ERE For Entrepreneurs

Where are you and where are you going?
Post Reply
dpmorel
Posts: 137
Joined: Mon Aug 23, 2010 6:51 pm
Contact:

Post by dpmorel »

I read some of the introductions and saw a few folks who mentioned they had entrepreneurial desires.
I am currently a co-founder of Peek (www.getpeek.com), and this is my 3rd startup... first two I was a very, very early employee (one IPO'd), and this is my first go-around as a founder.
One view of ERE is that it allows you to start living a low-cost, frugal lifestyle where you can tinker and do what you want and have major personal freedom.... which is a pretty f'n awesome life.
Another view of ERE is that it is an extreme "income-enabler platform" (horrid biz slang... you love it).
Since your personal costs are low and you have some passive income, you can take risks in life with your time. Your time is the massive enabler (forget the money you saved). Time is the biggest thing you need to start businesses. Owning your own businesses can pay you a frack of a lot more than your $80k/year salaried job.
Not only does ERE provide you the personal situation to start-up companies and take risks, but it also gives you the skillset and financial understanding needed to run an early stage business. Everything you learned from ERE is directly applicable:

-don't take debt, save to buy stuff...

-keep costs super low (do it from home, not in a big fancy office) and save large amounts of profit

-do it yourself, don't pay consultants/contractors

-when you need to spend, spend on assets that have high re-sell value
...and so on and so forth.
Remember, the biggest cost of most early-stage startups is in fact salary! Many 'entrepreneurs' live in fat-cat homes, driving BMWs and suck the money out of their businesses. Imagine how easy it is to for you with your ability to save 50-80% of your business's income, you can make your service or product far more compelling than Mr. BMW driver.
And the best part is, if you are successful, its basically income for life. Not only can you step back into "retirement", i.e. your $10k/month, one day of work a month chairman role... but tons of folks will want you to sit on their boards and a be an advisor one day a month, because you had the balls and the financial wherewithal to do it.


jacob
Site Admin
Posts: 15907
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
Contact:

Post by jacob »

Indeed! I mentioned ERE as a stepping stone for a new career, travel plans, family plans, but I had forgotten to mention entrepreneurship. It's in now :)
Actually one of the major issues/sources of frustration in the startup I'm involved in is that most people don't have the time to commit (busy with their dayjobs) and that much of the committed time is dedicated to raising money.


dpmorel
Posts: 137
Joined: Mon Aug 23, 2010 6:51 pm
Contact:

Post by dpmorel »

No idea where you are in your startup lifecycle, who the team is and what you're building... if you are early stage (not yet launched something) and doing a web-based startup and the team are not ex-startup rockstars... my advice would be:
1. Stop raising money

2. Only have 2-3 key folks in the founding team... and they should all be able to program and build the product

3. Get it built fast - but make sure the product is awesome

4. Come up with a way make money to pay the 2-3 people... find a sage advisor to help reduce their costs so they can live off of nothing.
I love the books by 37 Signals - http://37signals.com/
I also like a lot of what Paul Graham writes - http://www.paulgraham.com/articles.html


Ralphy
Posts: 198
Joined: Wed Jul 21, 2010 11:41 pm
Location: Iowa

Post by Ralphy »

......."which is a pretty f'n awesome life"
Nice.
Really liked this post. Entrepreneurship is something I look forward to exploring down the road when I get to ERE.


Q
Posts: 348
Joined: Thu Jul 22, 2010 8:58 pm

Post by Q »

2nd the post and the idea...
This support is what makes me believe in ERE REIT/Nullhof so to speak etc.


Matthew
Posts: 391
Joined: Thu Jul 22, 2010 6:58 pm

Post by Matthew »

@Q
I agree. It just means we all have to look at the Nullhof project more seriously.


NYC ERE
Posts: 433
Joined: Mon Aug 02, 2010 8:03 pm

Post by NYC ERE »

@dpmorel That seems like a promising business. Peek is one of the few products I could see myself getting behind as an entrepreneur/marketer. Perhaps coincidentally, the "lifetime" subscription seems pretty ERE-friendly. Best of luck with that!
I agree with your recommendations about DIY and running lean; I'm also an entrepreneur and I currently have no employees besides myself, but I do have two contractors--these are unavoidable in my situation, as I would forgo income/work 60+ hours a week by doing what they do for me myself.
re: working from home--this is one piece of advice I followed until 18 months ago; work-life separation has been a total blessing. My overhead is 19% of revenue, and I would never advise anyone to take a non-home office until they achieve a similar ratio.
In my ERE plan I've made the conservative assumption that I won't earn another penny after retiring in five years--just in case the industry I'm in evaporates, the sale value isn't significant, or I can't find anyone to manage it for me. In other words, I'm just counting on amassing savings, Jacob-style. A sweet chairmanship would be great, but I'm not sure my biz will get sufficiently large for that.


Steve Austin
Posts: 177
Joined: Thu Jul 22, 2010 12:17 am

Post by Steve Austin »

dpmorel, excellent point, which I take to be that ERE is the *basis* for good business partner material among ERErs. There are Other Factors(tm), of course.
As you probably recognized from the various Nullhof references in the forum, I'm infatuated with the rough idea of (mostly) DIY fabrication of wind, solar, hydro, ground-source, biomass, etc. home-scale energy systems. From a business perspective, what do you guys think is the most efficient approach? Sell the ideas/designs? Sell the fabricated goods? Sell the services (survey, installation, maintenance)?


akratic
Posts: 681
Joined: Thu Jul 22, 2010 12:18 pm
Location: Boston, MA

Post by akratic »

I definitely intend to start a business after ERE.
During my previous attempt at entrepreneurship, I disliked the compromises that were necessary to bring in early income.
As a computer programmer who enjoys building things from scratch, I think it will be very exciting to start a business after ERE! However, I wonder if I will be able to find a co-founder or two with similar goals and financial situations.


Steve Austin
Posts: 177
Joined: Thu Jul 22, 2010 12:17 am

Post by Steve Austin »

akratic, financial situations and matters of intellectual property aside, what are your software business goals? kinds and scale of customers, field of application, etc.? If you prefer, I can contact you off-forum.


akratic
Posts: 681
Joined: Thu Jul 22, 2010 12:18 pm
Location: Boston, MA

Post by akratic »

Caveats: I'm not going to be ERE for a few years, and I don't really have time for side startups before then.
I like making things people want, the more people the better. I like making things I can create single-handedly (or just within the team), thus things that are software only. I want location independence, thus websites and iPhone apps, etc., appeal to me.
I'd like the ability to disappear from the project for a bit if I wanted to, and still have it survive. I wouldn't disappear during the design/initial implementation stage, but I get bored after the big problems/challenges are solved (and want to go work on other problems/challenges).
After I'm ERE I'd consider making things that are useful to people and have no way of making me money in return. Before ERE/now I'm rather concerned with how the cash would flow. I don't like business models that start by imagining an acquisition.
I don't like VCs. I don't like debt. I don't like banks/beaurocracies/credit card companies.
Right now I'm particularly interested in learning, foreign languages, ride-sharing/hitchhiking, ERE, skill exchange. I've learned that my interests change drastically over time, though, and who knows what they'd be in a few years.
I like complementary skill sets. I could do most software projects single-handedly, but I'm not good at marketing, PR, advertising, legal stuff, people stuff, and knowing what to make in the first place. I know that I need to partner with someone with these skills, but I don't know where to find good candidates, or how to decide between them.


dpmorel
Posts: 137
Joined: Mon Aug 23, 2010 6:51 pm
Contact:

Post by dpmorel »

@akratic - I love this "I don't like VCs, I don't like debt, etc". I think that is ERE theory applied to business. Using VC funding or borrowing money to build a business off an idea that you have no idea if it will make money feels like the business equivalent of borrowing money to invest into your 401k.... i.e. irresponsible.
My opinion on finding a partner - for years 0-2 you really don't need a professional CEO/marketing type/business man... and you really don't need a great idea either.
The two biggest names in angel investing these days for s/w startups are probably Ron Conway & Paul Graham, whom both work off a thesis that is roughly:

-makers only (coders, hackers, makers, engineers, etc)... no professional businessmen in the early stage

-the original idea & business plan are going to be unbelievably wrong, you need someone who can "pivot" their idea (pivoting is the big startup buzz word du jour)

-so they invest in the people/team instead of the idea


Post Reply