This is my first book review: I've been reading a fair amount but found I'm not retaining much of the information and treating book reading as entertainment. In the spirit of getting myself more actively learning from books, I'll be writing book notes/summaries/reviews of what I read. This post is the first one.
Regarding format, I'm thinking first of sharing some context of why I read this, then listing out key ideas (perhaps following the book's structure), and finally adding some closing thoughts (e.g., what did I think of the book overall). Try to keep it in under 5 minutes.
BTW, I'm here on Goodreads, connect and send your recommendations of books to read my way!
Let's get to it 👇
Why did I read this
I've been following Sahil Lavingia since 2020 because of his viral post Reflecting on My Failure to Build a Billion-Dollar Company. Sahil is the founder of Gumroad and frequently shares his wisdom on startups, business, and life. I am pretty excited to read this first book from him, The Minimalist Entrepreneur.
The book shares the know-how and motivates people to build a new kind of startup ("minimalist business") that "prioritized profitability over growth and positive impact over moving fast and breaking things" so their founders ("minimalist entrepreneur") can be "making a difference while making a living."
Focusing on profitability is the key theme here - the opposite of "growth at all costs."
- "Profitability means sustainability. Instead of treading water until a lifeboat comes along to save you—which is how many founders think about raising their next round of VC funding—it means building your own boat."
- Success "happens over the course of many experiments. That’s why profitability matters. If you’re profitable, you can take unlimited shots on goal, virtually guaranteeing your success as long as you keep learning from your customers."
Key ideas from the book regarding how to achieve this (my own wording, with oversimplifications and omissions)
a. Pick the right kinds of businesses - the kind that has a fast feedback loop
"These include almost any kind of business-to-consumer or business-to-business enterprise that has fast customer feedback loops and ample opportunities for iteration like software as a service (SaaS), digital and physical products and services, or connecting people for a fee."
- Fast feedback loops are important - you can do more experiments/iterations within your limited runway and have a shorter timeline to revenue.
- I think the other thing to look out for is direct value exchange: you directly deliver value to customers, i.e., selling a product/service/utilities to customers that can be realized without waiting for having more users/network effect, e.g., don't count on selling users to advertisers (or some other second-order effects). This is just another necessary condition for faster timelines for revenue and profitability.
b. Find product-market fit from your community
The author said it well:
- "It’s the community that leads you to the problem, which leads you to the product, which leads you to your business."
- "Once you’ve found community-you fit, start contributing with the intention of becoming a pillar in that community."
- "Pick the right problem (it’s probably one you have), and confirm that others have it. Then confirm you have business-you fit too."
- "When in doubt, always go back to the community. They will help you keep going and ultimately succeed."
The main thesis here is to have a small group of ppl (your community) who share your problems, who you understand, whose problems you are actually excited to solve, and with whom you can work to iterate your idea and product.
I think this is a good point. Building on the foundation of a community helps validate demand and have a close loop to iterate quickly.
c. Build as little as possible
Prove to solve the problem actually matters first before building software. You can do this by having a "manual valuable process," e.g., manually recommend movies to your friends before building a movie recommendation engine. "Refine a manual valuable process before building a minimum viable product."
Use that fast feedback loop you have with your community to test your hypothesis. Ship early and often.
Be focused on doing one specific thing well. Be creative about how little you can build to charge for it / test your solution. "... Be honest with yourself about how useful your product actually is. A product that is beautiful or has great marketing behind it may feel more useful than it actually is. But if your product is incredibly minimal and useful, and people look past the lack of polish and use it, you will know you are on to something."
"I define “product-market fit” as having repeat customers who sign up and use your product on their own so that you can start to focus on outbound sales."
d. Sales: rely on knocking on doors to sell to the first 100 customers
Sell to your first 100 customers manually. Treat this sales process not as selling but as a discovery process: your customers get to know you, and you get to know what's working, what's not, and how to fix it.
"Manual “sales” will be 99 percent of your growth in the early days, and word of mouth will be 99 percent of your growth in the latter days. It’s not a glamorous answer, but it’s true. Things like paid marketing, SEO, and content marketing can come later, once you have a hundred customers, once you’re profitable, and once your customers are referring more customers to you. Only then!"
Charge something, anything - $1 is vastly different than free.
"Start by selling to your family and friends before moving on to your communities and, finally, if at all, to total strangers. (The further away from you, the harder they will be to convince.)."
e. Marketing by being you
Paid ads are expensive; delay doing it as much as you can. Paid ads may get even more expensive, and avoiding them makes your business more sustainable.
Instead, build an audience, and make fans. Use social media and SEO. But these all come after you have made manual sales and got 100 customers.
"Selling allows you to test the waters with these new people because it forces you to leave your bubble and convince them one by one, improving your product along the way. Marketing is harder because instead of going to your customers, you have to make them leave their bubbles and come to you."
Finally, there are some other interesting bits and pieces in the book about managing yourself, setting good company culture, and living the afterlife of your successful business, which I'll omit here.
My rating: 3/5
Sahil is a great writer and made the book very enjoyable to read. The book serves as a great reminder of the key themes to building a sustainable, bootstrapped business with a grounded value proposition. But these themes (finding community, building an audience, etc.) felt obvious, and the discussions were a bit high-level and not very actionable.