How to become rich?

Why would you start if suddenly decided to get rich? I think the best solution would be to run a new company - a start or join an existing one. This method proves to be effective for hundreds of years. The word "startup" emerged in the sixties of last century, but what happened at that time was very similar to an adventurous shopping trip, which were undertaken in the Middle Ages.

Typically, the notion of a start due to the high-tech. So much so that the expression "technological start-up" - almost a tautology. Typically, a small company that has taken on the difficult technical problems.
Many people become rich, not knowing anything of what was going on in this essay. You do not need to know physics to be a good salesman. However, understanding some basic principles that can help. Why startups should be small companies? Must they cease to be start-ups, if grow? Why do they almost always engaged in the development of new technologies? Why do so many startups selling new drugs or software, and so little sunflower oil or detergent?


From an economic point of view of a startup can be treated, as a way to compress your whole working life in a few years. Instead of forty years does not work very hard, you work for four years so much as possible. This is especially important in high technology, where success depends on the speed of your work.
Let us think. Suppose you're a good hacker (in the original, positive sense of the word) 20-25. You can get a job with a salary, for example, about $ 80,000 a year. Such a hacker has to do the work, the cost of which will be not less than $ 80,000 a year just to not have your company at a loss. Now assume that you will be able to work twice as more than just an employee, and if you work enough concentration, you can make per hour three times more than usual. If you get rid of an incompetent manager, standing over you, then you can increase efficiency even in two or three. Now think about how you're actually smarter and more performance than it's supposed to your job? It is possible that two or even three-fold. Now add up all these factors, I would argue that you can be 36 times more productive than expected at any corporate job. And if a good hacker in large corporations accumulating to $ 80,000 a year, a great hacker who works very hard without all the corporate nonsense, can do the work of three million.
As in other rough calculations in my also have plenty of room to maneuver. I will not argue whether the numbers will be exactly as I said. But I am confident that the scheme of calculation is correct. I am not suggesting that the factor is just 36, but he definitely greater than 10 and sometimes even close to 100.
If three million may seem to you too much money, remember that we are talking about limiting case: when you not only have no free time, but you still running so intense that it can damage your health.
Startups - it's not magic. They do not change the laws of the universe. Conservation law remains valid: if you want to make a million dollars, you have to withstand the stress of the equivalent of this amount. For example, one way to make a million, is a lifetime job at the post office at which you will have to save every penny. Imagine all the stress of fifty years of work at the post office and squeeze it in four years. Of course, you get some discounts if you buy all this stress in bulk. But to deceive the fundamental law of conservation, you can not. If you like to start a startup were easy, everyone would do it.
One of the most remarkable things that are present appear only in new companies is that you can work on anything without being distracted. If you every fifteen minutes otvelekat person who is looking for errors in the text, its performance will always be slightly reduced. But the programming is still worse, is often needed at least an hour just to get to the core of the problem. Therefore, the cost of calling you to the accounting for you to fill in some form, can be very high.
When confronted face to face with the idea that people who work in young companies that may be in 20 or 30 times more productive than those working in large corporations, managers are usually interested in how you can make so that their employees are working as efficiently ? The answer is simple: pay them.
Internal structure of many companies like the communist regime. If you believe in a free market, why not make your company look like him?
Hypothesis: the company will be most profitable if it is to pay for the work of their staff in proportion to the profits that they bring.

Millions - not billions

If for some three million people may seem a huge sum, for others it is not so much. Three million? Tell me, how do I become a billionaire like Bill Gates?
Okay, let's leave until Bill Gates alone. Not very good to use celebrities as examples. The media usually write about the most wealthy, and they are knocked out of the picture. Bill Gates is smart, determined and hardworking person, but to be so is not enough to earn as much money as there are with him. Besides all this, you still have to be very lucky.
The success of any company there are a large element of chance. Guys, which one reads in the newspapers, it's smart and determined people, but other than that they were able to win the lottery. Bill Gates is obviously very smart and very single-minded fellow, but Microsoft is also fortunate to benefit from one of the greatest mistakes in business: license agreement DOS. Of course, Bill did what he had in his power to ensure that IBM has made this mistake, and he did a great job, but if on the side of IBM has been at least one person with brains, the future of Microsoft would be completely different. At this stage Microsoft had only a small effect on IBM. In fact, they were the suppliers of components. If IBM has demanded an exclusive license, as they should have done, Microsoft would still have entered into an agreement. This would still mean a lot of money for them, but IBM could easily get the operating system somewhere else.
Instead, IBM has used all its influence on the market to allow Microsoft to monitor the standard PC. Since then, Microsoft has acted both as planned. They never had to take risky decisions. They just took a tough stance on licensing and producing innovative products as quickly as possible.
If IBM did not make this mistake, Microsoft would still be a successful company, but it would not be able to grow so much and so quickly. Bill Gates would be rich, but he would have been somewhere at the bottom of the Forbes 400 list, along with other rich men of his age.
There are many ways to become rich, and this essay only one of them. This essay is about how to make money by creating value. There are lots of other ways to raise money, including lottery, speculation, legal marriage, inheritance, theft, extortion, fraud, bribery, counterfeiting, and so on. Most of the great states is likely to have been made using some of these methods.
Value creation as a way to make money, has the advantage not only because it's more legitimate (many other methods now illegal). But because this method is more direct. You just need to do what is necessary to others.

Money - no value

If you want to create value, we need to understand what it is. Value - is not the same thing as money. values ​​exist throughout human history. Money also was invented relatively recently.
Values ​​are the fundamental concept. This is what people need: food, clothing, houses, cars, gadgets, travel to interesting places and so on. You can be rich, even if you have no money. If you had a device that according to your wishes could make a car or cook you dinner, or wash clothes or do anything else that you wanted, you did not need the money. Or, for example, if you were in Antarctica, where there is nothing to buy, the amount of your money, too, would not have mattered.
Value - is something that can satisfy your desires, it is not money. But why, if the value is so important concept, everyone is talking about how to make money? Money - a way of sharing values ​​and in practice they are interchangeable. But this is not the same thing, and if you do not plan to become a forger, talk about how to make money can only complicate the understanding of how to do it in reality.
Money - a side effect of specialization. In a specialized society, you will be able to do most things that you need. If you want potatoes, pencil, or housing, you get all this from other people. And how you can make a person who grows potatoes, give it to you? Just giving him what he needs to turn. However, if we directly exchange things with people who need them, we will not go away. If you make a violin, and they do not need any of the local farmers, you will have?
The solution found by the society to the extent that it has become increasingly specialized, it was that, to break the trading process into two steps. Rather than directly exchanged the violin for potatoes, you change them, say, a silver, which is then exchanged for something else, what you need. Intermediate - broker of exchange - can be anything that would be quite rare and that it is easy to carry around. Historically, that for this purpose is most often used metals, but recently they have been replaced by another agent, called a dollar, and in fact does not exist physically. However, it can act as a mediator because its value is guaranteed by the U.S. government.
The advantage of using a mediator is that it makes trade possible. The disadvantage is that it often obscures the real value of trade. People are starting to think that business - it is making money. But the money - it's just an intermediate, only the equivalent of what in fact people need. What is being undertaken by most companies - is the production values. They produce something that you need other people.
Until recently it seemed that even the government does not understand the difference between money and values. Adam Smith is sometimes said that they are trying to preserve the wealth of the country, prohibiting the export of silver and gold. But a large number of "broker of exchange" does not make the country richer. If money is greater than the material values ​​they represent, then the result will be just higher prices. have the notion of "values" there is quite a lot of values. I'm not going now to find out which one is more correct. Here I discuss some technical meaning of the word. Values ​​- that's why people give money. It's quite an interesting view of values ​​for the study because it allows you to not die of starvation. And then, for what people give you money, depends on them, not from you.
When you start your business, it is very easy to start to think that people want the same thing as you. During the dotcom boom, I was talking with a woman who was very fond of walking outdoors. And going to make a portal on the topic. Do you know what kind of business should be opened, if you love fresh air? Recovering data from damaged hard drives.
What's the connection? Yes no. It is simply my point of view. If you want to create value (or in other words - do not starve), be very critical to plans to create a business that is associated only with what you enjoy doing.

Myth Pie

A surprising number of people from childhood assimilate the idea that the world has a fixed amount of wealth. Yes, in any normal family in every moment, there is some definite amount of money. But this is not the same thing.
When told of the wealth in this context, it is often described as a pie. "You can not make the pie than he is," the politician said. When money is involved in a particular family or money collected by the government through taxes for the year, it really is. If one person gets more, someone else should get less.
I remember when I was young, it believed that if a few rich people own lots of money, they are still less than other people. The impression is that many people continue to believe in something like this, when the grow up. Usually, this cake is meant whenever you hear someone else talk about that X percent of the people has Y percent of the wealth. If you plan to start a startup, then you want it or not, you're going to expose the myth of the pie.
What causes people to err, it's what money is abstract. Money itself is not wealth. They are just something that helps to exchange values. And though at a particular point in a certain place (for example, in your family this month) may be a fixed amount of money available for trading with other people, the amount of wealth in the world is impermanent. You can increase the amount of wealth in the world. Value created and destroyed (and then created) throughout human history.
Suppose you have a broken machine. Instead of sitting on the couch next summer, you can spend some time and fix it. By doing this, you create wealth. World, and especially you, will be richer by a workable machine. And not only in a metaphorical sense. If you sell a car, you'll get for it more than broken.
Repairing a broken machine, you have made yourself richer. No one is poorer. Therefore, no World Pie does not exist. When you look at the problem from this perspective, one wonders how all anyone could think otherwise?


People who best understand that wealth in the world is impermanent, it is those who do good at doing things with their hands, artisans. Their self-made work can often be sold at the store. But with industrialization, the number of people decreases. One of the largest remaining categories of artisans - are programmers.
A programmer can sit in front of a computer and create value. A good program in itself is valuable. If someone sits down and writes superbrauzer that will not fail (a great idea, by the way), the world will become much richer.
People in one company working together to create wealth. Many of them (such as personnel managers or drivers), in fact, does not directly produce any items. Programmers also literally remove the product right out of my head, line by line. Therefore, for them it is obvious that wealth is something that is done, and not shared by some imaginary uncle.
It is also obvious that the quality of creating wealth may be very different. We have Viaweb had one programmer who was somehow superproizvoditelnym monster. I looked at what he did for one day and realized that every day he increases the market value of several hundred thousand dollars. Such superprogrammist can create wealth for a million dollars in just a few weeks. The average programmer over the same period will generate is likely to zero if not negative (adding a few bugs) the amount of wealth.
That's why most good programmers are liberals. In this world you either swim or drown, extenuating circumstances no one cares. When people are far removed from direct production values ​​- students, reporters or politicians - hear that 5% of wealthiest people own half of the money in the world, they begin to think that this is unfair! An experienced programmer is likely to think: "Is that all?". Top 5% of the world's programmers probably write 99% of good software.
Value can be created not only to sell it. The scientists, at least until recently, actually gave their knowledge of the world. We all get benefit from the invention of penicillin, people have become less likely to die from infections. Values ​​- that's what people want, and the preservation of life definitely a necessary thing. Programmers often contribute to the common pot, developing open source software. I have become much richer, having received the operating system FreeBSD, which runs on my computer. Or Yahoo, which uses it on all their servers.
Strictly speaking, you still could make the world a little poorer, microscopically pollute the environment. But it still is not equal to create wealth. In addition, you could just screw something and do not pollute.

What is Work

In industrialized countries, people usually belong to some institution, at least until then, until they are 20 years old. After years of getting used to refer yourself some group of people who wake up in the morning around the same time, they go in the same building as you, and usually do things that they do not really like. Gradually, it becomes part of your identity: name, age, role, institution. If you talk about yourself or someone else is you, then usually it looks like this: John Smith, 20, a student of a certain college.
It is assumed that when John Smith finished his studies, he will go to work. For him it's like to join another group of people. If you do not go into details, the work - it's almost the same as college. You choose a company in which you want to work and send them a resume. If they decide to hire you, you become a member of the new group. You wake up one morning and go even in other buildings, and doing things that usually do not like. There are a few differences: life is not so much fun and you get paid salaries. But the differences are much smaller than the matches. John Smith has become a John Smith in 1922, the developer of such a company.
In fact, John Smith's life has changed more than he thinks. From society's perspective, work in a company very similar to college, but if you look closely, the differences are much greater.
In order to exist, the company must make money. And most of them do this by creating value. By the way, can create value not only to those companies that engage in production. Remember that magic machine that would produce for you food, clothes and so on. It would be of little use if it were sent to make things somewhere in Central Asia. If the value - it's what people need, companies that deal with transportation, also create them. Same with the other companies that do not produce anything tangible. Almost all companies in the world exist for what to do what other people need.
And that is precisely what, in theory, you have to deal with the company. There are, however, one thing that is usually immediately noticeable. Your personal contribution to the work of other employees averaged. Sometimes you do not think as far as what you do, you need other people. Your contribution may be indirect. But the company as a whole must make the necessary things to other people, otherwise it will not make money. If your salary is equal to X dollars per year, at least, your job is to bring these companies money back, otherwise it will spend more than they earn, and eventually goes out of business.
College graduate said he, in the end, he begins to think that he needs to find a job. As if it is very important - to join any group. More directly would be to say that he must begin to do what others need. And for this purpose does not necessarily adhere to any company. Company - it's just a group of people who work together to finally do what needed rest.
For most people go to work in any existing company would be a good solution. Only need to understand that the work is the process of production values ​​and the results averaged for the remaining employees.

Work harder

Averaging carries with it a number of problems. I think the biggest problem lies in the fact that it is difficult to evaluate the work of each employee individually. In a big company you get paid for your work some fixed amount. You to expect that you will not be incompetent or lazy, but do not require work to devote your entire life.
In fact, here too, working principle of economies of scale. When properly constructed business, someone who will devote a substantial part of his life work, will be ten or more times more productive than ordinary employees. For example, a programmer, rather than to sit down and fix existing software can write a new one, thereby creating another source of revenue.
Typically, the device does not allow companies to reward such people. You can not go to the head and say what you want to work ten times as much, if they could tenfold increase your salary? Not least because that is what you have and so are working as best as you can. But far more serious reason is that the company has no tool to measure your performance.
Vendors - an exception to this rule. Their contribution to the profit can be easily measured, and they typically receive a percentage of sales. If the seller wants to earn more, it just starts to work harder, and it happens automatically.
There is another exception to the rule - a high-level managers. And also for the same reason: their performance can be measured. Their job is to increase the productivity of the company as a whole. And in this case we are dealing with concrete numbers, and if things are bad companies, it refers to top managers directly.
The company, which would be able to pay all my staff remuneration proportionate to their work, would have been incredibly successful. Most employees would have worked better if we could get more for it. More importantly the fact that such a company would attract people who would like to work especially hard. Such a company would be easily defeated his rivals.
Unfortunately, the company can not pay all the same as sellers or top managers. Vendors are working alone, and ordinary employees are usually linked. Imagine a company that produces some of the devices. Engineers develop functional designers appearance and packaging, marketing, and then convince everyone that this product is just what they need. How can I calculate how many percent of the profits belong to one group or another? Or how to identify what has raised the company's reputation after the release of the device? Even if you could read the minds of your customers, you still would have found that these factors all affect each other.
If you want to quickly move up the career ladder, you encounter a problem that your work is connected with the work of other employees. It is impossible to measure the performance of the individual in a large group. And the other members you will slow down.
Many people experience depression at this age. Still, college life was so fun. And now, you're a guest turned into staff. In fact, in this new world, life can also be fun. In the end, you can now pass freely into the door marked "staff only". But in general, such a change - it's a shock.

Measurement and lever

In order to become rich, you must make sure that your performance could be measured, otherwise you will not receive more money because the quality of your work has improved. Another condition is that your work should be a place for the application lever, in the sense that the decisions you make should have a noticeable effect.
Only one possible measure is not enough. As an example, piece work in the confectionery shop. Your productivity can be measured and your job pays according to her. However, the lever is missing. The only thing you can control is the speed of your work, but using it can increase revenue with a maximum of two or three.
An example of work in which there is both, may be the work actor. His performance can be measured by fees from showing the film. But the quality of his playing has a significant impact on their value as a lever in this case.
I think that all people who have the opportunity to influence the level of their income, are in a situation in which their performance can be measured and they have to exert leverage. At least, all those who come into my head: top-managers, film actors, managers, investment companies, professional athletes. A sure sign that the work is a lever, is the possibility of failure. Where there is a lot of opportunity to win, there should be a lot of opportunity lost. Actors, traders on the stock exchange, the athletes, they all live under the Damocles sword. Once they start to work poorly, they go out of business. If you work in a safe position, you will never get rich, because where there is no danger, is almost certainly no place for the application leverage.
In order to get into a situation, not necessarily to become an actor or a top manager. All you need is to join a small group of people, which is addressing a complex problem.

Small = measurable

And although it is impossible to accurately measure the contribution of each employee individually, you can do about, if we measure the work of a small group.
One of the levels at which one can measure the contribution of each employee is the level of the company as a whole. Less than the company, the closer you are to the exact results. I believe that the maximum size of a viable start-up - ten people.
Working in a startup is very close to that in which you can go to your boss and tell him to pay you ten times more for something that you will be ten times better than working. But with two differences: you say this is not the boss, and directly to consumers (after all, chief, this is only an intermediary between you and them) and say it does not own, and along with your other colleagues.
Typically, a startup - a group. With rare exception, the company can not consist of one person. Therefore in your interest to other participants were good enough as it is their job to be your average.
A large company like a big galley with thousands of rowers. Two things remain constant velocity galleys. The first - is that a single sculler did not see any changes because rowing is stronger. Second - what the average boater prefers to remain moderate.
If you randomly take ten rowers from this gallery and place them in a separate boat, they are likely to be able to swim faster. Energetic paddler will cheer the fact that he has a significant impact on the speed of the boat. And if someone is lazy, the rest is quickly noticed and be able to reason with him.
But an even greater advantage desyatimestnoy boat appears when you put back the top ten paddlers. They will further motivate the fact that they work in small groups. Much more profitable when your work is averaged hardworking people.
This is the real value of a startup. Ideally, you start to work with people who also want to get behind something that works better, much more than they could obtain in any large company. And since startups are usually created by people who know each other well, then the accuracy of measuring the contribution of each party is much higher. Start - not just ten people, it's ten people with similar qualities.
Steve Jobs once said that the success of a startup depends on the first ten employees. I agree with him. But not so much the value of a startup makes it able to kick ass big companies, how to choose the first employees. You should not just be a small company, you must be a small company the best.
The larger the group, the higher its average participant prefers to remain moderate. Other things being equal, a good man in a big company will be in worse conditions than in a startup, as its performance will drop lower performance of other staff. Of course, for his money may not be as important as stability, but if they are important, he had better go and work among equals.

Technology = lever

Startups allow each person to be in a situation in which their work can be measured and it can be attached to the lever. This is possible because, firstly, they are small and, secondly, they are developing new technologies.
What is technology? Technology - is the method, the method by which we are doing different things. And if you invent a new way of doing something, its value will be multiplied by all the people who will use it. This is the difference between a startup and, for example, a restaurant or barber shop. You fry an egg or cuts hair to only one person at a time. If you solve a technical problem that affects many people, you help them all. This is the lever.
If you look at history, we find that most people who became rich by creating value, did it by developing new technology. Nobody got rich through what has become quicker to fry eggs or cut hair. Florentines have become a rich nation, after the thirteenth century, developed a way to make high-tech product at the time - a beautiful woven clothes. Dutch team - after the sixteenth century, invented a new way to make ships and navigational instruments that allowed them to dominate the Far East.
Fortunately, there is a natural link between the value of a startup and the ability to solve complex problems. In order to be at the height of technology, we must move very quickly. What is today considered to be high-tech in a few years will not cost a cent. Smaller companies are much easier to resist at this point, since they are not crushing weight of bureaucracy. In addition, new technologies usually come from non-traditional approaches, and small companies is less limited by rules.
Large corporations are also able to invent new technologies. They simply can not do it quickly. Size makes them slow and can not adequately reward employees for outstanding efforts are needed in such developments. Thus, in practice it turns out that big companies are usually taken for the development in those areas that need a large capital, such as the production of microprocessors, power plants or Airbus. And even there, they depend heavily on startups involved in the production of components and ideas.
It is obvious that startups involved in the development of biotechnology or software, solve complex technical problems. However, I think that sometimes it may be true for those businesses that at first glance do not engage in technology in general. For example, McDonald's, which got rich by developing a system and a trademark, which were then copied around the world. McDonald's Restaurants are controlled by strict rules so that they can be treated almost like a computer program.
Choose a complex problem not only as the main objectives of the company, but in key moments of your work. We have Viaweb one of the rules right hand was running up the stairs. Suppose you're a small, stocky guy, and behind you chasing a huge, fat fat. You open the door and find her upstairs. Where do you run up or down? I advise you to run up. Down fat, is likely to be run with the same speed as you. If he would run up, then its size at once would be his fault. You run up hard, but it is doubly difficult.
In practice, this meant that we had specifically sought out his difficult task. If we had to choose between two options in the implementation of our program, and their value was the same in terms of quality to the complexity, we chose the more difficult. Not only because it was better, but much more because it was difficult. Thus, we were forced to our large and slow to catch up with rivals us shaky ground. I remember that sometimes we were just exhausted by the struggle with some difficult technical problem, but I enjoy it, because if it was difficult for us, it will be impossible for competitors.
In fact, the only way of startup. Investors know this and they even have a special expression: the barriers to entry. If you go to venture capitalists and ask them to invest in your idea, the first of what he asks you, this is how it will be difficult for someone else to develop the same? And you better prepare something poubeditelnee why your technology can not be copied by competitors? Otherwise, as soon as any large company will know that your product starts to threaten her, she would make her the same, and their brand equity and distribution network will help them throw you out of business.
One way to place barriers - it's patents. But, unfortunately, they are not very helpful. As a rule, the competitors are finding ways to circumvent the limitations imposed by patents. And if you can not get around, then they can just beat them and force you to sue them. A large company is not afraid of trials, for them it is an ordinary thing. They will make sure that the process was long and costly. Ever heard of Philo Farnsworth? He invented television. And you have not heard of him because his company could not make money. But could the other - RCA, but all that got Farnsworth - a decade of litigation.
The best defense - the attack. If you can develop a technology that will be hard to repeat your competitors, you will not need other barriers. Begin to solve complex problems, and then, at each moment when you want to make a decision, choose the more difficult.
When they asked about us, we usually answer that it is not impossible. However, I think we looked naive, or liars.
Some technologies invented by one person. Usually, if you know the inventor of anything (phone, airplane, light bulb), this means that his company could make money. If you do not know, this means that the money made by another company.
Incidentally, this is generally a good way to make decisions in life. If you are facing a dilemma, choose a more complicated solution. If you choose to go between a workout or watch TV, go do it. I think that the reason this trick works very well, is that when you have two options, simple you select only out of laziness. And subconsciously, you know about it, the choice of a more complex way just makes you realize it.


If the problem was only how to work better than an ordinary employee and receive a longer, it would be obvious that you need to start a startup. Up to a certain point it would be even funny. I do not think many people like the slow pace of large companies, as well as all those endless meetings and stupid managers.
Unfortunately, there are some unpleasant moments. One of them is that you can not, for example, decide what will work in two or three times more to get more money for it and thrive. When you run a startup, your competitors will appreciate how hard you work, and decide to work the same way as you or even more.
Another difficulty is that your profit is proportional to your efforts only on average. As I said, there are a lot of random factors affecting its value. And in practice, it turns out that the multiplication factor will be somewhere between zero and one thousand. Most startups are failures, not just the notorious portals dog food, which we have all heard the bursting Internet bubble. This is usual story when a startup developing a new supertehnologiyu slightly delayed from its release, spends all his money and goes out of business.
Startups - as mosquitoes. Bear can crush them, and the crab is protected from their shell, but the advantage of mosquitoes as a species, is that many of them. Although, of course, for a single mosquito is a small consolation.
Start-ups, like the mosquitoes have to act on the principle of all or nothing. Viaweb also sometimes had to work through. Our path was like a sine wave, but fortunately we bought at the top of the cycle. While we agreed with Yahoo in California for the sale of our company, we had to borrow a room for negotiations to persuade investors not to stop the funding.
Of course, nobody likes that aspect of startups. Developers in Viaweb were people who avoided risk at all costs. If there was a way to just work very hard and is guaranteed to get paid for it, it would be pretty cool. We would prefer 100% chance to make a million dollars than a 20% chance to earn ten million, despite the fact that the second option is theoretically twice as profitable. Unfortunately, in today's world there is no business where you could get the first option.
You can get almost a guaranteed profit by selling a startup at an early stage, thus abandoning a large (but risky) profits in favor of a small (but loyal). We had such a chance, but we are completely stupid, as we then thought to have missed it. Immediately after this, we are ridiculously passionately wanted to sell. Within a year or two, if anyone showed even a small interest in Viaweb, we have tried to sell their company. But since no one is interested, we had to work on.
We would then be a very good buy. But companies large enough to anyone to buy, and are large enough to be fairly conservative. And the people who make decisions on such acquisitions, even more conservative, because they usually come in the company from business schools are already at advanced stages. They prefer to pay more for safer alternatives. Thus, it is easier to sell a startup, when his future is already decided, even for an enormous sum.

Collect users

I think that the sale of the company - a good idea. Run a business is not the same thing to control. In addition, the sale of the company will allow you to invest in something else. What would you say about the financial manager, who would have invested all the money in stocks only a young company?
What you need to do to you buy it? In fact, almost the same thing, what would you do if you have no intention to sell the company. For example, to make a profit. But we also have many more tricks, and we spent a lot of time trying to figure them out.
Potential buyers of your business is constantly retard the purchase of as much as possible. The hardest part in selling the company, is to make them act. For most people, the strongest motive is not an opportunity to earn, and the possibility of losing. For potential buyers fear that you will buy their competitors, is the most powerful motivation. We understand that this fear robs executives reason. Next in strength is the fear that you will start to grow very quickly and will be more expensive or even become their competitors.
You might think that a company is going to buy you will examine in depth what you do and on that basis make a decision about buying? Absolutely not. All they want to know is how much you have users.
Potential buyers will think that consumers know best, whose technology is noteworthy. And it's smarter than it looks at first glance. Users - is the only proof that you've done something valuable. Value - is that people need, and if they do not use your software, then maybe it's not because you're bad marketing, but because you did not do what they would want?
Do venture capitalists have a list of bad traits that need to pay attention. One of the most important is the following: the company is managed technicians are deeply engrossed in solving technical problems and does not engage its users. Working in a startup, you do not just solve complex problems, you solve problems that concern users.
I suggest you do as well as potential buyers of your business. To optimize your performance measure the performance of start-up of users. In optimizing a computer program is key dimension. If you try to just guess where she slows down, and what can fix it, then you are likely to go wrong.
The number of users may not be very accurate test, but close enough to it. This is something that worries potential buyers of business in the first place. This is what determines profits. This is something that causes suffering competitors. This is what impresses journalists and new users.
Above all else, this test will allow you to avoid another problem that worries venture capitalists - is too long product development. Avoid continuous improvement program. Release version 0.1 as soon as possible. As long as you have enough users, you can optimize, relying on guesswork.
Always remember that the value - that is what people need. If you're going to get rich by creating value, you need to know what people want. So few businesses really pay attention to making their users happy. How often do you go to the store or call any company on the phone while experiencing fear? Really, when you hear: "Your call is very important to us, please stay on the line, you think:" Oh, finally, everything will be OK?
The restaurant can afford to occasionally submit burnt dinner. But in technology, any difference between your product and what users want, multiplied many times over. We can say that you meet or disappoint customers in bulk. The closer you are to what they need, the more value you produce.

Wealth and power

Production values ​​- this is not the only way to get rich. For most of human history, this method was not very common. Just a few centuries ago, the main sources of wealth were mines, slaves, land and cattle, and the only way to get it all quickly got the inheritance, marriage, the conquest and confiscation. In wealth had a bad reputation.
Since then, two things have changed. The first was the rule of law. At all times it was so that if someone was lucky and he has the wealth, the governor or his servant found a way to select it. But in medieval Europe there was something new. In cities, a new class of merchants and manufakturschikov. Together they were able to resist the ruler or the local feudal lord. For the first time in history, the owners stopped to plunder their subordinates. It was a giant step, perhaps that is what caused the second change - industrialization.
The vast amount of literature devoted to the causes of the Industrial Revolution. But exactly what her condition was necessary to ensure that people who are fortunate enough to make the state able to enjoy them in the world. Evidence may be what happened with the countries that tried to go back to the old model, the Soviet Union and to a lesser extent Britain in the 1960s and early 1970s. Take away people's opportunity to get rich and technological progress will stop.
Remember that from an economic point of view of a startup - a way of saying, I want to run faster, you pay me more. Instead of slowly save money and receive regular wages for fifty years, I want to get everything as soon as possible. A government which does not allow it, forcing people to run slowly. They do not mind that you have earned three million dollars for fifty years, but they do not want to do it for two years. They're like your boss to whom you can not come up and say what you want to work ten times better and get paid for it ten times more. The difference is that you can not leave and establish their own country.
Slow does not mean that technical innovations emerge slowly. Usually it means that innovations do not exist. You start to desperately seek challenges only if you want to help their decision to accelerate profit. Development of new technologies - this is the nail in your ass. That being said Edison is one percent inspiration and ninety-nine percent perspiration. Without the ability to get rich no one will do it. In principle, the engineers began to work on such inspiring projects as a fighter or a lunar module, but more mundane technologies such as electric light bulb invented by entrepreneurs or semiconductors.
Startups - is not only what happened in Silicon Valley the past few decades. Since then, how was it possible to get rich by creating value, whoever did it used the same recipe: measurement and leverage. This recipe was the same in Florence in the thirteenth century, it remains the same even now.
Understanding this will help answer the question: why Europe is so strong. Is it because of its geographical location? Or can the European race with something better? Or maybe it's because of religion? The answer is that the Europeans have put on a new great idea: let those who managed to get rich, the ability to maintain their wealth.
Once you do that, people who want to get rich, start to create value, instead of stealing them. In this case, technological progress will transform not only wealth but also in military power. Theory, by which was built aircraft invisible, was developed by Soviet mathematician. But since the Soviet Union was not the computer industry, it remained for them to theory.
In this sense, the Cold War taught us the lesson that the Second World, and the rest of the war of humanity. Do not let the ruling class to crush entrepreneurs. What makes a person rich, making the country powerful. Let people keep their wealth, and you'll rule the world.


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