Thu, 16 May 2019
Today’s episode is an excerpt from the Freedom Fast Lane Live 2015 (now known as the Capitalism Conference) with Jeff Hoffman.
Tune in for the Q&A section of this very popular talk with the well known billionaire.
Q. Thoughts on funding.
[2:26] For some reason, everytime Jeff asks entrepreneurs what their sources of funding are, no one says ‘customers’. He blames Silicon Valley for all the loans, bank debt, private equity, venture capital and this idea that you need to get the funding NOW.
List everything you need to do for your business to reach your definition of success, and circle all of the things you can do without anyone else’s money. Then do them.
If you need money, ask yourself if you can you sell something. Creative ways to finance your company through customers should always be your first attempt.
Borrowing money from somebody else should only come after you’ve done everything you can think of.
Q. Thoughts on money.
[4:43] Jeff would literally divide his money into 2 piles, one for him for the value that he created, and the other one to reinvest in his business.
To best manage your business’ money, you need to think of what normal controls you would you implement for someone else’s money: is the money being spent on things that will sell more for the business?
Entrepreneurs is like jumping off a cliff and building an airplane on the way down. If you don’t have that mindset of always focusing on the plane, you’re in the wrong field.
Q. Thoughts on failure.
One of the harder things with entrepreneurs is that failing is tangled into pride and ego, and when you have borrowed money from everyone you know and your business is failing, you don’t want to see them — especially for the holidays.
The problem is that people don’t define success and failure, and so they have no way of measuring.
So Jeff developed what he calls the Thanksgiving test.
1. Make a clear list of what success looks like
2. Have all of your stakeholders sign it
3. Come next Thanksgiving, determine if you succeeded/failed
4. Keep going/move on
By following this, you will never be stuck in failure for a long time, and your pride and ego will not prevent you from facing your stakeholders.
Mentioned in this episode