Starting and Growing a Successful Business

Que enspastic

Ostrich
Gold Member
Gringuito, cheers mate, I've just finished reading "How To Get Rich", as recommended in the other thread and now I have "Millionaire Next Door", "The Ten Commandments for Business Failure", "Good to Great", "The Millionaire Fastlane", and "E-Myth" at the top of my reading list.

I have some questions which I'll open to the floor as they are more retail specific than tech:

Has anyone:

1) Used Alibaba to purchase retail goods from a factory or supplier in China or South Asia to sell in their home country or another market? How was it?

2) Can you take a product from Alibaba and give the product an eye-catching name, put your own logo design on it, put it in special packaging with your own designed booklet, etc. Turn it into something impressive that will appeal to customers and sell.

3) Used Google or any other search engine to work out what exactly people are buying / searching for - so to help identify obscure yet emerging markets that can be entered. Where / how is the data to be found?

4) Successfully engaged in drop shipping? How did you set up? Could I do something like this with furniture for example?

5) Managed to build their own brand with logo, website, packaging, etc. How much of this was outsourced and to whom / at what price?

QE
 
I've recently was involved (giving legal advice) to a startup. The owner always choosed the number 3. It was like: 3 law firms, 3 geographical market locations, 3 banks to work with, etc. I don't know if this makes any sense.
I think to create a business you need paper. Basically you create a system and start staking paper. First paper statues of company, second business plan or business structure, business operandi, then papers with the marketing, then marketing the product which is done in paper (computer), then presentations. And finally agreements. in presentations You get in repeat mode. From the first presentation you enhance what caused an impression and ditch what was boring. Presentations are numbers game. It's like gaming in a club.

Creating a new business like the OP said. If I understood correctly Copy number 1 and do it cheaply. Take out ineficiencies.

Love this thread BTW. I've already sugested to Roosh creating a private paid roosh business forum. At this moment I need a chinese translator for some work. basically translate some emaIls. would rather give this position to a Roosher.. Anyone interested please let me know.
 
One of the best business books I have read was this one:

http://www.amazon.com/s/ref=nb_sb_n...orl,aps&rh=i:aps,k:poorly made in china&ajr=2

It details the experiences of a guy as he went about importing cheap shampoo from China. It is really interesting. It opens you eyes to so many issues.

One of the things he mentions is that in China - making money is not the main point of business. I dunno' exactly how it works - but if you work in business, I think you have to give any money you make (above a certain amount) to the government. As such - people compete in business for the political prestige and power that it will translate into.

I remember seeing news reports of rich businessmen going to prison in China for 'having too much money'. So - I am guessing this might be related to what I mentioned above.

Don't quote me on those exact details - but it gives you a small flavour of the idea that business in China is not as simple as just making money.

The other experience the guy really stresses is the increasingly stressful nature of importing goods from China.

He says the story is always the same.

You fix a deal with them which amazes you in terms of how cheap it is.

Everything is fine for a few months.

Then you notice that certain ingredients are being substituted (or left out al together) from the goods you are receiving.

This drives you mad since you have to pay for your own laboratory reports to uncover what is going on. Since the people back in China will claim they have no idea what is going on.

Eventually - the people back in China say they cannot make money on the current contract and need more money.

At this point - you see that reducing the quality on the goods being sent over was a form of blackmail in order to get a better deal. Since you cannot really sue people over there in the way you can here.

What the guy writing the book found. Is that the businesses he dealt with - didn't start messing him about because they wanted more money exactly. More that in China the excitement is all about wining the deal - and once the deal is won a certain ennui sets in. And eventually the only way they can excite themselves again is by trying to win the same contract again - but on better terms.

It is like a game in a way. And is an example of the strange psychology that envelopes business over there when you have businesses run by private individuals who have to hand over their profits to the government.

I am sure you will not have to worry about this. Since this book was written by a guy who was dealing in million dollar contracts. As such - he was expected to fly out to China (and live there) in order to make sure things were running properly. So unless you get that close to the ground in China you won;t have to worry about his in the same way - since it won't be your problem. But the problem of the guy who has agreed to supply you with shit imported from China.

Anyway - not sure if this is of any interest. Still - I wanted to give the book a shout out since it was such an interesting read.
 
Hey Gringuito, it's very kind of you to spend time answering our questions, I have one too.

You said that you prefer to invest in fewer companies to be more involved in each, so I assume the knowledge you bring is a significant part of your deals. Is it general business expertise or do you have one domain you know best (finance, marketing, etc.)? If the latter, was it the domain you learned in college?
 
I'm not as deep in the game as Gringuito but I'll give it a shot
Que enspastic said:
1) Used Alibaba to purchase retail goods from a factory or supplier in China or South Asia to sell in their home country or another market? How was it?
Alibaba is a great resource but you have to research extensively and more than likely some trial and error is going to be involved before you strike a gold vein(as it were). Many of the so-called manufacturers are not actually manufacturers, they are intermediaries looking to get between you and the suppliers to get a slice of the pie. You need to have - or develop - a finely tuned BS detector.
A thick skin also helps. Be prepared to screw and be screwed by multiple manufacturers before you manage to establish a good relationship with a good one.

Que enspastic said:
3) Used Google or any other search engine to work out what exactly people are buying / searching for - so to help identify obscure yet emerging markets that can be entered. Where / how is the data to be found?
If you mean keyword/niche research then there is a goldmine of information waiting to be found if you use, wait for it... google. Forums like BHW are very good but again, you have to separate the grain from the chaff.

In fact, go ahead and download this: http://nichehacks.com/wp-content/up...imate-Guide-To-Finding-A-Niche-Market-PDF.pdf
It should get you started on the right foot.
2) Can you take a product from Alibaba and give the product an eye-catching name, put your own logo design on it, put it in special packaging with your own designed booklet, etc. Turn it into something impressive that will appeal to customers and sell.
An emphatic yes! For this I highly recommend the books Cashvertising and Influence, as well as the classics, David Ogilvy et all.

As far as general advice, I strongly urge you to read. Read read read, I cannot stress this enough. Generally speaking, professionals in any area are a highly literate crew. Make it a lifelong habbit. Don't read just business stuff, read warfare, strategy, psychology, philosophy(the more practical stuff, not the endless logic-chopping kind). And also the classics. Anything that can give you a greater insight into the human mind and heart.

Like Miyamoto Musashi was fond of saying, "you must study this deeply".
 

Gringuito

Woodpecker
Gold Member
Pantheon Dweller said:
You said that you prefer to invest in fewer companies to be more involved in each, so I assume the knowledge you bring is a significant part of your deals. Is it general business expertise or do you have one domain you know best (finance, marketing, etc.)? If the latter, was it the domain you learned in college?

I started on the tech side with my engineering degree and early business experience. After all this time my focus is more on the management and financial side. I've never been very good on the marketing aspects, I defer that to other people.
 
Gringuito - just saw this thread, incredible advice. Did a little research and looks like you are a 9 figure BSD. I'm not quite there but let me add a couple more tidbits with a few real world examples to your already in-depth list.

Hiring
Waiting for the right hire is always better than hiring mediocrity - Hiring the wrong person, especially in the early stages of a company, can be a deathblow. Sure, you are lighting the candle at both ends, and really really need that extra developer or your first financial analyst. If you hire the wrong person, the company's growth will blow by their skillset very quickly and you will spend most of your time fixing their mistakes. Firing and rehiring will set you back months. EXAMPLE – I hired the first “decent” controller I interviewed because I was getting too bogged down with the accounting reporting/reconciliations. If I waited to find some top notch Big 4 manager type, he could have grown with the company. In my situation, our growth went 8x (from a 10 figure baseline) after I hired him and his skillset didn’t grow with the company.

If you can’t convince your close friends to work for you, you probably wont convince anyone else. Why should I work for you (or invest in you) when you cant convince your college roommate at Google to come aboard? This validates a couple things for me - 1) They know him better than me so not coming aboard gives me pause, and 2) As a leader, you need persuasion skills and you are telling me you cant convince your buddy to join the team?

Hire on brainpower, not experience. I’ve had tremendous success hiring super eager 23-25 year old Big 4/i-banking analyst types. These guys are generally very smart, flexible for different positions (FP&A, accounting, product management , operations, etc), and willing to take a paycut for equity. Avoid the guy with 15 years experience with his last promotion coming in 2002.

Capital Raising
If feasible, make sure some of your investors are also customers. Trust me, they have every incentive in the world to make sure your product is top notch before the commercial rollout. EXAMPLE - One of my companies provided a payment processing and credit risk management service for doctors. They managed to get over a dozen of the intended doctors as investors and believe me, we were ready for our commercial rollout after that. If they were just 10 beta testers that got the product at a discount, the input from them would have been down 90%. Not to mention the word of mouth from these guys saved our ass in marketing costs. It's all about incentives.

Market
Start a company that uses technology and analytics to bring efficiencies to a tired business/market. Everyone wants to start the next WhatsApp, which is a 1 in a million type of thing. My current big wins as an investor include the doctor services company above, a retail energy provider (REP), and a REIT. All boring as shit, all use technology and analytics to dominate their landscape.

Guys, I am a fulltime angel investor (former C level exec) and this guy clearly knows what he is talking about so please take his advice to heart. Very, very solid.

John Galt
 

ColSpanker

Pelican
Gold Member
Giving this thread a bump.
Currently I'm trying to buy out one of the partners in my company. To put it bluntly, he's dead wood, but has enough stock in the company to make it impossible to go forward.
Here's the problem, I'm short of cash to do the job. I need less than $5,000 to buy him out, but won't have the money till next month. I need the cash now to get him out of the picture and move forward.
What's the best way to raise a small amount of money (less than 5K) you intend on paying back in 30 days?
Please, honest suggestions.
 

Gringuito

Woodpecker
Gold Member
ColSpanker said:
Giving this thread a bump.
Currently I'm trying to buy out one of the partners in my company. To put it bluntly, he's dead wood, but has enough stock in the company to make it impossible to go forward.
Here's the problem, I'm short of cash to do the job. I need less than $5,000 to buy him out, but won't have the money till next month. I need the cash now to get him out of the picture and move forward.
What's the best way to raise a small amount of money (less than 5K) you intend on paying back in 30 days?
Please, honest suggestions.

Can't you just get the partner to agree in writing to sell his stock on receipt of the $5k? Make sure to write into the agreement that any partial payment will be used to by his stock. Then pay him just enough in the first payment to take his % below a blocking interest.
 
One other note:

If this guy has anything close to a blocking interest and can be bought for less than $5k, what are you trying to protect?

This could be a lot of drama for nothing. Do you have revenues yet?

At this level I'd almost think you need to consider some beers, tequila shots, admit defeat with your friend, have some laughs, and preserve the friendship.

Blow it up together. Wait one week and start fresh. Then recreate anything you need based on past experiences with a clean slate.

My gut tells me that your "buyout" discussion combined with "dead wood" view of him is a ripe cocktail for having a busted relationship. Before you dismiss this, remember, relationships have ripple effects.
 

2014

 
Success Psychology
Without a doubt, for new business start-ups, bootstrapping is the best way to get off the ground. This is great because it allows you to test the waters then build up on strength when you find something that works. If you can accept failures as they come and get stronger when set backs arise, then you are likely to learn quickly and treat your business as your life, taking it all in your stride.
An important thing to remember is that money = direct correlation of your perceived value. Thus, to earn more, you simply need to create valuable things for people. Easy, right?

Choosing a niche
The single biggest mistake new business owners make is the idea that because they like something and would be willing to pay hard earned money for something, that lots of other people will be willing to do the same too. The reality is that niches are OTHER peoples needs and wants, not yours. Start with the customers needs that are motivated by pain, urgency or emotions and then figure out a way to provide solutions to those problems. Test the waters – talk to the potential customers, and if you find that your prospects are pro-active in searching for solutions, you can be sure to have found a solid viable business niche.

The right product
Just like we touched upon when identifying a niche – you don’t sell a good or product; you sell a benefit, an outcome or a resolution of a problem!
Once you have a product that provides a solution to this problem or delivers an outcome, increase the perceived value in the product by going ‘high end’ on everything the customer sees. Advertising, packaging, customer service. This has to feel ‘high end’ even if it is low cost. The perception is the reality. Look at brands like Louis V. or Gucci. They are made in China bags, yet sell at an incredibly high price, due to the perception of high status that the brand portrays throughout its service and media campaign.
Name your product with something catchy – think cocacola, kakaotalk, whatsapp or google. Catchy names stick in the head and we remember them easily. This is a competitive advantage for you and your brand, product or service. Last, but certainly not least,
create a customer avatar and create a product or service that will sell directly to that ‘person’ and their wants, needs and desires.

Marketing
The key to successful marketing is making customers take action, not having them simply ‘remember’ you. Simply put, good marketing = good selling. Good sales come from close relationships, so try to get feet on the ground. If you can, try to position your product as the ‘original’ and ‘the leader’. Serve ‘freemium’ content in large numbers in newsletters and in give-aways. Paraphrasing from evernote CEO “The quickest/easiest way to get one million people paying is to get a billion people using”.
Always tell your customer exactly what they need to do to BUY NOW.

Focus and Action
One thing – just one thing at a time.
We learn more from doing than from planning, so make a plan and then do it immediately, readjust your schedule as you learn more. Analytic information feedback is vital to your success.

People
You need great people to have a good business. So you should always search for heroes, but you need to remember to only hire people who are NOT like you; hire people to do things you can’t do, won’t do, don’t like to do – leaving the creativity and running of the business to you. When managing your people, look at what people are doing, not what they are saying. One and the other are easily confused. Set your staff one weekly task, then leave your people to work on their own. Hire and fire as necessary.
 

ColSpanker

Pelican
Gold Member
Gringuito said:
ColSpanker said:
Giving this thread a bump.
Currently I'm trying to buy out one of the partners in my company. To put it bluntly, he's dead wood, but has enough stock in the company to make it impossible to go forward.
Here's the problem, I'm short of cash to do the job. I need less than $5,000 to buy him out, but won't have the money till next month. I need the cash now to get him out of the picture and move forward.
What's the best way to raise a small amount of money (less than 5K) you intend on paying back in 30 days?
Please, honest suggestions.

Can't you just get the partner to agree in writing to sell his stock on receipt of the $5k? Make sure to write into the agreement that any partial payment will be used to by his stock. Then pay him just enough in the first payment to take his % below a blocking interest.
Might be the solution. I see if he'll go for it.
 

ColSpanker

Pelican
Gold Member
anonymous123 said:
One other note:

If this guy has anything close to a blocking interest and can be bought for less than $5k, what are you trying to protect?

This could be a lot of drama for nothing. Do you have revenues yet?

At this level I'd almost think you need to consider some beers, tequila shots, admit defeat with your friend, have some laughs, and preserve the friendship.

Blow it up together. Wait one week and start fresh. Then recreate anything you need based on past experiences with a clean slate.

My gut tells me that your "buyout" discussion combined with "dead wood" view of him is a ripe cocktail for having a busted relationship. Before you dismiss this, remember, relationships have ripple effects.
Plenty of revenues and had the business for the past 8 years. There comes a time when you have a "come to Jesus meeting" and we had it. I wouldn't call us close friends, but we did occasionally hang out together.
I would never go into business with a close friend as the friendship wouldn't last.
 
Gringuito said:
I haven't talked about how best to structure your company for sale later on (C vs S vs LLC, keeping it clean, basis step-down, agreements for key employees).

Gringuito, tremendous value you're giving to the forum. Thank you.

Would you mind speaking to the points above?

I've always had LLCs, but I'm looking to raise investor capital with my next venture and would really appreciate getting your take on how to properly structure it for sale later on.

I listened to the interview below with Bill Reichert of Guy Kawasaki's Garage Technology Ventures and he touched on the subject but doesn't really break it down beyond saying that people tend to employ the wrong people (buddy as CTO) starting up and give away stock unnecessarily, making it harder to unwind the situation.

http://s3.amazonaws.com/Mixergy/Audio/Mixergy-Interview-Bill-Reichert.mp3

Just to be clear - in my case, I'm not looking to bring in VC's, just Angel Investors in the $50 to $100K range.

I'm assuming you prefer C-Corporation in a business friendly state like Delaware. My attorney just came back with the research on this and basically advised me to keep the shares at 5,000 or less at a part value of 0.01 to keep the franchise costs around $175 per year.

Is this the optimal structure in your opinion to bring in angel investors? Could you address "keeping it clean" and "basis step down"?
 
If anyone is interested, I've compiled 3 large lists of places where you can advertise your business, blog, or product online. I used these lists to promote my Boycott American Women blog and it went pretty viral.

500 Blogs (each has a blogroll and you can thus post your advertise on their blogroll blog links too, so all together you can access about 50,000 blogs from this list)
http://www.mediafire.com/view/zrpp0y6ld7xuhuc/500_Blogs_List.txt

1500 of the most active and popular Facebook groups
http://www.mediafire.com/view/slthqxd9m2ijcco/1500_Facebook_Groups.txt

2500 of the largest LinkedIn groups
http://www.mediafire.com/view/re19qkasnanwalp/2500_LinkedIn_Groups_List.txt
 
Excellent thread. Thank you very much.

As someone in the process of the college search, do you have any advice for me while I am in college? I want to, like most of us here, become location independent and well off.
 

jake1720

Woodpecker
Krusyos said:
Excellent thread. Thank you very much.

As someone in the process of the college search, do you have any advice for me while I am in college? I want to, like most of us here, become location independent and well off.

This x2
 
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