You've Got to Spend Money to Make Money

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"This is my friend Shane. He sold $20,000 worth of hoverboards last summer," my buddy Jonah told me on the first day of econ class.

Shane and I were fast friends. I went over to his dorm room one day and of course, there was a hoverboard. Surprisingly though, there were also a bunch of other random products from China. He said he was always looking for new products to sell.

He had no problem spending $50 here or there on a product that would most likely end up in the garbage. To me, that sounded like wasting. Shane saw it as product development — as a small investment in a potential new business.

Shane and I are still friends. He'd go on to sell an e-commerce business in college. Seven years later, that lesson stands out. You've got to spend money to make money. In the words of rapper YG, "scared money don't make money".

Your creative project is a pre-revenue startup.

Figma, the design app that Adobe acquired for $20B, had $0 in revenue in its first four years despite raising over $3.9M in their seed round. Yet you've been working on TikToks for 2 weeks and want to quit because you haven't made any money.

This shit takes time and money my guy.

If you're serious about winning the great online game, you should be investing money in upping your brand ASAP. You don't even need to have it all figured out. Everything is changeable and upgradable. This newsletter was previously called Brain Blasts. For fuck's sake, Figma's founders considered Figma being a meme generator.

I didn't realize this kind of idea transformation was so normal in startups until recently. I thought a founder had to have the product all figured out. Not true.

You're two weeks into making TikToks. Of course, you haven't found Creator Market Fit.

Because startup ideas change so often, VCs are often investing based on beliefs about the team. You don't have to believe 100% in the initial idea as long as you believe in your ability to figure things out.

You need to be your own venture capitalist. You need to invest in yourself and your own projects. Like a VC's portfolio, some of your projects will fail. But some will have 100x returns.

P.S.

Scared to invest in a project after you failed on a previous one?

After failing a first time, many people give up on entrepreneurship forever. Other don't. They choose to get back up on the horse and try again.

While working with VCs, I've learned that founders can often still get funded even if their first startup failed. You'd think they'd be kicked out of Silicon Valley for losing all their investors' money. It's not true.

If the founder tried their hardest, then they can still get funded. If guys like Chamath and David Sacks are giving people second chances, shouldn't you be giving yourself a second chance?

Give yourself a break. Yeah, your last project failed. Use it as motivation to push you forward. You're still you. And you believe in your ability to figure things out, right?

P.S.S.

Always pay for wi-fi on a plane you cheap son of a bitch. It takes money to make money.