How Do You Determine Your Startup’s Valuation?

How Do You Determine Your Startup’s Valuation?

How do you measure your company’s growth?

Growth is essential to a startup’s progress, but growth can feel like a totally abstract concept to a company looking for concrete ways to measure their success.

Do you measure your growth by the number of customers using your service? Do you measure it by the amount of revenue taken in over the quarter? These are both decent ways, but in a more general way, you measure the company’s size based on its valuation.

But what is valuation?

Valuation is another way of asking the question “what is this company worth?”

What is the actual dollar amount its stock should sell for?

Startups will usually go through a valuation process when they raise money. Early on, this valuation won’t reflect the actual revenue stream of the company (because there won’t be a real revenue stream to speak of) but will be sort of a made up quantity that a venture fund offers you in exchange for a percentage of your company.

The formula for understanding how raising money in this way works looks something like this:

The percent of the company someone buys =
$ amount of money they invest /
($ of money you’re worth + $ amount of money they invest)

If the math on this seems a bit daunting, don’t worry; it’s actually pretty simple.

Let’s think about it using some real numbers. If you have a company worth $10 million and a venture fund puts up another $10 million, your valuation is $20 million. So they haven’t taken any portion of your company, but have added to its value by putting money into it. Now, since there are two people putting up equal portions into the company, the venture fund has 50% of the company.

That’s assuming your company is already well along into its development. But to think of how this sort of valuation aids you, let’s think about a company looking for seed money.

You need about $100K to get started and a venture firm puts up that amount, asking for 10%. Running the math backward through our formula, you can say $100K/10% of the company = Valuation at $1 million (in reality, it would be a little higher than that, since your company already has a little money, but for the sake of the thought experiment, let’s assume you’re starting from scratch). In effect, the venture fund has raised your company’s valuation by buying a percentage of the company at a specific amount.

When a venture fund gives you money, how much of your company do they get?

Venture funds normally will ask for about 20-30% of your company when they invest. There’s no great reason why they settled on this amount. Basically, this is what the industry decided over time, and it just kind of stuck.

It may seem like a lot to ask, but really, this helps your company grow (more on this when we talk about dilution in our next video). How much they offer and the percentage they ask for depends a lot on what sector your company is in, the incubator and school it comes out of, and who is doing the investing.

As the company grows, it’ll find other rubrics it can use to find its valuation. Actual revenue flow will be a part of it, for one, but you can also measure valuation based on how many people are using your product, how many new users you have each month, and so on.

Key Takeaways

  • Valuation, simply put, is what a company is worth.
  • Older companies measure their value from things like revenue streams and users, but for new companies, their value is just tied to whatever funds they can raise at any given time.
  • A company’s valuation formula looks like this:
  • Valuation = Amount of money you have + amount of money investor gives you / percentage they buy from you
  • Venture funds will ask for 20-30% when they give you money. This is for no reason other than it being the industry standard.

Further Resources

The Startup Fundraising Series:

What Are The Different Stages of Startup Fundraising?

When you’re building a startup, how should you go about funding your company?

The early days of a company are virtually utopian: a founder and a co-founder batting ideas back and forth in an environment of perfect creative bliss.

Even the term we use for this creative space — the incubator — calls to mind the warmth and coziness and1 protection of a womb. There comes a point, though, when a company needs to move from ideas toward an actual product, and in order to do this, they need to think about generating money. But how to get money before there is a product to sell?

Well, when startups raise money, they do it with rounds of investments called the Seed Round, Series A-B-C, all the way until they either incorporate or sell. In each round, the company receives money from venture funds that focus on specific growth points at specific sizes.

Basically, you can break a startup’s funding rounds into the following stages:

  • Seed Round: This is usually a small amount of money given to a company to give it the momentum it needs to produce its initial product. Normally, the company will have a concept and will know that it has potential viability on the market, but they won’t have a working prototype yet. Seed money gives the company just enough runway to move from this early conceptual phase toward a product.
  • Series A: At the point when a company has a prototype, they can seek funding from a venture capital group to work toward bringing the product to market. The series A funding will be larger than the seed round (usually between three and seven million dollars), and will be offered in exchange for a portion of the company. Startups typically use series A funding to figure out the best business model for their company and to work out the nuts and bolts of moving your product into the actual marketplace.
  • Series B: By the time they’ve reached series B, a startup has a product and a business model and need enough capital to bring the product to a broader market. This represents a significant increase in the funding, from $7 million to upwards of $50 million.
  • Series C: This is all about fast growth. In series C funding, companies might move the work they’ve been doing in series B toward international markets or focus on diversifying their product for multiple different platforms.

How long do you spend on fundraising rounds?

Funding rounds can go on forever if the startup wants, but that’s not really practical. In each round of funding, you offer a piece of1 your company to your investors. That works great in the first few rounds, since the company’s valuation grows as people invest, but since you give up about 25% of your company each time someone invests, aft1er a couple of rounds of funding, you don’t have much left to offer an investor. At that point, it’s important for a company to either sell (like Instagram did) or to start trading publicly (like Facebook).

A good model for thinking about how this form of growth works is Instagram. They started with a $500,000 seed round, and then within two years of that raised a $7 million series A and a $50 million series B, before they were finally bought out by Facebook.

Generally, a startup can expect between a hundred thousand and a million dollars in their seed round. With each round of funding, the startup gives up a portion of the company (usually about 25%) to their funders. Occasionally startups skip the seed round and raise a few million dollars of series A funding right out of the gate, but the Instagram model above is much more typical.

Key Takeaways

  • Startups raise money in rounds of investments with venture funds that focus on specific growth points.
  • Most of the time, you’ll start with seed money and a short runway. More than a million dollars and you’ve skipped straight to series A.
  • It’s important to plan for growth. After too many rounds of funding, you won’t have much left to offer investors.

Further Reading

The Startup Fundraising Series:

Do You Want a Bigger Audience?

I recently gave a talk on audience growth, and while I don’t have all the answers, I do know a few things. I’ve learned both from my own experience and that of the people I work with (some of whom have much larger audiences than mine).

The common thread between people who hire me to do websites, consulting, buy my books, listen to my podcast, or take my courses is this: they want a bigger audience. Hell, I too wouldn’t mind a bigger audience of rat people sometimes.

First things first, this information falls entirely short if you do not start with the audience you’ve already got.

“Your current audience — the people who are already listening, buying, engaging — these should be the most important people to you.”

Your current audience — the people who are already listening, buying, engaging — these should be the most important people to you. Far above anyone you wish you were reaching. If it’s 10 people, 100 people, or even 1,000 people — if you’re not doing right by them, right now, none of this will make a lick of difference (aside: do differences lick?). Make sure you’re listening, communicating, and helping the people who are already paying attention to you.

The next thing to think about is your message.

This isn’t what you’re selling or what you’re writing about. It’s not even who you are. Your message is what you stand for. It is bigger than any single thing you do or say. It’s not some fancy content marketing strategic plan. It’s like a rallying flag that you use to direct your forward motion. It’s what makes you stand out beyond anyone else who has similar skills as yours.

“Your message is what you stand for.”

Your message helps craft what makes your unique voice cut through the noise. It’s what draws people to you (even if many other people are talking about the same topic or building similar products).

Unless your message is interesting to both you and your audience, one of you will get bored and drop off.

You may think that developing your own unique voice is easy, since, hell, it’s your voice. Sadly, this is not the case, especially in writing. Finding your voice takes work. It’s part internalization, part confidence, and part a damn lot of practice. I’m not sure developing your voice as a creator is something you can ever completely win at — you have to continually check in with yourself to see if it consistently aligns.

Your current audience, your message, and your voice are the groundwork. Next, you need to consider why audiences grow. Why do some people build sizeable groups of people who pay attention to them, and some people aren’t able to?

Growth happens when your audience shares what you do with their own audience.

Think about it. In order for your numbers to grow, people need to first hear about you. How do they do that? By listening to people they already listen to. If those people they’re already listening to mention you, you’ve got a good chance of adding them to your audience ranks.

Growth hacking isn’t always fancy tests and cool gadgets: in order for someone to want to share you with their own people, think about why you would share someone else’s work. Chances are, they said something smart, interesting, entertaining, or useful. You feel good about learning from them, you align with their message, so you want to tell others (and you do). Now you’re helping them grow their audience.

At the heart of it, audience growth requires each of the following things to be present:

  • Value: if someone is not getting value from you, they’re not going to pay attention. So value must to be present in order for your audience to grow. How do you figure out what’s valuable to your audience? You listen to them.
  • Message: what makes what you have to say unique? What do you stand for? An audience needs to react with, “Yes! This!” or there’s no hope they’ll tell their own people.
  • Consistency: want to show your audience you give a damn about them? Show up for them. Regularly. This is why I write and share every Sunday. And it’s why other creators set schedules for sharing, because if it’s not a schedule somewhere, chances are it won’t happen.
  • Generosity: trust and gratitude are built when you do something nice for someone else, with no strings attached. Do enough genuinely nice and helpful things for people, and they’ll start talking. You should want to do good things for your audience, because they are your audience.
  • Evolution: one trick ponies never see audience growth because they’re one-trick ponies. It might be exciting to watch the trick the first time, but by the 1,547th time, it’s kind of boring. Unless there’s newness, change, and exploration on your end, there’ll never be growth in your numbers. Creators can’t sit on their past work and coast for every long. Especially not online where our attention spans barely eclipse that of goldfish.

Your audience is not made up of numbers or stats or metrics.

Your audience is a group of individuals who share a common idea, value, motivation, or pain. Each one is more unique than they are similar. It’s easy to overlook the humanity when staring at numbers on a screen, but there are people on the other end of each of those numbers. People, each with their own lives, struggles, and satisfactions.

“Your audience is a group of individuals who share a common idea, value, motivation, or pain. Each one is more unique than they are similar.”

Looking merely for growth is not enough, and frankly, it’s a horrible goal. You can’t just wish it into being. You need to take lots and lots of small steps towards it: test ideas, analyze results, and adapt/change as necessary. Save the magic bullet for infomercials (they’re awful blenders at any rate).

Why do you even need growth?

When I was doing just web design, I only needed a few dozen clients a year. That was the perfect number of people paying attention for me to make a living.

For smaller products or services (like $5–10 ebooks), more are required. But, there’s also enough. Enough people where it still feels like a friendly small town and not a hostile city. Enough people where you can make a difference, and moreover, help them succeed. Because if you can help your audience truly succeed, they’ll reward you for it.

So when you’re thinking about what you can do to grow your own audience, consider these points we’ve just covered. I don’t have “5 easy tips to get the numbers you want, guaranteed,” but these ideas are worth thinking about if you want more people to pay attention to your work.

16 Things You Should Consider Before Going Freelance

Many people dream of being a freelancer: setting your own hours, working from home, and never having to work for a boss again sounds like perfection.

The grass is always greener on the other side, however, and going freelance can be a difficult transition. In this series of education and career interviews, we invite long-time freelancer and entrepreneur Thierry Blancpain, founder of Grilli Type, to talk to us about the hidden struggles of being a freelancer or a consultant, and how to overcome them.

If you’ve been thinking about making the jump to freelance, read this.

The Pros and Cons of Becoming A Freelance Consultant

I worked as a graphic design freelancer before I even went to design school. I was never really a full time employee, but I’ve been a freelancer for a long time, and now have also experienced life as a co-founder and boss. Here are some of the things I’ve learned:

1. Working from home, or by yourself, can be lonely

I worked from home for a long time, but ended up paying so much money to coffee shops that I realized that I could just rent a studio space for that money. Working from home can be isolating and lonely — you don’t have colleagues to talk to, and you have to keep yourself motivated.

Find a place where you can interact and stay in touch with people.

Find a place where you can interact with people, or set up regular dates with colleagues in the field to keep your mental acuity sharp. Sign up for event newsletters and meetup groups to stay in touch with people. Conversation can spark creativity and ideas, and being out in public can generate more client requests.

2. Learn how to create your own structure and schedule

Especially when I didn’t have a deadline, it was sometimes hard to not just go out for drinks with friends and then stay out too long. Working for yourself means it can be hard to get up at the same time each morning.

The best thing I learned was to set a consistent schedule and work regular hours so that I could differentiate between work and play hours.

Ironically, you might begin to miss the rigor of a schedule. So create your own.

Who knew that I’d want the rigor of a schedule again? But remember: there’s also beauty in taking a day off if the right alternative to work presents itself. So stay open to serendipity!

3. Plan ahead for creative “hermit days”

Consider setting up one day a week without any client communication and meetings. I used to mark all Tuesdays months ahead of time as such. Those days help you get things done and move projects forward markedly. Make sure to tell your clients ahead of time, though.

4. It’s up to you to learn how to plan ahead

You need to find new clients months before your old projects are actually finished. Both acquisition and ramping up projects takes time, and so if you have a project that’s supposed to start in September, it will often start in November. Plan accordingly.

5. Planning is important enough I’ll say it again: plan ahead

You will need around 20% of your time for administrative tasks. Plan and offer projects accordingly. I add a blanket 20% admin cost on top of anything I offer my clients. Meetings, phone calls, packaging up files for them, etc. The more corporate your clients are, the higher the number. For a bigger company I would add something more like 30–40%.

Your clients will take up more time than you think. Plan accordingly.

I had a client who loved to call me every day, because for him what I did was all his company was at that point, while for me it was a huge distraction from my other work and clients. And it was also a distraction from actually working on his company’s branding. So make sure it’s worth your while.

6. As soon as you can, prepare for rainy days

As long as we’re talking about planning, your first extra bit of profit should go towards a Rainy Days fund, not your next fun vacation. You should be able to survive a few weeks of sickness or a doctor appointment in case something bad happens — to you or your loved ones.

You’re not “making it” as a freelancer if you can’t sustain yourself in between clients.

Being your own boss also means that you need to build your own safety net.

7. Pricing projects is an art

If you don’t ever lose a project due to pricing you’re probably quoting too low — unless you’re so good that clients will pay anything to work with you, of course. Strive hard for conversations about the value you’re adding to a client’s business, and not about just the money they pay for your work.

8. Don’t “hope” that you’ll get paid — you need to make it happen

I luckily never had major problems with this, but some people get clients that don’t pay on time or at all. Make sure you deal with them properly and professionally, but be clear that you’re not a bank loaning them money. Just because you’re a designer doesn’t mean that you can’t also be a business-minded person.

9. Make clients pay for extras

Negotiations or changes in the scope mean that you also need to talk about your fees. Make clients pay for extras. If they need something tomorrow they will have to pay an additional fee. If they want you to work on a weekend, make them pay an extra 100% on top of your hourly.

Why should your clients respect your soft boundaries if they don’t have to pay for crossing them?

Why should your clients respect your soft boundaries if they don’t have to pay for crossing them? Projects often become much less urgent if that urgency costs extra.

10. If you’ve never managed projects, you need to learn how to.

If you’ve never managed projects, you need to learn how to. As a freelancer you’re also a project manager, account manager, secretary, accountant, and more. Find the tools to help you get all of those roles done quickly. I use Harvest for time tracking and Slack for team communication. Selecting the right tools might seem like a waste of time, but if you find the right one, you can free up huge chunks of your time.

11. Legalese: Invest early on in a good contract

Invest early on in a good contract. Make it as restrictive as you can, and then be happy to make it less so if a client asks you. I for example had a stipulation in mine that I can cancel any project after I don’t hear back from the client for two weeks and then invoice them for any work that I’d done up to that point.

In many jurisdictions the party writing the contract is at fault for any unclear or lax portions, so be clear and be tough. Talk to freelancers in your area about this — and consider shelling out for a lawyer — to find the right way of dealing with your clients. Contract-writing is also very much about defining the way you want to work, and that of course is always an important topic.

12. Be clear about how reachable you are, and how and when you aren’t

Manage your communication expectations with your clients. They should know when you are reachable, and when you aren’t. There’s nothing more frustrating than not knowing how long someone will take to get back to you. Clear boundaries are the best form of professionalism.

Be clear about how reachable you are, and how and when you aren’t. A friend of mine for example does not do any phone conversations unless it is really necessary. Instead he is always reachable by email during office hours. He finds that clients too often just want to chat a little bit and everybody loses focus because of it. So unless something is incredibly time-critical or best discussed in a back-and-forth of a phone call, he just doesn’t do it. Another friend only offers phone calls from 1 PM to 4 PM.

You don’t need to agree with either of this, but be aware and clear about how you communicate with your clients. What will your preferred modes of contact be? When will you take meetings? When won’t you?

It’s often best to set up a clear structure with your clients, especially if they are not paying you for full-time work. Clear boundaries and articulation of when you’re available can be really helpful!

13. Communicate, communicate, communicate:

With all that said, always tell your clients what’s happening. Don’t be a black box. Having an open, honest line of communication with your clients builds trust that is essential to our trade.

14. Be on fucking time:

Your work can be less than amazing as long as you reply to people in a timely manner and are reachable. We all have bad days and we have all designed projects that don’t hold up to our best work. If you deliver on time people will recommend you again and again.

If you deliver on time people will recommend you again and again.

Being on time is one of the most important factors for how clients judge their designers. Most clients really don’t know good design either way, so they will judge you on how you communicate with them instead. Of course you should still design great work. Just do it on time.

15. Be very clear about what you offer:

As a designer, you could “design websites”, or you could “bring brands into the digital age”, or you could “help clients communicate with their customers”. Think hard and long as to how you want to portray your work, and try out different approaches before settling on yours.

Think hard and long as to how you want to portray your work, and try out different approaches before settling on yours.

It’s better to be more specific about exactly what you offer than to be vaguely promising something that will result in confusion and disappointment. You should also be clear about what you don’t offer.

16. Learn your client’s language:

Last, but definitely not least, learn to speak your clients’ language. Learn a bit about technology, about business, or if you’re working for a petting zoo, maybe about goats. Who knows. But only when you speak your client’s language can you actually understand their needs fully, and communicate their business to their potential customers.

Freelancing can be an amazing way to work, but freelancing also means that you run your own business. Treat it as a serious business and plan accordingly.

Freelancing can be an amazing way to work, but freelancing also means that you run your own business. Treat it as a serious business and plan accordingly. But most of all, enjoy your life: what I really love about the freelancer lifestyle is that random hour of sun-bathing on a beautiful summer day, that way too long lunch with friends, that day off when projects are slow and you can make it a three day weekend. And then working hard when I’m in my studio.

Content Marketing Isn’t The Dirty Word You Think It Is

People call me a “content marketer” often (not sure if it’s a compliment or insult), so let’s talk about how you can use the articles you write to sell the products or service you’ve got.

Too often, clients, friends, and confidants (i.e. people I talk to on Slack) tell me that they don’t have time to write articles that support their business. Then, in their next (digital) breath, they tell me how their business could be doing much better. When I mention to them that useful content could support and grow their business, and they could do a lot better if they made time for writing, they reply that they don’t have time to write.

This, my friends, is known as a total logic fail.

Let’s start with what content marketing isn’t.

It’s not simply blogging. Otherwise, there’d be thousands of teenagers on Tumblr who could put “content marketer” on their resume (although I’m sure some do, those pesky teens!). If you’re writing entirely for yourself, that’s a journal — there’s nothing wrong with that, but it won’t be effective for selling anything.

Content marketing is the intersection of where the writing you do serves the audience and you, the creator, equally.

Your audience wants value from timely, useful, and engaging information. You need your business to grow (whatever growth means to you), make money, and be continually exposed to new audiences.

With this type of writing, there’s always an intended next step. Buying something, signing up for a list, registering for a webinar, sharing something socially, ranking in a search engine for a term, etc. There’s some explicit action that happens after someone has consumed what they just read. Because they made it all the way to the end, they’re finishing reading now, and are looking for what to do next.

The reason I’m called a “content marketer” is because my weapon of choice for selling what I create is writing.

The reason I’m called a “content marketer” is because my weapon of choice for selling what I create is writing. I choose this weapon because it suits me the best, and aligns with what I like do and how I like to show up in the world.

As a writer, I know I can write. Whereas if I had to make cold calls or give speeches, I’d be a sweaty mess of “uh’s” and “hmm’s.” Writing has consistently and strategically grown my product business (books, courses, online events) to make up more than 50% of my income in less than three years.

So maybe you want to be a content marketer, too? Maybe it’s not such a dirty term after all. And maybe, just maybe, it’s not as much work as you think.

Here’s how you can maximize a small amount of time to use content to help both your audience and your business.

Start by always having a list of ideas for topics you want to write about. What do you add to this list? Questions your audience has asked you, related content to your most popular existing articles, using apps like BuzzSumo to analyze topics/competition, even articles you’ve read that you have a unique or opposite take on.

Have ready access to this list of ideas (either in a physical notebook or a text file that you can access from your computer or phone). Add to it constantly and be on the lookout for new ideas to add to the pile while reading, watching TV, scrolling on social media, walking in the park, or even eating breakfast.

Now, look at the list and pick the first idea that stands out to you. You’re going to write a content marketing article on this idea!

Write down the following items in a spreadsheet (and we’ll use this article as an example):

  1. What’s your goal in writing about this idea? Ex. “I want to teach people that content marketing is easier than they think it is.”
  2. What’s the reward your audience gets for consuming an article about this topic? Ex. “They learn how to use content marketing to drive revenue and exposure in their own businesses.”
  3. What’s the main point of the story? Is there a secondary point? Ex. “PRIMARY: Content marketing is easier than most people think it is. SECONDARY: Writing consistent content takes less time than people think, too.”
  4. What makes those points valid? Is there data, a unique personal story, research that backs it up? Ex. “50%+ of my revenue is now coming from products — all because of content marketing.”
  5. What is the result a reader would see if they, too, acted on the main point you’re making? Ex. “Better/more business if they used content marketing correctly.”
  6. What are 5–10 headlines you could use for this post? Ex. “Content marketing isn’t the dirty word you think it is” “How I use content marketing to generate more than 50% of my product business revenue” “Why content marketing can work for you, in less time than you think” “If you’re too busy for content marketing, then you’re too busy to grow your business” “Get out of your own head about content marketing — it can help drive business”
  7. What’s the next action you want a reader to take after reading the post? Ex. “NEW READERS: Sign up for my mailing list. EXISTING SUBSCRIBERS: Download the XLS worksheet and actually use it.”

Guess what? In answering those simple questions, you’re now 80% (or so) of the way finished your article. No staring at a blank screen for hours or life hacks required, just asking yourself a few simple questions for each idea you’ve got. Let’s put the answers to those questions together a little better:

  • [A6 — Pick your best headline or A/B test the strongest ones.]
  • [A2 — Use the reward your audience gets to illustrate a pain point — what happens if they haven’t taken action.]
  • [A1 — Spell out what you are illustrating.]
  • [A3 — Clearly explain your point(s).]
  • [A4 — Back the points up with data or stories.]
  • [A5 — Describe what the outcome looks like if your reader acts on this.]
  • [A1+A2 — Reiterate your goal and why your audience cares.]
  • [A7 — Give a concrete next step now that they have the information. Bonus content, buying, signing up, sharing, etc.]

Without writing the article by staring at a blank screen, you’ve just written the entire outline, now all you need to do is make the sentences flow together in your own style. If you’re just starting out with writing, remember that writing is basically a muscle — it gets stronger the more you exercise it. So don’t be discouraged if things at first are slower than you expect. You’ll get faster the more consistent you are with your writing practice.

If you’re just starting out with writing, remember that writing is basically a muscle — it gets stronger the more you exercise it.

“Now Paul,” you might be thinking, “That sounds so formulaic and boring! And not at all like the creative person you are or — more importantly — that I am!” But here’s the thing. The formula may be … well … formulaic, but the key is all in how you apply it. How you take the information and make it into a flowing story for your readers. It’s like saying, “Oh, I don’t read fiction because they’re all stories of a character who starts out, goes through some things, and ends up in a different place.” The high level stuff IS formulaic — it’s what you do, what data that makes it interesting, and what makes it you.

With a bit of practice and consistency, there’s no reason you can’t spend an hour each week writing at least one of these articles. That way, you can get your words, ideas, and brand in front of your audience on a regular basis, and the more you write, the faster and easier it becomes. There’s no excuse not to carve out a bit of time each week if you have a business.

There’s no excuse not to carve out a bit of time each week if you have a business.

One extra thing I’ve figured out by doing this for a few years is that it’s easier to write a bunch of articles at once than it is to write just one, wait a week, then write another. Once you get into the rhythm and flow after writing one, you may be able to crank out another couple right after it. This helps you stay a few weeks ahead of your publishing schedule, which leads to less stress (also known as, “Oh shit! I have to release an article tomorrow?!”)

Staying ahead of your schedule can also help you commit to only publishing your best content. The formula above doesn’t guarantee greatness, it just helps frame content quickly. So you may find that some posts just aren’t that awesome. However, if you’re head of your publishing schedule by a few weeks, you can throw the bad ones away and keep the best for sharing.

I’ve used the above ideas to sell books, drive mailing list signups, sell courses, and keep my brand top-of-mind. It works for me because I get to share in a way I feel comfortable with: writing and teaching.

Using content to engage, teach, and inform your audience is a powerful sales tool.

Using content to engage, teach, and inform your audience is a powerful sales tool. It helps define you as an expert as well as a helpful person, which leads to trust, which then leads to sales. All done in a non-slimy, non-sales-pitchy, really honest way. You help the most important people to your business (your audience), and reciprocation from them helps your business. It’s a win-win.

For those of you paying attention (which I assume is everyone who has read this far), this post was written using the formula I just outlined. I took an idea from my list of topics and went through each question, then put the answers to those questions in a order that gave me an outline. From there it took a little while longer to turn it into the article you just read.

How to Setup Vagrant for Rails

How to Setup Vagrant for Rails

Overview

 This will take about 20 minutes.

Vagrant is a tool to automatically setup a development environment inside a virtual machine on your computer. This means your development environment can exactly match the production server and your coworkers can all run exactly the same software.

Your Rails development environment will stay the same no matter what your development computer setup is like. Plus, when you need to revisit a project 12 months later, you can get up and running within minutes. Future you will thank you for setting it up at the beginning of your project and using Vagrant in the first place.

In this Vagrant tutorial we’re also going to use Chef which helps us automate how our virtual machine development environment gets setup. It will take care of setting up Ruby and all the other packages on our system. It’s pretty rad.

Enough of a sales pitch, let’s get to it.

Setting Up Vagrant

Make sure you have 1GB or 2GB of free RAM on your computer before proceeding because Vagrant runs a full operating system inside a virtual machine to run your Rails applications.

The first step is to install Vagrant and VirtualBox on your computer.

  1. Install Vagrant
  2. Install VirtualBox

VirtualBox is where your virtual machines will run. They will be headless which means that they will run in the background and you will interact with them over SSH.

Next we’re going to install two plugins for Vagrant.

  • vagrant-vbguest – automatically installs the host’s VirtualBox Guest Additions on the guest system.
  • vagrant-librarian-chef let’s us automatically run chef when we fire up our machine.
vagrant plugin install vagrant-vbguest
vagrant plugin install vagrant-librarian-chef-nochef

This can take a while.

Create the Vagrant config

First off, hop into a Rails project that you want to setup Chef for and run the following commands.

cd MY_RAILS_PROJECT # Change this to your Rails project directory
vagrant init
touch Cheffile

This will create both the Vagrantfile and Cheffile for us to customize.

Your Cheffile

Now we’re going to setup our Cheffile. This file is just like your Rails Gemfile but for Chef. This file defines the Chef cookbooks that we will use in our project. Later on in the Vagrantfile we will tell Vagrant how to use these cookbooks to setup our environment.

We just want to paste the following code into our Cheffile:

site "http://community.opscode.com/api/v1"
cookbook 'apt'
cookbook 'build-essential'
cookbook 'mysql', '5.5.3'
cookbook 'ruby_build'
cookbook 'nodejs'
cookbook 'rbenv', git: 'https://github.com/aminin/chef-rbenv'
cookbook 'vim'

Your Vagrantfile

Our Vagrantfile defines the operating system and Chef configuration for our virtual machine.

We’re going to be using Ubuntu 14.04 trusty 64-bit (change to “trusty32” if you need to use 32-bit) with 2GB of memory. It is also going to forward port 3000 from the virtual machine to our computer so when we run rails server we can access the server inside the virtual machine from our regular browser. Last but not least, we have Chef setup Ruby 2.2.1 and MySQL inside our VM.

You can replace the Vagrantfile contents with the following:

# -*- mode: ruby -*-
# vi: set ft=ruby :

VAGRANTFILE_API_VERSION = "2"

Vagrant.configure(VAGRANTFILE_API_VERSION) do |config|
 # Use Ubuntu 14.04 Trusty Tahr 64-bit as our operating system
 config.vm.box = "ubuntu/trusty64"

 # Configurate the virtual machine to use 2GB of RAM
 config.vm.provider :virtualbox do |vb|
 vb.customize ["modifyvm", :id, "--memory", "2048"]
end

# Forward the Rails server default port to the host
config.vm.network :forwarded_port, guest: 3000, host: 3000

# Use Chef Solo to provision our virtual machine
config.vm.provision :chef_solo do |chef|
 chef.cookbooks_path = ["cookbooks", "site-cookbooks"]

 chef.add_recipe "apt"
 chef.add_recipe "nodejs"
 chef.add_recipe "ruby_build"
 chef.add_recipe "rbenv::user"
 chef.add_recipe "rbenv::vagrant"
 chef.add_recipe "vim"
 chef.add_recipe "mysql::server"
 chef.add_recipe "mysql::client"

 # Install Ruby 2.2.1 and Bundler
 # Set an empty root password for MySQL to make things simple
 chef.json = {
 rbenv: {
 user_installs: [{
 user: 'vagrant',
 rubies: ["2.2.1"],
 global: "2.2.1",
 gems: {
 "2.2.1" => [
 { name: "bundler" }
 ]
 }
 }]
 },
 mysql: {
 server_root_password: ''
 }
 }
 end
end

Running Vagrant

Now that we’ve got Vagrant and Chef configured properly, we’ll start up the Vagrant virtual machine and ssh into it.

# The commented lines are the output you should see when you run these commands
vagrant up
#==> default: Checking if box 'ubuntu/trusty64' is up to date...
#==> default: Clearing any previously set forwarded ports...
#==> default: Installing Chef cookbooks with Librarian-Chef...
#==> default: The cookbook path '/Users/chris/code/test_app/site-cookbooks' doesn't exist. Ignoring...
#==> default: Clearing any previously set network interfaces...
#==> default: Preparing network interfaces based on configuration...
# default: Adapter 1: nat
#==> default: Forwarding ports...
# default: 3000 => 3000 (adapter 1)
# default: 22 => 2222 (adapter 1)
#==> default: Running 'pre-boot' VM customizations...
#==> default: Booting VM...
#==> default: Waiting for machine to boot. This may take a few minutes...
# default: SSH address: 127.0.0.1:2222
# default: SSH username: vagrant
# default: SSH auth method: private key
# default: Warning: Connection timeout. Retrying...
#==> default: Machine booted and ready!
#==> default: Checking for guest additions in VM...
#==> default: Mounting shared folders...
# default: /vagrant => /Users/chris/code/test_app
# default: /tmp/vagrant-chef-1/chef-solo-1/cookbooks => /Users/chris/code/test_app/cookbooks
#==> default: VM already provisioned. Run `vagrant provision` or use `--provision` to force it
vagrant ssh
#Welcome to Ubuntu 14.04 LTS (GNU/Linux 3.13.0-24-generic x86_64)
#
# * Documentation: https://help.ubuntu.com/
#
# System information disabled due to load higher than 1.0
#
# Get cloud support with Ubuntu Advantage Cloud Guest:
# http://www.ubuntu.com/business/services/cloud
#
#
#vagrant@vagrant-ubuntu-trusty-64:~$

The first time you run vagrant up will take a while because it will provision your virtual machine with the chef configuration. After the first time, vagrant up won’t have to run Chef and it will boot much faster.

If you ever edit your Vagrantfile or Cheffile, you can use the following command to reconfigure the machine.

vagrant provision

Using Rails inside Vagrant

Vagrant sets up the /vagrant folder as a shared directory between the virtual machine and your host operating system. If you cd /vagrant and run ls you will see all the files from your Rails application.

bundle to install all your gems inside the virtual machine.

rbenv rehash to make sure the executables from the gems we just installed (like rails) are available.

rake db:create && rake db:migrate to create and migrate your database.

rails server from this directory will run your Rails application on port 3000. You will still be able to access Rails just like usual on localhost:3000.

Conclusion

Vagrant is an awesome tool for making a portable development environment that lives with your code. With a pretty simple configuration using Chef, we can be up and running in absolutely no time.

If you need to setup your Vagrant machine again or one of your coworkers needs to get setup, all you have to do is run vagrant up to have your entire virtual machine ready to go.

 

11 Ways To Improve Your Business and Personal Storytelling

When you want to learn how to describe yourself or your business, people look to storytelling as a way to improve their core message.

But what is storytelling? And how do you actually get better at it?

And what does it matter for businesses today?

“Story” — the word is vague and yet so appealing — so it can be difficult to know where to start, and how to use what you learn in your everyday practice.

If you’re not telling your story, who is telling it for you?

This essay will look at some of the core truths about stories and storytelling in Part I, and then I’ll share a few tools that are practical and easy to implement in Part II. Use these core principles across many communication needs, from a personal biography to the description of your company.

Storytelling is a fundamental human tool that we all do innately. The problem is that over time, we’ve been bombarded with terrible examples of bad messaging, and we don’t know what models to look to. Our brains are wired for storytelling, because stories help us learn, explore, and retain information through second- and third-hand experiences. We know when we’re in the presence of a good story, but do we actually know what’s happening inside of them?

We can recognize when we’re captivated by a great story. The problem is, can you dissect what’s happening into tools you can use to your advantage later?

Stories are innately human. Everyone is a born storyteller.

Case in point: when you recount events that you’ve done, even a simple sentence as you walk through the door, you’re setting up a basic story structure:

“You won’t believe what just happened — first I went to the grocery store, then…” — your ears prick up.

You’ve set up the most basic form of a story: do you know what it is?

Here’s another example —

“The beach was dark and quiet. It was eerie — the moon was dark and someone had turned off all the lights on the boardwalk. Alison felt uneasy as she stepped nervously out into the dark. Who had turned out all the lights?”

Both of these examples use a very specific form of storytelling that we’re all hardwired to understand. Do you know what it is?

I’ll explain it today as we deconstruct storytelling. But first, I want to debunk a few myths about storytelling. Somehow we think that only an elite few can be storytellers, and it’s a skill that we don’t have.

Part I: Common storytelling principles that apply to business and life.

1. Everyone is a storyteller.

Some people say that storytelling is limited to an elite few, or a professional clique. In reality, that’s not true. All humans are born storytellers, and we’re born to look for, hear, and describe our world in stories.

When someone comes back to us and says, “Avoid Atlantic avenue, it’s crazy full of traffic,” we select a different route because we got information — in the form of a story — about someone else’s experience.

2. We tell stories to connect, dream, and imagine.

We use storytelling to connect inwardly to ourselves, outwardly towards others, and to imagine futures. Humans spend up to four hours per day inside of imaginary landscapes — in daydreams, thoughts, visualizations, and places beyond the present. We live in a world of stories.

We use storytelling to connect inwardly to ourselves, outwardly towards others, and to imagine our futures.

Children are born telling stories — in fact, we play for exactly this reason. Play is our built-in mode of imagining the future and the past. In telling stories, and playing make-believe, we’re able to learn at a much faster pace than if we had to rely only on our own experience.

We are learning creatures. We learn by experience and through our imagination. When something good happens to us, that’s a reward. When something bad happens, there’s a punishment. These incentives teach us over time.

In stories, we get to pick up and enter into the landscape of someone else’s learning — and learn for ourselves, even though we may be sitting in one place, not moving.

3. Stories are how we are hardwired.

Prior to written language, we had to keep important information about the world around us, somehow. We’ve constructed melodies, songs, and other modes of storing information.

Is it any coincidence that “storing” and “storytelling” are related? We are hardwired to remember cause and effect relationships — “I saw a spider, that spider killed my friend, spiders are bad.” “REMEMBER THIS!” Shouts your brain.

Lisa Cron’s research on the brain science behind storytelling is what prompted her book, Wired For Story, if you’re curious about how it works.

In research in The Storytelling Animal by Jonathan Gottfried, he talks about how we actually make up stories all the time, whenever we see two events happening.

If we see a group of women and they’re all wearing tiny shorts, we might tell as story to ourselves about how they are all going to the beach. In research on people with their two brain hemispheres segmented or separated, they discover that our brains actually wire stories into our minds when presented two pieces of information. (For more on this, here’s a list of great books on storytelling.)

4. A story is what you take with you.

In any situation or setting, a story is what you take with you.

When giving a presentation or sharing your brand or idea, what someone walks away with is the story. They’ve taken all the information they’ve been given and distilled it into the easiest parts to remember.

Listen to what people catch from your descriptions, and guide your story towards what people naturally keep bringing up!

A story is what you take with you. Listen to how people explain

It’s less about what you want to say, and what people do with what you say. Pay attention to what people respond to, and adjust accordingly.

5. We are surrounded by far too many examples of bad storytelling — powerpoints, inadequacy marketing, and droll presentations have numbed our innate ability to tell stories.

Unfortunately, we’re surrounded by terrible examples of storytelling. In The Story Wars by Jonah Sachs, he talks about all the sins of modern storytelling — from our need for vanity to posing as an authority, and more.

There are far too many bad examples out there — boring presentations, terrible pitches, inadequacy marketing — that we’ve forgotten what great storytelling looks like.

Basically, the last century of mass broadcasting let the leaders in charge of storytelling get lazy. There’s too much talking about yourself, not listening to the audience, and shouting lists. Technology (like powerpoint) even encourages bad storytelling by putting bullets and lists as the mode of operation.

The good news is that once we recognize the bad examples for what they are — boring presentations that put us to sleep — we can stop copying them and start engaging.

6. When you sell anything — yourself, a brand, a business — you tell a story.

When you sell things, you tell a story. It’s not about the thing at hand. And powerpoint lists are terrible ways of communicating.

When you sell things, you’re telling a story.

Think about a toothbrush. You’re not selling a plastic stick with a bunch of flexible bristles on it. Why describe it like that?

When you sell a toothbrush, you’re selling the idea of a cleaner mouth. Why is that clean mouth important?

Think about Listerine: you’re not selling a bottle of alcohol, you’re selling … a date.

The ability to be well-liked.

A possibility.

Advertisements are stories about who you are and who you should be, and great advertisements want to capitalize on something deeper than the physical thing that they are selling.

What do they believe about human nature? What story are they telling you, implied or otherwise?

7. We are naturally curious, and we all want to be smart.

Finding Nemo, the movie, is about a little guy who gets lost and needs to find his dad. Along the way, he goes on adventure after adventure in order to return home.

At the beginning of the movie, we, the audience, know the purpose of the whole movie within the first few minutes: this is a story about a father and son finding each other again.

The same is true in most situations. We interrupt because we want to get to the point faster. When presented with a puzzle, most people work furiously to get it right — first.

People like to be smart, and curious. Stories let us engage our curiosity.

We want to be smart. We like the puzzle of a story, and we want to guess how it will end. Stories entertain us because they keep us in suspense, and they tickle our brains to try to guess how something ends.

Part II: How to improve your business and personal storytelling today.

So how do you take all this and make it applicable to your stories and messages? Here are some concrete ways to improve your storytelling right now.

8. Your English teacher was right — it is about “showing” versus “telling.”

Too often we jump straight to the point. Think about each of these as lead sentences:

“It was the hardest day of my life.”

“The thing is, simplicity matters.”

“Never underestimate the power of a good friend.”

These are all true statements, but it’s not gripping or exciting. Whatever your core philosophical statement, think about leaving it unsaid.

Just like the toothbrush examples before, the point of your story isn’t to beat someone over the head with the idea, but rather to SHOW it through lots of vivid detail and an example that highlights your core philosophy.

We don’t need to be hit over the head with ideas. We want to learn through the experience.

For example —

[It was the hardest day of my life.] vs:

“I’d just finished a fourteen hour shift in the cement factory. I had no idea what my dad did, so that summer I signed up to join him at work. Three days in, and I could barely lift my hands. My forearms burned, and my calves were shot from jumping in and out of the trucks. I’d probably lifted more than a hundred sacks of cement mix in and out of the truck. When I got home that day, all I wanted was to lie down. Then I discovered…”

[Never underestimate the power of a good friend.] vs:

“I’d just found out that my grandmother had passed, and I couldn’t make it home in time. My job had closed the week before, our office putting up the ‘for sale’ sign after more than eight months in the red. On the bus ride home through the foggy drizzle of Portland’s grey fall days, I wondered how I could pay for groceries for the rest of the week.

As I got off the bus, I saw someone sitting on my stoop. “Probably another homeless person,” I muttered to myself, thinking I’d be one soon myself. As I got closer, I saw that it was actually Andy, holding two bags of Indian food takeout. He wrapped me in a big hug. “I thought that you could use this today,” he explained, pointing to the food.

“Let’s eat.”

Words are the only vehicle someone has to understand your vision.

9. Detail, detail, detail. The environment matters — because it lays the foundation for imagination.

Words are the only vehicle someone has to understand your vision. The more you set the stage for where you are, the easier it is for someone to buy in.

Great storytelling is about detail — but a specific kind of detail. How do you set the stage and the context for what’s happening? What does it feel like to be you?

Stories immerse us in an event far away from where we are, catapulting us into a new time and space. Key descriptions anchor us into this new space through the use of all of the senses — smell, sight, touch, taste, sound, texture, even kinesthetics.

Begin by describing the world around you, in vivid sensory detail. The English language has thousands of words to describe the subtle differences in texture and weight and material. Tell the story of what the world looks like. Great fiction books often begin with these details — take a look at 1984 or Zen and the Art of Motorcycle Maintenance for great opening scenes.

With written narrative, all we have are words. Contrast this to film, where we can show rich detail through visual imagery. In our hyper-visual culture, we sometimes replace describing feelings with posting a quick picture, because it’s easier.

But in writing, all we have are words. Choosing words and describing the scene, in detail, is what brings someone into your story.

10. Introduce conflict — by using the “bait” method.

Here’s a secret about the human brain: we all like to be smart.

We like to figure things out, and know the answers to things. Whenever we are presented with a puzzle, we like seeing if we can figure it out before someone else does.

In storytelling, a great way to engage your audience is to add a teaser at the beginning.

In storytelling, a great way to engage your audience is to add a teaser at the beginning. By using a little bit of bait, you stoke the curiosity in your listener’s mind. Ira Glass talks about this often, and if you introduce a story with an underlying question (like “the house was eerily dark,” or “it was a different night than any other,”) the listener begins to wonder why it was so dark, or why the night was different.

This “curiosity gap” between a piece of information that asks a question, and the story that resolves the question, helps the reader stay engaged and curious about the story. A little bit of conflict introduces a puzzle to be fixed!

11. Shorter is often better. Keep it simple!

At the end of the day, a story is what you take with you — and we don’t remember every detail of every story, but rather, the highlights real.

When you’re presenting your idea, biography, or product, start with something short and sweet.

The idea of an elevator pitch is right, but with a twist. It’s not how much you can cram into 1 or 2 minutes, but how easy you can make something that’s understandable and sticky.

At a conference, if you babble and ramble when introducing yourself to people, they’ll forget most of what you said. If you string it into a story, and you keep it simple, people will be able to take that with you.

You don’t need to get all the perfect information into one sentence; in fact, being imperfect can prompt likability and curiosity!

A quick and easy test for how good your story is is to listen in to what’s being said.

Introduce yourself to someone, and then listen to when they introduce you. I’ll often keep it simple — I focus on writing and swimming. I’ll say, “I work as a writer; I teach writing, and I’m also an open-water swimmer.”

Then, when I’m being introduced, Clay leans over and grabs his friend and says, “You gotta meet Sarah, she’s a swimmer!” — I listen to what people hang on to, and what captivates them.

I can’t possibly capture everything about myself (or my business) in a single sentence. But what I can do is find the most interesting part, and start there.

Conclusions and take-aways: journaling and practice.

What did you take away from this introduction to storytelling?

How can you change your story to make it sweeter, simpler, and easier to understand? Is there anything you’re still curious about? Leave a note in the comments, and I’ll be happy to chat with you.

Here are a few ways to take your work forward in your journal and practice:

  1. Practice: how can you write a one-sentence description of who you are that’s super simple? What three keywords or nouns would you use to describe you? Think of it as a gift to your audience — the less you say, the more they can remember.
  2. Writing exercise: describe your environment, in vivid detail. What is the shape of the space that you are in? What does it smell like, taste like, sound like?
  3. Bookmark 10 great “About” pages that you love and highlight what stands out to you. What techniques and styles are used that you particularly admire?
  4. Take a quick look at your email inbox (but don’t get lost in it!). Take a screen shot of your inbox and print it out. Highlight what’s already been read, and what you’ve skipped. Are there any themes? Look at what you click — which email titles are stories? Which ones are boring? What do you skip over? Your inbox is a great case-study for clues to how storytelling works in your everyday life.

Great storytelling, just like anything else, is a learning journey. The best stand-up comics practice their material dozens (if not hundreds) of times to learn what works best.

And remember: a story is what happens between two people. So get out there, practice your story, and use each experience to get a little bit better.

If you want to know more about marketing, content marketing, and storytelling, check out the free webinar recording we have, or the class I teach on Content Marketing.

What else would you add? What would you like to know more about? Leave a note in the comments and I’ll be happy to respond.

How to Develop A Daily Writing Habit

One of my health habits is a daily writing habit. Last year, one of my goals for 2014 was to write daily. I’m happy to report that I only missed a total of three days in 2014. I’m currently on a 350-day writing streak, and it’s become kind of addictive.

Here’s some of what I learned about cultivating a writing habit.

Why write daily?

The idea came from a book called The Artist’s Way (which admittedly I haven’t read — but I’ve heard it’s good). They call it morning pages, which consist of three pages of writing done every day. It can be about anything that pops into your head — and it’s important that you get it all out of your head without editing or censoring in any way.

A daily writing habit helps clear your mind and gets ideas flowing for the rest of the day.

I initially started writing every day because I eventually want to write a book, but it’s become so much more than that. I use my daily writing as a way to think out loud, and troubleshoot problems, thoughts, and anxieties I have. It gives me something to look forward to in the morning and actually puts me in a really good mood.

As my friend Dev says, “Developing a daily writing practice is about deepening a conversation with oneself.”

“Developing a daily writing practice is about deepening a conversation with oneself.”

A really tangible benefit is that I’ve written way more blog posts since I’ve started writing every day.

Before, writing was something that I often needed to do — whether it was writing an email, a blog post, or a letter I’d been meaning to write — but never really found the time for.

Figure out why you personally want to write more often.

Is it to start a blog, to build a following, to become known as a thought leader, to connect with your inner voice, to develop a creative outlet, or to write a book? These are ALL good reasons, but it’s good to know which ones are most important to you and which ones aren’t. These will be your guiding forces that propel you forward when things are tough.

Pick some accountability metrics

It’s easy to say “I want to start writing more” and then fudge it at the end of the year. It’s tempting to come up with a loose goal — one that isn’t tied to a specific number or action — because it doesn’t require much thought and is almost impossible to fail. (Because what does “write more” even mean? Does sitting down to write once or twice count?)

But goals like that are almost meaningless and unlikely to help you create meaningful change in your life.

Instead, come up with one or two trackable goals. My trackable goal this year was to write 750 words every day. Seven hundred and fifty words is about three pages handwritten (or one page typed single space). But there’s another reason I picked that number which will become more obvious in a second.

Specificity matters. If you want to change your behavior, you have to know how to measure it.

Make it a regular practice

This is the really hard part, but in order to hit a big goal you have to develop regular habits in your life. When a friend introduced me to 750words.com, I was blown away. It’s a simple site where you go to do your daily writing. 750words isn’t a publishing platform, it’s a personal tracking tool. It keeps track of your writing streak and gives you some really cool daily stats on your writing as well as badges for your accomplishments that keep things fun.

Keeping track of streaks is a very powerful tactic for developing any new habit. There’s a story about Jerry Seinfeld that says he used to keep a big calendar by his desk and mark an X for every day that he sat down and worked on his routine. Eventually his streak became so long that he kept going just because he didn’t want to break it.

Althought this is a misattribution — Seinfeld said in a Reddibt conversation “This is hilarious to me, that somehow I am getting credit for making an X on a calendar with the Seinfeld productivity program. It’s the dumbest non-idea that was not mine, but somehow I’m getting credit for it.” — the idea is still powerful.

Like I mentioned before, I’m currently on a 300-day writing streak and the thought of breaking it pains me.

At first I started by writing whenever I had time during the day. Sometimes it was in the morning, sometimes it was at night, journal-style, just before going to bed. The problem with this haphazard approach was that a whole day would pass by without me finding any time to write. Indeed, those three days of writing that I missed, I didn’t even realized I missed them. I thought I had written on those days.

Eventually I settled on writing my 750 words first thing in the morning every morning.

Do you feel like you don’t have time to accomplish your goals every day? Make time.

Lao Tzu says, “Time is a created thing. To say ‘I don’t have have time,’ is like saying ‘I don’t want to.’”

The best thing I ever did for writing and habit development in general was start waking up earlier. Recently there has been some research saying that seven hours of sleep per night might be better than eight. So now I try to be in bed by 11:30pm and wake up at around 6:30am every morning.

Find ways to make it fun and easy

On top of the badges and stats that 750words.com gives me, I’ve had to find other ways to make it fun and kill the tediousness I sometimes feel.

Some of the badges I’ve collected on 750words.com

Initially I started by writing in different styles every day. One day would be murder mystery, then science fiction, then romance. Sometimes I write letters to my parents or my friends. They really appreciate those.

It might sound weird to write in a different genre or style than you’re used to, but three pages goes by pretty quickly, and then you get to never look at it again if you don’t like it.

Find a friend to keep you accountable and make it more fun.

For a while, my friend Mathias and I sent each other prompts to kick start our daily writing. One person would send the other a single sentence of a story to use as the first sentence and also a style to write the story in (to push us out of our comfort zone). Then the other person had to finish it in that style. Here’s an example:

Pippa eyed the watermelon two over from the end on the left because it reminded her of her ex-boyfriend. “This one will be perfect,” she thought.

Style: Realism

Though most of the time I just write in free-form every morning. I’ve been able to get the total time it takes to write 750 words down to about 10–15 minutes.

Keep a notebook of prompts for later days.

I’ve started keeping a notebook of writing prompts in Evernote in case I’ve run out of ideas or I want to finish a blog post (this is actually one of them). During the day, I come up with ideas, add them to Evernote, and then I write about those in the morning.

Right now, the list includes “What I’ve learned so far in 2014,” “There’s no expectation of privacy on the Internet,” “On people holding subway doors,” and other random thoughts I have on the subway.

One Month is sending out a daily writing prompt for 30 days to help encourage a daily writing habit. If you want to join in, click here to sign up to get an email reminder every day for 30 days.

Don’t worry about editing

It will take you forever (about an hour) to write 750 words if you worry about format and editing while doing the creative stuff too. Most people recommend separating the two actions.

Ernest Hemingway said, “Write drunk; edit sober”

Get comfortable with having tons of typos and your writing being mostly nonsense. If you want, you can edit it later.

This can be hard so a trick I’ve learned to accomplish this is to turn the brightness down on your computer screen so that you can’t read what you’re writing.

A lot of times, I’ll pick an idea from my Evernote notebook of blog post ideas and write about it for 750 words. Then I’ll take that writing and upload it to Medium for editing. I usually do one round of personal editing and then send it around to a few friends (using the “share draft” feature) before publishing.

Some of my most successful blog posts have been developed in this way (including How to get a busy person to respond to your email and How to never forget anything ever again).

Want to write more? Here at One Month, we’re all trying to write (and blog) more. Join us in Sarah’s Content Marketing course to get creative ideas for content, learn more about marketing, and become a better writer.

Do you have any other tips for developing a daily writing practice?

Have you read anything about techniques famous authors used to write every day? Post a comment! I’m going to compile a list of best practices.

Exit Strategies for Startups

Wait — you just started a company, why do you need an exit strategy?

The nature of being the head of a venture-backed startup is that you have to grow your company quickly, you have to grow it huge, and then you have to get out.

Even though most people might want to keep their company small and private for as long as possible, for investors, this is a losing scenario. Investors want to put in their money for a limited amount of time and then get a return on their investment.

Let’s look at it from the investor’s perspective:

About 90% of all companies investors put money into will go bankrupt. This means that investing money in your startup comes with a pretty substantial amount of risk. The odds are ever against their favor. The only way investing is worth it to the investors, then, is if the remaining 10% of companies that survive give them a return of ten, twenty, even fifty times their investments.

From the perspective of an investor, a ten-million dollar company isn’t worth a whole lot, so that leaves startups with a profound need to grow — and then exit. An exit is the term for when an investor gets a return on their investment in a venture-backed startup.

There are two basic exit strategies all startups follow:

A Buyout:

A buy out is exactly what it sounds like. A larger company, usually one that is well established and has interest in the product the startup has created, will offer a substantial amount of money to purchase the startup. In this case, investors receive a chunk of their initial purchase equal to their equity back. The startup might then be collapsed into the larger company, or it might run as a subsidiary of the original.

An IPO:

IPO stands for Initial Public Offering. This refers to the startup turning from a privately owned company into a publically traded one. In this case, the investors won’t necessarily get out immediately, but they at least now have the option to sell and trade their stocks on the open market.

Notice that the exit in these cases aren’t necessarily an exit for the founders of the company.

When we talk about exit strategies, we’re talking about a way for the investors to get their money back, but the founders of the company can still work with and grow the company as they see fit. Facebook, for example, put up its IPO back in 2012, but Mark Zuckerberg is still running the company. The exit just gave his investors a way to reclaim their investment.

The point in each case is that investors don’t want to invest in a company that eventually goes bankrupt, and they don’t want to own stock in a private company that leaves them with no opportunity to sell. No matter how much they love your company, investors want to see a huge return, so it is essential to know your exit strategy and aim to get big and get out when you start your company.

Key Takeaways

  • When we talk about “exits” we’re talking about ways for investors to get a return on their investments.
  • Investors are looking for a return of 10–100 times their original investment. A $10 million company may seem impressive, but to investors, it’s not.
  • You either need to aim for a buyout or an IPO; a buyout sells your startup to a larger company, while an IPO trades your company publicly.
  • Grow your startup fast, grow it huge, and then get out.

Additional Resources: