Thread by @alexhillman

Seen a few friends do these (@patio11 and @sol_orwell most notably), so I’m gonna try too!

I’ll reply to this tweet with one-opinion-per-like (up to 100) on the topic of creating sustainable businesses.

https://twitter.com/vgr/status/1205357296714280962

1. Most people pay way too much attention to things that matter exactly zero (things like press, awards, drama, and hype) instead of their customers.

Going into 2020, try auditing who and what you’re paying attention to. Cut TWO big things that you’ve let distract in the past.

2. Brand can be a valuable business but creating a brand is not a first step for starting a business. It’s not even one of the first 200 steps.

3. Most people confuse "brand" with "marketing"

Marketing is a wide range of activities that help people are that YOU understand THEM.

"Brand" is the result of doing that right.

4. Too many people throw away opportunities because they aren't passionate about it, instead of doing the work and finding the passion in learning and growing.

Passion isn't an input for business process, it's an output.

5. Service businesses are 1000x easier to start than product businesses, but they're much harder to grow.

Almost all of the successful people I know started a service business, then raised rates to reclaim time, and invested that time in growing more durable revenue streams.

6. Everyone charges FAR too little when they start out on their own.

I think this is typically because individuals can't imagine asking for more and a client saying yes, but also because people don't actively consider who their best clients might be.

7. Most business decisions are relatively reversible.

If you have a decision that isn’t reversible, look for ways to shrink the decision into smaller parts so it’s cheap or free to undo if things don’t go the way you expect them to.

8. To avoid over engineering (and wasting time), try flintstoning everything before you build big fancy systems and automations.

stackingthebricks.com/the-fine-art-o…

9. I'm amazed by how many people who start a business either

A) build a fancy spreadsheet that massively overestimates their income potential cuz all of the numbers are made up, or

B) never do ANY math to reverse-engineer income goals into project and rate goals

10. If you listen to your customers’ needs and show up to do the work when you say you will, you’re ahead of 99.9% of businesses that exist.

It is not hard to stand out if you do both of these things and you’ll have more work than you need from referrals.

F, this is harder than I thought it would be! 😅 gonna take a break but I’ll keep going so keep liking that top tweet y’all.

11. Money psychology impacts the ability to build a sustainable business in a massive way, but most people haven't ever analyzed their own money psychology for habits and flaws.

E.g. if I gave you the assignment to make $5000 in the next 7 days, how would that make you FEEL?

12. There’s cultural obsession with investment as a mark of success, or even a milestone to celebrate.

However, most (like the vast majority of) businesses do not ever need investors to succeed, or worse, will fail *because* of the growth goals set by their investment.

13. Investors and investment is the most complicated financial device that exists.

Start simple: use every lever you have to earn money the old fashioned way, and then use that money to stair-step your way to the next earning level.

aka learn how to invest in YOURSELF, first

14. Every minute you spend chasing investors is time you could spend chasing customers.

15. It’s basically impossible for outside investment to NOT change your trajectory, but...most people only talk about it in a positive sense and I think that’s a massive problem.

16. Investors expect a return, so taking outside investment means you’re serving two audiences at once.

If you’re lucky, they both want the same thing. But what happens in situations and decisions when you can only serve one? Who wins?

17. Most people overlook their own customers as potential sources of growth capital.

This is a gigantic blind spot. Nobody wants you to succeed more than your own customers.

18. If your customers or clients are strapped for capital, ask yourself what else they can contribute.

Financial capital is only the most obvious capital. Don’t forget knowledge capital, social capital, human capital, time capital, etc.

19. Do you know where your money comes from? Like, WHY do you get paid?

Especially if you’re in a job and just starting a side hustle, this is a critical question to be able to answer.

20. People don’t pay you because they like you.

They pay you because you generate some kind of economic impact or upside elsewhere in a system that matters to them.

If you learn how that system works, you can figure out how to make more money.

21. Another recurring problem I see around money psychology is acting as though all income is equal.

Yes, all money spends (roughly) the same and when you have bills to pay it feels wrong to turn down work.

But not all money helps you achieve your biz goals in the same way.

22. The feast/famine cycle of freelancing is a symptom, not a cause, of an unsustainable business.

The first key to unlocking sustainability in business is learning to spot (or create!) more durable sources of income.

23. It feels good to land a giant contract or client. At least upfront.

In reality, when large clients make up too much of your revenue, they are a liability.

24. Freelancing with several clients, or a product business with hundreds or thousands of clients, is so much safer than a job (as long as you treat it like a business and not a hobby).

No one client or customer can own you, or subsequently ruin you.

25. Few things are more satisfying than the freedom to fire an aggressive or toxic client/customer because you know they only make up a small % of your revenue and can easily be replaced with someone who is kind and appreciative.

26. Just about everyone has dealt with terrible clients and customers, just like most people have had terrible bosses.

But on the whole most customers and clients are great.

27. If you mostly attract lousy clients or cheap customers, I have some bad news: you’re the common thread, so you’re probably doing something to attract them.

28. Things that attract crappy customers (eg demanding, flaky, short term thinkers) include:

- selling to vague audiences
- selling in marketplaces
- selling “quick fixes”
- pricing too low

29. Recurring revenue is the “holy grail” of business models, and yes it’s amazing, but it’s also 500x harder to sell than one off purchases.

Many people who try subscriptions as their first offering struggle or fail, as a result of this miscalculation.

30. A customer who buys something small, and feels good about what they bought, is likely to be a return customer if you give them a chance to buy again.

A lot of people forget to give their past happy customers a chance to buy again.

WHEW gonna take another break. Be back later with my next batch of opinions.

The first tweet in this thread has >50 likes so I’m going at least past 50, will keep going one-opinion-per-like (on that first tweet) up to 100!

31. Most long term success doesn't look anything like success in the beginning. Or even in the middle.

32. Most success you see is the result of being able to do the right thing long enough.

33. “Doing the right thing” seems like the hard part of this equation 👆but that’s mostly because people either want to get fancy, or because they don’t understand who their customer really is.

But that’s not really “hard,” so much as it’s just easier to live in your head.

34. The real hard part is when you’re “doing the right thing” but the results aren’t immediately large enough to be self-sustaining.

A lot of early successes look like failures just because the first success isn’t as big as you expected, or needed, to feel confident continuing.

35. Being willing to repeat yourself and your actions is a massively underrated way to succeed.

36. An inability to cope with boredom kills more successes than any kind of competition.

37. Lots of people get stuck on the idea of “audience building” because it feels like an abstract outcome of self promotion, and for a lot of people, self promotion holds serious negative connotations.

This is because most people have only seen examples of BAD self promo.

38. Audience building should really just be called “earning trust at scale”

Cuz that’s what it is.

39. Earning trust is a critical piece of sales.

Bad self promo feels bad because it skips that step of earning the privilege of asking for the sale.

40. Before you ask “what can I do to make more money” try asking “who can I reach that has money to spend?”

Try to name specific people/biz’s instead of broad categories.

Treat that like a brainstorm except instead of brainstorming ideas you’re brainstorming customers.

41. On the topic of “has money to spend” it is also important to realize other people spend money differently than you do.

Like I said earlier in this thread, odds are that you will underprice yourself because you do it based on what YOU would pay, not what they already pay.

42. It’s infinitely easier to get people to change *where* they already spend money than to get them to spend new money or even in a new way.

43. Most people treat their small business the same way they treat a job, except in all the wrong ways!

E.g. they wait for someone else to recognize them with a raise, instead of looking for ways to create more value and then asking for more compensation in return.

44. Where you SHOULD treat your business like a job is around discipline and consistency.

E.g. if you regularly didn’t work because you “didn’t feel like it” at a job, do you think you’d have that job for long? No, you’d be fired.

Treat the work you own with the same respect.

45. When something in your business isn’t working, try doing a basic diagnosis before you move ahead:

- is this not working AT ALL or
- is a certain specific part (or parts) not working?

46. If you find something that works in your business, DO IT AGAIN. And again. And again. And again. Eventually, delegate or automate it.

Also set a reminder to check in once a quarter to make sure that thing is still working, and/or isn't creating other unintended consequences.

47. When you find things in your business that work, don't take them for granted. Try to understand WHY they work.

In addition to turning it into a sustained effort, you can also find clues for fixing or improving or creating entire new parts of your business.

48. I think people confuse "scaleable" with "sustainable" in business.

49. Bigger isn’t better, better is better.

50. At the halfway mark of this thread, I’ll point out that this entire thread wouldn’t exist without the first tweet.

That’s a metaphor for business, folks.

51. “Competition” is a reality of business, but 99% of the time it doesn’t look anything like people imagine it.

52. If you imagine another business that sells roughly the same thing as your primary competition, you’re probably wrong about them having any consequential impact on your business, let alone a negative one.

53. The only time that other businesses selling the exact same thing really matters is when they’re literally selling the *exact* same thing, or things that are readily interchangeable.

These are called commodities. Sustainable small biz’s don’t sell commodities.

54. It’s true that time is the most valuable thing you have (since it’s not replenishable), but it’s the most valuable to YOU, not to your customer.

55. Other peoples’ time is essentially the most common commodity in business.

Time easy to sell b/c demand is high, but difficult to price high for general tasks if it doesn't really matter whose time is for sale.

56. If you want people to value your time differently, you need to position your time as something *other* than time.

E.g. as a lever of knowledge or effort

This is counterintuitive and unobvious especially when you've been trained for corporate jobs.

57. To become a lever of knowlege or effort, you need to know where your clients/customers feel like they are wasting THEIR time and effort.

They aren't buying YOUR time so much as they are buying back THEIR OWN TIME, which again, they perceive as finite and valuable.

58. Your #1 competition is most likely to be:
- apathy about the problem
- uncertainty that you have the right solution for their needs
- attention (cuz they got distracted)
- awareness (cuz they don't know you exist)
- non-existence (cuz you didn't ship)

59. Unless you're an industry analyst (or you sell industry analysis) you are almost certainly wasting time by paying attention to what other businesses (who are not your customers) are doing.

60. If you're the kind of person who needs an "enemy" to be productive, don't choose another company as your competition.

Your customers' pain is the enemy. If you can't latch onto that, odds are, neither can your customer.

Top tweet just hit 100 likes so I guess I'm in this for the long haul. Just 40 more to go!

61. If you're young/new to an industry, one of the best habits you can cultivate is to work in public and document what you're thinking/learning/doing as you go.

It's perpetually valuable as a skill and an asset, and harder to start the longer you wait.

62. If you're trying to break into a new industry or segment, one of the best habits you can cultivate is to ignore the instincts around asking "dumb" or obvious questions.

This is especially hard if you're used to knowing what you're talking about. That's normal. Keep asking.

63. The longer you’re in an industry, "expertise" can become a liability if you can't tell the difference between feeling right and being right.

This only way I’ve found to overcome this is to recognize your own snap decisions and question them.

Trust, but verify, for self.

64. Instead of trying to be better than other people, just try to be better than the last version of yourself.

65. One of my most valuable business and life skills is separating my reactions (positive and negative) from my decisions.

Most of that comes from lessons I learned studying Buddhist teachings, and my own meditation practices.

66. Painful and scary situations are inevitable in business, no matter how much you've planned or prepared.

JFDI anyway.

67. Every challenge is just practice for how you’ll handle the next one.

Once you get through a painful or scary situation, you earn the ability to look back and realize...you made it through.

We tend to underindex that reflection, and underestimate our resilience.

68. The hardest parts of being in business long term are all people problems.

69. Extreme excitement - aka “irrational exuberance” - is an unreliable emotional state to make business decisions.

Also, nice. 😏

70. I regret not making tweet #69 about partnerships, but here we are! So...

A bad business partnership is MUCH more likely to kill your business than any form of competition.

71. Business partnerships are more like life/romantic partnerships, except more money tends to be involved and breaking them up tends to be more complicated.

Begin accordingly.

72. A great business partnership can be wonderful, but just like other partnerships, requires real effort on the relationship (not just the business).

73. Most business partnerships and terms are anchored in how things will be when things are GOOD.

A healthy business relationship is more about how things will be (and how you’ll treat each other) when things are imperfect, or even bad.

74. If you feel like your business partner isn’t doing their fair share of the work, and your instinct is to do anything other than talk directly about it with them, your partnership needs work.

You’re *allowed* to be afraid to bring it up, but consider what that means.

75. If you think YOU aren’t pulling your weight in your business partnership, but you’re waiting for your partner to bring it up in case they just don’t mind, you are definitely the shittier business partner.

76. Bringing someone into the business as a partner because they invested in the business is basically the same thing as marrying someone for their money.

If it works, congrats, but you’re not allowed to be surprised when it doesn’t.

77. It’s a lot easier to share equity than it is to share control.

78. Profit sharing is an extremely viable way to cut someone into the upside of a business without giving up equity OR control, I’m actually amazed more people don’t talk about it more often.

79. Most people should run a solo business before they even *consider* having a business partner.

Now that I have experience with both, it would take a lot to convince me to partner with someone who hasn’t run their own solo business (even if it wasn’t very successful).

80. If there’s a part of your business that you want someone else to do (because you’re bad at it or just don’t like it) that is 💯 great but you’re looking for an employee or contractor, not a partner.

81. Can’t believe I need to say this, but since I see it all the time:

Don’t make someone your business partner just because you need their skills but can’t afford to pay them.

82. If you can’t build the business you’re dreaming of today, build the business you CAN build today.

It’s still better than building no business at all.

83. You can never know which client or project or conversation or relationship will be the one that helps you achieve your next goal.

But you’ll also never know if you don’t ask for help from the people who have a reason to trust you.

84. If you are looking for your first clients or customers, start by asking yourself:

Where do they go when they have questions or need help? What resources do they trust? What communities do they belong to?

Then, go there.

But don’t go there to sell.

85. Marketers and sales people typically ruin these sacred spaces that your potential customers rely on for trusted support and advice.

So, uh, don’t do that. Don’t seek to extract value (eg talking about your stuff, link to your content, etc.)

Earn trust by being helpful.

86. If you only show up when you want something (e.g. their clicks/attention) you lose, but you’d be amazed how quickly you can have people contacting and referring YOU if they see you as a helpful peer and a community regular.

87. Believe it or not, this approach of ruthless generosity scales extremely well. Here’s how I do it as an individual. stackingthebricks.com/pick-your-brai…

I’m amazed that more companies don’t deploy this at scale. The closest I’ve seen is developer-focused tech companies doing dev rel.

(Note: if anyone has examples of this being done at scale, I’d love to see them!)

88. Try thinking of marketing and sales as two distinct processes:

Marketing is like “going to market” where you fill up your basket with insights, connections, relationships, and trust.

Sales is making strategic offers to people who trust you enough to buy.

89. If done well, teaching and marketing can be nearly indistinguishable from each other.

90. Almost all modern business books are written for middle managers, or as business-porn entertainment.

The most valuable books for business owners/operators aren’t business books. They’re books about human psychology and communication.

Ten more of these to go! Home stretch.

91. After the endurance of doing the right thing long enough, hiring is one of the hardest parts of business.

Like I said, all problems are people problems. 😂

92. In 2019/2020, almost every business function and skill you could need to support your business is available as an expert contractor.

It can be just as much work to find that expert contractor as a FT employee, but it’s much easier to undo if you get it wrong.

93. The two best scenarios for a first full time hire:

- a specialist to “own” and improve a specific part of the business that is extremely high value, freeing you up to work on other parts of the biz

- a reliable, adaptable junior who learns quickly and can become your #2

94. More companies can and should hire through apprenticeships.

95. You can still be successful even if you never hire a single full time employee.

96. Weirdly, these last 5 are hard but for a different reason than the first 10!

Now, the arbitrary ending feels like there’s pressure to end a certain way...

This is both true, and meta-commentary on the pressure people out on themselves to exit a business a certain way. 👀

97. It can feel like there is so much social/cultural pressure to grow and sell a business, but what if you just did the best job you could running it for as long as you wanted to?

If you have happy customers, don’t let anyone tell you that your biz is not enough.

98. You can pick any kind of business you want to run, but unlike a video game you won’t win extra points for playing on the most difficult mode.

Instead, use every advantage you have, however small they may seem.

99. The most likely thing to kill your business, is you. stackingthebricks.com/13-business-fa…

That also means the most likely causes of failure are 100% in your control.

100. People ask me all the time “do you really still enjoy running @indyhall 13 years in?” Same with @stackingbricks in year 9.

YES.

The “same” business doesn’t stay the same, so I’m still constantly learning and growing.

That’s why the long game is my favorite game.