This post will describe my thought process throughout my entire entrepreneurial journey. Through my story, I hope to demonstrably answer the question: “is business hard?” The answer is yes, business is hard.

And the reason why business is hard is simple: it’s close to impossible to make good decisions before you make them. A lot of the lessons come after, and as a result, the answer to something as simple as:

“Am I doing the most optimal thing to maximize my time?”

Is often impossible to answer.

Outlined below is an incredibly condensed version (it’ll still end up being long AF though, knowing me) of my entrepreneurial journey.

Chasing Passive Income

I became discontent with the BS corporate world back in July of 2015. And I wanted out. Rather, I wanted to have the option to work as opposed to being required to work to survive.

Working backwards, I wanted passive income.

I discovered a real estate site called BiggerPockets. And I started listening to their podcasts and saw a lot of people ‘making it’ in real estate. So I went deep and bought my first out-of-state single family by October 2015.

I didn’t care about wealth creation back then – just cash flow. I also lived in the SF Bay Area back then so I couldn’t really afford to buy a house there with my income. So my reasoning was this:

If I buy a bunch of cash-flowing rentals at $300/door, then I just need 20 houses for $60K/yr passive income.

Oh, how modest my goals used to be back then.

The problem: I couldn’t afford 20 houses. So I had to save up for one at a time. So I thought: if I drove for Lyft and got an extra $30K/yr, I’d be able to buy roughly 2-3 houses a year. Or about a 7 year trajectory to retirement.

Does this sound like a good plan to you? If so, you’re fucked – just like I was. Here are some reasons why you should avoid single family rentals, but I’ll give a condensed summary of what happened below / lessons learned.

• $30K/yr in Lyft is possible. At the expense of your health. You need to drive at weird times to get $30K/yr. Plus I had my day job.
• The $30K/yr isn’t $30K/yr. It’s almost nothing a year, because you need to pay for business expenses. The $30K/yr probably ends up as $10K/yr, which makes driving Lyft to raise money to buy houses infeasible.
• The thesis that single family rentals can make a lot of cash flow is true—but you’ll need to take immense risks. You could have months where you’re down $10K. And take months and months to recoup that cost. Imagine this at a scale of 20 houses. The volatility / risk is just too much for me to stomach.

After these lessons, I sold my rentals by August 2020.

Is Business Hard? Yes, So Do Everything!

I was stuck for around a year, and then I started going to Meetups to meet entrepreneurs.

One of these ‘entrepreneurs’ was an MLM recruiter. I joined that, and that didn’t work out. Because multilevel / network marketing is stupid, for obvious reasons. They marketed as “as easy to do as a McDonald’s fry cook, and make as much money as a CEO.”

Yeah—anyone ever says that to you, run. No such thing. The condensed lessons here are:

• Greed is good. But not when other people have to sell you the opportunity.
• MLMs are bad because their product provides little to no value. That’s why you need to sell to your friends/family. To compensate for the product’s uselessness.

Then I went to a real estate conference and learned about Airbnb arbitrage. This is the process of renting out a place from a landlord, then subletting it back out on Airbnb to make a spread. The marketers advertised the ‘beach’ + ‘passive income’ lifestyle. It’s passive income because “you can just hire virtual assistants to run your business” and so on.

Anyway, after a lot of cold calls we started our first unit in October of 2016. And then by October of 2018, we had 14 units.

While juggling Airbnb arbitrage, I took Tai Lopez’s “social media marketing” course. This was my thinking:

Me and my business partner were making roughly $800/mo per unit in Airbnb. If we scale it to 100 units, each of us make a lot of money. And if I can get $1000/mo for each client in social media marketing, I can get probably do 50k/mo ($40k/mo through Airbnb and $10k/mo with 10 marketing clients).

Empirically, $800/mo per unit sounds good. And is great proof-of-concept for scale. We’ve been working on this for a year already. And the risk for social media marketing is low. Just time/effort. Sounds like a good plan, right? Well-reasoned and logical. Again, if you think this is good enough, you’re fucked. Here’s all the shit that went wrong:

• First, social media marketing (SMM) is a waste of time. I held onto that idea for too long.
• Another problem with SMM is I paid for a $1000 course to help me make money. The information in the course is ineffective. I implemented all the strategies: none are effective.
• SMM took many more hours than Airbnb Arbitrage and lost money, whereas the latter made money. Yet I kept on and persisted.
• Here’s the lesson from SMM: Business is not about your hopes and dreams. It’s about making money in the least amount of time. Hustle and hard work does not give you money. Doing the right plays does. You’re going to die someday. Acquire the result you need sooner than later so you have more time to do other things. If an idea doesn’t work, drop it.
• Another lesson from SMM: don’t ever believe a single thing internet marketers say. Almost all online courses are garbage.
• Airbnb Arbitrage didn’t work out either. The reason why it didn’t work out is literally in the name “Airbnb Arbitrage”. The short-term rental industry is heavily monopolized by a single platform: Airbnb.
• A guest (or the landlord) installed a hidden camera in an Airbnb bedroom and the same guest / different guest complained about the hidden camera. We got banned from Airbnb and all of our revenue were cancelled. We tried to use other platforms to procure customers but it just wasn’t the same. We eventually used other Airbnb accounts, but margins were getting squeezed because more and more people jumped into this low-barrier-to-entry business model = higher competition.
• We lost probably 30K in total and 5 years of time.

SMM was shut down after 2 years of no progress. Airbnb Arbitrage was shut down after 5 years. Business is hard.

Business Is Hard And My Reasoning Is Bad. So Try Everything Once More, But Faster

I realized from the lack of progress in SMM and Airbnb arbitrage that I was going too slow. I don’t want to waste 2-5 years every time I want to test out an idea.

I’ll be dead before profitable. There must be a better way.

So I came up with an idea: sprint for a month or so for a new idea. And if it’s good, keep going. If not, don’t. Think of this is a 30-day sprint framework with a pass-fail criteria. If it fails then stop. If it passes, keep working on it for 2 more months, etc.

Here are the ideas I came up with:

• Do service arbitrage for 30 days. This is when you sell services as $X and buy the same services at $Y. And you make the spread between $X-$Y, where $X>$Y.
• Try to sell SEO to business owners for 30 days. This is mostly a lot of cold emails / cold calls. And I used tech that’ll spam everyone on LinkedIn given that the users showed up on certain filters.
• Invest in a crypto Ponzi scheme and see how it works for 30 days (I didn’t know it Ponzi when I invested into it).
• I tried to sell digital goods on Etsy for 30 days. Ended up being 60 days (see below) for some reason.
• I wanted to flip houses. And the process will take longer than 30 days. So I did it for maybe 3-4 months.

Here’s my reasoning:

Instead of wasting years of my life with an idea and getting overly romantic, just sprint it. It works or doesn’t within 30 days. Just pick low risk, reasonable businesses to test. 30 days isn’t much and that means I can execute 12 business ideas a year. Once a business gets traction, I can just run with it.

And if you think this reasoning is sound – then, you’re kinda fucked but not really? This line of reasoning – having a 30-day sprint as a framework was actually a really good idea. It allowed:

• Me to assess I enjoyed doing something.
• Me to ascertain if something is profitable, even.
• Rapid learnings/lessons. Much faster than focusing on only 1-2 businesses for 5 years.

Here’s all the lessons I learned from all the stuff above:

• Service arbitrage: You can make money with this. It’s relatively low effort. But the income is inconsistent. And the income isn’t passive. There’s a lot of translation work to make the specs understandable for lower-cost workers. Not scalable.
• Selling SEO: Finding clients is hard. Keeping clients is even harder because there’s a lot of time needed for SEO to propagate. Think 6 months. Have fun convincing clients for 6 months on why you haven’t gotten results. AKA the lesson = I will never do any more client work, ever.
• Crypto Ponzi: I got suckered in because I was greedy. Again, greed is good. But if someone is selling you the greed opportunity, you’re getting scammed. All real greed opportunities are generally some secret you discover. By definition, if there’s an easy to way to make money, you (and everyone else) would do best to keep the moat going by never telling anyone.
• Selling digital goods on Etsy: This actually worked and is profitable. Across 2 stores, it’s make a couple grand over the past few years. Not bad for a month’s work. And it’ll keep collecting the $3-5/week as long as the assets are live. But I didn’t go forward with this because 95% of the digital goods don’t sell. This means I need to do a lot of active work to build up a reasonable income stream. And I got carpal tunnel. This is the first idea that’s actually feasible for passive income + scale – but it’ll take too long in my opinion.
• Flipping houses – too much risk. Having consulted veterans that’s been in the business for decades, it seems like they still lose money on deals. If veterans are losing hundreds of thousands of deals, it’s quite likely I would also lose a lot of money. I can only lose a little bit of money before bankruptcy, so I passed on this after digging deeper.

Here’s the timeline of all of the above.

This is an old graph so there’s extraneous info here:

• Ignore “biceps”.
• “Logos” is the service arbitrage idea.
• I think the SEO lasted for more than 30 days because I landed a client and cut him off by end of May.
• I did Etsy for 2 months because I spent one month on a store. It was profitable. Then I realized that I might be able to do better with a more niched down store. The next 30-days were spent on another store. It didn’t do better (more niche, but much higher competition) and I gave up after 2 months.

Expanding On A Good Idea: Enter Dropshipping

From the previous epoch of entrepreneurship (Jan 2019 to Sept 2019), I found that Etsy worked…kinda. The problem with Etsy is that it took a lot of time creating the digital PDFs. And I wanted to go faster.

The schedule breakdown was like this:

1. 95% of the time was creating the PDFs.
2. 5% of the time is optimizing SEO/ads to see if it’ll actually sell.

What if I can do something like this instead:

1. No time creating the product.
2. 100% of the time marketing the product so that I can see if it sells, and scale from there?

Here, we enter dropshipping territory. Dropshipping is simply low-risk e-commerce whereby:

1. Customer buys something from your website.
2. You fulfill your customer’s order by ordering it on another website, and having them ship directly to customers.

This way, you hold no inventory risk. So my thinking is:

Let’s just do dropshipping because it’s got the benefits of Etsy, which is I’m selling a tangible good instead of a long-cycle services based goods. And it protects me from the time-downside of Etsy, which is I just need to market the goods, as opposed to having to craft each product by hand. All I need to do is to find one good product and scale it.

Reasonable right? Nope. Fucked again. Again, business is hard and no amount of reasoning allows you to really make good educated guesses.

Here’s what’s wrong with dropshipping and the lessons learned:

• Again, greed is good. But if someone’s selling a course on this, it’s no longer good. And people were selling courses on this. This heuristic should be absolute, with almost no exceptions.
• Secondly, because people are selling courses on this, dropshipping got very saturated. Hence, margins are a lot lower. As soon as you’ve got a good product, people will copy your hand-made videos/photos within a 24-hour period. And clone your website.
• Third, the logistics for dropshipping is not as good as it was 2015 when these dropshipping courses were released. Shipping’s a lot more expensive, which squeezes margins. Margins squeezed = no enough money for ads.
• Ads also are much more expensive than 2015 when these dropshipping online courses were released. By about 10-100X in CPM, for example.
• And despite all courses saying ‘Facebook ads work!’ – they don’t work. Google ads work, but you get suspended often.
• I don’t save that much time by not creating the product. Because instead of using a platform like Etsy where it’s easy to list items, I’m using a much more time-consuming process with Shopify to build a sick landing page.

Taking all of these lessons together, we’ve evolved the dropshipping business into the following instead:

1. Take inventory risk and buy in bulk. The economies of scale comes in and we can offset the shipping costs. But we might litmus test a new product and just eat the shipping costs upfront as we test if a product’s getting traction or not. This gives us back some margins. This means we’re no longer in dropshipping territory, and more in regular e-e-commerce territory. This had some struggles though as we needed to find a warehouse (3PL) that didn’t rip us off.
2. Migrate from Facebook ads to Google ads. Google ads is easier, faster, and better than Facebook. Period. Only issue is they’ll randomly suspend you and not tell you why. This is a business-breaker. Because of this, we’re currently adjusting by having our traffic come directly from SEO instead, so we don’t run into the “Airbnb” problem – or relying on a sole platform for profits such that a Black Swan suspension takes your profits down to 0.

Note that the above 2 points are just what I am thinking right now. It doesn’t mean it’ll work out. And given my past track record, more adjustments are probably needed. In the future though, instead of building a website, I’d much rather sell on Amazon via the method mentioned in 12 Months To A Million. This is because no website to build and no product to build = fastest product testing. Because you get SEO exposure with Amazon, I don’t mind the higher selling fees than if I were to sell on my own website. You also save time and money not having to run ads. But the issue with Amazon is the same issue with Google and Airbnb. You’ll probably get banned for no reason and lose all your income. So I’m not too keen on spending too much time on Amazon. But if I had extra time, I’d probably try that out.

Summing Up My Journey. And The Surprise

Basically:

1. I got all anti-corporate and dove deep into a couple random businesses, like Airbnb Arbitrage and Social Media Marketing Agency.
2. Realized that that’s not smart and did more shallow/wider-breadth work in 2019.
3. Learned stuff and decided to refine on the one thing that seemed like it could work for me, which is selling goods on the internet (as opposed to services). And that refinement into e-commerce continues to this day.

On the side though, I wrote a crypto arbitrage bot that scans for crypto market inefficiencies and the profits / ROI there for the time and money invested as a percent far exceeds everything I’ve ever done. Combined. And that bot took 2 weeks to start working (though I need to maintain it the past few months as I discover bugs and arb strategies change).

So the irony of it all is: 7 years of entrepreneurial refinement (2015-2022) doesn’t beat me being accidentally intellectually curious for 2 weeks on some random idea I came up with walking with my partner in NYC.

What. The. Fuck.

Why Business Is Hard

At the end of the day, business is hard for the same reason that picking a stock that outperforms consistently is hard:

You can’t predict the future.

Both are similar.

You reason out ‘the best thing you can do given your current situation and skill’ but you can’t predict the future. There are some obvious consequences you can predict, but there’s so many unknowns you just won’t know until you put the time, effort, and sometimes money in.

Likewise for stocks you can read the DCF and fundamentals and look at technical analysis. They all agree and you make a move. And the market disagrees for whatever reason and you lose $50K.

Maybe over time, we as entrepreneurs get better at predicting hard-to-see consequences. But even with that experience, we still need to juggle these variables:

• What are you good at such that you can leverage it?
• What’s the current market conditions?
• What are all the potential risks and consequences of doing a certain play?
• How much risk can I take?
• How much time can I put in?
• And how much time would I need to put in (given my competency/skillset)?

Consider all these factors, and you basically solve a multivariate, hard-to-solve, complex problem. And then you reason your way into a somewhat reasonable play.

And because you can’t predict the future, your “reasonable play” is probably quite unreasonable after all. And even if you do strike gold and you get tons of traction, as Logan Roy would say in HBO’s Succession:

Nothing is a line. Everything, everywhere, is always moving, forever.

Meaning you do all the hard thinking and hard work, and got lucky. You get results.

But even then, the results are only temporary. Unless you constantly adapt to the new threats and changes, and continue coming up with optimal plays.

That’s why business is really fucking hard.

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