Are You Makeing These Startup Mistakes?
Let’s take a break from business growth videos and look into starting a business. In this video, Matt reviews a video sharing 3 startup mistakes to avoid. Watch to hear Matt’s thoughts on these mistakes.
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
Video Transcript:
Business Advice Video:
Never do these three things when starting a business. Number one, be an expert at too many things. Remember, the only place general knowledge gets rewarded is on jeopardy, not in business. Number two, run out of cash. Because when you run out, the game is over. Business is a war of attrition. Never run out of ammunition. Number three, give up equity before you have some traction and some level of sales.
Matt’s Review:
Well, first of all, I’d be surprised if he wrote this himself with these cutesy rhyming sayings. That seems like probably somebody put a script in front of him and he just went through it. But the idea itself, right, you don’t need to do everything in your business. It probably doesn’t make sense to try to learn bookkeeping and learn marketing and learn sales and learn admin and learn, you know, manufacturing or whatever, right? Dothe core piece that is the key to the business, that’s what makes it different, and then as soon as practical, outsource or hire for the stuff that is stuff that needs to get done but doesn’t need to be done by you. Like bookkeeping and tax filing and admin and even marketing and branding and video and content creation and things. The way you scale is by doing the things that you can do and getting help on everything else. And the more things you can hand off, the more you can grow. Second was don’t run out of cash. Well, duh I don’t know, that’s not super helpful advice. Have enough cash, know what your break-even point is, know what the runway for that looks like, know enough of your numbers to be able to properly fund the business and not rely on getting eyeball deep in debt and hope that there’s some Hail Mary sale event that happens or revenue event that happens that digs you out, right? Know what this should look like. Know the metrics and numbers of the business and that you can afford to get to break even without running out of cash. But that general advice, don’t run out of cash, is not super helpful. Then the last part about giving up equity. Well, obviously he’s a Shark Tank guy, so he’s used to businesses that are looking for investors. But I’m a bootstrap guy. I think the best thing you can do for your business is figure out how to run it so you don’t need to ask anybody for money. That way you continue to own 100% and you’re not in a position where if you aren’t able to raise money, the business goes away. That’s super stressful. And the more desperate you get, the worse the valuation gets, the less you get to keep of all your hard work. And you don’t want to be in a position where you need an investor to bail you out or to be able to grow. So find a business you can self-fund, bootstrap from the beginning, keep 100%, and grow it organically. That, to me, puts you 100% in the driver’s seat, and you’re not now reliant on someone else to come and help you grow it or save it before it fades away. So this advice is okay. But I think for most people, it doesn’t apply or is too general to really be very helpful.
