Seth Goldman and Barry Nalebuff built a company called Honest Tea from scratch into a $100 million enterprise which they eventually sold to Coca-Cola.
They wrote a book about the journey called “Mission in a Bottle” which you can get on Amazon.
In addition, Eric Wagner wrote a great article for Forbes about the two entrepreneurs and their rules for success. You can read the whole article here:
In the article, Goldman and Nalebuff share what they consider to be their 10 must-follow rules on how to start and build a successful business.
In our blog over the next two weeks, I’m going to share those 10 rules – five this week and five next week.
So here goes with Honest Teas first 5 rules for building a wildly successful business:
1. “Build something you believe in – because that’s the first step to building a great brand.”
Just like Goldman and Nalebuff, there will be times when you’re all alone, sitting in a dark room wondering why your business is failing. At that point, there is only one true thing to power you forward – believe in your purpose.
2. “Don’t aim for 10% improvement. Make it radically better and different.”
Honest Tea was radically different when first introduced. In your business don’t settle for “just enough” Instead, dig deep and decide right now to build something radically different and radically better.
3. “Prepare to be copied. Don’t start unless you’ll survive imitation.”
If your idea is truly radical and takes off, you can count the minutes before the copy-cats arrive. How will you survive competition from the big 800-pound gorillas on the block? Or even from the upstart little guys? Your key is a system of ‘continuous innovation’. Although you could also take the route of Honest Tea – make friends with one of the 800-pound gorillas and let them buy you out. The Coca-Cola Company acquired Honest Tea in 2011!
4. “Build up reserves of money and energy for bad luck and mistakes.”
Great advice – but sometimes extremely difficult to do. What startup or growth company has reserves of cash sitting around? But Goldman and Nalebuff make a good point – run as lean as you possibly can and do not waste money or energy. You will endure mistakes and bad luck along the way, so having a war chest of capital and energy can help you handle it.
5. “Never, ever give up control – until you sell.”
Some high-impact entrepreneurs will readily give up control in exchange for the lure of high-growth through venture capital – but Goldman and Nalebuff decided against it. Relinquish control and you risk losing the culture and vision of the company you set out to build. Even though Honest Tea raised investment capital from the beginning, Goldman and Nalebuff always remained in the driver’s seat.
As a business owner and entrepreneur looking to build your business, these rules are a great start.
So, think about how you can apply them in your own business.
The other five success rules next week!