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Review: Reality Check by Guy Kawasaki

Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your CompetitionReality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition by Guy Kawasaki
My rating: 4 of 5 stars

Another of Guy Kawasaki’s excellent handbooks for startups. He dispels many myths and provides practical steps to starting and growing a business. The chapters are short but thought-provoking, and will enhance your “entrepreneurial quotient” whether you sell products or services.

Kawasaki expands on the lessons of The Art of the Start, which I found very worthwhile (read my review). In addition to his ample firsthand experience, Kawasaki includes interviews with experts, research from recent studies, and wisdom from popular books. I liked the advice on starting, executing, innovating, marketing, and selling. I skimmed the chapters that aren’t yet applicable to me: fund raising, hiring and firing, and managing.

Raising money
“Venture capital is something to do at the end of your career, not the beginning. It should be your last job, not your first.” You need real-world experience, ideally in engineering or sales.

Planning & executing
A business plan should take less than 1 week to write and be less than 20 pages. Write deliberate, act emergent: write as if you know what you’re going to do, but execute flexibly to react to new information and opportunities.

The primary goal of a startup: don’t run out of money.

Bootstrapping
Cash flow is more important than profitability.
Ship when the product/service is good enough, then improve it.
Focus on function over form.

Innovating
Build something that you want to use.
Make meaning. Enable people to do old things better, do things they always wanted to do, and do things they never knew they wanted to do.
Don’t worry, be crappy. Don’t wait for perfection; the first version can be crappy.
Don’t stay crappy. Improve every version.
Don’t be afraid to polarize. Create great products that make segments of people very happy, even if it makes other segments unhappy.

The purpose of innovation is not cool products but happy people.
To be successful, be the sole provider of something people really want.

The most powerful ideas in business are the ones that set forth an agenda for reform and renewal - the ones that turn a company into a cause: strategy as advocacy. Reshape the sense of what’s possible for customers.

Marketing
The most important lesson of marketing/branding: do one thing well.
The foundation of successful branding is to create an excellent product/service.

Selling & evangelizing
Sales fix everything. Sales means cash, and cash means you can fix your team, technology, and marketing.

People don’t buy revolutions. They buy aspirins to fix the pain or vitamins to supplement their lives.

Beguiling
Give people value and they’ll want to return the favor.
Every time someone thanks you, immediately ask for a testimonial or referral.

Influencing
Reciprocation. Take care of your customer, and they’ll take care of you.
Scarcity. It’s easier to sell your product if people perceive it as popular and in short supply.
Authority. The customer will believe in you if you’re knowledgeable.
Liking. Customers will only buy from you if they like you.
Consensus. Customers are more likely to buy when everyone around them is buying your product.

Don’t point fingers, just fix the problem.

Schmoozing
It’s not what you know or who you know, but who knows you.
Ask good questions and listen.
Unveil your passions.
Follow up.
Give favors, return favors, and ask for favors.
Make small talk to discover common interests and experiences.

Sucking up
Appeal to empathy. Take advantage of people’s desire to help an underdog.
Provide present or future value.
Thank for what you’ve already received.
Give favors.

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