Jeremy Gray – Practical Solutions to Difficult Problems on the IBGR. Network.
In each episode, I will share with you the ideas, thoughts, and lessons I have taken from the latest books and articles written by the best business thought leaders on entrepreneurship. I will present concepts for you to evaluate and decide if they are right for you and your business. Some may resonate, and some you dismiss as nonsense, but each episode will bring you a fresh perspective on launching and growing your business.
Lessons from “The Minimalist Entrepreneur – How Great Founders Do More With Less.” By Sahil Lavingia
Season 11 Episodes 41 to 44. Beyond 100 customers. You have achieved Product Market Fit – What’s Next?
Episode 41 Marketing? Just be you!
Selling to strangers is hard; it’s much easier if you have a connection with your potential client. In this episode, we will hear what Sahil Lavingia tells us about developing your audience.
Congratulations by following the steps outlined in last week’s blogs which were part manifesto and part roadmap, you know how to build a community, a product, and one hundred customers. You have achieved product market fit. Note that 100 customers is not a hard number, it will depend on your business. If you are a coach, consultant or other solopreneur this number may be only 5 or even as low as 3. The point is that you have repeat customers.
This week we will look at the advice for the minimalist entrepreneur offered by Savil Lavingia on how to grow beyond 100 customers starting with marketing by being you. Sales got you to 100 customers, marketing will bring you thousands.
Marketing at this stage of your business should not be confused with advertising. Ads cost money and as minimalist entrepreneurs we only spend money when we must. Let’s start by looking at what we can do for the cost of our time. Most social media is free. Blog posts are free, Twitter, Instagram, YouTube are also free. So instead of spending money, you should start by building an audience there.
Last week we talked about the relative ease of selling to family and friends. The harder challenge of selling to your community who cared less about you personally and more about your products. Strangers do not care about you at all, and buying your product is not going to be a priority. Selling to strangers is hard, but it becomes easier if you can bring strangers into you audience and eventually turn them into customers.
A quick definition of your audience would be helpful here. They may be followers of your social media platform, your business followers, or your newsletter subscribers. If you are launching a new product or service how many people could you tell? That is your audience.
People do not go directly from being strangers to customers. Instead, they go from being strangers to being vaguely aware of your product, to slowly over time becoming fans of your product to eventually becoming a customer.
To build fans you need to scale up the work you did when building your community. Remember the story of Nathan and Chris from last week, how Chris was able to build a loyal following by sharing and teaching what he learned as he improved his business? You should continue this but on a larger scale. You are a larger business now, you have more to share.
Which social media platform should you use? Sahil’s recommendation is that you should try them all, to find out which is best for your business. Some people call this the spray-and-pray approach. You post everywhere and pray that you get some traction. I have learned that it takes time to post and to be successful you need to be consistent in posting regularly. If you have time to do this great, remember to reuse content whenever possible. If you prepare a YouTube video, use the text for your blog. Post short excepts on Twitter, and post an abbreviated video on TikTok. Preparing for this show I talked to a media guru. Here is what he said: Use Instagram to build your brand, YouTube for informational videos, Twitch if you want to live stream, although this community is focused on gaming, TikTok for short snappy videos and everyone should have a Twitter account. I am intrigued with Sahil’s advice and the media guru’s recommendation. I will build a media plan for my business. If you want to follow along with me, drop me an email and I’ll share my progress, or lack of it with you.
What should you post? Sahil’s advice is as follows:
People want to be educated, inspired, and entertained. In his book, Mr. Lavingia suggests that you progress in that sequence starting by educating your audience, then inspiring them, and finally the most difficult goal, to entertain them.
Level one – Educate. Not many people make the transition from being themselves to being teachers, but those who do build audiences quickly because people spend time on the internet in search of ways of improving their lives, a better way to live, learn, and to improve their income. By providing value for free, asking nothing in return. By attracting 100 customers you will have learned a lot, you can start by sharing that.
A word of caution at this point. Do not forget to focus on your business. Building a social media presence is a lagging indicator of the success of your business and should always be secondary to the business itself. Social media is a tool to grow your business, not the main event.
Level two – Inspire. Education is a great start but to get beyond your audience of students you need to inspire people. Provide them with the motivation and inspiration to change their lives. How can you do this? Sharing learnings from your journey, the ups, and the downs in a way that others can follow in your footsteps.
Level 3 – Entertain. People talk to others about things that have entertained them. Did you see the show on TV last night? Let me tell you about the game I saw last week. When it comes to grabbing attention entertainment wins. If you can attract attention by sharing something humorous. Sahil’s example is a line he wrote. Entrepreneurship – working 60 hours a week so you do not need to work 40 hours a week. If you are brave enough sharing your dumb mistakes in an entertaining way could be a good place to start. And if you are like me and have made many mistakes over the years, you should have plenty of material available.
This is best summed up by the three signs Nathan Barry, founder of ConvertKit has in his office: Work in public. Share everything. Create every day. Nathan has is own website nathanbarry.com which contains a lot of useful information. To access the site Ctrl&Click here.
Lessons from “The Minimalist Entrepreneur – How Great Founders Do More With Less.” By Sahil Lavingia
Episode 42 From e-mails and communities to profitability.
Make email the backbone of your marketing – maintain control.
Twitter, YouTube, Instagram, and Facebook can take away your business at any time by changing the algorithms, shutting down your account, or making you pay to turn up. Social media is a great place to gain distribution but you are building on rented land. Once you have social media followers, start building an email list.
Email is a peer-to-peer network giving you a direct line to your customers. This is not controlled by anyone but yourself, an algorithm, or whether you spend money. The author’s position is that when someone gives you their e-mail address they are your friend, not a stranger. But it is very easy to lose that friendship. You would not spam your friends so you should not spam these contacts either. I have had some bad experiences recently. Look I get it, a business owner has spent time developing a piece of useful content, or producing a YouTube video. If I want more, then I buy the additional information such as an e-book, with my email address. And I know I will get some follow-up e-mails and if they are not too frequent and add to my knowledge, provide inspiration, or entertain me that is fair enough. But sometimes I find I have opened myself up to a barrage of emails that are thinly disguised sales pitches. That’s not what I signed up for. I unsubscribe and no longer consider the sender my friend.
Just as described in episode 41, for any type of content you produce, ensure your emails first educate, second inspire and finally entertain. And only send out an email when you have something useful to say.
At first you should be able manage your email list manually but later you will want to automate the process. An email marketing service like Mailchimp or ConvertKit will help you gather the email addresses of your growing number of fans. And by all means give something in return, a PDF guide, a video, or a short book, to solidify the relationship. But then be considerate in your follow up and you will build a loyal following.
Remember consistency is important, if you have a newsletter send it out at the same time every week, or every month. The frequency should match the time you need to prepare relevant content. There is no need to post four times a week, if monthly is more appropriate to your business and your ability to deliver. When to send it out? There are many folks out there who claim to know the best time to send out a post on various social media. I Googled best time to send out an Instagram post and the first return was from Sproutsocial who advised
I suspect these are US times and they may be different in other parts of the world. Maybe they are right, but some experts claim that there is no right time.
If you can track the open rate on your email or measure the level of response over time, you may find the ideal time for your email.
Spend Money Last.
If you look at the business press, it is dominated by million-dollar funding and billion-dollar valuations, articles targeted at aspiring entrepreneurs, not people like your customers. In many cases, the growth, which has caught the presses attention is being paid for. Growth at all costs is the mantra, and often it is not sustainable. In season 6 show 10, I talked about the rise and fall of Fab.com. Fab.com achieved Unicorn status in June 2013, just over two years after its founding, only to collapse and by mid-2014 it was for all intents and purposes out of business. The company was a victim of the speed trap. If you would like to listen to that podcast Ctl+Click here.
Growth at all costs is not for the minimalist entrepreneur. You built your business to help people you care about. Your product is what you offer, not your ad’s promise. Your product is not for everyone, so do not try to reach everyone. If you are paying to get eyeballs on your product you are buying advertising and that can become expensive. Wait as long as you can before starting to spend dollars. Wait until you know what is working for your product and then and only then start spending money to accelerate.
When you do spend, spend on your customers first. I am a great believer in starting loyalty programs early in your business launch. Your early customers will likely be your most loyal customers, your product fits their needs, and they trusted you when you were an untried and untested business. Reward them for their loyalty. Do not think of your loyalty program as a marketing tool, think of it as a genuine reward. Offer discounts for leaving a business review or sharing on social media. Note good business ethics says you should reward both positive and negative reviews. If they do not like your product, a discount is not likely to be attractive to them. And keep in mind negative reviews, if they are rational, are a great source of ideas for product improvement.
Once your business is growing and sustainable you can start contacting local press and micro and nano influencers. Micro and nano influencers often carry more weight with their target audience than Macro influencers. You probably cannot afford a Macro influencer anyway. You are now established enough to give away your product for free to reviewers or have enough credibility to provide insights to bloggers and journalists. But most of all just tell your story, and be yourself, you have worked hard to get this far. You can inspire others that their efforts and struggles will be rewarded too.
Take advantage of the benefits that technology can provide in targeting your ads as closely as possible to your audience. The more targeted you can get, the less you must spend. This is good news to the minimalist entrepreneur who does not the budget of a Fortune 500 company or the well-funded start-up.
Lookalike audiences. This is a service offered by Facebook that they describe as “a way to reach new people who are likely to be interested in your business because they are similar to your best existing customers.” Essentially you ask and pay Facebook to tell the people who most closely resemble your existing customers, that you exist. Pinterest calls them “actalike”.
There are many ways to spend money on advertising, do not rely on it and spend your money sparingly. A business built through customer connection will be durable from day one. Certainly, more durable overtime than a business that is heavily reliant on advertising.
Spend your time to build relationships, have passionate customers who spread the word about your product or service. Then think about spending a little money to expand your business. Stay lean and grow at a rate that is comfortable for you, and never overextend your business.
What have we learned?
Episode 43 Life is like riding a bicycle. To keep your balance, you must keep moving.
At this stage of our business cycle, you are profitable and growing organically. Maybe this is the end game for you, you are earning a nice living for you and your family. But many entrepreneurs want to continue to see their businesses grow. And to stand still means to go backwards in this ever changing world. You do not need to grow like crazy, but you do not want to stagnate either.
As a minimalist entrepreneur you have built a business that you enjoy working on, it’s a pleasure to go to the office every day. But sustained growth presents its own set of challenges. One tool that may help you decide the best path for your business is the Ansoff matrix which I discussed in episode 29 of season 7. To listen to that podcast CTRL Click here
When a business fails, it is not usually due to a tide of unforeseeable events, it’s usually for a handful of reasons. The most common of which is running out of money. In his book, Sahil talks about how to avoid these mistakes.
The first piece of advice seems so obvious that it hardly needs saying “Don’t spend money you do not have”. But we live in a society where spending money you do not have is encouraged, consider the number of credit card offers you receive. So, it’s not too surprising that this extends to businesses too. The most important equation in business Profit = Revenue – Costs. But all too many entrepreneurs forget profitability in favor of product development, growth, hiring, fancy offices etc. When you first launch it is likely that you will have zero revenue and some costs. But how long can this be sustained? I think of this as runway, how long do I have before I need to be at least at breakeven. In his book Sahil quotes Paul Graham, founder of Y Combinator, saying he can size up a company by whether they are “default alive or default dead”. If the status quo of revenues and expenses is maintained, will the company live or die? Amazingly 50% of founders do not know the answer to this question.
Costs fall into two buckets, variable costs that increase or decrease in line with production, and fixed costs that remain constant regardless of the output, typically these include staff costs, buildings, etc. Note in my world there are no such things as fixed costs. You can always change fixed costs, sadly people can be let go, and leases can be terminated. But the best way to avoid having to reduce fixed costs is not to let them get too large in the first place. Some ideas put forward by Mr. Lavingia:
Do not get caught up in the hype of what a successful company should look like, keep focusing on what has got you this far, and improve processes that are not ideal. Keep an eye on your numbers.
Stay focused on what your customers want.
Your customers do not want your company to get bigger, they do not care how much money you make, they want your product to get better and for your company to stick around. Your customer should remain the focus of your company. Amazon has a nice way of thinking about this. At every board meeting there is an empty chair representing the customer and the voice of the customer. So, everything that is done with the customer in mind. Why is the product important for me? What value does it bring? Do we need this service or product?
Raising Money from your community.
Growing businesses – even minimalist businesses may need to raise capital at some point. Raising money can make sense if you know how you will spend it to improve your customers’ lives.
Shopify for example raised money several years after their business launch. Because Shopify was profitable , they could keep their vision aligned with their investors, keep the dilution low, and retain control of their business.
If you are doing business in the US consider Regulation Crowdfunding which allows a business to sell up to $5 million in securities to small investors. The learn more Ctrl+Click here
This is a new way of raising funding and the author of The Minimalist Entrepreneur used this in March 2021 to raise $5 million from over 7,000 investors.
A downside of raising money from venture capitalists is that you create two distinct sets of stakeholders, your investors and your customers. Also, you lose some control over your business as they begin to have a say in how you run your business, your expansion plans, and what return on investment is acceptable. By raising money from your customers, you have only one group you are responsible to, your customers.
Maintain your energy and your sanity.
Some folks say you must grow big to avoid being eaten by bigger businesses. This is just plain wrong. Some of the longest running businesses are small. These are often family firms or midsized enterprises that are content to grow within their niche. Being profitable allows you to grow at the rate you wish. It brings confidence, it brings you runway. Have the confidence to build the business you want, not what “common wisdom” tells you. It is the aggressive voice and their plans that grab the headlines and like Fab.com they often hit the rocks and sink. Smaller businesses that deliver an acceptable income for their owners and quietly delight their customers do not make the headlines, and that should be alright with you.
What have we learned:
Episode 44 Build the house you want to live in.
Define your values early and often. Values are not generic two-word commandments that state the obvious. They should codify what you believe, in place where everyone can see them and everyone can suggest changes.
Values should be an oral tradition. They should tell employees how to behave in normal and extreme situations. And they are effective because values stick in our brains, they are efficient and memorable.
Using Nordstrom as an example. For my listeners outside North America who may not be familiar with Nordstrom, it is a high-end department store noted for exceptional service. In an iconic story, a customer brings a set of tires to a store to be returned, even though Nordstrom sells clothes, not tires. The store accepts the tires and fully refunds the customer. In another case, a clerk unable to find the right pair of shoes for a customer recommends a competitor, Macy’s and pays for the additional shipping cost.
These stories tell you more about the service Nordstrom and their customers expect than a thousand-page manual on how to be a good sales clerk.
Knowing these values, a potential employee could know whether they would be a good fit for Nordstrom before they joined the company.
Values are not just for employees, you should communicate them to your customers, suppliers, or anyone else you expect to interact with, investors, journalists, bloggers etc.
Absolute clarity is essential, as a minimalist entrepreneur for many of the folks you hire, it will be their first job. Defining and communicating your values sets the expectations of how work will be done, and how disagreements will be handled within your company. They help hold your team together and provide a path for your team to hold you accountable.
Values become more important than any one individual, they will allow you to scale. You founded your business to control your environment, how you work, where you work, who you work with and who you work for. They will guide you when making difficult decisions, for example, when to drop a product or service from your business offering.
Establishing your company’s culture that aligns with your vision may prove to be harder than developing your product, but it will be more valuable.
People do not change jobs often and rarely declare that they are thinking of doing so in advance. By communicating your values, you will allow potential applicants for roles within your organization to say this is not the place for me, or for some this is exactly the place for me. Great people will only apply if they see a job that matches or exceeds their expectations of their ideal work life.
From the outset you should seek to hire people who are better than you. They are not there to just implement your vision, but to improve on it based on their interactions with your customers. Consider hiring from the ranks of your customers, you know they are already aligned with your values. Gumroad, a company founded by the author, prioritizes hiring from their customers.
As entrepreneurs, we are often poor at delegating. But this can be improved by developing a higher level of self-awareness. Ask yourself:
Once you understand the role for which you are hiring, you will be able to identify who will be a good fit. But maybe it will still need to be clarified. That is why it is essential to communicate your values and let people come to you. Your job listings should be a filter, not a magnet.
Hiring becomes easier, faster, and safer if you can do this well. Because you have built your business around your community you are well-placed to engage them when it comes to hiring,
In his book, Sahil describes in detail how he communicates his business culture within Gumroad. It needs to be more time to cover all of this in the time I have available, if you want to learn more then consider buying his book, which once again is the Minimalist Entrepreneur, how great founders do more with less. His methodology is working, as he says Gumroad has 48 employees, and they seem to be happy.
At this point you have achieved success. You have a meaningful business, delivering products your customers value, with employees who share your values and enjoy their time at work. It has not been easy and there have been setbacks along the way, but you have met your personal goals. And it has all come about by building and leveraging your community. What you do next is up to you. But do give yourself the luxury of time. Whether that is time to do something you have always wanted to do, such as take a world cruise, to write that novel you have always known was within you, or to start your next business venture. By following the ideas in The Minimalist Entrepreneur and or the values in Dorie Clark’s the Long View covered in episodes 33 to 36, you can build the business you want not the business everyone else is telling you to build.
The Geriatric Entrepreneurs bookshelf.
Over the last two weeks, I have provided a summary of Sahil Lavingia’s “The Minimalist Entrepreneur” Now I would like to share with you some other books I have found inspirational, and I hope you will too.
Two books come from the pen of Dorie Clark:
Firstly, “The Long View” in which Dorie reminds us that overnight success is illusionary and success comes from making small steps to success on a daily basis. On her website she puts it this way:
“We need to reorient ourselves to see the big picture so we can tap into the power of small changes that, made today, will have an enormous and disproportionate impact on our future success. We need to start playing The Long Game.
Dorie Clark explains, we all know intellectually that lasting success takes persistence and effort. And yet so much of the relentless pressure in our culture pushes us toward doing what’s easy, what’s guaranteed, or what looks glamorous in the moment. In The Long Game, she argues for a different path. It’s about doing small things over time to achieve our goals—and being willing to keep at them, even when they seem pointless, boring, or hard.”
Dorie provides a self-assessment for you to assess your strategic thinking skills. It is available here for the price of your email address.
The second book from Dorie is “Entrepreneurial You”
I recommend this book for consultants, coaches, etc because it reminds us that trading hours for dollars is a finite game. There are only so many hours in the day and you cannot work all of them. By generating multiple income streams you can escape the tyranny of the clock. Dorie describes her book thus:
“In Entrepreneurial You, it’s my goal to provide you with a blueprint for professional independence, including insights and advice on building your brand, monetizing your expertise, and extending your reach and impact online. You’ll learn the necessary elements and concrete tactics for entrepreneurial success. In the book, I share the stories of entrepreneurs of all kinds―from consultants and coaches to podcasters, bloggers, and online marketers”
The final book I would recommend you read is “Book Yourself Solid” by Michael Port.
This is a relatively old book but it has stood the test of time. I first read this book some years ago when I was considering entering the consulting world as an independent. As I chose a different path aligning myself with The CFO Centre I set the book aside. As I have returned to my original plan to be an independent consultant, I have revisited the book for the invaluable advice it contains. A philosophy I have always enjoyed is “Give, give until you think you have given too much and then give some more”
I have been inspired by these books to persevere as an independent consultant I hope you will be as well.
I am committed to helping entrepreneurs succeed. I can bring the experience of 30+ years of experience at the C-Suite level in an MNC from Europe, North America, and Asia. Combine this with eight years of helping a diverse range of businesses and I can provide you with practical solutions to any complex problems you may be facing.
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