I first read Start Small, Stay Small by Rob Walling in 2014, as I was working on a self-funded lifestyle business idea (aka micropreneurship). I ultimately abandoned the product I was working on in favour of salaried work, but now I’m considering new ideas, especially in the climate and nature-positive space.
As I spent the intervening years as an employee with VC-funded startups and with Automattic, my micropreneurship skills are much weaker than they could have been if I had stuck to building & selling products independently. Still, salaried work has its perks – I’m now in a more financially secure position than I was in 2014.
As part of getting back into micropreneurship, I figured it’d be worth rereading / skimming Start Small, Stay Small. This time, I’m using my TIL format to post some notes for my own reference.
I originally thought this would be a single post on the entire book, but my summary and thoughts on Chapter 1 (The Chasm Between Developer and Entrepreneur) ended up on the lengthy side. My goal with the TIL format is to publish more frequently, so this is good enough for a standalone post.
Summary:
- The book is focused on micropreneurs (solo founders who want to remain solo) and bootstrappers (those who want to grow a business without taking external funding) – both follow a similar process.
- Seeking funding takes a lot of time and focus, and limits the markets you can pursue. It’s harder to justify aiming for niche markets and moderate success when you’re funded by venture capitalists who expect a substantial return on investment.
- Defining a self-funded startup entrepreneur:
- “technical visionary who creates software for a niche market”
- “merges existing technical knowledge with online marketing knowledge”
- “a cross between a developer, a webmaster, and a marketer”
- Wrong reasons to start:
- “having a product idea” – “without a market, a software application is just a project”
- “to get rich”
- “because it sounds like fun”
- The right reasons to start depend on your goals. Micropreneurs lean towards lifestyle choices (freedom & income/location-independence). Bootstrappers might lean more towards the challenge and excitement of ownership and control. It’s worth spending time clarifying goals. Communicating them publicly and creating an accountability system is helpful in following through.
- Suggested goal: Build a startup that generates a monthly profit of $500. It’s harder than it may sound.
- Goals are key to getting through “the dip”: The point where the work is so hard (e.g., high volume of support) it can become unbearable.
- Reasons why people switch from development to entrepreneurship: lack of learning (keeping up with new tech becomes less exciting) and wanting more ownership (when working for a salary, little equity is retained if you leave).
- Roadblocks to success and how to avoid them:
- “No market” – “building something no one wants”. Avoided by verifying there’s a market before building the product.
- “Fear”. Can’t be fully avoided, but this may help: “The up-front fear is a big indicator that you’re going to grow as a person if you proceed through it. And, frankly, the terror wears off pretty quickly.”
- “Lack of goals”, e.g., around profit growth and lifestyle. Avoided by defining your goals and writing them down.
- “Inconsistency”, doing pseudo-productive things such as reading business books – can’t consume information and produce at the same time. Avoided by setting limits on content consumption – asking yourself whether pseudo-productive activities are actually worth it.
- “Believing you have to do everything yourself”. Avoided by getting comfortable with outsourcing the right tasks to contractors and virtual assistants (e.g., probably outsource graphic design but don’t outsource the product architecture).
- Putting a dollar value on your work hours (i.e., dollarising your time) makes outsourcing decisions easier. It’s a step many entrepreneurs skip. This results in them performing menial tasks that can be outsourced, with an effective hourly rate that’s around the minimum wage or lower.
- Approaches to setting your current dollar value: (1) use freelancer rates; or (2) divide total compensation (including benefits) by work hours. Then set a desired rate. Don’t accept making something like $25 / hour. Make your target rate a reality as soon as possible, then increase it.
- Realisations that come from dollarising your time:
- “Outsourcing is a bargain”.
- “Keep work and play separate” – “work hard and play hard, but never do both at once”. Don’t do things like playing with your kids while working on your iPhone, as you’ll be doing both poorly.
- “Wasting time is bad” – unproductive non-leisure activities are wasted money.
- “Information consumption is only good when it produces something” (excluding consumption for leisure). Recommendation: “When reading blogs or books or listening to podcasts or audio books, take action notes.” If no actions arise, it may be that the content is low value.
- Realisations that come when transitioning from developer to entrepreneur:
- “Being a good technician is not enough”. It’s critical to do management work like thinking about return on investment and productivity, and visionary/creative work around the long-term direction of the business. This is a key component in escaping the $25 / hour pit.
- “Market comes first, marketing second, aesthetic third, and functionality a distant fourth”.
- “Things will never be as clear as you want them to be” – writing code is straightforward in comparison to the ever-changing market, which requires a lot of experimentation to get right.
- “You can’t specify everything, but you do need a plan”.
- “You need to fail fast and recover”.
- “You will never be done” – building and then collecting money is a pipe dream; product & marketing require continuous investment to remain successful.
- “Don’t expect instant gratification” – product/marketing/reputation require time and effort, and it’s way harder the first time. The real work begins after you launch.
- “Process is king” – having documented repeatable processes is key to delegation, bringing on partners, and avoiding mistakes. Such documentation makes it easier to sell the business if you want.
- “Nothing about a startup is a one-time effort” – getting to the point of an automated startup requires a wise choice of niche & product, as well as investment in outsourcing and automation. Things like marketing remain hard to outsource, though.
Key quotes:
- “A developer who knows how to market a product is a rare (and powerful) combination.”
- “Marketing is more important than your product. […] Product Last. Marketing First.”
- “If you’re a venture-backed startup founder you’re looking at many years of long hours with a small potential for a huge payoff. […] If you’re a self-funded startup founder, you’re looking at a decent potential for a decent payoff.”
- “Without a market, a software application is just a project.”
My thoughts:
- I’m surprised by the length of my summary! I thought it’d just be a couple of quotes, especially given that many of the specific examples and references haven’t aged well. But a lot of the key principles are still relevant today.
- It’s somewhat ironic that reading business books is described as non-productive given that Start Small, Stay Small is a business book, but I suppose that’s qualified by the later statement that information consumption is worthwhile when it leads to productive action notes. As I enjoy reading & learning, I can definitely relate to the sense of pseudo-productivity when going down information rabbit holes. Further, since the book was published, the number of ways to get distracted has kept increasing while the number of hours in a day hasn’t changed, so remaining focused is perhaps more of a challenge these days.
- Walling talks about not being able to get rich through salaried work (in the context of the desire to get rich being a wrong reason to start), but I disagree. It’s well-known that many tech employees earn well, even outside the big tech companies (where total compensation can be in the high six figures or even in the seven figures). Working consistently for a salary and keeping expenses under control is a safe way to get rich, but it can be hard (see the FIRE movement). In my case, I would have been richer now if I had joined Google after my PhD in 2012 (I interned there and chose to work with small startups instead), or if I had not done a PhD and stayed in Israel to work with big tech companies in 2009 (tech compensation in Israel is higher than in Australia), or if I had stayed with Automattic a couple of years ago and kept working full time. But life isn’t only about maximising material wealth – I’m happy with my choices.
- There are multiple references to long nights, which I assume mostly apply to people who work on a side-business in addition to a full-time job. I suppose there’s no avoiding some unpleasant work at inconvenient times, but applying time discipline is important, especially if control over how you spend your time is a motivator for going down the micropreneurship path.
- One segment that feels dated in 2023 discusses examples of tasks that can be easily outsourced, like one-off scraping of images from a website and making some CSS tweaks. These days, it’s cheaper & faster to prompt ChatGPT or one of its cousins to get such tasks done. Echoing Michael Lynch’s review of the book, I also have my doubts about Walling’s advice on outsourcing, but there are definitely tasks that can and should be outsourced.
- I remembered the book as being too militant about dollarising time. The simple fact is that time can’t be saved like money (e.g., when you die your heirs don’t get to enjoy all the time you’ve saved). However, at least in chapter 1, it’s clear that dollarising time refers to work time – leisure time is a different story. It makes perfect sense to be diligent about how work time is spent and aim to at least match the market value of your time when running a for-profit business. Still, it’s hard to put a price on joy and purpose found in work – many people are happy to take a pay cut for more fulfilling work. Fulfillment isn’t captured by the crude metric of dollars earned per hour worked. Nonetheless, at least being aware of your effective hourly rate as a micropreneur seems like a good guardrail.
- To dollarise time, you need to know how many hours you work. But the reality is that we use the same brain for work and outside work, and total control over thoughts is impossible. I doubt it’s even desirable, as many good ideas come when we’re not “at work”. Still, it’s worth striving for some separation between work and non-work time, especially given the ubiquity of internet connections and mobile devices.
- On this read, I found the paragraphs that talked about boredom with keeping up with tech especially relatable. While there have been transformative changes in tech over the past decade, anything useful quickly becomes a software commodity – less exciting from a technical perspective. Everyday tech work often requires putting the right lego pieces together and dealing with human problems. While I still find some satisfaction in the technical aspects of building software and exploring data, I’m less interested in tech for tech’s sake these days.
- I abandoned my last micropreneurship attempt because I came to the same realisation around the real work beginning after launch. I just didn’t care enough about my online price comparison product to put in months and years of effort into marketing. This is partly what’s missing from chapter 1 (though I suppose it’s somewhat covered by setting goals): For some people, aligning business value with personal values is key to putting in consistent effort. It’s easy to give up when there’s more money and less stress in salaried work, and you don’t care about the product you’ve built. If I decide to follow the micropreneur path again, one of my aims is to have better value alignment than last time.
Key action item from this chapter: Think deeply on goals and commit to them.
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