The Minimalist Entrepreneur
Rating: 9/10Author: Sahil Lavingia
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The Book in 3 sentences
One of my favorite books from 2021. The Minimalist Entrepreneur isn't a book about building a corporation but instead a book that provides actionable information on how to turn your passions into a living. Lavingia explains by leveraging technology you can build an audience that you can provide value to and grow with. Sahil uses many different examples of minimalist businesses including his own: Gumroad. This book really made me realize how beautiful the internet really is and the opportunities it continues to create everyday.
The Minamilist Entrepreneur Summary
- Narrow down who your ideal customer is. Narrow until you can narrow no more.
- Define exactly what pain point you are solving for them, and how much they will pay you to solve it.
- Set a hard deadline and focus fully on building a solution, then charge for it.
- Repeat the process until you’ve found a product that works, then scale a business around it.
2. Start with Community
- Example of Sol who joined Fitness subreddit and 5 years later started Examine.com which now does 7 figure ARR.
- The passion economy - a world in which people are able to do what they love for a living and to have a more fulfilling and purposeful life.
Tips to find a community
- If I talk, who listens?
- In what situations am I most authentically myself?
- Where do I already spend my time online and offline?
Networks do not equal communities.
- Ben McConnell & Jackie Huba call this the 1% rule: One the internet, 1% create, 9% contribute, & 90% cconsume.
Three Rules followed by Nathan Barry
- “Work in Public”
- “Teach Everything You Know”
- “Create Every Day”
Chris & Nathan example of how Chris was documenting and creating articles every time he was doing a client’s project.
If you're learning everyday, it means you have something to share.
There are only four different types of utility: place utility, form utility, time utility, and possession utility. What can you make easier to understand, faster to get, cheaper to buy, or more accessible to others?
- Place utility: Make something inaccessible accessible
- ο Form utility: Make something more valuable by rearranging existing parts
- ο Time utility: Make something slow go fast
- ο Possession utility: Remove a middleman
Before starting a business ask yourself:
- Will I love it?
- Will it be inherently monetizable?
- Does it have an internal growth mechanism?
- Do I have the right natural skill sets to build this business?
It begins and ends by thinking of your business as a tool to solve a customer’s problem. Not as a lottery ticket.
3. Build as little as possible
- Manual valuable process -> processize before building software for it.
- Instead of asking would you pay for my product? ask: Why haven’t you been able to fix this already?
Every time you build something new ask:
- Can I ship it in a weekend?
- Is it making my customers lives a little better?
- Is a customer willing to pay me for it?
- Can I get feedback quickly?
4. Sell to your first hundred customers
- When Slack IPO’d in 2020 at a valuation of $16 billion, its offering documents showed that 575 of their customers accounted for approximately 40 percent of their revenue.
5. Market by being you
Top of the funnel social media
- “Marketing is really just about sharing your passion. - Michael Hyatt
- People don’t care about about companies, they care about other people.
- Make your mistakes when few people are watching.
- Educate, Inspire, Entertain.
- Quilting business that took off thanks to 10 Youtube Videos.
- If you’re in the supplements business, a weight loss journey will gain far more traction than an information video.
- If content is king, entertainment is the king of content. Example: Andre Jihgke (Finance Youtuber)
- Entrepreneurship: work 60 hours a week so you don’t have to work 40 hours a week,
Middle of the funnel: Emails & Communities
- Laura Roeder founder of Paperbell & MeetEdgar.
- “Though Haus does spend money on ads, she notes that advertising performs best when it’s surrounded by a lot of organic content.”
6. Grow yourself & your business mindfully
- Variable costs -> for every dollar Gumroad makes they spend 40 cents on web hosting, payment processing fees, infrastructure costs, and fraud prevention.
- Fixed costs -> domain name
Use software not humans:
- Use pilot or bench instead of hiring a CFO
- Use gusto to run payroll & benefits
“The Four Horsemen of the Apocalypse,”: their name for four types of communication styles that start to appear in a relationship: (1) criticism, (2) contempt, (3) defensiveness, and (4) stonewalling.
Here are some questions worth asking your potential partners:
- What does a happy relationship look like?
- What does success for this business look like?
- What does an exit look like?
- How fast do we want to grow?
- Why are we starting this together?
“Instead of pretending to be a product visionary and trying to build a billion-dollar company, as if it were within my control, I could focus on making Gumroad better for our existing creators.”
7. Build the house you want to live in.
Absolutely clarity is particularly important.
- Defining and communicating your company’s values early sets expectations for how work is done.
- “Our creators don’t care about us. They care about the product, content, and community we happen to provide.”
- “Global studies reveal that 79 percent of people who quit their jobs cite “lack of appreciation” as their reason for leaving,”
- The Peter Principle, coined by educator Laurence J. Peter, states that “the tendency in most organization hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. #business
- “At Gumroad, I’ve tried to turn the Peter Principle on its head. Employees work for customers. I work for my employees.”
- Hiring looks a lot like firing yourself. Your job listing should be a filter, not a magnet.
8. Where do we go from here?
- “Never mind if your business isn’t “changing the world” from day one, or doesn’t employ hundreds of people. As long as you’re making the world better in an honest, scalable way by selling a product worth paying for to a community that wants it, starting a company is worth it.”
- Søren Kierkegaard wrote in 1844 that anxiety is the “dizziness of freedom.”
- “A healthy man wants a thousand things, a sick man only wants one,” Confucius
- I was a “E: time billionaire,” someone Graham Duncan defines as having at least a billion seconds left in their life— or at least thirty-one years.
- “Humanity is just getting started, and it’s unlikely that anything we do today will resemble how we do it in the future.”