In the podcast series, Seth Godin’s Startup School, Seth Godin gave a guided tour to a group of highly-motivated early-stage entrepreneurs on some of the questions they will have to dig deep and ask themselves while they build up their business. Here are my takeaways from various topics discussed in the podcast episodes.
- How do we know when we have achieved our purposes? We achieve “our purpose” or what we came to do when we begin to dance on the edge of failure and grow. We see a void or a precipice in our path, but we keep moving forward. That is when we feel alive as people. The industrialists have, for one hundred years, brainwashed us into not believing we can do that because they do not want us to do that. They want us to need them. If we need them, we will work for cheap, and we will comply.
- With the industrial age coming to an end, many opportunities are presenting in front of us. Still, it is easier to quit than is to stare down the abyss easier. It is easier to quit and to do that dance on the edge of failure. We need to move from one safety zone to another that is uncomfortable. In fact, our purpose is in finding a thing, which we did not think was going to work previously, that is working well enough. We can then wonder what the next thing is and keep that cycle going. The internet is making that easier than ever for everyone. The explosion we are about to see is not the explosion of industrial job creation. It is the explosion of people who figure out whether there is money involved in how to do that thing which we previously thought was scary to do.
- Taking on a partner and splitting equity is an important business decision. Someone’s perception of what needs to be done will rarely be the same as ours, and someone’s understanding of cash is also not the same as ours. If we have a 50-50 partnership, it will not take long before somebody is annoyed at the other person. Taking on a partnership usually involves solving two problems. One is access to technical expertise, and the other is figuring out who can provide support and back-up. A partner work out best when he/she can help on both fronts.
- Giving your partner all the equity upfront is not a good idea. It is better to phase in the equity distribution as time passes and contribution ramps up. If we can solve the technical expertise or the backup support problems without giving away equity, we should explore that option first. If possible, set up the equity distribution arrangement where, as the employees and other people are gaining shares due to the success of the business, we are also gaining shares. That way, we are not completely deluding ourselves as we go through the business growth process.