The Art of the Start – Guy Kawasaki [Book Summary]

by Nick

Entrepreneurs Should Strive to Create Something Meaningful.

Most often, people do not want to create companies but only get rich quick. This is the wrong approach. Entrepreneurship is not limited to making a profit. By creating products and services that make the world a better place, you create something truly meaningful.

Helping people is an important component of a company’s success. It’s more difficult to become a leading entrepreneur if you don’t “do good”. Money is not the best source of motivation.

“The Art of the Start” teaches you to begin with formulating a short, powerful mantra that reflects your goal. A mantra is a simple, often repeated statement that reminds employees why a company exists.

Example. The Nike mantra reads: “Everything is for real sports”, and Disney: “Fun for the whole family.”

The mantra differs from the company’s mission in brevity, certainty and is easier to remember.

Example. The mission of Coca-Cola is: “Coca-Cola exists to bring grace and freshness to the world.” This is too hard to pronounce. But if you formulate a mantra, you get something like “Let’s refresh the world!” – it is more catchy and easier to remember, isn’t it?

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There is No Place for Improvisation in Business: Build an MCT System (Milestones, Calculations, Tasks)

Many startups work in chaos: no one knows where the company is heading and how close it is to its goals. Do not let this happen. Define the MCT system in advance: milestones, calculations, and tasks.

Milestones demonstrate the development of the company. These are the most important events on the intended path to success, the fulfillment of key tasks or the adoption of an important decision.

Example. The first milestone of a startup can be a “concept check” of a product or service, proving the economic feasibility of the project. The next milestone is the creation of a prototype, then – raising funds for the release of the first batch of products.

To successfully pass the milestones, you must realistically look at the calculations of your business. Make a list of calculations that can affect the achievement of milestones, and regularly monitor whether they are relevant. If not, respond immediately.

Example. You open an atelier and assume that fabrics will cost $ 1,000 per month. Vendors then raise prices and your costs reach $ 2,000 per month. Obviously, you have to find new suppliers or raise prices.

Make a list of the tasks needed to produce, sell, and support your product that will help you reach your milestones. This is something secondary, but no less important (for example, renting office space or social insurance for employees). These things must be taken care of.

The Consumer Must Clearly Understand What the Company is Doing.

The simpler the positioning, the better. Ask yourself: “What are we doing?” The consumer must have a reason to buy your product.

How to achieve good positioning?

Make sure customers understand what your mission is and believe in you. The consumer must see that the company exists to satisfy a specific need.

Positioning should appeal to the target customer group.

Example. The company sells software – security systems for banks. Which statement would you prefer: “Improving the security of websites” or “Reducing the risk of fraud during online transactions of commercial banks”? The latter is clearly more effective when addressing the target consumer.

Use an individual approach to customers when positioning.

Example. If you have developed a new type of sunblock, do not say: “The cream will reduce the global cancer rates by three percent,” it is better – “The cream protects you from melanoma.” So the buyer immediately understands why he needs a cream.

Pitching Tells the Audience What You Do and Why It Matters.

An entrepreneur will not succeed without interest in others. Therefore, pitching is so important: presenting your business idea in such a way that it interests others.

How to present the idea?

  1. Always start with what the company does. This is the first thing the audience wants to know. The entry should be short and to the point. Do not load listeners with excess information.

Example. “We sell software” or “We are educating children from low-income families.”

  1. Explain to the audience why what you say is important. The audience does not have your experience and knowledge, so your words are not so significant for them.
  2. To achieve mutual understanding, when preparing a presentation, constantly ask yourself: “So what?”. Use a few illustrative examples.

Example. If you are an expert in audio technology and proudly declare: “Our hearing aids use digital signal processing” – this will not tell investors anything. “Our hearing aids use digital signal processing.” “So what?” “This makes the sound cleaner.” You can give an example from life: “Even in a noisy room, you can perfectly hear your interlocutor.”

Every Startup Needs a Business Plan

There is some truth in the saying, “You are preparing for luck – you are preparing failure”. It is not for nothing that companies draw up a business plan – an official document setting out goals and methods for achieving them.

For a startup with many uncertainties, a business plan may seem futile. But this is not so.

  1. Investors will definitely require a business plan, although they may not read it. Do not even dream of attracting financing without a business plan.
  2. The preparation of a business plan itself has certain benefits.

Example. The team is working together on a plan. This will either rally the team, or you will realize that you will never want to work with these people again and immediately eliminate potential problems.

  1. By drawing up a plan, it is possible to identify problems and future tasks that would not have arisen without formal planning.

Example. You can understand that two people in a team are doing the same thing, or that everyone has forgotten about customer service.

What is the secret of a good business plan? Just focus on the summary: a summary of the document in four paragraphs. This is the first thing that people will read, and you need to interest them to read further.

The summary clearly and concisely explains what problems you solve and how you plan to do it, and also presents your business model and the “highlight” of the product/service. Do not forget to evaluate the resume yourself: print the text and read it.

If it interests you, then everything is correct.

If You Cannot Get External Financing, Focus on Creating Cash Flow.

Many startups owe money to early-stage investors. But you can create a startup using bootstrapping, that is, without external investment. For successful bootstrapping, you need to focus on creating cash flow. After all, you need to pay bills, rent, pay salaries to employees and so on. Set priorities depending on how fast you get the money.

Example. The client wants to order a website design, which will take about six months to develop. But your company will go bankrupt in eight weeks, so you have to either abandon the project or ask for an advance.

You can improve the financial situation by deferring expenses. Agree to improve payment terms with suppliers so you don’t have to pay them the full amount right away.

Do not wait until your product is perfect before selling it. You will go bankrupt while correcting all the shortcomings.

From sales, you will receive an immediate influx of funds and reviews about your product from real buyers.

Perhaps the quality of the products will be insufficient, which will damage the image of the company. To avoid this, first sell the product in a small, isolated area or market. So the damage to the reputation will be localized.

You cannot fix one thing – product safety! She must be top-notch before the first sale.

Hire People Better Than You and Fire Those Who Can’t

Hiring employees better than you is essential for success. Imagine that every employee hires someone less capable – the company will inevitably be filled with bad employees.

To rephrase Steve Jobs: if class B players hire class C players and class C players hire class D players, the company will instantly fill up with class Z players.

Do not be ashamed to admit that there are more capable people than you. But you need to be confident in order to take them to work.

It is important to identify people who are not fulfilling their duties and dismiss them. It is difficult, but each employee is expensive: wages, renting office space and time for management – all is wasted if the person is not worth it.

How to identify unproductive employees? When hiring people for work, set individual indicators for them and determine the periods during which you will evaluate the results of achieving these indicators.

Example. You are hiring a seller. His indicators may include the successful completion of training, the development of the client base and the first ten calls to customers. The evaluation period should be about 90 days. Both the employee and the company must understand whether it is worth continuing to work together.

The Partnership Must Bring Tangible Material Benefits.

Startups cannot remain such forever – they either develop or become bankrupt. Startup growth can be fostered by partnerships with other companies.

Partnership Success Factors:

  1. Be selective. Only enter into partnerships that can positively affect your financial situation. A partner should reduce your costs, accelerate product development, or help you enter a new market. The benefits should be tangible.

Example. Initially, Apple partnered with Aldus Corporation, the producer of PageMaker. Apple needed a revolutionary novelty running on their computers, and Aldus needed a channel to sell its product. Through partnership, both companies flourished.

  1. We need a responsible executive responsible for partnership activities. If every employee of your company feels partial responsibility, nothing will come of it. The responsible executor should be a person who sincerely believes in the potential of partnership and has the authority to receive everything necessary from the departments of the company.
  2. The partnership should be mutually beneficial, but we need a plan to get out of it if necessary. The circumstances change, and when the time comes, you and your partner must clearly understand how to properly complete the cooperation. Understanding this from the very beginning will facilitate collaboration.

To Create a Brand, the Product Must Be “Contagious”

Every businessman dreams that one day his startup will become internationally recognized. How to turn your product into a legend?

Work on creating contagious products. People must be “infected” with the desire to buy them. To develop such a product is not easy, but there are basic principles:

  1. “Infectious” products are cool.

Example. Only Apple managed to release such a cool MP3 player as the iPod.

  1. “Contagious” products are effective, that is, they flawlessly perform what they are created for.

Example. TiVo became the legendary digital video recorder because it was easy to record your favorite TV shows. With uncomfortable use, no one would hear about it.

  1. “Contagious” products are easy to distinguish from competitors.

Example. You will never confuse a “hammer” with another car.

But even a “contagious” product or service is not enough to create a recognizable brand. We need to create a consumer community that supports users and makes the use of a product or service more enjoyable.

Example. Dedicated Coca-Cola fans have created a Facebook page with over a million followers.

If consumers haven’t created a community on their own, expedite this process by asking the most enthusiastic customers to do it for you. They will be happy to help, especially if you allocate funds for the promotion and conduct of events, as well as appoint a responsible employee of your company as their representative.

Keep an Eye Out for Contingencies

Example. Most likely, you do not know about Univac, which once occupies a leading position in the computer market. The company made a fatal mistake: it regarded computers as complex tools intended for scientists and produced machines suitable only for complex scientific calculations. Another company realized that enterprises were also interested in computers, and began to produce machines oriented to the new market. The name Univac has long been forgotten, but you definitely heard about the second company – IBM.

Do not jump to conclusions. Look for implicit customers and applications for your products. If your product is used by unexpected people or ways, do not panic, but take the opportunity. Do not make a Univac error.

Be prepared to turn your attention if you cannot attract the “obvious” target audience.

Example. The obvious target client for any startup is a prestigious, branded company that would serve as an example for others, thereby promoting your product. But these companies usually buy goods only from other reputable companies.

If the customer of your dreams does not understand why your product is good, forget about it and pay attention to buyers who are ready to try your product.


Companies are created with the goal of benefiting the world, not making money. Focus on generating cash flow and finding unforeseen market opportunities, and you can successfully develop even without investors.

  • Start by getting attention. The main part of any business plan is a resume because it is they who are read first. The same goes for other documents and presentations. Trying to sell a product or pitch for investors, you need to immediately grab the attention of the audience. From the very beginning, state shocking facts and vivid examples from life.
  • Do not rely on improvisation. Stick to the MCT system. Identify milestones – the most important events on the way to the goal. Make calculations and regularly monitor their relevance. Make a list of tasks that are secondary but necessary.

Why You Should Read “The Art of the Start”

  • To find out how to start a successful business
  • To have an edge over your early competitors
  • To separate yourself from amateurs

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