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Sami Kivensalo By Sami Kivensalo • December 18, 2015

10 Rules for Building A Company by Guy Kawasaki


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recently watched Guy Kawasaki’s presentation The Top 10 Mistakes of Entrepreneurs on Youtube and liked the way Guy crystallizes the most common obstacles businesses face especially in their early stages. As always, I like to focus on what can be done and what are the positive sides of things so here’s my abstract about the topic focusing on the solutions and call to actions.

1. Calculate from bottom up

Start by asking yourself these three questions: How many unique visitors can you have in your shop in a month? How many of those unique monthly visitors actually make a purchase? How much money a buying visitor uses on average? This little exercise gives you a very realistic estimate on what kind of business numbers to expect during the first months. After understanding where you truly stand at the moment you can start scaling up!

2. Eat what you kill

So you started from the bottom and realized where you are standing at the moment. This gives you a good perspective for thinking about the next level. How much can you invest to achieve the next level? What really is the reasonable ambitious next level? What is the most productive action that you should do next? Answering these simple questions gives you solid focus points for the following few months.

3. Focus on sales

Sales fixes everything! At the beginning you only need two kinds of people in your team: makers and sellers. The makers are the people who develop the core product or service. The sellers are the people who sell it. Remember that you should form partnerships only for lowering the costs or increasing the existing sales. So think about partnerships later, start selling now!

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4. Focus on prototype

The best way to convince that your business model works is to show actual results with a minimum viable product or service. If you do a good enough prototype you will never have to do a ‘pitch’! The goal of any company is to have a great product or service so in the beginning use at least 80 % of your time to build a prototype. Remember that at some level all pitches are equal: proven team, proven tech, proven marketplace, year 5 making 100 million dollars. The best ‘pitch’ is to show what your product or service does so well that it will suck the eyeballs out of our heads.

5. Obey 10 slides - 20 minutes - 30 points rule

Use 10 slides to tell what you want to tell, give these slides in 20 minutes and use max 30 points in total. If you need to use text, use font size 30. Skip the history of you and your team and lead off with the core results of your minimum viable product or service. By following this simple and super efficient way anyone can keep their presentation convincing and interesting.

6. Proceed parallelly

As crazy as it may sound, you should start working on all the different sections of your business engine at the same time! Develop, sell, market, recruit, support and do everything that is really essential for your core business at the same time. Focus is crucial so it is up to you to figure out the right balance of different focus points during each period of time.

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7. Make a bigger pie

Building a business is always consensus building and unanimous. Having this mindset from the very beginning is extremely helpful since if you want to go far you have to do it together. Bake a bigger pie so you can have a smaller share with a smile on your face. Think about it, to have a 2 % ownership of a 5 billion company is much better than 51 % ownership of a 10 million company, right? Guy’s guide for sharing equity is: 25-30 % for employees, 25-30 % for investors and the rest that is left is for founders.

8. Use success for defensibility

Speed is vital when you start the race. The only real protection against competitors and others who want to copy your business models is success. Patents, copyrights and such are a terrific bonus if you manage to have some but you should focus on using all the energy and efforts on growing the core business. Sometimes investors ask you a trick question: what makes your company defensible? The right answer is somewhere between implementing and scaling better than anyone else, reaching the critical mass first, a buttload of work, a lot of luck and a brilliant vision.

9. Hire to complement

You want to have diversity in your team and you want to have different kind of people who are different race, age, gender, everything. Having team members with different backgrounds gives you a lot of perspective. So hire people who don’t match up with your own image.

10. Exceed expectations

The best way to keep everyone involved in the business happy in the long run is to exceed expectations. Whether it is your customers, employees, co-founders or investors, when you keep exceeding whatever they are expecting, everyone will stay onboard and be happy to do so. A good rule when giving promises is to underpromise and overdeliver. Guy suggests that 80 % is a good underpromise. Just remember that the real work begins when you have reached your underpromise.

by Sami Kivensalo, COO

Now you can test which startup personality you are:

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Sami Kivensalo

COO at ZEF, adventuring life with warrior's heart and entrepreneur's mind. Passion for tech, sales, marketing, leadership, culture and product development. Also quite decent badminton player and guitar shredder.