- Market opportunity- a million dollars isn't a lot in the grand scheme of things, but it certainly is a lot if the market opportunity is not large enough. Even if you put Bill Gates and Steve Jobs as founders in a new venture with a total market size of 10 million, there is no way they could become too wealthy without completely changing the business (ie- failing).
- Inequality of information- find a place where you know something that many undervalue. Having this inequality of information can give you, your first piece of leverage.
- Leverage skills you know- You can go into new fields such as say Finance, but make sure you're leveraging something you already know such as technology and/or product. Someone wanted to start a documentary with me. I said that would be fun, but it would be my first documentary regardless of what happened. There was a glass ceiling due to that. If I do something leveraging a skill I know, I'm already ahead of the game.
- Look in obscure places- We're often fascinated with the shiny things in the internet industry. Many overlook the obscure and unsexy. Don't make that mistake. If your goal has primarily monetary motivations, look at the unsexy.
- Surround yourself with smart people- smart people whom are successful usually got there by doing the same and have an innate desire to help those do the same. it's the ecosystem that's currently happening with the paypal mafia and can be traced all the way back to fairchild semiconductor.
- Charge for something- Building a consumer property dependent upon advertising has easily made many millionaires, but it isn't the surest path. It takes a lot of time and scale, which due to cashflow issues will require large outside investment probably before you are a millionaire. Build something that you can charge for.
- Your metric shouldn't be dollars- If you're going after a big enough market and charging a reasonable amount, you can hit a million dollars. Focus on growth, customer acquisition costs, lifetime value of the customer, and churn.
- Get as many distribution channels as possible- There is some weird sense that if you build something they will just come. That a few like buttons and emails to firstname.lastname@example.org will make your traffic explode + grow consistently. It fucking won't. Get as many distribution channels as possible. Each one by itself may not be large, but if you have many it starts to add up. It also diversifies your risk. If you're a 100% SEO play, you're playing a dangerous dangerous game. You're fully dependent upon someone else's rules. If Google bans you, you will be done. Replace SEO with: App store, facebook, etc.
- Go with your gut and do not care about fameballing- Go with what your gut says, regardless of how it might look to the rest of the world. Too often we (I) get lost in caring about what people think. It usually leads to a wrong decision. Don't worry about becoming internet famous or appearing on teh maj0r blogz. Fame is fleeting in the traditional sense. Become famous with your customers. They're the ones that truly matter. What they think matters and they will ultimately put their money where their mouth is.
- Be an unrelenting machine- Brick walls are there to show you how bad you want something. Commit to your goals and do not waver from them a one bit regardless of what else is there. I took this approach to losing weight and fitness. I have not missed a single 5k run in over a year. It did not matter if I had not slept for two days, traveling across the country, or whatever else. If your goals is to become a millionaire, you need to be an unrelenting machine that does not let emotions make you give up / stop. You either get it done with 100% commitment or you don't. Be a machine.
- If it's a "trend", it's too late- This means the barriers to entry are usually too high at this point to have the greatest possible chance of success. Sure you could still make a lot of money in something like the app store or the facebook platform, but the chances are significantly less than they were in the summer of 08 or spring of 2007. You can always revisit past trends though.
- If you do focus on a dollar amount, focus on the first $10,000- This usually means you've found some repeatable process / minimal traction. ie- if you're selling a $100 product, you've already encountered 100 people who have paid you. From here you can scale up. It's also a lot easier to take in when you're looking at numbers. Making 1 million seems hard, but making $10,000 doesn't seem so hard, right?
- Be a master of information- Many think it might be wasteful that I spent so much time on newsyc or read so many tech information sites. It's not, it's what gives me an edge. I feel engulfed.
- Get out and be social- Even if you're an introvert, being around people will give you energy. I'm at my worst when I'm isolated from people and at my best when I've at least spent some time with close friends (usually who I don't know from business.)
- Make waves, don't ride them- There was a famous talk Jawed Karim gave from youtube. He described the three factors that made youtube take off. I think they included (1- emergence of flash, so no codecs required 2- one click upload 3- ability to share embed). Find those small pieces and put them together to make the wave. That's what youtube did imho. The other guys really just rode the wave they created (which is okay).
- Say no way more than you say yes- I bet almost every web entrepreneur has encountered this: You demo your product / explain what you're doing and someone suggests that you do "X feature/idea". X is a really good idea and maybe even fits in with what you're doing, but it would take you SO FAR off the path you're on. If you implemented X it would take a ton of time and morph what you're doing. It's also really really hard to say no when it comes from someone well respected like a VC or famous entrepreneur. I mean how the fuck could they be wrong? Hell, they might even write me a check if I do what they say!!!!! Don't fall for that trap. Instead write the feedback down somewhere as one single data point to consider amongst others. If that same piece of feedback keeps coming up AND it fits within the guidelines of your vision, then you should consider it more seriously. Weight suggestions from paying customers a bit more, since their vote is weighted by dollars.
- Be so good they can't ignore you- I first heard this quote from Marc Andreessen, but he stole it from Steve Martin. Just be so good with what you do that you can't be ignored. You can surely get away with a boring product with no soul, but being so good you can't ignore is much more powerful.
- Always keep your door/inbox open- You never know who is going to walk through your door + contact you. Serendipity is a beautiful thing. At one point Bill Gates was just a random college kid calling an Albuquerque computer company.
- Give yourself every opportunity you can- I use this as a reason why starting a company in silicon valley when it comes to tech is a good idea. You can succeed anywhere in the world, but you certainly have a better chance in the valley. You should give yourself every opportunity possible, especially as an entrepreneur where every advantage counts.
- Give yourself credit- This is the thing I do the least of and I'm trying to work on it. What may seem simple+not that revolutionary to anyone ahead of the curve can usually be pure wizardry to the general public, whom is often your customer. Give yourself more credit.
- Look for the accessory ecosystem- iPod/iPhone/iPad case manufacturers are making a fortune. Armormount is also making a killing by making flat panel wall mounts. Woothemes makes millions of dollars a year (and growing) selling Wordpress themes. There are tons of other areas here, but these are the ones that come to mind first. If there's a huge new product/shift, there's usually money to be made in the accessory ecosystem.
- Stick with it- Don't give up too fast. Being broke and not making any money sucks + can often make you think nothing will ever work. Don't quit when you're down. If this was easy then everyone would be a millionaire and being a millionaire wouldn't be anything special. Certainly learn from your mistakes + pivot, but don't quit just because it didn't work right away.
- Make the illiquid, liquid- I realized this after talking to a friend who helps trade illiquid real estate securities. A bank may have hundreds of millions of assets, but they're actually worth substantially less if they cannot be moved. If you can help people make something that is illiquid, liquid they will pay you a great deal of money. Giving you a 20-30% cut is worth it, when the opposite is making no money at all.
- Productize a service- If you can make what might normally be considered a service into a scaleable, repeatable, and efficient process that makes it seem like a product you can make a good amount of money. In some ways, I feel this is what Michael Dell did with DELL in the early days. Putting together a computer is essentially a service, but he put together a streamlined method of doing things that it really turned it into a product. On a much smaller scale, PSD2XHTML services did this. It's a service, but the end result + what you pay for really feels like a product.
If it's a "trend", it's too late
I disagree. In fact, if something is a trend, it's a guarantee that a market (of some kind) exists and it can save you a lot of time and research. Most big markets have large numbers of high value competitors and they're not all pioneers. Indeed, most companies with significant turnover were not pioneers in their field - they came in with "me too" products that merely improved upon the existing popular ones before they became too entrenched.
The trick is to get in when something becomes a trend but before the masses realize it's a trend and you have hundreds of competitors making similar improvements to the core products and services as quickly as you are. As well as being my belief, it's one of the core tenets of Michael Masterson's tackily-named (but a great read nonetheless) "Ready, Fire, Aim: Zero to $100 Million in No Time Flat."
With your reference to the App Store, I suspect you might agree with this, but have a different idea of what a "trend" is. I consider the App Store and developing iPhone apps to have been a trend in late 2008, not long after the earliest developers were starting to share revenue/sales figures, but before the masses had figured out it was going to be a giant cashcow. Now developing iPhone apps is just "what you do" rather than a trend, IMHO.
The good thing is what you said: market exists. There's money there, just make sure it isn't all taken up already.
The market very often has been there quite a while with major players in it that are concentrating on monetizing their current offerings while being completely blind to the fact that new possibilities are now available. This tends to happen to startups that have "matured", generally replaced all their leadership and now have very little internal vision.
If you can spot one of these opportunities it can be a true goldmine.
They take over oil fields after the big oil giants want to abandon the well and usually manage to squeeze more out of the well in a more efficient and environmentally-friendly manner. Their profits are generated primarily in Africa, and they also work better with local officials than the big players do.
Maybe BP should contact them and hand over the Gulf mess to them :)
I've been trying to get far more disciplined in looking for the more practical, boring problem/solutions that follow market trends etc.
I just find it so hard to do because it doesn't excite me as much, even though I know there is so much opportunity out there.
I'm pretty deep in the Ruby world. A trend that has emerged (and is almost becoming a cliché) over the past 18 months or so is selling Ruby related screencasts. Peepcode started selling screencasts about 3 years ago but no-one followed on in a serious fashion for quite a while (until Peepcode "proved" it could work, I say).
Now, there are at least 7 - 8 unique vendors of Ruby related screencasts I can think of. None are Peepcode scale at all, but I've seen sales figures and know that some of them, at least, have done reasonably well. Even the people behind the more humble attempts are happy, see: http://codeulate.com/2010/03/how-to-sell-a-hundred-screencas...
Now, "Ruby screencasts" is a crazily tiny niche. Not only is "programming" a tiny niche in the world of business, "Ruby programming" is a MINISCULE niche in the world of programming.. and Ruby programming screencasts is ULTRA CRAZY MOLECULAR LEVEL TINY!
If people have picked up on a trend in such a miniscule market and are making money with it, that's says, to me, that there are millions of teeny tiny niches in which you can start to perform very simple "tests" that make money and which, ultimately, could lead you to that million dollar concept or market.
Picking up on these teeny, tiny "trends" can be tricky, but is a lot easier in fields you're already absorbed in. If I had to pick out some trends just from reading Hacker News recently, these seem like a few areas someone could make some bucks in now/soonish: node.js consultancy/screencasts/books, Posterous theming, Flash-to-HTML5 tools/consultancy/screencasts/books, non-college oriented compsci education.
I first got my starts by trying to blog about video games. Then I started a wiki which I bootstrapped off my own saving. Now it produce maybe 20-30 bucks each year. Not a whole lot, but I bootstrap my way with that money in addition to programming work that I started working.
I am hoping to go back in automating the maintenance of my wiki and create new sites in that niche to generate a bigger income, which then will be used to bootstrap other sites.
The way I figure it is that for each domain, I only need to make about 15 bucks to be profitable. Basically, they serve as buffer money used to fund new mini-ventures.
It may seem boring at first, but let the chase of winning excite you, along with the money. Odds are you get bored because you're not interacting with customers and/or making money from it. I've fallen into this trap before. Seeing money come into your bank account or have customers contact you will get you insanely pumped. It's not about the money in a greed sense, but in the "i've done something people find valuable sense".
For extra effect do this in rapidly growing and/or rapidly changing markets. You may stumble upon an opportunity much larger than one likely to be left open in a mature and stable market. Doing this also give you a lot of the advantages mentioned in the post.
Choosing the right macro is easier then spending 3 years on the wrong macro, especially building up an organization depending on the next round of VC, which I did, realized and tried changing industry (from it-startups to commodity trading, yes I'm in China and happened to meet alot of powerful people while fund-raising asking me for iron ore, crude, just because I look like a foreigner, etc.). It got me off my field for a year, very educational though, did not need to raise more VC for my company and sitting on these buyer requests gave me reasons to climb higher in my social network and I ended up in Libya with the sons of the leader doing one deal, made about that amount.
However now I'm back working on what I'm good at, what I can control, tech-startups, I've had the time and money possibility to take as much time off and do what I want, I decided to study and become very good at php/mysql. Commodity trading depends too much on other people (closing is like winning the lottery).
So I guess, you also have to be lucky!
Drawing energy from people and specially your customers is a much underestimated ingredient for success.
After a couple of years of being a machine, you need an oil change and you need to replace the wear and tear components.
I found taking one week a day and cold-visiting our customers brings back the much needed spark that makes you feel like taking over the fucking world!
- I actually love anything that deals with customer support. It gives me a lot of insight and makes me feel rewarded.
- Yup, I fully fully agree. Machines can break. When I talk in terms of being a machine, I talk in terms of reliability, not over-working yourself. It's good to be reliable+ consistent. Avoiding burnout is certainly key.
- Inequality of information
- Look in obscure places
- Get as many distribution channels as possible
- Be an unrelenting machine <-- Love it! So true and congrats on the weightloss. You have added so much to my motivation you don't know!
Can I ask, which points are borne out of personal experience, and which points are advice from others? i would love to read some of your sources of information. Even if I have read them already, it would be good to re-read em :)
If you think you can focus or be actively conscious of all these things at once, you 1)have a weird definition of focus, 2)are probably fvcked.