The Solopreneur Manifesto – 9 Principles for Success
Whether you are looking for extra income, have dreams to generate passive income as you travel, want to be in command of your time, or just want a portfolio of incomes in the face of uncertainty, it is time to get started.
When testing ideas for a side hustle or online business that generate cash with a minimal time investment, there are 9 principles that every solopreneur would be well advised to embrace and review regularly. These principles will help you to persevere in finding an idea that works before committing significant time and money.
1 – Know how much income you need to live a life by your design
How much income do you need to live a life that frees up your time? If you are working in a full-time position today, what would the minimum salary be for you to walk out the door?
“Business is a means to an end. Do a life plan before you make your business plans.”
This amount serves as basis for the minimum success criteria of your business. By using a target 40% profit margin, we can determine the minimum business revenue that you need to free up your time. For example, let’s say that a parent wants to earn $60,000 income to replace their salary. This means that the business needs to earn $150,000 ($60,000/40%) or $12,500 per month to achieve their personal income goal.
Having a minimum success criteria enables you to track progress toward the daily or monthly rate of sales that will free up your time. It also improves accountability and focus.
2 – Test feasible business ideas
The goal of this business is not to bring innovation into the world but rather to put decisions about time back in your hands. Do you want to develop a leading-edge technology that will be the future of renewable energy? That’s great! That’s not this business.
Don’t pursue ideas where a risk is “Can I build this?” Limit uncertainty to “Do people want this?” and “Can I deliver it profitably?” Determining whether you can develop a technology or intellectual property takes time and money. By focusing on ideas where the only risks are desirability and profitability, you greatly reduce the time and cost to test ideas.
3 – Reduce risk and uncertainty before fully committing
When first testing business ideas, make small and fast bets to uncover whether an idea has potential.
To assess whether you can deliver your product profitability, conduct a short back of napkin test to ensure that there is enough profit in each sale to reasonably reach your revenue target. This includes variable costs such as manufacturing, shipping, tariffs, and marketing and fixed costs to develop the products. Digital information products tend to have low variable costs and some fixed costs. A physical product will have both variable and fixed costs.
To test do people want it, sell the product as quickly as possible while building as little as possible. Can you get 3 sales in 48-hours by contacting people you know? Sell through social media rather than developing a landing page. It is best to sell proactively first by reaching out before relying on inbound traffic. To sell the first units expect to keep your costs below $100 and don’t spend more than $300.
Have 50 customers lined up before committing time and or money to develop the product.
4 – Maximize the rate of learning
Selling manually with building as little as little as possible is about more than reducing costs, it also increases the rate of learning. When someone leaves a landing page, we don’t know why but if someone declines in-person we can get direct feedback.
Other strategies to maximize the rate of learning is to reduce the time to try ideas and focus ideas around a specific customer segment.
Reported success rates for businesses are based on ideas that become incorporated businesses and don’t reflect the number of ideas that are dropped before incorporation. So, let’s say that a business idea has a 5% chance of success. With such a low probability of success, one way to win is by maximizing the rate of learning by reducing the time to try new ideas:
5% chance x 1 try = 5% success rate
5% chance x 10 tries = 40% success rate
5% chance x 50 tries = 92% success rate
Angry Birds was a huge success that came after 51 failed games over 6-years. The faster we test ideas, the sooner we uncover an idea that works.
“I still underestimate the compounding power of the rapid execution and iterated learning feedback loop. A commitment to this, over the course of a career, is the closest thing you can get to guaranteed success.”
Another way to accelerate learning is to focus ideas around one or a few customer segments so that what you learn from one idea carries forward to the next. If we jump from photographer hobbyists to poodle fans to keto dieters, testing different ideas improves our ability to test ideas and increases our rate of execution but what we learn about the customer does not carry forward from one idea to the next. If we test 5 ideas with one segment, such as keto dieters, what we learn about the customer segment compounds and increases the chance of success. This impact snowballs over each successive idea.
5 – Have a why that is bigger than money
No business is easy to start. Aligning ideas with your interests or having a why that is bigger than “easy money” will help you get through challenges at the start. The ‘why’ for this business does not have to be your life’s work but think about how you can make your target customers’ lives better. Is that something you want to get behind? Is your target customer generally the type of people you like and would want to have a conversation with? If so, it will make the process easier and more enjoyable.
6 – Start manual but build the business to be automated
The end goal with this business is to create choice about your time. To build a business to own and not run. That being said, you maximize learning by doing everything manually. Therefore, until you get at least 50 customers do everything yourself.
Depending on your business model, this can include making your first sales by direct sales, handling all the customer inquiries, packing and shipping orders, reaching out to individual email subscribers, running ads, and updating the website. Doing everything will help you to learn the words that customers use to better shape ads and value propositions, determine the most common customer questions to create a website FAQs, and understand the mechanics of the business to inform your automation strategy.
7 – Cultivate a resilient mind
When starting out, there is a fair amount of stumbling, missteps, and a large number of hours spent working on ideas that may or may not succeed. This is part of the process. There will be setbacks and challenges. You will be called to learn and be uncomfortable. Solopreneurs that succeed build resilience to fear and failure.
Acceptance of the process and that not every idea will pan out relieves the pressure. Other tactics include gradually exposing yourself to rejection and failure related to the business if you feel anxious about starting and it is causing you to procrastinate. This looks like running Google ads instead of direct selling and not doing something unrelated like going to a coffee shop and asking for 10% off.
8 – Have a support network
By cultivating a resilient mind, you are helping yourself, but that should not be your only line of defence. Have network to support you through challenges and keep you accountable to your goals. The more that people are going on the same journey as yourself the more they will be able to empathize the challenges and offer a playbook of solutions that you can draw on. Solopreneurship doesn’t need to be as lonely as it sounds.
9 – Don’t quit your day job
If you are currently in a job, use that income to fund your business. Yes, you will be pressured for time, but use the constraint of time to focus on the most essential assumptions in the business model and later automate.
The Yerkes–Dodson law shows that performance increases with stress to a point and then negatively impacts performance. This is especially the case with work that involves decision making, creative work, and juggling multiple priorities. Does that sound like starting a business? Concerns about money and work are often cited as the top sources of stress for people. Having a stable income while you work on ideas limits that stress.
Take the next steps
Join my email list and be notified about upcoming posts and webinars
Write down 1 or 2 things that you can do to apply each of the 9 principles