Starting and Growing a Successful Business

Gringuito

Woodpecker
Gold Member
Bad Hussar said:
In your experience how much would a competent lawyer charge to look over a VC agreement and advise the start-up's founders?

Keep in mind that I don't use VCs, I'm on the other side of the deal now. But good lawyers cost $450-600 per hour. Depending on where you're located I can PM you a good law firm that I've used with good success.

When working with lawyers don't let them control the process or costs will get out of hand. Also, make sure you tell them to use a paralegal for all of the boiler plate preparation. It's an easy way to save money but not affect the quality of the work.
 

ColSpanker

Pelican
Gold Member
I would say: "Do it right from launch".
I could right a book about the mistakes I made starting my own company 8 years ago. It was supposed to be the key to my financial independence, instead it just barely chugs along, forcing me to take a series of jobs outside my field just to make ends meet.
Things not to do:
1) Partner up with someone who doesn't like to hustle. My business partner has plenty of money from his family connections and doesn't really need to work. Fine and dandy until you're sweating because you can't pay your utility bill and he won't be back for a week since he's off to another vacation.
2) Get a bad domain name. I'm sure riffraff.org sounds good to some people, but not potential customers.
3) Piss off a competitor with deep pockets. Lawyers are expensive. Some companies think nothing of unleashing their shysters on you just to make a point. This is called "spending out of court".
 
Im also curious about what you do, OP. You wrote in your post that you are giving some of your own thoughts plus advice from "someone that's been there." Is this "someone" you? Or are you just listing what you've observed?
 

WestCoast

Hummingbird
Gold Member
^ he is rich if you can't tell from typing style alone you guys need to work on your game.

The best thing you can do from reading people like this is to try to raise your level of consciousness. No one with real wealth is going to hand you their cards.

Best to try and triangulate themes to change the way you think.
 

DVY

Ostrich
Gold Member
hes def. legit. Thought process, mentality on money, and people psychology all line up.

The self-made super wealthy interacts w/the world and others much differently than typical media caricatures of "big ballers". Erase that picture from your head. Its just advertising flash
 

Abnormal

Sparrow
Gringuito, thank you very much for the golden information you are sharing.

I got couple of questions for you:

1) What were your biggest product failures?

2) What have you learnt about selecting/hiring people?

3)What happens if a bus hits you tomorrow? What will your business do?

4)What are the strategies you use to get inside your customer's mind?

5) What are the best strategies that made you your first $1,000,000?

6) I know you said don't marry, and I don't plan to. But I heard/read so many successful people promote getting married, stopping chasing poosy and concentrating on the biz. what do you think about that?

7) What are the 3 books that helped you most in your success?

8) Tell us about your one smart and interesting failure this past year

Thanks a lot man!
 
Hey Gringuito,

Do you think those who will be successful in business are basically born with a special spark?

Or do you think it is simpler than that - and is an avenue open to many and not just those who were born with the skills?
 

Gringuito

Woodpecker
Gold Member
Warning, wall of text coming...

Valhalla said:
Do you own any businesses op?

Yes, both in the past and currently.

GyopoPlayboy said:
Im also curious about what you do, OP. You wrote in your post that you are giving some of your own thoughts plus advice from "someone that's been there." Is this "someone" you? Or are you just listing what you've observed?

Yes, it's my experiences.

Abnormal said:
1) What were your biggest product failures?

Good question. I've had quite a few that didn't work out. I have a COO that I've known forever. His job is to listen to my crazy ideas and help me filter the 90% of crap. Even with that filtering we've tried things that didn't work. The biggest failure was a tech product for an industry far away from my normal target market. I still think it's a good idea but it never got traction. Letting go your entire staff is tough, but you have to know when something isn't working.

Abnormal said:
2) What have you learnt about selecting/hiring people?

You have to pay big bucks/big percentages for the best people. And they are worth it. The difference between a mediocre employee and a good one is an order of magnitude.

Abnormal said:
3)What happens if a bus hits you tomorrow? What will your business do?

Estate planning is a whole other topic we could start a tread about. I have a 3 inch binder that describes mine. I've setup a group of people that would work together (some in my companies some from my family) to keep things going. Estate taxes are a really big issue for business owners. You don't want to create a company that has to be sold at the lowest possible price just to pay estate taxes when you die.

Abnormal said:
4)What are the strategies you use to get inside your customer's mind?

I'll have to think about how to put that into words. I just do it. It may be what I do the best. I have a knack for making thinks that people seem to want.

Abnormal said:
5) What are the best strategies that made you your first $1,000,000?

I described this earlier in the rags to riches post. I was very lucky to be working for a company that recognized how much money I was making for them. I received a large amount of money that I used to fund my first larger company. Before that I had started companies but I never had the cash to make them go too far.

Abnormal said:
6) I know you said don't marry, and I don't plan to. But I heard/read so many successful people promote getting married, stopping chasing poosy and concentrating on the biz. what do you think about that?

If that worked for them that's great. If you find a great woman that can help you in your life and not change when you become rich, marry her. That to me is a unicorn. In my experience money changes people and women are people. Add the great divorce laws and you have a volatile mix. In addition, if she decides to divorce you then all of your employees will pay for that decision. They may be fired or laid off because you picked the wrong wife. On the other hand finding a good honest wife after you've had some success, another mine field.

Abnormal said:
7) What are the 3 books that helped you most in your success?

1) Millionaire Next Door: I found out I wasn't weird and many successful people think like I do.

2) The Ten Commandments for Business Failure: It's actually about success.

3) Good to Great: I read this quite a long time ago, I need to read it again

Abnormal said:
8) Tell us about your one smart and interesting failure this past year

That would be tougher to tell without being too specific. The failure was much more personal and not business related.
 

Gringuito

Woodpecker
Gold Member
cardguy said:
Do you think those who will be successful in business are basically born with a special spark?

Or do you think it is simpler than that - and is an avenue open to many and not just those who were born with the skills?

I think anyone can do it. I like to say that I was too stupid to know the odds I was up against. I was also lucky to have a relative that was also a serial entrepreneur. He had a new business almost every year. I learned about business failure from him, and that he finally succeeded.
 
To be successful in business do you have to devote all your time to it?

As such - does it became both a job and something that takes the place of any hobbies as well? Personally - I hate thinkigng about work and love switching off, reading books and so on. As such - would that mindset be a pretty bad one to even think about going into business with?
 

Abnormal

Sparrow
Thanks again, Gringuito! I am taking notes here!

Sorry in advance, but you clearly got lots of wisdom so here is few more:

9) How important is communication in your success?

10) How important are the contacts you made?

11) Did you always expect to be a success?

12) You must have had setbacks, how best to deal with it?

13) How much importance do you put on marketing?

14) How do you become an absentee business owner?

15) What would you definitely buy from me if I was smart enough to offer it to you?

16) Your thoughts on speed of implementation?

17) How do you keep a small business from being small minded?

18) Role of referrals in your business? How do you nurture lifetime relationships with customers and orchestrate referrals?

19) How do you stay afloat in the ocean of rejection?

20) Do you worry about competitors? Why not?

21) How do you get to the economic decision maker in a company you'd like to sell to/work with?

22) What would you do if you got paid ONLY when your client gets the result?

23) If you lost everything today and had to start fresh, what would you do and in what industry?

24) Is your product a "Vitamin" or "Pain Killer"? Your comment on this Entrepreneur's article would be really appreciated:
http://www.entrepreneur.com/article/230736

25) How often do you have unhappy customers in your business(es)? What was the last example and how did you(your team) deal with it?

26) When do you know that it is the time to sell business?

27) Is there any perpetuity of purchase set up in your businesses? What would be an example?

28) What was the longest gap in time between when your customer purchased the product and came back to re-purchase?

29) Are you friends with employees? Or is it something that shouldn't be practiced? ( drinking with them or going to a cottage)? How do you set boundaries?

30) Let's say someone wants to buy your business for 10mil, how do you sell it to them for 15mil and how do you find other suitors to compete?

31) What was your costliest mistake in business and in other areas?

32) Would you agree that the highest paid person in a company should be the sales guy that brings the largest volume of business?

33) If your competitor tried, how would they beat you?

34) Your thoughts on saying : "The hardest ship to sail is partnership"?

35) Does it bother you if you lose a big account/ client? Do you get upset?

Muchos Gracias!
 
Alot of times you just wind up falling into businesses. Not to take anything away from people who do because even falling into something it's not pure luck it happens because you have your eyes open for opportunities but sometimes thigns just fall into your lap.

I was working in a relatively low paying retail job but realized an opportunity not being met by my company. I started out selling on ebay with a buddy maybe making $50 a week. Then grew it to a free .blogspot website with Google Blogger and put up paypal buttons. Obviously not the most customer friendly or professional looking thing but grew the site, then migrated to a godaddy template site and finally reached out to an Indian web design and SEO company who designed us a custom site.

First year we were making 3k-5k a month which isn't huge money but when its a part time gig a nice side income. Things blew up at about a year and a half and were pulling in 15k to 20k a month although we don't see most of the money gets rolled into the business or gets tied up in merchant processing holds.

I'm at the point where I may quit my day job although having some legal problems in regads to my business at the moment so things are still kind of up in the air. The one thing I dont like about my business is due to regulations as well as needing to ship things cheaply it's not something I can really turn over to someone else and be location independent which is my ultimate goal.
 

Hef

Pigeon
Gringuito,

What do you know about how tech startups at various levels or progress are valued by angel investors or VCs? Say a startup with just an idea, a startup with a 'just-launched' website or app, and a startup that's been around for a couple of years but has no revenue?

Have you been in a meeting with investors where the value of the company or business is determined? Are people just throwing darts at a board to come up with a figure - since there's no revenue?

Is there a back & forth - the tech company's founders/owners say that their company is worth X because of the idea, the market size, the technology, the number of users, etc. - then the investors/financiers counter by laughing at that, etc.

A show on TV called "Shark Tank" comes to mind..

And the example above of $17,000 for 6% giving a valuation of $280k - is there science/math behind this or just again throwing darts...
 

Hef

Pigeon
DVY said:
hes def. legit. Thought process, mentality on money, and people psychology all line up.

The self-made super wealthy interacts w/the world and others much differently than typical media caricatures of "big ballers". Erase that picture from your head. Its just advertising flash

What are the typical media caricatures of "big ballers"? Like those rappers "making it rain" at a club?

And what behavior(s) is revealing of a person who is super wealthy?
 

TheBulldozer

Ostrich
Gold Member
This thread is an absolute masterpiece of information.

You can learn in 15 minutes from this thread what you couldn't learn in 15 lifetimes from a mediocre person.
 

WestCoast

Hummingbird
Gold Member
After reading this thread I am now certain that in under 50 posts I can tell how much money someone makes.

This is actually a good thing already changed my mind on how to read on the Internet.

--

I also find it hilarious that he wrote "warning wall of text coming" as if no one should care about his opinion lol.

---

Fuck now that I see abnormal liked this bloody post (he may remove it) I have to call you out now. You are being rude and you are wasting his time with 35 questions.The delete was meant to be the photo below.

:facepalm:

I have personally apologized to Gringuito for asking him to start this thread... But at least I learned something if that counts for anything :)
 

WestCoast

Hummingbird
Gold Member
Hmm since I am being a bit of a dick in the post above I will tell you how VCs value the firm assuming it has no revenue.

I am only going to give the highlights because if Gringuito answered that it would immediately tell everyone what exactly he does and that is not cool.

Here is the high level truth.

1. Average people think vc investing is about "numbers". No. That is why shark tank and all the other paparazzi stuff on TV is commercial nonsense (yes some of it goes through)
2. They want to see how passionate you are. I am not joking here this is a legitimate part of the process. If you have minimal revenue but the TAM is $10B+ what the hell do they care? They won't they want to know if your product actually works and if you're willing to ruin your life chasing a dream.
3. VCs are interested in leveraging a position over time! It's like a reverse mortgage, you don't know you're losing that equity value a bitch who sees her looks decline starting at 25. I literally saw his answer to VCs laughed out loud and knew for sure he was not trolling. (A more easy to understand example is think of VCs as activist hedge funds slowly eating up a slice of the equity then yelling down your throat on getting to the valuation and selling/going public).

Now why can't he tell you how he thinks? Here is why.

Each market is extremely specific.

Take a high tech storage company, they run a negative earnings for decades
Take a social media company (whatsapp) how come people invested in that? Similar model losses for decades
Now let's say he runs a software company well margin profile should be high so losses are less time consuming and it makes sense to look at actual multiples because they can be turned to profit quick

Anyway the two points I laid above is really the two items in how vc is different from bullshit you learn in college about "numbers man numbers!"

That is why he won't be able to answer all of those if he rally laid out what he looks at he would be outed right now. This is why I am trying to ask him questions on how he thinks about valuing people notice in my first question he said "that is where he magic is" but then he can't explain his "knack"... Well I will tell you if you can figure out how to mimic his "knack" you'll be richer than everyone reading this forum in 10 years. (Except maybe Gringuito lol!)

---

One of my favorite vc investors once said

"I don't give a fuck about valuations I give a fuck about value"
 
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