Things I wish I knew in my 20’s

How to think

Play the long game

  • With enough time, anything is possible.
  • Have a long time horizon, but take short, consistent steps.
  • Work on things that are going to outlive you.
  • Here’s a quick intro
  • Hard things are hard.
  • Be a planter, not a crop picker.
  • This means playing the long game.

Don’t trade your time for money

  • Focus on creating value, not trading your time for a paycheck.
  • Your time working at a job can be easily measured in a dollar amount per hour. This also means there’s a physical limit to what you can earn.
  • The value that you can create by solving a meaningful problem has infinite upside and can’t be easily measured in dollars.
  • 🚫 Don’t let people pay you for your time
  • ✅ Let people pay you for the value that you create
  • Build things that divorce your time from how you generate income.

More assets, less liabilities

  • For most people, their job is their income. For the wealthy, their assets are their income.
  • Becoming wealthy means making sure that your assets are always producing more income than your liabilities.
  • Assets are things that put money into your pocket. Liabilities are things that take money out of your pocket.
  • Most people acquire liabilities and don’t own assets. The wealthy acquire assets and minimize their liabilities.
  • Understand the Rich Dad vs Poor Dad perspectives—and start putting rich dad lessons into practice. This video is a good overview.

Before making a meal, learn the ingredients

  • Before you can create a masterpiece, learn the ingredients that make a masterpiece.
  • To do this in business, study and appreciate greatness.
  • Identify people at the top of their game—in homemaking, culture, arts, science, business, politics, medicine, technology, sports, and finance.
  • People tend to be quick to critique those at the top of their game.
  • Instead, focus on identifying what great people do well, how and where they fall short—understanding that no human is perfect nor should be glorified.
  • Understand the mechanics behind greatness—this includes the techniques, composition, habits, tools, words, interests, and skills.
  • Who do the greats study?
  • What makes a building great? What makes a song great? What makes an athlete great? What makes a financier great? What makes an entrepreneur great?
  • What makes a mother or father great? What makes a son or daughter great? What makes a brother or sister great? What makes a friend great?
  • What makes a man or woman great?
  • In order to do something truly unique, you need to know what came before you and what’s great.
  • Those that don’t know their history, are doomed to repeat it.

Put a dollar amount to wealth

  • Ask yourself: how much income do I need to create generational wealth?
  • Put a dollar amount to it. How much is that per year?
    • Per month?
    • Per day?
    • Per hour?
  • What’s a big enough problem that, if resolved, could create that kind of income…eventually?
  • It wasn’t until I was 28 years old that someone asked me that question—a white male who recently retired as a construction executive from New York City.
  • He asked: “how much do you think real wealth is? Go ahead, give me a number. How much do you have to make per month?”
  • Thinking I was bold I said, $100,000 per month.
  • He looked down as he let out a silent laugh. He looked back up at me as if he felt my answer to be too small.
  • “Try $1,000,000 per month. That’s $12,000,000 a year. To be wealthy in New York City—try making that per year.”
  • “Now tell me. How are you going to make that? Not your business. But how is Jose Cruz going to take home $1,000,000 per month?”
  • He paused and watched me squirm in my seat as I looked up at the ceiling as if to try to suggest I had a good answer prepared. I didn’t.
  • His question changed the way I think about wealth. It forced me to think of the mechanisms and economics by which I could even ever get there.
  • I later found out he had made $1,000,000 per month at the height of his career. It made me realize his challenge to me was relative to his own experience—and what he himself achieved.
  • I couldn’t help but wonder how someone whose made $1,000,000 per day would have challenged me to figure out those mechanics.

Privilege exists in a spectrum

  • Every human exists in a spectrum of privilege.
  • While every person is unique—every culture has set up systems to unfairly select for certain traits.
    • Man and woman and non-binary
    • Black and brown and white
    • Nationality
    • Gay and bi-sexual and straight
    • Tall and short
    • Overweight and skinny
    • Rich and poor
    • Seeing and blind
    • Hearing and deaf
    • Speaking and mute
    • Schooled and Unschooled
    • Child-bearing and non-child-bearing
    • Literate and illiterate
    • Healthy and unhealthy
    • Able and disabled
  • We exist somewhere in this privilege spectrum.
  • Recognize those less privileged than you and work to increase their access to justice.

You’re only competing with yourself

Build a frameworks library

  • Some people just always know what to say—and that’s no accident.
  • To steer, not follow, a conversation, think in frameworks. Another word for this is formulas.
  • The best communicators can connect isolated data into frameworks.
  • A framework can be considered a structured way of thinking of essential truths, often formulas.
  • For example: Revenue
  • Revenue will always equal “# of Units Sold” multiplied by “price”
  • That is, when being asked about revenue, you’ll know there’s 2 levers you’ll always need to speak to—no matter what other fluff is mentioned:
    1. Number of Units Sold
    2. Price
  • That’s it. No matter what people may throw at you—you’ll always be able come back to the essence of the topic: number of units sold and price.
  • Now, consider: Profit.
  • Profit will always equal Revenue minus Cost.
  • To increase Profits, there are 2 levers: revenue and cost.
  • The best communicators can connect multiple frameworks.
  • So if someone asks you “how do I make more money?,” you’ll be able to connect two different frameworks to answer this question:
    • Revenue framework levers
      • Increase units sold
      • Increase price
    • Profit framework levers
      • Increase revenue
      • Decrease cost
  • By combining frameworks, you’ll be able to steer the conversation on how to answer the original question: how do I make more money?

How to build

Start with the end

  • Define a vision: What does the world look like in your vision of the future?
  • Define a mission: To bring that vision to life, what has to happen?
  • Take a “future-back” approach
  • To be innovative, don’t look at your customer’s best alternative and improve from that—that’s the wrong starting point.
  • Instead, start by asking: how should this product or service exist in the future—and work backwards from there.

Find, obsess, address a problem

  • Pick a meaningful problem
  • Ideally, this problem intersects with what you’re good at, what you’re passionate about, and what people are saying needs to improve.
  • Find ways to address the problem better than anyone
  • You’ll find that people (or companies) are willing to pay you to solve it

Build a network

  • Connect skilled teams, customers, mentors, information, tools, and production systems interested in solving the problem—that’s your network
  • Tapping into your own network allows you to get help—and allows you to go further than if you were working by yourself (see: leverage)
  • Use your tools to write down and organize these connections.

Define a solution

Align network and solution to move forward

  • Alignment is the best way to steer your network in a specific direction.
  • To create alignment, identify and meet the needs of the entire network.
  • Create win-win scenarios and minimize for zero-sum incentives where someone wins and someone loses.
  • Everyone needs a purpose, a mission, a challenge, appropriate compensation, and room to grow.
  • If a person in your network has every incentive to sell something quickly to get paid, don’t be surprised if you’re struggling to get them working towards your long-term vision of improving something.
  • Define the right financial incentives so that money isn’t a hinderance to the network all working in the same direction.

Tell a story that gives direction

  • Before people care about what you do, they need to understand why you do it.
  • Any story has to pass the “ what?” test: why does this thing matter?
  • If your customers agree that this thing matters—you’re onto something.
  • Make your story as clear as possible by practicing with your grandmother or little cousins. They may not immediately get what you do, but if they get why it matters—that’s a good sign that your story is clear.
  • After understanding the why, then describe the what: be able to communicate to your network: “if we’re successful in solving this problem, the world will look like this…”
  • Get your story right to attract great talent to work with you.
  • Write and memorize your value proposition statement so you can quickly share what problems you’re solving and for whom:
    • The Steve Blank Method: “We help (x) do (y) by doing (z).”
    • The Geoff Moore Method: “For [target customer] who [needs or wants X], our [product/service] is [category of industry] that [benefits]”

Master your tools

  • Regardless of what you do for work—we all learn, create, organize, develop, and launch new things, activities, projects, services, and products. I’d summarize this as doing.
  • Some people are significantly more effective than others at doing.
  • These overachieving doers usually know their tools, get good at them, and get good at connecting them to address a problem.
  • These days, most job tools are digital (particularly software).
  • Combine these digital tools together to create your own technology stack.
  • Every time you update your technology stack, understand the implications. Ask questions before adopting a new tool in your stack:
    • Where does this tool fit within our overall technology stack?
    • How does this make our network more effective?
    • Do subscription costs go up or down?
    • How many people in my network need this tool?
  • Here’s some of the important tools I use for day-to-day work:
    • Notion: How I write notes to myself and for my business: Notion
    • Slack: How I send text messages, files, and images to my team members. I use it for internal messaging
    • Gmail & GSuite: An Integrated collection of email, calendars, and word processing software that helps me stay organized
    • Twitter & LinkedIn: Use this to connect to individuals within your field. Make sure to comment and leave valuable comments in the posts of your admired connections
    • Google Meets & Zoom: Make virtual calls and record meetings using this software
    • Google Slides: Create visual presentations
    • Figma: Create mock-ups of your website or social media posts
    • Airtable: Collect, store, And visualize data from your users and projects
    • Loom: Create video tutorials easily
    • DocSend: Send documents via URLs securely and easily

Know the numbers

  • Develop a pricing strategy by first knowing your customers’ unit economics—then create a way better financial proposition.
  • Understand what people value by looking at where and how they spend money, effort, and time.
  • Know the 1’s and 0’s behind what they spend and how much time it normally takes them to get or achieve what they want.
  • Know who they currently have to pay or hire to know their best alternative options.
  • Knowing this helps you identify a problem (see #1) and start building a solution.
  • If someone pays $100 for X and you’ve figured out how to sustainably create X for $5—then build it and sell it for $10. You profit 50% of every dollar you put into X. And, your customer just saved 10X what they were spending before.
  • If customers tell you they’re willing to pay even more, listen to them.
  • Know the difference between “cost-plus” and “value-based” pricing—know when and which to use.

Embrace tradeoffs to create your lane

  • You can’t compete on multiple fronts—at least not sustainably.
  • You can’t be the best luxury goods and the best low-cost goods provider at the same time. I mean, you can, but you won’t last long.
  • You can’t solve the whole world’s problems. But you can solve a specific group’s common problems.
  • Pick your battles and optimize to be the most unique in the world at what you do (notice, the goal is to work towards being the most unique, not the best.)
  • Working to be “the best” is a race to the bottom as you directly compete with everyone else in your space. Working to be the most unique creates your own lane (see: blue ocean strategy).
  • To create your own lane, you have to make tradeoffs.
  • Usually these tradeoffs are in the activities you do and, more importantly, don’t do.
  • To run a budget airline company that offers $99 flights—you can’t offer first class, premium meals, VIP hostess services, super spacious seating. I mean you can—but the unit economics and the activities you choose to perform won’t align long-term and will lead to failure.
  • If you choose to service a budget-conscience market, accept your trade-offs. If you choose to service a premium market, accept your trade-offs.

Do one thing…really really really well

Follow builders, not critics

Your first draft is going to suck

  • Say one thing at a time.
  • Write key points first, then add supporting details.
  • Studying how an effective news article is written is good practice to better format your business writing.

Be a journalist, not a preacher

  • Talking more doesn’t mean you're more right
  • First-time founders think they look smart by talking more. They overwhelm listeners with information.
  • When cramming information doesn’t work, first-time founders tend to double-down by concluding—maybe what I said isn’t clear enough, maybe I need to say more, or say it in a smarter way.
  • This leads to meetings in which the founder is speaking 90% of the time, and the participants speak 10% of the time (i.e. customers, your employees, your partners, etc.)
  • Be more effective by flipping the speaking ratio.
  • Being genuinely curious is a huge competitive advantage. Not assuming you know the right answer is another competitive advantage.
  • People can read through you. They know when you’re actually interested in what they have to say versus when you’re just waiting for your chance to say or sell your two cents.
  • Let go of the urge to say every point running through your mind. Every time you want to say something—frame it as a question towards your customers or team members.
  • As general rule of thumb: if your customers or team members are speaking 90% of the time, then the remaining 10% of the time is your moment to summarize the problem, the solution, and make a decision on next steps.

When in doubt, ask your customer

Distribution over product

  • Maximize the amount of people that can see, buy, and get your product.
  • First-time founders obsess over perfecting their product.
  • Second-time founders obsess over distribution—that is, getting their product in front of as many eyeballs and into as many hands as possible.
  • If you had to choose between perfecting your product, and perfecting your distribution—choose distribution.
  • Imagine building the perfect product or service—that no one knows how or where to buy.
  • Instead, ship your product to as many people as possible.
  • To start, create partnerships with others that have strong connections to a large group of your target customers.
  • Long term, own your distribution.
  • If you’re building a physical product, distribution might include the necessary steps to create, pack, and ship, and market to your customers.
  • If you’re building a digital product, distribution might be the social media channels where your target clients may be spending their time.
  • Think of your distribution as a railroad system to get your product in people’s hands—without the rails, your product is moving.
  • Small railroads will reach smaller audiences of people.

Don’t wait for perfect

  • Choose “done” over “perfect” (unless you’re building a rocket ship company).
  • Use early feedback from customers to constantly improve your product and launch new versions or editions (see: “when in doubt, ask your customers”).
  • In 2007, the first iPhone was plagued with bugs, glitches, and features that didn’t work—and still launched to over XX Million in sales.
  • In 2022, iPhone customers have grown over to over 100,000,000. Those same customers are now on version 13 of the iPhone.
  • Customers don’t expect perfect—they expect constant improvement.

Service then product

  • Level 1: Do anything for everyone
  • Level 2: Do a specific thing for everyone
  • Level 3: Do a specific thing for a specific niche
  • Level 4: Build a product for a specific niche.
  • Build a solution by way of a service first, before selling a (software) product as a solution.
  • Services look different from client to client. This means there’s little efficiency gained from your 1st client to your 100th client. There’s little that you can re-use as every new project requires a different or partially different way of solving the problem. Clients usually have to pay more for services given the time, effort and tailored activities you provide.
  • Products look the same from client to client. Products can get into more hands quickly, but are also less malleable than services, and more expensive to change or update (see: build once, sell twice).
  • Ease into building a product by “productizing your service.” This means adding restrictions to what your service may or may not offer (see: trade-offs).

Create predictable pricing

Celebrate when customers pay you, not when you raise money

  • Don’t raise equity (angel or venture capital) if you’re in the pre-revenue stages of a company (unless you’re starting a rocket ship company).
  • Instead, first prove that someone—anyone—is willing to pay you $1 for your solution (which is presumably better than a current solution.)
  • The first version of your solution doesn’t need to be automated.
  • If your solution is still better than their current solution, then do it manually first and get paid.
  • Gradually get more efficient at
  • Don’t build an expensive product that tries to automate everything without proving people are willing to pay you first.
  • If you want to build a software product that provides a service more efficiently than the status-quo—hack together a faster way of providing that service without building the product first (remember, products are expensive to build and hard to get right).
  • In 2022, there’s so many affordable tech stacks you can stitch together to perform a service better, faster, cheaper.
  • Raising a round of venture capital from a known investor gets more TechCrunch articles and social media shares than customers paying you.
  • Don’t be fooled by the hype, customers paying you is what helps your business—not accepting checks in exchange for equity.

Revenue does not equal income

  • (Revenue) minus (Expenses) = Income
  • I had a $130,000 salary before leaving my job and starting my company.
  • I told myself that if only I can create $130,000 in revenue in my first year that it’d justify my entrepreneurial jump (because it’d match the number of my previous salary)—I was wrong.
  • In my first year in business, I made $132,000 in revenue, but only took home $30,000 in income that year—less than 1/4th of what I made in my previous job.
  • I quickly learned the difference between income and revenue.
  • And yet, I was more proud of my $30,000 income as the owner of my own company than making a $130,000 salary at a company that I wasn’t completely aligned with.
  • Here’s Prince Donnell explaining how he made the same mistake with the first $10,000 he made in his business.

Get paid fast, often, and on a recurring basis

  • You just booked $1,000,000 in new business revenue, but that money doesn’t actually hit your bank account in 90 days once you actually complete the work—this is a common issue.
  • If you run a service or a product company that sells to other companies (enterprise customers)—you often have to accept payment terms that pay you upon completion of you services. Once you complete it, the enterprise customer will pay you weeks or months after you submit the final invoice. This payment could be in Net-15, Net-30, Net-45, Net-60, or Net-90 days.
  • While you wait to collect on your $1,000,000, you’ve got thousands of dollars in expenses to pay in the next few weeks. Remember, you have to pay your employees, contractors, subscriptions, rents, insurances, etc.
  • What’s the problem with longer payment terms? You’re paid slower. And yet, you still have to pay your bills every 2-weeks or every month.
  • If you’re not careful, you’ll run into a cash flow problem. You may have to pay employees 3 or 4 times before you actually collect on that $1,000,000 in revenue that is due in 90 days.
  • If this happens, you’ll run out of cash if you don’t have enough in the bank to cover the expenses while you wait to get paid. This means your company is left without oxygen to continue—even if you have a lot in booked revenue. Game over.
  • Negotiate payment terms that allow your company to collect money quicker to improve your cash flow situation.
  • Better yet—create integrations with payment systems like Stripe on your website so customers pay you via credit card before you actually deliver a product or service.
  • Even better yet—create recurring payment packages where your customers pay you every month before you actually deliver your product or service—this is the most favorable payment situation your company can achieve.

Whatever happens, don’t run out of cash

Profit is gas

  • Profit is gas for your business.
  • Profit isn’t the reason for doing business. But without it, you’re not going anywhere.

Create success in one area (services) to fund your way to the next (product)