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The Only Entrepreneurship Lesson You Need (with Do/Don’t Reading List)

The Only Entrepreneurship Lesson You Need (with Do/Don’t Reading List)

When I was first getting into entrepreneurship, I asked Mark Cuban what he read or studied to learn how to start and build businesses. His response:

 

“Experience. It’s the only reliable teacher I’ve ever had. No books ever captured what it’s really like. You just gotta do it.”

 

 

Mark’s smarter than me on most things, but on this, I think he’s wrong.
Sort of.
Yes, experience is crucial, of course. And yes, most of the reading on entrepreneurship is pretty worthless.
BUT, after investing in 80+ companies and starting several of my own and reading nearly everything there is about entrepreneurship, I think there is not only a clear method to doing entrepreneurship right, I think there are a few things you can read that can teach you that method.
Reading is NEVER a replacement for doing, but reading can be how you figure out where to start.
I’m going to tell you what those entrepreneurship lessons are, and precisely where you can read them.

 

 

The Only Entrepreneurship Lesson You Need, in 3 Parts

 

 

 

Paul Graham * sums it up perfectly *:

 

 

 

 

 

You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.

 

 

I can’t sum it up any better than that. Lemme break down each three:

 

 

1. Start With Great People:

 

 

So many people skip over this, and I can see why — it’s hard to understand how crucially important people are to business until you’ve tried to build one with bad people.
The difference between a good co-founder and an average co-founder is the difference between chicken salad and chicken shit. I have experienced this many times in my life; in fact, there’ve been times where I was the average (or bad) co-founder, and I ruined a great idea.
So what are you looking for in a great co-founder (or founding team)?
Basically, your core founding team must be people who get shit done .
Paul Graham likes to talk about it in terms of finding people who are resourceful and determined. Sounds simple to understand, and it is. But not super easy to find those people. Most people say they are like that. The reality is that they WANT to be like that, but aren’t.
How do you tell if someone is resourceful and determined? Pretty easy actually: just look at what they’ve done in their life that showed resourcefulness and determination. Past behavior is a great predictor of future behavior.
No matter who you are and where you start in life, you can display those attributes. If you start poor and disenfranchised, you have a ton of opportunities to show them; basically, your whole life is using determination to overcome obstacles with few resources.
If you start rich and privileged, you can show these attributes as well, just in different ways. For example, by learning a lot of new things, by taking advantage of the opportunities in front of you, and by creating things from those resources you have.
The people who have shown these traits PRIOR to working with you are the people you want to build things with.
Once you have product-market fit, then the emotional intelligence of the leaders, as much as the resourcefulness of the team, is what impacts success.
NOTE: We literally just went through this in our company , and in fact I had to fire myself because I got it wrong .

 

 

 

 

2. Make Something People Want:

 

 

The most common mistake I see from founders is that they think they need a great idea . This is completely wrong .
Ideas aren’t worth shit. And “great ideas” are usually worth even less. Why? Because startups are not about ideas. They’re about solving problems.
Sear this into your brain:

 

 

 

 

A startup’s only purpose is to find a commercially viable solution to a real human problem.

 

 

This is what “make something people want” actually means.
Paul Graham frames it like this :

 

 

 

 

“I like to find (a) simple solutions (b) to overlooked problems © that actually need to be solved, and (d) deliver them as informally as possible, (e) starting with a very crude version 1, then (f) iterating rapidly.”

 

 

Marc Andreessen outs it in the most succinct way:

 

 

 

 

“The only thing that matters is getting to product-market fit.”

 

 

What is product-market fit? Andreessen says:

 

 

 

 

“Product/market fit means being in a good market with a product that can satisfy that market…The life of any startup can be divided into two parts — before product/market fit and after product-market fit…When you are before product-market fit, focus obsessively on getting to product-market fit.

 

Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.”

 

 

 

 

You don’t have a business until you have a sustainable and repeatable model for bringing in users and turning them into active (paying) customers, and the only real way to do this is to make something people want.
Make sure you fall in love with solving a problem , and not your idea or your solution. Because if you care about solving the problem, then you can keep trying things until you…make something people want.
There’s NEVER been a better time in history to start a company. You just can’t make it more complicated than it is:

 

 

 

 

Start with a real problem first, then keep trying solutions until you have made something people want, as evidenced by people using (and buying) it.

 

 

Now, ideas DO matter, of course. But ideas are easy to come up with when you understand they only matter when applied to solving real problems. And there are SO MANY problems to solve everywhere.
If you can’t find a problem to solve, this post outlines the best tactics I have seen, and this one is really good , and this one is very good as well . But the reality is, if you don’t see any problems that need to be solved, maybe you shouldn’t be an entrepreneur.

 

 

3. Spend As Little Money As Possible:

 

 

I would frame this as “avoid mistakes,” but I understand why Paul Graham called it “spend as little money as possible.”
He’s assuming that spending money faster than you make it is the BIGGEST MISTAKE a startup can make — and he’s right.
Why? Because spending money too fast (especially in venture backed companies, which is almost exclusively the type of company Paul deals with) is a signal of poor thinking and poor decision making, which is pretty much impossible to overcome. If you are spending as little money as possible, it forces you to be resourceful and focus ONLY on the things that matter — which first and foremost is achieving product-market fit, and then selling.
If you’re spending as little money as possible, then you’re probably going to be fine, because it gives you time to solve all the other mistakes you inevitably make.
But that is NOT the only mistake you can make as an early stage startup, and being cheap doesn’t solve all your problems. What are other common mistakes to avoid? This piece outlines many of the biggest mistakes that founders make , and this one covers most of the same ground, but some different , but most of those reduce down to not having #1, a good team, or #2, product-market fit, on this list.
If you just spend as little as possible, you have time to fix #1 and #2.

 

 

 

 

There’s Only One Thing To Do Now: Go Build

 

 

These are the only three fundamental lessons you need to start a startup:
1. Begin with great people : resourceful and determined
2. Make something people want , by solving their problems
3. Spend as little money as possible , so you have time to find solutions and fix mistakes
That’s it.

 

 

 

 

Once you know these fundamentals, and use them to guide your decision-making, there’s nothing left to do except exactly what Mark Cuban said — start building.

 

 

 

 

 

Knowledge Master
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