Fastlane AMA: James Altucher; Startups, Publishing, Bloggin More...

[socaldude]

James,

You have started several successful companies. Can you share with us your thought process or checklist or criteria or important variables you go through to maximize the chances of starting a successful company. Hopefully that makes sense.

For example here at the Fastlane Forum we use "CENTS", an acronym from the book: The Millionaire Fastlane

N= Need, your product or service must be of value or benefit to others to warrant the transfer of money between parties.
E= Entry, there must be barriers to entry.
C= Control, you must control vital variables that influence your business.
S= Scale, it must be a scalable business, instead of just being able to sell 10 units, you need to be able to sell 100,000.
T= Time, the business must be able to become a self existing organism on its own to free you of time bondage.

Thanks,

 

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[TopChef]

James.

You mention flexing your idea muscle on a consistent basis. How do you sort out which ideas to focus on and which ideas to park? Supposing you have three great ideas that each can lead to great success and each week you come up with another one. Eventually you will have to focus the majority of your time and energy on one or two projects.

What process do you use to know which ideas to move forward on without getting stretched too thin? Do you develop every good idea you have to a point and then focus on the most successful one? Do you devote a lot of time to market research before starting? Do you rely on your instincts? Do you have any rules as far as how many projects to focus on at once?

 

[J. Altucher]

What does, in your opinion, the future hold for Greece?

What is Greece?

 

[Whiphsh]

A country.

https://www.google.lt/search?q=Gree...:en-US:official&client=firefox-beta&gws_rd=cr

The unemplyment rate has been climbing steadily since 2008 and it doesn't seem like it's going to stop.

Seems like Spain has finally caught up, too.

I barely know anything about it myself, though. Just curious what you think about it.

 

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[theag]

A country.

https://www.google.lt/search?q=Gree...:en-US:official&client=firefox-beta&gws_rd=cr

The unemplyment rate has been climbing steadily since 2008 and it doesn't seem like it's going to stop.

Seems like Spain has finally caught up, too.

I barely know anything about it myself, though. Just curious what you think about it.

He already gave you the answer Think about it again

 

[Whiphsh]

He already gave you the answer Think about it again

HAHA

I was so clueless.

 

[million$$$smile]

James,

When one has put so much of oneself in a business, how does one know when it is time to sell?

Thanks,
Randall

 

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[J. Altucher]

N= Need, your product or service must be of value or benefit to others to warrant the transfer of money between parties.
E= Entry, there must be barriers to entry.
C= Control, you must control vital variables that influence your business.
S= Scale, it must be a scalable business, instead of just being able to sell 10 units, you need to be able to sell 100,000.
T= Time, the business must be able to become a self existing organism on its own to free you of time bondage.

This is a great checklist for starting a business.

Note, though, that the business will change drastically after you start it. Almost every business does. Some recent examples:

Yammer (an enterprise messaging app) started as Genii (a genealogy app)
Buddy Media (an enterprise software product company to set up facebook pages) started as a faux facebook co and gaming company
Groupon started as a way to raise money for charities
Twitter started as a podcasting platform and the SMS stuff was just started as an afterthought
Microsoft started as a compiler company and ended up as an OS company
Google started a search engine and ended up as an advertising platform (first revs were about 5 years after launch)

and so on.

The interesting thing about business is that the most important thing to start one is you need someone who is GREAT at starting a business. By that I mean:
- someone who is very good at selling
- someone good at vision
- someone good at execution
- someone good at all of the above in your checklist
- and then, perhaps most importantly, someone who can switch everything on a dime without causing too much disruption in the business.

Those are the best leaders. And I've only done well in companies that have good leaders (as an investor or as an entrepreneur myself. When I was a poor leader I created a poor business, even if I had demand).

 

[J. Altucher]

how does one know when it is time to sell?

Most acquisitions turn out bad for the acquirer. Which means that most times you start a business, you should sell as quickly as possible and then start a new one.

BUT, how do you know when?

- if you feel that only one or two things can happen to cause you to go out of business
- if you sense cheaper competition is on the way. When I had a web services busniess I saw jr high school students were learning how to do web design so I knew the whole industry would collapse (it did)
- if you feel your business is slightly hype driven (a "myspace for finance" was bound to be overvalued for awhile)
- you should sell when your business is overvalued. For instance, I was involved in a mental health institute. We sold for 6x NEXT YEAR's planned EBITDA which was a lot higher than anyone was valuing that type of business then. And they ended up not making the EBITDA so we probably sold for 40x next year's EBITDA
- you should always be raising money and never worry about dilution. Because whne you need money you're going to be forced to sell with a gun to your head. I've seen a few of these also.

 

[J. Altucher]

Eventually you will have to focus the majority of your time and energy on one or two projects.

In 2006 I had a bunch of ideas and I decided I needed to switch careers.

I was running a fund of hedge funds at the time. We got an offer for 4x our revenues, whcih was great. The only problem was, they wanted me to sign a six year employment agreement. I couldn't do it. Even my lawyer said, "I thought they got rid of slavery".

So I realized I wasn't creating good equity value in my business and came up with new ideas. About ten new ideas.

On top of the ten ideas, came more ideas.

I started all of them. Probably a dozen businesses simultaneously. And I was working out deals, partnerships, etc for each one. And I was still running the fund of funds.

But then one site, stockpickr, which was in the field that I knew the most about, really started to take off. And the partnerships were driving real users and revenues.

So that's the one I stuck with. Execute on all to the best of your abilities and stick with the one that survives. There is no way to know in advance.

It reminds me of the process of writing. Stories don't come out of thin air. They have to be dug up from the ground. So you have to get out the shovel and dig.

 

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[ricktx]

I would love to know what you think about the future of Cloud Computing? More specifically the future of Software as a Service (SaaS) delivery model. Would you invest in companies like Sales Force, NetSuite or other in the same space?

Thanks in advance for any insight you have.

 

[GerTex]

James,

Thank you for being so kind and sharing your knowledge. Question from a Father. What are you doing with your children to help them learn about business, the world and life? Have you found any interesting methods to inspire them and show them there is more then just this tiny box of going to getting good grades, college and a job? Have you found any great online 'entrepreneur' resources for kids/young teenagers? Any interesting programs that might NOT be about business?

Any other info you think might be worth sharing?

Thanks again for all you do.

 

[FastNAwesome]

Hi James, great to have you have on the forum and thanks very much for doing this AMA. Love your blog too.

One of the things that resonated with me is this:

The key is to not let the idea muscle atrophy.

If you don't walk for 10 days, your leg muscles will atrophy so quickly you will need physical therapy to walk again.

It's the same with the idea muscle. You need to exercise it every day.

My question is - if someone wants to acquire, keep and improve many skills in life, how to go about it?

My current solution is dropping all wishes and desires and focusing on one thing I consider the most critical, because that's the only way I get anything done.

Is there a way to improve in multiple skills at once (like learning multiple languages, becoming more fit, singing...) or focus is the price of excellence and I should pick what to excel in?

 

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[DarkZero]

Hi James, weirdly enough, I read all through your book the beginning of last week without even seeing this thread existed. Your book is an amazing and I'll always be going back to it.

Not sure if you're going to keep answering questions since its basically been a week but I'll ask anyway.

I want to second FastNAwesome's question "Is there a way to improve in multiple skills at once (like learning multiple languages, becoming more fit, singing...) or focus is the price of excellence and I should pick what to excel in?"

And is it smart to juggle learning skills while trying to aim for a successful business? Or is it better to just devote yourself to the business and go back to learning skills later.

 

[Era]

James, thanks for all the wisdom you've shared with everyone!

My question is pertaining to learning programing.
I'm in the process of learning to program and would like your opinion on the most effective way to go about learning. I self-taught myself html and css. To learn the back end programing, is it more effective to take programing courses at a university/college on computer science (just for the sake of learning programing with no intention to get a C/S degree) or is it wiser to just self-learn? Also since I don't plan to learn to program in all languages which language would you advise is best to learn in your opinion.

 

[paqman]

even with all this, some evil bitch nicknamed doubt, fear and insecurity showed up the other day as I came closer to launching. I pushed through it and forced myself to speed up my timeline instead of further postponing. The best validation is to get it out there now so I've decided that I will make a sale this weekend, guaranteed.

FUD - Fear, Uncertainty, Doubt.

Don't get F'UD Up. Get FIRED Up. You're taking an action and the only thing stopping you is fear of failure. Don't be afraid to fail. Be afraid to be common - as 95% of people are just like you - full of fear, uncertainty, doubt.

It's the 5% that push through and take that massive action and drop it into motion. You can do it! And as James has so eloquently pointed out (repeatedly), failure is just a common part of the road to success.

 

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[shoaib]

Hi James,

Nice to see you here.

James, I am a business consultant. I work with small business owners and increase their profits and revenues. I am very successful at what I do but the only thing that keeps me down is how to cold-email prospects.

This is the only area which on which I need improvement.

Let's assume, I found out 10 SME's so how I should be contacting (e-mailing) them regarding my consultancy service, provided, we both are in different countries?

Thank you, James.

 

[Whiphsh]

In ''40 alternatives to college'' you share your experience with learning French and later on suggest not learning it and taking up Chinese or Portuguese instead.

Why portuguese? Predicting a growth of economy in Brazil or some other reason?

 

[Sir Ingenious]

FUD - Fear, Uncertainty, Doubt.

Don't get F'UD Up. Get FIRED Up. You're taking an action and the only thing stopping you is fear of failure. Don't be afraid to fail. Be afraid to be common - as 95% of people are just like you - full of fear, uncertainty, doubt.

It's the 5% that push through and take that massive action and drop it into motion. You can do it! And as James has so eloquently pointed out (repeatedly), failure is just a common part of the road to success.

I fully agree 100%.

Trying to shift my mindset fully into this but whenever I fail, get hurt, or whatever, I try to think differently.

I try to think in terms of, "So What?"

This takes the so-called "bad" situations like failing into a new perspective; it forces you to embrace the consequences for what it is and accept it. Accept the responsibilities of your consequences, or facing failure. The so-called "fear" and "doubt" prevents you from doing such.

So what if I get a F on my quiz
So what if I get rejected by a girl or 5?
So what if I got broccoli on my teeth while I'm talking with Bill Gates?
So what if I stutter in front of millions? Or in front of 1?
So what if my new start up fail?
So what if I make shitty artwork, dishes, forum posts, threads, poems, books, whatever?
So what if I farted in public?

Accept, embrace and learn from failure. Darkness allows a man to figure out how to make light. Every failure is an opportunity, not a cost. Either take darkness, failure, bad situations for what it is and learn from it. Or wander in darkness, feeling sorry for yourself.

The feeling of "I Can't" is just you feeling sorry for yourself.

That negative feeling you get from failure, bad situations, or whatever is just you feeling sorry for yourself.

Ain't got no time for that, brother 'cause we got stuff to do.

Next time you feel sorry for yourself post-failure, do something productive instead like learn from it.

Take responsibility from the consequences of action, negative or positive and stop feeling sorry for yourself.

That's what.

Personally, it's hard to do but that's what I'm trying to shape my mind into.

 

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[bensonj]

James...I don't have a question. I've started my daily practice including my daily gratitude list. Today, I just wanted to say: Thank You for writing Choose Yourself. It is on my list of best books ever along with MFL.

The most impactful line ever (and there were a lot of them):

I'm forty-five and I still have no idea what I want to be when I "grow up." But I'm starting to finally accept the fact that all I want to be is ME.

I am now saying this to my children and my g-children. If I had been told this when I was young I can't even fathom what I would be or where I would be today. But hey, it's never to late! I've got it now!

Needless to say I won't be asking for my money back. Great book! Great Thread!

:thankyousign:

 

[Chris_Willow]

Been following this from the beginning, also read the book.
The thing that stuck with me the most was the daily practice. Been doing it for almost a week now and really starting to see results.
Definitely recommend everybody to give it a try

Thanks, James!

 

[Jonleehacker]

James, did you buy the SPY at the close today?

 

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[andviv]

James, in your book you talk about the economy and the fact that people will be either entrepreneurs or staffers.

How do you see that played in the healthcare industry?

Is it that doctors, nurses and lab technicians will be just 1099 type of people with high mobility between hospitals?

I keep missing to see the real value that managed healthcare and insurance companies bring to the table. The more I think about them the more I see them as taking money from the system and not adding real value.

Is there any business idea you have thought of to add value and help people in the healthcare industry?

I constantly see complains and frustration with insurance companies and the system as a whole so I'd like to get your take on this.

Thanks in advance.

 

[simlet]

James, thanks for doing this good gesture, communicating the intelligence you have learnt.

On your blog: My First customer is Dead

you posted what i put below.

my question is why did you just make $17,500 and the next thing is
straight to rent an expensive place and finished the money immediately?

any thing you want to achieve with that?

How was life after that action?
"We delivered to Shlomo. He couldn’t believe how fast we did it. He couldn’t believe we also did the GIA certificates the way we did. He gave us more work.

He paid us in cash. $35,000. I took, $17,500.

I walked over to The Chelsea Hotel on 23rd Street and said I wanted to move in. They were known for only letting artists and writers live there. Arthur C Clarke wrote “2001: A Space Odyssey” there. Madonna wrote “Sex” there. Dylan Thomas died on the steps leading in. Nancy was stabbed there (“Sid and Nancy”). I was told to wait for Stanley Bard to see me. He owned the hotel. I waited for two hours and then he took me into the office. I gave him the $17,500 in cash and asked if I could live there for a year."

 

[theBiz]

Wow i had no idea this was even going on, been out of the forum for a bit. James ive been reading your blog for a long time now, truly is some of the greatest stuff ive ever read. It seems i always end up there when im down and out or just confused hmm...

I think what works so well for your readers is you've clearly been super successful.... but then even after that, you tell people you go on craigslist and write crazy postings trying to get a date or move away because your broke & miserable.... then eventually back on top again one day. That's just not how its supposed to work. We are all so conditioned to think if you "fail" thats it, everyone was right, no time to get back up, just give up. Your living proof this isnt the case, it inspires me and others like nothing else. So many people have a limited perceptive on life but you inspire others to continuously learn & grow from our failures/mistakes. If there is one thing ive learned from your reading its that failure is temporary, whether that business, relationships, regrets... all of it, failure is a starting point, not the end.

I cant say THANK YOU enough, continue being brutally honest.

 

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[tranquil43]

James, first off I have to say I love your blog. Your writing has offered me more comfort and wisdom than most material I have ever read.

Also, I think you and I are the same person, except that you're very successful and have millions and I don't

You failed out of grad school, I failed out of grad school. You've been fired many times, I've been fired many times. You've worked at HBO, and so did I! And we're both neurotic New York jews

Anyways keep up the great work!

 

[DeletedUser394]

The week has elapsed (22nd-28th), not sure that he's going to continue answering questions.

 

[LeungJan]

Just wanted to let you know I have been a long time reader of your blog, your unique voice stood out straight away.

Your new book has literally penetrated all of my news stream, twitter, tech sites, lifehacker..., now this forum!

I had to buy the book - thanks for the AMA some really great insights.

50 pages in and loving it.

 

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[InMotion]

James will probably hop back on here again soon. If he is not going to answer anymore questions the thread will most likely get locked.

This is a forum and not a timed Q&A; therefore, I'm fairly certain we will see him again.

 

[Texan]

I just wanted to say that I read through this thread while James was answering questions and for anyone who has not done that, it is well worth the read.

I also just bought Choose Yourself and I'm half way through it. I highly recommend it!