On Business Practices

Updated: Mar 4

Don't start with loans. Once you take out a loan, you are a slave to the lender. If you do take out a loan, don't take out a big amount. Avoid interest altogether. In some cases, default incentivizes the lender because they can collect fines and more interest.

Don't get venture funded. If you do, you become a slave to the investor (s). Don't sell equity for the same reason.

Principle: when you need to do something big, take the smallest step you can take to begin with. Scale-up from there.

Fuel your mission only with profits. Why? Because it helps you refine your business model. When corporations need money, they sell shares. This does not allow them to improve their business model or cut costs. This is why corporations (and governments for that matter) can be wasteful and yet exist. They are getting cash from taxpayers and stockholders.

Amazon is not fairly competing with local shopkeepers. It gets funded by investors and taxpayers (when governments and favorable laws help them). If it had to earn only from customers solely via value-creation, it would lose to local businesses.

A firm that earns only from customers must focus on the precision of its central value proposition. The solution it is providing must precisely be what the market needs (product-market mix). It must continually adapt to market conditions while staying strategically consistent. It must add new profit-generating mechanisms and eliminate those that are obsolete. The goal is to be completely aligned with what the market needs and reject that which is superfluous.

Cash coming in from other sources must not be relied upon. A firm that relies on investor's money is fundamentally a slave. Since it serves its investors, not its customers, its products will never be the best. Its business model would include unneeded processes that don't result in income generation. It will also fail to adapt and capitalize on new opportunities because it is not looking for market openings. It's is merely looking to beg its investors.

Thus, don't take money from anyone other than customers. If customers are not supporting you, tweak your model. Come up with something they do support. This matching of needs and wants creates value.

Unneeded products are backed by governments. Bad products are backed by shareholders. Great products are backed by customers.

If you need help from either governments or shareholders, you don't have a great product.

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