I spent $8,000 developing a web based visual media platform in 2011. It’s cool, and it works, and it’s out there on the web behind a password protected portal but it’s wrong. It should be prettier, easier to use and mobile. I lost money and time. I overbuilt the product before I had traction. I didn’t apply the idea of The Minimum Viable Product properly.
(lean and mean)
The Minimum Viable Product is a concept written about in Eric Ries’ book The Lean Startup. It’s now the de facto standard for startups. Before you waste money and time overbuilding an idea, you create something minimal first. The biggest problem with the concept of “The Minimum Viable Product” is what “Minimum” and “Viable” actually mean.
I’m working on a new product-based company and it has major traction. Starting this company cost $317. I had an idea for something I needed. I made 4 prototypes, each a different color. I posted some photos of it on social media and my friends said “Cool! I want one!”
But I didn’t believe them. You can’t trust your friends.*
So I took the prototypes to 5 stores. If 3 of 5 stores wanted it, I’d move forward with figuring out the details and getting them produced.
Four of the 5 stores wanted it NOW. Everyone said “Yes.” The product worked but wasn’t finished.
We figured out the details, took a few orders launched into 3 stores and sold out in 4 days. We refreshed the inventory and sold out again. Every new store we’ve opened sees a similar trend. We’re validated and now we’re going big.
We even developed a no-lose negotiation strategy that converts stores who say “no” to “yes” instantly and even makes them long-term customers.
We have revenue, demand and our idea is validated. Now we are confidently allocating more capital with a high expected return.
We’ve filed patents and invested in infrastructure. We’re refining our logo and branding. We’re getting better product photography and making promo clips. We’re begging media not to publish anything about us because we’re just a few steps away from being able to fill massive demand. We’re going to blow the doors off of a category that has been stale for 30 years or more.
We had revenue before we had a real product. That’s what matters. Now we can hunt without starving first.
(sell the sizzle)
The key to the MVP is one goal and one goal only: accelerate the sales cycle. The MVP should get you from concept to traction. If no traction move on immediately.
Don’t waste your time on infrastructure or paperwork or permission or overly ornate packaging or a business entity or lawyers or following “the rules” you think are required. Time is your greatest asset. You don’t even need a business plan. Whatever it takes to get to your customer saying “yes”, or better yet “holy crap I want that” is the point of the MVP. Any business can use the MVP philosophy.
Everything starts small.
Validate first, scale and grow later. Talk, date, marry, have kids.
Sell before you spend, promote before you develop, get users and customers before you dig a hole, don’t overdevelop your MVP. Don’t commit too much too early.
Sell the sizzle.
(lizanne falsetto started ThinkThin products in her kitchen. p.s. they’re really good)
Want to sell cookies? Bake a batch in your kitchen and sell them. Have a product idea? Prototype it cheaply and get orders with the prototype. Got a great beer recipe? Brew it and get restaurant or bar owners to try it. Mobile app? Design it in MS Word or Photoshop. Think of all the corners you can cut. It’s like speed dating for business. You talk, flirt and if there’s a fit you go on a date. You know very quickly whether or not you’re attracted in the first 6 seconds (aka “Blink” by Malcolm Gladwell).
That’s the point of an MVP. If you can’t sell the sizzle, put it to bed and move on. Don’t lose your hard earned cash or your time.
Patagonia has sales of over $500M annually but when Yvonne Chouinard started he was selling rugby shirts and hand-forged climbing gear to dirtbag climbers in Yosemite out of his car. Was he “executing”? He was chasing freedom from a job so he could afford another Summer climbing in The Valley and another winter surfing in Ventura.
(this became a $100M business?)
Yakima car racks grew from a $5,000 purchase to over $50M in annual sales. The founders bought a kayak footpeg company. Their business struggled until a consultant told them “these patents for carrying stuff on car roofs that you bought with the footpegs are a better idea”. So they tried it because they thought it was a few thousand extra dollars in sales. The owners sold Yakima in 2001 for $90M to Arcapita (formerly Crescent Capital). They had no idea it would ever become such a business. Were they “executing” in the beginning? They were just chasing ideas and some freedom from corporate life.
(the beginning of the future)
For thousands of years people tried flying but it was two brothers from Ohio that showed the world how to do it. Hundreds of prior attempts were perfectly executed: well engineered, well financed, well prepared, but the wrong idea. The Wright Brothers, underfinanced, working out of their bicycle shop, had the right idea. Was this execution? Their idea was still bad. Compared to modern wing designs and technologies their idea was remedial with poor execution. But the idea was still approximately correct and gave other engineers better and better ideas.
I worked at Watermark Paddlesports (later Yakima Products Inc) when it was owned by Arcapita. Yakima attempted to launch a ridiculous home organization product (I put one in my closet and hated it). They got a lot of press, had a lot of retailers carry the product, but it didn’t sell through. Consumers hated it. The company scrapped the idea and took a heavy write off in less than a year. You could argue they “executed” perfectly, but were exactly wrong.
Warren Buffett says “it is better to be approximately correct than exactly wrong.”
What is the value of “executing” if the idea is bad and noone buys it? $Negative.
Have you ever tried to make anything and sell it?
It’s hard.
I’m working on a new product. It’s not that complex, but we’re working with UL, sourcing components, finding quality suppliers and responding to customers.
Every day a new, unexpected challenge comes up.
My mantra every day has become “F* it. We’ll try again.” All expectations about the “plan” continuously change and the process of letting go is constant.
When everything changes, the creativity muscle flexes and sometimes fails under the weight of immediate decisions. Many times the decisions have hidden implications only visible after the decision is made.
It highlights how incredible some of the success stories are. There are so many opportunities for failure at the intersection of every decision. Navigating those decisions, consistently, is incredibly hard.
Ben Milne is a hero of mine and an example of the value of ideas. I’d call him a mentor, though he doesn’t know me.
He’s a straight-talking, f-bomb-dropping, corn fed Iowa kid. From what I can tell, he’s easily annoyed at the inconveniences of life, and doesn’t hide it. He’ll tell you if he thinks something is bullshit and he’s usually right.
(Ben, iterating)
But Ben doesn’t fit your normal geekapreneur profile. He’s not a royal. He didn’t come from money. He didn’t go to a fancy school. He didn’t roll with a group of vcs or geek out coding apps when he was 8. He’s just another kid from the Midwest who had ideas that are worth a $billion.
Ideas are the blood of life. Whatever you want starts with ideas.
From nothing comes something and the space in between is the idea. Like the spark of the big bang. Everything after that is meaningless unless it is fed a strict diet of ideas every day.
Because ideas are experiments. Experiments yield information which yield decisions which yield results that yield problems requiring more ideas. But the game doesn’t stop when someone “wins”. You can “exit” a business or idea, but as long as the business is alive, ideas must continue.
Which is exactly the problem with the statement “execution is everything ideas are meaningless”.
Execution for what and for whom? When they say “execution is everything ideas are meaningless” I want to puke.
There is no “execution” there is only “experimentation, adjustment and experimentation”, hopefully with enough time to figure out where there’s traction before you go broke. It’s the “Build-Measure-Learn” loop mentioned in “Lean Startup” by Eric Ries.
The ideas are important and “execution” isn’t “execution” at all.
Execution is Ideas In Action:
1. persistence – going under, over, around or through barriers
2. flexibility – switching course and letting go of your “plan” when it’s not working; doubling up when it is; trying new ideas and recognizing assumptions about the market may be wrong
4. ideas – the foundation for everything: constant ideation to overcome hurdles
5. effort – drawing more than you may have in your energy reserve. you have to make that one more call. send that one more email and hear yet another “no”: “no, we can’t do this for you”, “you’re not our kind of customer”, “no, we won’t invest”, “no we don’t like the idea”, and keep going.
6. selling – because without sales, you have nothing
You’re never “done” it’s never “executed” unless you consider a sale or taking cash off the table the “execution”.
Dwolla handles billions of dollars in currency transactions, charging a straight fee no matter the size of the transaction. It’s the best deal out there and I’ve used it for everything from collecting payments from customers to paying software developers in Russia.
When Ben started, he heard nos from all angles. He didn’t have the background, or the connections, or the knowledge. He had a vision, but as he dug in, things changed and he had to be flexible. The recently released Dwolla apis for example. Dwolla needs new “ideas” to adapt their product to the market: iterate, test, launch, cancel.
When Yakima misstepped with gear organization they correctly cut their loss. They learned and iterated. We built new products that recreated categories and revenue poured in again. Flexing creativity and new ideas in the face of mistakes.
It happens all the time in startups: execution is good, but the idea is bad and it dies; investors lose their money.
The key to success are the ideas that get you through the challenges. You can call ideas “execution” but don’t call ideas “worthless”. They’re the most important thing you have and the one thing that costs you nothing in the beginning.
They’ll also save you after a failure. Or during depression. Or after your girlfriend breaks your heart. Ideas crack open the weight of the world and let light flow through.
So don’t dismiss your ideas with the overused but useless adage “ideas are meaningless, execution is everything”. Instead, go for it.
Your dreams might be waiting within your ideas, where everyone else is afraid to go.
(i rented a room in this house where i started my first business)
When I was in college I was pretty broke so I started a business in Missoula, Montana in my tiny 75 square foot bedroom in a 6-bedroom house where I lived with 4 girls and 1 other guy.
I had no space and very little money but sometimes our constraints are advantages.
I was an outdoor athlete along with many others in Missoula, so I used my Dad’s company “Equipment Sales Company” (a company that built machines for the ceramic wire industry) to open accounts with outdoor gear companies. I posted handwritten signs around town “Wholesale Outdoor Gear 30-50% Off. Call 406-555-5555”
They would order the gear they wanted, save a ton of money on gear and I would get a 10% cut risk-free. It wasn’t huge but it paid rent. I’ve gone on to start 3 or 4 more businesses, help turn around a $50M company, help raise money and build a company into its IPO and I’ve got a few new projects I’m working on. I have a different perspective on things, but sometimes you need money NOW.
A lot of us are broke but the thought of starting a company is intimidating. We don’t know where to start or what to do. We’re afraid we might do something wrong or we need an accountant or an LLC, SCorp, CCorp, and so on. In short, we talk ourselves out of doing it because we’re afraid of the scary monsters in the lurky business forest.
But it’s not that scary. You just haven’t seen the forest during the day when the ferns and trillium are lit by sunlight. There are no monsters, just opportunities, and you’re standing there in the middle and I’m going to try to help.
(the forest seems scary at night…)
(…but it’s not so scary after all)
Before you start, this is what I recommend:
1. Write down ideas every day. What’s an idea? the idea and the next step it takes to start the idea. 2. Look around at your resources: somewhere to live, a talent, a car, bikes, boat, skills like cooking or drawing, maybe you know something unique, maybe extra space, a dock, a piece of land. 3. Be specific about how much money you need. Maybe it’s $50 for food or $1,000 to pay your mortgage. 4. See where you can cut expenses now so you can relieve some pressure. Give yourself some freedom. 5. Forget about the big details. Once you get traction (money coming in) worry about the rest. Maybe you never need a business structure and can just stick to nothing and file a Sole Proprietorship at the end of the year with your taxes.
With our smartphones and the web in full force, you have a powerful platform and tools to make money.
Here are 7 of the ways you can make money NOW:
(rent a place to crash on airbnb)
1. Rent your space. Use Airbnb, Vacation Rental By Owner or Craiglist. I was in Maui and people were renting tents in their back yard in Hana for $45/night with sleeping bags, refreshments and breakfast. There are no boundaries anymore. Rent your couch, rent your deck, rent your sleeping bag. Turn a room into a pirate ship and rent it. Throw in an eye patch and hot buttered rum. Offer your space for storage- use a small corner of the garage and rent it for $100/month. Maybe your shed. Anything you have – get creative. Rent the space that is just sitting there.
(rent your tools on craigslist)
2. Rent tools. Growing up I was oblivious. We had a barn full of tools we hardly used: a wood splitter, a chipper, power tools, several lawn mowers. I could have put an ad in the paper and rented the tools and made a ton of cash (well, a ton for a kid anyway). Use Craigslist and rent your tools. Someone needs that tile saw in your basement.
(sell your cookies!)
3. Sell your food. My aunt won Illinois State Fair awards for her chocolate chip cookies. Her recipe could be bigger than Famous Amos. In grad school I built her the front page of a website called “Aunt Bee’s Bakery.” It had bees buzzing around a chocolate chip cookie and the chips were each a different menu option that popped up on scroll over. She hasn’t done it but maybe you can. Sell food in parking lots in front of busy stores, rent a small space and start a little tail gate restaurant at a food truck lot. Offer to cook for parties. Sell at Farmer’s Markets or other events. Dave’s Killer Bread started this way and is huge today. Grow something (no, not that) – trees, flowers, vegetables, anything, and sell it to local stores or florists or nurseries.
(build stuff people want…)
(…like the bubble tea collar from ii inu)
4. Build stuff. In 2004 I cofounded a company called ii inu (ee-ee-new; Japanese for “Good Dog”). It was a designer pet products company started when my partner created a cool looking collar for her dog. People stopped her to ask where they could buy. First we built them ourselves, then I outsourced manufacturing to a company in Seattle. Within 6 months we were in stores in 36 states and 12 countries. Our cost was $2.40-$4.30 and they sold for $42-$60 retail. It was a good business. What can you make that someone else can buy? Sell it on Etsy.com, eBay, get a Shopify web store or in local stores. No local stores? Find other stores and call them or send a free sample.
(do this, but not creepy like this guy)
5. Offer other services. If you’re a student you should launder peoples clothes for $7.50/basket. 100 loads is $750/month. Maybe it’s 1,000 loads. Offer to create facebook pages and twitter accounts for $20/month for businesses. Get 10 businesses and you’re making $200/month for just a little effort. Get 100 businesses and you’ve got $2K/month. Would that change your game? Do yardwork, mow lawns, serve elderly or handicapped by running errands, offer a coffee delivery service to offices near you. Drive someone – sign up with Lyft or Uber and user your car as a service. People in cities are making $50K/year doing this. Think of a service you can offer right now to people in need. One idea I think would be a great business is helping other people convert their extra space to being Airbnb ready or driving people to airports at 1/2 the cost of a town car. Decorate Christmas trees, power wash decks, string lights or shovel driveways.
(entertain people)
6. Entertain people. Can you play music, edit video or do some other fun thing? Offer to perform at parties or services for local active events. Teach music or sports or tutor kids in those activities. Belly dance. I know one girl who teaches belly dancing and practically owns the market for belly dancing costumes.
7. Help local businesses make money. What local business can you help? Approach restaurants, stores, anyone and offer to help them advertise or run special events. Take a % of the money from each event or that day’s sales. Help a different businesses every weekend and observe to find more services they need or opportunities to extend the money you make.
But there’s just one catch. In any of these ideas, do it differently. Be remarkable. Give people more than they expect:
-if you’re mowing lawns, dress up like a clown. Be “Clown Mowing”. Every time a car passes they will be like “hey there’s a clown mowing a lawn!” When they need their lawn mowed, they will want you. Maybe they’ll start using you every week just for laughs
-if you’re renting a space on Airbnb throw in more than the guest expects. If they rent your couch, throw in dinner or a free Netflix movie. Surprise them to the upside so they give rave reviews or come back again
-if you’re cooking something throw in a sample of something else you cook or give them a recipe for anything they’re interested in. Help them learn to cook themselves
Being remarkable will do two things: 1. It will get you a lot of attention. Imagine how many people would share “Clown Mowing” on facebook, twitter and Instagram. 2. It will make you more money. More people will want to have that experience and they’ll be willing to pay more for it.
Colonel Sanders started KFC by selling chicken at his gas station. Ray Croc wasn’t too good to flip burgers. Conrad Hilton started with one crappy hotel, built a business, lost it and rebuilt it. You’re not too good for whatever idea you have. Just do the work.
When I feel uninspired or unmotivated I remind myself that everything, EVERYTHING, starts small. Microsoft was just a few guys in a room. Facebook was one kid in his dorm. Famous Amos cookies was an eccentric guy and a recipe. McDonald’s was a single diner. One thing is all it takes.
Right now I am working on at least 3 projects. I’ll share the details when it’s time. Some of it won’t work out, hopefully some of it will. No matter what, I’m not going to stop, because everything I want is just ahead.
And when I feel like stopping, I go to Wikipedia and read about Colonel Sanders, Conrad Hilton and others who started from nothing.
Sometimes I wonder what is missing in the world today because so many other people quit just before they became a huge success.
If you feel like quitting, read these stories and don’t give up. I believe in you:
(there are people that make us feel like this, but they can’t control us if we know His secret)
She said something to me on the phone.
Actually, it was a text message so I kept it.
It was awful. One of the worst things anyone has ever said to me.
Someone else said something to me with their mouth.
It doesn’t matter what they said, you know what it feels like:
It burns you and you force every cell in your body not to lash out.
Sometimes it doesn’t work and I lash out with words puking all over. Uggh.
The words stick to the brain like flypaper trapping a million dying flies.
Putrifying, the words rot year after year until you let them go.
But in the moment, you want to react. You want to puke out the horrible thoughts at the instigator.
Or you might be like me and do what our brains are trained to do: run, eject, disappear.
Why stay and subject ourselves to repeated offenses? Sometimes we have to, but not always.
(the secret is like an ejector seat)
If you’re in an abusive relationship, and verbally abusive relationships can be just as bad as those physically abusive, we should disappear: Andy Dufresne the heck out of there. Don’t be afraid of burning bridges, just go.
(i wanted to be judd nelson in high school but was more like anthony michael hall)
I am a high school dropout.
I figure dropping out of high school saved me about $200,000, and if you pay attention to what I did, it can save you $50,000 or more.
I went to a private high school in Mundelein, IL that I (not my parents) paid for. Tuition was a few thousand dollars each year.
I dropped out after sophomore year and went to college at 16, in 1994. I graduated 3 years later in 1997. My friends were starting their second year of college when I was starting my career. I made money, started a business and traveled the world before my friends graduated college in debt, with limited job prospects.
I was 20 when I started working at the Chicago Mercantile Exchange, and began trading full time about 18 months later.
(my first career was in this trading pit at the chicago mercantile exchange)
Peter Thiel says “…what important truth do very few people agree with you on? To a first approximation, the correct answer is going to be a secret. Secrets are unpopular or unconventional truths. So if you come up with a good answer, that’s your secret.”
His point about secrets is that secrets are keys that can lead to successful ventures. A few secrets:
1. Zuckerberg believed coeds in colleges would find social networks valuable
2. Systrom believed people wanted an easy way to improve their photos
3. Page & Brin believed search would be more powerful if it ranked pages by links-back
4. Bezos believed the future of commerce was in the web with books as an entry point
Secrets are non-obvious truths that few other people see until they are introduced to them.
College is a big secret everyone is talking about. The trend right now is for rich guys to diss college. Peter Thiel is renowned for paying kids $100,000 not to attend college. A lot of other people, like my friend James Altucher, have written about how college is a scam.
(peter thiel says don’t go to college)
At what price does college become “worth it”. It can be argued that it may never be worth it – you pay more money in than you can ever get back and end up in a black-hole-of-no-return. This is what happens to most people but there is another way. This is my secret to hacking college.
College is a bet. You are betting 5 years of your life and hundreds of thousands of dollars on an outcome that occurs after those 5 years. You have to have an expected outcome in order to know how much to bet. Five years is a lot of time and you shouldn’t bet 5 years and all that money on something that will not propel you forward.
The real question is one of cost versus value.
Benjamin Graham said and Buffett popularized: “Price is what you pay, value is what you get”
Graham is popular for inventing value investing: buying things intrinsically undervalued, which limits risk and improves probability of reward. The challenge with value investing is finding undervalued things – because these are non-obvious and hidden.
What if you had a formula that helped you find the secret value in college so you could graduate debt-free with many job offers? Kind of like value investing in your education?
That is what I did, and this is what you can do, too: unlock the secret value in college, propelling you ahead into an insanely successful career instead of convicting you to a life of slavery. Do you want to be a master of the universe or a slave to everyone?
Everything is a scam. Your car dealer, your coffee shop, the house you just bought, your job, taxes, blogs, facebook, google, stocks, commodities. All scams set up to take advantage of you.
But you are not a scam. You are an opportunity. Everything – all choices – flow through you and you have the power to choose your future. Choose to avoid scams and be successful.
Use the scam to your advantage; hack the system, and you can give yourself the best chance for success. This is how Buffett invests, how Thiel advises and how Altucher has rebuilt himself too many times – by following a value-based formula.
Most people get scammed by college because they are comfortable getting scammed by college. When you went to college how many of your friends said “I’m totally getting scammed right now”? None of them. Instead, they said “where can I get the cheapest slice of pizza tonight because I am literally dead broke paying my life savings to an institution that doesn’t guarantee I’ll have a way of earning it back when I graduate and I have a final exam tomorrow in Georgian Literature so I’ll see you later.” They may as well have said “I am learning to live a life of slavery
I graduated with no student loan debt and a full time job where all the money came straight back to me and not to student loans. My first job taught me the lessons in an industry that I then used to build my own business.
The financial freedom I gained allowed me to take more risks. I quit jobs and traveled the world more than once. I started trading from a home office when I was 22. I paid cash for my cars and never made a single car payment. I wasn’t wealthy, but I was free, and I’ve always lived below my means, enabling more freedom.
(i spent a lot of time climbing at smith rock with my freedom)
I almost got scammed by college but I figured it out just in time.
Scams are situations where you get taken advantage of. Why is college a scam? Where else in the world do you pay hundreds of thousands of dollars to read from books and listen to professors talk about topics irrelevant to making a living? Most people are getting taken advantage of.
Let’s look at the numbers:
2013 average college loan debt: $35,200 (and we all know people with much more)
Average starting salary of 2013’s graduating class: $44,928 (after tax and 401K your take home is ~$30,596)
US Gov’t Student Loan Interest Rate: up from 3.4-3.9%
Average graduate salaries: down 5.4% in 2013
Average Annual Tuition: up 5.4%
Tution and living costs at Harvard: $64,954/year
Tuition and living costs at University of Illinois: $29,594-$48,896/year
Tuition and living costs at #1 ranked Walla Walla Comm. College: $11,415-$17,976/year
At these prices, education is a major cost. If you attended University of Ilinois with in-state tuition you pay $30K/year. The average student graduates in 5 years, not 4, total cost is $150,000 + you have to remove the money you could have made if you were in a job for 5 years. Let’s call that $30,000/year for a whopping total college cost of $300,000 over 5 years. Wow. THREE HUNDRED THOUSAND DOLLARS for in-state cost of going to college.
How to Hack College Rule #1: Reduce the amount of time you spend in college. This will reduce room & board and tuition. If you went to U of IL in-state for 3 years instead of 5 you’d save about $60,000. SIXTY THOUSAND DOLLARS! If you attend Harvard I just saved you $130K. If the average graduate finishes with $35K in debt, they could wipe out the debt and have $25K extra in their pocket plus the money they make in the lucrative job I’m going to show you how to get. The way to reduce your time in college is by cramming in more hours per semester. I was taking over 21 credit hours per semester. Next, you attend school year round. No summer jobs, no internships. Finish fast. When you graduate with a degree in a trade, you don’t have to worry about interning anywhere. People will give you job offers all over the place. Take lots of hours each term and go to school year round. This will make you finish college up to 2 years early.
Would you rather have a couple hundred grand in your pocket and show your date a good time in style, or would you rather take her to Buca-di-Bepo and split entrees and the bill? Either could be fun, but at least you’d have more choices if you had a lucrative job and didn’t have enormous debt after college.
How to Hack College Rule #2: What really matters to people is the focus of your degree and where you graduated, not where you went to school all 5 years. When was the last time someone asked you “well, I see you graduated from Stanford but where did you go the other 4 years?” Never. No one cares. Start your education going to a less expensive school, finish your prereq’s, and if you must go somewhere that “looks better” on your resume, transfer there for the last few terms so you can get the degree from that school. Is it risky? Not as risky as spending $130K on two years of basic college courses, frat parties and coeds. When you transfer into your graduating school, finish fast. Finish as fast as you can to limit the expense. Walla Walla is $17K out of state. Much better than $30K or $65K/year! Two years at WW saves you easily $26K. Go somewhere inexpensive the first 2 years, live at home if you have to, and save the extra cost of living expense and tuition expense. Many schools look favorably towards transfer students and make it easy for students to transfer in.
(from harvard’s website. is it worth it?)
I spoke to Christine Mascolo , Harvard’s Director of Transfer Admissions. Harvard looks favorably on transfer students. They look for students with a sincere concentrated focus combined with other interests outside the classroom showing how they can contribute to the community while pursuing their academic passions. Though Harvard only accepts a small number of transfer students per year, transferring into a good school is not only possible, but a solid option that can save you a ton of money.
If you are average and you graduate today you will have $35,200 in student loans.
A $35,200 loan at the current gov’t rate of 3.9% is $355/month in loan payments for 10 years. That’s a lot of money! This means that before you have a job, you are in the hole $355 per month! But wait, it’s worse. 10 years is 120 months. You will pay 120 payments of $355. This is $42,600 you are paying, not $35,200.
Before you get a job, you owe almost $43,000 for your “education”, and these payments won’t stop if you lose your job. What are you willing to bet 5 years of your life and $43,000 on? Don’t you want to bet it on the best possible outcome?
Since you got an average job out of college, maybe you make $44K/year, you take home about $30,000 in cash. After rent, groceries, a few dates every month, car payments and costs…you have nothing left. This isn’t to mention what happens if something goes wrong – accident, health problem, job loss, etc.
It’s no wonder that the average US Household credit card debt is $15,325 – people use debt to supplement income, and it’s only getting worse.
And that’s “average”. We all have friends that graduated from a good school and have over $100,000 in student loan debt on top of mortgages of $150K+ and more than $15K credit card debt. This is not freedom. This is slavery. This is the scam.
Tuitions are increasing faster than just about any other cost in the U.S. The return on the S&P 500 index is about 4.8% per year for the prior 10 years versus an average annual tuition increase of 5.42%. Forget what the S&P 500 is. Tuitions are going up super fast and you can’t keep up.
(s&p returns cannot keep up with tuition increases)
But there are still opportunities.
Get to the light at the end of the tunnel. You can tan yourself in the sun while your friends get morbidly pale in the darkness of their slavery dungeon.
How To Hack college Rule #3: You may love Georgian Literature, but you have to study a trade in college. Georgian Literature is essentially useless. No one will pay you for your review of Defoe. A trade is anything that trains you for a specific type of career after college: finance, accounting, programming, engineering, environmental geology, law, medicine, nursing, etc. These majors will get you a job after college, and your grades hardly matter. I don’t care if you say “but I’m passionate about Georgian Literature”. Study academics as a minor. Your job at college is to learn how to create value or prepare to get a job after college: minimize cost and maximize return.
A friend just graduated from Univ of Colorado with his bachelor’s in computer science and his first job is a programmer at Apple making over $100,000. He had multiple job offers in several cities. His future is set for life and I am totally jealous. Win.
My younger cousin graduated from Saint Louis University recently with a degree in nursing and a great offer from a local hospital. She went straight from graduating into a great job while some of her friends struggled to find any kind of job. She can go to any city and be employed quickly. Her friends can’t. Win.
Another friend graduated from Univ of Colorado with an english degree. She moved back to her parents’ house in Maine and is working at a restaurant as a server. This is after 5 years out-of-state tuition + living expenses totaling around $125,000 + financial aid. I’m sure she’s academically enriched, but she’s in the financial and opportunistic hole. Loss.
When I was in school I worked on weekends at a company and started an outdoor sports product business from my apartment. People saved 20-30% off retail prices on outdoor gear by mail-ordering through me. I would take a 10% margin on all orders and had no inventory risk. The more orders I got, the more money I kept.
(i rented a room in this house where i started my first business)
I limited my living costs – my room was in a 6-bedroom Queen Anne style house on the Missoula Historic register – 227 S Third Street West, Missoula, MT. Everyone else paid around $300/month and I paid $186/month for the smallest room. I budgeted carefully and spent less than $100/month on groceries. I ate a lot of peanut butter, granola and apples but I had dreadlocks at the time so it was appropriate. There was even a little money left over.
How To Hack College Rule #4: Be entrepreneurial by learning how to help people. You are around a totally unique demographic. Facebook started as a college-based product. Would Facebook have ever started if not for its founder attending college? It’s a great market. What do these people need? Be creative. Start something on your own. Maybe it will grow and make you wealthy, maybe not, but it will teach you real keys to success. Go to the entrepreneurship center at your college. I was the Graduate Teaching Fellow at the Lundquist Center for Entrepreneurship while in graduate school at the University of Oregon. Not only did that fellowship pay for my graduate business education, I also worked with aspiring entrepreneurs and founded a company through a relationship that began there.
The secret of real education is learning how to create value. If you can do that, you will be secure and free for life. Most of college is like tourism: fun experience but it’s all about YOU. This is not the way the world works. No one cares about your mind opening experience. They care what you can do for them. You have to learn how to help people: you must learn how to create value. This is another reason for negativity towards college: college is self-centered rather than value centered.
(add a comment below if you like her jewelry and think she should build this business)
Another friend of mine is a lifeguard in San Diego. She started a jewelry company in college and people love it, but she doesn’t see the opportunity. I beg her to focus on her business over her job. Here’s why:
1. She is young – No family, no rent, no overhead
2. She has customers – Lots of customers! Stores want to carry her products and the products sell. I am jealous. Everyone in business would kill for this problem. Give your customers what they want! If they want to buy, you sell!
3. It’s scalable – At her “job” she is stuck making an hourly wage. No matter what, she can only make that wage. Her jewelry income is theoretically unlimited: if she markets herself more she could get into big stores and create a million dollar company very quickly. Look at what Sara Blakely did with Spanx or what Charlie Chanaratsopon did with his concept Charming Charlie. Why not you? Why not her?
4. It’s dependable – She won’t fire herself
5. It creates value – It brings pleasure to lots of people and I personally love it
6. It’s valuable – If she stuck with it she could sell the company in a couple years for a lot of money and never have to work again. Then she could go surf in Fiji and be a lifeguard for fun rather than as a slave
7. It’s a real education – she’ll learn more about building something than school can teach; she could skip school
When you are in college it’s a great time to start a business. You have facilities, a customer demographic, time to experiment, and limited overhead.
How To Hack College Rule #5: limit your expenses. This includes tuition, but also rent and other living expenses. With my little company I was paying rent with enough left to eat at Tipu’s Tiger and drink Chai Lattes at Second Thoughts a few times each week. I bought a VW bus with summer job money (before I knew enough to go to school year round) for about $3,500 and had no car payments. I traveled and lived in it on weekends so I didn’t have any camp site fees or hotel fees and my friends LOVED traveling all over the West Coast in my house on wheels (it had red chili pepper lights inside; we looked like a glowing red spaceship zooming down the highway). I was going through college fast, earning money, learning valuable business skills, and still having fun.
Thiel’s definition is that secrets are about value – something you know that others don’t see, but can help a lot of people. His interest as an investor is of course to create a return on the secrets of the founders he invests in.
The secrets I’ve shared with you follow Peter’s model:
A. you save a ton of money – reduce risk
B. they help you make a ton of money in the future – increase return
C. they are non-obvious – limited visibility
D. improves the economy – the more people that follow this advice, the better our economy becomes
E. long-term value – it creates value that compounds returns over time
F. it’s scalable – anyone can do this if they want
After I did this my younger sister used the same secrets and finished college faster than me. Today, she is a very successful litigation lawyer in Maryland.
If you compress your college career into fewer years, start at the least expensive school and transfer, study a trade, be entrepreneurial, and limit your expenses, you will save at least $50,000. You will graduate with more job opportunities and more years of income. You could probably make $100-$200K additional income in those extra years.
We haven’t even touched on fellowships, scholarships or other hacks that reduce the amount you would pay to your college.
In the meantime, what would you do with $50,000 extra, or more, in your life? Before you go to college, you should think about this. If you follow this advice I’d love to have dinner and hear your story. I’ll even pick up the dinner tab.
I was on an airplane headed to Beirut in June, 2013 thinking about the last few years.
They’re a blur.
(sometimes things are blurry)
A month before this trip I left my job as a VP of the technology company that invented the modern method of showing 3D in movie theaters. I started as their Director of Finance in 2007 building the financial infrastructure then spent five years doing deals and building new business opportunities outside the core business. I’ve always written – proposals, emails, business plans – but I’ve never been a “writer”.
Things happened, the company grew and initiated their IPO in 2010.
(the day we IPO’d on the NYSE)
It is a strange experience going from a small group of people in cramped offices working on a business that gets laughed at (“3D? I thought that was dead 20 years ago?!”), to listing on the NYSE with high visibility, press coverage, and broad brand awareness. We were a success.
In many ways it’s rewarding. I can only imagine how the founders of the company, and the original two employees, the CFO and the President, felt seeing some of their dreams realized.
It’s hard to be a founder. Your idea is worthless in the beginning, until you figure out how to convince someone that your idea is worth something, then prove it.
(Since 1995 Amazon has convinced a lot of people of it’s idea)
The best ideas are ideas that help people. Every great idea from Bill Gates, Walt Disney, Nikola Tesla, your local restaurant and the most popular social media site has one thing in common that makes it successful: it helps people.
The best ideas don’t take things away from people, they give things to people. Some ideas make people money. Other ideas make people look cool, help them feel better (release oxytocin), teach them valuable skills or knowledge and give them opportunities.
Think about it. Every really popular thing out there gives people something they want. When you add up what all the people are getting from good ideas, you’ll see that it is much larger as a whole than what the ideamaker gets back. The value ideamakers get is much less than the value they create, but even that small piece, financially, is often more than one could use in several lifetimes.
But some ideamakers don’t structure the communication of their ideas such that they benefit (sometimes the benefits take several more lifetimes before they’re recognized). Nikola Tesla, for example, died penniless even though his ideas are some of the most powerful ever created while Ford, Rockefeller, Ellison, Gates, Andreesen, Thiel, Musk and Zuckerberg figured out ways of holding onto some ownership in their ideas and profiting from them. They convinced others – communicated – the value of their ideas in such a way that it activated groups of people to take action and, like dominoes, the communication of the idea flew from person to person as each one tipped into believing.
(ironically Marconi built communication equipment based on 17 of Tesla’s patents but it wasn’t until after Tesla’s death that he was awarded judgment for inventing modern communication that would have made him seriously wealthy)
Powerful communication spreads messages like genetics on a rabbit farm.
It’s the communication of the ideas that really matters. In this post I describe the most successful companies in the world, of which many are communication companies. Newspapers, books, magazines, websites, social media, conversation, smart devices, billboards, sign language, vision, hearing, sight, taste, smells, blogs; communication may be the most valuable thing of all time. Powerful, valuable messages are carried through time and space like particles; communication channels are accelerators.
Every day we communicate outward and receive incoming communications. Processing and responding. Creating or reacting to pivot points. The stimuli meshing into micro and macro instances. Perhaps the most powerful tool we have and use is communication, but good ideas, good communication and strategic management is really tough. Think about all the people you know that communicate horribly.
(graphene may make internet communication over a thousand times faster)
Sometimes there is too much communication. Sometimes I want to hit CTRL-ALT-DELETE and start over, but not recently. Not since I figured out how to build my own momentum, creating experiments in life and adjusting as the instances are generated.
It was about eighteen months ago that I CTRL-ALT-Deleted. I felt perturbed, as if there was more I was supposed to be doing; a purpose I hadn’t yet found but couldn’t put my finger on how to find it.
It wasn’t the first time I’d felt this way, but I came across some ideas that changed the direction of my life and led me to writing, increasing outbound communication – something I never thought I’d do since I’m a terrible writer.
I realized that there was a lot of time in my life spent as a drone. I’d work all day in my office, come home, maybe do something active, like run or surf. Then I’d eat dinner, sit down and “relax” by watching TV. I’d end up there for a couple hours until I was tired, go to bed and repeat the next day. It wasn’t relaxing because my brain was bombarded with messages, stimuli and emotions from the box.
But I’m not against TV. Entertainment is good. I love watching well-developed stories and the art and effort that goes into producing a good show or movie and epic sports matchups. It’s not bad living having a great job, eating good food and sitting in a safe, comfortable apartment watching good TV. It is a very privileged life of security, entertainment, health and free time. But we all have keys to our own happiness and I’m never happy unless I’m building something, so I choose building over watching.
I started an experiment.
I don’t like grand change-your-life schemes or stressful commitments with static goals. Success vs Failure. Life is not that black and white. I do believe in success and failure, and I’m not a give-everyone-an-A-on-their-test-because-they-all-have-capabilities-that-come-out-differently type of person but any time something is stressful it usually will not work out in the long run. Stress is like rust. Over time things will corrode and fail under too much stress. It could be your health, relationships, job or happiness. All these things affect one another and build off of each other.
I prefer experiments. Experiments are more flexible and start with hypotheses that can be adjusted with feedback.
Experiments grow into larger things if they go well, or can be killed if they don’t respond the way you hope them to. The key is staying agile, or lean, by taking it one pivot point at a time, considering the direction and adjusting. Ideally, this method helps avoid waste (time, energy, money, relationships, etc).
My experiment was asking the question “What would happen if I cut out the things in my life that make me less creative, productive, helpful, loving and happy? Eliminate the things that hold me back and block the conduit. What if I got rid of them?”
My hypothesis was that I’d have more ideas, better relationships, higher energy and get more done.
So I measured the things in my life that took up my time and hypnotized me, disabling my creativity and relationship cultivation.
In an average week I was watching twenty-eight hours of television/entertainment. I didn’t think this was bad since about seven hours (25%) was news. Then I asked why news was better and I realized news was one of the biggest drains, actually worse, than regular entertainment. News is scary. People are dying. Lies are spreading. Crimes are happening. Disasters are imminent. Revolution is brewing. Governments are failing. Security is evaporating! There are no jobs! Money is devaluing!! Your house is worthless!!! There is nothing you can do…except watch so you know when the next bad thing happens so you can escape to the future settlement on the moon or the compound in the mountains. A lot of bad communication.
Uggh. I’d rather watch South Park and Louis C.K. At least they make me laugh – give me some oxytocin for goodness sake. But it was all hypnotizing. Blocking my ideas and thoughts. I needed silence.
So I started with News then cancelled cable and got rid of my 73” 3D TV.
(I got tired of worshiping the tv gods)
This meant no news at all and no television programming except by demand via online portals. No newspapers, CNN, news magazines, nothing. Most importantly, no more distraction.
It’s scary. media is like a thick down comforter hugging you so tightly that you are padded from yourself. When you drop the thick cushy blanket you realize you’ve been naked the whole time and your thoughts silenced, inundated with content produced by Hollywood.
I looked at relationships. How much time was I spending nurturing unhealthy relationships with negative people? How much time was I spending hoping for people to return feelings they didn’t share with me? Why was I spending time with pits in my stomach and hopes in my head?
I leaned away from negative, needy, selfish people and leaned towards creative, motivated, thoughtful people cultivating their own experiments, and towards those who care for me as I care for them. In the short run there will be pain and withdrawal, but in the long run this strategy works. Ask yourself the question “if this thing happening to me were happening to someone I love unconditionally, what would I want for that person?” You are who you hang out with, and I could see my life improve immediately. My energy redirected towards creating, communicating and ideating.
The first thing that happens when you get rid of the negative is brain diarrhea. I was scared. Lonely convulsing thoughts running out of my head and depositing fear all over the place. Like a cleanse, this was natural. My brain was jailed and now it wasn’t. Like Morgan Freeman in “The Shawshank Redemption”, I was institutionalized and now I was free and freaking out. With so much freedom, what does one do first? Once your brain is free, you can get busy living.
(get busy living)
So I focused on my job and in my free time read a lot and got obsessed with ideas. I started writing down ideas every day. About anything. Mostly the company I worked for, and then new ideas to consider someday like things I want to build, people I’d like to meet or help. I’d throw all of those ideas out a few weeks after writing them down. Most were terrible. Something funny happens when you write down ideas: once they hit the paper it’s like there’s more room in your brain and ideas just start gushing out.
Many of my ideas are business ideas. There is nothing better than creating something and putting it out into the world for people to use. Money is great. We all need it. Seeing creations come to life while getting paid for them is an indescribable feeling, but it’s rare because that’s not how we’re taught. We’re taught to work for the people with ideas, not create them ourselves.
Ideas are hard to start when you aren’t sure what to do with them or where to go next, so I started doing something else.
I sought out people I thought had the secrets to the future. These people were the rare ideamakers. Many were wealthy, had started companies, went from nothing to something, were covered heavily by media and their stories were well known. They, I was sure, could tell the stories of how they did it and maybe I could steal their methods.
So I started connecting. I’d send notes, comment on blogs, ask mutual friends for introductions or send an honest message on LinkedIn asking to connect.
Once connected, I’d tell them what I was doing and ask for a short conversation – no more than ten minutes – during which I had three questions in the area of ideas and innovation that I’d like to ask.
I was shocked to find that people actually care. They want to give and help. The secret they know, is if they are a conduit to others, giving to those that are creative, unselfish, proactive (my friend Casey calls them Doers) and sincere, that they would get back many times what they gave. Like Kevin Systrom giving us Instagram, a platform that helps our horrible photos look better so we can more easily share them, we gave him billions of photos per day, hundreds of millions of users, that brought him a $billion along with respect and fame in the developer community. This is the power of ideas. They start small, like experiments, and if they go well, they grow out of their petri dishes until they cover the earth like oxygen.
I connected with CEOs, VCs, entrepreneurs, investors, ideamakers, creatives, writers, connectors, influencers and filmmakers among others.
And that led to more clarity and ideas and inspiration and excitement. I found that my relationships were getting better, my thoughts clearer and my energy higher. Like a snowball.
Since I was spending time connecting with people, cultivating my health and creativity, the snowball was getting big and there was more to share. I got more deals done at work and had more financial security.
It’s hard when we’re just getting by, or even doing well, not to be selfish and concerned about what we’re going to get out of a deal, conversation, job or any effort that we put forth; we are concerned with our own hunger. When we have a lot, we let others have a taste of our kill, but when we’re just getting by it’s hard not to hold onto every little morsel.
When I started to realize that for every idea I gave away or helped someone else with, I would have 10 more ideas, I got excited, even giddy, about giving away ideas. I was full and since I was full, I could give without worry about receiving.
But getting started was the trick. So I connected with James Altucher on his blog and wrote a comment.
James recently published “Choose Yourself: be happy, make millions, live the dream”.
I preordered it and it arrived just prior to my flight to Beirut. I was over Switzerland when I turned the page and saw this:
(I hope this technique works for you)
James had included my comment in his book because it’s a technique that works.
His book is now a Wall Street Journal bestseller and I became a bestselling writer. People all over the world are benefitting from the technique I wrote, and I’m happy if it helps them. Maybe it will help you? It helps me every day.
(James’ book made me a bestselling writer)
James continues to give me advice on building things, and I’m grateful for his time and effort.
It’s been 18 months since I took back control of my life and filtered in the right people. Somehow I still know most of what’s going on in the world and am wayyyy more productive.
I’ve converted 28 hours per week from hypnosis to 28 hours of productive energy and experimentation. I launched two ideas (with more on the way) and the free browser app www.noppl.com, invested in a disruptive Chicago-based startup while advising three more companies on strategy and direction.
And I’ve also failed. I tried to launch other things that fell flat. I lost at a relationship with someone who didn’t reciprocate the same feelings and I had to step away. I wanted to help someone else who didn’t want help and it’s hard to see them struggle. I pitched at least 5 ideas to the company I worked for and they didn’t do them. I sent other companies at least 20 ideas and they all said “these are great ideas” but haven’t called me back. Those things hurt but being grateful is the basis I use to stay positive and happy through the ups and downs.
I’m not sure what will happen next. There are too many things I want to do and I’m not good at saying no, but the best people know how to say no. I’m working on it. I’d like to run 21 miles of trail every month in a new destination around the world, share ideas with people that need them and build something really great that matters. Spend more time with my family, find love, listen to great music, watch amazing sunsets, design cool things and hopefully keep myself financially secure. We all have dreams.
But it starts with silence so the ideas can shine through. And ideas start with saying no to distractions. And saying yes to the possibilities that are out there waiting, just outside of that numb comforter around you, preventing you from feeling the warmth and opportunities of life.
I used my technique and met my friend Kash. I’d love to know what you’re doing to create your own freedom in your life, or as Kash says, what you’re doing to #besomebody.
Google is a boring company. So are Facebook and Apple. Have you ever been inside these companies? A bunch of people crouched over computers talking bits and bytes. BORING.
(Pam Anderson thinks google is sexy)
Where will Google, Apple and Facebook be in fifty years? They may not be around, and if they are it is likely they’ll look nothing like they do today. Parts of these companies will fall into the abyss and be replaced by something else, or the whole company will disappear and be replaced by something better. Constant innovation is almost impossible under managerial change over long periods of time. Even Mr. Jobs agreed that technology is short-lived, making it very hard for companies to remain on top:
So where does that leave us? Most ideas fail. Most startups fail. In the long-run, most companies disappear. In the words of Paul Graham, “…the number of failed startups should be proportionate to the size of the successes”, which they are. This means the odds are not in our favor, the market is fairly efficient and profitability and adoption are unlikely. Every day I try to think of new companies to start and new ideas that will help owners of existing companies. I can’t help it. It’s like a disease. I’m obsessed with ideas. Most of these ideas are terrible. Most won’t matter in five years let alone five months. Many of them never see reality and stay on the pages of my notebooks. Some of them get started and a few of those become something.
(this idea became something. it cleans your facebook page)
After a year of writing down ideas every day I got frustrated and wanted to figure out how to make my ideas better so I could start better companies, or help existing companies implement lasting ideas. Putting the nuts and bolts together is really hard. Technology is especially hard because it changes so fast.
I thought maybe there are ways to make success more likely. We don’t need to be Mark Zuckerberg or Drew Houston, we’re just looking for a small piece of pie to make our lives secure and free. A small piece of a trillion dollar economy would be more than enough for most of us to live the rest of our lives. So I started researching.
Most people think of success as being the richest or sexiest company – the best of the best; the winner of all. Nike comes to mind. Apple, Tesla and Beats are all “winning” and these companies are SEXY. But how likely is it that you too can start the next-sexiest zillion-dollar company and win in your category? Pretty unlikely. That’s okay because success isn’t defined by one method, and that’s a lot of pressure to put on yourself anyway. We all know stress erodes us. Let’s avoid stress. My research pointed in new directions.
(professional sufer Coco Ho, thinks beats is sexy)
While considering the seemingly overnight success of sexy companies I sometimes get frustrated enough that a quiet surf break on a Costa Rica beach sounds like a good early retirement plan. When I get frustrated I seek inspiration and hope. I find hope in the history and stories of incredibly resilient businesses from around the world. Many of these businesses started small, with a single person or idea, and slowly grew to brands we know today, and many are still small companies that just persist every year. This was the core of my research.
My definition of personal success is freedom to choose what I want to do every day. Successful companies provide freedom to their owners by creating meaningful products and services (maintaining relevancy), maintaining flexibility and defensibility, producing profits (on average, not every year), building lasting relationships with their customers, and serving specific vertical markets effectively.
After reading a lot about company history I compiled a list of the most successful companies in the world. There are almost 2,700 companies. Old companies have a lot of insight into successful business models. They’re not what you might think, and they are not immune to disruption (newspapers, for example are in the midst of huge disruption), but they hold clues that can help us be smarter and better entrepreneurs.
What I call the most successful companies don’t include modern “tech” but fundamental companies that serve the most basic needs and problems. These companies feed, entertain, shelter, clothe, communicate, protect and help people. These companies may never be rich like Google or sexy like Nike, but they have soul, meaning and history, and they do pretty well (some of them are rich, but you’d never know it).
Going through the companies in my list, I started noticing trends. Withing my research I found ten common clues of building successful businesses. The clues point to things that may be useful in our own ventures, tech or not.
Clue 1: Stick to the basics. Make something that people always need; maybe it’s something new. Consider the underlying foundation of the business. Publishing, for example, is not about printing, but is about communicating. The underlying need is the reason these companies exist.
Clue 2: Be patient. Think in ten or twenty-year terms rather than a few months or years, and don’t ignore technology. Just because they’re old and successful doesn’t mean they can’t be disrupted.
Clue 3: Be unique. Serve unique customers or unique areas and markets; don’t be afraid to pick a niche. It’s okay if the business has natural constraints. Like a neighborhood bar, these businesses can be more than enough for what you need, even though they’ll never be the next Instagram.
Clue 4: Be reliable and trustworthy. Only reliable and trustworthy companies survive. You might fake something over the short term, but long-term you will be discovered as a fraud and disappear, even if it’s a slow death.
Clue 5: Be customer-centric. Focus on what the customer needs and not on what you need. Knowing what the customer wants and needs (even if they don’t know themselves) will ensure long-term success.
Clue 6: Simplify. Complicated business models rarely last.
Clue 7: Be an artist. Business models can be copied, art can be copied, but character is timeless. Be the artist. Always, as David Foster Wallace says, “Make Great Art”.
Clue 8: Love what you do. It takes time to build something, and you must believe in what you do every day. “You’ve got to find what you love” (thanks Mr. Jobs).
Clue 9: Focus. Pick one thing and stick to it. You will become the best and brightest of that industry and your chances of success will expand greatly.
Clue 10: Let go. You can’t predict the future with 100% accuracy. These companies did not know they would be the most successful companies when they started, and they can’t predict where they’ll be in another 100 years. Focus on the right things and let the success happen. Don’t ignore the obvious threats or valuable tools (like technology).
Of the 2,691 companies in the list I compiled and analyzed, the top ten industries account for 1,176. The top ten segments are sake, hotels, breweries, confectioneries, restaurants, wine, food (all food except those food items listed separately), newspapers, banks and distilleries.
(the oldest company in the world)
The earliest company still existing today is a hotel in Japan, founded in 705, the Keiunkan.
Some of the other oldest market segments include soy sauce, insurance, jewelry, construction, publishing, firearms, retailing, paper, tea, porcelain, watches, farms, bakeries, real estate and coffee.
(the oldest companies in the USA)
Only 286 are in the United States, and of those, the oldest by year is a farm (1632) but most are insurance or newspapers. NOT SEXY but what does this tell us? We’ll always be worried about things that could happen to us. Security is as important to us as food and beer is pretty high on the list (Yuengling founded 1829 in Pottsville). We like to have fun. Fun, safety, sustenance, shelter. Sound familiar? The basic needs of people have been constant.
Though tech is sought after because it scales quickly, there are some things that software just can’t eat, like food, beer and real estate (though it can change the way these businesses operate and compete). However, it is obvious that banks, newspapers, publishers and lawyers are all being disrupted as we speak. Old does not mean successful, but adaptation does.
This gives me hope. Though entrepreneur extraordinaire Elon Musk is changing the world, there are opportunities everywhere building businesses in industries that have served the needs of people for centuries. We can find those opportunities if we focus on the needs. It may not be billions, but it is probably more than we’ll ever use in our lives.
Old also doesn’t mean immune to disruption. Publishing, seventeenth on our list, has suffered severe disruption: no longer do publishers control the fate of publications, but I would argue it is the publishers that got lazy and forgot to understand their business at the core.
(Yuengling was founded in 1829, almost 1,100 years after Weihenstephan, the oldest brewery in the world)
Sometimes I get tired of hearing about the new Snapchats, Instagrams or Summlys because I know it is unlikely they’ll be around in ten years and I get jealous that I didn’t think of them first and make a few million. So I like to think about the meaningful companies with history like the 1,300 year old hotel where I can stay in Japan, or a 1,300 year old brewery (Weihenstephan Abbey, 768) that still uses the same recipe. With these companies I feel a connection, meaning and rich history. An experience shared with countless others throughout history, and hope that there are needs beyond fleeting. These are the most successful companies in the world, started with grain, water, ideas, blood, sweat and tears.
Honestly, I still love Google, Apple, Nike, Beats, Dropbox, Tesla and the disruptors changing the world in sexy new ways. I’ll always be a little envious that I wasn’t the mastermind behind those companies and revel in their success. Instead of copying what everyone else is doing, let’s consider doing something totally crazy: starting the next 1,000 year-old company for you and the next 33 generations. If it has to do with the basic needs of people, chances are we’ll be onto something.
Now, who wants a 200 year old beer?
p.s. for the spreadsheet of my research and all the companies within, email me at kcfaul@gmail.com and I’ll send it to you
future perfect 