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Weekend roundup: the speed of learning, what to read every morning and understanding the lifestyle of building a business.

Happy Saturday.

Hello from Orlando, FL where we’re blowing off some steam after wrapping up the 2016 tech tour. Fun fact: this was my first visit to Disney World and IT IS AMAZING.

Wichita, KS was the 41st stop of the tech tour and it was the best way to wrap up this year. [RECAP VIDEO] We’re going to take the next couple of weeks to rest, recharge, catch up on emails and nail down the 2017 tour. We’re definitely doing this again.

  1. “I now see it’s not speed of doing that matters. It’s speed of learning.” [Link] [Tweet]

This is a sobering look at what happens when you try to grow a bit too fast. To be fair though, 99% of the companies we meet aren’t growing fast enough — or at all.

It’s a fuzzy line but it’s better to be growing too fast (so you can pull back) than to be growing too slow. Default to fast.

2. “I will only meet people who genuinely give a shit about what I do.” [Link] [Tweet]

If someone shoves a business card at you before they learn at least one thing about you, they’re not that interested in you.

3. What do Elite Venture Investors Read Every Morning? [Link] [Tweet]

Email newsletters are the morning newspapers of our generation. I made a quick list of things you should skim every morning.

4. “there is zero correlation between how much money goes into a company and its exit value.” [Link] [Tweet]

Many of the founders I meet — especially outside of Silicon Valley — don’t seem to understand that an investor’s fund size usually dictates the minimum size they want you to reach.

Big funds need big exits. Small funds don’t mind smaller exits. It’s a bit more complicated than that in real life but that’s the gist.

5. “I know a lot of companies that failed due to lack of focus.” [Link] [Tweet]

I know a lot of companies that failed due to lack of focus. I can’t think of one that failed because they were too focused.

I can openly admit that nearly every failure I’ve experienced over the past few years was directly related to my own lack of focus.

I’ve got the same 24 hours in the day as you.

Do one thing well and don’t do anything else until you can get that one thing turned into a business that can run reasonably well whenever you’re not involved. Then — and only then — you can start to experiment with other things.

6. “Tesla spends $6 on advertising for every car sold (compared to the $2k+ that Lincoln spends per car).” [Link] [Tweet]

Most purchases (and investments) are emotional, not rational.

7. “Find (hunt down) people who are currently practicing but are not blogging about it” [Link] [Tweet]

For anyone currently looking for growth hacks online, stop reading blogs. Think about it: no one reasonable would openly talk about a good growth hack until it stops working for them.

By the time you read about it, the experts have moved on to the next thing and won’t tell you about it until they’ve exploited it.

The point is that you should be paying attention to what people do, not what they say.

8. “Whether bootstrapped or funded, there is nothing easy about the lifestyle of building a business.” [Link] [Tweet]

I’m not sure why people talk about venture-funded companies as it they’re somehow better than their bootstrapped counterparts.

When you’re bootstrapped, you can pretty much do anything you want as long as you continue to grow your revenue. When you’re venture-funded, there are only three ways off the “venture treadmill” itself: M&A, IPO or failing.

9. “It now takes much less time to self-fund a SaaS business to profitability.” [Link] [Tweet]

One of the hardest things about the tech tour has been repeatedly noticing that the “common sense” people have in the Valley isn’t quite common everywhere else.

99% of what people need to know about growing their business is already online.

10. “People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up.” [Link] [Tweet]

This is one of the most balanced things I’ve read about the recent election. Technology is moving faster than ever and the people being left in the wake have few ways to re-invent themselves.

Firehose

You can get the full stream of the things I read, it’s all on Twitter — follow me: @paulsingh.

-P

You can’t afford to look dumb, lazy or worse.

It kills me to see smart people make easy mistakes but it happens almost every day along the tech tour.

Sometimes entrepreneurs will use the wrong terminology, talk too much about the product or make spelling mistakes in their pitch decks. It’s the same mistakes in every city.

These all probably sound like small things but, when the stakes are high, they compound quickly. At worst, they kill the entrepreneur’s credibility entirely.

Don’t be that entrepreneur. You’re better than that.

Read what others are reading. Subscribe to every one of these right now:

Don’t make common mistakes during your pitches. Study the videos and pitch decks of 1,000+ other funded startups.

Tap into Silicon Valley’s brainpower from your desk. Watch livestreams of Startup School or 500’s startup events.

This isn’t the most comprehensive list of ideas but it’s a start. 99% of everything you need to know to start, run and grow your business is online already.

You’re either first or fastest.

For the vast majority of you reading this, I have bad news: you’re not the first one that’s pitched your idea before today. Someone else is probably sitting in a coffee shop halfway around the world from you right now.

“But Paul,” you might say, “no one else is doing this — we have to do it!”

Um, no.

If no one else is doing whatever it is that you want to do, there are two likely reasons:

  1. You haven’t actually looked for competitors. This is one of the best ways to lose all credibility, if that’s your goal.
  2. Your competitors have already shut down. Sometimes, the timing is all wrong. A company starts up and the market just wasn’t ready.

If you do happen to stumble across a relatively empty competitive landscape, the best thing you can do is dig deep to figure out how quickly the surviving companies might be growing and why others have failed. And then talk about it with your investors and advisors. You’ll look smart and you’ll make better decisions.

For the rest of you: just focus on speed, it’s your weapon.

If you’re making 2 sales calls a day, dial it up to 20. If you’re cranking out one piece of content a day, dial it up to 10.

Whether you choose to raise other people’s money or bootstrap with your own, this is the only strategy you need (and the best way to introduce yourself to potential investors and advisors): Understand your funnel, start filling the top of it and keep dialing it up every single month.

 

Skip the local investors (first).

If you want to do anything big, you need to leave your home town. Even if only for a few short days, weeks or years. That’s because no one’s ever a big deal in their hometown, especially entrepreneurs.

If you want to do anything big, you need to leave your home town. Share on X

Once you’ve decided that it’s time to raise money, aim for angels, groups and venture firms within a 1,000 mile radius and focus on getting meetings with them first. Let me say that another way: you’re better off not talking to your local investor community first. The problem isn’t the local investors, it’s you.

Before you even think about raising money, you need to know your market inside and out. Look at every deal that’s happening and know every player in the space. (If you don’t know how to do that, click the link at the beginning of this paragraph.) Once you know the players — both entrepreneurs and investors — focus on the ones that are outside Silicon Valley and outside your home town.

Give them value, if you can. Cold email them if you must. But never ask them to spend any time or social capital before building a relationship with them first.

This all probably sounds like a lot of work — and it is. If you want to build a company, you need to raise the bar on yourself and your company. The alternative is that you can stay local, complain about everything and wonder why no one wants to back you.

If you want to build a company, you need to raise the bar on yourself and your company. Share on X

Once you get someone outside your home town to believe in you, don’t be surprised when the local tech community starts to do the same.

Friday roundup: the real value in life, getting a jolt of the unfamiliar and the lack of a Midwestern startup network.

Happy Friday.

I’m thankful for another Thanksgiving filled with fun, laughter, food and family. Today, we’re starting the drive towards the next tour stop: Wichita, KS. See you out on the road this weekend!

  1. “The real value in life comes from saying no.” [Link] [Tweet]

I openly admit that I’ve said ‘yes’ to far too many things. As a result, my inbox is constantly piling up and managing my own anxiety has been one of the biggest professional challenges for me this year.

I’ve resorted to ‘no’ as my default answer, I’m using Asana to organize my to-do list and getting better about sticking to my calendar.

On a related note, saying ‘no’ is something you can only do once you’ve reached a certain point in your career and not enough people talk about that openly.

2. “You took all the right pictures, but were you really ever there?” [Link] [Tweet]

You’ll get a good laugh (and reconsider your Thanksgiving-related social media posts) while you read this.

3. “Be technical, be customer-focused, be process-oriented, be data-driven and be interdisciplinary.” [Link] [Tweet]

My #1 advice for anyone starting their careers today — regardless of whether they choose to work at a startup or a huge enterprise — is to optimize for a role that allows you to see and touch as many parts of the business as possible.

Learn how all the pieces of a business fit together and you’ll quickly become more valuable than most.

4. “Never give up on something you can’t go a day without thinking about.” [Link] [Tweet]

This is your entrepreneurial pep talk for the weekend.

5. “power down your smartphone, close your browser tabs, roll up your sleeves and get to work.” [Link] [Tweet]

If you can ignore the clickbait headline on the article, you’ll find the more important point: you need to be able to focus on one thing from time to time.

Gary Vaynerchuk talks about this idea of keeping your head in the clouds and your hands in the dirt. The best people have the ability to do both of those things from time to time.

6. “Don’t seek comfort. You need to give yourself a jolt of the unfamiliar.” [Link] [Tweet]

Apparently, everyone’s in the mood for entrepreneurial pep talks this weekend. Here’s a second one for you. (As a reminder, this link round up is a compilation of the highest clicked links in my firehose each week. So, this is pretty much what all of you are clicking on these days.)

7. “They may like the product, but their first love will be the economics.” [Link] [Tweet]

A long time ago, I stopped trying to judge people ideas — because I was usually wrong. I don’t think enough people admit that we’re all terrible at picking ideas.

8. “The best jobs are the ones that have not already been put on a job board.” [Link] [Tweet]

The best jobs come through the side entrance, not the front lobby. That’s why you need to keep putting yourself out there. Welcome to the resume of 2016 and beyond.

9. “Wantchapreneuers are attracted to the entrepreneurial lifestyle, but they aren’t inherently entrepreneurs.” [Link] [Tweet]

Entrepreneurship is hard to teach but easy to learn. It’s a bit like working out: you only get stronger/faster by actually doing the work itself.

Stop reading this stuff and get back to work.

10. “There is no Midwestern network, no central spot where startups can gather.” [Link] [Tweet]

This is one of the best written peices I’ve seen about a cross-country road trip and the characters you meet along the way. More importantly, he’s right: Midwestern cities have a lot of intra-city resources for their entrepreneurs but very little in terms of inter-city networks.

Firehose

You can get the full stream of the things I read, it’s all on Twitter — follow me: @paulsingh.

-P

Stop chasing money, it just makes you look desperate.

There’s a saying in the investor community: if you’re not chasing a deal, it’s probably not a good one.

if you're not chasing a deal, it's probably not a good one. Share on X

Think about that for a minute.

Investors understand that the best deals are quick to oversubscribe — and they’ve got to fight for an allocation on the cap table.

Having met thousands of entrepreneurs over the past few years, I’ve heard a few phrases that instantly set off alarm bells.

Founder: “We’re raising our seed round and expecting to close it in the next 90 days.”

Um, what? I’ve seen deals close in a week. Sometimes three weeks. Nothing takes 90 days. You sound like you’re not trying hard enough. Or, worse, you’re not good enough to close anything.

Founder: “Happy to meet you any time you’re available.”

Wait, so you have nothing else better to do? Don’t you have customers to keep you busy or are you really doing nothing else at all?

Founder: “We’re looking to raise something between $X and $Y.”

Huh? You don’t know exactly how much money it’ll take to hit your next real business milestone?

Founder: “WE DID ALL OF THIS JUST THROUGH WORD OF MOUTH!”

Shit. Being lucky isn’t the same as building a business. Please, please, please tell me you’ve at least started trying other tactics to grow the business.

Look, here’s the thing: the best founders know how to humblebrag.

You should be leading every conversation with an investor (and perhaps customers too) with factual statements around your business. Preferably namedropping other notable people that are using your product or investing in your company.

If you focus on building a business, don’t be surprised when money starts flowing your way.

If you focus on building a business, don't be surprised when money starts flowing your way. Share on X

***

If you’re looking for more actionable tips on raising money for your company, check out fundraising for startups.

Good pitches take 3 minutes. Bad pitches take 30 minutes.

A typical note in my inbox on a daily basis: “Can we hop on a quick call? It’ll be easier to discuss that way.”

My response: “You mean you couldn’t take the time to distill your idea down to 1-2 sentences so I could decide whether to spend my time on this? No.”

Look, I have the same 24 hours in the day that you do. You wouldn’t take that call if the situation was reversed, why should I? Or anyone else?

I get hundreds of pitches each week — sometimes they’re for startups, other times they’re for people trying to sell me something. In all cases, they only suck because the sender didn’t take the time to distill the idea down to the core. And that just screams “we’re going to shoot the shit on the phone for an hour with nothing actionable at the end” to me.

If you want someone’s time, respect it. Don’t ask for more than you need. And always lead with something that’s beneficial for them.

The four numbers you need to have handy if you *ever* want to raise money.

There’s rarely anything more frustrating than meeting a founder that doesn’t know the numbers around their own business.

At the very least, you need to memorize these four things and be ready to talk about them at any time with no notice:

  • Revenue (or Monthly Recurring Revenue if you have that)
  • Churn
  • CAC (cost of customer acquisition)
  • LTV (lifetime value)

Even if your business is still early, you should have reasonable assumptions around those numbers.

The more data (read: sales) you have to back those numbers, the more likely you are to actually raise money for your company.

It sounds simple… because it is. Investors want to invest in businesses, not startups.

Investors want to invest in businesses, not startups. Share on X

Business growth and the 10% rule.

Whether you choose to bootstrap or raise money, aim for 10% month over month growth in revenue.

That’s really all you need because compounding growth is the most powerful thing you’ve never really understood.

For easy math, let’s pretend that you’re making $100/month through your business today and you grow that revenue at 10% each month. Here’s what that looks like:

  • Month 1: $100
  • Month 2: $110
  • Month 3: $121
  • Month 4: $133.10
  • Month 5: $146.41
  • Month 6: $161.05
  • Month 7: $177.16
  • Month 8: $194.87
  • Month 9: $214.36
  • Month 10: $235.79
  • Month 11: $259.37
  • Month 12: $285.31
  • Month 13: $313.84
  • Month 14: $345.23
  • Month 15: $379.74
  • Month 16: $417.72
  • Month 17: $459.50
  • Month 18: $505.45

You see what’s happening, don’t you? The business is doubling just about every 8 months… and it just gets faster and faster. (And just imagine how much bigger the numbers get when you’re at $1,000/month or more.)

Now, before you crucify me for not discussing churn or anything else — you’re missing the point.

In the early days, investing in a startup is an emotional decision for an investor. If you can show that you’re focused on building and growing a business, you’ve already set yourself up to look like a better investment than anything else that the investor has probably seen lately.

If, on top of that, you can show a 10% month over month growth rate, you’re basically killing it.

When someone asks you how much traction you’ve got, you should always have a line ready. Maybe it’s something like “we’re making money and we’re growing at X% month over month at this point.”

Stay focused on sales and growth — not the idea.