⭐ Impressions

As someone prone to burnout and anxiety over my lack of achievements, this book opened my eyes in many ways. It taught me that I shouldn’t resist myself but rather lean into the things that make me who I am – the path of least resistance. This idea is pretty radical to someone like me who’s obsessed with becoming “well-rounded” and trying to correct every single vice he has.

By playing the game of ‘perfection’, I was slowly eroding my unfair advantages and playing inauthentic games designed solely to impress other people. And the reason I needed to impress other people was because I wasn’t in a game I was happy to play.

I also had a strong tendency to do things the hard way without anyone’s help. Again, in this way, I threw any unfair advantages I had (like my parents being willing and able to invest in me but me choosing to go it alone) down the drain. I’ve foregone a lot of unfair advantages in my life in pursuit of true meritocratic ideals. The trouble was, as this book showed, our society was never purely meritocratic to begin with. I was driven by naïve delusion.

🚀 TL;DR – The book in 4 bullet points

• Life isn’t fair – but it’s not an excuse to have a victim mindset – instead we must equip ourselves with knowledge of the potential obstacles and shortcuts
• An unfair advantage is a condition, asset or circumstance that puts you in a favourable business position (e.g. being tall in basketball, knowing someone at a company you’re applying for a job at)
• There are five categories of unfair advantages – Money, Intelligence and insight, Location and luck, Education and expertise, Status
• The key to success is working hard and smart (on things you are lucky/have unfair advantages in) – it is not just about hard work or getting lucky

📑 Key Takeaways

• There are two leading, opposing narratives on how success/wealth is attained:
  • Luck – rich people got rich due to factors outside their control (luck, timing, natural talent and fate) – their success wasn’t earned (fatalism)
  • Hard work – rich people deserve their riches because they earned it through hard work (meritocracy)
• The reality is in the middle of these two:
  • You can be unlucky and still successful (e.g. Oprah Winfrey was raised in a poor, traumatising, unstable household but still became wildly successful)
  • But hard work can’t undo luck in all cases (e.g. if Warren Buffett was born black or a woman or in war-torn Iraq, no matter how much he worked, he wouldn’t have the same opportunities/success he did)
• The key to success is working hard and smart (on things you are lucky/have unfair advantages in)
• An unfair advantage is a condition, asset or circumstance that puts you in a favourable business position
  • We ALL have unfair advantages
• Examples of unfair advantages – being tall in basketball, being rich before starting a business, knowing someone at a company when applying for a job etc.
• Properties of unfair advantages
  • Can’t be easily copied or bought
  • Unique to you
  • Build on each other and have a snowballing, multiplicative effect
  • For any early-stage startup, the startup’s UA = sum of individual founders’ UAs
    • This is why it’s important to choose founders that complement your UAs
• There are five categories of unfair advantages which comprise the MILES framework
  • Money – the capital you have/can easily raise
    • Money gives you a safety net, contingency and the power to scale (you need money to make money)
  • Intelligence and Insight – ‘book smarts’, social + emotional intelligence and creativity
    • Business isn’t an exam – all aspects of intelligence are needed (not just ‘book smarts’)
    • Insight is required to find a need/problem in the market that can be solved
  • Location and Luck – being in the right place at the right time
    • A good location affects your vibe and makes it easier to make friends, find out business insights, have access to capital and better infrastructure
      • Note – location isn’t just physical – it refers to your environment (which can be online)
    • Luck/timing is important – you don’t want to be too early (i.e. VR) or too late (i.e. Bing)
      • To be more lucky – maximise your ability to seize chances, trust your intuition, expect to be lucky, turn bad luck into learning opportunities and take more action
  • Education and Expertise – formal schooling and your self-learning/gained knowledge
    • Education can be formal/informal – doesn’t matter
    • Three main benefits from formal education – knowledge, network and signalling that comes with a degree
  • Status – social status (your network and connections) + your ‘personal brand’ (how you’re perceived) + your inner status (confidence and self-esteem)
    • Status is your perceived ability to add value
    • It’s comprised of three types of capital – economic (i.e. wealth), cultural (i.e. social class/subculture) and social (i.e. who you know)
    • Note – inner status creates outer status because other people can pick up on it subtly
• All unfair advantages can be double-edged swords
  • Lots of money can make you complacent, wasteful and less hungry to succeed
  • A lack of intelligence can mean being more humble and willing to ask questions and less overthinking
  • A good location costs money and being frequently lucky means you may not develop the skills needed to develop your startup when luck runs out
  • A lack of status (i.e. being an outsider) reveals powerful insights and enables you to stand out/be memorable

📕 Chapter-by-chapter summary

Introduction

• The media bombards us with messages that hard work, meritocracy and personal responsibility are all you need to achieve startup/wordly success but this is not true
  • Meritocracy refers to the idea that those who deserve to get rich, get rich
• Success in the startup world is not simply awarded to the hardest workers. It is awarded to those who develop and use their Unfair Advantages
• An unfair advantage is a competitive upper hand over the competition
  • Your set of unfair advantages is unique to you
  • Sometimes your unfair advantages aren’t earned or things you had to work for
  • Examples of unfair advantages – being tall in basketball, being rich before starting a business
• The goal of this book is to teach you:
  • What an unfair advantage is (for both individuals and startups)
  • How to find and use your own unfair advantages to succeed in business
  • The roadmap to startup success (given the previous knowledge)

PART ONE – UNDERSTAND

Chapter 1 – Life is unfair

• Evan Spiegel, founder of Snapchat, said he “got really, really lucky. And life isn’t fair” because:
  • He grew up in a multi-million dollar household in Los Angeles with a lavish lifestyle
  • Went to an expensive private school (also attended by Hollywood stars/business founders)
  • Got elite private tutoring at a cost of up to $250 per hour
  • His parents were powerful lawyers who had connections at Stanford University (which presumably got him in) and to big-time venture capitalists
• All these factors stacked and contributed to Evan’s success – he received over a century’s worth of combined wisdom and business lessons by the time Snapchat began to grow
  • Note – not all of Evan/Snapchat’s success is due to privilege (a lot of privileged kids amount to nothing after all) – it was due to Evan’s execution, idea and timing as well
• Evan says: “It’s not about working harder. It’s about working the system”
  • Not in an unethical way – it means you should work smarter, not harder
• Working hard without working smart is useless – e.g. working hard on a product noone wants
  • Hard work and sacrifice ARE factors but not THE factors

Chapter 2 – Our entrepreneurial journeys

Ash’s story

• In his late teens, one of Ash’s friends owned a shoe warehouse – he and Ash came up with the idea to build a website to sell shoes online (before eCommerce and Amazon were a thing)
  • It did so well, Ash was courted by multiple companies for work and was hired on the spot at his first interview… until the dotcom bubble burst and Ash was made redundant
• But Ash realised that his success wasn’t due to ‘hard work’ but due to a series of lucky events:
  • Being skilled at the Internet right before it was just taking off
  • Having a friend whose parents owned a shoe business
  • Having access to books on computers and the Internet
  • Having his parents allow him to stay home and use the phone line for dial-up Internet
• Ash realised that his Internet/marketing skillset was his unfair advantage – it got him hired as a senior member at Just Eat UK – an online takeaway startup
  • Just Eat UK got valued at 1.5 billion pounds at their IPO and Ash was extremely early as a hire so he got a lot of equity – he finally achieved financial freedom
• With the unfair advantage of money, he became an angel investor + founded multiple startups

Hasan’s story

• Hasan doesn’t consider himself a natural/born entrepreneur
  • He never felt inclined to make money as a child like Ash
  • He was introverted and had to push himself to learn how to tell
• His parents wanted him to be a doctor but he didn’t like that path nor did he like the corporate grind path that everyone else was taking after uni
  • So he took an online course in digital marketing and launched a web design/SEO business (after learning sales via multiple jobs)
• It did really well and he “made it” – was travelling the world with passive income from his biz when he saw some incredibly poor kids in the Philippines begging for money
• That was when he understood the luck/unfair advantages that contributed to his success:
  • His parents moved to London from Iraq just before economic sanctions devastated Iraq
  • He had the education, security and stability of being an English-speaker
  • He had the money to take an online course
  • He had the connections to get his first few clients
  • He had a British passport allowing him to travel the world freely and be a digital nomad
• He could’ve just as easily been those kids in the Phillipines without his unfair advantages

Chapter 3 – Success is both hard work and luck

• There are two leading, opposing narratives on how success/wealth is attained:
  • Luck – rich people got rich due to factors outside their control (luck, timing, natural talent and fate) – their success wasn’t earned (fatalism)
  • Hard work – rich people deserve their riches because they earned it through hard work (meritocracy)
• The reality is in the middle of these two ends of the spectrum
• Luck isn’t always a positive factor (you can be unlucky) – as Oprah Winfrey’s story proves:
  • Oprah was raised in an unstable, traumatising, poverty-stricken household
  • Yet despite this, she became one of the richest, most influential people on the planet – because she took advantage of the unfair advantages she had:
    • She was taught to read at a young age and spoke at every event her grandmother attended – eventually she received scholarships, and radio gigs cause of this
    • Her traumatic childhood allowed her to develop the empathy, compassion and emotion that makes her show and personality so great
  • Oprah’s story teaches us every disadvantage has a corresponding advantage – your circumstances/unfair advantages can be double-edged swords – luck isn’t always positive
• But hard work can’t undo luck in all instances
  • Example – if Warren Buffett was born black or a woman or not in the US, no matter how much he worked in the 1930s, he wouldn’t have had the same opportunities he did
  • In this way, hard work only serves to hone the skills initially provided by natural talent/luck
• The belief we live in a pure meritocracy is dangerous because it means that everyone gets what they ‘deserve’ in life i.e. if you’re poor, you’re a loser and deserve to be poor
  • This aspirational attitude creates a lot of status anxiety and guilt for not achieving more
• Instead we must hold the two mindsets of luck and hard work like tools in a toolbox
  • In this way, we develop compassion for others when we’re successful and lose our inferiority complexes when we see people achieve more than us
• The two mindsets can be encapsulated in The Serenity Prayer:
  • “God grant me the serenity to accept the things I cannot change, the courage to change the things I can and the wisdom to know the difference”
• The main idea you should take away from this is that you should work hard and smart (on things you have unfair advantages in) whether it’s in business, your career or other life areas

Chapter 4 – Introducing Unfair Advantages

• Life isn’t fair – but it’s not an excuse to have a victim mindset – instead we must equip ourselves with knowledge of the potential obstacles and shortcuts
• An unfair advantage is a condition, asset or circumstance that puts you in a favourable business position
  • We ALL have unfair advantages
  • The simplest unfair advantage is knowing the right people that can give you access to opportunities (e.g. getting you a job interview)
• Examples of unfair advantages
  • Where you were born, who you know, what money you have, personal interests, your skills, talent or expertise, your lived experience that gives you unique insights into a problem, access to a key audience etc
• Properties of unfair advantages
  • Can’t be easily copied or bought (e.g. Evan Spiegel’s business savvy/interpersonal skills)
  • Unique to you (e.g. Oprah Winfrey’s early audiences)
  • Build on each other and have a snowballing, multiplicative effect
    • Those who are successful are given special opportunities that lead to further success
    • Examples – rich getting tax breaks, best students getting best teaching etc.
  • For any early-stage startup, the startup’s UA = sum of individual founders’ UAs
    • This means you should partner up with someone with UAs that balance out yours
    • This is why investors will interview you rather than your company in the early-stages
    • As the company grows, it gains its own UAs independent of founders
• Unfair advantages are your leverage points – they are how you ‘work smart’
• You can work to develop unfair advantages for yourself based on what you have to start with
  • You can get an education, develop expertise, move cities, make friends and change your mindset

PART TWO – AUDIT

Chapter 5 – Introducing the MILES Framework

• To help you discover and audit yourself and your UAs, use the MILES framework

The MILES Framework

• There are five categories of unfair advantages which comprise the MILES framework
  • Money – the capital you have/can easily raise
  • Intelligence and Insight – ‘book smarts’, social + emotional intelligence and creativity
  • Location and Luck – being in the right place at the right time
  • Education and Expertise – formal schooling and your self-learning/gained knowledge
  • Status – social status (your network and connections) + your ‘personal brand’ (how you’re perceived) + your inner status (confidence and self-esteem)
• Note – you don’t need to have all these UAs to succeed – the best strategy is to partner up with people who have UAs that complement yours
• All these advantages are built on the foundation of Mindset – which is the thing you have most control over and can leverage most
• But before trying to determine your UAs, you must learn about your motivations + personality

Motivation

• At the core of your mindset is your ‘why’ – why are you striving to achieve what you want to achieve (presumably business success)?
  • The answer to this guides every action and choice you make
• Ideally your ‘why’ must come from you alone because if it’s driven by other people’s expectations (or need for validation), suffering will be the outcome even if you succeed

Personality

• There are five major personality traits (the Big 5):
  • Openness – how open you are to new experiences + how imaginative you are
  • Conscientiousness – how organised, self-disciplined and goal-oriented you are
  • Extraversion – how much you enjoy spending time around other people
  • Agreeableness – how friendly, compassionate and cooperative you are
  • Neuroticism – how prone you are to worry, anxiety and stress
• Having more insight into your personality helps you play to your strengths and know where you need to expend extra effort
  • Example – introverts need to be more proactive in meeting new people, open-minded people need to say ‘no’ more often to projects
• No one personality is ideal for entrepreneurship but two traits are key
  • Low neuroticism – entrepreneurship is a very high stress, emotional rollercoaster which requires emotional stability
  • High openness – it is important to be a visionary and be unafraid to experience new things

Chapter 6 – Mindset

• Your mindset is where you have the most control out of the factors in the MILES framework
  • You can change your mindset simply by viewing your circumstances and life situation differently e.g. by being more grateful
• Mindset matters – a good mindset is a prerequisite (but not the sole requirement) for success
• Fixed mindset (fatalism) – believe they’re born naturally gifted at some things but incapable of others
• Growth mindset (meritocracy) – believe your intelligence/talents can be developed and you can achieve anything given time
  • It’s better than fixed but still not quite accurate – it ignores the stacks of UAs and luck some people already have in life – it’s too meritocratic when the world isn’t
• Reality-growth mindset – accept the hard limits of the way things are (like the physical laws of the universe) AND also believe anything is possible
  • Acknowledge there are limitations but they’re more malleable than some people may think
  • This deploys the fixed and growth mindsets both when needed – like a toolbox
• The reality-growth mindset is the fertile soil from which your UAs spring
• Four characteristics of a strong reality-growth mindset
  • Vision – the ability to plainly see what will exist, voice the unknown and bring it to reality
    • Without vision, companies lose their way, people lose their jobs etc.
  • Resourcefulness – coming up with creative solutions to difficult problems
    • Entrepreneurs can take steps to mitigate risk but can never eliminate it completely
  • Constant growth and lifelong learning
    • Change is constant – you need to adapt in this new world or else you’ll be left behind
  • Grit and perseverance – keeping on going in the face of resistance
    • You need thick skin, be able to handle criticism and bounce back when you’re down

Chapter 7 – Money

• Money is the first UA in the MILES framework – in this context, it refers to wealth (cash + assets)
• Money matters because it takes money to make money e.g. you need money to fund a startup
  • But note – money is not all you need to succeed – there are lots of failed startups that received a lot of funding (e.g. Shyp, Beepi, Quibi etc)
  • Besides funding, money gives you the unfair advantage of a safety net and contingency
    • If you can fail and still get back up again, then you can start again and again
• The concept of runway and burn rate is important because startups can take a while to become profitable and you need to survive until this happens
  • Runway = time you have until you/your startup runs out of money and has to close down
  • Burn rate = how much money your startup is losing every month
    • If you have $5K and your burn rate is $1K per month, you have 5 months of runway
  • There are two ways to increase runway
    • Cut costs – reduce your burn rate e.g. simplify your lifestyle, stay lean with spending
    • Increase money – save more, get investors to fund you etc.
  • Rule of thumb – have 6-18 months of runway before quitting your job to focus on a startup
• To decide whether money is your particular unfair advantage, ask yourself:
  • Do I have capital (6-18 months of runway) in my bank accounts now?
  • Do I have friends and family who might invest that money upfront?
  • Can I save that money doing my current job?
• If your answer to these questions is no – consider building a business with low startup costs that can be profitable quickly
• OR focus on increasing your income/money first by: minimising living expenses, learning marketing, sales and coding, raising funding or freelancing to supplement your income
• If you’re in extreme poverty, facing financial instability or have children/dependents to support – you should DEFINITELY not be thinking about starting a startup
  • You have to have your basic needs met before you think about business
• While money can be a massive unfair advantage, it is a double edged sword
  • Having a lot of money can make you complacent, wasteful and less hungry to succeed
  • Financial constraints can breed creativity, resourcefulness and ingenuinity

Chapter 8 – Intelligence and Insight

• Intelligence has many dimensions (which can each be UAs in their own right):
  • Intelligence Quotient (IQ)
    • People with higher IQs on average do better in life, have better health and a longer life
    • But business isn’t an exam – other fields of intelligence like social and emotional intelligence, creativity and self-awareness (all of which IQ doesn’t test on) are more important than IQ in business
  • Book smarts – the capacity for theoretical understanding
    • Learning from books and being able to grasp concepts quickly/easily without having to go and do it yourself first is a powerful UA
      • Books contain all the knowledge accumulated throughout history
    • Having a degree and a string of letters after your name on your CV is helpful too
  • Street smarts and people skills – stuff you learn outside of school by ‘doing’/experience
    • Largely about people skills which are essential to every stage at a startup – e.g. recruiting co-founders, speaking to customers, calling suppliers, getting a loan
    • Street smarts are comprised of three different elements:
      • Social and emotional intelligence – knowing/asking the right questions, building trust and relationships and being assertive
      • Common sense – knowing who to trust, who to approach, and getting a sense of trends and the demand for different things
      • Bullshit detection – knowing when people are trying to screw you over, reading their intentions and having a sense of where their incentives lie
  • Creative intelligence
    • The creativity we use in day-to-day life and business is about connecting things from one domain to situations that seem completely unrelated
      • One way to improve creativity is to increase your interdisciplinary knowledge
        • Learn from areas/fields/industries that are different to what you already know
    • In the past, business was more about incremental improvements/efficiency – the future is about innovation (where creativity is essential and a huge UA)
• Insight – being able to see below the surface and understanding things others might not
  • Intelligence is useful but for your idea to work, you also need a unique insight
  • Having an insight means finding a need/problem in the market that can be solved
    • Example – Jeff Bezos knew that the internet would change retail forever
  • The main way to get insight is by talking to potential customers/users and getting your hands dirty
    • Other ways – be the target customer yourself, get a job within the target industry
• To develop your intelligence and insight, you have to:
  • Cultivate your curiosity
  • Ask more questions
  • Do more experiments
  • Be more interested in how people feel and the emotional impact things have on them
  • Notice when people say something is a pain/is inconvenient (gold mines for insights)
  • Be more aware of your own emotions and moods and don’t let them dictate your actions
• But like all UAs, intelligence is a double-edged sword – a lack of intelligence results in:
  • Being more willing to ask questions and listen to experts/people that are smarter than you
  • Less overthinking/analysis paralysis – you need some naiive optimism as a startup founder
• Similarly, deep insight based purely on your own experience can be misleading – you might just be one of a handful of people with that issue – you need to talk to people

Chapter 9 – Location and Luck

• “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it” – Ray Kroc
• Location and luck means being in the right place at the right time
• LOCATION
  • Location matters – e.g. imagine if Warren Buffett was born in war-torn Iraq
    • It determines whether customers are likely to visit/use your business
    • A good location results in things like making friends, finding out business insights, access to capital, having better infrastructure – adds up for massive effects
    • It affects your vibe – you’re the average of the five people you spend most time with
  • Note – location isn’t just physical – it refers to your environment (which can be online):
    • We can control our environment by choosing who we follow/what content we consume
  • Picking a location with a recognisable reputation can help in other ways:
    • Example – if you’re making a film in Hollywood, people will take you more seriously
    • Example – being at the top of Google search results gets you more website visitors
  • Always ask yourself whether you are positioned (physically and online) where you need to be in order to give your business (and you) the best chance of success
    • Are you near other similar businesses/people?
    • Do you have access to the talent you need to build your business?
    • Are you easy to find for potential clients or customers (or other people)?
  • If your physical location isn’t great, you can either move or leverage the internet through remote work
• LUCK
  • Being in the right place at the right time involves not only location but luck too
  • In one study, it was found that timing was the most important factor for startup success, ahead of execution and the quality of the idea
    • Timing in founding a startup is all about trying to ride the big waves (not short-term trends or hype) that result from societal and technological shifts (macro-trends)
    • With timing, you can either be too early, too late or just right
      • Example of too early – VR still has heavy, bulky headsets
        • Being too early is bad because you have to educate your potential users about the benefits which is costly and challenging
      • Example of too late – trying to create a search engine to compete with Google now
        • Being too late means entering a market full with competitors and whose growth has already peaked
      • Example of just right – Snapchat coiincided with the trend of high quality front-facing cameras on smartphones connected to internet through mobile data
  • There are five principles that lucky people use to create good fortune in their lives:
    • Maximise your ability to seize chance opportunities
      • It’s not enough to be in the right place at the right time – you also have to be in the right state of mind to do something about it
    • Trust your intuition and gut feeling – especially when you’ve had some experience
      • The unconscious mind is surprisingly accurate at noticing patterns and using past experience to inform present situations
      • Note – be careful of taking this too far – unconscious biases form in the same way
    • Expect to be lucky – you’ll be more likely to notice opportunities if you expect them
    • Turn even the bad luck into good luck
      • If you get unlucky, you can either give up (making the event bad) or use it as a learning opportunity (making the event lucky)
        • A bad event may well be the catalyst for something great in future
    • Take more action – if you roll more dice rolls, you’re more likely to roll a 6
      • Nobody is counting the number of attempts you make, and each one gets you luckier and luckier
• As with every UA, location and luck can be a double-edged sword:
  • A good location costs money while a bad location can give you less competition (+ you can use the money you saved to hire labour remotely around the world
  • If you’re frequently lucky, you may not develop the skills (soft and hard) needed to develop your startup when your luck runs out e.g. thick skin that comes with a lot of rejection

Chapter 10 – Education and Expertise

• EDUCATION
  • Education is very important – what doesn’t matter so much is how you get that education (i.e. it doesn’t matter whether it’s formally or informally through self-teaching)
  • There are three main benefits/UAs from formal education/university degrees:
    • Knowledge – including specialist knowledge that makes cutting-edge startups possible
    • Network – you’ll meet other smart and driven people who passed the selection process
      • Makes for a great source of co-founders and business partners
    • Signalling – going to an elite university signals you are ‘smart, diligent and talented’
      • This is the status and ‘personal branding’ side of the education system
  • We can’t change the education we received as children but it’s never too late to get more
  • Whether you need more education to succeed depends on a number of factors:
    • Do I have the skills to build my company?
    • Do I know what I am an expert in?
    • What would I like to be an expert in?
• EXPERTISE
  • An expert in a given domain is somebody who obtains results that are vastly superior to those obtained by the majority of the population
  • To become an expert, you learn enough theory to get going and then you apply that theory to the real word, get feedback over and over
  • Expertise often means being great at specific things – noone is an expert ‘in general’
    • Choose your area carefully – go for something both in demand and interesting to you
      • For areas outside your expertise – lean on others and seek help
      • Double down on the things you have a natural aptitude and interest towards
  • If you feel as if you don’t have an expertise in anything, then you can build it by learning online, reading books, seeking mentors and doing things yourself

Chapter 11 – Status

• Your status is your personal brand – it is how others see you, your social standing, appearance, gender, age, how you dress, stand, talk AND your perceived credibility
  • Example – Ash was denied a job he was qualified for because he seemed too ‘young’
• There’s two parts to status – outer status and inner status:
• OUTER STATUS
  • Outer status is your perceived ability to add value – and value can take many forms
    • Value = wisdom, entertainment, spreading positive emotions, solving problems, achieving difficult things, being cool, trendy, aspirational, attractive, interesting
    • We all have a certain status in different situations
  • Our shared beliefs as a society reflect whom we consider to have higher outer status e.g. doctors > nurses, CEOs > interns, billionaires > working class
    • There’s a lot of assumptions, prejudices and unconscious biases involved
  • Status is also about power – with higher status comes more prestige, respect and influence
  • Sociologist Pierre Bourdieu explained status as comprised of three types of capital:
    • Economic (covered in Chapter 7) – tangible form of wealth i.e. money, assets
    • Cultural – linked to your social class/subculture – reflected in your accent, credentials, set of tastes, hobbies, manner of speech/dress, posture, possessions etc
      • You signal your belonging to a subculture by how you dress, speak and behave
    • Social – your network, relationships and connections
      • Who you know is part of your status – explains why people like to name-drop a high-status person to increase their own status by association
  • Note – all the other pillars of the MILES framework help increase status – as social animals, status affects/is affected by virtually everything we do
• INNER STATUS
  • Inner status = self-esteem, self-confidence, whether you like yourself
  • Inner status creates outer status because other people can pick up on it through your body language, voice and other subtle cues
  • You need to like and value yourself to have high self-esteem and come off as competent, confident, likeable, trustworthy and engaging
• If you are high status in some areas, highlight them when necessary e.g. show that you went to a good uni on your CV, pitchdecks etc – BUT not too often – it makes you unlikeable
• If you think you don’t have the UA of status – it’s alright – status is also a double-edged sword:
  • Being an ‘outsider’ reveals powerful insights that insiders might miss and enables you to stand out and be memorable
  • But before you try to build status, it’s important to develop your inner status first – so work on liking yourself

PART THREE – THE STARTUP QUICK-START GUIDE

• In Part Three, the previous knowledge is applied to guide you practically on how to launch your own startup and maximise your chances of success

Chapter 12 – The why

• Not everyone should start a startup e.g. if you’re highly neurotic/anxious
• You have to ask yourself what are you trying to gain/achieve and what are you trying to avoid by launching a startup? e.g. gain financial independence, avoid having a boss
• The best way to align your motivations fully is if there’s something in it for both selves:
  • Lower self = trying to live a certain lifestyle, getting recognition, money, status, freedom
  • Higher self = helping others, spreading opportunity, saving lives, etc
• While there’s no right or wrong ‘why’ – if you only seek status/recognition from others, you won’t be happy when you get it – you need intrinsic motivation for fulfillment/happiness
• You need to define success for yourself otherwise everyone else will define it for you
  • Make your criteria for success process-based rather than outcome-based
  • You can’t control the outcome (since luck always plays a role) – but you can control your own actions/processes

Chapter 13 – The type of startup

• LIFESTYLE STARTUPS
  • Lifestyle startups are designed to sustain a certain lifestyle (i.e. income, work schedule)
    • They usually don’t need external investors and aren’t particular new or sexy ideas
      • E.g. dental clinics, restaurants, bakeries, accounting firm, niche YT channel
    • Alternatively there could be growth constraints on them
      • Example – professional service businesses can’t scale without hiring more people
      • Example – startup selling equipment for a niche sport (limited by small market)
  • Investors aren’t usually interested in lifestyle businesses because they aim for the big, moonshot-type ideas that have the potential for hyper-growth
  • Hyper-growth startups are binary (it’s either succeed big or fail) – lifestyle startups aren’t
• HYPER-GROWTH STARTUPS
  • Hyper-growth startups usually focus on tech (whether in product or distribution)
    • They can become so huge because software is inherently scalable – once it’s built, it can be distributed at a very low/no cost
    • E.g. WhatsApp, Uber, AirBnB, Google, Apple, Facebook, Netflix, Amazon etc.
  • This distribution principle can be applied to any digital product e.g. films, books, photos
  • Since they’re based on software/algorithmic innovation, your founders should have the technical know-how to build/iterate a digital product
  • The most important thing for a hyper-growth startup is product-market-fit – for the product to actually be what customers/users want
    • If you have product-market-fit, demand will keep increasing and it will grow
  • The second-most important thing is to get funding – hyper-growth startups lose a lot of money chasing growth/market share at the expense of profits initially
    • This is because in some industries, there’s winner-takes-all stakes e.g. Google won search, Facebook won social media, Uber won on-demand taxis etc.
    • Funding is needed to hit the home run and become unicorns
    • Funding usually comes from having Status and Money (credibility and connections) and Location/Luck as unfair advantages
• CHOOSING BETWEEN THE TWO
  • Due to their competitive nature, hyper-growth startups are better if you have very strong unfair advantages
  • If your unfair advantages aren’t so developed, a lifestyle startup is better

Chapter 14 – The idea

• Ideas are overrated compared to things like execution:
  • Heaps of people have the same great ideas
  • You don’t need a unique/new idea to be successful – most startups twist on an already-existing idea or implement the same idea in a new market/industry
    • Example – Spotify wasn’t first/unique – iTunes, Napster existed before
      • Only difference was Spotify used subscription and advertising business models
• Location and Luck (specifically timing) are more important than ideas
  • Example – Facebook wasn’t first – Myspace, Friendster, Bebo already existed – it had:
    • Right place – Harvard gave it massive prestige, status and exclusivity
    • Right timing – social networks before taught the public how to use them, broadband and smartphones were taking off
  • Being the first in any industry might actually be worse for you since you can’t learn from the failures of first-movers – the risk is much higher
• Still, ideas are very important – just that they don’t have to be unique/ground-breaking
• You get great ideas by having key insights into a problem and then coming up with a great solution to that problem (the solution = your product)
  • Intersectional thinking (Ch 8) is where ideas come from – putting a twist on existing things
• Find great ideas by digging into your target customer’s lives to find unmet needs OR by ‘scratching your own itch’ (build solutions for problems you already have
  • Note – sometimes people have problems they don’t know they have (since they’re so used to them) – it takes a lot of Intelligence and Insight to find unmet needs
• Note – the biggest mistake is having a ‘solution’ and then looking for a problem for it to solve
• Despite the importance of ‘product-market fit’ to your product/idea, it is equally important to have ‘founder-product-market fit’ – making sure the idea is right for you
  • This is because startup’s unfair advantages come from the founders themselves
  • If you don’t have some UA in the target industry, then the idea might not be the right fit

Chapter 15 – The people

• FINDING CO-FOUNDERS
  • It is exponentially harder to build a startup on your own vs with a team
  • In a team, you need a:
    • Creator – the visionary who wants to make their mark on the universe
    • Communicator – can sell and market, communicate with customers and sell the investment opportunity to investors (for fundraising)
    • Technician – builds the technical side and makes sure it works (e.g. engineer, chemist, biologist etc.)
    • Note – multiple roles can be taken by one person but it’s best to have atleast two founders
  • You can always outsource technical parts of your business, but if the technical side is the core part of your business, then outsourcing makes you inflexible and dependent
  • Ask these questions to find and select the right co-founders:
    • Where am I weakest?
    • Which of the unfair advantages do I have the least leverage in?
    • Example – Mark Zuckerberg chose Eduardo Saverin as his co-founder because he was a better networker, communicator while Mark was the visionary/creator/technical founder
  • To actually find a cofounder, you need to network and be in the right place at the right time
    • You need Location and Luck to help you out (i.e. physical locations like startup hubs/universities or online locations like virtual communities)
    • Be careful of partnering with a stranger – the cofounder relationship is almost like marriage – it’s all about trust – founder conflict is the leading cause of startup failure
• HOW TO GROW YOUR NETWORK
  • There are two ingredients needed to develop your network
    • An authentic desire to add value to people you meet
    • Increasing your status so that people perceive more value from you
  • ‘Value’ in a social/networking context is not just what you can do for someone
    • E.g. if you’re a consultant, you don’t need to just offer consulting strategy sessions, you can be a warm, respectful listener or introduce two other people
    • Note – adding value gets harder and harder as you become busier – so you shouldn’t be too indiscriminate with your networking
  • The strength of your network increases the more you add value to it – do this by proactively reaching out to people periodically (not just when you want something from them)
    • E.g. ask how they are, forward them an article, comment on their status updates etc
• TIPS FOR GETTING MENTORS
  • Identify who could be a good mentor for you – look at people a few years ahead of you
  • Get their attention – break through the noise by seeking to add value
  • Seek to add value – find some way of helping them by studying what they’re doing
  • Act normal – if you get too deferential/fan-like, they probably won’t like you
  • Apply what your mentor advises you to do as quickly as possible, then give them feedback
    • You become more coachable and it becomes a game to them

Chapter 16 – The business

• Whether you want to build a lifestyle or hyper-growth startup you should always start small
  • Take small risks – run small tests to see if your idea works and people like it
• Rather than fundraising, bootstrap your startup (do it yourself with no external investors)
  • Bootstrapping will not only let you risk less, but also increase your creativity/resourcefulness
• THE IDEA VALIDATION PHASE
  • Once you have an idea, you need to validate it – check if people actually want to buy/use it
  • Based on people’s feedback, you then tweak/rethink your approach until the customers/users LOVE your product (enough to share it with others)
  • In this early phase of your startup, you should split your time ONLY doing two things:
    • Building your product
    • Speaking to your customers
  • Note – Ideally, before building your product, you should speak to the customers to see if they’ll be intereted at all – the best form of this is getting pre-orders or crowdfunding
• BUILDING AN MVP (MINIMUM VIABLE PRODUCT)
  • To get your business started, you need to build a MVP
  • Minimum = simplified, just core features that solve the customer’s core needs
  • Focus on exactly what the customer wants to solve – don’t be distracted trying to do more
  • You have to build something that’s crappy but solves the problem – it doesn’t matter if the product doesn’t look good, sometimes crashes, has typos/mistakes
• GROWTH SCRAPPING
  • Before product-market-fit helps you grow virally, you need to directly reach out to customers/users through messages, social media, email etc (known as growth scrapping)
    • You’ll get rejected a ton – so mindset and resilience is critical
  • You should “do things that don’t scale” (Paul Graham) in the early days
    • Personalise messages, meet people face to face, offer amazing customer service
  • Be careful about measuring based on vanity metrics – these are numbers that grow but don’t represent the most important thing for you to measure
    • Example – social media followers isn’t as important as sales/downloads for your product

Chapter 17 – Fundraising

• Your job as a founder who fundraises is to make a startup that’s investable
  • But remember – you’re starting a company to serve customers/clients/users, make a profit and have a positive impact on the world – not raise money
  • It’s important to know the basics (not the details) of fundraising – outlined in this Chapter
• When asking investors for funding, it’s important to have traction and proof of growth first OR proof that you’ve built a successful startup in the past
  • You want to avoid asking investors to just invest in an idea with no growth
• Funding a hyper-growth startup follows this sequence usually:
  1. Using your own savings
  2. Bootstrapping (using your revenue/sales)
  3. Fundraising from family, friends and fools (an unfair advantage on its own)
  4. Government grants and competitions
  5. Private angel investors (rich individuals who invest in startups privately)
     • Angel investors usually expect less traction (vs VCs) and their investments are usually based more on their confidence in the founding team
  6. Venture capital (instituions that invest professionally and invest larger sums)
     • They dig into your company and look at your team, traction, growth and total addressable market
     • If a VC invests, you’ll be accountable to outside share-holders in a very significant way
  7. Private equity (like VCs but for more mature companies)
  8. IPO or acquisition
• When fundraising, research which investors you want to target – don’t just pick any. Look at:
  • Industries and businesses – do they usually invest in your kind of startup?
  • Ticket size – how much do they typically invest?
  • Application process – what are the steps you have to follow to apply to them?
  • Decision-making process – what are their criteria for investment?
  • Location – which countries/geographies do they usually invest in?
  • Value-adding investor – can they add more than just money (e.g. contacts, advice)?
• HOW TO PITCH TO RAISE FUNDING
  • At the pitching stage, communication is key – make sure you’re concise and to the point
    • Avoid jargon, marketing speak and be brief, clear and specific
    • E.g. don’t say “we’re revolutionising social media”, say exactly what your startup will do – e.g. “we are getting rid of the news feed”
  • For the content of your pitch, answer the following questions:
    1. What does your startup do? (Keep it simple)
    2. What problem are you solving? (represent your key Insight)
    3. How big is the market? (i.e. TAM = no. of customers x how much you charge per cust.)
    4. What is your traction? (how many customers you have and your growth)
    5. How will you make money? (needs to be clear)
    6. Who are the team? (highlight your individual status/credibility e.g. achievements)
    7. Who are your competitors?
    8. What is your Unfair Advantage? (using the MILES framework)
       • E.g. “with our strong network in this industry, we are uniquely placed to be able to reach the customers and sell our product to them”
    9. How much money do you want to raise? (Be specific)
       • If in doubt, raise more than you need to avoid another round of fundraising
    10. What will you spend that money on?
• PITCHING TOP TIPS
  • Use storytelling skills to keep your pitch interesting and coherent
  • If you have no traction – sell your vision, team or some other validation of the product
  • Tell investors your growth forecasts (even if they’re inaccurate) and explain your thinking
  • If you’re pitching to VCs, don’t spend too much time talking about market size (they’ll have plenty of data) – just make sure market size is billions of dollars if you want them interested
  • Try to find investors who really believe in you
  • Keep crafting your investor story and customer solution story at key milestones and use two different decks for both
  • VCs want to bet big – show them your path to $1M, $5M, even $100M revenue
  • Don’t forget – investors care mostly about cash and the return they’ll get
  • Quick way to learn if somebody is interested in your startup – ask a simple question like “Can I send you my deck for feedback on slide 7 please?” and then email over a short deck
  • If you want referrals/intros – make it easy for people to refer you by writing them a pre-written email they can edit and send
  • Always try to get warm intros to VCs – get on their radar, follow their recent investments and read their tweets for example
• PITCHING NO-NOS
  • “We are building an app, website or MVP” – try to already have it built
  • “We don’t have competitors” – suggests you haven’t researched enough
  • Jargon
  • “Hurry, we are closing our round now” – creating false scarcity is irritating
  • Complicated pitch decks with 30 slides
  • “We haven’t tested any of our ideas yet”
  • “Co-founding teams need big salaries” – investors want their investment spent on marketing and product development
  • “We just need money – not your help” – investors want to feel useful beyond cash

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