My 3 Key Takeaways from "The Hockey Stick Principles" by Bobby Martin
🔖 Summary in 3 Sentences
The journey of a startup: an idea, to building it, to finally see it take off, then decide whether to sell it off. The dos and don'ts in each of the stages. And what's at the end of the journey.
🧑🏻💼 Who Should Read It?
Anyone who is working on a new idea, who is struggling in the initial stage of building a new business, who is managing a company that experiencing great growth, and who is looking to sell his/her business.
🔑 My 3 Key Takeaways
It's okay to take "love money".
Taking love money is nothing to be ashamed of when you're open and optimistic.
We might be reluctant to ask friends and family to invest in our risky start-up. We might feel brazen to ask for money from the people we love. But if we upfront with the challenges we going to face, the prospects for growth, the plans for achieving it, and be clear about the risk of failure and they might never see their money again, then there's no reason to be ashamed of. They are investing in your business not because they know anything about it or think you are going to succeed. They are investing because they love you.
Focus on accelerating what's working, not keep making changes.
We had started to dream in billions when we should have been focused on making one day simply better than the one before it.
Fab.com sells carefully selected items from high-end designers all around the world. Acting as a platform for third-party producers to sell their products, allowed them to avoid holding inventory and warehousing, which is crucial to their business model. With the early success, they managed to raise more than $330 million from big-name VC includes Andreessen Horowitz, and started to scale up their growth. Their key issue is the fulfillment of the sales is done by the third-party producer, making the customer needed to wait for a couple of weeks for their product to arrive. To fix this issue, Fab.com decided to hold inventory in their own warehouses to speed up the fulfillment. But soon, they end up holding a large volume of unsold goods. And they tried to hire more staff and have more resources to fix it but it ends up nowhere. Finally, the company is sold to PCH for $15 million (they're once valued at $1 billion).
To sell or not to sell?
When you're selling your business, you're selling your passion.
When it is time to decide whether to sell your company to a bigger player or keep on building it, what will be your choice? The author of this book, Bobby Martin sold his company, First Research to the market leader, Dun & Bradstreet. He has been asked if he could do it all over again, would he sell? As he reflected through the years since the sales, and his answer is no. The reason is not that he thinks he can get a better deal, instead, it's that he enjoyed working at First Research so much. "What I had was already great – much greater than having money and options". When it's your turn, what will be your choice?
💭 Afterthought
When I first read the book, it felt similar to a book I read before, "Good To Great" by Jim Collins, which I highly recommend everyone to read. I like the narrative of the book, it takes you on a journey through each stage of a business, and each section is packed with case studies of different businesses. There are 91 dos and don'ts (in the book it's called "The Hockey Stick Principle"), spread throughout the chapters. Many of them resonate with my own experience in starting a business. Overall it's a great book to read if you're starting your own business! 👍🏻
🛍 How to Buy?
I bought it on Bookxcess's official website @ RM17. But later found out that it can be bought at a much lower price @ RM11 on Shopee. Click here to buy it on Shopee.
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If you have any comments or feedback, feel free to drop an email at barnabas@ebteq.com. Cheers✌️