Scott Rafer’s 5 lessons for Entrepreneurs:
- Make the first startup simple and small. Make a million or two and get some leverage.Sexy sucks. boring is always better. If anyone thinks that they can get laid competing with you, it will screw up your economics.VC deals are mortgages not partnerships. Stick with angels as long as humanly possible.Demand chain integration is cheap. Supply chain integration is expensive. You’re the founder. You want cheap. See # 3.Employees 11-20 don’t normally raise enterprise output. Small teams create the most value per person.
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{ 13 comments… read them below or add one }
I was asked to clarify point 4. I had specifically made it MBA jargon as the info request was for a Tuck alum speech.
“Trying to fix the customer will cost you at least half your company in VC. Focus on making your offer look like what the customer already buys.”
So from the other comment about #4 is that your pricing better match the set expectations of the customer rather then some new model that they are less likely to accept/adopt?
I am fighting this questions with our new product and we go around and around with the models. And each time we balance simplicity (for us) to what clients have come to accept or tolerate.
I have also heard that many other successful entrepreneurs explain they wished they had played with the pricing models more in the earlier.
very nice and interesting good luck
Hi David, I saw you came to my site via MyBlogLog, so I checked out your site. This post caught my eye, especially #2
“Sexy sucks, boring is always better.” Not sure what the second sentence is referring to, but the first is worth it. It's like Warren Buffet investing logic: don't try to make money though buying and selling, shooting for huge quick gains. It's sexy, sure. But if you invest with a boring strategy of “make money slowly over time through purchasing good companies”, it works.
simple lesson, but I think I (we) always forget the first Lessons. I always try to make it big from the beginning, and the result is, I never end up with a good result
. Thanks for this tips, I'll start with the first lesson, hope I'll get best result
I like points on #1 and #5. Starting small usually yields effective results and small workforce yet efficient has the most value in the company.
no doubt about it small works every time… scale when the model works.. IDEATION, Business Design, Business Launch and Service are four different paradigms that require different skill-sets at each stage. My advice to anyone is never give equity to early adopters unless they are prepared to go the full hog.
Boring is always better, i beg to disagree, how can you get customer with this?
It sounds good,
but the question is that does it works for all?
Thanks
Great read
The test of courage comes when we are in the minority. The test of tolerance comes when we are in the majority.
the second pint is the best. The sexy sucks
You speak the truth my friend. I like 1 & 3 the best. I didn't know there was true data behind #5 but it isn't shocking,