James Altucher's rules for being a successful entrepreneur

This man admits that he fails often. Of the 20 companies he has started, 17 did not work out. He defines entrepreneurship as a sequence of failures occasionally interrupted by successes. He has advised more than 50 private companies and sits on the boards of several. And on top of that, he has written more than five bestsellers. This time he is going to answer the question of how to succeed in business through a set of rules, or keys, that he has put together.

We are talking, of course, about my dear friend James Altucher, who says he has learned as much from his few successes as from his many failures. Here we summarise his rules for being a great entrepreneur, which will help you succeed in business. And as you will see, they carry the Altucher stamp.

How to be a successful entrepreneur in the business world

1. Owning your own business is not fun

And he is not going to explain the many reasons why it is not fun, because these are rules. Not theories, so there is no need to prove them. Still, if you want an idea of why it is not as much fun as some people make out, we explain it in detail in this article: The secret price of starting your own business. You will hate a large part of the process of being an entrepreneur, especially at the beginning, so Altucher advises you to keep away from sharp objects in the worst moments.

2. Try not to hire people

You will have to hire employees to grow your business, but it is good discipline to question whether you really need each hire you are thinking of making. Jeff Bezos of Amazon said something similar.

3. Get a customer

It seems obvious, but it is not. Get a customer before you start your business, if you can. There is a huge gap between a business idea and actually landing customers. How hard it is to find that first customer before opening will tell you a lot about your future business. Validate your business idea with a napkin and a pen in 5 minutes.

4. If your company offers a service, call it a product

Oracle did it. They said they had a database and would then send a team of consultants to help you install it and meet your needs. In its first years, the company claimed to sell a product, but in reality it was a consulting firm. Never forget this: products are valued much more highly than services, so make sure you use the right marketing to sell a product, not a service.

5. It is fine to fail, and all that about starting again with lessons learned, but…

try to fail before you run out of money, and hopefully before you have investors’ money. But if it happens, don’t worry more than you need to, and start again with new ideas.

6. Be profitable

Try to be profitable straight away. It seems obvious, but it is not. How much a business needs to grow each year to be profitable.

7. Competition is good

It turns you into a cold-blooded killer and helps open your mind to new paths. And never forget that your competitors can also be potential buyers of your company.

8. Communicate with everyone

Employees, customers, investors, suppliers. Communicate with them all the time, every day or every week.

Employees want to know what to do and how to help. Customers want to know how to keep their bosses happy, suppliers want to know how you are doing, and investors want to be your friends and get first-hand information about your company. In fact, communication is the most important thing for succeeding in business. What’s more, there is no business if you are not able to communicate properly.

9. Do everything for your customers

Perhaps in Spain this kind of customer policy does not really exist; I would even venture to say the opposite policy exists, which is to keep a personal distance from customers. And that is why I found it so easy to take customers away from the competition.

Help them grow. If your customer grows, your company grows. Forget the “prostitute-and-client” relationship where the only bond is money. Go to your customer’s daughter’s wedding if they ask you. Call them just to see how they are, and forget the impersonal touch of Christmas cards. If you are going to send me a generic greeting card, you know where you can stick it…

10. The customer is not a company

As they say, behind a company name there is usually a human being, generally a person. What will make this person happy? Help bring them that happiness. They will not forget it.

11. Let your customers get to know you as a person

There is nothing wrong with having breakfast or meeting a customer for lunch, and not necessarily during working hours.

12. Know your customers’ stories

Behind every business owner running a company, large or small, there is a success story, large or small. Maybe they had hundreds of problems when they started; maybe they have a truly inspiring story of overcoming the odds. Behind every entrepreneur there are more than 100 lessons in entrepreneurship. Some are repeated, but others are original, and we need them.

13. Know your product

Nobody should know your product better than you. If you are not technical, at least learn every specific technical detail to the point where you can manage the technical staff.

14. Sleep as much as you need

Don’t fall for myths such as the idea that an entrepreneur works 20 hours a day. We know that many successful people need only 3 or 4 hours of sleep, but that gift is genetic. If you need 8 hours of sleep, make sure you get those 8 hours, or you will not be productive. If you work 20 hours a day, it is because you are not working well or you are in the wrong job.

15. Exercise

As with the previous point, exercise is not an option but an obligation if you run a business. Otherwise, your health will make you pay for it. Don’t think of the time you spend exercising as time lost. Think of it as time well invested, because it will pay you excellent dividends.

16. Make your employees happy

Show your employees small gestures of appreciation, whether it is massage vouchers or theatre tickets… Altucher says he made sure that if one of his employees’ mothers called to ask how their day had gone, they could say it had been an excellent day.

17. Treat your employees like your children

They need boundaries, and sometimes they need you to tell them “NO!”, although the most important thing is that, as employees, you let them open up their minds and their imagination.

18. Don’t be greedy when pricing your product

If your product is good, and cheap as well, people will buy. Later you can raise prices or create other, higher-priced services and products.

19. Make yourself known

Getting known is everything. Your brand is everything, although the best advertising is word of mouth. Write a company blog, talk about your industry and be very honest about all your flaws. Authenticity is the best brand.

20. Don’t work yourself to death

A company is not worth dying for. Besides, your employees need you. The slogans that tell you to chase your dreams and go after them don’t tell you what to do when your dream turns into a nightmare. If you think the stress is going to finish you off and you don’t feel able to control it, don’t carry on. At least not with this idea.

21. Give employees the means to succeed professionally

Make sure your employees know how they can find their path to success in your company. Above all, make it clear to them what is right and what is not right to do.

22. Fire employees immediately

There are many diseases in a company, but there is one that is incurable. If an employee does nothing but ask for more money all the time and still hasn’t left, invite them to leave. If they speak badly to their colleagues, fire them. If they speak badly of you behind your back, fire them immediately.

This disease has no cure and, on top of that, it is highly contagious. Show no mercy and give no second chances to this kind of employee, especially if you have done the previous points properly.

23. If an employee comes to you in tears

close the door or step outside the building with them, and sit with them until they calm down. Listen to everything they have to say. If someone is crying, it is because there has been a serious breakdown in communication somewhere in the company. Listen carefully and don’t get angry with them. Just solve the problem.

24. Have lunch with your competitors

There is no reason not to. Meet them and try to listen more than you talk. You have a lot to learn from them too. Besides, there is no reason you can’t be friends. Who knows whether at some point in the future you will have the chance to create synergies with them. And if your competitors are not entirely above board, apply the old saying: “Keep your friends close and your enemies closer.”

25. Read to understand what is changing in the world

What are today’s concerns? It might be that drinking water is running out, global warming, the death of an industry or the disappearance of printed newspapers. You need to be informed about what is happening and what affects us all. Being informed can also open your mind to new business ideas.

26. But be selective about the news

As an entrepreneur, avoid reading extreme doom of the “the world is ending” and “everything is totally screwed” variety. It is a way of depressing you so that someone else can take your money.

27. Recessions and depressions don’t matter

At any given moment there are at least 15 trillion dollars circulating in the world, so it is a matter of finding a way to get hold of part of those 15 trillion. If one business idea doesn’t work, try another. If an idea dies, try another. There is always someone making money in every economic cycle.

28. Tell everyone what your company does

Even your friends can help you find customers.

29. Quickly find someone you can trust

Find someone you trust completely to come with you to meetings. Being an entrepreneur means not doing everything yourself, so you will need a second in command. Keep an eye on that person’s progress. They will be delighted to take on the role, because you will be acting as their mentor. But if they break the confidentiality of critical meetings or show themselves to be dishonourable, don’t think twice: fire them.

30. Say yes to every opportunity

Whenever you get into a room with a decision-maker who offers you a reasonable idea, say yes to the opportunity. It doesn’t matter if it costs you money. You have to try.

31. Celebrate successes

Your employees will love it, because they are part of the project and they will like knowing that the company is happy with them. They will feel part of the company.

32. Sell your first company

Sell your first company as soon as you can. At that point you will have money in the bank and you will feel ready to build your next multi-million-dollar company.

33. Your company is always for sale

Don’t make the mistake of thinking a company is forever, especially if it is a technology company. If only it were, but when a good price is offered for our company, selling it is probably the best option. Mark Cuban sold a company for 10 million dollars before he became famous. It was with his second company that people started hearing about him.

This article is a summary and adaptation of James Altucher’s original post “The 100 Rules for Being an Entrepreneur”.

Further reading

Featured image: Peter Kaminski from San Francisco, California, USA, CC BY 2.0, via Wikimedia Commons.

James Altucher’s rules for being a successful entrepreneur