10 Decisions Founders Have to Make
There are 10 Decisions Founders Have to Make when starting a business. Knowing these decisions can help you create a strong foundation and a thriving company. Patrick Bet-David shares his personal experience that have led him to build a very successful company. Subscribe to Valuetainment: http://bit.ly/2aPEwD4
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1. How to Choose the Right Business Partner: https://www.youtube.com/watch?v=RY0Bc-I1bAU
2. How to Raise Money as an Entrepreneur : https://www.youtube.com/watch?v=KB442EchOTY
3. Size vs Position: https://www.youtube.com/watch?v=xqHX3fDk360
4. 24 Ways to Build Great Company Culture: https://www.youtube.com/watch?v=PW-ivdroycc
5. Top 10 Marketing Books for Entrepreneurs: https://www.youtube.com/watch?v=ymOZyaNcEMo
6. Biggest Mistakes Marketers Make: https://www.youtube.com/watch?v=3JfWgFFr9S0&t=706s:
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10 Decisions Founder Have to Make
You’re going to have to make a lot of different decisions in your career as a founder and an entrepreneur but there are also 10 major decisions you’ll have to know how to approach. Being a founder is a different kind of a role, it requires careful thought and attention to the following 10 areas.
1. Do I partner with somebody or do I go solo?
By the way, there is no right answer here. There are certain people that probably shouldn’t marry somebody like your own personality. A lot of times when these partnerships don’t work, they don’t work because people team up with somebody very similar to themselves and that’s just. It just doesn’t work out and there’s a lot of times people go solo all by themselves thinking they can do it all and they can’t do it by themselves. Some people can win and be the lead guy, like a Jordan needs a couple of role players to go win, but a piddling can went on his own. He needed to have somebody else be a number one. You have to kind of realize, are you a number one person, two, three, four, five? What role do you best position yourself there?
2. Do you use your own money, or do you go raise it?
I decided to go make my own money, have my own money, build the business and then validate who I am in a marketplace. Then I raised money and did not give a lot of equity. Instead give equity to the people that are internal within the company. That’s the route I took, but that’s one of many. There’s a lot of people that go raise the money to build an incredible business. There’s a lot of people that go, don’t go raise money and they do their own money and they do very well. The biggest thing I’ll tell you, every time you hear these stories of what Mark Zuckerberg, he started a business and his friend Edward, $18,000 and that’s how they build it and what if we build it that way, but on the other side, these guys raise it in silicon valley, they raised $6,000,000, and what if I go that route? There isn’t a one story that fits for everybody.
This is important because you have to get very clear on who your customers are. The more niche and specific you are at the beginning, the better you’re going to do. Jeff Bezos and Amazon people say, well, Pat, look what Amazon does. They sell everything to everybody, but he started off in niche with books and then it spread. about Walmart? You know Walmart had so many different products. Yes, but the product is built for Middle America. Walmart is for Middle America. They got very crystal clear on who their product was. McDonald’s, before they messed up and they changed their identity, they understood their product was for kids; Happy meals. McDonald’s decided to start selling salads because there were not getting enough single woman going there. It was the first year where they’re stock didn’t do that well, and the profit margin wasn’t the same. Why? Because they forgot who their customer was. As the founder, you need to figure out exactly who your customer is.
There are three areas to technology but it’s really two choices. One is cheap and you either go through somebody that doesn’t really know what they’re doing. Number two is you go spend some money and build a real technology and you keep it. Now many will watch us and they’ll say, well, Pat, what if I start cheap and what if I white label and then I go use something of my own? That’s totally fine. A lot of people do that. We did that at the beginning, but I will tell you a couple of challenges you will face with that. If you all of a sudden start growing very fast and that technology company is not ready for you, you have a very big problem. You have to make the decision of at what phase you want to adjust and it’s all about timing because if you’re too late, you’re going to take a big hit.
As a startup founder it’s very important for you to know the location of where you build your headquarters. It’s location, right? A lot of different things you have to be thinking about, but this is a multidimensional type of a decision. I may get deeper into that for another video, but that’s location.
How are you going to differentiate yourself? Who are you going to be in the marketplace. Who’s going to be direct competitors of yours? They’re competitive, but you’re going to have to compete for market. How was it going to be different? You have to think about that. Like right now, if you’re a founder, you’re a CEO, you have to sit there and say, who are my direct competitors? And I know sometimes CEOs and founders don’t like to say somebody is their competitor because they can’t stand that competitor. You have to be very clear on who your competitors are and what they have and what they don’t. You need to know that this isn’t something you can just look away from and leave it to positive thinking. That’s not how capitalism works in a marketplace. If you don’t think about your competitors and what areas they have the edge, all of a sudden they’re going to take that market share away from you. If you allow that they may put you out of business. You have to know exactly how you’re going to differentiate yourself.
What kind of a culture are you going to build? What’s our culture in our sales office: is it very safe, is it very competitive? It’s like ESPN sports center where everybody’s trying to break records. That’s a very, very competitive type of an environment, right? Home Office is very collaborative and may be very different now at higher levels. The senior vice presidents or Chairman’s council may collaborate more, but it’s different than sales. Sales versus support versus home office versus different departments. That culture comes from you, right? What kind of an environment is it? Is it a fun environment? Is it a serious environment? Some of you may say, what do you mean fun or serious? A law firm is going to be more serious than a marketing agency. It’s going to be a part of your culture, party or personality that will bleed into the culture. You have to think to yourself, I would like us to be kind of like x, y, z minus this, plus this element that I want to add myself.
8. Compensation Plan
People will call me, and they’ll say, “We will pay you 5,000 thousand dollars if you can help us clear up our compensation plan”. No problem, I’ll spend a few hours with them and we’ll do that. I’ll give you a couple things for you to be thinking about. Minimum wage. What are you going to pay for, for your minimum wage people? Whatever part of the world you are in, what are you going to pay your staff and your executives? How are you going to pay them? How are you going to keep them? Is it profit sharing, bonus equity, what are you going to be doing? Your compliant will dictate the level of urgency and the kind of sales people you attract, and it’ll also dictate the kind of executives you attract that want to stay with your long-term. That’s your complaint.
9. Method of Marketing
What is it going to be: Word of mouth, digital, storefront? What approach are you going to take? How are you going to be going after people? Will it be purely on online with Facebook ads and YouTube ads? What are you going to be using when you’re driving your product out to people? There are so many different ways, but you got to get clear on it.
What is your story on how you came up with this idea? Was it a group of you? Was it some of your sales guys? Was it your peers? Why did you come up with this idea? People want to know what your mission statement is. What is your vision? What do you plan on doing? What problem are you going to be solving? Who are you going to be in a marketplace? That itself is your story and your identity. I can tell you myself, from the moment we started our insurance agency, I’ve told the story 10,000 times, that’s me low balling it. I’ve told the story tens of thousands of times to carriers, to people I want to recruit, to salespeople, to staff, to clients, to potential clients, to investors, to some vendors, to so many people, to media, to the market, to everybody. You keep telling that story, this your story, your identity is what you’re going to be saying for a long time, and people are going to say, “wow, that makes sense”. It’s interesting how you connect the dots and they came up with this.
If any of this stuff I covered today makes you want me to go a little bit deeper, send me a tweet and Patrick Bet David and let me know. We’re listening to you all the time. We want to hear what kind of content you want us to cover on Valuetainment next.