It took me a long time, years in fact, before I was comfortable enough with myself and my ego had recovered enough to look back at my failed ventures and try to figure out where I went wrong. I found a lot of mistakes and before starting Ukulele Underground I promised myself I would not commit these mistakes again. If you’re just starting out in business, or if you’re struggling like I was for so long, please please please not only read the following but apply them to your life and business. It will exponentially increase your chances for success. I know it did for me.

My biggest business mistakes from my past failed businesses

1. I didn’t honestly give it my all. – I wasted a lot of time when I should have been working. In my early 20s I played a lot of video games, went out a lot, didn’t spend a lot of time working on the business and it showed. Your effort is one of the few things in business you can control 100% so don’t waste it. There are so many more things you can’t control at all so maximize your effort. Do everything you can (legally) to make your business succeed no matter how daunting it may seem.

2. I thought because I was smart, I didn’t have to work as hard. – Hustle > Smarts. every time. period. If you’re like I was and think because you’re smart you will have an easier time in business think again. Success in business belongs to people who are willing to hustle. To work as long as it takes to get the job done. I would often see people who I thought I was better than having more success than me and this used to make me jealous and jaded until I realized that hustle beats smarts and skill every single time. If you are truly smart bring hustle to your game and you can become unstoppable.

3. My ego was too big. I didn’t know enough but was too ashamed to admit it. – I made a lot of mistakes early on because of my ego. Starting out in business is pretty scary as there are a lot of new things you need to learn very quickly. I made a lot of mistakes, some very costly ones, simply because I wouldn’t admit I didn’t know what I was doing. What I should have done, and what I do now is find people who have done what I want to do, then try to ask them for advice. It’s pretty foolish to think that your business is so unique that no one out there has faced the problems you’ve faced. More often than not, you can find someone who can help you along and get you to the next step. Don’t let your ego get in the way. Ask for help.

4. I thought I could do everything myself. This goes hand in hand with the last one. Because I was ashamed to admit what I didn’t know, I tried to do everything myself. This takes time away from the important things. Things you should be focusing on to build the business. In the beginning you can get away with this and honestly probably should try to do as much as you can to save money, but there comes a point where you need to let go and put certain tasks into the hands of more experienced and talented people. When the time is right, ask someone you respect for referrals to help offload work that is taking up time that you should be using to focus on building the business.

5. I wasted a lot of money. Treat money sacredly. This again goes back to ego. When I started my first business, my grandma gave me $5000 to get it off the ground. I spent it all on stupid stuff and it was all gone before I knew it. That company never made a cent. $5000 may not sound like a lot of money, especially to people who are out looking for funding, but every dollar should be treated as sacred. That experience is probably why I am such an advocate of bootstrapping. It’s easy to spend and waste a lot of money. Money is the easiest, laziest, and least efficient way to solve problems. With Ukulele Underground, we purposely started with just $300 to make sure we didn’t have any money to waste. We had to use our brains and brawn to make things happen. I am so proud of the creative solutions for problems we figured out on a shoe string budget in the early years. We learned to be efficient with capital and make every dollar grow. Even today, we still operate the entire business for a little over 10% of our total gross income. And that is something I am very proud of.

6. I built things nobody really wanted – No matter how cool you think something is, if nobody wants it you don’t have a business, you have a project. If you’re going to be in business, you need to solve other people’s problems, not just do cool things, or think about solving your own (money) problems. Entrepreneurs solve problems for money. If you want to be an entrepreneur solve problems.

7. I always gave up – This was the biggest revelation to me and what finally go me from failure to success. Whenever things got a little rough or tight in my past businesses I gave up. Business is not easy. You’ll often hear the saying that, “it’s a marathon not a sprint” and its very true. You need to be in it for the long haul. There are many roadblocks, broken bridges, and pitfalls on the path to success. There will be many things that will seem unfair, that you feel should not happen. You will feel cheated at times, and you will be frustrated by the lack of progress. Deal with it. Keep pushing towards your goals. It took us with Ukulele Underground years before we made enough money to be even considered middle class. We lived on well below minimum wage income for a few years before we broke through. Did it suck? Hell yes it sucked, but we didn’t quit (even though I wanted to at certain points). Even though I started out this post by saying I failed many times, in truth I didn’t. In all of my past businesses I gave up. I gave up many times because things got a little bumpy. The only difference between UU and all my “failures” is that this time I didn’t give up. Don’t give up.

From Facebook:

Back from Japan. It was a truly spiritual experience for me. The last time I was there, I think I was just too young to truly appreciate the trip. This time was different. I was overwhelmed with two powerful feelings there. Being of Japanese descent, visiting Japan made  me so proud of my heritage. Everyone there seems to be honestly trying their best to perform their jobs to the best of their ability no matter their station in life. There was no complaining no matter if they were a janitor, policeman, teacher, or working at the hotels, restaurants or tourist spots. Not only are they trying their best, but they all seem to take pride in their work. Even to the point where I think they would feel shame if they are perceived to be doing their job poorly. If only more people in America could accept this attitudes at their jobs, I think our country would be a lot better off.

At the same time, I was totally overcome with feelings of gratitude for my ancestors for having the courage to leave Japan to seek a better life for their future generations. There is a term that i learned in Japan called “datsusara”, which means leaving your corporate salaried job to pursue your passion (datsu = to remove, sara = salary). It’s kind of a novel concept in itself in Japan as not complaining about your job goes hand in hand with putting your own desires to the side. But here in America, individualism is celebrated, being brave enough to be the nail that sticks out is often rewarded if you are strong enough to stand tall when you are struck by society trying to put you in line. While there, I reflected about my own life and how it could be considered a prime example of Datsusara and how incredibly grateful for everything I have now. It also got me thinking of all my ancestors, who left permanently left their home in Japan to seek build their own dream life in Hawaii. That could be considered Datsusara as well. Accepting their station in life was not what they wanted either and they were also willing to leave not just their jobs but their country in search of their own fulfillment. Even after coming to Hawaii, my parents, grandparents, and great grandparents took risks, made bets on themselves to provide a better life for their families. Without their risk taking in the past, would I have ever been in a position to take my risks? Would I have had the courage to Datsusara myself? I don’t think so. And for that, I am forever grateful.

There is only one simply difference, but it is a huge difference between owning a business and owning a job and its this:

The earning potential of a job, is directly tied to the amount of hours you work. The earning potential of a business however is scalable, unlimited, and hours and income are decoupled.

Now don’t get me wrong. There is absolutely nothing wrong with owning your own job. In fact, it often creates the freedoms many people are searching for when they say they want to start their own business. If you are enjoying what you are doing, are satisfied with your income, and are happy, then shit, you already won. You don’t need to start a business.

But for many, they often fall into the trap of “I thought I started a business but ended up with a job”. They’re not making as much money as they thought, or they now are making a lot of money but they have to spend all their time working and have no time for anything else. They become jaded with their “business” and may even come to resent it after the initial excitement wears off.

If this sounds like you, you have your own job. But its not the end of the world. Most businesses start as your own job. So what do you to fix your unhappiness and scale from a job to a business?

The two main ways to scale from an owned job to a business is

1. Offload your work to employees or contractors

2. Implement methods to reduce or automate redundant tasks

The good news, is that if you are making money, it is easy to scale because both additional help, and technology usually cost money. The one you should choose first depends on what your primary problem is.

If you want to increase revenues by adding more business, utilize subcontractors, part time employees, or if you can afford it fulltime employees. One important note, NEVER hire until you absolutely need to hire. I see many people make the mistake of hiring before you need it. Hire ONLY when you absolutely need someone to help you. Always try to max yourself out before hiring.

If on the other hand you feel like you need more time to get to the work that actually makes you money, invest into systems that cut down redundant tasks from your daily schedule. For example, if your customer support / maintenance calls take up a large portion of your day, hire and train someone to handle tier one support and invest into a support system like Zendesk or Grasshopper. If you absolutely hate doing sales, maybe you should find someone to work on commission to generate leads (though I would highly recommend ALL business owners to lead their marketing message. It will set the public perception of your company. The last thing you need is some scummy sales person ruining the image of your  company). Same rules apply here as the first one, do not incur any additional expenses until you are overwhelmed and absolutely need it.

For both of these to work, you will need to develop a crucial skill of hiring the right people and firing the wrong people. This comes with establishing a strong company culture that resonates with your personal values. Highly recommend reading ‘Delivering Happiness’ by Tony Hsieh CEO of Zappos  for tips on creating company culture. I’ve learned the hard way that company culture is the single most important aspect of building a fulfilling company. Trust me, you want a fulfilling company because as an entrepreneur, your company is your life. Even your business partnerships, sub contractors and VAs should fit in with your culture. Ideally after you scale your job into a business, you should be spending the majority of your time doing things you enjoy while your team does things you don’t enjoy so much. When you find yourself in this position congrats you’ve scaled out of your job and life will be awesome (well, honestly I don’t know how you will feel, but all things considered, it should feel awesome).

Additional reading of Scaling out of an owned Job

Anything you Want – Derek Sivers

The Four Hour Work Week – Timothy Ferriss

1. I’ve become comfortable.

Ukulele Underground has reached a point where the three of us are now financially pretty comfortable. No longer do I have to lie through my teeth to save my ego when people ask me how my company is doing. We’re doing well and that’s no lie. Through organic, non-exponential growth, we’ve managed to grow $300 into something that pays us a decent salary while maintaining our very lax work schedule (3 days a week). This is incredibly dangerous. Why? Because I know this is what so many people dream of. Working a few hours a week but still earning a full-time salary. It sounds too good to be true, and honestly it kind of feels like it. It’s dangerous because in all honesty, I could get used to this. But this, is not where I want to be. I haven’t proven my point yet. I haven’t proven to myself that I can do what I think I am capable of. I know where I am now, this point, is not my top of the mountain yet the view and the breeze here is so so nice. I can look below me and see that I have come pretty far and its tempting to stay here just a little longer. It’s comfortable and in business, comfort is death. I know this yet, I struggle daily trying to bring the same ferocity I brought when I was struggling; when I was broke living in my parent’s house at 27. It gets me down because the people I admire in business never seem to switch off. They’re always on the hustle yet here I am doing nothing. It is bad and I need to fix it.

2. I am daunted by the sheer amount of information that I know that I still do not know.

This I know is a significant part of why it seems so hard to get the wheels turning these days. As much as I feel I’ve learned about running and growing a bootstrapped business, it seems the more we grow, the more knowledge I need to have, and there is so much things I still do not know. My biggest gaps in knowledge are with business metrics and analytics. I know that to get to the next level, I need to understand these concepts on a much deeper level than what I currently have mastered; Lifetime value, Cost per Acquisition, churn rate, optimizing conversion funnels, Split testing, the list goes on and on. Every time I learn something, it opens the door to all these other things I have no idea on. When I think I finally got it, I realize I don’t know the formulas to calculate it. When I think I finally got the formulas, I’ll roll something out only to realize it was completely wrong. I’ve gotten better with being wrong, but it still sucks every time it happens (and it happens A LOT). It becomes overwhelming as it seems like you’ll never know everything. I know that this is most likely the case but I sometimes wish I had someone that could just tell me, “this is what you need to know and you will be successful”. When I first started out in entrepreneurship, I thought I knew everything and that naivety was costly and painful. The more I’ve learned the more I only see what I don’t know. Knowing that you never know enough definitely gets old and wears on you.

I have definite goals this year for the company and I think we can reach them most notably to double our current monthly revenues. I already wrote out the plan to do it, just need to execute which sucks, because one thing that I know for certain is that the execution is the hardest part. Ideas and planning is so easy, doing is what separates. Time seems to go by faster and faster and I need to kick this slump as soon as possible. Writing this post was a bit cathartic and I think helped, but I’m curious if others out there experience similar things. Is this normal for entrepreneurs or am I just lousy at this?

I’ve met people who have passion. My cofound Aldrine is a great example of someone who is passionate about what he does. He’s been playing music since he was a kid and the passion he has for the ukulele is all consuming. Not only can he talk about literally any aspect of the ukulele for hours he also spends an ungodly amount of time practicing the ukulele (although these days I don’t think he practices nearly as much as before). It’s this passion that has allowed him to become one of the premier ukulele players in the WORLD and why so many people watch and learn from our tutorial videos. When you watch one of our videos with Aldrine teaching you some small little technique about the ukulele, you can literally feel his excitement coming out of your computer screen. Doing something with the ukulele is a dream job and you can tell he’s not in for just a paycheck. In fact, he didn’t get paid at all for 3 years.

The same way Aldrine is about music, I feel about entrepreneurship. I love entrepreneurship, all aspects of it and I can talk about it forever. I read things and listen to things about it everyday. Ask my wife (and the fact that she puts up with it and hasn’t filed for divorce means its true love). I’m testing my own theories in my own businesses and constantly honing what I consider my craft.  My idea of a fantastic day is meeting another entrepreneur and talking shop and learning something that I can add to my tool box. May not even be something I need at the time, but just something I can whip out like batman when the time comes.

The reality is, most people never find their passion. Why? Because most people aren’t passionate people. To have a passion for something, you need to be a little crazy. A passion is something that consumes your entire life and most people honestly don’t want that. They want to enjoy their weekends. Passionate people are not balanced people. There’s a reason why there are only a few Tiger Woods(es?), Richard Bransons, Kanye Wests. Its just not normal. So when normal people tell me they finally found their passion, what they’re actually saying is, “I found something that is fun and I’m kind of interested in right now.” Who knows, maybe it will turn out it actually is your passion, but if you just found it you have no way of knowing. So stop calling it your passion.

In the end, it’s ok to be normal. Despite what so many successful people preach, it’s ok not have a passion, its not a prerequisite for success or happiness, it just means you’re going to have to work harder. See the only advantage people who have passion have is that when they are working, it doesn’t feel like work. So even if you don’t have a passion in life it’s ok, if you can learn to put your head down and just work as hard as you can, you’ll be fine. You can fake your passion.

There is a caveat to this diatribe or sorts and that is that I think there are many people out there that already know their passion yet are not pursuing it. Maybe they had a parent who pushed them into a field or maybe they are afraid that they won’t be able to make ends meet with the passion. These people may live their entire lives with a mask on. They spend their entire working career pretending to be something that they think the world wants them to be. STOP DOING THAT SHIT.

If you have a passion it is your OBLIGATION to pursue it. If it’s truly a passion there is no way you can fail. The world loves those who love what they do. If you are a lucky one who already knows their passion in life do it. The rest of the world wishes they could be you.

I think when you have a disruptive company such as Paypal you attract a certain type of person. You attract people who are willing to bet on themselves and believe that they can be a big part of a change agent in an industry. People who don’t want to fit in with the status quo and are almost unemployable. You need to be a little crazy to start a startup, and you also need to be a little crazy to work for (or with) one.

In Hawaii in the mid 2000s, there was a company that produced some noteworthy Alumni (small potatoes in the larger scheme but not bad for Hawaii at least). A tiny design firm called Spunge. Founded by Chris and Wil Lucero, two award winning graphic designers who caught the entrepreneurship bug and decided to try to forge their own path and make it on their own. In Spunge’s short life, Chris went on to be named the youngest 40 under 40 award recipient ever in Pacific Business News and they won even more Pele awards (AAF Hawaii’s annual award show). Though they eventually closed up shop and moved on to other things, the effects of this small design firm and its two founders have had huge impacts in Hawaii’s growing tech scene today. The Spunge team was so small, so scrappy, so cash strapped, everyone who worked with Spunge was basically doing it  because they wanted to be a part of the change that Hawaii so desperately needed. The idea was that we were going to change the culture of Hawaii itself, bring art and technology together. We were all in our early to mid 20s at the time. We definitely were not compensated with money but with simply the feeling of being a part of something that could be bigger than we were.

 The Spunge Alumni

1. Eric Nakagawa – Co-creator of icanhascheezburger.com , co-founder of simplehoney.com. In the mid 2000s Eric was working a full-time job at CTA as a programmer. In his nights and weekends however, he was hanging out with the Spunge team, and often times helping us with our projects. He single handedly coded the e-commerce store for world renown DJ lifestyle company Thud Rumble in his free time during nights and weekends for Spunge. Eric would later go on to co-create the viral sensation icanhascheezburger.com with Kari Unebasami (who coincidentally I sat in the cubicle next to at my next job on Oahu!) which he then sold to Ben Huh for a rumored $2.25M. Eric is now the co-founder of a new startup simplehoney.com, a company looking to simplify vacations.

2. John Garcia – Co-founder nonstophonolulu.com, The Greenhouse Hawaii. in the mid 2000s, John was working for Airgas Gaspro as their in house designer. During his nights and weekends however, he was busy with his own client photography business. We contracted him numerous times at Spunge, in fact he was the photographer for the photo shoot that won Spunge its first official Pele Award (as a company). What amazed me most about John is his professionalism at such a young age, I was 22 at the time and he was even younger than me but he sure had his act together. John went on to co found nonstophonolulu.com which has media partnerships with KITV and Oceanic Cable and also open what has quickly become the premier co-working space in Hawaii, The Green House.

3. Me ( Ryan Esaki) – Co-founder ukuleleunderground.com – I was hired at Spunge right out of college as a web design intern. It was my first real job, one that I got on my own. It was an eye opening experience which I wrote about in this other blog post. I credit Chris and Wil for infecting me with the entrepreneur bug as they talked about it constantly in the office. I only ended up working at Spunge for less than a year but my time there has definitely had a huge impact on my future. I went on to fail miserably in business many times before starting Ukulele Underground in 2007 with Aaron and Aldrine.

It’s always neat to think back to those days, when we were all so young, so hungry, trying to compete with these these advertising companies who were filled with people who were all at least 10 years older than us, and all had so much more money that us.  It was exciting and miserable all at the same time. We were all trying to hammer our dents in the world. Its so awesome that we’re all well on our way to doing just that (or for Eric already have done so). Today when I look back at those hard times I can’t help but smile, and I’m so grateful for the experience.

Then today I found a fantastic article in Forbes about what it feels like to be a startup CEO written by Paul DeJoe. As I was reading it I found it eerily similar to my own life. Spending 2 years building things only to have to throw it away and start building again from scratch, feeling guilty about doing anything not related to building the business, having fun was now not fun because I felt so guilty (I’ve since found some a very mutated version of “balance”),  annoying my friends and family with the constant talk about turning hobbies into money making activities, even the part about not being able to enjoy things like vacations because of A/B tests (my last attempt at a vacation I couldn’t enjoy because i was literally running an A/B test on the newly designed site and couldn’t stop myself from constantly checking the results.) This was all me. I kept reading, nodding my head agreeing more and more until i reached a line that stopped me dead and tears began welling up in my eyes:

“You feel like a parent to your customers in that they will never realize how much you love them, and it is they who validate you are not crazy. You want to hug every one of them. They mean the world to you.”

At that moment I realized that these past few weeks I had it all wrong. I had been pining for validation, from the media, other entrepreneurs, the industry and it was all a waste of time. All these things never meant anything and never will. They don’t care if I succeed, all they care about is doing things that will help them succeed.

There were however many many people who do care if we succeed. I was being validated; constantly, repeatedly, every single day.

I was being validated by the hundreds of thousands of people who come to our website each month, by the tens of thousands of people who have chosen to become our customers, from the thousands upon thousands of emails thanking us for doing what we do, the hundreds of people who have traveled to specifically see us either here on Kauai or when we’re out on tour. This is real validation. This is what really matters. If I have this, who gives a shit about all the other stuff. This whole time, I had been waiting for this specific pat on the back because thats what I thought validation felt like, that I was oblivious to the fact that there were already so many people doing so.

To everyone who has ever visited our site, come out to see us on tour, bought something from us, joined UU+ or become a forum VIP, thank you does not even begin to communicate the intense gratitude I have for you. I’m sorry I was so busy peering into my telescope that I didn’t see you all right here with me. When you start something like UU, there’s no guarantee that it will work, most people will tell you that you are wrong, that it will never work and that you are crazy to try. In fact most people did tell us that. Thank you for proving them wrong.

You no longer control the message

That’s it. That’s all you need to know. What does this mean? Well it means that if you do things that piss people off, you should expect them to complain about it on twitter, facebook, youtube. You should expect, that others will base their opinions of your business off of these posts. This is the biggest disconnect for traditional marketers, social media takes away the power for brands to control their message. The power is strictly in the hands of the consumer. That is why I love the internet. Because of this fact, businesses can no longer treat people poorly and expect no ramifications from it. The internet is a space where the bad guys are exposed and good guys finally have a shot.

Marketing is no longer about pushing a message to as much people as possible and hoping for the highest conversion rate. Marketing today consists of only one thing, consistently exceeding the expectations of your customer. If you can do this, your customers will willingly create the best marketing campaigns you could ever hopeful. When the message about your company comes from peers, you tend to become convinced much more easily. Just like when you treat your customers poorly they will shit on your brand, if you treat your customers exceptionally well, they will sing praises of you and literally become your sales force online.

How crazy is of an idea is that? Great customer service / experience = social media marketing.

Do things that delight and inspire your customers and they will spread the word for you. In days of yonder, social media marketing was called word of mouth marketing. The only difference is social media has shot word of mouth marketing with as much steroids as Ivan Drago in Rocky IV. Everybody has a platform now, everybody has a soapbox (regardless if they deserve it or not). Take care of your  customers and they will take  care of you. Treat them poorly, I will guarantee that they will treat your brand poorly online. It’s as simple as that.

Dear __________________

You may read this letter now, but you probably won’t think much of it. It’s just some piece of paper some old guy handed you at the career fair at school. Getting a job, starting a career, or any of that boring stuff may be the last thing on your mind right now and that’s cool. You’re young and should enjoy being young. All I ask is that, if you think this letter is boring, stop reading it, but please don’t throw it away. Just put it somewhere in your house where you know you will be able to find it. A year later, 2 years later, 5 years later. Whenever that time is when you have to think about starting your real life, find this letter and read it.

There’s this concept of the “right plan” that most adults will try to convince you to do. Go to school. Study Hard. Go to college. Study hard. Get a job. Work hard. Get promoted. Rinse. Repeat. Retire. Ride off into the sunset. Sound familiar? How many people do you know personally who followed this plan? Your mom, your dad? Maybe your older brother, sister or cousin is in the process of following this plan. Of those people how many of them do you think are frustrated with life? Hate their job? How many of them complain about work constantly or maybe people that they work with. How many of them wish they didn’t have to work but feel they have to? How many of them feel stuck. How many of them are waiting for retirement. This is the result of following the “right plan”. This plan is full of crap.

This plan is full of crap because it tries to make you believe that life is about reaching a destination. Get a job! Hooray you made it!

Then reality sinks in.

You realize that this is not the finish line you were hoping for. You get upset. You feel cheated. You feel lied to. You followed the plan, you did everything you were supposed to. You’ve “arrived” and yet this is nothing like what they promised. You’re frustrated but you don’t really know why. This is what causes mid-life crises. This plan was a hoax.

Now, I’m not saying the “right plan” is the worse plan. There are far worse ways to live your life than the “right plan”. I’m just saying that what it promises is a lie and nowhere near the best plan. There are much better plans available. Like the one I’ll propose in this letter.

The “right plan” is full of crap because in reality, life is NOT about the destination. Life is about the journey. The point of life is to gain experiences, make mistakes, learn from your mistakes, become a better person and try your best to make your life one that brought value to the world. When you bring value to the world, you create meaning in your life. By bringing value to the world, your life has a purpose. You’re no longer just existing, now you are living!

So how do you make your life one that brings value to the world? 

Well the first step is to get to know yourself. Try to truly understand yourself. What are your strengths, weaknesses, what brings you true joy and happiness, what pisses you off that you want to change / need to change, what brings fulfillment to your life. Self discovery is something very few people do, yet understanding yourself is the first true step in becoming an asset to the world. By understanding your strengths, your passions, what truly makes you happy deep down inside, you can focus on those things and those things alone. You can take a stance and choose a direction. Some people refer to this as “Finding your Calling”. Most people who follow the “right plan” never do this and live their whole lives without discovering what could have truly make them happy and fulfilled.

The second step is once you discover what you truly want to do, to put yourself into positions where it is possible to fail. Anything worth doing in life usually comes with the chance of failure. Success and failure are yin and yang and chances for each usually grow proportionally.  Most people are terrified of failing. So terrified, that they forfeit their opportunity to achieve true happiness in an attempt to completely avoid failure. I am not saying that failing is great. It is terrible. It sucks to fail, but you should never let the fear of failure deter you from the possibility of achieving something you truly want. You cannot hit a home run without swinging the bat. You may strike out, but living with regret that you never took a swing is much, much worse.

Step three is to persevere. Don’t give up. Trying to do anything worth while always comes with adversity. Creating anything that makes a difference in the world does not happen over night. You WILL fail. It is inevitable. The important thing is to always, always get back up.  Learn to appreciate the process of growth, this includes failure. There is tremendous value if you can learn from your mistakes.

Most people will quit after failing once. “Quit while you’re ahead…” They’ll say. Bullsh*t. How are you ahead? Did you accomplish anything by giving up so fast? Most likely not. The funny thing about life is, people tend to forget about all your failures if you end up succeeding. Do people remember the Wright brothers as those guys who crashed a bunch of times? No. They remember them as the first people who flew in an airplane. Do people remember Mark Zuckerberg’s 3 or 4 other failed projects before Facebook? Persevere. People will only remember you as a failure if you give up. Never let a failure be the last thing you do.

I hope this letter will help you in your life’s journey. We all have the choice of how we want to spend our years on earth. You have the choice to live or to exist, to bring value to the world, or take value from it. It’s up to you if you want to have a life filled with fulfillment and purpose or one that is not. It truly is up to you and don’t ever let anyone and their “right plan” tell you otherwise.

There’s no two ways about it, we’re in a tech bubble. It has cooled down a little but there is still a lot of dumb money floating around just looking for somewhere to go. What is dumb money? Dumb money is money provided by people who can bring no other value to you other than money itself. Its often the easiest type of money to get in bubbles as these people are the johnny come latelys who want to jump off the last bandwagon they were on and onto the latest and greatest thing. These types of investors do not understand your market nor do they want to, all they want is to give you money and have you do all the work and get more money back. Dumb money brings very little except high expectations and pressure for you to constantly be moving the graph up and to the right on their timetable.

Why Do People take Dumb Money?

There are many reasons why people take dumb money but I believe the two biggest reasons have to deal with the type of people who become entrepreneurs. First, as Eric Reis states, entrepreneurs operate in areas with very high uncertainty. Getting investment capital makes you feel good. It means someone believes in you or your idea enough to put their money behind you. A type of personal validation. The other reason is often entrepreneurs are arrogant enough to believe that all they need is money and they are capable of doing everything themselves. While this may be true, it is rarely the case and great angels and VCs can offer so much more than just cash.

Dumb Money does not mean dumb people

Dumb money usually never comes from dumb people. If people have that kind of money to throw behind an idea, they are usually not dumb as they got to that point somehow. What makes smart people hand out dumb money is when they try to invest in things they don’t understand. If they can’t understand your situation as an entrepreneur AND your market, chances are you may be accepting dumb money.

 What can you do as an entrepreneur?

If this is your first rodeo, I’d highly recommend bootstrapping your first business. It will allow you to wear multiple hats and find out truly how tough it is to start something and how its even harder to grow something substantial. You’ll discover what areas you’re weak in and need to outsource and what areas you excel at. It will ultimately prepare you better for success even if your first bootstrapped company flops.

If your mind is already made up that you need investment capital, I would highly recommend being extremely selective in who’s money you take. Only take money from people who can directly bring value your company, even if this means turning down money from someone you highly admire.

There are many ways investors can bring value to your company. If you are starting a consumer facing company, find investors who have deep connections with your target market that can bring instant credibility and brand awareness to your company. If you don’t know much about scaling a company bring on investors who have experience growing a team and revenues. If you are starting a B2B business, find investors who are already engaging in commerce with your target market. If its not instantly clear how this investor can benefit you and your company, DO NOT TAKE THEIR MONEY.

There’s a ton of dumb money floating, don’t take it, taking it makes you a dumb entrepreneur.