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Starting A Business: Providing Value vs Making Money
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I was having a conversation about starting a business with someone the other day and I left it feeling a little unsatisfied.
The person I was talking to was interested in starting a business and told me they were going to be selling a not-so-unique product online.
I nodded and tried to be supportive, but upon further reflection, I just don't think this idea is the million-dollar idea.
I'm not even sure this is the $100,000 idea.
And this isn't a knock on my friend, I've had lots of conversations recently with people who are interested in starting a business for lots of different reasons.
Today I just want to highlight a few things I've learned as I've started my own business and as I've worked for successful startups.
Stop drinking the "start your own business" Kool-aid
There are a lot of articles out there about someone who works 5 hours a week and makes X insane amount of money.
I don't totally doubt that those kinds of people exist, but I don't think that's a particularly truthful narrative.
And I don't want to be interpreted as anti-start your own business, I've done it and I think it's pretty cool!
There are definitely some perks (especially tax-wise) and generally, I think it’s a great idea.
But what I'm saying is stop reading the 4-hour work week and thinking that's a realistic thing that you can do.
I don't know a single person who only works 4 hours a week and makes serious money.
I don't even know anyone who knows anyone who only works 4 hours a week and lives in Argentina and learns to dance.
I honestly think that's kind of a fallacy.
I do think you can get to a point (like a doctor or a dentist) where you only work a few hours a week and your business runs itself, but I think that when people read these stories they aren't accounting for the insane amount of time it takes to get to a place where you can work 4 hours a week and make tons of money.
Here's an example:
My wife and I just had kiddo #3 and we found ourselves chatting with our nurse about the OBGYN, he's a great guy and we really like him, but we were kind of chuckling about how easy it is to be an OB.
But the more we chatted, the more we realized it's not all money, sunshine, and rainbows.
He has to be on call at certain hours and is most likely always on call for his patients.
Yea he's only in the office 3 days a week, but he wakes up in the middle of the night frequently and has to perform high-intensity and cognitively draining work.
All hours of the day.
Same with a dentist, but I think a dentist probably gets called into the office less.
But both of these careers have worked for YEARS to get to a point where they can do that.
Dental school is college + dental school and you for sure aren't working 4 hours a week the moment you graduate.
You have to work and build a practice, you might not even start your own practice for years.
Same with doctors, but add on even more time for residency, specialization and on-call hours.
So let's just reset the expectation, you might be able to get to a place where you only work 4 hours a week, I think that's real, but you'll be working 40-80 hours for years before you get to that point.
Don't quit your day job
I was having a conversation with my dad about business.
My dad was a pilot in the Air Force for 20 years and now he works a government desk job that he likes just fine, but it probably isn't his life's most passionate work.
He was telling me he has an idea to start a business but isn't really sure how to get started or when he would do it.
Then he confessed that he works remote from 6:30 am to 3:00 pm and actually probably has time to start doing something.
I am literally writing this at 11:13 am on a Saturday morning, 4 days after the birth of my 3rd child.
I think some of the best side hustles start during nights and weekends.
So I told my dad the same thing.
Why don't you work your normal same hours, then take 3-5 and work on your side hustle, and then document everything you've learned on a blog or website?
Then you have a log of your own learnings AND others can read what you're learning and you start to establish yourself as an authority.
If I can go back and see that a business owner has documented the things they've been learning over the years, I'm not only going to be super impressed at their grit, but I'll know what they know.
I'll know that they know more about their business than I do and that will build trust, I will see you as the expert in your field and trust you.
Then when you have this log of learning and you've actually figured it out, start doing it for real, all during that 3-5 period. 2 hours a day.
You would be blown away seeing how much you could do with 2 hours every day.
You really won't be your own boss
I hear people say this a lot "I want to be my own boss".
I'm just gonna tell you straight up, you will likely never really be your own boss. I think that's totally made up.
Even if you don't have someone breathing down your neck telling you what to do, your customers are your boss.
No matter what you do, someone will be asking you to do something: make a product, improve the product, reply to an email, fix a problem, and on and on.
I can't think of any business where you actually make money and are responsible to no one.
I think this is an expectation that needs to be reset too, if you want to make money and have autonomy, look for a good job with a good boss.
My boss doesn't care if I take a break during the day to go to the gym, as long as I get my work done.
If your employer doesn't offer you the flexibility you need in your life, find a new job.
Figure out what you need out of a job, what energizes you?
Owning your own business isn't really a thing, so what about owning a business is appealing to you?
Is it the potential of making a ton of money? Maybe that works out, but not right away.
Is it having more autonomy? Or fewer people to report to? Definitely don't start a business, that's not gonna happen.
When you start your own business you stop being the expert at that thing you love to do and you become an accountant, customer service, tech support, IT, and everything.
So before you start your business, ask yourself do you want to be an expert at that thing you love or a business owner?
Does this thing actually make money?
When you're starting a business you have to actually learn if the thing you want to do will make money or not.
What is the barrier to entry?
Who is the newest player in the space, and how well are they doing?
What's the market cap? What are the margins?
There are a lot of questions to ask before you jump in.
Are you providing value to someone?
It's weird that I have to say this, but I think this is the most overlooked question when people start their businesses.
Are you providing value to someone that they can't get anywhere else?
Marques Brownlee has a YouTube channel where he reviews tech, just like hundreds of other Content Creators.
So what separates him from the rest?
Well, on the one hand, he bought a crazy expensive robot to help him get really cool shots.
This differentiates him from his competition and makes his videos feel way higher quality.
So before you start that Etsy business, what are you doing that is better or more unique that the rest of the internet?
I love riding my Onewheel, so I watch videos and engage in the community, it’s great!
But I found myself googling questions and not able to find good answers. I just couldn't find what I needed.
So I started this site as a way to provide value to the community.
I started writing these blogs so I could answer the questions I had about the Onewheel.
It's starting to evolve into a lot more, but the core is that I want to continue to provide value to the community.
You don't have to monetize your hobby
My wife is a Disney Junkie. I like to play Mobile Games.
We both have thought and kind of started trying to monetize those hobbies but came to the conclusion that not every hobby needs to be monetized.
One of the other reasons I started this website is because I actually like writing.
I like the idea that I can write something and that people can find value in it and learn from it.
As of this writing I've made about $120 from my Onewheel website from ads and affiliate links.
I'm not gunning to get the site monetized, but I think that's an option down the road.
At its core, I just like doing this.
YouTube Creators as a great example
Bringing it all home with this example.
I watch and study a lot of YouTube Creators because I think what they do is so interesting (shoutout to Colin and Samir for offering so much value in your content) and one of the interesting observations I've made is that almost every successful Content Creator on YouTube got started making little to no money but making videos because they love to make videos.
This is the cycle that I think leads to incredible success and tons of monetary gains.
Create value -> grow audience -> figure out how to monetize
I think people get in trouble when they focus on monetizing before creating value.
This concept is also sometimes referred to as Product Led Growth in the tech world.
They focus on building an incredible product first and then let that product facilitate the growth and therefore the monetization.
Now don't get me wrong, I'm not suggesting you give 0 thought to monetization, if you aren't making money, you don't really have a business you have a hobby.
But I do think that when you're building your business you need to be asking yourself hard questions about what value is being provided here?
Is someone else providing similar or more value?
I've looked at buying used Onewheels in the past, but I haven't felt comfortable buying from random people online.
This sparked the idea that I could create a safe marketplace where people can buy and sell new, used, and refurbished Onewheel's and their accessories or other products in one central, safe place.
I'm far from actualizing my goal here, but it's a very good product idea, with a great product-market fit (I think) and lots of ways to monetize in the future.
But primarily I'm focused on providing value.
Look, I'm all for starting your own business and making it work.
I know lots of people who have started businesses, big and small and some of them work and some don't.
I'm just proposing that when you start planning your business plan, make sure you give proper thought to the actual tangible value that you're providing.
Can you quantify that?
Have you proven people want/need what you're offering?
Hope that helps!