These are the critical things entrepreneurs need to know

I made a fool of myself in front of Tupac Shakur’s mom.

Her manager said, “Ok, show us what you got.”

I sat down at his desk. His PC was off. I said, “how do you turn it on?”

“You don’t know how to turn a computer on?”

“Well, I know how to turn a Mac on.”

“Let me get this straight,” he said, “You don’t know how to turn a computer on and you want to do our websites?”

“Well, I do everything on an Apple.” But he didn’t hear me. He was laughing. I packed up my stuff. I was red in the face. I was afraid because it was a $90,000 job and I didn’t know how I was going to make payroll.

When I walked down the hall I still heard him laughing.

When I got back to the office, everyone crowded around and asked me, “How did the meeting go?”

“Great,” I said.

Another time I was pitching a business. We were making wireless software.

I visited a big investment company. They were considering investing $5 million.

“How does it work?”

“Well the signal goes into space and then…”

Mahmoun, the investment manager stopped me. “I thought the signal went through a cell tower,” he said.

“Well, I said, “sometimes they do. But sometimes through space also.”

I had no idea what I was talking about.

I started a dating website for smokers.

It didn’t work.

I started a company where we offered real estate agencies videos of all of the homes they were selling.

I started a tea company. A rap label. A clothing line. A penny auction business.

I started a debit card business before debit cards were a thing. I started a delivery company where we delivered from every restaurant
in town. This was pre-web.

I was the sales guy, I answered the phones. I made the deliveries.

I hated all of it. I wanted to write a novel. I was obsessed with what people thought of me. I wanted people to think of me as an artist.

I asked Mark Cuban what passion did he have that he then pursued so he could make money.

“Money,” he said, “I was passionate about making a lot of money.”
—-
It’s been 32 years since I started my first business. I’ve learned a little.

I’ve seen billion revenue businesses crash within days. I’ve seen the most unexpected businesses sell for hundreds of millions of dollars.

Business is really hard. Its hard to find a loophole in time and space that’s big enough to fit money through.

My last business I started in 2015. We didn’t take any investment. Last year it made $60,000,000 in revenues.

I’ve sacrificed a life because of business. I was depressed for at least 12 years. My mom doesn’t speak to me. My two sisters don’t. I have no idea why they don’t. I always feel I am nice to everyone or maybe I’m just clueless.

In any case, I wish I had never started my first business. But I’m also glad I did.

Contradictions are fine. I wish I hadn’t been so depressed for so long.

I wish my older sister still spoke to me. I miss her.

Being an entrepreneur is going to shake your life. Good luck.

You will go from a paycheck every two weeks to being the sort of person who only eats what he kills.

I haven’t gotten a paycheck since 1997.

Don’t worry. It will all be ok. But it will take you naked to the jungle and you have to come out alive.

Here’s some advice to skip a lot of the BS that beginning
entrepreneurs make.

A) Service vs. Product

My first business was an agency. American Express was our first big
client. They needed a website. This was 1995.

I was dirt poor. I shared a 5 x 8 room with one other guy. We were kicked out when it turned out he wasn’t paying the rent, even though I
was paying him my share.

American Express gave us $250,000. It was just my brother in law and me and we made it and split the money.

I wrote some software to help me. We made 60,000 pages almost overnight. And I set it up so that they could check it and send
messages to me on each page of the website.

I didn’t tell anyone about my software. I was afraid people would think

I wasn’t’ working so hard because once the software was done, everything was easy.

What an idiot!

WordPress is software that helps businesses make websites. I basically made WordPress. WordPress is worth billions. Instead I got my $250,000.

Products are always more valuable than services. I didn’t know that then.

I didn’t know that software was scalable and so Wall Street valued it more. I thought, “they’ll value profits and I will make less money if people knew how easy this was.”

I was wrong.

B) Best new customers are old customers

When I finished HBO’s website I moved on to the next entertainment company. I was always out there selling selling selling. I should’ve called HBO and said, “I think I can solve this software issue for you.”

I had already done a good job for them. I had many connections at all levels of the company.But once we finished the job I moved on.

Now I don’t do this. Take my podcast. I’m not always looking for the best new famous guests.

It’s hard for me to find a great guest that I have rapport with. That I feel that instant friendship that is so rare for me.

Now I know, if someone is a good old guest, then they are always welcome to come back and be a new guest.

Life is to be lived, not sold.

C) People, people, people

One time Dave told me, “so-and-so was supposed to be there to help out. They never even called to cancel. I’ll give them one more chance.”

I told him, “Why? Never ever call them again.” People show you who they are right away.”

“But maybe I can teach them. Train them.”

“Did she ask you to be trained?”

“I know, I know,” he said, “But it’s good to give another chance?”

“Why?” I said.

“It just is.”

No it isn’t. 99.9999% of people never change. Maybe they aren’t bad.

They just don’t have the same agendas as you and you’re not meant to be working together.

One time I was doing due diligence on a company. They were the big buzz at that moment. They were the “Uber of Food Trucks”. I heard a rumor that the partners were bickering a bit too much o phone calls with investors. I said to my friend, “Don’t invest.”

He said, “Everyone loves the product.”

“It won’t work. If the two founders are arguing in front of strangers imagine what they are thinking of each other when they go to sleep at night.
The company failed in six months.

People have an energy. I connect with you. You connect with me. And it’s like we know each other. It’s like we can complete each other’s
sentences.
Or not.
Not everyone has my values. Or my agenda. That’s fine.

I had one boss. And I admired him so much. He was like a hero to me.

And finally I worked for him.

He was like a second father to me in some respects. But every time we had dinner I would say to my friend, “I always feel bad afterwards.”

Now I know. The “gut” is the only other part of the body than the brain that has neurochemicals (serotonin).

If your “gut” says “no” then listen to it. Else you’ll waste time, end up with an enemy, and lose money.

A business is made up of people. Your business will never fail because of the product. It will only fail if you have bad people.

D) Over promise and over deliver

I get emails, “I have a correction for you. I think you meant, ‘under promise’”.

No, under promising is lying. Don’t lie to your customers. Don’t lie to anyone.

If I say I can get the job done in 20 days but I know I can do it in five, then say five and deliver it in four. First off, everyone else is lying and saying 20.

You win the job by saying the truth (five).

And you push yourself and challenge yourself to do it in four.

You become a better person. The client is with you for life. And you exercise the muscle that pushes you to exceed your own expectations.

Otherwise you’re mediocre like everyone else.

Don’t be mediocre.

E) Execute fast and cheap

Don’t waste time building a product at first.

Get one person who wants to experience what you have to offer.

Sell them your services (Which will evolve into a product).

Just get one customer. Execution of an idea STARTS with the customer, not building the product.

The customer might pay for you to build the product.

But an idea is not real until someone says, “yes, I want it.” Else it might be a bad idea.

A business is an unlit match. Do whatever you can to light that match.

Set the match on fire and you’ll see the world around you in a new light. The world that now how your business in it.

F) Experiment every day

I started a social media business in the finance space. Every day we’d add new features.

Even after we sold the company, we wanted to prove that the other company made a good decision. We didn’t want them to feel bad.
So the day they officially closed on buying our business, we set up a

Q&A section on the site. Anyone could ask questions about stocks and anyone else could answer.

Our traffic went up 40% in one day.

We could’ve done this before and probably made more money.

I try a new thing for my business, my career, my creativity, every single day.

Like in science, most experiments don’t work. 99% of them don’t work.

But when an experiment works. Your life changes. If you never experiment, Your life will never change.

I said “yes” to doing standup comedy. My life changed.

I said, “yes” to buying ads in the back of NYC cabs.

The experiment: the ads didn’t point to any website or phone number.

There was no call to action. There was no branding. I just wanted to see what would happen.

“Why are you doing this?” the people said to me.

“It’s an experiment.”

“At least put a website address”.

“That would ruin the experiment.”

I don’t know if the experiment will work. But I don’t mind failing.

I make sure I do one experiment a day.

G) Be a voice in the industry

When I was building a venture capital business I didn’t want to be like the other 10,000 people trying to build a venture capital business. I learned everything I could about the industry. I didn’t have the right pedigree. I didn’t have a Harvard MBA. I didn’t work at Goldman Sachs and then start off as an intern at an older venture capital business.

So I read every book, listened to mentors, learned learned learned.

And then I wrote about what I was learning. I wrote every single day.

And soon people wanted to read what I wrote. I wrote for the Wall St Journal, the Financial Times. I wrote books.

It was hard to get people to listen to me at first. But I developed my own unique opinions. I became a voice that people wanted to listen to to hear an alternative to the normal BS that was on TV.

People became aware of me and wanted to hear about my business.

And it grew and grew.

H) The future is right now

I think genomics is going to change the world. Within 10 years, the healthcare you experience now won’t be anything like the healthcare you’ll see in the future.

But the technology is not here yet. Maybe it’s five years away. Maybe it’s ten.

And I’m not a genomicist. Or a scientist of any sort.

So what? I’m not going to let things like: the technology doesn’t exist and I have no qualifications, stop me.

There’s plenty of ways to start a business right now:- start a hedge fund investing in early stage companies. Or advising hedge funds on these companies (write a report)
– Write an industry newsletter about what you are seeing at the cutting edge conferences
– Write a book about the technology. Start a podcast. Give a TED talk about the future of genomics.
– Don’t complain. Don’t say, “I’m not qualified.” Don’t say, “it’s way in the future.”

If you are passionate about something, you can find the business opportunities right now and then you’ll be first and you’ll make a name for yourself.

I) Don’t smoke crack

I had a friend who was so excited about his business. He was a smart guy. A genius. He could always look at a business and tell me if it was going to work or not.

Except for himself.

He had what I call, “Smoking Crack Bias”. He smoked crack about his own idea. He thought it was great and it was impossible to convince him otherwise.

Whenever I have a business I ask myself every single day. Is this good. Why? What problem does it solve? Who really wants to pay for this?

This is a REAL bias and 100% of people get it. You can only fight it as best you can but you have to fight it.

J) List your options

So many people have an idea and then they think, “This is my
business.”

My approach is: experiment with many ideas. Don’t just start one business and throw everything you’ve got into it.

Don’t waste one of your precious years devoting yourself to just one idea.

View your business idea as “the wheel”. A wheel has many spokes.

Experiment with all the spokes.

List your options every day. Practice that muscle. 10 ideas a day.

K) Build community

Be in touch always with the people who want to hear what you have to say.

Only talk when you have something unique to say. Otherwise, listen.

This was the most important advice I ever got about business. I started my list in 2012. This list is my friends, my family, my customers, the way I’ve made the most amount of money.

Start it now and it builds over time. Trust me.
——
But most importantly, be around good people. The ideas are there.

But nobody is a self-made millionaire. Sometimes you need your superhero team in order to save the world. Rarely can you do it
yourself.

My latest experiment didn’t work.

set up a GoFundMe to buy Greenland. So that no one country could control it, given its immense natural resources.

I got some attention at first but then GoFundMe shut it down.

I decided not to pursue it further. But it forced me to: A) learn about crowdfunding. B) learn more about Greenland. C) figure out how to get media on a crazy idea.

So the experiment didn’t work but, like all good experiments, I learned something. “I don’t understand,” someone might say. “Was this experiment to do a
business?”

No. This was an experiment to make me a better person and maybe change the world. Onto the next one.

James Altucher is an author and angel investor. You  can find more of James by listening to his top-ranking podcast.