The WhatsApp success story should come as no surprise to regular Daily readers. That’s because the company implemented most of Mark’s core methodology for creating successful businesses:
Limit Your Preparation: Before you start your business, make sure you understand what is required in
terms of time and money. And understand too how you are going to discover your “optimal selling strategy.” Do that but not too much more. Most small businesses fail because they never get started. Ready. Fire. Aim.
Be Frugal but Not Foolish: Spend as close to nothing as you can on all the nonessential aspects of the business such as office space, furniture, business cards, and—most importantly—branding. Use 80% of your cash for discovering the optimal selling strategy.
Get Operational Fast: The longer you spend planning your business, the less likely you are to succeed. That is not always true, but it’s still a good rule to live by. Don’t feel the need to perfect everything—including the product—before you begin. Your goal is to get operational quickly so that you can figure out how to bring in the cash.
Don’t be afraid to imitate the marketing strategies and product ideas of other successful companies. But always be sure to have some element in your business that is uniquely your own. In starting your business, you are in a race: Can you develop sustainable cash flow before your capital disappears?
Cash Flow First: Once cash is coming into your business every day, all other problems are soluble, because cash flow gives you the time to solve them. Cash flow is the oxygen of every small business. Do as the flight attendants advise: Get your own oxygen mask working before you do anything else.
You Are the Team: Don’t hire a big team at the outset. One or two partners/employees is more than enough. Keeping salaries low in the beginning has two important benefits. It keeps you alive longer, and it allows the core team to learn every important aspect of making the business successful.
Don’t quit your day job until your new business is putting more cash in your pocket than your day job. Be proud to be a “chicken entrepreneur.” Think Bill Gates and not Louis Borders.