10 things I’ve learnt the second time around

Fred Schebesta is well known to SmartCompany readers as an online traffic guru and the former owner of Freestyle Media. But last year he launched his second business, called Hive Empire, which owns Credit Card Finder, Home Loan Finder and Savings Account Finder. We asked Fred to reveal the 10 big lessons he’s learnt the second time around.

Read and forget this list at your own peril. I have spent a serious amount of time learning these insights and I strongly suggest you take them on board. Here are the 10 things I learnt when launching my new business.

1. There are still big dollars to be made in Australia

Niche markets are great to start in but if you want to make big dollars in Australia you have to own a major category, such as cars, finance, jobs, real estate and hotels. You might think that there are already too many competitors in your market, but what I have learnt in Australia is that realistically, most businesses in Australia aren’t that great. No one writes about Australian companies in the major blogs and tech sites. They don’t break the mould, they don’t innovate that well and they tend to just sit and let their market share crumble. Most big Australian companies became big because they were the only option.

You can still make big money in Australia if you are willing the persist and fight. How did Virgin steal so much market share from Qantas? If you have ever worked with Qantas you will know why. They are slow, old and have so many deadwood people NOT working in their business. I’d prefer to compete with Qantas rather than a quick and nimble company.

Make your business nimble and give the customer another option. There are always rebels in every customer base.

2. If you loved your first business, you will marry your second

All of your ideas are clearer and the path to growth is easier the second time around. I learnt fast from my first business and made the mistakes quickly. I learnt what worked and just replicated a lot more of that. If you are thinking of starting a business, just do it. Start small and make $1, it’s very addictive. I challenge myself always with any new niche we enter to make the first $1. After that it’s easier to know what is required next – make $2, of course.

3. Staff are everything

If you want to create a very profitable business you need profitable employees. The easiest way to get this is to hire motivated employees that can manage themselves to achieve results. This has been my most important fundamental focus the second time around. Developing a process for this and knowing who you want to hire have been two of my best upgrades to my second business.

Here are three key suggestions:

• Don’t hire average staff, or you will end up with an average company. Wait and slow down before hiring. It’s better to just wait that much longer rather than hiring the wrong person. You don’t actually need to hire a person if you are smart and just optimise the systems you are using at present.
• Ask more questions, not less. The impact of who you hire impacts your other top performers in your company. Hire poor quality people and you say something to them. Hire high quality people and you breed greatness into your organisation.
• You can’t motivate people – you can only hire motivated people. Don’t bother with motivational programs, just hire a motivated person. Do some personality profiling to figure out if a person is motivated or not and you will save yourself a lot of time from creating motivational programs and talking to staff members to motivate them. If someone slips through your process, talk through it – perhaps they aren’t suited to your company and would be better working in a big organisation where they want slow moving and predictable employees. Stop trying to motivate the average staff member in your company and just replace them instead.

4. Read more

If you are an achiever you will probably have a small, old and outdated TV and a large library of books which you have read and used. I always look at the size of someone’s TV and the size of their library in their house. It reveals alot. I read a lot, but try and speed through boring parts in the books these days. I find that reading slow in key areas and implementing ideas is crucial but speeding past stuff that is boring and non-relevant is time effecient.

My suggested readings:

• Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People by Bradord D. Smart. Provides insight into a rigorous hiring process. I read this book on my babymoon and is the greatest book on HR I have ever read.
• Rework by 37signals founders Jason Fried and David Heinemeier Hansson. Great tips on business management.
• The 4-Hour Workweek: Escape 9-5, Live Anywhere and Join the New Rich by Timothy Ferriss. I used this book more as a motivational tool.
• Good to Great by Jim Collins. It’s a bit of an essay, but if you want to build a biggger and better business, it’s worth the effort.

5. Outsource everything you can

Time is currency. I have literally put my entire life on the internet and pretty much outsource everything. I haven’t been into a supermarket in four years. Supermarkets are time wasters, pay the $7.50 and get it delivered instead of spending two hours roaming the supermarket.

Some of my key insights to outsourcing a business process are:

• Test first. Start with a contract or hourly model, then lock in good suppliers with retainers.
• Start small. Just outsource one part of a process, then add to it. Either with the same person or with different people so that you keep core business secrets with yourself.
• Document it or they will f**k it up. Assume zero intelligence. You want a reliable, simple thing done, over and over again. You don’t want a business strategy for taking over the internet.