You won’t hear this from billionaire entrepreneurs, but learning from small online sellers could change the way you run your business
When I started my company 12 years ago, I decided to take it to a multi-million dollar exit. Startups have to think big.
Inside the swanky startup incubator, we founders gossiped about the recent multi-billion dollar exits of high-profile startups and bragged about the investors who provided the most seed cash. We were scientists, engineers, ex-executives and top management consultants. National magazines have portrayed us as an “elite” of young entrepreneurs with breakthrough technological innovations that change the world.
But after attending a local Amazon Seller Meetup, my perspective on business changed. By talking to resellers of gym mats and homemade candles, I was able to learn lessons I never heard from Incubator his clique.
They were ordinary people: students, machinists, bakers, clerks. About 2 in 10 had a college degree. There were no magazines written about them. Yet they were smart, pragmatic, efficient, and had realistic morale. Instead of changing the world or bragging about making millions of dollars, some of these sellers demonstrated an ingenious ability to build profitable businesses with an absolute minimum of resources.
I learned five remarkable lessons about starting a business from a seemingly “obscure” entrepreneur.
This was probably the most important startup advice I’ve heard.
An Amazon seller who sold gym mats and cut-and-dry fitness products said: “My clients are my best investors”.
Start with a small amount of money and make a profit as soon as possible. This is simple yet profound advice that many entrepreneurs often forget. Multi-billion dollar startups often say profit doesn’t matter. According to Elliott Brown, the attitude of Valley startups is to spend money, make money on steroids and worry about profits later. By spending billions of dollars on advertising and delivering unprofitably low prices, the company made huge sales without a profitable business model. The global market did not embrace the WeWork story when the company went public in its IPO. $37 billion market value ‘evaporated overnight’.
Most small business founders can’t afford to spend millions of dollars. If investors don’t have ample funds, they have to make money with very little money. They train themselves to be profitable and invest in their business as soon as possible. This way of thinking makes for a very robust business model.
I agree: no company is profitable from day one. But small business owners never say they’ve spent years and millions of dollars into a useless business model and haven’t made a single dollar in return. They expect profits in the first few months of starting a business.
The mindset of successful small business owners is to create cash, not burn it. My “high-profile” entrepreneur friend waved disdainfully when I mentioned the Amazon meetup. What do gym mat sellers know about actual product development and marketing?
Many entrepreneurs despise small business owners, calling them do-it-yourself little people destined to live at the bottom of the business food chain without the financial backing of the venture capital industry.
It turns out that the gym mat seller can tell you a lot about running a business. The fierce competition on Amazon is a tough marketing school that even top-tier entrepreneurs would envy. Learn how to use micro-influencers in your promotional campaigns, where to get the best shipping rates, and how to ensure the best product quality from your Asian suppliers.
Small online business owners are practical.
I can’t afford to hire expensive consultants or coaches. Instead, they learn every aspect of technology, experimenting with advertising during the day and studying videos and online courses at night. And when something doesn’t work, they throw it away and try something else.
Business realities force them to act quickly to survive and grow. They have often made their businesses successful by focusing on what works and avoiding risky and risky gambling. Their experiences and lessons learned help entrepreneurs understand how to build businesses that are both profitable and sustainable.
Learn from small online businesses selling products similar to yours. In the meantime, teach yourself every aspect of the business before running for investors or hiring consultants.
Some entrepreneurs use complex words to describe simple things. Some people use simple words to describe complex things. Who do you think will win in the end? We often get bogged down in complicated and complicated strategies. As a result, overthinking makes it harder to manage your business. Successful leaders don’t get too complicated. They are looking for ways to simplify and reduce complexity wherever and whenever possible.
Sitting at Starbucks, listening to Amazon salespeople talk about product strategy, I wondered why they were following a simple plan.
For example, instead of spending months prototyping a product, try selling a simplified version (or even a competitor’s product) first to understand your customers. They weren’t really into products, but more into what people bought. Small business owners didn’t have the money, time or staff to pursue complex and complex business strategies or develop cutting-edge products from scratch. In a way, the scarcity of resources meant things had to be made simpler, better, and more profitable.
Success often comes from focusing on the fundamentals of providing great customer service, delivering quality products, and finding simple, smart solutions to everyday problems.
It is here 7 Simplicity Principles of a successful business that you can follow daily.
We joked about the team. When someone asked us how we survived before we got investors and sales, we replied: we always found free finger food”
During my first few years, I loved attending startup events such as awards ceremonies, festivals and sponsored meetups. Who can say no to free beer and canapés? Onstage, the founders boasted about their stratospheric growth and staggering valuations. These entrepreneurial gatherings were fun, exciting, and calorie-rich.
But most of those events were circuses that taught me nothing about becoming a better entrepreneur. If anything, they boosted our egos, made us embrace the lure of “being an entrepreneur” and look down on other uninvited startups. It distracted us from the real work of developing, growing sales, and serving our customers.
Don’t get me wrong. Sometimes you just want a few drinks to clear your head, but celebrate the achievement, your goal, and your business. Instead of listening to other founders bragging, evaluate your team’s performance. Are these free meatballs and mojitos worth the distraction and wasted time?
If there’s one thing I learned at startup parties, it was to prepare myself. I ask myself: is there something specific to learn there? If I did, would there be at least three tangible benefits to my business? Meetups over the past decade where I answered a definite yes were the most helpful. The rest (minus the free meatballs) was a lost cause sinking cost.
Start your gym mat business on a tight budget in the crowded Amazon fitness equipment market. It’s a meat market, and your chances of success among the thousands of cheap Asian vendors are dwindling. Small business owners without deep investor capital quickly face this reality.
They quickly learn that the product doesn’t take off as expected. All products require a massive kick to move them off the shelf. So most of these sellers have already failed a few times and have an edge over other entrepreneurs in experience and humility.
My company is off to another start. Our team flew through the clouds for years without facing any real failures.
We spent some time in a lab equipped with a soldering iron and an oscilloscope. We discussed product features and marketing strategies, but we didn’t spend enough time with our customers. Time passed and our first product launch was met with crickets and weeds lazily rolling through our warehouse.
Please keep your feet on the ground. Defeat your fear. Test your product as soon as possible and as often as possible. It’s better to make a small mistake early on than a big one later.
Stephen Covey writes that you should always start with the end in mind. Imagine where your journey should take you — think big.
But whether we’re building the next big AI platform or opening a neighborhood bakery, we all start at the same point. We all start with the same issues and issues that require humility and common sense to build a business from scratch.
Yes, it was exciting to be part of a group of big-thinking entrepreneurs. We’re talking million-dollar exits and grand plans to conquer the world with our innovations. But you can’t put inspiration in your pocket. It also cannot be used to pay bills.
Aspiring entrepreneurs often look to successful business leaders for inspiration and guidance, but not all role models are created equal. Unicorns may seem like the ultimate goal for many entrepreneurs, but there are actually compelling reasons to seek advice from smaller, “low profile” founders. These entrepreneurs develop a more attainable and pragmatic approach to building a successful business, allowing them to reach their goals with greater confidence and success.
Entrepreneurship is a challenging but incredibly rewarding path. Remember to have all the cards in hand to make it a success.
- Keep things simple even when others say it’s complicated.
- Focus on profit early on because profit is the blood that keeps the business alive.
- Sell your product early because small failures early are better than big failures later.
- Educate yourself before paying for help.
- Celebrate your business. We don’t stand in the shadow of other startups.
Ready to boost your work, leadership, and productivity skills? Join our free mailing list.
