Preparation is the difference that makes the difference. Often times we half-ass the work to get prepared for a journey. The thrill of winging it makes you feel special especially if you survive the journey. You are not here to feel special. Yes, At UF, you are surrounded by luxury but that is not so you feel special that is a tool to eliminate distractions. Your needs are met so that you can focus. Turn off your phone, stop checking social media, focus on changing the make up of your mind.
Welcome back. We’re making the transcripts available on the Onli Blog. They’re a bit delayed, but once the program concludes, we’ll compile them into a site for easy access. Now, session number three. What you’ve been doing so far is preparing to embark on the journey. We’re doing something quite special here. Typically, you read about unicorns because someone has created one, and they get to narrate their story, regaling you with tales of their journey. Hopefully, by now, you realize that’s not the scenario here. This is in reverse; you’re constructing them in real time. This isn’t edutainment. I’m not here to entertain you. I’m not attempting to present you with a “how I did it and you can too” narrative. What you’re here to do is to develop a specific set of skills. This is a training program. To extract the value you paid for, you need to do the work to build the skills, and you achieve that by following instructions and executing.
Look around you because one or more of these individuals is going to become a billionaire. One of these companies is going to be a Unicorn. Hopefully, it’s all of you. If you make up your mind and do the work it takes to change the makeup of your mind, then what you’re learning here will work. UF is a recipe. You practice until you get it right and then practice until you can’t get it wrong. When you do it, they’ll call it magic. It’s not. Magic is just technology, and in this case, a methodology and a way of thinking, that you don’t understand yet. It isn’t luck. Luck is something you have after an event, not before. None of this matters if you don’t do the work. Billionaires are not special. There are no extraordinary people. There are only ordinary people who do extraordinary things because they think differently. It’s your job to dismantle those barriers in your mind. It’s your job to break yourself and rebuild yourself. Your perception of yourself is not reality. All I’m offering you is information, and information is not knowledge. Information is absorbed, but knowledge is formed. Experience is the bridge across it.
Now let’s get to work.
We’ve established that a startup is not a business. Constructing a business from a startup necessitates an entirely different skill set. I’m going to tell you that most founders can’t accomplish that because the qualities required to be a founder are the antithesis of what it takes to build a business. Ego and arrogance invariably obstruct that process. It’s rare that a founder can construct a business. Typically, they put the founder out to pasture, allowing them to write books, embark on the talk circuit, give interviews, and build brand recognition on social media, while the adults undertake the labor of building the business. And that’s how it should be because a startup is not a business. Founders are often emotionally scarred because the battle leaves indelible marks. You have to love the fight to be a founder. Business builders are often envious of founders because they crave the credit. They want the recognition but they don’t want the risk. The prerequisite for curiosity is risk. The secret to taking a startup and building a repeatable and scale-able business, lies in knowing when to step aside. You are here to build a startup. That is job one. Focus is the father of success. Therefore it all begins with the realization that a startup is not a business.
A startup is a value proposition in search of proof. A startup is a hypothesis in search of a viable business model. A Unicorn is one that is repeatable and scale-able with a potential of $1 billion or more. As a founder, your task is to unearth proof. Because proof — independent, measurable, incontrovertible, concrete proof — is what an investor needs. And they’re correct. Proof is what they need. Proof is what you should demand because the most significant investor is you. You’re investing something you’ll never regain, no matter how much money you amass. You will always generate more money, but you will never get more time. Remember that, engrave it in your mind, sear it in. Proof is what you need. You’re here to produce proof. You can’t get it before you take the risk. You get the result after you take action.
Once you have proof, you can hire people to construct a business. If you have astute investors, they will insist you hire people to build the business. Building a business is a distinct skill. Blitz scaling a business is another one of those special sets of skills. Before you can build a business, you need proof. So our focus will be on building the minimum viable proof, not product, proof. The business will develop a product, and usually, that translate to a multitude of products, once you have proof and only after you have proof. You must undergo this shift in thinking because investors are peculiar creatures. The prerequisite for curiosity is risk. I wish I could say investing is about risk, but experience has taught me otherwise. For most people, investing is about managing fear, specifically the fear of loss. Investors simply don’t want to lose. It’s this feeling, more than anything else, that most investors are trying to avoid. This is why they follow trends rather than facts. They follow the crowds because they don’t want to be alone with their sense of loss.
Let me share a story. Back in 2019, I noticed an opportunity in an emerging market called ICOs. Let me give you some numbers. Research on The ROIs of 1,600 Crypto ICOs showed that on average, ROIs were at 3,100% percent. The average current ROI is 30%. Think about that for a second. Here is a link to a 2022 study if you like. We conducted a simple test of my hypothesis. We offered 30 major investors a simple arrangement: 10x in 3 years on an index fund of Crypto ICOs. At the time, there were lots of headlines about ICOs, and a few of them were frauds, which spooked a lot of people. I pointed out that it didn’t matter because only less than 3% of ICOs were frauds, and exposure was limited, so ultimately it didn’t matter. How many investors do you think said yes? We got 1 out of 10.
The fund made 100x, and it took half the time I projected. They went out after the fund was over and showed the results to the same group of investors, under the guise that we do it again. Of course, the early mover advantage had passed, but I wanted to see how many would say yes. Granted understanding ICO investing is complicated and people don’t invest in things they don’t understand so you are always at the mercy of their ability to understand. Even so, during my presentation, I spent more time explaining about the ICOs that were frauds that we bought and lost on. They were more concerned about the ones that we lost on than the ones we gained on, even though our net return was 100x and more. Now, how many of them do you think expressed interest in going again? The answer is two.
Investors are fundamentally about managing the fear of loss. Believe it. If you don’t accept that, then you are going to have a hard time raising money. Sure, greed gets people interested, but it’s demonstrable proof that assuages the fear of loss, and that is what gets you the check. “Anyone can but only a few will”. That is another of those general rules to follow in anything you endeavor. I know most of you believe you have superpowers and can talk anyone into anything. You need to believe that, but that is an emotional crutch. To be a Unicorn, you need a lot of investors to be able to see the potential without talking to you. You need proof. A startup is a value proposition in search of proof. Hard proof is critical. It’s all about proof. Founders get paid more any other profession. You get paid the big money because you are willing to go out and find proof. If you are not willing to risk doing that then you shouldn’t be a founder.
A startup is a value proposition in search of proof. So, what are you going to invest your time and resources in building, and what does it prove? No one, in their right mind, will fund you trying to prove everything, everywhere, all at once. You can’t boil the ocean. Your value proposition needs to be focused on an actionable group of people you can identify and communicate with. You need to identify some subset of people in the target audience who have some key predisposing attribute that makes them more likely to buy that which you seek to sell. You need a distinction that provides a frame of reference for the buyer. You want to prove that you can create value for a minimum viable subset of a customer segment. Always start with the customer segment. Who, specifically, are you solving the problem for? A really good way to evaluate a value proposition is to look at the experience of the customer before and the experience after. The more transformative the experience of relieving pain, the more compelling your value proposition will be and the easier it will be to demonstrate proof of that.
Most of you are in the market space, ultimately you are trying to solve a matching problem, matching buyers with sellers. You want to take Onli Technology and create something that makes it easy for buyers and sellers to conduct a specific kind of transaction. You are looking to reduce the resistance inherent in a transaction. This gives you a pretty good foundation but it also means you have a chicken and egg problem. You need to find buyers and in order to do that you have to find sellers. Which comes first, buyers or sellers? There are lots of strategies for getting past this which we will go over in the lab session. For now, what I want you to concentrate on is the value proposition for the buyer and the value proposition for the seller because you don’t have just one. You have two and that is the insight I want you to walk away with today. Buyers don’t have the same needs sellers have. Sellers need buyers but the resistance they experience is also very different from the buyers’ resistance. Taking into consideration both is critically important, in the market space.
We are now at the threshold to the adventure. You learned a framework, a way to organize your thinking, called the lean canvas with a few caveats. You made a shift in thinking about a few core ideas. Mainly redefining what you think a startup is. A startup is a value proposition in search of proof. A startup is a hypothesis in search of a business model. You are not here to build a business. You are here to get proof. You want to limit that proof to an actionable subset of your target audience. You want to evaluate your value proposition because you are here to build a unicorn so you need to ask the question is it worth it. If you are in the market space you really have two value propositions, one for the buyer and one for the seller. I want to leave you with something today because the term ‘Unicorn’ carries with it a sense of foreboding as if it is a daunting task. This can often lead to doubt, and doubt is a precursor to fear, and fear is the mind killer. Only action gets results so anything that stops you from taking action, seek it out and cut it out your life. All you need to understand is arithmetic. If you make something that you sell for $1 Million dollars, you only need to sell it to 1000 people in order to generate a billion. If you sell something for a $1, you need 10,000 people to use it 100,000 times. If you sell something for $100,000,000, you only need 10 people to buy it. Don’t think $100m is a lot. Recently at a yacht auction and I figured how many people could bid $100m, not a lot right, Boy was Iwrong, there were 336 bids. Yeah, so shift your thinking. If you ask an investor to invest one million dollars and they will make 10% of what you sell that means they will make $100 million, 10x on their investment. Do you think they will say yes, especially if you can provide proof that you can sell it? Of course they will. It’s arithmetic. You need to focus on doing the work. Its a recipe and if you follow the recipe it will work.
According to Bloomberg, ESG assets are set to reach over $50 trillion by 2025. If you solve a problem for them, a billion is 0.002% of the market. The artificial intelligence market size was valued at USD 328.34 billion in 2021 and is projected to grow to USD 1,394.30 billion by 2029, and I can tell you beyond a doubt that is completely off by a factor of 10. Pick a market, any market, its large. It is even bigger because Onli Technology gives you a global scale not geographical. What I am trying to show you is that a billion isn’t that hard to conceive of. You need to prove that to yourself. “The man who moves a mountain begins by carrying away small stones.” ― Confucius. Being a billionaire begins with a frame of mind. It is a perspective. You have to make up your mind to change the makeup of your mind. That is how you get it. Anyone can do it, only a few will because only a few will do what is necessary. Only a few will take action. Only a few will challenge and change what they believe. Be one of the few. Be the change you want to see. You can build a Unicorn. All it takes is the discipline to follow the recipe.
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