Things to Know Before Your First Startup

Things to Know Before Your First Startup

Sean: Any advice to people who are starting a startup?  

Toni: Sean’s the perfect person to ask.

Sean: The most important thing is cash flow. Make sure your revenue is greater than expenses. Don’t let other people tell you otherwise that passion is the most important thing, sleepless nights’ the most important thing. It’s not. It’s cash flow. As long as your revenue is greater than expense, you’re doing well. If expenses are greater than revenue, you’re screwing it up and you’re bleeding out and you have to stop that.

So anything to make sure your cash flow is good, keep on doing that. If you have to sacrifice your own lifestyle, to make sure cash flow is positive, do it because I did it. If you need to sacrifice sleep for it, do it because I did it. You have to sacrifice a lot. That’s why they say your startup is like a baby, it needs you. It needs a lot of nutrition. It cries, you know, it brats out.

Toni: Attention.

Sean: It needs a lot of attention. There you go. So you have to sacrifice a lot for it. The word sacrifice. That’s why they say passion is also important because passion, the Latin word is pati, which means sacrifice. If you’re not passionate about your startup, you’re not going to sacrifice for it. But that doesn’t mean if you’re passionate about it, it’s a good business. If cash flow is negative, no matter how passionate you may be about it, it’s not a good business for you during that time.

So, yeah, that’s my advice. You really have to save. Sacrifice. You’re going to go through a lot, but here’s the great thing about it, you learn a lot. You learn a lot, not just about business, but about life and you learn a lot about other people. That’s your tuition fee. The tuition fees are your sacrifices, the tuition fees are your effort, and if you lose money, that’s also part of the tuition fee. I know people who started up and lost money in their first few startups.

Now it’s a blessing for me, I didn’t have to go through that. My first startup SEO Hacker is already doing good, but I still had to pay the price by learning a lot from the wrong people I got in the company during the first years. So yeah, maybe that’s the second advice I’m going to give you, make sure you hire the right people. Prolong the hiring process. Take your time in hiring them and hire ahead.

Don’t hire when you need them, because you’re just going to hire whoever comes along because you need them. So hire ahead. If not, you’re going to be a hostage. And if you hired the wrong person, they’re going to burn up your company, your startup. They’re going to burn your baby. And since it’s a baby, it’s very vulnerable. So yeah, I hope that helps. Toni, do you want to add to that?

Toni: Yeah. I’ve actually heard that advice from one of your podcasts. The first thing they take into consideration is really more on your cash flow. So that stuck with me. It looks familiar when you explain that advice. Eowyn, good luck and she also look young.

Sean: Yeah.

Toni: Right? A lot of people are so driven to start their business, to start managing their money, it makes you proud.

Sean: You also look young. And you know Toni, it’s one of the best times to start today as a startup. It’s one of the best times, because you can look at it in a way we’re in a great reset. Everything is on a reset. Suddenly brick and mortar, which is so expensive by the way. It’s so expensive to set up a brick and mortar business, suddenly it’s not working. So you have this huge opportunity right now because people know there’s no brick and mortar to go to.

You can only go online and it’s easier to compete online because you don’t need a lot of money to set up a brick and mortar store. No renovations, no fancy lights, no interior designer, no all of that. Yeah, you’re going to have to replace it with a web developer and web designer, but how much would it cost you? Instead of paying millions, you pay like, I don’t know, 50,000, 100,000 maybe. Right? But the difference is huge and the market, they’re all online, every single one of them. So it’s one of the best times to start a startup today.

From Mitch. How do you empower your team to step up and thrive without you?

I’ve taught this in a couple of live seminars before. It’s all about allowing people to make mistakes. If they know they’re allowed to make mistakes and learn from it and evaluate the experience, they’re empowered. That’s how you empower them. It’s not about the rara. It’s not about nice glittery words that you tell them and expect that they’re going to move. They’re not going to move if they know the first mistake they make, you’re going to spank them.

So in SEO Hacker, how we do it is I tell everyone we have two kinds of mistakes we don’t like, other than that make as much as you can. First mistake is a fatal mistake. That means you lose a client or you do something so messed up that we lose revenue over it. And why I don’t like losing revenue is because it affects the entire team. It would affect our hiring. It would affect the load that we need to carry as a team together or we lose some good people along the way. That could be collateral damage. So we don’t like fatal mistakes.

Repeated mistakes is the second kind of mistake we don’t like, because that means, I paid for your tuition, you made a mistake, I paid for it and you did it again because you did not evaluate the lesson there. You did not evaluate the mistake. That means you paid for it, they didn’t study it, they didn’t think, and they didn’t reflect on how they could have done it better. So those are the two kinds of mistakes we don’t like, other than that make as much as you can and evaluate them and learn from them.

With this knowledge in mind, they are really empowered because now they know, “Oh, okay. I can do it how I feel like doing it, how I think is the best way to do it, and if I make a mistake, as long as I evaluate, that’s okay, so I will do it.” Now, they’re really empowered. So for me, that’s how empowerment works.

When you say step up and thrive without me, I’m going to just use the school bus example. If I go out there, the school bus hits me and I die, they don’t have a CEO anymore, the founder is gone, how would they still be able to thrive without me? It’s through the current leaders installed and number two, through the processes that we have.

So we document our processes, how we do things. And whenever there’s a new hire, we ask the new hire to read those process documents, apply them, and if they’re confused somewhere in between, or they couldn’t apply because it’s outdated, then that’s a signal for the leader to update the process document.

So our process document is ever alive and it makes sure that if we lose good people, even the CEO, the company is going to go. And yeah, it’s not going to be a problem. Those are the two things. Install really good leaders. And number two, make sure you have good living process documents. And even if you get hit by a school bus outside, your team’s going to do well without you there. I hope that answers the question.

Toni: Wow. Yeah, that’s a very good answer. Just to pull out the point that you’ve mentioned earlier about employees making their mistakes. And I guess that’s the advantage of working as an employee, it’s that you get to test your knowledge, you get to test your skills in an environment that’s not yours. And I learned this from Dodong Cacanado and he said that when you make a mistake, it’s the boss that loses money in your workplace. But when you have your own business and you make a mistake, you lose your own money. So that’s the advantage there. I just wanted to pull that out.

Sean: That’s right. That’s a good addition. So now, if you have a startup, make sure you help your people, so that they don’t make a lot of mistakes and you lose a lot of money.

What affiliate marketing or niche programs can you recommend for beginners who currently don’t have a lot of online presence? What’s the best way to start?

Affiliate marketing and niche programs are actually highly recommended for beginners, even if you don’t have a lot of online presence, as long as you know how to sell online. If you’ve ever read the book, I forgot the title. Oh my goodness. It’s not a popular book.

Toni: Just say the message. For as long as the message is there.

Sean: It’s about writing great sales letters. Now this might sound so old, but the history of sales letters is snail mail in the US. They will snail mail you a sales letter. And if you read it, there’s a high chance that you’re actually going to buy it. So that’s the history.

But how it translated itself into digital is usually a very long page full of testimonials, proof of the product working, and full of call to action buttons, like click here to leave your email, or if you’re interested or buy now you get like 50% discount. If it’s a very long write up, that’s a sales letter. Now sales letters work. They work and they still work today. So if you can actually create a sales letter like that, you’re going to be making money through affiliate marketing.

Now how we do it to SEO Hacker, we have good authority. The blog has good authority. A lot of software has partnered up with us. SEMrush which recently launched their public offering. They went IPO in the US. I’m very proud of that by the way, because we’re affiliated with them.

Toni: Congrats.

Sean: They’re our software partner. I don’t have any IPO shares, but I’m proud of them. We don’t sell, we’re affiliated with them, so we have an affiliate account with them. And whenever people click on the link to go to SEMrush from our website, and then they become a customer of SEMrush, we actually earn affiliate money. And since it’s a software we earn every month because they pay every month. So that is one of the best ways to do affiliate marketing for me.

It’s not big since affiliate products would give you like 40%, 50% of the cut, which tells me maybe the product might not be that great because they give a huge cut. So I know SEMrush gives 15% I think. Yeah. So we get 15% of the revenue that they’re making from the clients we drive to their website. But that 15% is monthly. It’s not a one-time thing, so that’s what’s really good about it. If we just drive traffic one time, two times to them, and become a customer, we get it pretty much for life, that 15% payment.

A lot of those products that are affiliate marketing, you can find it in marketplaces like ClickBank. You could try that. ClickBank has a lot. ShareASale is also a website where you go look for affiliate products that you think you can sell. A lot of them are software, but I love software because the chances of you being able to make monthly revenue out of one or two sales is really good and they just deposit it via PayPal. So every month you get PayPal money coming in.

You’re not doing a lot, it could be passive income. For SEO Hacker, it’s actually a passive income for our website. So the best way to start is through a sales letter. Study how to do it, set up a website and that’s it. Drive traffic to that.