When I talk about Energy as it relates to startups, I’m giving it a broad definition to include not only your physical health but also your mental health and things like perseverance, the mental toughness required to get you through the rough spots of being an entrepreneur.
Superpower #1: Health
“The first wealth is health.” – Ralph Waldo Emerson
Say there are two founders that have the exact same set of skills and knowledge but one is healthier than the other. Nine times out of ten, the healthier founder will outperform the other. Healthy founders simply have more mental and physical energy to bring to bear on the various issues that a startup encounters, not to mention they will be sick less and able to bounce back faster from setbacks. You want to prioritize your health and energy first, which will allow you to be more effective in almost every aspect of your life.
It’s critical that the founder not make the mistake of overworking and ignoring their physical health. Trust me on this. It’s almost a badge of honor how much founders work, but I’m of the belief that founder who works 40 hours a week but is well-rested, “clocks out” at night, takes proper vacations (even if just a 3-day “staycation” around the house), eats healthy, and most importantly, sleeps well, will easily outperform a neurotic founder who works 60 hours a week but doesn’t do these things. There’s much more on this in later chapters.
Remember: It’s not selfish to focus on your health. It’s actually moral and responsible for you to make sure you’re healthy enough to make sure your company survives and thrives, especially when others are counting on you.
Mental Health
Taking care of your mental health is as critical as your physical health (perhaps more). One thing I’ve noticed is how many of the “rock star” entrepreneurs and successful people I admire have worked on their mental game as much as their physical game.
In the book Tribe of Mentors by Tim Ferriss, nearly 80% of the successful people he interviewed have some form of meditation or relaxation practice. Arnold Schwarzenegger and billionaire hedge fund manager Ray Dalio have credited mindfulness meditation for much of their success. Being able to calm your mind is an incredibly valuable skill and has been a game changer for me personally. I list resources on this in the Chapter Resources.
Another aspect of mental health that affects a lot of founders is “imposter syndrome.” Imposter syndrome is very common among many high-performing people, and is where you feel like a fraud, feel that you don’t know what you’re doing, and fear that you’ll be exposed as a fake.
Trust me, this is very common and comes from the fact that you’re usually pushing yourself to learn new things as you grow your skills. Life and business never provides 100% certainty. When I learned that many world-changing geniuses and entrepreneurs also felt like this, it was an enormous relief.
One interesting thing is that pretty much nobody fully knows what they’re doing, and while that might be terrifying (my first thought: what about pilots!), it’s actually pretty relieving. By the way, pilots have lots of training and sophisticated help via a backup pilot, air traffic controllers, weather, and flight software, so as we discuss later, having systems and a team you trust will help in your startup journey.
A lot has also been written recently about loneliness and depression among founders. I’d be lying if I said that these things have never affected me or founders I know. If you’re a founder, you’re probably going to encounter times where you feel absolutely alone and nobody else really understands or cares, even your best friends and family. It’s not that they don’t want to help; it’s that they likely can’t possibly understand your specific situation at this time, and that’s totally normal.
Connecting with other founders locally and online is a great way to overcome loneliness. There are now so many communities, organizations, Facebook groups, Twitter personalities, and more that the “startup ecosystem” is now very big and supportive. In the resources section of this chapter, I list some great resources for connecting with fellow founders that can make this journey easier. Actually, one of the reasons I’ve structured this book in such a systematic manner is to overcome a major reason for depression: being overwhelmed and not knowing what to do next.
Hopefully, by breaking down this process into bite-size chunks, we can take some of the overwhelm out of the process. Taking care of your physical health is a big part of fighting depression. Finally, never be ashamed to admit you’re depressed to your doctor, friends and family, and get the help you need.
“I see entrepreneurial efforts often fail but good entrepreneurs don’t fail.” – Naval Ravikant, founder of AngelList
Why do we start with the founder habits, skills, and traits that I call the Founder Superpowers? Because these have proven to be the most obvious determining factors of success in starting a business. Highly effective founders can make even mediocre ideas work and bad teams more effective. It’s why venture capitalists and others keep shoving piles of cash at the same people over and over: These people have a set of skills that continually deliver results.
Habits and skills, however, can be learned, and through my research over the years, there is a core set of skills that will definitely improve your odds for success. Don’t worry if you don’t have all of these right now (and I would never insinuate I have all of these). People succeed all the time without some or even most of these skills. However, they are usually very good at one or more of these and have a cofounder, team, or at least an assistant that compensates for a lack of any of these skills. (Or they simply learn them on the fly like most of us.) Think of all of these as a “talent stack” as Dilbert’s Scott Adams likes to say; the better you get at each one adds value because they all work together.
The Superpowers
I group these superpowers in four broad categories:
Energy:
Superpower #1: Health
Superpower #2: Perseverance
Superpower #3: Optimism
Superpower #4: Momentum
Vision:
Superpower #5: Clear Vision
Superpower #6: Clear Goals
Superpower #7: Product Obsession
Execution:
Superpower #8: Agency Mindset
Superpower #9: Resourcefulness
Superpower #10: Personal Productivity
Superpower #11: Good Decisions
Superpower #12: Problem Solving
Leadership:
Superpower #13: Good Communication Skills
Superpower #14: Accountability Mindset
Superpower #15: Team Development and Motivation
Superpower #16: Courage to be Disliked
These categories might sound like an oversimplification, but think about it—if you have enough Energy, you can work very hard on whatever you put your mind to for as long as necessary and persist through tough times. If you have a clear Vision, then you can imagine a clear future and something great that people will want. If you are great at Execution, then you can get things done, including implementing your Vision. Now combine all this with Leadership and the ability to get a team to go along and get things done, then you’re basically unstoppable in life (not just business).
Note that these could also easily be called the Employee Superpowers in many regards, so developing these skills in your team is a great way to build a great company. You can make a team of highly competent, entrepreneurial, mini-CEOs.
In Part Three, I provide a checklist for you to rate yourself (and your co-founders or team might consider doing this) on these Superpowers, which should help you not only improve in areas where you are weak but focus on areas where you are strong.
Imagine the perfect business for you. Imagine that you could take that vision and systematically, in clear simple steps, make it a reality while saving time and avoiding the mistakes that destroy most startups.
Creating a business is the greatest source of personal freedom, wealth and progress in the world. Nearly three-quarters of the Forbes 500 Richest People are on that list because they own a stake in one or more businesses. And the majority of those people are “first generation” – they didn’t inherit the wealth, they created it.
I believe the future of humanity’s progress will be led by entrepreneurs. Think of all the entrepreneurs working on everything from space exploration, renewable energy, easier ways to get a cab, or even a better or faster meal. These people are making the world a better place through their business. This is the power of entrepreneurship: You can create fantastic wealth while helping people and even help solve the world’s problems.
This book is a guide to take the entrepreneur from an idea to a real, profitable and systemized company (one that allows you to take a real vacation) as fast and easy as humanly possible. My intention is to make this book the best and most concise guide for entrepreneurs starting a business in the real world; especially for those without a lot of resources and connections.
This book deals very little with pitching investors, going to conferences, or other things that are popular with “wantrapreneurs” who seem to do everything but actually build a business. My focus is on the bootstrap entrepreneurs that start real businesses every day. In reality, less than 1% of startups get venture capital funding.
Silicon Valley types like to disparage these small businesses as a “lifestyle business” with “only” $1 million dollars per year in revenue or less. It’s amazing; they’ll congratulate you for raising $1 million in funding but not actually making $1 million in revenue. However, most of these small business owners work damn hard and deserve the freedom that a well-run business can provide.
Silicon Valley also seems to be obsessed with writing books, articles, and more about best practices that only seem to apply in hyper-competitive, well-funded businesses that basically have a monopoly (Google, Microsoft, Facebook, etc.). Many of these companies are nothing like 99.9% of businesses in the real world. For example, most small business owners just need good, reliable employees that show up on time. These small businesses cannot afford stock options, catered lunches, free daycare, massages, personal development training and the many other things required to compete in the ultra-competitive job market of Silicon Valley and other tech hotspots.
There are also literally thousands of small business books available on Amazon and other places, but what I’ve found is that the vast majority of them 1) over-complicate things, usually so they can sell you their consulting or other services, and 2) should not be books at all. They should be articles because the concept is simple and the author has padded the information with endless stories and examples to make it book length.
These are huge pet peeves of mine, so I hope to avoid both issues in this book by presenting the information clearly, minimizing fluff and filler, and providing clear and simple action steps and checklists every step of the way because I assume you’re as busy as any CEO. Minimizing wasted time and unnecessary risks for a startup is the entire point of this book. This is the book I would give my friends and family to most ensure their success.
Why Listen to Me?
I founded MyCompanyWorks, Inc., from my apartment with less than $1,000 in 2001. This was in the middle of the “dot com crash” and one month after 9/11, so the economy wasn’t exactly what I would call optimal. Since then, we’ve helped over 50,000 entrepreneurs start their business. In that time, we’ve never taken a loan or venture capital, never had an unprofitable year, and have been honored to make the Inc Magazine INC5000 fastest growing companies in America list.
More importantly, I’ve made almost every mistake in the book (and continue to make mistakes!). There’s nothing special about me except perhaps my intolerance and embarrassment over screwing up so much. I’ve left millions of dollars on the floor and have damaged relationships and my health because of the many poor decisions I have made through the various phases of my company. I don’t want you to make the same mistakes.
I also personally know many successful entrepreneurs and have spoken to thousands of them as our clients about their successes and failures. I consider this topic to be my wheelhouse and constantly devour any information I can find on startups and small business management.
Let Me Be Your Guide
This book contains the distilled wisdom from my experience and that of many others. More importantly, I’m obsessed with what makes a startup succeed and how to simplify this into a system that can be replicated.
There are many companies that are much larger, make more money, and have a greater impact on the planet than mine. But, one of the things I emphasize in this book is that you want to start the perfect company for you, not what others expect or want. It’s silly to want anything else.
I’m perfectly happy with my business the way it is and would hate anything much more complex or “corporate.” I don’t like constant meetings, complex business models, or a difficult-to-manage business. But that’s just me.
Today, my business is systemized, requires little supervision, and grows consistently. I choose when to work or go on a vacation when I want, and I’m in the best shape of my life.
The business continues to generate income and wealth while I am free to work on the big-picture projects or not work at all, depending on my mood. In my opinion, wealth, freedom, and making an impact or helping other people via your business is a peak life experience, an experience I’d like to help others attain.
Why Businesses Fail
Unfortunately, the statistics for new business startups are pretty grim. Depending on the source of data, you can expect at least a 50% failure rate within a few years (these statistics are more or less the same worldwide). Some sources place that number as high as 90% after 10 years. In addition, 96% of businesses never break $1 million per year in revenue. These startups never get past a few employees because the entrepreneur is in their own way and doesn’t plan, communicate, or systemize.
One thing I’ve noticed is that there are many ways to succeed in business. You can succeed via a good plan, lots of funding, a great idea or product, luck, good timing, good economy, connections, or many other things (usually combinations of those things). However, it seems that one big key to success is simply not making the big mistakes that seem to be common among startups.
So, instead of focusing so much on what you need to do to succeed in your startup, we’re starting to find out that a lot of doing well in business (and life in general) is simply avoiding the bad habits, decisions and situations that have continually proven to lead to bad results. Basically, it’s easier to learn from the mistakes of others than it is to make all those same mistakes yourself. This concept is called via negativa (popularized by the book Antifragile by Nassim Taleb) and I use it frequently throughout this book to make you aware of the well-known startup and small business management mistakes.
Personally, I’ve made a number of huge mistakes that have wasted a lot of time, energy, and money, literally millions of dollars as I’ve mentioned. Sure, I’ve learned from them and they were valuable lessons but some were easily avoidable with even a basic amount of planning and preparation.
If you’re going to start a business, you might as well do some quick planning now to save you hundreds of hours of heartache down the road. Don’t over-plan, but don’t go into the process blind. The great thing about business is you can attempt as many times as you want, but you only have to succeed once to be set for life.
Don’t Believe the Hype
There are a lot of misconceptions about startups these days. For example, did you know that the average age of a successful startup founder is 45? From all the hype you see in media, you would assume all the successful founders are barely out of high school or in their 20s. As I’ll show you in Part One of this book, there are founder skills that are critical to success and older people tend to have acquired more of these skills over time.
Or did you know that of those 90% of businesses that failed, up to one-third of those businesses were actually profitable? Yes, just like anything else, a founder can become tired of their business and might have simply closed it, sold it, or moved on. This dramatically changes our perception of the 90% failure rate mentioned above. The reality now seems to indicate a real failure rate of a bit higher than 50%, and I’ll take a 50/50 shot every time.
Armed with those facts, a startup doesn’t look so daunting now, does it? What I want to do is add valuable planning, skills, and habits to the equation, and I believe this will dramatically improve your chances for success. Merely being aware of some of the landmines and best practices for startups should be incredibly helpful.
Why Planning is Important
Here’s the nightmare scenario: You’ve started your company, it’s making money, you’re working hard, and decide you really need a vacation. The problem is that the company is entirely dependent on you; you couldn’t take a vacation or even a sick day if you wanted.
Suddenly, you realize that you haven’t created a company, you’ve only created another job for yourself—with no paid time off! Even worse, you are 100% responsible for everything and your customersare now your boss. You now have more pressure and stress then you did when you worked for someone else and are probably wondering what the point was. Trust me, I spent years like this.
This is not an uncommon scenario. The vast majority of entrepreneurs are stuck in their business working on the day-to-day, and they work, on average, well over 50 hours per week. They don’t realize that they’re actually the bottleneck in the growth and systemization of their company. Whether you’re just planning or have already started your business, I will show you a clear way out of this trap.
Many books like the E-Myth and others have covered this topic, but the basic truth is that most people know a skill or craft but don’t know how to build or manage a proper business with systems. Franchises like McDonalds and 7-Eleven almost always succeed because they have a system and an operations manual for each new franchisee/owner to follow step-by-step and has been proven to work.
Systems = Freedom
System is the key word here. Systems are the key to your freedom and will multiply the value of your company because it will not be completely dependent on you. I not only show you how to do basic planning from the very beginning, but how to lay down a framework for you to eventually replace yourself as your business grows—not to mention that systemizing a business is an incredibly valuable skill to learn and apply elsewhere.
A business that does not have systems is in a difficult place. This “owner dependent” type of business usually hits crisis when the founder gets sick or needs to retire or sell the business. So, even if you don’t intend to be more than a one-person company or don’t intend to sell your company, I make the argument that you should at least have basic systems in place, if only for your own sanity. At the bare minimum, keep everything in the same place and some basic instructions for loved ones if there is some kind of emergency.
Worst case scenarios aside, one thing I want to emphasize is that by “planning,” I don’t mean a 50-page business plan and a 200-page operations manual. Modern business planning focuses on speed, simplicity, and testing your idea before you do an enormous amount of planning – the plan I give you fits on one page.
In the real world, most companies are started with more of a shotgun approach to validate the idea and get moving. Someone starts a website, a person starts charging for their shirts or consulting, etc. This has largely replaced complex business plans because the focus is on getting quick market validation so you can correct course quickly and not spend months and lots of money on a bad idea.
Also, we won’t be building out a huge operations manual but will instead simply start documenting things in one document and let you organize things organically and systematically from the start. If you already have a business, then we’ll show you how to begin organizing things as well.
Using this system, you should be able to grow your business to $1 million in revenue and potentially a lot more depending on the complexity of your business. Every business is different. We keep the system simple for people at that level and below. Once you exceed several million dollars in sales, then the complexity of your company will grow and may require additional systems, but I want to emphasize again that, while you should plan, there is no need to overplan and over-optimize things until you get to that level.
Overview and How to Use This Book
This book has three parts. Part One covers what I’ve found to be the skills and habits of great founders that I call The Founder Superpowers.
In Part Two, we dive in to the system, which has six steps:
Imagine it. Whether you have a business idea in mind or not, this section will help you brainstorm and clarify your idea. We also work on a vision for the perfect business for you. Having a clear vision of what you want is the first step to making it real.
Plan it. Using a simple one-page plan, we begin laying out what you need to test this business idea and then get it off the ground as quick as possible.
Start it. An overview and simple checklist of things to do to get your business registered and legal. We also cover picking the business name, entity, taxes, and more.
Grow it. Using another simple plan, we lay out the steps to help you identify your ideal customer to build your “sales machine” and grow your business.
Manage it. We cover the five things you need to master to have a well-run business: the plan, process, people, tools, and routines.
Systemize it. We put it all together and systemize your business into one simple system and continue simplifying and improving your business until it is essentially self-running.
Part Three contains two scorecards to assess your skills as a founder and assess your company as a whole. I recommend you complete them after reading the book to get a baseline score. Everything in the first two parts should help you dramatically improve in these areas.
Feel free to skip around if you are in a hurry or already have a business and need specific help in any area. Otherwise, I believe the book is brief enough to go from beginning to end, skimming what you already know. I use bullet points and checklists extensively and each section or chapter has resources for implementation.
Now that you know what to expect, let’s dive in and keep the following tips in mind:
Take the time to go through the book and do the action steps. These things done properly should save you many hours of painful “make up work” later. It’s amazing, but most people will put more planning into their wedding than their life or business! Do a few hours of planning to massively clarify your thinking and build a business right, a few hours to save hundreds later. Thinking through important things for a few hours will put you ahead of 99% of the population on earth.
My writing style is very direct and informal and can sometimes come across as “tough love” or even a bit harsh despite my best intentions. This is because I’d rather give you the real truth about business instead of some motivational nonsense that should be on a business poster (which is what I see a lot of in business books these days).
Note that the Imagine it step can be applied to a new business or to reimagine your existing business (I’ve done this a few times, and we’re on our third company name!), to brainstorm a new product or just solve some problems you have at your company or in life.
We’ll start with one document I call the Startups Made Simple Planner. We’ll work with this planner from idea all the way to systemization. This document will be a godsend later in business, trust me. Download a free Startups Made Simple Planner at www.StartupsMadeSimple.com and make sure to keep all of your company startup and planning documents, plans, and notes together in one folder (either a real folder/binder or on your computer).
