One of the difficulties I had when starting my first business was getting the right advice.
Most advice was from business books or blogs. Some of the most accepted advice turned out to be the worst thing for me at the time.
The advice was often given by someone at a completely different phase and often by people who had lost touch with what it’s like to be a bootstrapped startup founder. As a result, I had to learn some of these startup lessons the hard way.
Here are my top 12 pieces of business advice to ignore in your bootstrapped startup.
1. Work on your business not in your business
Working ‘on’ the business not ’in’ the business is likely the most popular advice ever given to small business owners. The problem? It’s completely impractical and ignored by most successful business owners.
What would have happened if Steve Jobs and Steve Wozniac hired a sales guy and an engineer and spent their time strategizing?
In most small businesses, you have to work in the business. No one else has your vision and you can’t afford a replacement for yourself anyway.
Better advice is from Paul Graham who says ‘Do things that don’t scale’. This is the opposite advice. It’s means getting stuck in, getting your hands dirty and doing whatever you have to do to kickstart growth.
It’s a prerequisite that you have a business model that will scale, but you don’t have to replace yourself from day 1.
2. Learn how to sell
If you love sales, good for you. I hate it. Most business owners hate it, but they accept that you need to learn how to sell in order to get customers.
That’s not true. You don’t have to learn to sell. You only have to be there with a valuable proposition when people are ready to buy.
If you create value for potential customers, build trust over time and you are there, top of mind when they are ready, they will sell themselves. Particularly if you have a very simple proposition.
Selling becomes more and more necessary the more you complicate things. A simple solution to a well understood problem, sells itself.
3. Ideas don’t matter, only execution matters
I have a love hate relationship with this advice. I think it sends the right message by helping people launch something quickly, and not stress out for months about ideas. But the problem is, ideas do matter.
A bad idea that’s well executed will fail. I know that because I’ve done it. A great idea that is poorly executed will also fail. I’ve also done that.
You need both.
4. Refine your elevator pitch
One of the first things your friends will tell you when you start a business is to refine your elevator speech.
If you watch Grey’s Anatomy you’ll know there’s one thing that happens in elevators and it’s not business development. More to the point, if your business model is complicated or boring, it won’t matter how good your speech is.
But the worst advice you’ll get is to frontload your elevator speech with benefits.
Let’s say you have a graphic design business. On day 1 of your business you run into Jane in the elevator. She asks what you do for a living. You say ‘I make business cards’.
Your entrepreneurial friends don’t like your pitch so they help you make a better one by frontloading it with benefits.
The following day you run into Jill in the elevator who asks what you do for a living. To which you reply ‘we help companies grow and increase the value of their brands with best in class graphic design solutions like high quality business cards’.
When Jill passes on the message do you think she repeats your pitch? No, she says ‘He makes business cards’.
The point is, no matter how tricky you try to be, people will only understand your words from their own perspective. Rather than try to complicate your message, create something simple and referable in the first place.
If it’s a challenge to explain what you do in one sentence, then the problem is not your elevator pitch. The problem is your business.
5. Content is King
I am a huge fan of content marketing, so it hurts a little bit to admit that content isn’t king. The fact is, most businesses get their customers when people talk about them.
If content is your thing, then by all means create compelling content to get the attention of your customers and get people talking. But don’t do it at the expense of your product.
It’s much more important to have a great product or service than anything else. A great product means sticky customers, instant referability, more coverage and more growth. It’s the shortest path to more customers.
Content works too, but it takes a long time and it won’t launch a poor product into success.
Product is king.
6. Think big
As an entrepreneur we all think we are Steve Jobs. I’m guilty of it as well. I get excited about my ideas and try to turn them into world-changing products.
For most businesses, this really isn’t how things work out. Our most successful product WP Curve is boring - we fix websites! But it works because a lot of people need their website fixed.
I’ve had a lot more exciting ideas, but they’ve generally failed. When you think big you run the risk of losing focus on solving real problems.
Playing the visionary is a privilege reserved for 2nd and 3rd time entrepreneurs. People who’ve already made it and are now playing for fun and legacy.
For most of us, we want to create a profitable business and it’s much easier to do that by solving existing small problems. This generally means thinking small, at least to start with.
7. Raise your prices
Fellow entrepreneurs will tell you to raise your prices when you ask them for advice.
The popular way to start a business is to go after the biggest consulting projects you can. A $1,000 project is great, a $10,000 project is even better.
In my first business my biggest project was $32,000. In my current business which is far better and much more profitable our biggest project is $99 (we don’t do projects, it’s a monthly recurring service).
The truth is, prices can only be raised so far. And business models based on large projects are notoriously difficult to scale.
If you have to raise your prices 50% to become profitable, there is a good chance your business model is broken.
Higher prices sometimes means less clients, which means less referrals and less momentum. Businesses with less clients and higher prices tend to be founder dependent.
To build something that has scale built in and can outgrow the founder, often the answer is to drop your prices and get more customers.
A business with lower prices and more customers tends to be more stable, more consistent, more scalable and more valuable.
8. Be productive
Entrepreneurs are obsessed with productivity. If you have a real business, it should run well regardless of how productive you are.
What’s likely to have a much bigger impact is your level of happiness and motivation. If you lose motivation your business will die. If you are unhappy, your business will die.
Look for ways to stay motivated and work on things that make you happy, before worrying about being productive.
9. Be everywhere
New business owners think they have to be everywhere. They sign up to 30 forums, attend networking events, advertise on Google, sign up to 50 different social networks and create content on 5 domains.
Being everywhere is a waste of time and bad advice.
Be where your customers are. By all means test as many as you like, but don’t stay in 50 places because you think it’s good advice. It’s not. Stay in the places that drive customers to you.
10. Follow your passion
There’s a good chance if you follow your passion you’ll end up creating a local niche business and ‘working for yourself’.
The problem with working for yourself is you end up never building a real business and just re-creating a job. But this time with a much harsher boss who makes you do jobs that no real boss could legally make you do.
Forget your passion. Be passionate about business instead. Be passionate about creating things and creating value for your customers. If you can get into that zone, you can be happy creating any business.
Create a business that has you working on things you enjoy yes, but don’t create a lemonade stand because you like lemonade.
11. Scratch your own itch
Experts say ‘solve your own problems’ and create a business based on that. This avenue is fraught with danger.
When you do this, judging the actual value of a product or service is difficult to achieve. People vote with their wallets, not their words. When you scratch your own itch, you can’t vote with your wallet. You make assumptions about what is and what isn’t really important. Your assumptions are wrong.
A better way is to solve someone else’s problem and measure your progress based on whether or not they pay you.
If you are scratching your own itch, make sure you get it in your customers hands quickly.
12. Niche down
When you start your business, everyone will tell you to find a small group of people to sell to. Find a niche of specific buyers that you can serve well.
My point of view is that real businesses serve large markets.
Some think it makes sense to start small and then naturally ‘outgrow’ the small market and go after bigger ones.
This advice causes more problems for people than it helps. I see a lot of entrepreneurs with successful niche businesses. But they’ve hit a ceiling and lost momentum. It impacts on your productivity, your growth, your motivation and you start second guessing your strategy.
The easiest path to having a business serving a large market is to start a business serving a large market.
From day 1, our business has served a market of 70 million websites running WordPress. Every country, in every timezone no matter what kind of business they run.
For us it’s meant:
- Zero changes in strategy from day 1.
- Clear targets and goals with consistent month on month growth.
- Immediate referability because everyone knows someone with a website running WordPress.
- We were immediately on the WordPress radar, being featured in big sites virtually from day 1.
- We’ve been able to explain our business to people easily and they have been able to pass it on.
- We’ve had a better return on our content marketing because a huge percentage of the audience of any site we end up on, uses WordPress.
- We aren’t constantly second guessing whether we ‘chose a niche too small’.
The last thing you want to do as a business is to lose momentum. It’s the most powerful force in business and when you choose to start serving a small niche and hope to outgrow it later, you plan on compromising your momentum at some stage.
Don’t be afraid to enter into a large market.
Want to hear more?
You can learn more about my background and some of the steps we do suggest you follow in this free sample chapter for my new book The 7 Day Startup.