The Minimalist Entrepreneur – Sahil Lavingia

The Minimalist Entrepreneur, written by Sahil Lavingia, is a book that advocates for a minimalist approach to business. It focuses on the idea that successful companies are those that can do more with less, and that entrepreneurs should strive to minimize their costs and maximize their profits. 

The book provides advice on how to create a successful business without spending a lot of money, including focusing on what is essential and cutting out the non-essential, learning to prioritize and delegate tasks, and understanding the importance of iteration.

Additionally, the book includes case studies of successful entrepreneurs who have found success with minimal resources. Finally, the book provides guidance on how to adjust the business model quickly and effectively in order to remain competitive.

This book is a manual to help design, build and successfully grow your own minimalist business

Do it yourself

• Bias towards doing things manually before creating systems and processes
• Use your time and expertise instead of software. document your minimum viable process so you can figure out what works/doesn’t
• Do one thing well (solve a real pain instead of creating a nice-to-have)
• Productize your process – after proving your minimum viable process sells/solves customers’ problems, turn it into a product that you can sell

This is where you can automate each individual task so that people can do your process without you being involved (e.g. sign up, use, pay for it etc.)

Add constraints so you don’t try to do everything perfectly at once – in the early stages, create something good enough and deliver value quickly to customers

Pick the right problem to solve

Don’t invent problems – find a problem that your community actually wants to solve before starting a business

People value four things:

• Place utility – make something inaccessible accessible
• Form utility – make something more valuable by rearranging existing parts
• Time utility – make something slow go fast
• Posession utility – remove a middleman

Alternatively – solve your own problems (chances are the community might share them)

Build the right solution – ensure your solution is something you’ll love, is obvious/easy to monetize, has an organic growth mechanism and fits your natural skillsets

Build as little as possible

After finding a problem worth solving for people worth solving it for, you need to figure out what is essential to build now and what can wait until you’re in business

Start by testing your hypothesis – every minimalist business starts by testing their product/solution with real customers at a small scale

Note – hypotheses’ must be testable and falsifiable (able to be proved wrong)

When validating a hypothesis,focus on the problem not the transaction:

• Don’t ask: “Would you pay for my product?”
• Ask: “Why haven’t you been able to fix this already?”
• Leave businesses that need lots of investment/can’t be tested to VCs
• Get started by going manual and doing one thing well

You don’t need to know everything in the beginning – learn what you need to know, leverage what you already know and delegate the rest – just get started

Running out of energy

• Overcommunicate with your cofounder – approach your cofounder relationship like a marriage (because it’ll drain you otherwise):
• Don’t start a relationship unless you really, really trust them
• Introduce vesting so that each of you earns your stock over several years
• Make sure you’re aligned on your values, what/how you want to build
• Plan for the possibility that one of you may leave
• Have the hard conversations as early as you possibly can
• Maintain your energy and sanity – avoid thinking you always need to do more, earn more or grow more

Your company grows as quickly as your customers determine it will grow – the number of hours you work often is not correlated with business growth

Grow yourself and your business mindfully

After you’re profitable and have an organically growing customer base, don’t get complacent – the world is constantly changing and you have to adapt

If you don’t, your customers will churn and your employees will leave

Two categories of self-inflicted mistakes to watch out for:

Running out of money

• Don’t spend money you don’t have – always be profitable and make more than you spend so your company can keep going forever
• Only pay yourself as profits allow
• Outsource everything using software -> freelancers -> full-time employees (in that order)
• Don’t get an office or move to Silicon Valley – it’s cheaper and less competitive to work remotely & build your company in a smaller city
• Be incredibly disciplined with your expenses
• Stay focused on what your customers want – everything your business develops/creates should be scrutinized in the eyes of your customer
• Why does this matter for the customer? What value does it bring?
• Raise money from your community – using regulation crowdfunding (if legal in your country) instead of raising from VCs or calm funds

Red team yourself

Every time you want to build something new, ask yourself:

• Can you ship it in a weekend?
• Is it making your customers lives a little better?
• Is a customer willing to pay for it?
• Can I get feedback quickly?

Alternatively – you can also freelance if you’re not sure what product to build.

Ship early and often – take feedback and iterate frequently so you can learn from your mistakes quickly and correct your course until you’re on the right track

Each time you ship, some customer goes from “I may want this later” to “I need this now”

Fit is two-way – if someone isn’t working out for you, you’re not working out for them.

Sell to Your First Hundred Customers

Once you have your MVP, you need to sell to your first hundred customers

The sales process is about discovery – you want to learn about what people want, why don’t they want your product, what’s working, what’s not and how to fix it

Decide on pricing – pricing decisions are subject to iteration – just start the discovery process, don’t worry about getting to the perfect result right away

You’re able to charge in two ways:

• Cost-based – adding margin to how much it costs to provide something
• Value-based – charging for the value you deliver (e.g. Netflix multiscreen features)

The goal – charge people for tiered levels of service (like economy, business and first class) – this happens when your offering has an established value/brand

Steps to becoming a minimalist entrepreneur

• Profitability first – create businesses that are profitable at all costs
• Start with community – learn from markets/communities before building
• Build as little as possible – build only what you need to and automate or outsource the rest
• Sell to your first hundred customers – educate instead of convincing people – use selling to learn more about people’s problems
• Market by being you – people care about other people – share your stories
• Grow yourself and your business mindfully – own your business instead of letting it own you – don’t sacrifice profitability for scale
• Build the house you want to live in – set how, when and where you work based on your values instead of conventional wisdom
• Before you become an entrepreneur, become a creator
• Start creating things, then learn business (as a tool) – instead of starting a “business” and then creating later

Start with Community

Successful minimalist businesses start with communities they love to spend time with/on things they love to do – you can’t just be in it for the money

Pick the right community – focus on communities you care about for the long-term and are large/well-off enough to sustain a living but small enough to deter large competitors

These will usually be where you spend most of your time (online and offline) and where you feel most like yourself

Learn more and contribute to communities – join where the community meets (online and offline) and add value by creating content, showing your work, teaching and contributing to conversations by commenting/participating

Eventually, people will start re

Introduction

Minimalist entrepreneurs create sustainable businesses that are profitable from the beginning and have the flexibility to take risks to serve the greater good

Instead of prioritising “shareholder value”, minimalist businesses are focused on solving meaningful problems in their own way while making a profit.

• Venture capital businesses embrace growth (above all other metrics like profitability)
• The VC model needs a few huge wins (5%) to pay for all their losers (95%)
• Minimalist businesses embrace profitability, not growth, as the key indicator of success
• Being profitable means you have unlimited runway and can guarantee success

Build the House You Want to Live In

Before you hire anyone, you first need to make a company people want to work for – build the house you want to live in

• Define your values early and often – start small and grow from there
• Values codify what you believe, tell everyone how to behave in any situation and put it in a place where everyone can see (and suggest changes)
• Values supersede you, and allow you to scale

Beware of the Peter Principle – in every hierarchy (company), every employee gets promoted until they get stuck with the job they’re not good at.

Profitability means sustainability. Instead of treading water until a lifeboat comes along to save you—which is how many founders think about raising their next round of VC funding—it means building your own boat.

Sell it to the existing network

• Sell to people you know – you have little credentials when starting out so sell to friends and family and get them to fund, try, refer or help you with your product
• This is how your business grows – it starts with the people who care about you most and ends with people who care about you least (and more your product)
• Sell to your community – if you can turn friends and family to customers, move on to your community (by contacting micro-influencers and building relationships)
• Contact everyone who has written/shared anything about a similar business and ask for their honest feedback (and show your appreciation for their time)

Market by Being You

Once you have repeat customers to sustain your business without ongoing sales efforts (product-market fit), you can focus on scaling with marketing

Marketing is sales at scale – while sales is outbound and one-by-one, marketing is inbound and about attracting 100s of potential customers at a time (harder)

The best way to start marketing is by spending your time (not money) building a following (audience) online and offline

People don’t go from being strangers to customers in one step – they go from strangers -> being vaguely aware of your existence -> fans -> customers -> repeat customers through The Minimalist Marketing Funnel:

• Engage – people encounter your product (e.g. in their Instagram feed, forum post etc.) and most likely forget about it or “like” it
• Follow – eventually, they’ll get interested (not in your product), but in what you/your business has to say and they’ll “follow” you/check out your website
• Research and Consider – if they’re a fit, they’ll consider your product and evaluate its functionality, pricing etc.
• Purchase – if they like your product enough, they’ll eventually buy

Top of the Funnel – Social Media and SEO

Get started on social media by trying platforms (e.g. Twitter, Instagram, YouTube etc.) where your audience “lives” online and that most suits your personality

Teaching and sharing

Add value through teaching – share your work in public, teach everything you know and learn new things and create content regularly for the community

Eventually, you’ll be skilled enough to monetize what you know and have the community/relationships to serve as your first customers

The world will tell you to go big or go home, but I say go small at the beginning. And the smallest you could possibly start is to build nothing at all. Instead of skipping straight to software, stick with pen and paper

People don’t care about companies – they care about other people.

Be authentic online and create content with this framework

• Educate – provide value for free – build in public and share what you’ve learned
• Inspire – share your struggles, successes and show people what’s possible
• Entertain – just have more fun while educating and inspiring people – crack jokes, make people laugh
• Trust the feedback loop – as you keep sharing, you’ll collect more data on what works and what doesn’t

Middle of the Funnel – Emails and Communities

Building an email list gives you a direct line to your customers that’s not controlled by private companies, algorithms or advertising

Do the same with emails as any other content – educate -> inspire -> entertain

By collecting emails, the sale isn’t the end of the transaction between you and the customer – they become part of your audience and hear from you again and again

Bottom of the Funnel – Sales – now the customers buy.

Hiring looks a lot like firing yourself – look to hire people who are better than you from the beginning

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