An unpublished piece of advice for entrepreneurs I wrote back in 2011
A few years back I wrote blog posts on my Tumblr blog, but I never published them (I think I was 21 at the time). I’m republishing here on my new blog, nearly 5 years later. Back then I was still in the early stages of building PhotoWhoa, an e-commerce site for photographers which I’ve now sold. Looking back at this piece I realize my advice wasn’t that great, my writing wasn’t that great (it still isn’t), but for memory’s sake I’m posting it up here anyways.
A lot of entrepreneurs cite the lack of funds as the reason why they can’t start their business. Unfortunately, that’s because these entrepreneurs are really just wantrepreneurs.
A ton of huge Fortune 500 companies are bootstrapped (meaning they took no investment, at least in the early stages). Microsoft comes to mind. Facebook was bootstrapped early-on (with Eduardo Saverin’s $1,000) before getting funding.
My co-founder Eric and I, started PhotoWhoa with exactly $250 each, and it has grown in 5 months into a business that does tens of thousands of dollars in revenue. Nothing great, but it’s off to a good start in its first year and its growing.
The problem is that you’re not looking for the right business to start.
While it’s great to think big, sometimes you need to just get started. For a first-time entrepreneur, it’s highly unlikely that you’ll be able to make the next Facebook. BUT it’s not unlikely that you can make your first dollar in profit.
My advice is to start something that will either instantly make money or instantly fail (by instantly, I mean within a few months).
Everyone wants to make the next Facebook, Instagram, Twitter, Pinterest, or [name viral app], but very few of these people succeed. That’s because these sites don’t make any revenue or profit, and they continue by gobbling up tons of investor money. Of course, at some point, these sites make money, buttloads of money, but in the early years, almost none of them do.
Forget viral. Focus on making a business that makes money in a straightforward way. To make it even simpler: procure money directly from your users.
But you might say: “You need money to create a product!”
No you don’t!
With PhotoWhoa we found a formula for either instant cash or instant failure. It’s a daily deals site for photographers. It’ll either sell deals or it won’t, and if it doesn’t then we can move on quickly to a new product. Turns out, people absolutely do want deals on photography products.
We’re just two guys. We haven’t made any products. We decided to sell other people’s products.
But even if you can’t replicate our model, there are tons of other ways you can sell something without spending money. A service or consulting business is a good example. Forget about all the people that tell you service businesses don’t scale. It’s true, they don’t scale that well, but worry about that tomorrow, and make your first dollar today.
A good example of a service business success story is College Hunks Hauling Junk, which sells a junk removal service. The two guys started off just selling their own bodies (helping other people remove their junk) and scaled their company into a multi-million dollar business, hiring college hunks all over the country.
It’s true that my site PhotoWhoa might just be a lifestyle business. We were rejected by YC and didn’t raise any funding. So I admit that maybe I don’t have a 100 million dollar business on my hands. At the same time, I definitely have a potential 10 million dollar company, and I’m happy with that.