Daniel's notes on Collection Of Practical Business Advice

Daniel: I love this idea of thinking of business as a game which you have to try many shots before you can get it right. Just like baseball, you don't expect a first-timer hit the ball with his first swing! You need to keep swinging and swinging till you learn how it's done. It sounds ridiculous to bet all your resources for a first-time swing in baseball! why it should be different for something much more complex like business?

Daniel: I don't think MBA can help you if you want to start something from nothing. But I think practical eduction can help. Education coming from people who have done it several times and then decide to share their experiences either via a book, or post or other means. You need to be able to distinguish the difference between practical and theoretical. My rule of thumb is this: if the person who is giving advice has done what he is preaching before, there is a good chance what he is saying wil be practical and possibly replicable for you to adopt.

Retention rate is the closest proxy for future revenue (if your product is designed for repeat usage). Absolute "Active users" can be misleading if your user base is constantly growing either due to some marketing campaign running or other means. Because then you always see your "Active users" metric is growing. But not sure why and if you are on the right direction. The same goes for "Churn rate". That's why you need to measure them per cohort of new users/feature release/marketing campaign and not absolute numbers. I personally think the most important metric of all for a pre-PMF: "Retention Rate" per cohort of users. The percentage of users who continue using your product or service over a given time period. With that you can see if a new feature set, a new marketing channel, messaging, or a new target market made a meaningful impact on your results. And then act accordingly.

Time freedom is key. Autonomy (which time freedom provides) is one of the biggest contributors to satisfaction/happiness. When you achieve financial success in a 5-10 year time span, one of the biggest advantages you get is buying back 20-30 years of the better part of your life which otherwise you may have to spend for making a living. And that's usually the best part of your young life which is 25-50 and best part of every single day which is between 9-5!

Don’t build confidence. Build evidence. Confidence comes as a result of evidence. Not the other way around. Confidence without evidence is delusion. You don’t become confident by shouting affirmations in the mirror, but by having a stack of undeniable proof that you are who you say you are. Give yourself so much goddamn proof that you are the version of person want to be, and you’ll become them. Outwork your self doubt. —Alex Hormozi

Stewart Butterfield: The Glitch team had exhausted all of the ideas they had to fix the problems with the product. Sam Altman: That’s always when I tell people to give up on an idea: when you run out of ideas for how to make it work. Daniel: A brilliant recipe for knowing when to quit a project: Build. Assess the metrics. Troubleshoot. Repeat. Repeat till you don't have more troubleshooting ideas and metrics are not showing meaningful progress. Troubleshooting: Find what's not working on the surface or what you are not getting. Then dig deep and try to investigate the potential root causes. Then generate ideas for how to solve them. Prioritize them. Execute on the list till the list is exhausted!

“Parker just gave you the most important thing you’ll ever hear, which is also what I was going to say. My #1 piece of advice comes from Steve Martin who explains in his book that the key to success is to ‘be so good they can’t ignore you’… If you do what Parker’s done and build a business that’s going to be a gigantic success then investors will throw money at you. But if you come in with a theory, a plan, and no data then you’re just 1 of the next 1,000.” Mark Andreessen

The biggest risk for an startup is building something no one (or not enough) people want (Paul Graham). This reason alone counts for almost one third of the failures in the startup world (reference: Why Startups Fail by Thomas Eisenman). So if entrepreneurs can tackle this first huge risk using idea/product validation and getting some initial traction or even paying early adopters, they can differentiate themselves from the crowd and get investors attentions with strong evidence instead of guess work (business plans, imaginary data projections…)

Jeff Bezos: “I very frequently get the question: “What’s going to change in the next 10 years?” That’s a very interesting question. I almost never get the question: “What’s not going to change in the next 10 years?” And I submit to you that that second question is actually the more important of the two. You can build a business strategy around the things that are stable in time.

20/80 principle says 20% of your actions produce 80% of the results. But it’s not that easy always to know in advance which actions will be in that 20% that produce 80% of the results. I never knew learning javascript can lead to a career in software engineering which will get me a job in another country like Germany which I will be in the top 10% earners of the society and love the work I do everyday and fill satisfied. You need to keep trying new ideas and learning new things. You never know which one will be the one thing that will have the most impact. Here is the key: consistently learning and trying new things and ideas.

The cost of being who you are is conflict with those who want you to be someone else. The cost of being what others want you to be is conflict with yourself. My comment: This is brilliant line! The question is not if we have to pay the price, the question is which price and when we have to pay it.

Reid Hoffman: “one of the things that’s actually really important for inventing products is a fairly deep theory of human nature and humanity… you should be able to articulate a relatively robust theory about ‘what is human nature?’ … and ‘how does your product or service fit into that?’ If you’re trying to create a mass-market consumer application, what are the parts of what it is to be human that you’re actually triggering, responding to, surveying, etc.? Facebook is ego. Zynga is sloth. LinkedIn is greed.” Nikita Bier: “People download apps to solve core human needs (1) finding love, (2) making or saving money, and (3) play. People rarely take time out of their day for anything else.”

Sam Altman: “The cycle here is basically: talk to customer to understand pain point → build product to address that → get product in front of user → see what they do → repeat cycle. This cycle is how you iterate and improve. The law of compound growth being what it is: if you can get 2% better every iteration cycle, your iteration cycle is every four hours rather than every four weeks, and you compound that over the course of a few years, you’ll be in a very very different place. Make it one of your top goals to build one of the fastest iterating companies the world has ever seen.”

Sam Altman: “Most companies have a 2-3 year time horizon. But companies are almost always a 10 year project if they work. If you think about it that way from the very beginning, you will make very different and much better decisions. I think this is the only arbitrage opportunity left in the market. Almost no one makes a fairly long-term commitment to a new project. But if you do that, you will think in a different way, you will hire different people, and it will work very well.”

Sam Altman: “Vinod Khosla has a saying that I love: ‘the team you build is the company you build.’ This is really true and I never appreciated how true this was for a long time. If you build a team of great people and you have a product that people love, you’ll have a 90%+ chance of success. Those are both really hard to do, and they’re independent variables. But don’t ignore the team component. The best CEOs I know spend huge amounts of their time recruiting and retaining good talent.”

Jason Fried: “This person asks ‘How do you still win in a packed category?’ Winning what? Winning who? Winning it all? Taking everything? That’s an insurmountable mountain of intimidation right there. Don’t do that to yourself. How about just making something that can sustain itself? Why do you need to win it all? Why would you ever want to make it that hard on yourself? Build something good, keep your costs low, keep your growth in check, hold back your expectations, find some customers, charge them money for your good/services, make more than you spend, and you’ll buy yourself another day, or week, or month, or year in business. Just aim to stay open, don’t aim to win anything from anyone. Staying afloat is a win for yourself. Just start there. The odds are still against you, but they’re a whole lot better than trying to win it all.