How I Would Build A Business in 2025 (If I had to start over)

Key Concepts

• Entrepreneurship as a learnable skill
• The "Entrepreneurial Mindset Shift"
• Lifestyle Business: Fun, Freedom, and Flexibility
• Founder Opportunity Fit: Aligning personal background with business ventures
• 766 Apprenticeship: Learning from successful small businesses
• Pain, Prize, and Payment: Identifying profitable business ideas
• Asymmetrical Risk: Low downside, high upside potential
• The Digital Economy vs. the Industrialized Economy

1. School Didn't Teach You How to Be an Entrepreneur

• The traditional education system, designed for industrialization, conditions individuals to succeed within established systems, hindering entrepreneurial thinking.
• Example: The Prussian schooling system, established in the 1850s, emphasized uniformity, obedience, and regurgitation of information, preparing students for factory work rather than independent business ventures.
• Contrasting School and Entrepreneurial Traits:
  • School: Discourages disruption, attention-seeking, and teamwork (considered cheating).
  • Entrepreneurship: Rewards disruption, requires attention-seeking for marketing, and relies on teamwork (e.g., hiring a CFO).
• Children are naturally entrepreneurial but these traits are often suppressed by the school system.
• Good students are trained to ask for permission and follow schedules, while entrepreneurs need to challenge these tendencies.
• School emphasizes perfect answers immediately, while entrepreneurship is about iterative improvement.

2. The Entrepreneurial Mindset Shift

• Many aspiring entrepreneurs seek "business in a box" solutions, desiring to be told what to do, which is antithetical to entrepreneurship.
• Entrepreneurs are "shot callers" who create and innovate, not simply follow instructions.
• The 1 and 10 Rule: Entrepreneurs focus on the initial vision (step 1) and the final commercialization (step 10), outsourcing the intermediate steps (2-9).
• AI and Outsourcing: AI and employees excel at the intermediate steps, but entrepreneurs are needed for the initial vision and final value creation.
• Founder vs. Core Team: While not everyone is suited to be a founder, they can still benefit significantly as part of the founder's core team, potentially earning more than in a corporate job.
• Founder Traits: Requires managing complexity, working with abstractions, and visioning.
• Co-founding is often easier and more effective than solo founding.

3. The Lie You Were Taught About Business

• The traditional path of school, university, and a job no longer guarantees financial security.
• Jobs are becoming less secure and often fail to keep up with the cost of living.
• Example: Even qualified doctors are facing unemployment, and accounting jobs are being automated or outsourced.
• Smooth Road vs. Rough Road:
  • Jobs: Start smooth but can end rough (e.g., restructuring at 50s leading to unemployment).
  • Businesses: Start rough but can end smooth (e.g., acquisition offer leading to financial freedom).
• Myth of Business Failure: The 90% business failure rate is a myth. Businesses close for various reasons, including mergers and acquisitions.
• Asymmetrical Risk in Business: The downside of failure is limited (fast, cheap experiments), while the upside of success is massive (millions in value).
• VC-backed startups have a different definition of success (billion-dollar valuation) compared to most entrepreneurs who aim for a seven-figure revenue and a six-figure profit.
• "Wild success" (e.g., becoming the next Amazon) relies heavily on luck, while "mild success" (e.g., a six-figure lifestyle business) is achievable through skills.
• A business with six-figure profits is relatively insulated from broader economic fluctuations.

4. What a Lifestyle Business Actually Looks Like

• A lifestyle business is designed for fun, freedom, and flexibility, fitting within the owner's broader life context.
• It prioritizes quality of life over endless growth and profitability.
• Lifestyle businesses are only possible due to the internet, AI, social media, cloud computing, and affordable software tools.
• Examples:
  • Stephen Box: Monetizing his passion for Warhammer through speaking and content creation.
  • Scott Manel (Driver 61): Building a successful YouTube channel about track days, receiving perks like loaner Ferraris.
  • Gabriela Rosa: Running a virtual fertility clinic with remote workers, leveraging her book and research.
• Businesses with fewer than 12 employees are easier to manage and offer a better quality of life.

5. Goodbye, Homer Simpson

• The idea of a high-paying, secure job in a large corporation is a relatively recent phenomenon (post-World War II).
• The middle class emerged after World War II due to economic rebuilding efforts, but the entry of women into the workforce and technological advancements have changed the landscape.
• Automation and Outsourcing: Technology has decoupled labor from production, leading to job losses and wage stagnation.
• The Simpsons Analogy: The show depicted a middle-class lifestyle that is no longer attainable for many.
• The Digital Age vs. the Industrialized Economy: A widening gap exists between those in the digital economy (improving lives) and those in the industrialized economy (declining prospects).
• Classical economists identified land, labor, capital, and enterprise as key economic factors. In the digital age, entrepreneurship is the most important.

6. How Business Actually Works

• A business exists when a customer wants to buy something.
• The mistake is thinking a business is having something to sell, rather than having someone who wants to buy.
• Smart entrepreneurs focus on finding customers before creating products.
• An idea is not enough; understanding how businesses run (lead generation, sales, customer retention, product development) is crucial.

7. The 766 Apprenticeship

• A 766 apprenticeship involves working for six months as a direct report to the entrepreneur of a business that generates seven figures of revenue and six figures of profit.
• This provides firsthand experience in how a successful small business operates.
• The goal is to learn how the business generates leads, makes sales, keeps customers happy, and develops products.
• Adapting the Apprenticeship: If a full-time apprenticeship is not feasible, consider part-time work or leveraging existing skills in a small business.
• Importance of Founder Contact: Direct interaction with the founder provides insights into the realities of the role (pitching, recruiting, customer acquisition).
• Payment in Experience: The primary goal is to gain experience, with monetary compensation being secondary.
• Benefits of the Apprenticeship: Increased self-awareness, commercial awareness, and access to resources.
• Former employees who start their own businesses often become millionaires by applying the knowledge and skills they gained.
• Entrepreneurship is a system and a process, not just luck.

8. Your Founder Opportunity Fit

• After gaining experience, focus on finding the right opportunity that aligns with your unique situation.
• The initial business idea often evolves significantly.
• Execution is more important than the idea itself.
• Founder Opportunity Fit: The best idea is a good idea for you, based on your origin story, case studies, and background.
• Origin, Mission, and Vision:
  • Origin: Your background, successful case studies, and moments of transformation.
  • Vision: What you want to see happen in the world.
  • Mission: The highest value activity you can do.

9. Pain Prize and Payment

• When evaluating business ideas, consider:
  • Pain: What problem do you know how to solve?
  • Prize: What big outcome or emotional uplift can you deliver?
  • Payment: What are people willing to pay for, and who has the budget?
• The 1/9/90 Rule: In any market, 1% of people have 15% of the budget, 9% have 45%, and 90% share the remaining 40%.
• Focus on the affluent segment of the market.

10. On Selling to Rich People

• Focus on affluent customers who can justify the spend.
• Example: A couple's therapist specializing in high-net-worth clients understands that the value of keeping a marriage together is higher for those with significant assets.
• Design your business to meet your needs, which is more likely with higher-paying clients.
• It's easier to manage a smaller number of high-value clients.
• The $100,000 Example: It's easier to sell one thing for $100,000 than 100,000 things for $1.
• Value vs. Volume: Volume-based businesses are the hardest to run.
• Ideal Starting Point: Aim for 10-100 customers paying $1,000-$10,000 each (agency or services businesses).
• Avoid the extremes of having only one client (a job) or relying on massive volume (extremely difficult).

Synthesis/Conclusion

Starting a business is a learnable skill accessible to many, not just a select few. The key is to shift from an employee mindset to an entrepreneurial one, focusing on creating value and solving problems. A lifestyle business offers fun, freedom, and flexibility, prioritizing quality of life over endless growth. By understanding the principles of founder opportunity fit, pain, prize, and payment, and by learning from successful small businesses through a 766 apprenticeship, aspiring entrepreneurs can significantly increase their chances of success. Focusing on affluent customers and designing a business that aligns with personal values are crucial for building a sustainable and fulfilling entrepreneurial journey.