Context: Derek Sivers started a business by mistake, because he wanted to sell his music online, but he had no deal with a big record label. Back then, you couldn’t sell online if it wasn’t through a record label. So he created a website, to be able to sell his CDs. Then some friends asked him if he can sell their CDs on the website too. Then his friends of friends started asking. And so CD Baby was born.
My Notes
On creating and managing a business
You don’t need to advertise things that people really want. Make things that people want, i.e. solve their problems. Persist by improving and inventing, not by repeatedly doing something that’s not working.
A business plan doesn’t need more than a few hours of work, and ideally no more than a few minutes. Simple plans can take you a long way.
Famous quote from Steve Blank:
No business plan survives first contact with customers.
Continuously adapt. When Derek created CD Baby back in 1998, he thought it was a card processing service. A week after he launched his website, a customer emailed to ask if there are any new releases, thinking that CD Baby was a store. So Derek changed his “business plan”. When iTunes launched 5 years later, Apple asked CD Baby to be a digital distributor, and so it happened.
Investors can skew your mission/vision. You should only spending effort on pleasing your customers, no one else.
Never promise a customer you can do something that is not in your full control.
When you have no funding, you only spend money on essentials, and you build the rest yourself. Your customers don’t care if you spent $100000 for something or you built it yourself for $1000. They only care about user-facing improvement of your product.
Don’t punish everyone, past and future customers, employees, friends, for one person’s mistake. Also, don’t make decisions when you are angry. That’s the worst time to roll out a new policy. Quoting straight from the book, as I love his phrasing:
Several years ago, one guy tried to light his shoes on fire on a plane. Now, and for all future time, millions of people a day have to queue up to take their shoes off at the airport—because of that one dumb moment.
If your business crumbles the moment you leave it alone, you’re self-employed. You are a business owner when you leave for a year and your business is doing even better when you come back.
Execution is all that matters. The idea is just a multiplier of the execution:
| weak idea | 1 |
| good idea | 10 |
| great idea | 20 |
| no execution | $1 |
| weak execution | $1000 |
| great execution | $100,000 |
| brilliant execution | $10,000,000 |
A business exists to serve its customers
Make every business decision (including expansions, raises, promotions etc.) according to what is best for the customer. If you don’t know what to prioritize, ask the customer what do they want. Then satisfy that.
No customer will ask you to expand. Your customers want you to have your attention on them. Focus entirely on your existing customers, and make them love you. Your business will grow because they’ll tell everyone.
Remember your reason for doing something. Refuse opportunities, partnerships, and offers that go against your reasons, even if it means big money for you.
No customer would ask you to put ads on your website, so don’t do it. Read this funny story from Derek.
Rule No. 1 of a good service: it’s all about the customer. When ordering from CD Baby, this is the email you would get:
Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow.
A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.
Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy.
We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day, Friday, June 6th.
I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year.” We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!
Such a tiny piece of genius. See Derek’s post.
Why are you doing this?
If you’re not excited about something, say no.
You can’t expect to start big. If you don’t want to start without being big, maybe you are more interested in fame than doing what you have in mind. Start now with 1% of your vision. It will not be grand, but you will be in the game. You’ll be ahead of the rest because you started, while others are waiting for the finish line to appear on the starting line. Just focus on helping people today.
Never forget why you are really doing what you’re doing. If your goal is to be happy and help people, do you want to spend your nights turning in bed thinking how to maximize profits?
Know what is important to you, and how you grade yourself. This will be your guiding compass when others loudly and confidently say what they think you should be doing. There will always be people telling you you’re wrong. Be mindful of what excites you and what drains you. Pay attention to when you’re being the real you and when you’re trying to impress.
You can always do things more efficiently, outsource them, do all kinds of growth tricks. Do you want this? Why are you doing your project/business in the first place? Isn’t the point to have fun and be happy? You are doing things because of who you want to be, not what you want to have. Being requires learning, practicing and honing your craft.
Everyone assumes a business’ goal is to be as big as possible, but that means spending most of your time on meetings, investors, bankers, media etc. This has probably nothing to do with why you started the business in the first place. Always keep in mind your reasons for doing things. Even if your reason is money, you want money to do something with it, and that something will supposedly give you happiness.
Anything you hate doing, someone else loves. If you love programming, but hate management, find someone who loves management and let them do it. Doing things you hate will make you lose interest in the whole thing.
Keep examining and realigning yourself with your actions. If you find that your project grew or changed beyond of what aligns with your identity, let it go.
See Derek’s story of how he knew he was done with CD Baby, and the astonishing way he sold it.
Create your small utopia
A business - or a website, a book, anything you create - is the reflection of it’s creator. It can be as unconventional and as quirky as you want.
Creating a business is like making a little universe where you control all the rules. Your own utopia. How would a business work in your utopia? What would be the 5 things that would be true in your perfect world? Write them down, and make them the guiding principles for your business. If you make a dream come true for yourself, it might be a dream come true for others too.
Revolution is just succeeding by doing things differently. When you are onto something great, it doesn’t feel like revolution, it just feels like uncommon sense.