Introduction:
Sahil Lavingia started his career chasing unicorns. He joined Pinterest as employee number two but left before his stock invested to build his own billion company: Gumroad. A tool to help creators sell their products online. Simplicity was key, no complicated setup, no elaborate storefront. Just a link for customers to pay and you are in business. Fifty thousand people visited the site on the first day and Sahil felt he was on the cusp of something big.
Gumroad never did become a unicorn, after burning through $10 million of investor’s capital, growth plateaued, attempts to raise additional capital failed. Three quarters of the company’s staff were laid off including many of Sahil’s good friends. From the perspective of Silicon Valley, and in his own eyes, Mr. Lavinga was a failure.
A move from San Francisco to Provo Utah enabled Sahil to change his perspective. Gumroad was a sustainable business, thousands of creators were using Gumroad to build their own businesses. Real people in the real world were paying their mortgages, their kid’s college funds or simply making pin money selling stuff online. By most people’s estimations Gumroad and Sahil Lavinga were a success. By changing his environment from the white-hot environment of San Francisco to the much more conservative atmosphere of Provo Utah it became clear that many more entrepreneurs want to build a sustainable business that matched their values and gave them a lifestyle they found satisfying rather than chase the elusive unicorn.
Another path to success became clear. The Minimalist Entrepreneur running a Minimalist business. In his book Sahil provides a part manifesto, part manual to help us design, build and grow our own right sized business. Mr. Lavinga exhorts us to start, to start as soon as we can. Start before we feel ready. Start today. You do not learn and then start. You start and then you learn. So, let’s get started.
The Minimalist Entrepreneur:
Every minimalist entrepreneur and minimalist business is different as is their path to success. But there are some common traits identified in Sahil’s book that if followed can lead to success. They are:
- Profitability first: Minimalist entrepreneurs create businesses that are profitable at all costs. Many businesses do not plan to be profitable; the plan is to sell the business before profits become necessary. Money is raised from investors to fund rapid growth. Minimalist investors aim to be profitable from day one, or very shortly after launch. Profits are the life blood of their businesses. This is done by the simple expedient of selling a product or service to their customers.
- Start with community: The minimalist entrepreneur builds on a foundation of community. The observe and cultivate authentic relationships. They take the time and effort to build trust.
- Build as little as possible: Build only what you need, automating or outsourcing the rest. They focus on one thing and do it well. They work alongside their customers to iterate towards a solution, making sure it is worth paying for before taking it customers outside of their community
- Sell to your first one hundred customers by educating them. Consider selling as a discovery process, an opportunity to talk to potential customers. Use the process to learn more about the problems you are attempting to solve. This is a long game built on relationships and solutions. Eschew the one-day grand opening extravaganza for now, instead celebrate the 100 customer milestone.
There are three other aspects covered in the book:
- Market by being you – share your stories from struggle to success
- Grow your business and yourself mindfully. Own your business do not let your business own you.
- Build the house you want to live in. Hire other minimalist entrepreneurs, build your business according to your principles.
These are outside the scope of this post, and the next three posts, as my objective today is to guide you to your first 100 customers.
Chase Profitability not Unicorns. Building a minimalist business is not a get rich quick proposition but it is a get rich slowly proposition. The leading indicator of success of your business is profitability not growth. The minimalist approach does not guarantee success, there will be setbacks. That is why profitability is so important. Being profitable means you can stay afloat and take another shot at goal. Given enough shots you will be eventually successful. Most people who dream of becoming an entrepreneur do not start. Those who do start do not continue, those who continue eventually give up. Many winners are just the last one’s standing. Do not give up. By being profitable you provide the foundation to keep going.
What type of business should you start?
Some business models are more suited to the minimalist entrepreneur than others. Business to consumer businesses are ideal, as are consulting, coaching, teaching businesses. B2B, business to business enterprises are fine as long as the customer feedback loop is fast and there are ample opportunities for iteration.
Business that require heavy investment in R&D or are targeting heavily bureaucratized corporations or institutions are probably not suited for the minimalist approach.
The great news is that what constitutes a business is changing rapidly and opens up a wider range of opportunities for entrepreneurs. The internet allows you to learn from anywhere, network with anyone, and to raise money directly from your customers.
Create first. Find your passion, identify a problem that is not being solved develop a business offering then become an entrepreneur.
Remember:
You do not learn, then start. You start and then learn
Focus on being profitable at all costs rather than growing at all costs
A business is a way to solve problems for people you care about and get paid for it
Become a creator first and an entrepreneur second.
If the minimalist approach appeals to you and you want to learn more please consider learning more about Sahil’s approach using my Amazon Affiliate link. If you purchase through my link there is no additional cost to you and I will get a small commission that will help keep this blog active.
