How I Built This | Guy Raz on The James Altucher Show

Check out The James Altucher Show Episode Page & Show Notes

Key Takeaways

  • Smart entrepreneurs keep their options open:
    •  “They don’t burn bridges; they keep their options open in case they need to pull that parachute” – Guy Raz
  • When you solve a problem that you have, it’s confirmation of a market because you’re already a customer of it
    • “If it works for you, it’s probably going to work for everybody like you” – James Altucher
      • Tobias Lütke started Shopify to build an eCommerce store to sell snowboards
      • Derek Sivers created CDBaby to sell his own music online
        • “If you love it and you would use it, it’s probably a good idea” – James Altucher
  • If you’re starting a business just to make money, it’s not going to work:
    • “I’ve never come across a product or service that was started out purely as a money play” – Guy Raz
  • “It’s super important for founders to remember in the back of their minds that they have to build a culture and not a cult” Guy Raz
    • You want to build something you feel strongly about, but also build it so that you can walk away from it down the road if you decide to do so
      • “If it’s only about you, then the company also dies with you. Which you don’t want.” 

Intro

  • Guy Raz (@guyraz) is a journalist, correspondent and radio host, currently working at National Public Radio.
  • Host:  James Altucher (@jaltucher)

Books Mentioned

Smart Entrepreneurs Minimize Risk

  • Most entrepreneurs aren’t huge risk takers and actually do everything possible to minimize risk
    • Out of the 350+ entrepreneurs Guy has interviewed, very few of them quit their day job when they first had their business idea. Instead, they kept their day job and grew their business in their free time until the business got big enough that it could replace their day job.
      • Daymond John worked at Red Lobster while he grew his clothing brand
      • Sara Blakely was still selling fax machines when Oprah Winfrey featured Spanx on her show  
  • “Most entrepreneurs mitigate risk” – Guy Raz
    • Smart entrepreneurs test their idea, try to find holes in it, and have a backup plan in case it fails
      • “There are ways to take risks that don’t result in catastrophe”
  • Smart entrepreneurs keep their options open:
    •  “They don’t burn bridges, they keep their options open in case they need to pull that parachute” – Guy Raz
      • Sergey Brin and Larry Page were still in graduate school while building Google

Business = Solving Problems

  • The core reason for a business is to provide a solution for  a problem people face
  • If you’re looking to start a business, first identify the problem you’re going to solve
    • Be open to the things around you and observe problems in your day to day life
      • When you solve a problem that you have, it’s confirmation of a market because you’re already a customer of it
        • “If it works for you, it’s probably going to work for everybody like you” – James Altucher
  • If you’re starting a business just to make money, it’s not going to work:
    • “I’ve never come across a product or service that was started out purely as a money play” – Guy Raz
      • Tobias Lütke started Shopify to build an eCommerce store to sell snowboards
      • Derek Sivers created CDBaby to sell his own music online
        • “If you love it and you would use it, it’s probably a good idea” – James Altucher

Advice For Founders

  • In the past decade, investors have swung from replacing the founder with an established CEO to keeping the founder as the CEO 
  • “It’s super important for founders to remember in the back of their minds that they have to build a culture and not a cult” Guy Raz
    • You want to build something you feel strongly about, but also build it so that you can walk away from it down the road if you decide to do so
      • “If it’s only about you, then the company also dies with you. Which you don’t want.” 
        • It’s also much harder to sell a business if the company is all about you. You want the brand to be bigger than just you.

More On Business

  • Even if you have a great business idea, it will likely take a while to raise capital
    • Airbnb pitched 20 investors before they got funded. You could’ve bought 10% of it for $150k back in 2008.
  • Understand that friction and resistance are all part of disruption and creating a new business
  • “In many cases, there’s an advantage to not knowing what you don’t know” – Guy Raz
    • You don’t have to be a domain expert in an industry to build a successful company there
  • Your first business idea likely won’t be the final one and that’s okay. You can always pivot if you find a better business model.
    • ClassPass pivoted several times before they landed on their current business model
    • Slack started out as a gaming business but pivoted to communication
      • “Business models change and also companies pivot”Guy Raz
  • In every business, there’s a side door to getting customers:
    • “Keep your eyes open into finding a different entry into an audience” – Guy Raz
      • The founder of RXBARS would go to Cross Fit gyms and sell their bars there instead of going to a supermarket and having to compete with all of the other bars

Additional Notes

  • There are many  similarities between the classic hero’s journey archetype and the path of an entrepreneur
    • Both leave the ordinary world, go out and try to accomplish something crazy, face a lot of challenges along the way, and eventually emerge as a new person with a prize
  • Great entrepreneurs love their product and are invested in providing a great service to customers
    • You’d be surprised to see how many founders help customers with their product
James Altucher Show : , , ,
Notes By Alex Wiec

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