obstacles are on the way and have a plan to overcome them.
10. Face your fears
Running a business is hard. There are going to be times that you are going to face your fears head-on. Hate picking up the phone to make a call? Do it. Hate the feeling of pitching your business to people you don’t know? Get used to it. Succeeding in business means stepping outside of your comfort zone.
Want a copy of Noah Kagan’s 10 Commandments for Business? Click here.
Share the lessons YOU learned from starting and growing your business below — we want to hear from you!