How I Start Companies
My fastest-growing and most profitable business ever was the
store the back of Ellen Nottingham's classroom at T.T. Minor
Elementary School. I bought a box of pencils at a store near our bus
stop, and Cy Keener and I sold them the next day at school for 15
The next week, we diversified into erasers, pens, and paper. A
month later, after expanding into higher margin, about 3 weeks of
reinvestment, and annoying pink things that Cy claimed that girls
would buy (he was right). We were netting about $20 per week, which
was back when $20 meant something.
The partnership worked pretty well: Cy had a good idea of what
peple would buy, and I was stingy with the money.
Initial investment: five dollars.
Read more: Lesson 1. Don't get a MBA
This is just about the startup deal. Running an organization in which stakeholders are
empowered to grow and contribute is a different story.
Business development is not selling a product. It's predicting what people will want,
and then figuring out a way to deliver it. Success requires more than technology.
Development is applied game theory, because for an idea to catch on, it has to be in
everyone's best interests. As with any game worth playing, you start from a losing
position. If you started in a winning position, someone else would have already done it,
right? So, as with any game (in the Von Neumann-Morganstern sense), you can change the
rules, change the facts, or change the players.
Most of the players aren't trying to manipulate the game, so all you have to do is
let them know they're playing, and they'll find the Nash equilibrium on their own.
Read more: The Game of Business Development