It’s been a while since I last thought of myself as an entrepreneur.
I had rejected the term and vowed not to fall for that trap again.
I’d been burned by the whole “startup” mythology. Read too much Paul Graham. Even went to Mecca and talked to the man himself.
I was “Founder & CEO” (omg that’s laughable) of 3 toy things that would make me millions (billions!) if only a huge amount of non-paying users went nuts about them first.
- Umamão was a Brazilian StackOverflow / Quora / search engine (wha? I know).
- Fonista was a Yelp exclusively for delivery services.
- Meleva, a taxi-sharing app.
Poured a bunch of time and money and worry into them. Sacrificed a lot. Didn’t make a dime.
Now I’m at it again. Am I crazy?
Aspiration and Business Model
To be honest, the first time around (and second, and third), my main aspirations were to make something popular and work with friends on technology I liked.
The “money side” was just to keep the fun going, and would inevitably happen spontaneously at some point.
This “fame & fun” duo reflected itself in the product and business model:
- B2C
- free forever
- useless if you’re the only user
Consumer product, two-sided market, completely dependent on network effects.
If I was sitting on a pile of VC cash, my chances of pulling this off would be slim. Without it, it was clearly irresponsible and suicidal.
Social Navel-gazing
In all three projects (Umamão & Meleva, especially), there was a “selfish idealism” to it: I definitely wanted people to answer my own questions and to split my own taxi bills.
But I also genuinely liked the side effect of building a CC-licensed public body of knowledge and an urban mobility movement for less cars on the road.
Fame, fun, and idealism are rarely self-sustaining though, and nothing i did came close to the simple formula of charging money for value delivered.
New Aspirations
You have to know 1) what you are doing to pay rent and 2) what you are doing to help society.
If you have a do-gooder mentality and you don’t decouple these two things in your head, you’ll trick yourself into thinking that your charity work is actually going to make you money in the future.
If you are insecure about your ability to provide value to the market, you’ll hide yourself from market rejection and delay charging as long as possible. You’ll convince yourself that you are doing that for noble reasons, not fear.
Here’s how I’m trying to decouple charity and money-making in my head: GiveDirectly.org.
Give Directly is a data-driven, evidence-based charity organization that routes your money directly to the poor so they can make their own decisions on how to improve their lives. Asymptotically, it’s a private-run, global universal basic income program.
What I’ve decided is that:
- The entire sum of my altruism from now on will be donating 10%+ of my revenue to Give Directly (once I have any).
- Anything else I do has to be 1) to make more money and 2) to buy more resilience.
When I have stable, resilient income, then I’ll use my free time to do charitable work.
But I won’t do any of it now while convincing myself it’s going to keep a roof over my head.
This decoupling both appeases my social morality and removes the excuse for avoiding icky sales-y and business-y stuff that is necessary for my disability insurance.
Contour parameters
What’s a good business to pursue then, without the vanity and idealism?
Here are some parameters I’ll be looking for:
- B2B: organizations, not users
- they know they have a problem
- they know what the solution looks like
- they are actively looking for a solution (avoid educating the market)
- they pay from day one
- they derive value from the product even if they’re the only ones using it (single-player mode; no dependency on network effects)
- not time-critical, low support overhead
- scalable acquisition & delivery
- not necessarily software
On top of that, it has to be doable:
- by a single person
- in less than 6 months (from idea to first sale)
What fits those criteria?
I don’t know.
From everything I’ve read so far, I only hear people screaming infoproducts!!
A niche business ebook is indeed an elegant solution:
- it solves a problem measurable in dollars
- charges on value delivered, not commodity price
- near-infinite margin
- PDF downloads are infinitely scalable
- no support or servers crashing in the middle of the night
- default single-player mode
I’ve started reading Authority, by Nathan Barry (thanks to a friend o/), and it makes a strong case for this business model.
There’s one thing I don’t like about it though: it still requires network effects.
How?
I’m still formulating this, and after I finish the book and do some research I’ll expand on the topic in a new post.
Summary
- Decouple social from business aspirations
- Donate to Give Directly to sleep in peace
- Then go hunting passive (resilient!) dollars
- Reduce your search space by knowing what you will or won’t accept in a business idea
Does any of this resonate with you? Are you in a similar situation? Have been there and have advice to share? Please shoot me a G✉ at hsribei.pub. I’d love to talk!