The Four Steps To The Epiphany Book Review – Put Aside Your Pride and Ego When Starting a Business
Do you know why nine out of ten startups fail? It is very simple: founders have an idea and they ‘ASSUME’ (read: ASS-U-ME – “asses are you and me as founders if we assume”) that whatever they came up with will be profitable without seeking constant feedback from potential customers from the very beginning.
They lock themselves down in the war bunker and rush to develop their idea into software, product or business model and they burn through a lot of money and waste time unnecessarily without getting out and asking their potential customers first if they desperately need their miracle solution and if they would pay for it. Some say that startup founders do it this way because they don’t know any better – I disagree, I think this happens because of pride and ego.
Many are full of pride and that is why they refuse to be humble and go find their future customer, his needs and pains first and then develop a profitable business model. They assume they have a profitable business model first and they build a business without checking if there is a demand for it.
This is a paradox: the fear of being told they are wrong stops many from doing the customer discovery work first. As a result the mistake becomes amplified and more painful down the road. Being wrong is the important part of the startup process: have an idea – go out and validate it by talking to customers – modify it until you make it work or trash it if you can’t. You are in this to make money, not to be proven right or wrong – nobody cares about it but your ego.
There is no room for pride here, you have to be humble and admit if the assumptions were wrong and bend them until you find a problem with enough demand and provide a solution for it that makes a profit. Here are few (not all) of the reasons startups fail:
- Arrogance: we know there is a demand and we don’t need anybody else to prove it. (as pointed out by a friend, this is true for things like a cure for cancer and perpetuum mobile)
- Fear of your idea being stolen: your idea is worthless – the execution is the key (inventions are an exception here). I can’t prove it to you in one sentence here, Steve Blank did it a lot better in this excellent post: Someone Stole My Startup Idea.
Idea of customer development is not just a theoretical assumption, Steve Blank has been there, done that for twenty years and speaks from personal experience. His book “The Four Steps to the Epiphany”
The Four Steps to Epiphany is a very detailed and practical book that will help you to avoid many pitfalls when starting a business and it is worth a lot more than its price – this is a practical knowledge for life.
P.S. I recommend you read first Millionaire Fastlane book for general money management and startup advice.
“Get Rich Quick” – How to manage your money effectively
One of the important points I took away from an excellent book Millionaire Fastlane is that if your life savings are small (less than $1million), don’t try to get rich in stocks or by investing it. It is going to take you a long time to get rich that way and you might not see the results of it if planned ‘richness’ is 40 years away.
Rich people use stocks, bonds, commodities and real estate to diversify and to preserve their wealth, not to get rich with it. Why do people who have $10,000 or $100,000 put it in a stock market? To get an average annual return of 8%? During a period of a few years it can be negative % return in the stock market depending on market trend. Get rich first then diversify. Compound interest works when the initial capital is big.
If you have $5,000,000 in the bank, 5% annual interest is $250,000 – you can live very comfortably on this amount. When you have $50,000 in the bank, 5% annual interest is $2,500. See the difference?
The phrase “Get Rich Quick” has become a synonym for a scam, swindle or a false promise. For most people these days this phrase carries a negative meaning. It got beaten to death by a lot of peddlers and snake oil salesman selling seminars, courses and what not. They are getting rich by selling you those easy promises: for only $99 buy this five book and twenty DVD course and be on your way to riches!
If one could get rich by paying $99 and spending ten hours of one’s time reading and watching a seminar, everybody would be rich! These types of courses and seminars make fortunes for the people who sell them because a promise of easy reaches always works. Our lazy nature wants to believe that we can get rich by reading a book, taking a course or seminar.
“Get Rich Quick” should mean five to ten years of dedicated work building your own business. On a big scale of things ten years to being rich and retired sounds a lot better than penny pinching for forty years.
On how to start and build your business, the best roadmap to date is a book The Millionaire Fastlane by MJ DeMarco. It is under $15 and money well spent in my opinion.
Millionaire Fastlane Review
Nine out of ten books about money making and personal finance suck. This book is one out of ten that rocks! I just finished reading “The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime” by MJ DeMarco last weekend. I read it in one sitting, just couldn’t stop.
I know title sounds cheesy, but don’t let it fool you. Don’t think it is one of those get-rich-easy books or a teaser to an expensive course or seminar. MJ has no hidden agenda and he tells it the way it is – in easy to understand words. There is no fluff on any of 336 pages.
Beginning is a bit slow as he tells his story, where he comes from and how he got to where he is now.
Most of the concepts in the book are “un-common common sense”. He proves his points with simple to understand breakdowns and examples. You would think: “A-ha, how come I never thought about it this way?”
The main point of the book – MJ proves wrong the widely accepted premise in our society: get good expensive education – get good job – then get into a 30-year mortgage debt and work for 40 years penny-pinching in the process in hopes to retire wealthy. Then he gives you a new mindset and teaches you how to make money.
Do you realize that with a 30-year mortgage you would pay around triple of what the house price originally was? And how having all that debt over your shoulders for those years wears you down, ties you up to a place and makes you miss good opportunities?
Why do we do that? – Because we want it now and we cannot wait. Because we don’t know any better and we do it like other sheep around us. Instant gratification, compulsive shopping and brain-washing by society to keep you as a worker-bee are some of the reasons.
What if you die before you retire?
What if the market crashes and you can’t retire like many baby boomers now?
What if the dollar devaluates and can’t support your lifestyle with those savings?
I hope this book answers many of your questions, it answered mine. He tells you exactly how do you need to think and what exactly to do to become wealthy without waiting for retirement. Instead of giving you a fish, he makes you a fisherman!
Does it sound too good to be true? The only way to find out is to read it. I consider the few dollars I spent on this book the money well spent.
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