Years ago, I had a successful business. I gave it up because it was exhausting. I was willing to make less money and work less, so I could have less stress and more time to live my life.
During that time, it occurred to me, what makes a successful business. (spoiler alert) It is sales. If you have sales, you have a business. You can always find someone to do the fulfilment, as long as you have sales.
Of course, sales isn’t everything. If you don’t manage your business well, you will leak money until you bleed-out the company. Certainly, things like unproductive labor, poor quality control, bad accounting and theft, can wreck a successful company. However, I have seen companies who were able to earn money faster than they could waste it. It was amazing.
When I owned my own business, an acquaintance recommended that I read the book “The e-myth”. I thought it was going to be about email or e-commerce. No. The “e-myth” is the entrepreneur myth. It goes like this: “Hmm, I work for my boss and make $15 per hour, he is probably charging $50/hr. For every dollar that I earn, he is getting two and a third. He just sits on his butt and rakes it in. Gosh, if I started my own business, I could be taking home all $50 of that cash.” It seems like easy logic, but it doesn’t actually work that way.
In “The e-myth”, the author points out how much work it takes to run a successful business. It takes dozens of unique skills, but beyond that, it requires tireless hard work and determination. At first, you don’t own a business, you own a job. If you don’t work, you don’t make money and your business might fail. It is more like the business owns you. The book points out that you will do better if you focus on hiring people and training people to do the work. You need to be able to focus on running the business. It was a really good book. However, the one thing that the book seems to ignore is sales.
I’ve heard “if you build a better mousetrap, people will beat a path to your door”. I would say that is not necessarily true. Because if the maker of the old (worse) mousetrap, has better/more-effective sales, he will eventually suffocate your business. If you can’t/don’t do effective marketing, then nobody will know that you have made a better mousetrap and your sales will suffer.
In (nearly) every successful business, the president of the company is the #1 sales person. He handles all of the biggest accounts. So, if you own a business, that job will be yours. You better be ready for that.
So, what does this have to do with programming, you might ask.
- I’ve known dozens of people who have come to me with “a really great idea, that will make millions”. I just need to do the programming and they will cut me in for some percentage of the business. I fell for this line, a half-dozen times before I wised-up. Since then, I’ve dismissed anything where the soon-to-be-president/person-with-the-idea, has never run a successful business before (and probably doesn’t know how to turn an idea into a solid business).
- I’ve known programmer friends who have passed-up good opportunities because they didn’t get offered enough pay or enough % of the company. Here is the flawed thinking: “After all, the business was a program/web-site, so the programmer should get most of the money. The idea would sell itself, however it won’t go anywhere without a programmer.” No respect for sales, eh? (No product sells itself)
- I’ve seen companies go from concept, to multi-million-dollar companies without showing a solid way to make money (craigslist). I’ve seen companies with huge potential go nowhere because they tried to make money too soon, or charged too much.
- I’ve seen companies with lots of talent and great products, go under because they couldn’t sell those products/skills. However, their competitors may have sucked, but they could sell those same skills very well. When the competitors offered to “sub” work to them (ie, the talented guys could do the fulfilment for a competitor), they refused, because the competitor (with superior sales) might take credit for all of the good work.
- I’ve seen hundreds of great ideas (that would have really worked) go flying past me, and I didn’t go for them, because I couldn’t fathom how to turn them into solid businesses, or maybe if I could, it looked like I would have to do all of the work (shouldering all of the risk and stress) and I wasn’t ready to do that again.
So, periodically, people ask me why I don’t own my own business. I guess this is why. It is more work and more risk than I’m willing to endure. I’m not a very good sales person. I find that work to be exhausting. However, if you would like to own a successful business, you should try selling some vaporware. If you manage to sell it, call me up. I’d be glad to handle the fulfilment for you.