James Altucher’s cheat sheet to starting a business

James Altucher is a serial entrepreneur, author and one of my favorite bloggers. He shared some priceless tips for starting and running a business and I highly recommend you check them out. Here are some of my favorites:

4) Should you go for venture capital money?
First build a product, then get a customer, then get friends-and-family money (or money from revenues which is cheapest of all) and then think about raising money. But only then. Don’t be an amateur.

14) What if nobody seems to be buying your product?
Then change to a service and do whatever anyone is willing to pay for using the skills you developed while making your product.

19) What’s the best thing to do for a new client?
Over-deliver for the first 100 days. Then you will never lose them.

25) What is the sign of an amateur?

Asking for an NDA.
Trying to raise VC money before product or customers.
Having fights with partners in the first year. Fire them or split before anything gets out of control.
Worrying about dilution.
Trying to get Mark Cuban to invest because “this would be great for the Dallas Mavericks.”
Asking people you barely know to introduce you to Mark Cuban.
Asking people for five minutes of their time. It’s never five minutes, so you are establishing yourself as a liar.
Having a PowerPoint that doesn’t show me arbitrage. I need to know that there is a small chance there is a 100x return on money.
Catch 22: showing people there’s a small chance there’s 100x return on their money. The secret of salesmanship is getting through the Catch 22.
Rejecting a cash offer for your company when you have almost no revenues. Hello Friendster and Foursquare.

26) What is the sign of a professional?

Going from bullshit product to services to product to SaaS product. (Corollary: the reverse is amateur hour).
Cutting costs every day.
Selling every day, every minute.
When you have a billion in revenues, staying focused. When you have zero revenues, staying unfocused and coming up with new ideas every day.
Saying “no” to people who are obvious losers.
Saying “yes” to any meeting at all with someone who is an obvious winner.
Knowing how to distinguish between winners and losers (subject of an entire other post but in your gut you know — trust me).

28) How long does it take to raise money?
In a GREAT business, six months. In a mediocre business, infinity.

67) If my customer just got divorced, what should I say to him?
“I can introduce you to lots of women/men.”

72) Should I hire a head of sales?
No. The founder is the head of sales until at least 10 million in sales.

86) I have an idea for an app but don’t know how to execute. What should I do?
Draw every screen and function. Then outsource someone to make the drawings look like they come from a real app. Then outsource the development of the app. Get a specific schedule. Micromanage the schedule.

Check out the full cheat sheet here.