Most people who want to start a business or a project or anything of significance suffer from fear paralysis. This debacle stems from two sources: one, a perceived uncertainty. Humans are terrible at dealing with uncertainty. And people think businesses are too uncertain to start. In truth, almost everything is uncertain. Anything can go wrong at any moment. But when it comes to entrepreneurship, this sense of uncertainty is more pronounced. Fear of failure is too high.
The second source is ambiguity — we often don’t know how to and where to start.
Sahil Lavingia of Gumroad has written an excellent book that addresses these two challenges head-on. The book, titled The Minimalist Entrepreneur, offers a practical framework for starting and building a profitable business from scratch and is a brilliant read.
There are a lot of excellent business books that address this question. But The Minimalist Entrepreneur does an excellent job in laying out a system that one can use to start small and build gradually that can both reduce uncertainty and risk of failure and also provides clear guidelines that effectively deal with ambiguity. You now have a roadmap to start and build a profitable business.
Sahil suggests today’s internet culture allows us to reverse engineer entrepreneurship. You don’t need to start a business, raise money, and find out after a while that your idea is not going to work.
Instead, Sahil recommends a more predictable approach to building a business. You create first and then become an entrepreneur second. Sahil suggests a simple framework for this: you choose a small target group, find a pain point they have that you can solve, focus and create a solution and repeat the process until you get to a product that works.
Sahil provides four steps framework for doing this in the Minimalist Entrepreneur:
The key themes here are experimentation and focus. Many of us expect that we’ll try once and it will stick. But that’s not how most things work. Most things are iterative in nature. You try several iterations before getting to a version that serves the purpose.
In entrepreneurship, this is the central truth. Stories of almost all successful companies validate this reality. But the question comes about how to run experiments continuously when it is expensive to do so. Sahil suggests minimalist entrepreneurs don’t spend money mindlessly. Instead, they start as creators. They create, not to build a business, but to serve a community. Over time, one of their solutions resonates with the community and the entrepreneur gets the opportunity to scale profitably. This is the key difference between a minimalist entrepreneur and an entrepreneur with the so-called BHAG.
Minimalist entrepreneurs start small, create first, find a market and then focus on building profitably. When you take this approach, it allows you to experiment as long as you want because the cost of running experiments is almost zero. Since you can stay in the game longer because of your model, your chance of finding success is much higher.
One overlooked caveat here is failure. When you are talking about constant experiments, it is a given that you will fail. To that end, it is necessary to have a high tolerance for failure and for things not working exactly according to your plan. This is not difficult if you understand that most things don’t work. Startups are often long-tail events. You try 100 iterations and 5 works.
Morgan Housel puts it beautifully: “A takeaway from that is that no matter what you’re doing, you should be comfortable with a lot of stuff not working. It’s normal. This is true for companies, which need to learn how to fail well. It’s true for investors, who need to understand both the normal tail mechanics of diversification and the importance of time horizon, since long-term returns accrue in bunches. And it’s important to realize that jobs and even entire careers might take a few attempts before you find a winning groove That’s how these things work.”
That said, it is simpler to create a list of how to start a company. But in reality, doing so is not that easy. Sahil writes:
“In practice, it’s not so simple. There are many complications that pop up, and most people don’t even know where to start. A business of any kind is too scary, too amorphous, or too unattainable.”
As I mentioned before when you consider building a business it seems almost un-figure-out-able. Sahil offers two solutions in the book. He writes:
“Luckily, there is another way to get started today. Before you become an entrepreneur, become a creator. That could mean being an artist, but it does not have to. Creators make things, charge their audiences for those things, and then use that money to make more things. They use the first dollars they earn as tools to fuel their own creative drive, not the other way around. With time and experience, creators show others how to turn their own creativity into businesses, and the cycle continues. In the end, there is not much difference between a business like Gumroad and a creator. It’s just semantics—one or more people using the tool of a business to make something new. Painters need brushes. Writers need pencils. Creators need businesses. It’s key for people to understand that, because it lowers the cognitive barriers to starting a business, and starting is really important.”
A lot of entrepreneurship, from start to growth, is psychology. When things are massive, we struggle to understand them. We can’t figure out how to proceed. This is what happens when you are thinking about starting a business.
You are thinking about all the things that you have to do to set up a business. The legal aspects. The marketing aspects. The product aspects. The competition and so on. But when you think you just want to create some designs, unload them to some freelancing platform or social media platform and see the response of people. It appears approachable. No mental barriers to doing it.
Sahil suggests minimalist entrepreneurs take this route. You don’t think about building a product but instead creating something you love creating. Once you see there is a demand, you get to the next step by serving that demand.
This leads to the next psychological challenge we face when it comes to entrepreneurship — whether we should start and then learn or first learn and then start.
Many of us consider ourselves illiterate to start a business. We consider what we know about entrepreneurship to be insufficient to start a business. Many of us feel that we have to learn about entrepreneurship first and then start. But learning does not work like that. At least when it comes to entrepreneurship you can’t do it just by learning.
Entrepreneurship is often counterintuitive. You have to start to learn. Sahil puts it beautifully: “You don’t learn, then start. You start, then learn.”
There are several aspects to this idea of learning by doing. We can read up all the major literature on building a business and yet fall short of starting a real business. Knowledge does not always lead to action. The barrier is psychological. It is inner inertia. It has to be dealt with as such.
We can get over it by taking action. The approach Sahil proposes in the book — creator first, entrepreneur second — effectively deals with this fear and psychological inertia that we face when we try to start something. You don’t start a business. Instead, participate in a community and create something that you value and the community values.
The second aspect is the phenomenon of the map and territory. While a map can be an excellent tool for navigation, the map is never the territory. It is the same for everything. Without starting a business, you can’t really understand the reality of entrepreneurship. Without getting out of your building, you can’t learn entrepreneurship.
Start small but start. When you start, your fear diminishes and you learn things that you will never learn otherwise. The best way to learn is always by starting. Sahil provides a framework for minimalist entrepreneurs in the book:
The minimalist entrepreneur: how great founders do more with less by Sahil Lavingia is an excellent read in its entirety. The book offers unique insights into looking beyond the mainstream ideas of entrepreneurship and rethinking entrepreneurship. More importantly, it offers a practical framework to start and build businesses that work. Highly recommended.
This article was originally published on August 1, 2022. Updated on 19 October 2022.