A solopreneur is usually (not always) a digital entrepreneur who leverages automation, work flexibility, and creativity to develop ultra-lean business models. Those can scale over the one-million-dollar revenue mark with a minimum business overhead, no venture capital funds, and mostly bootstrapped. Those solopreneurs start by mastering profitable microniches.
- Clarifying the meaning of solopreneurship
- Solopreneur vs. startupper
- Step one: Start from a business model rather than a business plan
- Step two: It’s all about your Blue Sea and the Smallest Viable Audience
- Step three: Target Ramen Profitability
- Step four: Bootstrap your way through
- Step five: create options to scale
- Bringing it all together
Clarifying the meaning of solopreneurship
In the business world the solopreneur is seen as the owner that does, from A to Z, all the functions and tasks the requires to survive.
Yet a solopreneur doesn’t necessarily do everything on her own but instead focuses on devoting the whole focus on the most critical part of thewhile contracting (if necessary) the remaining portion of the company.
Where the classic start-up vision of an exit. Either through venture capital acquisition or an IPO.(the Silicon Valley archetype) is about building a company with the grandiose
In many cases, the solo businesses will transition toward becoming a small company (like DuckDuckGo solo-business that turned out in a profitable and successful venture-backed business).
In other cases, the solopreneur might limit the growth of the company as a choice of freedom. In short, for the solo business isn’t just about money but also about the kind of business you might want to build.
Solopreneur vs. startupper
The solopreneur approach might well be the opposite approach compared to the Silicon Valley-type, which primary aim is to build that scale but that also requires a lot of maintenance and large employees’ base.
The solopreneur makes the opposite choice. Thus, let me recap in the following points how solopreneurs might differ from startuppers:
- Bootstrapping vs. funding: bootstrapping is the primary mode of growth of the solopreneur
- Passion vs. planning: the solopreneur is often fueled and build on top of passion and choice rather than opportunity alone
- Non-linear income vs. financed and artificial growth: the solopreneur puts work in building scalable assets, due to the limitation in resources for the business, that is a key element for the success of the business
- More key customers vs. more customers: due to constraints in terms of structure, finances and time, the solopreneur has to make hard choices very early on. Thus, giving up that part of the business or those customers which are not key to its strategic long-term success
Step one: Start from a business model rather than a business plan
Rather than drafting a business plan, which is suited for those entrepreneurs looking for outside financial resources. The solopreneur has to look for simple tools to start and grow its potential business.
Step two: It’s all about your Blue Sea and the Smallest Viable Audience
Once found the gap in the market, it is then crucial to niche down. In other words, you have to drill into that specific segment of the market until you find a potential target audience (from a few hundred up to several thousand people), which will be your manna.
Related: The Blue Sea Strategy
Step three: Target Ramen Profitability
Serial entrepreneur and venture capitalist Paul Graham popularized the term “Ramen Profitability.” As he pointed out “Ramen profitable means a startup makes just enough to pay the founders’ living expenses.”
In short, all the expenses that you are going to incur. Imagine, for instance, that you always dreamed of traveling the world. What does that mean? How many countries are you going to travel while setting-up your Muse? For how long will you stay in each country? How much would you pay off rent, travel, and living expenses?
It might sound complicated at first, but once you set this up, your goals will be much clearer. In fact, Tim Ferris makes your life easier by making a great tool available: The Monthy Expense Calculator.
In short, this tool tells you line by line what expenses to take into account. After you have to divide by 30 (to get the daily budget) and add a 30% buffer (you must be ready for any emergency).
Step four: Bootstrap your way through
Step five: create options to scale
The most important concept to understand is that of creating options to scale.
Bringing it all together
- Identify a microniche
- Draft a business model
- Bootstrap your way through organic growth
- Create options to scale
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