Updated: May 31, 2020
To read this book, we first clear everyones world map orientation. YOU are not the center of the world. This is a very important fact. But many people would strongly yell to disagree, and would forget about this fact all the time.
The center of the world is MARKET. In a market, people conduct BUSINESS.
According to Wikipedia, Business is either (1) Make a Living; and (2) Making or selling products for profit. This may sound trivial, but it is important. If someone is "starting up for making a living" - it belongs to the category of solo operators, sole proprietor, gig job, etc. It is called "Job Replacement" or "Job Alternative". As the world populations grow, traditional industry cannot support this many "traditional job posts". As a result, smart governments starts to advocate for people to "get their own jobs". In this book, we don't focus on solo operators, "earn a living operations", "passive income", "free lancer", or so called "side gigs" or other fancy terms.
A Company Means Two Founders or More. A dream by self is a dream. A dream shared is reality.
We focus on the BUSINESS OF MAKING, OR SELLING PRODUCTS THROUGH AN ORGANIZATION AND PRODUCING A PROFIT.
You are not the center of the universe. We all live in a world defined by business. Even simple "trade" or "bartering" is business. When you "sell something for cash", you are simply trading the "something" for a paper currency that holds value in your country.
The BUSINESS WORLD is FULL. It consists of markets, shops, shop owners, and the things they sell (called merchandises). The design, manufacturing and selling of such merchandises form many industries and sectors. In fact, in the past twenty years the biggest innovators on earth are remaking markets (think Amazon.com and Alibaba.com), and remaking channels (think salesforce.com).
The basic point of the world is for a growing population to live. Everyone needs to have meals. This is the basic essentials of the world. Meals are farm produced, transported with machines and energy. Such transportation and machines take energy and resources (mines). And all energy on earth comes from the Sun.
Don't think about an Earth with smart beings roaming. The fundamental picture of the world should be a jungle of monkeys, some young running around, some older senior pining in the trees. The monkeys needs entertainments to occupy their mind. The world keeps on "renewing" - new things come all the time, and things need to be fresh, including fashions and customs. This is what we call "innovation". Innovation is a constant and incessant process of renewal.
You are most likely a class of people without properties, without capital, without substantial skills, and without connections. I am a 50 year old "middle class" but I still belong to this group. Capital is defined as the money that you can freely spend without endangering your livelihood. You are not part of the "business establishments" or network of business. So the only way you can get into the game is a process called "startup", which is the basic topic of this book. In a startup, you force your way into the center of the business world.
Business is hard, cut throat, and a "war". Starting up businesses and starting companies is even harder. If you think "startup is cool", you have an overly enlarged view of yourself and the value of your ideas. Think of it, if you "think on your own" and "cannot tell anyone the secrets", do you run the risk of coming up with a useless idea?
For someone without much resources to start a business and become an "owner class", it is not easy. Many people become owner class when opportunities present themselves and recognized - these opportunities are called "disruptions". The best startup success uses disruptions to replace old businesses. Think Microsoft (Microcomputer), Intel (VLSI circuit), Amazon (Internet), McDonalds (automobile and highway), and Facebook (mobile internet). Gates and Zuckerberg immediately quit college to build business - when the opportunity of a life time is recognized, you cannot wait for one more day to start to build.
Sometimes people are purely innovative. They recognize opportunities others do not see and make a run. Examples include many restaurant businesses such as Starbucks, Dunkin Donuts, and Noodles. Truth to be told, it is a harrowing journey. Many "founders" were forced to startup. Startup is uncomfortable. Most "smart visionary" people really started due to life necessity.
In startup, there is no guess, estimates and projections. Only first person direct experience counts. Trust is hard earned, not an expression.
Many people wishfully think, intelligently guess, happily estimate and project, and eagerly "find problems to solve". These are not the right reasons to startup, and not the right way to start a startup that can last to make the founder benefit from it. The right way to plan is to think about the market, not about your idea.
If your startup is right in the core of business, you compete right away with big boys on their home turf and need a lot of money (called red sea). if you compete with something new and something out side of main arena (blue sea), you need to stay alive until what you advocate becomes major main stream shown. The market has no opening for someone to chance onto. Think about the movie business. All the successful franchise come from fringe and early sacrifices (Marvel heroes), or you pay actors big bucks. If you like, put yourself in the shoes of a "Games of Thrones" scenario - do you compete with the primary families head-on or do you establish a new weapon (say a dragon) that takes time to grow?
Startup is often associated with a light bulb moment, a Eureka moment, a propellor head thinking smart. But this is all wrong. Startup is really a business concept, just like innovation is a business concept. Startup is much beyond clever and smart - it is much more beyond that.
Innovation is constant. A company that stops innovating is dead company, sooner or later (think of General Electric). So even business in the establishment are working hard to change. Any "startup" business must be new, otherwise you have to compete through brute force money and name recognition. New things take a long time to diffuse into our societies. In business, time is money, and name recognition is money.
The hardway is the only easy way. If you don't know things are hard, the easy is hard. If you know that things are hard, the hard is easy.
In Business, Expect Only the Unexcepted
In startup, your education does not matter anymore. Startup IS education - you teach yourself with countless encounters with failures. Our education system made up of college, graduate schools and research institutions fail to teach real life lessons, human behavior, and common sense.
Some people try to use a "new idea", "revolutionary idea" or a "good idea" to startup. These almost always result in disappointment and failure, because they don't have money to sustain the drive. The common mode of failing to become a "business establishment" include: the idea is actually not new, the offering is not accepted, an offer is made but you cann't make a profit, an offer is made but it is buried on the second page of search results, the idea does not have good business sense and can not survive, and the entity of startup runs out of money due to bad execution. Typically it is a combination of ALL these.
Startup is hard. It is like jumping off a cliff and learn how to assembly the parachute on the fly. Anyone who wants to "forego" a regular job post is admirable. But most of things that you "think" is wrong. To illustrate the difficulty, let's examine a few fantasy scenarios:
Let us imagine you invent a new product. You still need to find a market, find a store, and try to sell to customers who pass by. This never changes despite progress in on-line shopping.
If you dream about a revolutionary cloth line, but you don't make it, you certainly can not sell something that has not been made. And, when nothing is sold, you can not ask an investor to "trust your estimate" and give you the case to start making the line. It is a devious none-stater-ever cycle. When you do business, you have no helper.
You have a great idea, and then you make it into a product. But you will find people are not willing to pay you price that allows you go make profit. You can not simply add a percentage to your cost and expect people to beat to your door to get anything, no matter how great, how useful and how life-saving it is.
Teaching Startup Is Important but Almost a Thankless Job
To write a book about startup for the young is audacious but highly necessary. Startup is a strange magnet that draws a lot of people in. It is part of the growth path, independent of traditional career path in a company.
A lot of young people seems to be drawn to entrepreneurship by the false promise of exciting work, freedom and rich. They are start a self employment or income producing unit, not a true company or a steady, sustainable, profitable and impactive business. "Starting a job or gig occupation" technically does not qualify as a startup, to be honest it is not even entrepreneurial. Most "startup enthusiasts" are just running away from reality and wishfully dreaming a shortcut. This is the trend of the future, though. A lot of people want to hide their treasured idea secrets and don't discuss with anyone. There is a bad feeling to it, since they don't understand that an idea not big enough to feed a startup team is just not big enough.
Although it is convenient to think alone, it is unproductive. Truth be told, a solo business will ONLY takes one person to break or copy.
Hence business must be run by a company, and a company must be more than one person. Remember, a senior employee or an investor is not a founder. They are just there for the ride. They are not the builder of the ride.
Further, if a startup is done with the goal of getting rich, it should always be a veteran. A first timer does not know where all the skeletons are buried. The "trap map" is very expensive and no one will really share.
The problem with people who don't know a lot, is that they don't know that they don't know a lot. Young people are made to believe that schools and textbooks are the limit of knowledge pursuit. In fact, it is only the beginning.
Young people don't have a sense of risk, which is good and bad. They are gullible but have a sense of invincibility. A lot of young people need the most advice, but they are the ones ignoring them, often out of ignorance and rebellions. Unfortunately, wisdom is only gained by direct experiencing, including experience of failure. For this reason, startup is good for a person to gain maturity, growth, scar, and life transforming wisdom.
In theory, the art of startup can never be taught, because people who need to learn the most will never listen. With this in mind, I try to write a short book that is digestible and useful for young people, who need the help the most and who are the most promising.
There are three simple undeniable facts that never has exceptions:
It takes money to make changes to the world.
To break rules, you must understand every rule.
The book of this nature is never tried. It is a bible for startup starters who knows virtually nothing. I can not avoid mistakes for you, but I want the reader to be the numerator, not the denominator. In this book, we will discuss about the art of startup. We called them the rules for breaking rules.