Starting A Business: Providing Value vs Making Money

I was having a conversation about starting a business with someone the other day and I left it feeling a little unsatisfied.

The person I was talking to was interested in starting a business and told me they were going to be selling a not so unique product online.

I nodded and tried to be supportive, but upon further reflection I just don’t think this idea is the million dollar idea.

I’m not even sure this is the $100,000 idea.

And this isn’t a knock on my friend, I’ve had lots of conversations recently with people who are interested in starting a business for lots of different reasons.

Today I just want to highlight a few things I’ve learned as I’ve started my own business and as I’ve worked for successful startups.

Stop drinking the “start your own business” Kool-aid

There are a lot of articles out there about someone who works 5 hours a week and makes X insane amount of money.

I don’t totally doubt that those kind of people exist, but I don’t think that’s a particularly truthful narrative.

And I don’t want to be interpreted as anti-start your own business, I’ve done it and I think it’s pretty cool!

There are definitely some perks (especially tax-wise) and generally I think its a great idea.

But what I’m saying is stop reading the 4 hour work week and thinking that’s a realistic thing that you can do.

I don’t know a single person who only works 4 hours a week and makes serious money.

I don’t even know anyone who knows anyone who only works 4 hours a week and lives in Argentina and learns to dance.

I honestly think that’s kind of a fallacy.

Don’t quit your day job

I was having a conversation with my dad about business.

My dad was a pilot in the Air Force for 20 years and now he works a government desk job that he likes just fine, but it probably isn’t his life’s most passionate work.

He was telling me he has an idea to start a business, but isn’t really sure how to get started or when he would do it.

Then he confessed that he works remote from 6:30am to 3:00pm and actually probably has time to start doing something.

I am literally writing this at 11:13am on a Saturday morning, 4 days after the birth of my 3rd child.

I think some of the best side hustles start during nights and weekends.

So I told my dad the same thing.

Why don’t you work your normal same hours, then take 3-5 and work on your side hustle and then document everything you’ve learned on a blog or website?

You really won’t be your own boss

I hear people say this a lot “I want to be my own boss”.

I’m just gonna tell you straight up, you will likely never really be your own boss. I think that’s totally made up.

Even if you don’t have someone breathing down your neck telling you what to do, your customers are your boss.

No matter what you do, someone will be asking you to do something: make a product, improve the product, reply to an email, fix a problem, on and on.

I can’t think of any business where you actually make money and are responsible to no one.

I think this is an expectation that needs to be reset too, if you want to make money and have autonomy, look for a good job with a good boss.

My boss doesn’t care if I take a break during the day to go to the gym, as long as I get my work done.

If your employment doesn’t offer you the flexibility you need in your life, find a new job.

Does this thing actually make money?

When you’re starting a business you have to actually learn if the thing you want to do will make money or not.

What is the barrier to entry?

Who is the newest player in the space, how well are they doing?

What’s the market cap? What are the margins?

There are a lot of questions to ask before you jump in.

Are you providing value to someone?

It’s weird that I have to say this, but I think this is the most overlooked question when people start their businesses.

Are you providing value to someone that they can’t get anywhere else?

Marques Brownlee has a YouTube channel where he reviews tech, just like hundreds of other Content Creators.

So what separates him from the rest?

Well on the one hand, he bought a crazy expensive robot to help him get really cool shots.

This differentiates him from his competition and makes his videos feel way higher quality.

So before you start that Etsy business, what are you doing that is better or more unique that the rest of the internet?

This website is actually a perfect example of this, if I can toot my own horn for a minute.

You don’t have to monetize your hobby

My wife is a Disney Junkie. I like to play Mobile Games.

We both have thought and kind of started trying to monetize those hobbies but came to the conclusion that not every hobby needs to be monetized.

One of the other reason I started this website is because I actually like writing.

I like the idea that I can write something and that people can find value in it and learn from it.

As of this writing I’ve made about $30 from this website from ads and affiliate links.

I’m not gunning to get the site monetized, but I think that’s an option down the road.

At its core, I just like doing this.

YouTube Creators as a great example

Bringing it all home with this example.

I watch and study a lot of YouTube Creators because I think what they do is so interesting (shoutout Colin and Samir for offering so much value in your content) and one of the interesting observations I’ve made is that almost every successful Content Creator on YouTube got started making little to no money but making videos because they love to make videos.

This is the cycle that I think leads to incredible success and tons of monetary gains.

Create value -> grow audience -> figure out how to monetize

I think people get in trouble when they focus on monetizing before creating value.

This concept is also sometimes referred to as Product Led Growth in the tech world.

They focus on building an incredible product first and then let that product facilitate the growth and therefore the monetization.

Now don’t get me wrong, I’m not suggesting you give 0 thought to monetization, if you aren’t making money, you don’t really have a business you have a hobby.

Conclusion

Look, I’m all for starting your own business and making it work.

I know lots of people who have started businesses, big and small and some of them work and some don’t.

I’m just proposing that when you start planning your business plan, make sure you give proper thought to the actual tangible value that you’re providing.

Can you quantify that?

Have you proven people want/need what you’re offering?

Hope that helps!