Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!
- PROFITABILITY FIRST: Minimalist entrepreneurs create businesses that are profitable at all costs. Many businesses never intend to stick around long enough to be profitable. Instead, the plan is to sell the business before profits become necessary, raising money from investors along the way. Minimalist entrepreneurs aim to be profitable from day one or soon after, because profit is oxygen for businesses. And they do that by selling a product to customers, not by selling their users to advertisers.
- START WITH COMMUNITY: Minimalist entrepreneurs build on a foundation of community. They don’t ask “How can I help?” but are instead observant and cultivate authentic relationships. They spend time and effort to learn and to build trust, focusing on the market part of “product-market fit” (a term coined by venture capitalist Marc Andreessen for being in a good market with a product that can satisfy that market) before they build anything at all.
- BUILD AS LITTLE AS POSSIBLE: When they do build, minimalist entrepreneurs build only what they need to, automating or outsourcing the rest. Similarly, minimalist businesses do one thing and do it well. They work side by side with their customers to iterate toward a solution, and make sure it’s worth paying for, before they take it to customers outside of their communities.
- SELL TO YOUR FIRST HUNDRED CUSTOMERS: Minimalist entrepreneurs don’t spend time convincing people—they spend time educating people. Selling is a discovery process, and minimalist entrepreneurs use sales as an opportunity to talk to potential customers one by one about their products while simultaneously educating themselves about the problem they are trying to solve for them. Selling this way is a long game built on relationships and vulnerability, not a one-day grand opening extravaganza followed by selling to strangers.
- MARKET BY BEING YOU: Speaking of vulnerability, minimalist entrepreneurs share their stories, from struggle to success. The best marketing shows the world who you—and your product— really are. Minimalist entrepreneurs understand that people care about other people, and educate, inspire, and entertain whenever and wherever they can. Instead of making headlines, they make fans—who turn themselves into customers over time.
- GROW YOURSELF AND YOUR BUSINESS MINDFULLY: Minimalist entrepreneurs own their businesses, they don’t let their businesses own them. They don’t spend money they don’t have, and they don’t sacrifice profitability for scale. At this point, it becomes a game to lose . . . and minimalist entrepreneurs don’t lose.
BUILD THE HOUSE YOU WANT TO LIVE IN: Minimalist entrepreneurs hire other minimalist entrepreneurs. Instead of following the status quo, they build their companies from first principles, alienating almost everyone. The way you do things won’t be for everyone, but it will be really great for a few people, and if you define your values early and often and tell the world who you are, they will find you. Conventional wisdom about how we work, when we work, and where we work is changing fast. Minimalist entrepreneurs understand there are few rules. Even when you’ve successfully built your minimalist business the journey isn’t over. Spoiler alert: It never is. Minimalist entrepreneurs know that life is about more than just their companies. The true magic of entrepreneurship is that you and your business can improve the quality of life of many people. And it doesn’t have to be millions; “enough” is what you decide it is, not a specific amount.
The world desperately needs the solutions that only entrepreneurs can provide. Everyday problems are all around us, but they are often hidden from the view of the Silicon Valley software engineers and Ivy League overachievers who have been anointed as our entrepreneurial class. We need the help of entrepreneurs from every part of the planet and every stratum of society. It’s down to individual creators and entrepreneurs to set better goals for ourselves and our businesses. After all, problems don’t solve themselves. People do.
- Creator First, Entrepreneur Second. On paper, it seems simple enough:
- Narrow down who your ideal customer is. Narrow until you can narrow no more.
- Define exactly what pain point you are solving for them, and how much they will pay you to solve it.
- Set a hard deadline and focus fully on building a solution, then charge for it.
- Repeat the process until you’ve found a product that works, then scale a business around it.
In practice, it’s not so simple. There are many complications that pop up, and most people don’t even know where to start. A “business” of any kind is too scary, too amorphous, or too unattainable. Luckily, there’s another way to get started today. Before you become an entrepreneur, become a creator.
Community is a fundamental societal unit. From Sol’s r/Fitness subreddit to yoga classes to family to the group of friends we game with in the middle of the night, communities are a place where we can connect, learn, and have fun. For minimalist entrepreneurs, communities are the starting point of any successful enterprise. That doesn’t mean you should run out and find a community to join just for the purpose of starting a business. It means that most businesses fail because they aren’t built with a particular group of people in mind. Often, the ones that succeed do so because they’re focused on a community that a founder knows well. That process can’t be rushed because it comes from authentic relationships and a willingness to serve, both of which take time to uncover and develop. You may even have to learn a new language—or at least some insider lingo.
Communities used to be limited by geography, but it’s never been easier to connect to people with whom you share something in common, whether it be an interest, a favorite artist, or a belief system. But a community isn’t a group of people who all think, act, look, or behave the same. That’s a cult. A community is the opposite. That’s what I discovered when I moved from San Francisco to Provo and got out of the Silicon Valley bubble. For one of the first times in my life, I saw that the best communities are made up of individuals who might be otherwise dissimilar but who have shared interests, values, and abilities. It’s a group of people who would likely never hang out with each other in any other situational context, and it often encompasses virtually every identity, including, yes, politics. A community can override people’s dislike of one another. Every Sunday in the Latter-day Saints Church, I saw the progressive next to the conservative, the rich next to the poor, the young next to the old. I’m not sure what they thought of each other outside the church building, but for at least one day a week, they sat together for the sake of the community. It wasn’t easy. It was real work to be an active participant in that church community, to learn how to speak the language, but for the first time in a long time, I was reminded of something important: you don’t have to bring your whole self to every community you join, but you do have to bring a slice of yourself. And that part needs to be authentic to its core. It’s the combination of time and vulnerability that leads to relationships and growth. Part of my own growth was realizing that as an outsider, I was in a particularly great position to see the community with fresh eyes and to contribute value in a new way. You may never move to a new city, but getting out of your bubble matters when it comes to community. And it’s healthy and normal to leave certain communities as you explore new ones.
- On how to explore communities:
- For every group with a shared interest, there’s a Facebook group, a Reddit community, a Twitter or Instagram hashtag, or some other form of gathering and sharing ideas on the web. There are often several. Join them all.
- There are communities run by the businesses that service that community: forums, groups, and more. Join those too.
- There are also notable teachers, with online classes that also function as communities. They may be also worth joining— though be mindful of the cost.
- Of course, there are the in-person communities! There are meetups, workshops, classes, speaker series, networking events, and more.
It’s important to note that your goal here is to join communities, not networks. In a network, such as Facebook, Twitter, or Instagram, new-comers start at zero. No one says “hi” when they walk in the door, and if you have something to say, there’s no guarantee that anyone will hear or help. Networks, in person or online, aren’t bad. Sometimes they can lead to genuine and meaningful connection, especially over time, as you gain friends and followers and the algorithms start to recommend your work and your content to people who don’t already know you. But where did those friends and followers come from in the first place? The communities you’re in!
Chances are, if you’ve learned something, there’s probably a good portion of your community that would find value in learning that same thing from you, even if you aren’t the world’s leading authority on the subject. And if you’re regularly learning, then you’ll always have regular content to contribute to the community. This can become a nice flywheel over time, as teaching often becomes the best way to drive your own curiosity and inspiration to learn more yourself. And when you learn publicly, your students will have questions that force you to learn even more stuff to teach them. You don’t have to teach everything you learn. In fact, a narrower core focus can be better. For example, Patrick Mc-Kenzie, a writer, entrepreneur, and software business expert who is best known for a 2012 post on salary negotiation that has since become a cult classic in the software engineering space, believes that the best personal brands exist at the intersection of two topics. He now works for Stripe, where he continues to write and advise software engineers and software entrepreneurs about how to start and scale their businesses, speaking from real experience as a creator and business owner himself.
Every community has a unique set of problems that’s calling out for a custom-built solution. You’re probably part of a number of communities, but when it comes to making an impact in a community in a way that leads to a minimalist business, you should focus on a community where you can (and want to): (1) create long-term value; (2) build relationships for decades to come; and (3) carve out a unique, authentic voice for yourself. For the minimalist entrepreneur trying to make an impact, community is a way to stay focused: Instead of changing the world, you can change your community’s world. It’s not enough to pick any community; you also have to consider your own interests. There are many communities that you may be a part of, but that doesn’t mean you want to dedicate a significant portion of your waking hours to solving their problems. Unless some element of the community and its problems overlap with something you’re passionate about, it is unlikely you would be happy operating a business within the space—contempt for your customers is not optimal. There are two more important attributes that will decide which is the ideal community to focus on: how large the community is, and how much money they are willing to spend (said differently: the total addressable market, or TAM). The goal here is not to find the largest community with the most dollars to spend in order to capture 1 percent of it. Instead, you should find something right in the middle. Too small, and you won’t be able to build a sustainable business. Too large, and it will cost too much money to get to sustainability in the first place—and you will attract or create competitors along the way, leading to a race to the bottom in product pricing that you may not survive. The best way to win is to be the only. And the best way to be the only is to pick a group that is Goldilocks size, has problems they would pay money to solve, and is underserved (likely because it is too small for larger competitors to go after).
- There are only four different types of utility: place utility, form utility, time utility, and possession utility. What can you make easier to understand, faster to get, cheaper to buy, or more accessible to others?
- Place utility: Make something inaccessible accessible
- Form utility: Make something more valuable by rearranging existing parts
- Time utility: Make something slow go fast
- Possession utility: Remove a middleman
One business that provides time utility is theCut, an app that connects barbers and clients and makes it faster and easier to find, book, and pay for services. Founders Obi Omile and Kush Patel came up with the idea after spending hours struggling to find barbers they liked and trusted. And getting an appointment with the best barbers often meant waiting hours because many used informal booking systems. TheCut provides utility for both sides. Clients save time, and barbers find new clients (possession utility), spend less time communicating with current ones (time utility), and receive mobile payments (form utility). Omile and Patel built a great business because they understood the problems that plagued the community they planned to serve. Once you’ve picked your own community, the path to the right solution will become clear for you too.
- It is important to ask: If your business achieves its potential, what kind of positive impact might it make on the world? That, not the lure of an IPO, should be the guiding light for the founders of a company and all of its employees.
These are the criteria I use:
- Will I love it? Building a business is hard and time-consuming. It will take years. And the more successful it is, the longer you will work on it. So it’s important to find something you want to work on, for people you want to work for. To build a successful business, you need to build something people love. To stick with it, you need to build something you love working on.
- Will it be inherently monetizable? There should be a clear path to charging people money for something of value, in a way that feels obvious. If it makes sense, it’ll make cents.
- Does it have an internal growth mechanism? In 2020, Gumroad’s revenues almost doubled due solely to word of mouth. In our case, it’s impossible to use the product without sharing it with other people, and as a result, we’ve been able to “outsource” our sales and marketing efforts because our customer base does the work for us as their customers use our platform. This is true of a lot of minimalist businesses, especially because you’re going to build a great product people want to tell others about, and that they may eventually want to use themselves.
- Do I have the right natural skill sets to build this business? For example, if the business requires a lot of business development or sales calls to get off the ground, and you are deathly scared of speaking to anyone, then it’s probably not a good fit for you. There are a lot of businesses waiting to be built—pick the right one for you.