How to start a business - Part 1 - What is a business?

I’m starting a multi-part series on how to start a business. In it I will explain my philosophy; and follow up with how it applies to TuitionCoin.

If we are starting a business, let’s start with a good definition of a business. A business is repeatable value. That’s it. If it is repeatable but not valuable – it either goes bankrupt or never starts. If it is valuable but not repeatable – it may burn bright, but will eventually fade or crash. Another definition; BIG businesses are scalable. If it is not scalable it may be a business, but it will never be big.

It is my theory that all business go through the following stages. Discovering value, delivering value, repeating delivery, optimizing, scaling, operating, and capitalizing. We will talk through the stages in future posts.

The founders job is to start a business from scratch. You succeed, when you have a business.  This means, you need to get through the first three stages. Discover value, deliver value, and find a way to repeat delivery. At the end of the three stages, based on my definition, you are a business!

How does this apply to TuitionCoin. I’m in phase two, but investors want me in phase 5 (scaling). I’m not there because of a strategic decision. I could have outsourced both origination and servicing to move faster. This is a big question for any founder. The question is; how much do you do, and how much do you have others do? The tradeoff is between learning and speed. In doing you will learn. In not doing you will be quick. I believe the most important thing for a start-up is learning your core business. If something is not your core, have someone else do it. In my situation. I believe the lender that owns the entire value chain and optimizes every step will win. It's a lot of work figuring out the entire value chain; but, here is the thing. I’m playing to win.

Go to Part 2 - Discovering Value