The Minimalist Entrepreneur

Before I started to write this book, I wouldn't have described myself as a minimalist entrepreneur. I would have said I was a founder committed to a new kind of startup, one that prioritized profitability over growth and positive impact over moving fast and breaking things. Instead of capturing as much value as possible, I was determined to create as much value as possible for our customers and our community.

I'm not the only one. In this book, you'll meet dozens of entrepreneurs like Peter Askew and others who are taking the same approach to building their companies. In the past years, I've exchanged ideas on Twitter or at conferences with all of them, and the more people I talked to, the more I felt we should label this new pathway that uses the advent of software to democratize and normalize business creation for everyone.

Minimalist entrepreneurs are all unique, as is every path to success, but I've tried my best to coalesce my learnings into a single, repeatable playbook.

The steps to becoming a minimalist entrepreneur map to a function of the minimalist business-and, not coincidentally, to the chapters in this book. Each chapter builds on the previous one-just as addition leads to multiplication leads to algebra leads to calculus-until finally, at the end of the book, you'll be fully equipped to become a minimalist entrepreneur yourself. You can read it all the way through, but you should also feel free to hop around; everyone is at a different stage in their business-building journey.

PROFITABILITY FIRST

Minimalist entrepreneurs create businesses that are profitable at all costs. Many businesses never intend to stick around long enough to be profitable. Instead, the plan is to sell the business before profits become necessary, raising money from investors along the way. Minimalist entrepreneurs aim to be profitable from day one or soon after, because profit is oxygen for businesses. And they do that by selling a product to customers, not by selling their users to advertisers.

START WITH COMMUNITY

Minimalist entrepreneurs build on a foundation of community. They don't ask 'How can I help?' but are instead observant and cultivate authentic relationships. They spend time and effort to learn and to build trust, focusing on the market part of 'product-market fit' (a term coined by venture capitalist Marc Andreessen for being in a good market with a product that can satisfy that market) before they build anything at all.

BUILD AS LITTLE AS POSSIBLE

When they do build, minimalist entrepreneurs build only what they need to, automating or outsourcing the rest.

Similarly, minimalist businesses do one thing and do it well. They work side by side with their customers to iterate toward a solution, and make sure it's worth paying for, before they take it to customers outside of their communities.

SELL TO YOUR FIRST HUNDRED CUSTOMERS

Minimalist entrepreneurs don't spend time convincing peoplethey spend time educating people. Selling is a discovery process, and minimalist entrepreneurs use sales as an opportunity to talk to potential customers one by one about their products while simultaneously educating themselves about the problem they are trying to solve for them. Selling this way is a long game built on relationships and vulnerability, not a one-day grand opening extravaganza followed by selling to strangers.

MARKET BY BEING YOU

Speaking of vulnerability, minimalist entrepreneurs share their stories, from struggle to success. The best marketing shows the world who you-and your productreally are. Minimalist entrepreneurs understand that people care about other people, and educate, inspire, and entertain whenever and wherever they can. Instead of making headlines, they make fans-who turn themselves into customers over time.

GROW YOURSELF AND YOUR BUSINESS MINDFULLY

Minimalist entrepreneurs own their businesses, they don't let their businesses own them. They don't spend money they don't have, and they don't sacrifice profitability for scale. At this point, it becomes a game to lose . . . and minimalist entrepreneurs don't lose.

BUILD THE HOUSE YOU WANT TO LIVE IN

Minimalist entrepreneurs hire other minimalist entrepreneurs. Instead of following the status quo, they build their companies from first principles, alienating almost everyone. The way you do things won't be for everyone, but it will be really great for a few people, and if you define your values early and often and tell the world who you are, they will find you. Conventional wisdom about how we work, when we work, and where we work is changing fast. Minimalist entrepreneurs understand there are few rules.

Even when you've successfully built your minimalist business, the journey isn't over. Spoiler alert: It never is. Minimalist entrepreneurs know that life is about more than just their companies. The true magic of entrepreneurship is that you and your business can improve the quality of life of many people. And it doesn't have to be millions; 'enough' is what you decide it is, not a specific amount.

If you're nodding along, great. If you're still skeptical, well, that's okay too. I have 50,000 words and a few hours to convince you. Just keep reading!

Chase Profitability, Not Unicorns

Building a minimalist business is not a get-rich-quick proposition, but it is a get-rich-slowly one if you embrace profit-ability, not growth, as the key indicator of your company's success. 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.

And while I do think the minimalist entrepreneur mindset leads to a near-100-percent success rate, I'm willing to concede that it may only happen 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. Most people don't start. Most people who start don't continue. Most people who continue give up. Many winners are just the last ones standing. Don't give up.

We're moving past an era of gatekeeping, where bosses and universities and venture capitalists decide who gets to try and who doesn't. Information about how to start and scale companies is now available to founders around the world, and it's cheaper too, which means there are fewer and fewer reasons to raise money from venture capitalists. There's nothing inherently wrong with raising money, and not all unicorns are evil. I raised money for Gumroad (and, as you'll read later, have again, but in a very different way), and there are companies like Pinterest, Lyft, Slack, and others that raised venture capital, grew quickly, yet stayed focused on their customers. But much of the venture capital model depends on creating unsustainable growth and destroying successful-by-any-other-metric businesses.

Why does this happen? The venture capital business is a high-risk, highreturn investment strategy in which venture funds swap capital for earlystage startup equity, essentially buying a piece of the future value of the companies in which they invest. For the model to work, the rare winners like Uber, Airbnb, and Stripe need to pay for all the losers. Aileen Lee of Cowboy Ventures coined the term 'unicorn' to refer to privately held startups valued at more than $1 billion, which are the lifeblood of venture funds. In fairy tales, people can't help chasing unicorns-they are nearly irresistible, but they're also rare, elusive, and nearly impossible to catch.

Her mythological metaphor couldn't have been more apt. Almost everyone fails to build billion-dollar businesses, even the founders who raise gobs of venture capital. According to Matt Murphy, managing director and partner of Menlo Ventures, approximately 70 percent of startups fail, which can mean anything from full liquidation to becoming cash flow positive, which, despite being good for the company, is still bad for the VC. Of the 30 percent still standing, he says, some return three to five times the initial investment, which constitutes only modest success in this setting. The whole system is riding on at least 5 percent of VC-backed companies delivering tenfold to one hundredfold returns to balance out losses and make it all worth it. Without them, the VC model simply doesn't work. That's because the outsized success of the rare billion-dollar startup compensates for all the money thrown against the wall, like so much spaghetti, on thousands of other ventures.

That's not what minimalist entrepreneurs do. We are laser focused on profitability from day one, in order to get to sustainability soon after, so that we can serve our customers and our communities for as long as we wish.

Don't Call It a Comeback

No matter where you work, how you work, or who you work for right now, you can use the principles in this book to rethink the beliefs and practices that may be holding you back. I really do believe that starting a business should be an option for everyone, no matter your background. That's why this book is full of examples of many great businesses that have been built by passionate individuals around the world, many who have flown under the radar until now. For up-and-coming minimalist entrepreneurs, I hope their stories can serve as examples as new online tools make the process of building, marketing, and selling easier and cheaper for everyoneincluding solopreneurs and independent creators.

Where do you start? Take a good hard look at the people, places, and communities you care about. Where are the pain points? What isn't working, but might with a little elbow grease? These are all opportunities to make things better through minimalist entrepreneurship. It's ironic to me how often people go around hoping to find a startup idea while simultaneously complaining about all the everyday stuff around them that doesn't work properly. 'Sure, I could solve that for people with a little effort, but the potential market just isn't big enough to really scale.' That's the kind of thinking that this book seeks to address.

You may already be on your business-building journey, but if you're just getting started, some business models lend themselves more easily to the pathway of minimalist entrepreneurship. 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. We'll talk about all of these later in the book.

There are also businesses that aren't necessarily suited for this framework because of the slow pace of customer feedback. For example, any business that requires a heavy investment in research and development or that relies on sales to large, bureaucratized corporations or institutionslike Fortune 100 companies, academia, or hospitals-might not match up as well with the processes and systems I recommend.

The good news is that what constitutes a 'business' is changing faster than ever before and opening up possibilities to a wider range of innovators. Though this shift was in motion before 2020, the COVID-19 pandemic accelerated it and drove increased interest in entrepreneurship from people of all backgrounds. Now more than ever before, we don't need to move to a place called Silicon Valley, go to a school called Harvard or Stanford, and raise money from the venture capitalists. The internet lets you learn from anywhere, network with anyone, and raise money directly from customers.

The world desperately needs the solutions that only entrepreneurs can provide. Everyday problems are all around us, but they are often hidden from the view of the Silicon Valley software engineers and Ivy League overachievers who have been anointed as our entrepreneurial class. We need the help of entrepreneurs from every part of the planet and every stratum of society. It's down to individual creators and entrepreneurs to set better goals for ourselves and our businesses. After all, problems don't solve themselves. People do.

Creator First, Entrepreneur Second

On paper, it seems simple enough:

• 1. Narrow down who your ideal customer is. Narrow until you can narrow no more.
• 2. Define exactly what pain point you are solving for them, and how much they will pay you to solve it.
• 3. Set a hard deadline and focus fully on building a solution, then charge for it.
• 4. Repeat the process until you've found a product that works, then scale a business around it.

In practice, it's not so simple. There are many complications that pop up, and most people don't even know where to start. A 'business' of any kind is too scary, too amorphous, or too unattainable. Luckily, there's another way to get started today. Before you become an entrepreneur, become a creator.

That could mean being an artist, but it doesn't have to. Creators make things, charge their audiences for those things, and then use that money to make more things. They use the first dollars they earn as tools to fuel their own creative drive, not the other way around. With time and experience, creators show others how to turn their own creativity into businesses, and the cycle continues. In the end, there isn't much difference between a business like Gumroad and a creator. It's just semantics-one or more people using the tool of a business to make something new. Painters need brushes. Writers need pencils. Creators need businesses. It's key for people to understand that, because it lowers the cognitive barrier to starting a business, and starting is really important. You don't learn, then start. You start, then learn.

My best friend in middle school, obsessed with the computer game World of Warcraft , started designing fantasy creatures in Photoshop. I was impressed, but I also remember thinking, 'I could do that.' So I went through some Photoshop tutorials and got to work. When I started to get the hang of the software, I began submitting logos to online competitions. I didn't win any, but the process of creating a lot of stuff and putting it out there made me a pretty decent designer, and then led to freelance web design work.

Once you're working on other people's projects, you can't help but get ideas of your own, so I began building simple web applications, hiring developers to help with the coding. For example, before Twitter natively supported threads, I created an app called Tweader to see the conversations that happened between people on Twitter. Another app, Ping Me When It's Up, would text me when a website that had gone down was back up again. (It should be clear by now that I've never been very good at naming things.)

When the iPhone App Store opened, I learned to code for it by taking a free course on iOS development from Stanford through iTunes University, called CS193P (I still recommend it!). The App Store handled all the financial aspects of selling what I made to customers around the world, which meant I could focus on creating apps. Perfect.

The first app I built was called Taxi Lah!, which let users call a cab from their phones-before Uber. I put it on the App Store for fellow Singaporeans and made a few thousand dollars. Then I made an app called Color Stream that let designers create and modify color palettes on their phones. I made about $10,000 from that. Each time, I was trying to solve a problem I had. I wanted to design and build a little bit of software to make my life-and the lives of others-a little bit better.

This experience-shipping real products to real customers- led to my first job at Pinterest, where I designed and built the Pinterest iPhone app. While I was there, I built Gumroad in my spare time to help me sell an icon I designed in Photoshop. When I found a solution that worked, I sold it to other creators, who sold their products to their own community of creators, many of whom eventually became Gumroad customers themselves. Now I'm an honest-to-goodness entrepreneur without ever having really given it much conscious thought along the way.

The App Store cleared the marketing and financial obstacles out of my way so that I could fully embrace my creative side and become a creator. That transition led to me becoming a founder. It's an upward, virtuous cycle. Creation begets more creation. Today, Gumroad does the exact same thing for other would-be creators. It's basically a glorified Sahilcloning factory. Isn't that beautiful? (My mom thinks it is.)

Max Ulichney is an art director and illustrator based in Los Angeles. He'd always imagined he'd spend his days working at a large company to pay the bills in return for a few hours in the evening to do his own work. He spent fifteen years as an art director at the same creative agency, eventually using an iPad app called Procreate to draw and paint in between meetings. One day, a couple of years ago, Max decided to sell some of the digital 'brushes' he'd designed for his own use to other Procreate users. A few hundred dollars later, he decided it was worth the effort to continue selling the digital tools as a business. Two years in, Max was making a living as an independent creator. Recently, he quit his job at the agency to work on Maxpacks full-time.

There are thousands of 'creator first, entrepreneur second' stories like Max's.

Adam Wathan and Steve Schoger teach people how to build and design web applications. They believe, as I do, that nearly anyone can become a competent front-end engineer and designer with a little help. In December 2018, after just a few years building their online audiences, they released Refactoring UI, an online course, earning over $800,000 in a single month. Now they get to spend their time doing what they really love: building Tailwind, a free and open-source framework for the rapid creation of custom web designs.

Kristina Garner, mother of two boys, teaches families how to run secular, nature-based homeschooling programs for their kids. What started as a blog in 2015 about her personal passion has become Blossom and Root, a business that employs dozens of people and helps thousands of families every month.

These are just a few of the 28,207 creators who sold something on Gumroad last month. That sounds like a big number today, but I too started somewhere smaller and less lofty, where creation always begins: at the number next to zero. Where there was nothing, now there's something: digital brushes, online courses, Vidalia onions on your doorstep.

In the next chapter, I'll show you how to get started.

KEY TAKEAWAYS

• You don't learn, then start. You start, then learn.
• Minimalist entrepreneurs focus on getting 'profitable at costs' instead of growing at all costs.
• A business is a way to solve problems for people you care about-and get paid for it.
• Become a creator first, an entrepreneur second.

Learn More

• Follow Peter Askew (@searchbound) on Twitter, where he regularly tweets about business ideas, domain name opportunities, and other interesting stuff.
• Read his article 'I Sell Onions on the Internet' at www.deepsouthventures.com/i-sell-onions-on-the-internet/.
• Read the article that inspired this book: 'Reflecting on My Failure to Build a Billion-Dollar Company' at sahil lavingia.com/reflecting.
• Follow @gumroad on Instagram to see our creators' stories.
• Join the Minimalist Entrepreneurs club on Clubhouse to meet and learn from other minimalist entrepreneurs in the community.