Biz Features

Interesting Entrepreneurial Advice from an /r/cocaine Regular.

by . July 17th, 2014

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Earlier, a Redditor named iSkat3 started an Ask Me Anything on Reddit. Although they stayed anonymous and isn’t a regular at any of the business subreddits, they gave good insights and have been pretty spot on with their answers. They claim to have taken nearly 50 products from concept to reality with two of them being great successes. One related to automobiles and the other in the mobile industry. They also claim to have had multiple awards for design, products in major stores, managed a supply chain, sold a business, had one blown up, and spent months in federal court to defend against someone doing something to them.

If you want the whole thread, there’s a link in the bottom of the article. But if you don’t have the time to go through 400 comments, or are inexperienced with the posting format of Reddit, please feel free to read on. As the list of questions tackled is quite long, here are a few ones that I enjoyed reading.

“Your biggest mistake? Your best day? If you are married, how did you get spousal buy in?” –ap3lovr

“Biggest mistakes:

  • Not forcing an operating agreement on a former partner. The guy attempted to rob me of my share of the business. I saw it coming and did something’s that can only be classified as “doing what I had to do” to protect myself.
    My POS of an ex-partner decided while I was out of town he would form the corp for the new business we were starting and not name me on it. I was representing another business we were partnered on in another country. He then did the whole “what you don’t trust me?” We ended up in federal court over this. Got really really ugly. Best part was he didn’t have the courage to show up to court once and sent his wife in his place.
  • Not having an attorney read over a contract that turned out to have some clause buried in legalese that essentially have them the power to return anything at any time for any reason for cash. I always spend the money to have major contracts reviewed after that.
  • Not reinvesting fast enough. My first success came when I was 24 and I suddenly had more money then I knew what to do with. I was writing huge checks and got gun shy about pouring money into development. We had the brand, we had the ability, but I was the weak link and it held it up. I’ve never made that mistake again.

 

My best days:

  • Realizing I had achieved celebrity in an industry. Face on magazine cover etc.
  • Taking my core staff (3 people) out for a $3,000 dinner and giving my entire staff of then ten people each $1k bonuses just for the hell of it. That’s on top of normal profit sharing.
  • A name employee once sobbed in my office because he had to move to a different state. Said I had helped him grow more than anyone in his life up to that date. I really miss that guy.
  • And of course the time I realized I made $148k in a month. I was pretty happy about that.

 

As for the S/O… My fiancé and partner of six years left me because she thought I was a dreamer. She also said I was doing it for me and didn’t care about her. Most people can’t fathom writing $100k checks and the idea of someone doing it isn’t real to them. It’s a tough road we must walk; if you succeed you don’t know why they are really there. If you’re together and it collapses you don’t know if they will stay.

In the end I made it and guess who came back. I fantasized about the evil ways I’d say go away but in the end I showed mercy and we parted as friends. I’m really glad I went that route.”

“What is the most important piece of advice you could give someone who wants to become an entrepreneur?” – xxbertoo13xx

  • “One piece isn’t enough.
  • Pay more for better employees. You can expect more from them and if you are good to them they will happily deliver for you.
  • Never ever rush a product to market. Side note to that try and avoid giving hard delivery dates until you are sure you will have product in hand.
  • Have a lawyer in mind. Have a CPA in mind. Get relevant insurance.
  • Don’t do handshakes on major deals EVER
  • If you are going into a partnership lawyer up and make a bulletproof operating agreement.
  • Realize that in most cases any favors or free things you get will cost you more in either damaged relationships or having to redo the job. Get the best and you can.
  • Image is everything. Project that you are big from day one in everything you do. I used to answer the phone and say “this is so and so” and tell big players “the owner” was “meeting with a vendor” or something that made it look like I had business going on then I’d call them back. If it sounded like a big deal if offer to interrupt myself.
  • Don’t ever ever ever tell a supplier you want to work with then or in the future that you don’t have the money or can’t afford it. Tell them you need to get the budget approved before you can commit. Then tell them you need to sort a few things out. You never want anyone to associate you with “I don’t have any money”
  • Don’t be afraid to throw down big money if the path to the return is mapped out. If you’re going to do a million in sales for instance, you’re going to be writing hundreds of thousands in checks. Don’t become gun shy and not invest in your next product or a fantastic marketing opportunity.
  • Try and make friends with the owners of complementary businesses. Also your competitors when possible. You may be able to team up to push another competitor out of the market.
  • If they don’t have IP protection their idea is yours. I used to be the opposite but after having dozens of my original designs knocked off and having the industries I services not care to save $10 I am completely numb to the concept of being the nice guy.
  • Don’t ever let anyone see you lose your cool. That is the ultimate sign of weakness in a CEO.
  • Get used to having really uncomfortably conversations. And get used to expecting to get what you want and to push back to get it. Try and give as little as possible.
  • Made in America is dead. I get better service, more consistent quality and lead times, and of course pricing from my Asian suppliers. By this point in time they have way cooler machines then we do here.
  • Teach your early employees their job is to replace themselves and to become managers. Task them with creating the systems their replacements will follow.
  • When you can hire someone better then you create a Rock star employment agreement and bring in a new CEO. You will always be above them, but now you are officially free to live your life. I currently work less than ten hours all of which is discussing high level things with high level people. The ground employees think I’m cool because I talk to all of them when I’m in the office but they know and respect the CEO as their boss.
  • Lastly, college doesn’t prepare you for entrepreneurship. Read ALOT of books.”

 

“What are your recommendations for getting into a product that you don’t have a lot of firsthand experience in?”

Find someone who knows the market landscape. You must have mentors.

I don’t know anything about many of the industries I’ve been in. I do however know how to put together a team, measure results, and manage money.

You have to present yourself like you’re the real deal. You must make them want to be a part of what you are doing. Don’t go looking for help; go looking for people who want to be a part of your adventure. Does that make sense?

What will help is if you define the type of person you are looking for. Then you figure out where they go and go there and network. Its ok to be awkward, I was so awkward at first, just say you are new and what you are looking for to as many people as you can. You are bound to find someone.

Also, if your idea is rejected, who cares? I’ve had so many ideas rejected its not even funny. It’s not personal.

“How do you find good staff? How do you come up with ideas? What programs do you use for inventory management?”

You fire people very quickly. You test them on critical thinking, decision making, knowing when to ask for help, going the extra distance for the sake of pride etc. Give a person a week, if they aren’t striving to achieve, NEXT!
I have custom inventory control software.

I feel weird answering that first question. As for the second, I don’t give a shit about money. It’s just a means to an end; I’ve lost tons of it and was more pissed off that I didn’t get to do whatever it is that I wanted to do.

You stop letting it go to your head by really looking not at yourself but who you have in your life. If your squad is all on your level then rock on! But if you have clingons you will realize you are buying friends.

Here is the strategy I used. This is based on the salary you pay yourself and not bonuses.

Save 20% right off the top. Maintain an overhead that allows you to only use 50% of the rest to pay bills Take the other 30% and do whatever you want so you’re motivated to do it again.

When you get a fat bonus, save 50-60% of it and just go nuts with the rest.

My friends didn’t get me anymore. But I also didn’t get them. They wanted me to stay and play and I wanted to go to the next level. So we parted. Years later we got back together and they are very proud of me.

It’s not that I will do “nothing” forever. It’s that I have escaped having to do something. Now I’m an investor, the guy above the CEO. I make huge decisions and take huge risks. It excited me like you wouldn’t believe.”

If you want to read the whole thread, here’s a link. What did you think of iSkat3’s replies? Would you have answered differently? Comment below.

image sources: kalexanderson via photopin cc

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