The 3 entrepreneurs featured in the book started from zero and then built firms that generated at least $50 million a year in revenue and/or netted their founders more than $20 million in personal profit.
Here are snippets of learnings I picked up from the book:
When thinking of business ideas:
- Start with a problem you really want to solve. Do not start with a solution and then go looking for a problem.
- Pain businesses are those that solve a significant problem, and people will rarely hesitate to pay money to solve that problem. Pleasure businesses solve less urgent problems. They can sometimes be great, but the success rate is much lower.
- “DROOM” – don’t run out of money.
- What makes a successful company is the strength of the management team. Hire outstanding people. Look for a CEO who has exceptionally high intellectual horsepower, who understands the nature of competition and what will be required to win. Look at all ingredients—the size, the business model, the competition. But 50 to 75 percent is the caliber of the people.
- It is almost always better to have a hole in your lineup than to bring in or retain a marginal performer.
- When you can’t move forward, move on. Persistence doesn’t mean you should stay with one venture until the cause is utterly lost. Maybe you’ll discover that you’re ahead of the market, or maybe you misjudged the amount of competition you’re facing. Maybe the product you’re selling doesn’t solve an essential problem or the team you’ve built simply isn’t strong enough. Maybe you’ve legitimately encountered a run of bad luck. Whatever the reason, there sometimes comes a point wherein the smartest thing you can do is walk away. But a committed entrepreneur will find a way to get back in the game. One roll of the dice might be the beginning—but don’t let it be the end of your entrepreneurial story.
- Be careful which mountain you climb. God forbid that you climb a mountain, plant your flag at the top, And then look around and realized—what was I thinking? I climbed the wrong mountain.
- Finish school because startups founded by college grads have 25 percent larger sales that those with only high school diplomas. And startups founded by those with graduate degrees do 40 percent better than startups founded by college graduates.
- Work for someone else first. Learn as much as you can about an industry that interests you. And if you’re serious about starting your own company, you’d be wise to learn to supervise, manage, and lead on someone else’s dime.
- Experience matters. “On average, businesses founded by people between the ages of 45 and 54 tend to perform better than those founded by people who are less than 35 years old, “writes Scott Shane in his book The Illusions of entrepreneurship.”
Freedom and security provided by a high income or a significant windfall are much more important to highly successful entrepreneurs than the money itself. At the deepest level, what matters most is finding a true measure of fulfillment—one that leaves you feeling that you have used all your talents to accomplish something worthwhile, make a difference in people’s lives, and leave a legacy for those who follow. Entrepreneurship isn’t just about solving a problem, building a venture, managing risk, or making money. It’s about having a positive impact on the world, making the most of the gifts you’ve been given, and realizing your full potential as a human being. An intelligent entrepreneur, in short, plays this game for life.
Finally, here are the 10 rules of the Intelligent Entrepreneur:
- Make the commitment
- Find a problem, then solve it.
- Think big, think new, think again.
- You can’t do it alone.
- You must do it alone.
- Manage risk.
- Learn to lead.
- Learn to sell.
- Persist, persevere, prevail.
- Play the game for life.
