
The Ultimate Cheat Sheet For Starting And Running Your Business - ssclafani
http://techcrunch.com/2013/08/24/the-ultimate-cheat-sheet-for-starting-and-running-your-business/
======
javajosh
The more I've read about him, the more I believe that James Altucher is doing
some sort of marketing/PR experiment, a la Andy Kaufman. I believe he's a liar
and I don't trust him. I think he's a kind of art-punk troll who might even be
manipulative on purpose. Even taking his story at face value, I'm not sure why
people would give him any kind of credibility. His own story states he made a
few million lying and kissing ass on Wall Street, which is NOT a note of
distinction.

This cheatsheet is ridiculous. There is no one-size-fits-all prescription. For
example, IANAL but I was told by council that incorporating in Delaware means
that you'll have to travel to Delaware to litigate.

Splitting equity equally with the guy with the idea? I AM an idea guy, even I
have to say that's crazy. An idea without execution isn't worth anything
except maybe a clever throw-away side-plot in a Neil Stephenson science-
fiction story. (Although if you think differently, please contact me through
my profile.)

Honestly, if you're going to take advice from someone you want to take advice
from someone with a great reputation as a smart, successful, honest, and
generous entrepreneur or investor. Along those lines I think DHH has done a
great job (bootstrapping FTW), although I think he tends to underestimate his
luck with timing. Fred Wilson has also done a great job with his excellent
blog, avc.com. Warren Buffet, although not really an entrepreneur, has talked
unwaveringly about sound business principles for 50 year - and he has the
knack of making it sound like common sense.

Take Altucher with a big grain of salt, is all I'm sayin'.

~~~
henningb
He does not say split equally with the idea guy. Idea guy gets one fifth.

> Take Altucher with a big grain of salt, is all I'm sayin'.

Agreed. However I would take any general advice with a grain of salt. Every
business situation is different.

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Bjoern
Some of these answers are outright dangerous in my opinion. This list is quite
a mixed bag.

~~~
minimaxir
The list isn't intended to be 100% serious.

~~~
clicks
Those are the worst kinds of lists then. Because if it's not clear whether
they are or are not 100% serious I'm left here trying to figure out how he got
to that conclusion on some contentious point and I start doubting my own
strategies where we disagree.

But really, I think the author by himself meant all of it to be serious, just
that he tried to be humorous along the way.

~~~
curiouscats
It seems to me it is like most short quick comments, there might be some
valuable insight if you apply it right but sure you can easily mis-apply the
ideas.

I think it is pretty obvious no advice from a list can really be used to guide
your decision. But it can make you think, "founder is the head of sales" \- am
I really making a good decision hiring a head of sales so quickly? Yes, the
founder is wonderful but a lousy sales person. Similar to the no hiring a CEO
idea. Avoid doing so is the advice, if you want to question that impulse but
if there are good reasons to, well you have to decide based on the actually
situation you face.

I generally find such lists of general advice close to worthless. I actually
find this one worthwhile, but sure it has plenty of advice I don't agree with.
What I really care about is if it provides some insight and sparks what seems
like useful thought.

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ianhawes
Could someone please elaborate on why an LLC would not be good for selling
your company?

I'm aware that it wouldn't be preferable for outside investment, but this is
the first I'm hearing about issues with sale to another company.

~~~
Terretta
LLC is incredibly flexible, and incredibly easy to convert to a C if you do
actually need.

He's wrong on that, conflicts with all his other MVP product advice. LLC is
the MVP corporate structure.

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AliEzer
Half of these answers is common sense, the other half is shitty advice. You
can't answer by "yes" or "no". Bad delivery too.

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tobylane
When I read about an area I know little about I generally don't want to
disagree too strongly with anything. But this, even on a somewhat renowned
blog, is written in such a defining way. It doesn't fit all that I read about
startups to be so molded. My understanding of PG's essays is that this is
still true with raising money. And this article seems very sure that it can be
light hearted, reminding us that sex with employees can work (there are some
forms of rape from consensual where one has standard work power over the
other). Who is this list for? No-one would act on this, so it's a joke piece?
Is there some in joke from experience?

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dmourati
I googled "choice ambiguity". Nothing useful jumps out. Anyone have a good
reference?
[https://www.google.com/search?q=%E2%80%9Cchoice+ambiguity%E2...](https://www.google.com/search?q=%E2%80%9Cchoice+ambiguity%E2%80%9D&oq=%E2%80%9Cchoice+ambiguity%E2%80%9D&aqs=chrome..69i57j0l3.505j0&sourceid=chrome&ie=UTF-8)

~~~
jacquesm
I read that as 'none of my competitors stand out from the field'

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jacquesm
Longest comment I'll likely ever write here. While reading this keep in mind
that it is easier to criticize than it is to write and that 101 applies to me
even more than it does to James Altucher who I tremendously respect.

1 & 2)

That's US start-ups only. Elsewhere consult a fellow starter-upper and/or a
corporate lawyer.

4) I'd build the product _after_ finding the first customer, and I'd build it
together with the first customer. I'd stay away from friends-and-family money
at all costs. My friends-and-family are worth more to me than whatever money
they can supply and the risk of failure is no different for this new fantastic
idea than for any other.

6) Debatable. I work for quite a few venture capital companies and NDAs, while
not the norm are definitely in play especially in the bigger deals.

7) I'd weigh those a bit more careful depending on where the centre of gravity
lies. If someone contributes _just_ an idea and won't be doing any work an
equal portion would not be on the table because it will become a deadweight in
the long term.

9) depends. If the service is marketing then that would be up for discussion.
Large amounts of leverage in marketing can be a big success factor and a
partnership with a company with both eyeballs and experience can make life a
lot easier. One way this is sometimes structured is through an investment part
of which is then spent at the company doing the investment, other times it is
an outright swap. Complex but workable.

10) only works for b2c. Not everybody builds apps.

11) contradicts 4.

12) strong disagree. If you feel that you're selling yourself short then
simply don't. Venture capitalists telling you to take money at any valuation
...

15) no way. No deadweight, even if that brings business. Likely they're just
trying to offload their friend and you'll end up with deadweight and you
_still_ don't get the business or it turns out that it nets less than the
friend costs. This doesn't scale unless you fire the friend right after you do
get the business (in case that happens...). Needless to say this is unethical.

16) stay in touch but not once per month, you've got better stuff to do than
to re-visit all your rejects once every month. Selling starts at 'no', so do
keep an eye out, they never leave the 'prospect' bin.

20) do it, but if you can charge for it.

25) some sour grapes there. Contradicts 23

26) If it were easy to distinguish the obvious losers from the obvious winners
this would be actionable.

27) when you need them.

28) Cisco.

31/32) It depends. Taxes are at some stage in your development unavoidable. If
you are putting everything on red then not paying taxes can be a valid
strategy, it can also be the fast track to bankruptcy. Adjust to your comfort
level and don't let VCs push you into making bad long term decisions, their
goals are _not_ aligned with yours.

35) Don't. It complicates matters tremendously and opens you up to potential
lawsuits and any move you make after that will be classed as favouritism with
the rest of your crew. It also makes for a very uncomfortable atmosphere in
case the relationship ever sours.

36) Employees should be fired if and when they don't keep up their end of the
employment arrangement or when you can predict you will run out of cash (this
can be costly in and of itself!). If your employment agreement states you
should not gossip then don't, otherwise I don't see how you could fire someone
for that. Employees with an attitude are pretty common and those are often the
best people.

41) then work like hell on getting your revenue more balanced. One customer
that can sink you is a time-bomb waiting to happen.

44) do your homework and know your competition better than they know
themselves. Know their weak points and their strong points, show how your
attacks drive at their weak points and how your defences are taking care of
their strong ones. This can be a lot of work. But don't let yourself be taken
for a ride by your competition, you are driving your own course.

45) Figure out what it is worth to the other party. The cost+ model is likely
going to end low, especially if you are a dominant player and/or have a
significant userbase or network effects in your offering.

47) that's just sad.

48) this works if you run a lawyers office and in some b2b offerings. (I'm
trying to imagine github charging extra for github pages or issues).

49) b2b only

52) only a little bit and only in the beginning. and make that clear.

56) debatable. Blog if it works for you, if it doesn't cost you a lot of time
you need to spend elsewhere and if you can do it as part of some strategy.
Don't just blog to blog.

57) strong disagree. Care about what you are netting and keep track of which
sales are netting you money and which ones are losing. Get rid of the losing
ones. Revenues are nice for a flip or a crash-and-burn strategy but at some
point you're going to run out of infused cash and you'll have to stand on your
own 2 feet. Don't be caught out with lots of revenues and negative profits
when your growth plateaus. If you do you're dead.

60) I'd hear them out first.

62) that seems to be one for the FAQ.

63) Hm. They're all likeable, at least most of them. Turning up the charm when
talking to founders is something VCs have down pat. That doesn't mean that you
shouldn't be looking very closely at the terms sheet. Don't like something?
Strike it and see if the deal stands. If not then walk. You don't need to
sleep with them, you need to find a good partner. If you like someone but they
screw you over afterwards that contract is all you have.

67) weird.

68) depends. If you're in enterprise IT then make that 6 months. Those sales
trajectories can be very long.

71) Wonder what Brin & Page have to say about that.

73) You do have boundaries. You need your rest or you'll mess up for all your
other clients. If a client is important enough that they can call you at night
then by all means, serve them but reserve that privilege for a very select
group or you'll be looking at burning out in a year or two.

76) Don't borrow from the business if you have partners. Pay everybody or pay
nobody.

81) Find a good middle ground between the two, it can be done.

82) rubbish. For a VC your private life is not as important as it is to you.
If a VC I worked for told a founder to quit their relationship I'd resign on
the spot. It's none of their business, really.

90) not every business revolves around traffic. Some business I know have
_very_ little traffic and are immensely profitable.

94) No, but make sure you're not accidentally violating your contract.

99) That's really up to you. Don't sell if you don't feel like it. Ask Mark
Zuckerberg.

100) Some people do.

~~~
thaumaturgy
This is only your fourth longest comment.

Your longest is
[https://news.ycombinator.com/item?id=943618](https://news.ycombinator.com/item?id=943618).

Ask me how I know that ...

~~~
jacquesm
Ok, you got me there :)

So how do you know that?

And if you know that, do you also know what is the longest comment?

At a guess, you've scraped all of HN into a db.

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balloot
This is way too narrow in general, and a number of the points are just wrong.
He spends a lot of points talking about "clients" and "revenue" like every
successful company has those right off the bat.

My absolute favorite is the irony of #21 (Should I focus on SEO? No), when
this post was originally published on Quora.

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henningb
I love this list. If you follow James Altucher for some time, this is
basically all his experience very much condensed.

As with all advice, it certainly does not apply 100% all the time for your
context. But this is some sound advice from someone who has a bit of
experience building business, both successful and failing.

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axolx
There is no one size that fits all. I've been following JA for the past year
or so. He has unique business story but he sells his advice like it'd apply
everywhere. Buyer beware.

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nXqd
The one I love the most is : 13) Do you listen to venture capitalist? Yes, of
course. They gave you money. But then don’t do anything they ask you to do.

~~~
arbuge
The corollary to that one is: Never give VCs control of your company.

------
shakiba
90) I have no traffic. How do I get traffic? Shut down your business.

------
revx
My biggest issue with this article is the use of "her" in the question, "when
should I have sex with an employee?". Can people who are interested in men not
run businesses? That's not even subtly sexist.

~~~
greenyoda
Whether it's a him or her, a boss having sex with an employee is probably a
very bad idea:

\- If your partner ever has a disagreement with you about their job or if the
relationship ends on unfriendly terms, they can turn around and hit you with a
sexual harassment lawsuit that you can't afford (either in terms of expense or
time).

\- It will be a morale-killer for other employees, who will think your partner
is getting preferential treatment (whether it's true or not).

\- If the employee you're sleeping with isn't doing their job well, it will be
harder to fire them (due to emotional baggage and/or threat of a lawsuit).

