The Curse of Capital

“I used to think that more money meant a better chance of winning,” writes Michael Girdley. “But eventually I figured out a thin budget is much better.”

Good Morning!

Here are today’s highlights:            

• Gene Marks explains what he thinks Kamala Harris would have to do to win the votes of business owners.

• The better an individual performs as a salesperson, a study finds, the worse they are likely to perform as a sales manager.

• A renowned professor of entrepreneurship tells his students to think of generative AI as their co-founder.

• Exit Here wants to look like just another retail shop—not like a typical funeral home.

MANAGEMENT

Michael Girdley says too much capital is a curse: “Over the last 10 years, I’ve started about a dozen companies. My goal is never to run it myself. I want to find the right people, find the right idea, and grow it into a successful new business that doesn’t need me beyond a monthly board meeting. Of the dozen I’ve started, some have gone great (e.g. Dura Software), while others kind of sucked (e.g. my failed Halloween costume store). Along the way, I’ve learned some hard lessons about starting businesses:

• “Nobody wants to work on my shitty ideas: Early on, I thought I could get great people to believe in my ideas. I was totally wrong. The only sure way to get someone bought in is to develop the idea with them. Your partners have to talk to genuine customers, and personally experience the pain point you’re solving. So if you want a partnership, don’t figure out your whole business plan first.”

• “Lots of great business ideas come from trends: That way, your idea can ride a tailwind (that gives you momentum). Trying to buck a trend means you’re working against headwinds, which makes everything harder. First, I find an obvious trend. Then I look for second- and third-order effects. For example: First order: ‘Hiring in the U.S. is hard.’ Second order: ‘American companies want to hire overseas.’ Third order: ‘They’ll need someone to help them.’”

• “Too much capital is a curse: I used to think that more money meant a better chance of winning. But eventually I figured out a thin budget is much better. After all, a real business only survives by its bank account. And having limited means forces you to tackle problems creatively, instead of just throwing good money after bad.” READ MORE