🚀 The Entrepreneur's Dilemma
How to choose the best business model?
👆🏼 You can listen here 🎧
⏳ Current status
👥 Active users: 1.545
📝 New Developments: survey ❓
⏰ Time it took to write: 6 hours 16 minutes
I am writing to you about a dilemma that has haunted me throughout my life. 😒
Sometimes it distracted me for less time, sometimes for longer. 😶🌫️
You already know about me; how competitive I am and how much I like to be the best at something. However, there is another side to me, the calm reflective type.
This would be fine if I wasn't building a big company in the process. 🧱
Because you have to make decisions and it doesn't matter what kind of company you build for yourself, because it will determine your lifestyle later on... 📌
But before we get started, let's look at... 🪓
🚀 How's the challenge?
🏆 You can win a Lifetime BookBase Membership
Simply put, if you're an active subscriber or have had a subscription at some point, just fill out this questionnaire. (ONLY FOR SUBSCRIBERS)
https://kerdoivem.typeform.com/to/sstUaiGZ
I'll show you what the rewards are:
📙 All completers will receive our Concentration Improvement Notion Temple
🥳 One lucky completer will receive a free BookBase Membership for lifeI think it's well worth the few minutes!
It's now or never!
We do it all to get to know our users better! So that we can understand what you should improve in the App! 📲
👕 The new OM Merch is ready
I'm going to post them now and hopefully next week they will be proudly worn! The inscription is the same: Education ≠ School
One of our followers, Ákos, pointed out to me that this could be offensive to teachers, which could have some truth to it. But in my experience so far, no-one has ever been told off for it, AND no-one has ever specifically agreed with it. 👨🏽🏫
The quote does not imply that the school is bad, simply that the school is not the ONLY education. It is learning outside of school! I am genuinely glad that some teachers could identify with it! 🙏🏻
🇮🇹 Edu on holiday
In sunny - I want to say monsoon rainy - Italy. Not far from where I was an exchange student! I'm already starting to detect the Italian traits in his writing. ⛈
He said he had an amazing time - although I could tell from the pictures. He had a great experience, and then "The Road trip" is coming soon! 🚗
💡 Side note: There weren't many bugs this week either, for which we gave him special praise. He did get 1-2 updates from us for the Slack Channel, so he'll have a serious thread once he gets home. 😜
🔥 Kokesz eats the giant
The Giant = Streak System
A brutally large task, cleverly broken down into small parts by Kokesz. Let's be honest, when you have 1 huge thing to do, you don't always have the spirit to do it. But if you break it down into small steps and get constant feedback, it can be quite an experience. 🧌
It's the same with Coke, I'll show you how it looks:
✅ Streak design
✅ Streak prizes
🟩 Programming StreakSo Kokesz is also on a big mission right now! 👨🏽💻
Okay, now we can get started! 🏁
💭 Why is it important to talk about this?
I don't think it's really necessary to go into the fact that work takes about 8 hours out of your life every weekday - more for some people - which is 1/3 of your day. 🌞
So, it's not a disadvantage if you spend that 1/3 NOT suffering, but doing something you also love. 🧡
So far, we're doing it, it wasn't too hard. However, the devil is in the details. 😈
How many times have you seen a billionaire who just rushes around all day and can barely put his work down. 😪
And how many times have you seen a "small" entrepreneur who is just dying to get on with life, even when they're working. 🤩
Of course, it's a multi-factor equation, but I'll try to point out the small part that has caused me a lot of headaches. 😓
If you are building a Startup, you can start 2 ways:
⚒ Bootstrapped: when you fund everything yourself and have no investors. This is also called Lifestyle business, for a reason.
🚀 VC funded: in young words, when older, wealthy investors fund you because they see it as a good deal for them too.
💡 Side note: It's important to remember that investors don't give money for everything and you have to meet a lot of criteria to get investment.
And that's where the dilemma hit me. ❗️
Because, you know, I value freedom the most, the freedom that no one tells me what to do. It's directly proportional to the Lifestyle Business that we're doing now. ⚒
The problem is I'm just too competitive and I want to show - mostly to myself - that we can beat the big companies. Because I believe we can! 💪🏼
However, the big companies have endless money, if we want to grow big, we have to go the VC route. Which can sometimes be a bumpy ride... 🤯
💡 Side note: Most young people, when they want to start a business, think they have to invent the new Facebook to make a living. But you couldn't be more wrong! "Small", "average" businesses are just as cool and can make money much faster. Just look at a plumber or an electrician. The clever ones bring home millions anyway. But it's just an "average" business in the eyes of young people. I have NOTHING against these professions and I have a lot of respect for the people who do them. Because I had a hard time even unclogging my shower... Thanks Nándi for the Facetime help (Nándi = one of my best friends, who is also a plumber)
If you don't know yourself well enough, you will make the wrong decision.
If you make the wrong decision, your whole life can go wrong.
Let me give you an example:
If I had been looking for investors from the very beginning, I might not have made it to the first level. Because I didn't produce results "fast enough". It would have discouraged me and I might have left the whole thing. And then there would be no OM, no BookBase and no Book. ❌
🧐 How can you judge which one you need?
This was perhaps most clearly stated in Lenny's newsletter:
If you want $100 million a year in revenue and a free life, choose the Bootstrapped business model. ✅
If you want to build the new Facebook and $1 billion a year in revenue, then an investor is "essential", so VC is the way to go. 🚀
That's a start, but making your decision based on that would be a bold one.
So, I'll write down the pros and cons of both. ❌
💡 Side note: It occurred to me on Tuesday that I have quite a few friends from different areas and I could easily invite them or ask their opinions on these topics. This was also here, - I wanted to ask my friend Joci Gyarmati - Head of Startup Mafia - to help me on this topic. I just figured it out so late that I wouldn't have finished this post until Friday.
🚨 Update: After all, I didn't bitch about it being too late, I wrote to Joci to quickly sketch his knowledge for us. If you like this line of thinking, I'll look for relevant people at other Posts.
✅ Advantages of Bootstrapped
Totally free life
No one bossing you around
You shape the business the way you want it
You can make a good living from a medium sized company
Less people to manage
Typical travelling, "party in Bali" business model
❌ The disadvantages of bootstrapped
You need money (sometimes a lot of it)
You need expertise
Much slower
Can be a huge headache sometimes
You are clueless in certain situations
Not much of a safety net, as you are "playing" with your own money
📕 Book recommendation: the book "From Zero to One" by Peter Thiel will help you get started! It shows you the pitfalls and possible solutions! 11 minutes in the BookBase! 🎧
The 5 biggest mistakes you can make with Bootstrap
Losing touch with your users
Not putting your passion and goals first
You become one of the crowds
You start growing too fast
You don't have the right company culture
5 examples of startups that have successfully bootstrapped in Europe
ExploCrowd
WLPayments
The Newsroom AI
Kidbrooke
Homer
~ The words of Joci
+1: Global company with Hungarian founders: brokerchooser (biggest Hungarian bootstrap success story) - if you want to interview them, there is a contact" - Thanks Joci I will take advantage of this opportunity! 😉
💡 Side note: Making the decision that you want to be an entrepreneur is not difficult. Making the decision to become an entrepreneur is! I have more than one friend who has wanted to be an entrepreneur for years, but is always dancing on the edge of the blade and analyzing, waiting for the right opportunity. This is called "paralysis of analysis" in English, but you know what, I'll explain more...
Analysis paralysis: the state of over analyzing a situation. In essence, the decision-maker overthinks and becomes indecisive.
One of my mentors told me a long time ago that I quote: 🤾🏼♂️
"Sometimes you just need to jump."
And, thinking back, how right he was. There will never be a perfect opportunity. ❌
I'll back that up for you with 2 stories:
When we were in Polignano a Mare with my Erasmus friends, some of them made us jump off the rocks... which didn't seem that high. Everyone was in, let's go! Then when we got there, they were so high and the waves were so big that no one dared to jump. Until I stood on the edge - I was brutally scared - and said it was now or never! - I'm not kidding, I'm getting goosebumps writing this... - Then everyone jumped. 🤩
The other is that when my friend and I started our first business - drop shipping - we had no idea what an invoice was, where to pay taxes, what the contract was, etc. Yet we made the decision to jump in head first and learned as we went. Yes, there were many conversations with the accountant or lawyer that made us look stupid, but we didn't care at all. The point was that we made the decision and jumped in! 😉
Once you jump, you give yourself the opportunity to succeed!
As long as you're just analyzing, you're not giving yourself the opportunity!
📕 Book recommendation. Michael Masterson's book, "Ready, fire, aim", highlights the factors that can make your start-up a waste of time. However, he also shows you the ones that are essential to progress! 11 minutes at BookBase!
And then with that cue, let's paddle over to VC waters. I wanted to put some serious puns here, but unfortunately nothing came out. It's no accident that I didn't become a poet or a humorist. Anyway... 🤦🏽♂️
✅ Advantages of VC
Incredibly fast growth potential
Almost "infinite" money
Best workforce
Serious relationship capital
Billion-dollar potential
Media attention
❌ Disadvantages of VC
Expect continuous results
You feel the pressure
In 5-10 years, they either want to take you public or sell you to another company to get a return on their investment
You have to give up a part of your company (sometimes quite a bit) - and there is no going back from there
It's more like a multinational environment
Much harder to travel with because it requires more attention
"I have to say that once you get on the venture capital journey, it's almost impossible to get off. Whereas, once you start with a bootstrap, you still have a lot of options to choose from, including VC capital raising."
~ Joci's words
To this day, I see starting with Bootstrap as a good thing on my part, as there was no pressure on me. Plus, I feel that whoever chooses the harder start, gets more experience. 💪🏼
You know, "The obstacle is the way!"
💡 Side note: Somehow, ever since I was in high school, I couldn't stand young people whose dad was loaded and he was a total bum. I'm sure it's familiar that he didn't even earn the price of a stick of gum, but he drives to school in a 10-million-dollar car or spends 40,000 in a nightclub.
And the best part is when his "friends" say to him, "huh, he's a real bastard" and he says, "I had to work hard for that!"
Sure dude, just not for you! 🤦🏽♂️
Now back to the Blog Post. For some reason, I used to identify VC startups with this personality type - my view has changed a bit since then, but it's still not my cup of tea. 😒
After all, there is endless money out there that he didn't work for. Because of this, he throws it around very lightly and if he doesn't get a result, he just spreads his arms. 🤷🏽♂️
Well, I don't want to impose my own subjective opinion on you, maybe I'm the only one who has seen bad examples. ❌
The above comparison gives you a more concrete picture and allows you to formulate your own opinion on the subject. 😉
And finally, we come to the usual checklist, I'll summarize in 5 points what I would do in your place before making such a decision. And Joci will help you out!
✅ What exactly should you do?
[ ] First step, find your own Ikigai. 🔍
📕 Book recommendation: the Ikigai, a wonderful book by Francesc Miralles, is one of the few that is not yet up in the BookBase. It is one of the few books in the library that is not yet available.
[ ] Step two, if it's there, see what you like better. Live a free life with lots of travel or build your new Facebook. ⚖️
[ ] Step three, talk to 2-3 people who have tried that particular business model. Preferably with both ends in mind, who has been successful at it and who hasn't. 💬
[ ] Step four, based on your decision above, go for the implementation! Be especially careful NOT to fall into the trap of analysis paralysis. 🪤
I show you what I got from a real Startup genius:
1. Know your market
"First of all, you need a good market to save a lot of money by not guessing. Do a market analysis by talking to your potential customers, trying to understand their needs.
It's great if you have an idea that motivates you to start a business, but if you want to make money, you need to make sure that this idea appeals to your audience. Do an analysis of the existing market and see what you are different at, what you can offer more of.
Often competitors and the products they offer can help you get started. That way you can see what you are moving towards or what you need to be different from."
📕 Book review: "Blue Ocean Strategy" by W. Chan Kim discusses this. It shows you step-by-step how to choose your market. A basic work in Startup circles! 12 minutes at BookBase! 🎧
2. Have a strategy
"Like many other businesses, we need a strategy as an action plan. The strategy should necessarily include goals and how to achieve them, as well as a timeline and financial plan.
This may seem very obvious, but our experience in the market suggests that most startup failures are due to founders not having a clear idea of what their startup offers, how they will implement their idea and what goals they want to achieve.
Remember that the strategy can always change because there are many unknown factors in a startup, but you still need a plan that can be modified later."
3. Build a team
"Find people who complement you. For example, if you can't program, find programmers like Kristóf did. If you don't know Marketing, find someone who does.
The key is not to sit idle and wait for everything to happen, but to proactively look for solutions."
4. Find a mentor
"If you have a good mentor who has been down the path, you're on, simply doing this "little" can multiply your chances of success.
It's important to look for someone with experience in the field! A successful butcher will not be able to teach you how to scale an online business. He is good at something else!"
~ Joci's words
[ ] Step five, learn from your mistakes and be persistent, because the road can be bumpy at times. 💪🏼
💡 Side note: There's a reason we said no to the last investment opportunity. We felt it wouldn't go with our current vision. But, as I mentioned above, it's possible that could change. It is also possible that it will stay that way forever. One thing is for sure, the dilemma remains, because I don't want an either-or, I want an is-is-. A free life and an outstanding business that is internationally recognized!
I know this was quite a specific topic and only a few of you may be able to incorporate the advice given. But I felt it was important to get a little insight and see what goes into it. 🔍
No matter how successful you are, there will always be obstacles.
And you don't run away from them, you solve them! 🙏🏻
🔥 Challenge
The biggest challenge for me now is to somehow prepare for the Road trip in advance. After all, we will be away for 24 days and we will be travelling around the most beautiful places in Europe. 🏔
So, it will be quite difficult to dedicate 8 hours a week to writing the blog. I'd like to work ahead and write the blog articles so that I only have to add updates there. Which is usually the beginning and end of the email you are reading now. 🤓
However, the biggest problem for me is finding good topics, so I ask you to help me with any ideas you have and post them on my Instagram (you don't have to follow me to write) 🆘
If I had the 3-4 topics to write about, I'd get started now and work ahead to provide the most interesting content possible!
📖 What have I just read?
A brilliant Reddit Post about overthinking. I was trapped in it myself back in the day, but luckily, I managed to get out of it. I can safely say I've used a lot of the tips below! 💭
I'm only halfway through it, but I'm already very much inspired by Clayton Christensen's writing. Who is also the author of "Innovator's Dilemma". It's a piece he wrote for the Harvard Business Review and it's called: How Will You Measure Your Life? ⚖️
💡 Side note: The reason I know I've gotten serious over the years is that I used to read Facebook, and now I read the Harvard Business Review. It's also been a big realization of mine this week that the more serious business leaders I talk to, the more the 3 letter acronyms and numbers come to the fore (CVR - conversion rate, CTR - click through rate, AOV - average order value). When I started Entrepreneur, I used to just brainstorm with everyone, now we tend to go around specific topics and try to help each other. I would add that both have their own beauty, but not everyone sees it.
🎧 What have I been listening to now?
I had a cool podcast with Zsolti on Talk About Hours. Where we talked about - not just - watches. Zsolti is a real "Swiss Army knife man", but you'll understand that as soon as you listen to the first 20 minutes! I'll link it here for you! (Hungarian) ⏰
I listened to MakeItCount's latest Podcast about Cybercrime and Stolen Cryptocurrencies. I think it's an outstanding Podcast on this topic, as it can invite experts I never knew existed! Definitely worth checking out: linking it here for you! (Hungarian) 💰
✍🏼 Top quote
"Strive not to be successful, but to be valuable." ~ Albert Einstein