How to Start a Business and Insult Engineers

Hello, how is everybody doing? Great? How are you guys there in the back? How are the people doing over here? Here’s what I want you to do, does everybody here have a smartphone? No? Does anyone not? What I want you to do is turn around and take a photo of the person behind you or next to you that you do not know and tweeted them and now you have a new friend. So take two minutes and do that right now. Make a new friend. You take a photo with your phone and you can tweet to each other. Now you guys are besties.

You can do that on the side. Don’t be too cool. C’mon! Meet those guys. Do you guys know each other? Dude, c’mon, make some relationship. Maybe they’re power brokers. Yeah, take a photo of them. Make it awkward. Go find someone new. Did everyone do it? Is there anyone alone? Is anyone, alright, Do you guys do the photo thing? Do you guys do that over here? Alright, bring it back, bring it back. Good.

So I want to get an understanding of who’s here. And I’ll start with the real basic steps. So if you are male, raise your hand. Okay, good. Ladies, make some noise.  There’s a few. There’s a few. That’s good. If you have hands, raise your hand. C’mon, really? If you have hands, raise your hands. Be cool, alright. If you are starting a business? No one? No one here is, yeah. Oh, shit I thought it’s the wrong place. Okay, if you are really, already rich, single? Single? And rich? Put your hand up. Put your hand up. Oh, you’re like rich in life and then blablabla?

So alright. So I got to tell you guys something. There’s something on my mind. Do you guys want to know what it is? Do you want to know what it is? Alright, fine, I’ll tell you. What is the meaning of life?  And that’s what I’m here to talk to you guys about today. Is that what you guys are here for? Say yes, fuck no. so we’re not going to talk about that. That’s good.

This is me in India during like a guru spiritual thing two months ago. This is like the beard. God. Alright, so here’s what we’re going to do tonight. Are you guys tweeting? Are you guys texting? What you should really do is make really funny ones. So you guys can all laugh and don’t get bored and zoned out.

So my objective tonight is that each one of you go home, literally, I don’t want you to go to the after-party. Ah, sorry, don’t go to the after-party but I want you to go home and if you’re trying to start a business, if you’ve been struggling with your business or it’s already working, I want you to go and work on it. Right, because while you’re at the after-party, your competitors or other people are working. Right? Who said that’s right? Yeah, make some noise. That’s what people do. Good.

So the objective that I want you guys to have tonight is that I want you to go and DO ACTION. So, I’m not going to get up here and key note. So is that what you guys wanted me to do? I’m not going to do it. What we’re actually going to do tonight is we’re going to start two real businesses because I think that will be the best way that you guys can actually learn how to start a business. And so, yeah, I love you. Come up here. Take my cheerleader. Who’s that guy? David Letterman?

Every time I was in Australia I started seeing… “What are you doing on the computer dude?” are you tweeting me? Oh, cool, take your time. So that’s what we’re going to do tonight. Do you guys want to do that? Like actually see how to start a real business? Okay, so we’ve spent at How many people here know Appsumo? Okay let’s do the reverse, who doesn’t know Appsumo? Well, check it out,, you got smartphones. It’s a pretty cool website.

And so the thing that we’ve been focusing on as we felt over thousand people staring their business and that’s one of the main things that we are really working on. So you’ve seen a lot of things about what’s going wrong? What are you going to do and how do we make it happen. And so what we’ll do tonight is we’ll start two real businesses but we need to practice right? I can go, I’m not getting you paid for this. C’mon. I can get home I can get more money.

Do you guys want to do it? In the back?  You guys just don’t care. You’re like “shut up”. I’m going to have fun up here too. But I want you guys to have a good time. So remember the objectives? Hustle, I want you guys to go home and make some things happen. So here’s what we’re going to do. When you’re starting a business, there’s three phases. So you have to figure out the magical idea which never exists. Then you have to validate and see if it’s a real business, and then you have to grow it. That’s pretty simple.

So let’s just practice. Wow, I’ve gone really fast I can slow down. Maybe we’ll do 4 businesses tonight. Let’s see how it goes. So if you’re going to start Airbnb tonight, tonight and that’s one of the key thing for entrepreneurs and people starting businesses. They say “Oh, I have to wait for the development”. How many of you here are waiting for the developer or designer or co-founder? I know you’re embarrassed. Yeah, right, right. I know the excuses and I’ve gone through. I’ve done it to myself and I’m helping others to not do them.

So let’s do this. Let’s start Airbnb tonight. What would you do? I’m not going to give you the answers otherwise you’re not going to learn it. So in the back, the quiet people, how would you validate that people want this service tonight? What does that mean? Boring. So how do you validate that it’s a real business tonight? I’m going to insult you a little bit but it’s a tough love.

Okay, someone, don’t raise your hand just shout. You, okay, now we’re starting. What do you didn’t do? Right here? Okay, put up a clap for this guy. Put a clap for this guy, everyone. No, not a shitty clap but good clap. Good, yes. Here’s one that’s really fascinating about people starting businesses. They over-complicate it and they out-think it. “Oh men, this idea and then this person and then this other thing and then this other thing” and then nothing happens and what you just said right there. I don’t know if you’re going to put a sign this kind of like a church group that’s creepy. But what is another way? Let’s do one more in Airbnb, what is something else you could do tonight? If you wanted to validate that people actually want it, I don’t teach any of the strategies. I just actually see if people want it.

The customers will tell the truth. That’s too far, too far, one that’s a lot of work which I don’t want to do. But I think you’re getting close and you really hit it but there’s another way besides you wanted to hold the sign here? Okay, that’s good. What else? C’mon, yeah. And then what do you do when you find that friend? And how, let’s start back, how do you find that friend? Okay, Facebook. Facebook is good but it’s actually reactive. You’re like put it out there and then you find out that you have no friends. Facebook is okay, but it’s better to actually just call, in person at work, you have a lot of colleagues, right?  I hope.

What else? So you called someone or you emailed someone and then you find out that you have ten friends with houses? What do you do next step? You pay them to sleep there? That could be a start or you can also just post that on Craigslist for them and you manage it for them? Do you guys realize what we just did? That you just validated Airbnb which is now a billion dollar company.

That’s one of the company that is most people thought would fail and so the point is, people email me, “do you like my idea?” and I always just say no. but you know who will like your idea? What do you guys think? What do you think? Yeah, customers, that’s what they are called. I mean you call them the hell you want. I call them customers.

So you find the people who have houses and what if you don’t have a house. You find your friends who have a house. You say let me rent it and I’ll make you money, okay? Do you guys want to do a few more? Practice rounds? You guys don’t? okay, we’ll do it. I like this guy.

Netflix, are you guys familiar with them? They’re pretty big. Alright, kind of familiar? Okay, so on this side, how would you guys validate Netflix? How would you actually see if people really want? So this is the problem with pitching in a lot of businesses today. We go through iterations. We go through market research, and if you can actually do it yourself within a 48-hour window, there’s something wrong. It doesn’t need to take that long. And if it’s taking that long, you’re making excuses and adding barriers to your business.

You really need to find “what is the core of what I’m solving”. So let’s have someone on the side, let’s party, with this guy. Relabel a red box? Go on, I’m curious to see what you’re going to say. Let’s do Netflix in the beginning, in the old school days.

I’m just saying that Netflix with mailing DVDs which is what they started off. How would you validate that? How would you know that you have a business that people want? No, that’s creepy. I don’t teach creepy. That’s not, that was last year, remember the beard thing? No, c’mon guys.

One more time? Are you rich? Yeah, brother I like it. Good, good. I think you can do it a little bit easier than that. But I think that’s the right mentality. So do you guys, did you guys catch what he was saying? What do you guys think in the back? Exactly, how could you guys think you could validate that people actually want this? Ask them?

How many times have you ask someone for something and they follow through? How many times that they not follow through, right? Just because I get your business card does not mean we’re friends. How many business card have you gone that don’t respond to your email? 10 minutes?  Laughter, that’s how much we’ve done. Ok, let’s go.

Netflix, what they actually did. They went and manually bought DVDs and then just found their friends that wanted DVDs and ship it to them manually. That’s exactly what they did. No website, no coding, no market research, they validate that people actually want it immediately.

Alright, taco stand. I’ll just tell you because we only got 10 minutes. I want to get some two businesses going. If you get a taco stand, it’s very simple. You make tacos. You invite your friends over and you ask them to pay for the tacos. Then you keep doing that until you can’t handle a lot of friends that want your tacos. Right?

I know you’re wanting something really complicated and very magical and iterative and big buzz that I’m not just going to help you with. Last one, Square. What? That’s very cool. Thanks Paul. So how would you guys validate Square. Right, its hard work, you can’t validate it right?

Do you want me to tell the answer? Do you guys want to cheat? Do you want me to tell the answer? I prepare the speech. I know it. So the easiest way I think you can validate Square, there’s probably other ways. Just what I said, it’s not the ultimate one. If you go to your farmer’s market, put a sticker of MasterCard on your cart and see if people ask you for credit card payment.

You didn’t build anything. You don’t have to do any market research you saw or people going to say, or people additionally now say “can I pay with a credit card”. Can you guys follow that in the back? Are you guys going for the after-party?

Okay. So real quickly, what is the meaning of this matter, who cares if we validate? Why do we validate the ideas we have? Instead of just like playing business, making websites, getting cards, why do we do this? We do it to make money. Why do we do the validation? And we do the validation specifically for 2 reasons, TIME AND MONEY.

You’ll never get this time back. You’re sharing it with me. And that’s the same thing that I’ve spent months and years and hundreds and thousands of dollars that I’ll never get back and it was a complete failure. And so that’s why I teach this. That’s why I show people what has worked for me.

Everybody, who here does not have a dollar in their wallet? Do you guys have a credit card? Who here does not have a dollar or credit card? Look around the room. Look around. There’s no hands up. There’s no hands up. Why is it that we’re all looking outside the building for all of these round of people when we have people here who could be our potential customers, Right?

(Engineer?) I don’t even know bro. your customers are all around you and if it’s really hard to do your marketing or your business, focus your validation, your product sucks. Marketing is hard when your product sucks. That’s a fact. The reason it ended well because it’s a great product.

So let’s jump in. How much time do we have now? This gives me the fun part. This is where you guys are going to have some breakthroughs. Alright, excuse me. Who here is an engineer whose really smart? In the back? Okay, awesome, are you guys worrying out with your business? We’re going to validate your business. Do you want to? C’mon, bros. do you guys wanted to do it for peer pressure?

Stand up. I’m on stage. It’s just nervous for me up here. Alright, put around applause to them, good, alright. So we’re going to validate, this could be a total flaw. I don’t know them. What’s your names? Jake and Greg, perfect.

What problem are you solving? Right? That’s why it’s hard to validate and I’ll bet someone $10. Who wants to bet me $10 or something? You’re doing it? You’ve been working on your business for longer than a month and you’ve made 0 dollars. You owe me ten bucks.

How do you think I knew that? Damn, that was good. That was pretty good. Once in a while I have moments. That’s my only one for the night. Exactly, exactly, so the fact that you can explain your business in two senses is the problem, right? So what’s the problem you’re solving? Don’t look at him, tell me. Okay, what does that mean in English?

This is going to help you. I know it’s a little awkward to talk that for me because you guys might see some weird stuff which is then funny. So driving experience, what do you mean? So I said I would love though.

Let’s just ask a quick question. Who here in this room drives a car? Raise your hand. Raise your hand high, higher, highest. Good. Wow you have a lot of potential people here. Does anyone get what they do? Okay. Let’s work on this again, okay?

So people are driving, LA traffic. We all know that stuff. It’s an old story. So what problem are you solving for these people? What solution are you providing that they didn’t know about? Okay, this is good but this is what they need. This is what everyone is facing when they’re at their computer working, when if you just met with people that is around you in this cool app,, right? That’s a nice plug  for them.

If you just ask them while they’re driving what their problem is so you’re saying that their problem is that they don’t want to look at their phone or they don’t have GPS, so a lot of people who drive, let’s sell someone what you’re doing, so there’s two ways to validate an idea. We either get pre paying customers, even with iPhone apps, don’t build it, get people to pay for it before you make anything and say honestly “hey I’m working on this I’m going to give you a great price I want to make sure that people want it and I need your money if you’re serious, remember the business card thing.

So people here who drive are you selling them a huggler or just a software? Alright, it’s just going to fail. Oh burn, let’s work on something right. Everyone here drives? What is something with driving that we could solve? What sucks about driving? What do you guys think? Traffic, what was the other ones? What is that, other drivers, parking, waste of time, road rage, battery.

Do you guys just hit ten business ideas or main problems that people actually have? The cops? The cops? What you need to do is validate around something around with people that have a pain around versus you just randomly making something because most people have smartphones and the GPS is there and that’s just me right? But you talk to someone like this, who else would you just say, “yoh bro, get up here, get his email.”

So here’s the thing, how many people want to make parking, this is the thing with validation, if it fails its good. I know I’m up here and I’m trying to validate, it’s awkward if it fails because it makes me feel like a failure and I’ve got a mom and so the point of validation is that you’ve save the time and you have save the money for the month that you have nothing to show for really and you have no profit but you could have use to solve this problem with parking, so let’s just stick with this one for two seconds or like thirty seconds.

How many people here, it’s like we can ask but then it comes down to give me money or give me your email address, just to be involve with this. How many are here who wanted to help in fighting up on parking spot? Why do you sit down? Stand up. No stand up its cool. So if they have shown upon your parking spot, how many of you have thrown up on your parking slots in Sta. Monica. Okay so what’s the actual problem?

Okay, so this is where you connect money, how much time do you spend valet looking for parking?

Okay I know guys this is weird right? How does this feel? To you guys it’s fun because it’s not you. How do you guys feel? So but connect the money for this, this gentlemen I want you guys to do it, so how much time do you spend looking for parking? How much do you make an hour? Are you looking for a job? I like you. If you can save them $2.5, this is good and if this is worth as time to pay for it, you see how I connected the money with this time? What you do then is you say, hey, you need parking in sta. Monica? You email me anytime, this is what I would do? What’s up? Five more minutes? Thank you.

Can I do time out very fast, is it okay? Have you guys learn something? In the back, it’s okay say no, it won’t hurt my feelings that much. Was there anybody here who can’t realize like oh maybe I cloud do something quicker, I can’t get at the core? And you ask me what I’m trying to accomplish. You haven’t? no, well. Yup. Yeah, so this is one of the common, I’m not calling you entrepreneur but this is a common entrepreneur and a commonality and I think when you realize that there is commonality that helps realize that you don’t have to deal with it and you’re like it makes you feel better knowing that there’s others, so there is seven billion people in the world. How many people are here like ten million? There’s a lot of people out there, don’t worry about the competitors. Just don’t because trust me, it’s never going to be an issue and I hope it becomes an issue. So what you do then is if its parking for this guy, everyone here is in Sta. Monica, you put in on your email list, you say hey, anytime you are going to put Sta. Monica you tell me and I will get you the parking spot, it’s ten dollar, ten dollar, right? Email me when you come to Sta. Monica then what you do is get a code, that’s a common engineer problem, that’s why I called engineers up here, right? Because you want to code because it’s scary to talk to people and ask one in sort of real business.

So get a piece of paper up, if you want a help in parking in Sta. Monica get a piece of paper out. This is too mean it should be nicer, softer, I’m just checking, I need to be conscious of who I am and how I treat others, what’s up? Time it, type it, no I wanted to do it now. Type it let’s go home. No now, so come around and get this guy’s email address and anyone who is in Sta. Monica who wants parking help, it’s ten dollars and what you do, I’m going to send you an example but get their emails. So I come up here. This is what you do, put it up for this guy

Alright because they’re good sports they get absolute t-shirts, extra extra large. Get their emails, so if you have parking, now there’s more people that drives. Pass the paper around, and at the end get their emails, so here’s the point, next time anybody wants parking and this is up to them if they want to do it maybe this is not they do and you could do it for validation. You email out and you say anytime you come to Sta. Monica, its ten dollars I get you a guarantee parking spot within fifteen minutes at that email, and what do you do then? You go out on your ass and you stand and you do at home what people do. Or you hire a home as person, right? But that’s what you do, Are you guys texting or something? It’s cool

With these two gentlemen, they haven’t build anything, they got all this field with that want to service maybe or maybe not and they get out and do it manually. Is there any buts in the audience like but what about this? But what about that? Any buts? Maybe that’s extra. So that’s where you can probably, it’s more the initial the details. I wouldn’t actually two word about that. I would say with you anywhere downtown between this streets from this hours or maybe they want to do premium service for thirty dollars but that is something, so what they do is that email us anytime or text us and after that become so annoying that they can’t manually handle the email, that’s when you build the website, the websites only purpose is to help you leverage your time, right?

So many people gets so excited about having a website, having a social media whatever that means but the whole point is what are you helping this people with, how are you creating value and making their lives better? And that they want to give you money for it,

I’ve started like a lot of business and I had a lot of failures, that’s how easier for me to get to the core and talk about this stuff with these two guys which is a little awkward but at the same time you learned, how do you break it down to really what you’re solving. How do you limit yourself for 8 hours, so with the business person it’s a similar thing, I need a developer I’m waiting on my idea, right? What are you actually trying to do? What are you really trying to do, so I actually did this a month ago where I started business in one hour and I made a hundred bucks, right? It was doing this golf, it’s for the surprise. I might have made a business doing it but if you go to and you email I’ll send it to you, so you can actually see other techniques and strategies for how do you start embodying your business.

How are you guys feeling? Thank you very much.

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