What They Dont Teach You At Stanford Business School

Stuff you can't learn in B-school: LARRY CHIANG

What is the best business to start with the lowest overhead?

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Answer by Andrew Bellay:

I need to be brutally honest here. I typically reject requests to answer questions like this but you (and others) need to hear this. Your question demonstrates that you don't really have a clue, but that's OK as long as you're willing to learn and bust your ass.

The best way to start a business (especially one with low overhead and one that doesn't require a lot of skills) is to cheat.

No, don't cheat, but… C.H.E.A.T.

1) Choices
2) House Advantage
3) Experience
4) Attitude
5) Team

In your specific case – given that you're a recruiter – I'd recommend that you start a recruiting agency on the side. There's no overhead, you simply take a 10-25% cut of first year's salary as a success-fee, you already have many of the skills & experiences that you'd need, and you wouldn't have to quit your day job until you were ready! That's the best business for you to start with the lowest overhead.

1) Choices – Use history, the advice of others, and the experiences you've already had in life to make the smartest decisions possible. Believe it or not, you ultimately choose which games you're going to play in life. Pick a game that you can win at or create one where you can't lose. I noticed that you're a corporate recruiter – can you moonlight in a non-competitive way to get your own recruiting business off the ground?
2) House Advantage – You have resources available to you now – use them. For example, I see that you live in Dallas. Dallas – and much of Texas – has a much stronger economy that the rest of the US right now. How can you leverage that to your benefit? Maybe you can build ties with UTDallas, UTArlington, and other local universities to build a recruiting funnel?
3) Experience – Get out of your comfort zone and try new things that might open new worlds of opportunity for you. Get new experiences while fully leveraging your past ones. You have experience recruiting already. What experiences would you need to gain before you felt comfortable leaving your current job and started working for yourself?
4) Attitude – Recognize that you are in control and that failure is simply a pre-requisite to learning. Stress, fear, anxiety, and most emotions are often times a choice. How can you fail in safe ways while also realizing that failure isn't usually as bad as we fear it will be?
5) Team – The coolest thing about a small business or start-up is that a few bright & hard-working people can come together and literally create value out of thin air. Build the right team around yourself and learn to effectively lead. You'll have both an optimized business where people are reaching their full potential, but also have a fulfilling work-environment that you love to come to every day.

You already have a big team on your side. Think about all of the people who you've interacted with as a recruiter. You have a budding relationship with each of them and it's your choice to either nurture those relationships or not!


In broader terms & so that this answer is useful to other folks: C.H.E.A.T.

1) Choices – This is all about strategy

  • Use history, be educated. Life's too short to reinvent the wheel. Use the past as a beacon for your future.
  • Know the rules, master the game. Sometimes in life you have to play by the rules (let me know when you defy the rules of gravity…), but you better damn well know what games you're playing and what rules you're playing by. Wherever possible, break the rules or – better yet – redefine the game with the rules in your favor.
  • Only you make it happen. Persistence pays off and there are a million examples to prove it. Ask until they say "Yes" or "Fuck off" – put the other person in the position to be the asshole. Find your well and go back often to get a drink and get rejuvenated.
  • Stop screwing around and devote yourself. Way too many people are half-committed to things. And I'm not talking about spreading yourself thin – that's another issue. You can have 10 projects and be devoted to each one… You can't be 100% devoted to each one, but you can really be passionate about each one and move each one forward at a reasonable pace.
  • Quit your day job (when you're ready). Your day job is so over-rated. It's expensive, tears you down, and it's not even a good investment. You're not learning anything anymore, you're not progressing in the world anymore, you're not having fun, you're not even making that much money. What a shit deal. Quit, put your feet to the fire, grow, learn, and crush life.
  • Fail fast through experiments. I believe in chance. I don't believe in luck. We all throw around this luck word all the time and yet only idiots truly believe in it. Stop hoping to get lucky and play the odds in your favor. Stop making bad investments of your time and money and start designing smart experiments to separate good and bad experiments.
  • Fake it til you make it. Create a self-fulfilling prophecy. Project your future success and you will be a success. Project your failure and you'll be a failure. You're not always going to have the resources that you need at your finger tips. Beg, barter, and steal what you need to be a success. Put yourself in a position where you have no choice but to succeed.

2) House Advantage – Stack the cards in your favor

  • Money, Time & Energy. Your time and energy are your most scare resources. When working, have a process in place to first make decisions and then execute on them. Focus on high-leverage, high-ROI, effective activities.
  • Maintaining & Gaining Perspective. Get mentors, get peers, get mentees, practice being creative.
  • Leverage What You Have To Get More. You're building something on your existing foundation. Ask for help. Find people who will buy-in to your vision (you need to craft a vision first…) & partner with them. Your time is a great currency to buy other things (not money) with.

3) Experience – Get all you can

  • Knowledge As An Experience Substitute. Borrow and Steal from everyone else – Read the top 2-3 books in each field of interest, network with people who know things you don't (relative experts),
  • Fail Fast Through Agressive Experimentation. There’s honestly not much more to say here.
  • Fake It Until You Make It. Do things you're not qualified to do.

4) Attitude – Be all that you can be

  • Everything Is A Learning Opportunity. Change your attitude: Everything is a learning opportunity. Write – when you write you start processing experiences in new ways and actually learning from them.
  • Persistance And Confidence. Be ego-less & learn to make smart decisions. Define go/no-go points for ALL projects so that you don't over do it. Teach yourself decision analysis.
  • Execution Is Everything. practice executing; pick your top three priorities of the week; make tiny goals; divide the tasks ruthlessly into the next actionable step; execute, measure, improve; Dread List (change tires, change health insurance, sell some stuff on Craigslist…); 1) write it down, 2) keep it in front of you 3) id metrics, establish go/no-go points, execute, stick with them.

5) Team – People are the best and worst of life

  • Network Building. Its not what you know, its who you know; People, Relationships, and Networks are everything; You are not squeezing enough out of your network, because you don't have the right tools.
  • Incentives Are Everything. Always remember incentives for yourself and for others… starting with Basic Needs; When someone isn't acting according to plan, review their incentives; Alter them by making them more time-relevant; Build in the tightest feedback loops possible.
  • Learn To Negotiate. Separate people from principles, don't bargain for positions, get emotions on the table if you have to, state interests, brainstorm solutions, etcetc; None of this is possible if your attitude sucks so fix that first. Go take a walk, have a drink, punch a wall, call you mom, dad, mentor, or trusted friend, whatever you need to do to 1) calm down and 2) gain perspective on the issue.

Plus: see Mike Driver's (and many other amazing) addition's below!

Check out my other, less snarky, posts here: Meta Style
Follow me here: Andrew Bellay


[EDIT: This is one of the top 100 answers in Quora history!]

[EDIT: I'm seriously blown away – & humbled – by how much attention this answer has gotten. Thank you to everyone for the up-votes, dozens of DMs, comments, and other awesome answers. …some folks were turned off by my honest approach to a question that can only be summarized as: "What business can I start without any real skills?" (read the question). But as I said in my answer, I feel the need to brutally honest when answering questions like this – but my aim is always to be hard on the issues and softer with the people! Thanks again!]

[EDIT: After nearly 18 months of this question being collapsed – for reasons that escape me – Quora mods have finally made it live again! If you like this answer, pretty please (with sugar on top) share it by clicking the share link below! Thanks, bellay]

What is the best business to start with the lowest overhead?

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Written by Larry Chiang

August 23, 2014 at 8:23 pm

Posted in Uncategorized

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