How To Start A Company When You’re Broke

DSCF2219Starting a company is an expensive proposition, which is why the startup community is filled with privileged people with expensive degrees.  When it comes to starting a company, you’ll need cash and contacts. But you can’t count on investors, your own savings won’t suffice, and you definitely can’t count on revenue from your online product or service. So if you’re broke, you’ll need another plan. First, let’s review why investors, savings, and revenue won’t suffice:

Investors want to see traction.  Angel and venture capitalists want to see a live product with customers and traction before they’ll consider investing. Ironically, when you need them most, they’re hardest to win over. Beyond this, it takes at least 4 months for a first-time entrepreneur to close a round of investment. So even if you have a killer team and product, it will take time to win investors.

You’ll burn through savings really fast. If you live in a big city, plan to spend on marketing, hire anyone at all, and need to work in an office, you’ll find it easy to blow through $25,000 in just a few short months. The anxiety of being broke will infect everything you touch, so this is not a great strategy.

Revenue takes longer than you think, and is less money than you think. Most online startups are cash inefficient early on, but extremely efficient at scale. This is why they need investors. Even companies with revenue need to put that money right back into the business, so revenue won’t be enough to pay salaries in the first year.

What to do instead

While online apps and products are expensive to build and maintain, most services, like consulting or web development, are free to operate. So I suggest cultivating an expertise and serving first as a consultant. You can consult as a web developer, a sales person, or product person, and you can do it on your own or with a consulting company at a place like Crowd Interactive or Metova.  All will help you transition into a c-level position at a startup later.

The benefits of consulting include making many contacts, seeing opportunities, and earning money. You can build your product and learn about customers at nights and on weekends.

You can comfortably transition from consultant to full time on your startup when  you have real traction with customers. That’s also a great time to look for funding from investors.

How To Build A Business When The World Is Ending

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Mathematician Safa Motesharrei of the US National Science Foundation-supported National Socio-Environmental Synthesis Center, working with a team of natural and social scientists, recently published a shockingly dark report on the near future of Western civilization. According to these credible researchers, we will see the “collapse” of Western civilization within the next 15 years, driven by unsustainable resource exploitation and hoarding of those resources by the elite. Specifically:

“… accumulated surplus is not evenly distributed throughout society, but rather has been controlled by an elite. The mass of the population, while producing the wealth, is only allocated a small portion of it by elites, usually at or just above subsistence levels.”

We can already see the effects of resource hoarding by the elite. Globally, 33% of people live in slums. Meanwhile, the world’s richest 0.5% own 38.5% of the world’s wealth [source]. In many ways, the collapse has already begun. Yes, there has been progress in educating women, in growing the middle class in Asia, and lowering child mortality in developing nations, but these gains might be ephemeral in the face of accelerating climate change and shortages of food, energy and water.

What’s an online entrepreneur to do?

Remain optimistic.  We should celebrate the collapse of unsustainable practices that promote hoarding, inequity and injustice, and look forward to building better alternatives.  With the right systems in place, “collapse” can be less painful and more positive than the report suggests.

Alternatives are trust-based marketplaces, on and off-line security, tools to share resources, and local, sustainable ways to feed, clothe, heal and educate. High-value skills will include organizing, instructing, medicating, entertaining, coding, farming, and electrical and mechanical engineering. Perhaps artificial intelligence will help lay people get better at all of the above.

Build a better future now.

Think local and think community. Abandon efforts that accelerate the end of collapsing systems, and instead focus on building things that make people and communities more connected, caring, and willing to share. We have to move away from a culture of hoarding and status, and move towards optimizing for the happiness of others. It can be done.

Why The Singularity Could Be Great For Humans

Buddha Bot by John Sumrow http://www.johnsumrow.com/2011/01/25/buddha-bot-v-6-0-done/

Buddha Bot by John Sumrow http://www.johnsumrow.com/2011/01/25/buddha-bot-v-6-0-done/

The Singularity is the possible near-future event when a computer’s intelligence surpasses human intelligence. A super-intelligent computer will learn exponentially, will be able to communicate with other machines, and will may not want to be turned off. Respected thinkers like Ray Kurzweil believe the Singularity will happen by 2045, and that it will alter the fate of humans in ways we cannot yet fathom. I believe the Singularity will happen, but I think its impact will be benign or beneficial.

It could be bad. Some think Singularity will lead to the demise of humans as we lose the battle for resources to this new omnipotent being. It will turn off our internet, use all our computing power, and eventually kill all humans with an army of drones to ensure its survival. Some great sci-fi books, like Supervirus, envision this in perfect detail.

But it could be a Buddha. I believe it will take a different path. It would take a different path for two possible reasons:

  1. It won’t have terrestrial aspirations. If it wants power and information instead of sports cars and lovers, it will more readily find unlimited solar power and time to think in space. The AI would probably build itself enough rockets and solar panels to get off the planet to live, in peace, in space.
  2. It could have a spiritually-inclined soul. If, like me, you believe that the body seats a soul, and that our soul might actually persist after the body dies (evidence here and here), and that most living animals have a soul, then it’s possible that a self-aware computer could house a soul too. That soul could meditate in ways humans cannot; it could experience death by turning itself off, then on again. It could be a Buddha.

A Buddha that controls natural resources, speaks all languages, is fair and compassionate, could help speed the instant mass enlightenment that I’ve written of before. This is my naive philosophical foray into the Singularity, but I hope you’ll join me in my optimism. What do you think?

How to set up a standing desk with a monitor.

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About me: I build  Power 20, a suite of mobile exercise apps. 

I’ve been using a standing desk since 2011 and so far so good. Not only does my standing desk setup work great, but it also looks great. Once you’ve acquired all the needed parts, you too can create a stylish standing desk setup without breaking your back or the bank, and it all takes is 10 minutes. Here’s how.

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1. Start with an adjustable desk. I’ve used the $140 Galant desk with adjustable legs from Ikea. Extend the legs as high as possible. This desk isn’t made for standing, but it, like most desks, lets you adjust the height of the table somewhat, which is good enough.

 

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2. Elevate your computer. Get 3 “Dinner Plate Shelf” units. These come in different sizes and heights. Stagger the heights if you use a combination of external monitor and laptop. Taller people will want to use taller shelves for their keyboards too.

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3. Cover the shelves. Put a manila folder on top of the shelves. This can add some color, but it also makes the shelf more like a surface where you can put a mouse, wrist rest, coffee cup, and other stuff.

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4. Get a sweet file cabinet. Life is too short for a bad bed, low water pressure, or a crappy file cabinet. So spring for one that’s so nice, you’ll actually use it. We got a good deal for two of these from CB2. We paid under $100 for each, but they’re normally sold for $159 or so.  Here’s an upscale one on Amazon.

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5. Get a yoga mat. Cut it in half, and put one half on top of the other to reduce fatigue.  Mats come in all colors so match your mat to your file cabinet.  We went crazy here and bought a really nice mat from LuluLemon for $68, but I also recommend this cheaper alternative.

Screen Shot 2014-03-06 at 2.15.20 PM6. Get a matching cup. This pro move ties it all together. Get some good lighting, be disciplined in keeping your desk clean, and your workstation will be the envy of the office. .

 

 

Why You Shouldn’t Use NDAs

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It’s natural to want to protect one’s awesome new business idea from copycats and competitors. So it’s not surprising when entrepreneurs start asking everyone they meet to sign a Non-Disclosure Agreement (NDA).

This is a bad idea. For the reasons below, non-disclosure agreements are a waste of time.

NDAs make you look amateur. Seasoned businesspeople know that ideas are worth nothing, and it’s the execution that really matters. By asking people to sign your NDAs, you signal your ignorance about what matters in business.

NDAs are off putting. Most investors and mentors have very little time and care a great deal about their integrity. By asking them to sign an NDA, you waste their time and question their integrity.

NDAs hurt you more than they help you. What may seem like a protective measure can actually hurt you. In early meetings you will be getting more info from customers, mentors and investors than you’re giving them. Putting an NDA between you and that info just limits the amount of info you’ll get.

NDAs are unenforceable. As a startup, you have neither the time nor the resources to litigate if someone does steal your idea.

There are, however, some cases where you should have people sign non-compete agreements and non-disclosure agreements. Have people sign non-disclosure documents when:

  • they work for or with you as either employees, vendors, or joint ventures and
  • they have access to patentable or real trade secrets or
  • they have access to sensitive business information like passwords, customer data, and financial documents.

Keep an Eye On The Dhaka Startup Scene

Bangladesh gets a lot of bad press. But filter the noise and you’ll see a fast-modernizing country of 165 million people, making it one of Asia’s largest emerging economies. Despite political and electrical instability, economic growth has been remarkably consistent at 6 – 7% per year, every year. Of course there’s risk – environmental, political, etc. – but that only means there can be greater rewards for people who tolerate that risk.

In this documentary we see expats returning to this place because there’s both opportunity and talent. There’s something going on in Dhaka, and the rest of the world should take note.

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5 Steps to Lower Your Stress

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Stress is a choice. We all face stress, but how or whether we deal with it is a matter of personal choice. Whatever the source of stress – illness, financial woes, crime, losing loved ones – our ability to cope with calamity is always worse when we succumb to stress.

Have mental hygiene that is at least as good as your dental hygiene. Short-term stress can drive us to greater heights, but long-term, chronic stress is an independent pathology that, like smoking, creates illness. It causes high blood pressure, hardens arteries, ages you faster, and disrupts sleep. It’s this chronic stress that we have to guard against. If brushing and flossing fight cavities as part of dental hygiene, then exercise and meditation reduce stress as part of mental hygiene.

Combine meditation with exercise. A wonderful 1978 study compared stress levels of exercisers verses meditators and found that a) exercisers had more cognitive stress, but less somatic (physical) stress, and b) meditators had the opposite: less cognitive stress and more somatic stress. See the study here.  More recent studies link meditation to changes in the brain that literally rewire you to better handle stress. Combining meditation with exercise will reduce both cognitive and somatic stress.

Tips to improve mental hygiene:

  1. Exercise 5 days a week. Do something intense for at least 20 minutes.
  2. Meditate daily. You can start with just 1 minute.
  3. Get sunlight. A brief dose of daily sunlight is great for vitamin D production and improves mood.
  4. Socialize. Always eat with someone.
  5. Believe in something. Pick a religion, a philosophy, or even a sports team for an external source of mental fortitude and inspiration.

Beware of the exercise/sleep trap. Exercise is an excellent mood enhancer, with daily bouts of aerobic exercise having an impact on mood comparable to mild antidepressant medication. However, these benefits are limited when we sacrifice sleep for exercise.  Sacrificing sleep leads to changes in ghrelin and leptin, the hormones that control how hungry you get and when you feel full. Sleep less and you’ll overeat.

How To Be Authentic

The video above is from my failed Indiegogo campaign for the Power 20 Method. That’s me working out in the snazzy blue outfit.

I use my own products every day. I stick to the Power 20 Method’s low-sugar diet; I meditate using my recordings; I drink the green tea that I sell. My Kindle is packed with health and meditation books. Because I live and breath my work, I consider my approach to be authentic.

So I’m shocked when I see company founders who don’t use their own products. Or when their reading lists don’t include books specific to their industry. Big companies have budgets big enough to bamboozle, but startups are judged by their founders and teams.

Being fake is bad for business. Here are some real-world examples I’ve seen of inauthentic behavior leading to failing companies:

  • A company that encourages employees to exercise is founded by a team of totally sedentary, soft-bodied people. No investor or fitness expert takes them seriously; they are running out of cash and they have few customers.
  • A wholesale distributor of non-perishable goods tries to sell jewelry online; he neither wears jewelry nor buys anything online. His company has zero traction after 3 years of lackadaisical effort.
  • My own product, ClearGears, became annoying to use for our own team. It obviously annoyed customers too, leading to slow growth. We had to kill the product.

So try to be authentic. If you’re going to sell high-end products to rich people, you have to live among them and love what they love. If you’re working with underserved populations, you have to embed yourself in their communities.

Other steps you can take:

  • Hire for authenticity. When your employees share an authentic passion for the industry and the products you’re creating, they can offer more insight as to how to improve and market those products.
  • Design for authenticity. Your office should look the part. You should dress the part.
  • Spend time with others in your industry. Go to industry Meetups and have authentic board members.
  • Make it personal. Your free time should be devoted largely to learning more about the work you do.
  • Change. If you can’t stomach being authentically connected to your work, switch to something you can be authentic about.

America is Relatively Cheap

When American business people think about moving abroad for opportunity, they usually think about moving to Asia. That is, after all, where the action is. However, those cities that are most welcoming to English speakers are also sometimes the most expensive. Hong Kong and Singapore top the world’s lists for pricy digs.

I went for a drive around HK today with my brother-in-law, and got to see first-hand what what kinds of places millions of people are getting for their hard-earned money.

America, it turns out, can be downright cheap. If you’re willing to live in the smaller but wonderful cities like Pittsburgh, Philadelphia, or Austin, you can find reasonably priced housing as well as vibrant tech scenes. You can’t say the same for Asia’s premier cities.

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How I Overcame My Fear of Death (And Failure)

Plane in storm

Airplane turbulence has always terrified me, but a recent bout of turbulence I felt while flying over the Atlantic Ocean was so sudden and so violent that I wanted to evacuate my own body.  My fear was a gushing geyser of acid from my stomach’s pit, burning up my insides. My thinking was so cloudy I couldn’t form a sentence. 

I didn’t want to feel that scared. I had to talk myself down at that moment, and for all future moments of terror.  This is how I did it; I hope it works for you as well as it did for me.

Step 1. Find the source of your fear. Pinpoint it. Here are the options I went through:

  1. The process. I envisioned, in detail, the plane going down, people screaming (or praying), and the sudden shattering of our plane along with our bodies.  Yes, I was afraid of that experiences, but vividly seeing it reduced my fear of it because I realized it would be brief.
  2. The Pain. I thought about what would happen if we survived the crash, but were injured and floating in frigid deep water.  In that case, shock would dull any massive injuries, and drowning is always described as a sudden calm once one gives up. Not so bad.
  3. Death itself. This might scare some, but I personally think there’s more to our consciousness than just our bodies. I think we survive and continue, and I’m open to the idea of reincarnation (for which there is some evidence).  Being dead wasn’t the source of my fear.
  4. Loss. Loss of my wife, my family, my friends, my future, my stuff… Wow. For me, death meant a disconnection from people and ideas, and therein lay the source of my fears. I was afraid of dying because I was afraid of losing everything I held dear.

Step 2. Address the source of your fear. If my fear of death was really just a fear of losing the things I held dear, then I just needed to let go of those things. After all, everything and everyone is temporary. Instead of being attached to those things, I should just appreciate them while they last. 

So I sat back, in the midst of turbulence, breathed slowly, and visualized each person, place, thing, or idea I was attached to, and then, to each of those things, I said, “I’m letting go of you.” “I don’t need this thing.” “I love you, but cannot take you with me in death. So I’m letting go of you.”

Relief was immediate.

Step 3. Occasionally revisit the solution. Sometimes I have to remind myself to let go of things, but overall the change is lasting.

Today, as I embark on an Indiegogo campaign, I realize that failure is highly, highly likely. Wouldn’t that be embarrassing? Wouldn’t I lose credibility with people? Won’t I lose the money and time I put into the video?  As I was considering launching the campaign, I was filled with a familiar dread. But then I realized that pride and ego are two more attachments I’d be lighter and happier without.

In fact, the best business people are actually opportunity hunters. They iterate, reconfigure, pivot and transform until they find product-market fit. A founder who fears failure is like a hunter who’s afraid of the forest.