How do successful businesses really get started today?
James Altucher, a New York City-based author, programmer, entrepreneur and venture capitalist, recently poured his two decades of business and investment experience into a memorable article for TechCrunch.com called “The Ultimate Cheat Sheet For Starting And Running Your Business.” It contains 101 vigorously written tips for startups and other entrepreneurs, many of which are open to debate, but all of them reflecting Altucher’s all-out approach to life and business.
Altucher claims to have started more than 20 businesses, 18 of which he admits have crashed and burned. But percentages only count in high school; two of those businesses, web-design firm Reset Inc. and investor website Stockpickr, were successfully sold for about $10-million each.
Altucher, now managing director of Formula Capital, and author of a new book called Choose Yourself!, calls his article “a bullet FAQ on starting a business.” To start, he writes, “I’m going to give no explanations. Just listen to me.” But he does invite readers to add new points or take issue with any of his ideas. “If you want to argue with me, feel free. I might be wrong on any of the items below.”
Here are a handful of his 101 points. You can decide if they apply to your life and business as well.
* Should you go for venture capital money? First build a product, then get a customer, then get friends-and-family money (or money from revenues, which is cheapest of all), and then think about raising money. But only then. Don’t be an amateur.
* Should you patent your idea? Get customers first. Patent later. Don’t talk to lawyers until the last possible moment.
* Should you require venture capitalists to sign NDAs? No. Nobody is going to steal your idea.
* How much equity should you give a partner? Divide things up into these categories: manages the company; raises the money; had the idea; brings in the revenues; built the product (or performs the services). Divide up in equal portions.
* What if nobody seems to be buying your product? Then change to a service and do whatever anyone is willing to pay for using the skills you developed while making your product.
* How do you get new clients? The best new clients are old clients. Always offer new services. Think every day of new services to offer old clients.
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