James Altucher, a New York City-based author, programmer, entrepreneur and venture capitalist, recently poured his two decades of business and investment experience into a memorable article for TechCrunch.com called “The Ultimate Cheat Sheet For Starting And Running Your Business.” It contains 101 vigorously written tips for startups and other entrepreneurs, many of which are open to debate, but all of them reflecting Altucher’s all-out approach to life and business.
Altucher claims to have started more than 20 businesses, 18 of which he admits have crashed and burned. But percentages only count in high school; two of those businesses, web-design firm Reset Inc. and investor website Stockpickr, were successfully sold for about $10-million each.
Altucher, now managing director of Formula Capital, and author of a new book called Choose Yourself!, calls his article “a bullet FAQ on starting a business.” To start, he writes, “I’m going to give no explanations. Just listen to me.” But he does invite readers to add new points or take issue with any of his ideas. “If you want to argue with me, feel free. I might be wrong on any of the items below.”
Here are a handful of his points. You can decide if they apply to your life and business as well.
* Should you 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. Don’t be an amateur.
* Should you
patent your idea? Get customers first. Patent later. Don’t talk to lawyers
until the last possible moment.
* Should you
require venture capitalists to sign NDAs? No. Nobody is going to
steal your idea.
* How much equity
should you give a partner? Divide things up into these categories: manages the
company; raises the money; had the idea; brings in the revenues; built the
product (or performs the services). Divide up in equal portions.
* What if nobody
seems to be buying your product? Then change to a service and do whatever
anyone is willing to pay for using the skills you developed while making your
product.
* How do you get
new clients? The best new clients are old clients. Always offer new
services. Think every day of new services to offer old clients.
* What’s the best
thing to do for a new client? Over-deliver for the first 100 days.
Then you will never lose them.
* Should I pay
taxes? No. You should always reinvest your money and operate at a loss.
* Should I ever
worry about the news or the economy? Absolutely not. The best businesses
are started in horrible economies.
* Should I do
social media marketing? No.
* Should I blog?
Yes. You must. Blog about everything going wrong in your industry. Blog
personal stories that you think will scare away customers. They won’t.
Customers will be attracted to honesty.
* My client
called at 3 a.m. Should I tell him to respect boundaries? No. You no longer
have any boundaries.
“The Ultimate Cheat
Sheet” reads like the sort of chippy, personal schooling you’d get over
three beers with a street-smart, opinionated entrepreneur who learned all his
lessons the hard way.
Again, this advice
isn’t for everyone. But Altucher’s insights make useful reading and are worth
pondering. They may work best as a conversation-starter with other
entrepreneurs and your advisors.
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