{"id":8334,"date":"2014-08-05T14:00:00","date_gmt":"2014-08-05T18:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=8334"},"modified":"2020-03-30T19:00:23","modified_gmt":"2020-03-30T23:00:23","slug":"dont-go-billions-startup-aiming-1000-instead","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/dont-go-billions-startup-aiming-1000-instead","title":{"rendered":"Don\u2019t go for billions: why your startup should be aiming for $1,000 instead"},"content":{"rendered":"

Entrepreneurs dream about building the next big billion-dollar company. But the Apple, Google, and Facebook-shaped stars in their eyes end up clouding their vision. It\u2019s easy to get caught up imagining your company going viral and getting to millions of users \u2014 all before your business has made a single dollar.<\/p>\n

All the hopes and visions in the world won\u2019t get you any closer to your billion-dollar exit.\u00a0In fact, setting out to build a billion-dollar startup is one of the biggest mistakes you can make<\/b>.<\/p>\n

Gary Chou, an instructor at the School of Visual Arts in New York City, teaches his students how to launch a startup by taking a completely divergent approach. His course in Entrepreneurial Design has an\u00a0unexpected syllabus<\/a>\u00a0for a business class: Forget about creating a business plan or making a pitch deck for a fictitious billion-dollar unicorn company. Instead,\u00a0get out there and create a real $1,000-dollar company.<\/p>\n

Chou\u2019s assignment is to create a business that will produce $1,000 in monthly profit in a way that\u2019s repeatable and sustainable. What has\u00a0emerged from this exercise includes profitable, ongoing businesses and funded Kickstarter projects. If you take on the challenge of building a $1,000 startup, you\u2019ll learn three valuable lessons:<\/p>\n

You\u2019ll Create Self-Sufficiency and Independence<\/b><\/h3>\n

Getting your project to\u00a0ramen profitability<\/a>\u00a0is a vital and game-changing milestone because individuals and startups need to be self-sufficient. Relying on others can hold back your\u00a0creativity and autonomy<\/a>.\u00a0If you have to worry about a salary to make a living or investor money for your company to stay alive, you severely\u00a0limit your capabilities.<\/p>\n

Deciding to raise investor funding and swinging for the fences often means chasing someone else\u2019s dream, not your own. When you set out to build a billion-dollar startup, you\u2019re often implicitly following another\u2019s path to success rather than thinking independently.<\/p>\n

For example,\u00a0Zingerman\u2019s<\/a>, a Michigan deli that was doing $5 million in annual revenue, had potential to go big and take their local operation national, become a chain restaurant, and replicate the same formula in city after city. Their own definition of success meant staying small and local. Instead of replicating the deli by racking up franchises, they created opportunities for their employees to start local businesses, such as a bakery, a creamery, and more \u2014 all based on the Zingerman\u2019s culture and brand.<\/p>\n

They multiplied their annual revenue by 10 times to $50 million by blazing their own path.<\/p>\n

Get your company to make $1,000 per month, and you\u2019ll be able to cover rent.\u00a0Your self-sufficiency will give you more of a sense of control.\u00a0When you feel more in charge of your fate, you have the means, the autonomy, and the creativity to do something totally original.<\/p>\n

You\u2019ll Actually Learn How to Build a Business<\/b><\/h3>\n

Following the well-trodden road of building a startup often results in a rude awakening. I\u2019ve seen many founders who went through top accelerator programs, raised impressive-sounding million-dollar seed rounds, and then fell short when it came time to actually building the business. They had never made a single dollar because they never learned how to do it.<\/p>\n

Basically,\u00a0building a business is not\u00a0fundraising<\/a>.<\/p>\n

By the time\u00a0iDoneThis hit $1,000 in recurring revenue<\/a>, I had gone through setting up the groundwork and learning how to grow my business.<\/p>\n

When you focus on building a $1,000 startup rather than a billion-dollar one, you\u2019ll get the order of operations right without putting millions of dollars of investor cash at stake as a funded company:\u00a0validate and learn first<\/a>, then scale.<\/p>\n

Your $1,000 company might be bigger than you think<\/b><\/h3>\n

Building something big by building something small is actually one of the best, most counterintuitive ways to build something at all.<\/p>\n

The paradox is you limit yourself to \u201cbig\u201d ideas, narrowing your scope and most likely coming up with bad big ideas<\/b>. According to\u00a0Paul Graham<\/a>, the best ideas are often what he calls \u201ctoys,\u201d or ideas you wouldn\u2019t recognize when you\u2019re touching on a billion-dollar opportunity.<\/p>\n

ZeroCater<\/a>, a Y-Combinator-funded company started by founder Arram Sabbeti, was born from the humble ambition Arram had when he wanted to quit his job. He just needed enough money to pay for his rent and ramen. He started by helping his own employer cater company lunches and began to expand to other local area startups.<\/p>\n

What started as a $1,000 startup soon became a much bigger opportunity and then a full-fledged business, as Arram added more and more paying clients. Within a year, Arram had turned his rent and ramen side project into a startup backed by the best investors in Silicon Valley.<\/p>\n

The big mistake is to focus on opportunities that seem like big ideas but result in products no one would pay for or use. To Graham, it\u2019s far better to build a product that has customers who \u201creally need what [you’re] making.\u201d This will be a small number of people at first, and that\u2019s okay. When your product has $1,000-worth of passionate customers, you have concrete evidence that you\u2019re on to something good, with the potential to be huge.<\/p>\n

* * * * *<\/p>\n

The $1,000 startup is a powerful frame to put on your ideas, because it strips the distorting force of market opportunity out of the idea equation. Rather, it properly focuses you on the question of whether you\u2019re building something that some significant number of people want enough that they\u2019re willing to pay you for it.<\/p>\n

Meanwhile, you get out there with a kernel, a seed, you do the work and grow from it, and you\u00a0learn how to put one foot in front of the other<\/a>.<\/p>\n

This story originally appeared in IDoneThis’s blog.<\/i><\/a><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

Entrepreneurs dream about building the next big billion-dollar company. But the Apple, Google, and Facebook-shaped stars in their eyes end up clouding their vision. It\u2019s easy to get caught up imagining your company going viral and getting to millions of users \u2014 all before your business has made a single dollar. All the hopes and […]<\/p>\n","protected":false},"author":931,"featured_media":8407,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-8334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nDon\u2019t go for billions: why your startup should be aiming for $1,000 instead<\/title>\n<meta name=\"description\" content=\"Entrepreneurs dream about building the next big billion-dollar company. 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