Editor’s note: James Altucher is an investor, programmer, author, and entrepreneur. He is Managing Director of Formula Capital and has written 6 books on investing. His latest book is I Was Blind But Now I See. You can follow him@jaltucher.
I was in a meeting with Uri Geller. You know who he is. He’s the psychic that bends spoons. He’s been doing it since he was a kid. Marvel Comics even did an issue once where Uri Geller was helping out Daredevil. The cover has Daredevil wearing an extremely tight uniform where you could see the outline of his genitalia (putting it delicately for SOPA Nazis). Daredvil was swinging around punching people while Uri Geller (“the Most Shocking Guest Star of All” according to the cover) was melting tanks.
So now Uri Geller was sitting right in front of me pitching a business.
That’s the way I roll.
First there were the demos. Uri (“call me Uri”) gave me a 3×3 piece of paper and a very squeaky magic marker. I made two lines and a bunch of squiggly lines. All sqeaking very loud. Try to imagine how they would sound. “A tree!” he said with his eyes closed. He was right. Then he took a letter opener and we stood by the heater in the office. He rubbed it very hard until it started to bend.
Ok, I said, what’s the idea?
An entire website on how to generate psychic powers. Including, he said, a big button in the middle of the page that if you kept pushing it, it would increase your potential to have psychic powers.
It’s a free country. He’s allowed to pitch me that idea. I don’t know whatever happened to it. Most ideas don’t work. Clearly he didn’t become the next Google.
In fact, Google almost didn’t become the next Google. They tried to sell to Yahoo for $1 million and they were rejected. So they were forced into actually making a business out of their pet project. And it took them four years to find a business model that worked. And to this day it’s still the only business model that works. (Feel free to argue with me about this. I won’t respond).
Groupon almost didn’t become Groupon. They were originally “thePoint.com” and they were focused on raising money for charities. I don’t know how they raised the money to do that. The idea was that once enough charitable people would be willing to donate, the charity would get the money. ThePoint, I guess, would get a cut. I once pitched something similar to the CEO of one of the two largest media companies in the world. His instant (and only) response to me was, “Charity sucks! What else do you have?”
So Groupon had charity and, of course, the CEO of the media company had been right. Charity does suck and the Point was probably going to go out of business. Instead, they sent out emails for anything, not just charity, and guess what!? It’s now a $14 billion market cap company three years later. Magic!
Yelp started as an email recommendation service before they became a more general review site. Twitter started out as a phone-to-podcast service (called Odeo ) that then turned into a way to SMS your friends (called twttr ) that finally became Twitter. All of these companies were accidents.
And, like most accidents, I’m sure there was a lot of blood, a car upside down in the woods, ambulances, flares in the ground to keep out traffic, and policemen with blowhorns yelling, “keep it moving, people. Nothing to see here.” And meanwhile, Jack Dorsey, trying to turn Evan Williams’ little podcast thing into the best thing that ever happened to Charlie Sheen.
Accidents happen. My two best investments at the moment are two accidents. They started as one thing, and after much agony later, ended up as something completely different and better. It takes a special person to survive these accidents. In other words, nobody, and I mean NOBODY, knows what’s going to work in advance. An abililty to see the future makes Uri Geller famous but does not make a successful entrepreneur.
Many of these accidental successes had an “oh shit” moment where it seemed like everything was going to fall apart, they had to come up with a way to transition (I hate the word “pivot” –its very February, 2011) and then they figured out a way to flourish and get over the hump.
Uri Geller didn’t have what it takes. I don’t know what happened to his online company. I’m not even going to Google it right now even though I can. It magically disappeared as far as I’m concerned.
But the accidental entrepreneurs mentioned above had it. The combination of luck, health, and flexibility that allows one to roll with disappointments, learn from them, move forward, and repeat when necessary.
Train your body, mind, and soul before you jump into your startup to be able to handle the following:
- Get used to vomiting. Because you’re going to do it a lot before it’s all over. And guess what—it’s never going to be over. Once you’re an entrepreneur, you will be one for the rest of your life. Make sure you don’t eat too much junk food—that feels horrible when you throw it up—and make sure you keep a lot of Maalox around for gas.
- The economy doesn’t matter. Groupon started in November, 2008. The news media is always going to say the economy is in the crapper. For once in your life, and for the rest of your entrepreneurship, turn the TV off.
- You have no idea what’s going to be successful or not. Nobody is going to hit that big button in the middle of your page. They might hit that random little button that is the size of the dot on an “i” in the corner of your page. Don’t argue with that dot! Change directions and build your business around it. In 2006, I really really wanted to get out of the whole online finance game. So I made a dating website. I made ten dating websites. None of them worked. I built Stockpickr.com and got a million users a month. So that’s the one I stuck with even though I felt like shooting myself in the head. I really wanted to get into online dating but online dating took one look at me and said, “uhhh…you better get back where you came from, sugar.” Hmm, that sort of came out in a transvestite thought bubble. The point is: a good entrepreneur probably has no clue what’s going to be good or bad. That’s not the key to success.
- You have to kiss a ton of ass. More asses than you can ever have imagined kissing. Every customer wants to be your friend. And friends call each other at four in the morning, right? Get used to it. I had, and still have, a lot of four AM calls. But finally about a year ago I stopped picking them up. Hence my phone number.
- You have to travel 60,000 miles at least. In coach. Everyone needs to meet. Lots of meetings. maybe 10 of those miles will result in actual revenues. Try to avoid meetings since 99% of them are worthless. And if you go to meetings, do this: no dougnuts and chairs in the meeting room. Then the meetings will at least be fast.
- You have to learn how to use a lead pipe or a baseball bat if you want to get paid by all of your clients.
- Your website is always going to be too slow. When I started Stockpickr.com I once went bowling with my then five year old. I was constantly reloading the site on my now-antique phone and doing “one Mississippi, two Mississippi,..” to see how fast it was loading (not fast enough and it would be hours before the guys in India woke up and it was random whether or not it was a religious holiday or the power was out all over Bangalore in a freak lightning storm). Finally, my five year old dropped the bowling ball on her toes while I was doing this. Then I got divorced.
- You’re always going to have three features in your head that need to go on the site now and that’s just not possible. (Remember: freak lightning storm).
- Your investors, by the way, are going to have six features they want on your website and none of them make sense and they want to know from you right now why the features weren’t on your site yesterday. And if you don’t return their call right now they are going to take legal action. Which brings me to…
- Investors have lawyers and you don’t.
- Your employees are going to have sex with each other and somehow you’re going to be in the middle. And not in a good way.
- You are constantly going to be gripped with thoughts that your competitors are all better than you. And guess what, they are. So now you have to lie to all of your investors who are constantly calling you before their “Monday morning meetings” asking you, “can you tell me one more time why you’re better than so-and-so?”
- The only way to really secure a client is to get them money or sex. You didn’t read that here. I forget already what I just said.
- You are going to, at least once, hire a PR firm and only realize much later that it was the worst thing you ever did. PR people are very charismatic so it takes awhile before you stop being snowed over by them. Corollary: the launch of your site will have no publicity anywhere. Not even on TechCrunch. Corollary number two: successful CEOs often divorce their wives and marry their PR people.
- Practice saying this in front of the mirror and pretend you are talking to an employee: “the pay is not a lot but we’re heading to an eventual IPO. We’re working on an option plan but it’s not done yet.” Watch how your eyebrows move while you say that.
- Then practice saying this in the mirror: “yes”. Imagine all of your customers are squeezed into your mirror. Maybe it’s like a group Skype Mirror. Or a Google+ Hangout Mirror. “Yes”. “Yes, I can do that in three days.” “Yes, you can call me at four in the morning.”
- When you are raising money, you have to be able to answer the question, “what if Google decides to get in this business?” The question is rhetorical. It’s like asking, “what happened to you the last time you were in the center of a black hole.” But, I don’t know why—everyone asks that question. Heck, I’ve asked that question. I’ve been asked it. It’s just something that happens. You need to answer it with absolute seriousness. Like, “Fortunately I was wearing Neutrino Block 90 and only got a minor burn in a past life.”
- Finally, one more mirror item (your mirror is going to get sick of looking at you. Because if you are an entrepreneur you’re probably ugly): Practice saying, “your sales are going to triple after you hire us”. You might have to stretch the muscles in your mouth a little for that one. Try it right now. Stretch your mouth until dry lips start to crack. Practice makes perfect. If it’s too hard just start with “triple”. “TRIP” “POOL”.
- Lying awake at 3 in the morning wondering how you are going to make payroll next October (note: it’s December now. But every three in the morning that October looms one day closer). It is critical to sleep through that anxiety. I’m not kidding. Better to dream about missing payroll than lie awake thinking about it.
- Getting that thought out of your head of the crush you have on employee #6. Fire her (him). It’s not sexual harassment if you fire them before you sexually harass them.
- Calling your buddy and saying, “I hate this stupid company already. I wish I can sell it and start the other five ideas I have.” And, by the way, you might be right. Time to transform your crappy company into one of those five ideas. My first company made websites for Fortune 500 companies. At different points we almost became a record label, a tea company, a TV production company, and a half-dozen other things. Maybe one of those would’ve worked out even better. I’m not smart enough to know. But always be writing down the next ideas and see how your company can transform. If you aren’t writing down ten ideas a day then you’re failing.
- And note: Its ok to fail. We all make mistakes. We all crush the hope and spirit out of our friends, investors, and loved ones. It’s ok if you do it also. But be ready to start again and do it again. Avoid the shame. Crush them again and again. Until finally you squeeze juice out of them. Then it’s all worth it. Did that analogy just work? If so, then congratulations. You’re an entrepreneur.
If you can handle all of the above and still retain health and sanity then you are probably ready to start a business. Uri Geller could bend spoons, melt tanks, and be friends with both Daredevil and Michael Jackson. But he probably doesn’t have the magic powers you have. And he never will.
Oh, and critical to your success: follow me on Twitter.