The Art of the Start 2.0 by Guy Kawasaki

These are my personal book notes of The Art of the Start 2.0 by the author Guy Kawasaki.

If you like what you read, please consider buying the book.

Fact Sheet

  • Title: The Art of the Start 2.0
  • Subitle: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything
  • Author: Guy Kawasaki
  • Author's websiteguykawasaki.com
  • Type: non-fiction
  • Genre: business / entrepreneurship
  • Rating: 9/10
  • Recommended: Yes

“Entrepreneurship is about doing, not learning to do.”

Guy Kawasaki

Table of contents

  • Also by Guy Kawasaki
  • Title Page
  • Copyright
  • Dedication
  • Epigraph
  • Acknowledgments
  • Read Me First
  • Conception
    • Chapter 1: The Art of Starting Up
  • Activation
    • Chapter 2: The Art of Launching
    • Chapter 3: The Art of Leading
    • Chapter 4: The Art of Bootstrapping
    • Chapter 5: The Art of Fund-raising
    • Chapter 6: The Art of Pitching
  • Proliferation
    • Chapter 7: The Art of Building a Team
    • Chapter 8: The Art of Evangelizing
    • Chapter 9: The Art of Socializing
    • Chapter 10: The Art of Rainmaking
    • Chapter 11: The Art of Partnering
    • Chapter 12: The Art of Enduring
  • Obligation
    • Chapter 13: The Art of Being a Mensch
  • Afterword
  • What Do Entrepreneurs Do?
  • After Afterword
  • Index

From "Read Me First"

I assume that your goal is to change the world - not study it.

Entrepreneurship is about doing, not learning to do.

If your attitude is “Cut the crap - let’s get going,” you’re reading the right book by the right author.

From Chapter 1: The Art of Starting Up

GIST (Great Ideas for Starting Things)

It’s much easier to do things right from the start than to fix them later.

At this stage, you are forming the DNA of your startup, and this genetic code is permanent.

By paying attention to a few important issues, you can build the right foundation and free yourself to concentrate on the big challenges. This chapter explains how to start a startup.


The genesis of great companies is answering simple questions that change the world, not the desire to become rich.

Find Your Sweet Spot

If you have the answer to a simple question, the next step is to find a viable sweet spot in the market.

Mark Coopersmith, coauthor of The Other “F” Word: Failure - Wise Lessons for Breakthrough Innovation and Growth, and senior fellow at the Haas School of Business, helps entrepreneurs do this by using a Venn diagram with three factors:

  • Expertise. This is the sum total of what you and your founders can do. Though you won’t yet have a complete team, you must have a core of fundamental knowledge and ability to create something in order for a startup to start up.
  • Opportunity. There are two kinds of opportunities: an existing market and a potential one. Either is okay, but do a reality check of the size of the market in the next few years. There’s a reason people rob banks, not thrift stores. There are times, however, when there’s no way to prove that an opportunity exists and you just have to believe.
  • Passion. This one is tricky because it’s not clear whether passion causes success or success causes passion. Everyone assumes the former is true, but let’s be honest: it’s easy to get excited about a business that takes off, so the latter may be true too. Still, success may take a long time, so you’d better at least not hate what you’re doing.
Expertise Opportunity Passion Sweet Spot

Don’t get the impression that all three factors are necessary or even obvious at the start. If you have at least two of the factors, you can often develop the third if you try hard enough.

Keep Things Clean and Simple

You will face hundreds of decisions during the startup process, and there’s often a temptation to optimize each one of them - sometimes by breaking new ground.

However, it’s best to focus your energy and attention on milestone issues.

For everything else, go with the flow and stick to your MATT by keeping things clean and simple.

Do Something Cringeworthy

“If you are not embarrassed by the first version of your product, you’ve launched too late.”

Reid Hoffman

When I go back and read the first book I wrote, The Macintosh Way, I cringe at its crudeness.

When I remember the first Macintosh, I cringe because it didn’t have enough software, RAM, or storage, and it was slow. When you look back at the first version of your product, you might cringe too.

It’s okay. It happens to everyone. The first version of a product is always flawed, but how it evolves is as important as how it begins. The fortunate startups are the ones who are still around because they eventually got the product and business model right, so give yourself a break.

FAQ (Frequently Avoided Questions)

Q: I admit it: I’m scared. I can’t afford to quit my current job. Is this a sign that I don’t have what it takes to succeed?

A: It doesn’t mean anything. You should be scared. If you aren’t scared, something is wrong with you, and your fears are not a sign that you don’t have the right stuff. In the beginning, every entrepreneur is scared. It’s just that some deceive themselves about it, and others don’t.

You can overcome these fears in two ways. First, the kamikaze method is to dive into the business and try to make a little progress every day. One day you’ll wake up and you won’t be afraid anymore - or at least you’ll have a whole new set of fears.

Second, you could start by working on your product at night and on weekends and during vacations. Make as much progress as you can, try to get some proof of your concept, and then take the leap. Ask yourself what’s the worst thing that could happen. It’s probably not too bad.

Q: Should I share my secret ideas with anybody other than my dog?

A: The only thing worse than a paranoid entrepreneur is a paranoid entrepreneur who talks to his dog. There is much more to gain - feedback, connections, sales opportunities - by discussing your idea with many people than there is to lose.

Also, if discussing your idea makes it indefensible, you don’t have much of an idea in the first place. Ideas are easy; implementation is hard.

My hypothesis is that the more an entrepreneur insists on a nondisclosure agreement, the less viable the idea. After several decades of work with startups in Silicon Valley, I’ve never heard of a company stealing an idea and implementing it well.

Q: How far along should I be before I start talking to people about what I’m doing?

A: Start right away. By doing so you’ll be constantly mulling over your idea - as both a foreground and background task. The more people you talk to, the richer your thoughts will be. If it’s only you staring at your navel, all you’ll see is lint building up.

Q: I think that I have a great idea, but I don’t have a business background. What should I do now?

A: If all you’ve done is come up with a great idea - for example, “a new computer operating system that’s fast, elegant, and bug free” - but you can’t implement it, then you have nothing.

This is why you need a cofounder - until you’ve convinced other people about your idea, you may be a nutcase.

Q: When should I worry about looking like a real business, with business cards, letterhead, and an office?

A: Your priorities are wrong. What you should worry about is a working prototype.

A real business is one with something to sell - not one where people have business cards and letterhead.

Q: Do I need an MBA to start a company?

A: Not at all - and I have an MBA. You need an MBA to fulfill the expectations of an employer. In the case of a startup, you are the employer.

It’s better to spend two years in the trenches getting the shiitake kicked out of you than mastering business administration.


From Chapter 4: The Art of Bootstrapping

GIST

Bill Reichert, my partner at Garage Technology Ventures, likes to tell entrepreneurs that they’re more likely to get struck by lightning while lying on the bottom of a swimming pool on a sunny day than they are to raise venture capital.

He’s exaggerating. The odds are worse than that.

Most entrepreneurs have to dig, scratch, and claw out a business while living on soy sauce and rice.

Fortunately the costliest expenses of starting up are now cheap or even free.

Bootstrapping a startup is more possible today than at any other time in history for these kinds of reasons:

  • Development tools are open source or free.
  • Infrastructure is cheap because of cloud-based services.
  • “Middle-layer” cloud-based apps make development easier and faster.
  • Employees can work virtually, or you can hire freelancers, so you need less office space.
  • The most potent form of marketing is also the cheapest: social media.

It’s a wonderful world! This chapter explains how to survive the critical, capital-deprived early days of a startup by lifting yourself up by the straps on your boots.

Manage for Cash Flow, Not Profitability

Entrepreneurs can bootstrap almost any business - especially if they have no choice in the matter.

A bootstrappable business model has the following characteristics:

  • Low up-front capital requirements
  • Short (under a month) sales cycles
  • Short (under a month) payment terms
  • Recurring revenue
  • Marketable through social media and word of mouth

Bootstrapping involves managing for cash flow, not profitability.

These requirements point to products and target markets with these characteristics:

  • People already know, or it becomes immediately obvious to them, that they need your product. You don’t have to educate your potential customers about their pain.
  • Your product is “auto-persuasive.” That is, once people recognize their pain and how you cure it, they can persuade themselves to buy what you’re offering.
  • A megatrend tsunami of a market is breaking down barriers for you. The Internet was an example of this. (Realize, however, that every wave eventually runs out of energy, so you must have a real business by the time that happens.)
  • You can piggyback on a successful product that already has a large installed base, thus reducing your risk.

Bootstrapping involves managing for cash flow, not profitability. That isn’t a long-term plan, but until you are sitting on a pile of cash, it’s the way to go.

Position Against the Leader

Seth Godin, the author of The Bootstrapper’s Bible: How to Start and Build a Business with a Great Idea and (Almost) No Money, makes a strong case for positioning against the market leader as a bootstrapping technique.

Rather than trying to launch your product from the ground up, you utilize the existing brand awareness of the competition. Consider these examples of how you can do it:

  • Lexus: “As good as a Mercedes or BMW, but 30 percent cheaper”
  • Southwest Airlines: “As cheap as driving”
  • 7UP: “The Uncola”
  • Avis: “We try harder” (than Hertz)

By spending millions of dollars and years of effort to establish its brand, your competition has done you a terrific favor.

Positioning against the leaders or standard ways of doing business can save lots of marketing, PR, promotion, and advertising dollars, so pick the gold standard in your industry and identify an important point of differentiation in your own product, such as:

  • Cost
  • Ease of use
  • Convenience
  • Industrial design
  • Reliability
  • Speed/performance
  • Range of selection
  • Customer service
  • Geographic location

By spending millions of dollars and years of effort to establish its brand, your competition has done you a terrific favor. There is a catch, though, because successful positioning against a leader requires three conditions:

  • The leader is, and remains, worth positioning against. Imagine, for example, if you had positioned your startup against Enron when Enron was the darling of Wall Street.
  • The leader doesn’t get its act together and erode your advantage - for example, if you position your computer as faster than IBM’s and then IBM responds with an announcement of a radically faster model.
  • Your product surpasses the competition’s in truthful, perceptible, and meaningful ways. If not, no one will care about your hype. Worse, you’ll lose your credibility, and credibility is hard to regain.

Still, for the near term, positioning against the market leader is a useful and cheap technique to enable you to explain what you do.

Sweat the Big Stuff

Bootstrapping goes awry when entrepreneurs focus on saving pennies to the detriment of the Big Picture.

The reason for starting a company is not to build your own desks (nor is it to spend venture capital to make Herman Miller a bigger company).

Here is a list of the big stuff and small stuff entrepreneurs must manage:

Big Stuff

  • Developing your MVVVP
  • Selling your product
  • Enhancing your product

Small Stuff

  • Business cards and letterhead
  • Office supplies
  • Furniture
  • Office equipment

So take care of the small stuff in rapid, good enough - not perfect - ways.

Rick Sklarin, a former Accenture consultant, puts it this way: “Make one trip to Costco and be done with it.” Then focus your attention and resources on the big stuff because that’s what counts.


“Everybody can be great... because anybody can serve.

You don’t have to have a college degree to serve. You don’t have to make your subject and verb agree to serve. You only need a heart full of grace. A soul generated by love.”

Martin Luther King Jr.

My personal book notes covered only small parts of the book The Art of the Start 2.0 by Guy Kawasaki.

If you like what you read, please consider buying the book.

Stay awesome,

Your Online Business Dude

Leave a Comment