A few days ago, I saw a question from a classmate:
I’m too tired. It’s better to be a “performer” and a “PMP” than to work hard in the company.
So what if you work tirelessly and achieve results? In the end, you won’t be able to write a PPT.
The organization engages in internal scheming for their own interests, earning money from selling cabbage and with the intention of selling ‘white powder’.
I don’t know if it’s still necessary to continue doing this job?
Hey I want to start a business and don’t want to look at others’ faces anymore.
I think it’s better to earn more than I can earn. At least, I’m free and frank, and at least I’m the final say.
In my lifetime I don’t want to work anymore.
I want to start a business.
Where is the opportunity? Which industry is developing well? Which industry makes money quickly?
I am actually the least good at answering questions like ‘how to do it quickly’.
I am actually someone who likes to put in a lot of effort.
I can understand his anxiety and fatigue, but I must honestly answer:
1) Don’t start a business just because you’re dissatisfied with the past.
2) The starting point of entrepreneurship is always to benefit consumers.
If you really embark on the path of entrepreneurship in the future.
I really hope you can understand the 5 basic starting points for entrepreneurship.
What are the essential elements of business success?
What is entrepreneurship?
In my understanding, what every entrepreneur actually does is to turn a lot of uncertainty into certainty through their own efforts, products, and teams.
This is entrepreneurship.
Entrepreneurs are very difficult, confused, and even lonely.
What they experienced was an experiment of survival of the fittest, the ups and downs of life and death.
In this experiment, many people said:
Where are the opportunities to make money?
Where is there an opportunity for others to make big money that I haven’t seen yet?
I want to go there to start a business and earn the kind of money they earn.
When they started out in this way, I knew they were looking for an arbitrage space.
They first find where to make money, and then go to make that money. Their goal is to play games in the market and get a share of the pie.
And some others, they say this:
Where are the opportunities to make money?
Where is there an opportunity for others to make big money that I haven’t seen yet?
Others make a lot of money, but I can do it as well or even better than them at a lower cost, saving consumers money.
These are two completely different mindsets, one of which is:
Why do those people make so much money? I should earn this money.
And another mentality is:
Why do those people make so much money? This money should be returned to the consumer.
Have you really thought it through?
Are you avoiding the job itself, or do you have a deep understanding of business models, market demands, and your own abilities?
Don’t evade.
Many people’s so-called desire to start a business, fundamentally, is a mentality of “avoidance”.
cannot bear sth. I’m tired. I’m tired. I’m tired. I can’t bear it. My heart has been wronged. Not giving enough money
If you start a business with the above avoidance mentality, there is basically no return.
I really hope you remember one sentence:
Escaping an industry is not the reason for entering one.
Entrepreneurship or career change is usually due to finding better practices in a new industry, rather than the inability to continue in the original industry.
Creating value for customers is the prerequisite.
The more excruciating the customer’s problem is, the more valuable it is.
Emotions and grievances can provide motivation for entrepreneurship, but they are not essential elements of business success.
A business that cannot shape barriers
None of them are good startups
In May 2013, I founded a small startup called “Runmi Consulting” and started my own business.
This small and rundown company has only me, including the boss, employees, administration, personnel, finance, security, and aunt.
Not even an office. Actually, I don’t need an office either. What kind of office does one person need?
I go to the community library to work every day. I didn’t hire my first employee until I worked with the old men and women for a month or so.
At this point, a problem arose:
I can go anywhere alone, but what about two people?
Fortunately, I have many friends.
A friend said, ‘I have multiple tables here, you can squeeze them first.’.
In the following months, a startup company grew within another startup company, constantly searching for the direction of light shining through the cracks.
A few months later, I finally found my own office.
Then, I replaced the bitten teeth with steel plates and pasted them one by one on the wall, decorating them into the earliest form of “Runmi Consulting”.
This is’ entrepreneurship ‘.
Runmi Consulting shares common characteristics with most startup companies:
Poor.
Even though they are very poor, they never come to their doorstep to actively promote themselves, and the company doesn’t even have a front desk phone.
We don’t want to use a “loudspeaker” to actively call out to customers, nor do we want to persuade others.
If we find that this person is still being convinced, it can only prove that we ourselves are not capable yet.
It is very normal for startups to lack personnel, money, resources, direction, and opportunities.
Does a company have to be located in a 5A level office building to prove its strength?
Can we recruit excellent employees?
Is it really impossible to defeat entrepreneurs with resources, backgrounds, and connections without resources, backgrounds, and connections?
Only those who spend their hard-earned money on “face” and have insufficient product potential need marketing and channel subsidies, which cannot be compensated for,
In the end, I had to accompany the client for drinks, meals, and relationships, but it still couldn’t be sold.
Things that can’t be sold even when drinking, eating or having relationships, and the Internet can’t help much.
Focus on entrepreneurship instead of proving yourself.
The most difficult thing for both business and personal growth is to gradually accumulate from small things.
We need to continuously and steadily create unique value for users and build deep competitive barriers.
Barriers are the endpoint, and businesses that cannot shape barriers are not good startups.
Willing to make all decisions for oneself
Take full responsibility
What exactly is’ entrepreneurship ‘?
Coase once said in his famous book “The Nature of Business” that there are two forms of “connecting” people in the business world.
One is called ‘enterprise’, and the other is called ‘market’.
In the enterprise, we use the means of “management” to connect people.
Management is the process of breaking down an overall goal into individual parts, assigning different responsibilities to individuals within a group, and then working together to accomplish larger tasks that individuals cannot accomplish independently.
In enterprises, the vast majority of people are local and only responsible for the local, and only a very small number of people need to be responsible for the whole. Among these people who are responsible for the whole, there are actually only a few who truly understand the “whole”.
In the market, we use the means of “trading” to connect those enterprises that have become independent entities, allowing them to quickly and continuously exchange value in the “market” system, where the fittest survive and rise and fall.
In the market, there are no “artificial” management tools such as promotion, salary increase, and dismissal in enterprises.
The market has only one tool:
Reward the strong with life, punish the weak with death.
We call the person responsible for the local area an employee;
The person who turns individuals into a whole is called a manager;
The person who is truly responsible for the overall situation is called an entrepreneur.
So, what exactly is entrepreneurship?
Entrepreneurship is a “choice” for individuals in complex business systems, whether active or passive.
Choose to transition from being responsible for the parts to being responsible for the whole, using internal management to deal with external transactions as an ‘entrepreneur’, and being responsible for the whole without any way out or complaints.
Entrepreneurship means choosing to take full responsibility.
Don’t make quick money
Do things that accumulate assets
Liu Qin from Wuyuan Capital once said to the founder of a certain company:
You lack money, I will invest in you, but can you promise me not to touch finance in the next few years.
If you don’t make money in finance, your team will suffer a major blow to their morale;
After making money, the team will no longer be interested in hard work and entrepreneurship, and their vitality will be further weakened.
Is it really a good thing to be able to make quick money quickly?
On the path of entrepreneurship, one often faces many temptations, opportunities to make quick money, and so-called collaboration opportunities.
For example, Bitcoin, finance, gaming
If you choose to make quick money, you will be consumed by desire for your most precious resource:
Time.
Time was originally meant to build your core competitive barrier.
So, making quick money is like taking drugs. The more and faster you make quick money outside of your core values, the more and faster you lose.
To accumulate assets and build a corporate asset pool, the longer the time, the higher the value.
Find your own flywheel, determine the first driving force, and then persistently push it.
When the flywheel rotates in the right direction, it makes money; when the flywheel rotates in the opposite direction, it loses money.
Imagine that there is a huge and heavy wheel in front of you, and you want to move it, but you are sweating profusely and still almost motionless.
In fact, you apply force at every point on the wheel and keep turning it according to the momentum.
No matter what happens or the temptation of interests, I will always focus on doing the right thing. At the beginning, it will be very slow, but there is no useless effort. Every drop of sweat counts.
Once the giant wheel rotates, it will spin faster and eventually form an unparalleled potential energy.
Make good use of leverage
Before starting a business, I suggest meeting with investors more often, identifying risks, and finding people to share the risks.
Secondly, you also need to learn how to use leverage effectively.
Because no matter how much you improve in ability and efficiency, you only have 24 hours a day, and there is always a limit to what you can do.
You can never surpass your own personal boundaries.
Specifically, what are the levers?
I will introduce four types to you: team leverage, product leverage, capital leverage, and influence leverage.
The first type of leverage is called team leverage.
What is team leverage?
Let me give you an example.
The Runmi Consulting that I founded is engaged in the consulting industry.
In the consulting industry, there are as many small companies as stars, but very few that are very large.
Why?
Because the consulting industry heavily relies on the professional abilities of consultants, and truly highly skilled consultants are rare.
So once it gets bigger, talent bottlenecks arise and it’s difficult to replicate.
However, in such a difficult to replicate and expand industry, there is a company that has achieved great success, constantly replicating itself globally.
This company is McKinsey.
Today, McKinsey’s global annual revenue is approximately $10 billion.
How did it do it?
Firstly, McKinsey has found its pivot, which is its solid and replicable core of capabilities.
At McKinsey, all client cases that have been served are entered into a knowledge base.
This company has succeeded in doing so; That company did that and failed; Write it all down.
At the same time, McKinsey also invented and designed many consulting methodologies, such as the MECE rule, the seven step analysis method, and so on.
Knowledge base+methodology “is the” core competency “extracted by McKinsey from the most experienced consultants.
With this core capability, McKinsey began to search for its leverage.
It attracts a large number of young people who have just graduated from business schools every year from top universities around the world, such as Harvard, Stanford, and MIT.
These top smart young people are McKinsey’s abundant and effective ‘team leverage’.
These people can provide strategic consulting to experienced entrepreneurs who are 20, 30, or even 50 years older than them using scientific methodologies and validated knowledge bases.
Using a team to replicate and grow is the most fundamental lever, and you must be proficient in using it.
The second type of leverage is called product leverage.
What is product leverage?
Let me give you an example.
In 15th century Europe, copying the Bible was a specialized profession called a “transcriber”.
A transcriber can transcribe approximately one Bible per year.
So you can imagine that in the 15th century, you looked like you were buying a book, but in reality, you were buying a year’s worth of time as a transcriber.
The money you spend on buying the Bible is actually the transcriber’s annual salary, which not only needs to support him, but also his family.
So, in the 15th century, only the wealthy could afford a Bible.
How can we spread the Bible if one person has to copy it for a year?
The European Catholic Church has adopted a “team leverage” model, hiring approximately 10000 transcribers to replicate and expand.
But even so, the dissemination efficiency is still very low.
What should I do?
In 1450, Gutenberg opened a movable type printing factory and began using “product levers” to print the Bible.
The invention of movable type printing greatly reduced the price, increased the speed, and greatly increased the quantity of copying the Bible.
At that time, the Pope was very angry and wrote an article saying that transcription was the most beautiful profession in the world, but it was destroyed by printing.
Ironically, this article spread worldwide through printing.
Gutenberg transformed the copying of the Bible from a “service” that heavily relied on human “marginal delivery time” to a “product” that relied more on technology and tools and took less human time.
Once we break free from dependence on human time, the possibility of copying the Bible increases significantly.
Why are there far more product companies than service companies in the Fortune Global 500?
Because only by trying to break away from dependence on human time can companies have unlimited development space.
This is the power of product leverage.
The third type of leverage is called capital leverage.
What is capital leverage?
Let me give you an example.
The core of the ability to consult on this matter is “knowledge base+methodology”.
However, many people often question the consulting industry:
You speak eloquently, why don’t you do it yourself and only hide behind to give advice to others, earning the relatively small consulting fee?
A person named Romney said, ‘Yes, our advice is so valuable, we charge so much money, and you still talk nonsense.’.
So Romney invented a special methodology for replicating and amplifying the core capabilities of the consulting industry: the Bain model.
Firstly, Romney will focus on and select some mature companies that encounter operational problems.
Then, he will send a team of analysts to conduct several months of research on the company to see if there is still a way out.
If there is still hope, he will make an offer to acquire this company, and the prerequisite for the acquisition is that he must have absolute control over the company.
Once the acquisition is successful, he will dispatch dozens of internal consultants to the acquired company to provide all relevant consulting services.
Finally, the company’s value increased significantly, and Romney sold the company for a profit.
To summarize this’ Bain model ‘in one sentence, it is: leave me alone, I bought this company, and I will personally do it for you to see how to make a good company.
Due to the Bain model, Romney’s Bain Capital earned the nickname “bankruptcy harvester”.
During Romney’s 14 year leadership of this company, its annual investment return rate was 113%.
Bain Capital is a legend in the consulting or investment industry.
Its essence is to replicate and amplify the “knowledge base+methodology”, the core capability of the consulting industry, through capital leverage, to obtain returns far exceeding consulting fees.
This is the power of capital leverage.
The last type of leverage is called influence leverage.
Influence is a very powerful lever.
Can you access some of the most valuable products?
Can you find the best team?
Can you make others truly believe in you and invest in you?
This is called influence.
But how can we gain greater influence?
You need two skills: public speaking ability and writing ability.
Speech and writing are two weapons of mass destruction, and if you want to expand your influence, you need to continue training.
Leverage can help you achieve great success, but there are also prerequisites for using leverage:
You must first have a strong core of abilities.
Remember, all leverage, whether it’s teams, products, capital, or influence, their role is to replicate and amplify.
Copying and enlarging does not necessarily lead to success.
If your ability core is strong, you will achieve success faster by using leverage.
However, if your ability core is weak and leveraged, it will only accelerate your failure.
The final words
If you are still young, in addition to the 5 above, if you really want to start a business, I have a few suggestions:
If you really think you can start a successful business and make a lot of money, then don’t “take” your parents’ money. There are several ways:
1) After working for a few years and accumulating some knowledge, start a business with your own savings (money, ability).
At this point, some people may choose not to start a business anymore because they realize that the cost of this money is so high;
2) Find professional angel investors.
They have experience and ability to price risks.
If they don’t invest in you, you need to realize that the biggest problem may be that the risk of your entrepreneurship is too high, and you are not worth the money at the moment;
3) What if you don’t want to work and can’t find venture capital, only your parents and friends can rely on you?
My suggestion is not to ‘take’ their money, but to invite them to ‘invest’.
For example, if you want to borrow 200000 yuan from your parents to start a business.
Agreed, if we receive the second venture capital, our parents have the priority to withdraw.
If the second investment cannot be obtained, parents will default to not investing and admit failure.
You have to take the initiative to bear unlimited responsibility. If your entrepreneurship fails, you can convert your parents’ shares into debt and go to work. You can use your future salary to repay your parents’ 200000 yuan in installments.
If you make money, your parents’ equity income is the risk price you deserve for taking on huge risks that others are unwilling to bear.
This is a practice that people who are willing and capable of taking full responsibility can consider if they want to start a business.
It is also a truly helpful approach for parents who are willing to support their children’s entrepreneurship in order to exercise their children.
Willing to bear the consequences of all their decisions and take full responsibility.
Further develop the ability to take full responsibility in entrepreneurship.
But if you don’t even have the willingness to take full responsibility,
Maybe, let it go.
