Category Archives: Entrepreneurship

What is a hustler?

“Birthdays was the worst days, now I sip champagne when I’m thirstay…”

“Birthdays was the worst days, now I sip champagne when I’m thirstay…”

Hustler can mean a lot of things. For many people, it’s a pejorative term.

In the 1993 rap hit, “Juicy”, Biggie Smalls talks about how he was forced to hustle on the streets in order to support his baby daughter. So for some, a hustler is a criminal.

When I was in third grade playing soccer, my coach used to scream at me to show more hustle during practice because I was so lazy. This is my personal negative association with the term, of being forced to hustle at soccer practice when I could have been at home playing video games on Saturdays (I had different problems than Biggie).

But today I love the word hustler. In fact, it is one of the greatest compliments I can give to someone. In the startup world, a hustler is someone who doesn’t let fear get in her way. Even when she’s in over her head, lacking a certain skill or network, she puts her head down, learns what she needs to learn, and succeeds no matter what. This is a resourceful character trait that I look for in all people I want to do business with.

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How Chris Dixon helped me handle Fear

Thanks dude!

Thanks Chris!

Oh shit.

That’s all I could blurt out. I was at the ATM staring at my Chase business checking account balance and the number staring back at me was $500.

Oh shit.

An $8,000 bill that my business owed was scheduled to post tomorrow. Earlier in the day, I hounded a client about a slightly late payment they owed for a big marketing campaign. The VP I spoke to curtly assured me that the payment would arrive the next day.

Oh shit.

Running through the logistics in my head, the mailman arrived at my office every day around 3:00 PM. That gave me about two hours to collect the client check (assuming that it indeed would arrive) and deposit it in the bank. If the $8,000 bill posted at the end of the day, I’d be okay. If it posted earlier, then I’d now have to deal with a bounced check, which was sure to create headaches for the line of credit I had applied for at Chase…

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My pathetic Profit & Loss Statement from 2006

This is a snail

Photo source: Wikipedia

Businesses take time to grow.

What I hate about Silicon Valley is that this ecosystem puts a lot of pressure on entrepreneurs to grow their companies at unnaturally fast speeds, across all dimensions: user acquisition, headcount, revenue, even expenses.

I’m not saying that growth is bad. But I do believe that more often than not, a slower and more deliberate pace of growth early on can set an entrepreneur up for success later on.

What is the root cause of this pre-mature growth pressure among founders? It’s investors. When you raise money, you buy into a rat race that compels you to show progress toward a huge ROI for your investors. Some investors are patient, but many are not and want to see fast returns on their investment in a startup, pressuring founders to raise more funds or take quick exits. The way to get to higher valuations fast for the investor is fast growth.

I chose to bootstrap my last startup because I didn’t want to deal with investor pressure. I wanted to grow organically, at a speed that I dictated.

Today I’m proud to say that my company pulls in substantial revenue and is highly profitable. But the earliest days were ridiculously modest in terms of performance. The following screenshot is my company’s actual Profit & Loss Statement from 2006. Keep in mind this is eighteen months after I started my startup:

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Leaving the startup I founded 9 years ago

The Beat The GMAT Team

Today is my last day at the startup I created.

Nine years ago this month, I was in my dorm room at Stanford with a laptop on my lap and a credit card in my hand. I was about to make a $4 purchase for a domain name that would change my life: beatthegmat.com.

At the time, I had no intention of building Beat The GMAT into a business. All I wanted to do was blog about my experiences studying for the GMAT test as a broke college student.

That blog would later turn into a discussion forum, then a niche MBA news network, then an online community, then a social media platform, then a recruiting platform for MBA service companies and MBA institutions, then a highly profitable bootstrapped business, then an acquisition by an incredible education company.

It was the best $4 I’ve ever spent.

When I told friends this week that I would be leaving my startup after 9 years, they asked whether it is a bittersweet feeling. It doesn’t feel bittersweet at all. The business, the community, and our clients are all in great shape. It was simply time for me to let go and move on.

Rather, the primary feeling I have right now is gratitude.

I’m grateful to have worked on a project with a deep social stewardship mission, helping millions of people achieve their dreams with higher education;

I’m grateful to have collaborated with amazing team members who sacrificed blood (literally), sweat, and tears to make this venture succeed;

I’m grateful that Beat The GMAT could find a home with such an amazing parent company, who has done so much to further invest in the growth and potential of my startup;

And, I’m most grateful that I could share this journey with my wife, who quit her job and joined my startup right after our honeymoon.

Now that I am at the end of the road, I find myself reflecting a lot on Beat The GMAT’s long history. Here are a few moments that come to mind:

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Elon Musk

“Being an entrepreneur is like eating glass and staring into the abyss of death.”

— Elon Musk

Amen, brother.

Should you do a startup with your spouse?

Spouse Founders

DON’T DO IT.

That’s my initial gut reaction whenever someone asks me whether it’s wise to work with a spouse or family member.

My wife and I have been running our startup together for the past five years; don’t get me wrong, we love it! We enjoy the challenge of building a business together and appreciate the unique value that each of us brings to our work. Our work life is a huge source of joy in our marriage.

But here’s the truth: you can truly love someone as a person, but still be incompatible with him or her as a professional.

Not being able to work with someone you love says absolutely nothing about the strength of your relationship to that person. Personal complementarity does not correlate directly with professional complementarity. When conflicts arise with your spouse in a professional setting, you risk having those issues bleed into your personal life as well. For that reason, I believe that it’s generally too risky to work with a loved one because the cost of failure could be the failure of your relationship (how much is that worth to you?).

Nevertheless, if you still want to see whether you and your spouse can make it as a startup team, consider the following scenarios to test your professional complementarity.

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I lost so much money from this stupid startup decision

Shut Up And Take My Money

tl;dr: If you are a startup founder who wants an acquisition, then you probably want to form your company as a C-Corp. This might save you a crazy amount of money on federal and state taxes due to Qualified Small Business Stock.

There are very few things that I regret about how I ran my last startup, Beat The GMAT: my team bootstrapped a highly profitable business over multiple years; built a product that helped millions of people achieve their higher education dreams; and fostered a team culture that was close-knit and fun.

But I do have one serious regret: forming my company as an Limited Liability Company (LLC) instead of a C Corporation (C-Corp).

This little business decision cost me a ton of money when my company got acquired. The reason why: Qualified Small Business Stock (QSBS).

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