Choose Yourself: Part 2
In my last review of the amazing book: Choose Yourself by James Altucher, I stated two key facts in my summary:
“Success comes from continually expanding your frontiers in every direction — creatively, financially, spiritually, and physically. Always ask yourself, what can I improve? Who else can I talk to? Where else can I look?”
“The only truly safe thing you can do is to try over and over again. To go for it, to get rejected, to repeat, to strive, to wish. Without rejection there is no frontier, there is no passion, and there is no magic”.
— James Altucher, Choose Yourself
In this follow up I want to go deeper. What are the practical steps to start a business/side hustle? I would do this by examining the Braintree case study in this book.
Braintree is a company that provides mobile and web payment systems for e-commerce companies such as Uber, Airbnb. Braintree was founded by Bryan Johnson in 2007 after he became fed up with his jobs at Sears. Within two years he was making over a million dollars a year. Eventually Braintree grew, raised $70million and was bought by PayPal in 2012 for $800million. Braintree was processing $12 billion in payment volume at the time of acquisition.
So how did he do it?
7 Rules to start a Business and Succeed
Rule #1: Take out the middleman — Prior to working at Sears, Bryan had worked as a salesman offering credit card processing services to merchants like restaurants. He figured he can do the same thing for himself on the side. He went to a credit card processor and got a resale agreement with them and started selling. He did this BEFORE leaving his job at Sears. BEFORE!!!
Rule #2: Pick a boring business –Bryan picked a business that every merchant in the world needs. He also knew it was exploding because of the growth in e-commerce. You don’t have to come up with a completely new idea. Just do the old and do it better than everyone else.
It helps to check that there is a big market for this business, and there are not too many existing players. If there are, can you offer the service significantly better and cheaper than them?
Rule #3: Get a customer! — This is the most important (and sometimes hardest) step for any business. Getting that 1st customer. Once you achieve this, you can REPEAT again and again.
Bryan found ten customers (out of the first 12 he approached). He figured he needed to make $2100 a month to quit his job. With his first ten customers he was making $6200 a month. He quit his job.
A good rule of thumb is to quit your job when your business is earning you ten times your current salary, consistently.
Rule #4: Build trust while you sleep — It is often “Make Money while you sleep”, but all businesses are based on trust. Bryan was already making money but did not want to be constantly looking for customers, so he started a blog about all the things going on in the credit card industry.
This made him a trusted source on credit card processing and drove traffic to his website which led to more sales.
Rule #5: Blogging is not about money — Blogging is about trust. Bryan’s blog led to a deal with OpenTable. They wanted a software solution to handle storing credit cards, handing the data to restaurants. He signed a three-year deal with them that allowed him to build a team of developers and build the software solution.
Rule #6: Say YES! — When OpenTable asked him to do software development even though he’s never developed software before, said YES! He got software developers, built great product, and quadrupled his income.
Rule #7: Customer Service — So we made sure there was as little friction as possible between the customer contacting us and actually getting their problem solved. Customer services is the most reliable touch point to keep selling your service to them.
Your best new customers are your old customers, serve them well and they would tell other customers, who tell other customers.
By the 2nd year, Bryan was making over a million dollars, his business was doubling every year, and they couldn’t grow fast enough. In 2011, after four years in business, Braintree took in its first investment of $34million in a Series A funding round.
ENTRE-EMPLOYEE
These principles are not limited to a business and can be applied at your job. Think of your company or manager as your customer.
Be an entrepreneur at work. An “entre-employee. Take control of who you report to, what you do, what you create. Or start a business on the side. Deliver some value-any value-to somebody, anybody, and watch that value compound into a career”
Conclusion
These are rules I practice, and I believe when combined with the lessons from The $100 Startup, would enable anyone start a business, add value, and change their lifestyle.
“The only real retirement plan is to Choose Yourself” — James Altucher
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