PDF Summary:What's Your Dream?, by Simon Squibb

In What’s Your Dream?, entrepreneur and investor Simon Squibb argues that everyone has a dream: a vision of the life you want to live and the contribution you want to make to the world. He also says the most satisfying—and financially viable—way to realize that dream is to build a business around it.

This guide walks you through Squibb’s framework for building a profitable business around your dream. We’ll first explore what a dream is, what holds you back from pursuing it, and why it’s worth turning it into a business. Then we’ll cover how to prepare yourself mentally and financially for entrepreneurship, develop your ideas into a functioning business, and set it up for long-term growth and profitability. Additionally, we’ll supplement his ideas with research and actionable methods from other entrepreneurs and business experts.

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Method 3) Build a Financial Cushion

Squibb advises you to leverage the first two methods to save as much money as possible. The more money you have in the bank, the less you’ll have to worry about covering expenses while building your business. As a result, you’ll be able to make decisions based on what’s best for your long-term success rather than what pays the bills immediately. For example, without savings, you might feel pressured to launch your product prematurely to generate income, only to discover no one wants to buy it. But with six months of expenses saved, you’ll have time to test and refine your product until you find something customers will actually pay for.

(Shortform note: David Bach (The Automatic Millionaire) adds to this advice by suggesting that you arrange to automatically save at least 10% of your gross (before tax) income before you have a chance to spend it. He argues that you’ll quickly get used to living without this money, so you won’t feel tempted to spend it—and you’ll effortlessly create the financial security you need to pursue your business.)

Part 2: Build

Now that we’ve covered the preparation phase, let’s explain how to develop your idea into a functioning business. During this phase, Squibb advises you to focus on two goals:

1. Acquire and learn from customers.
2. Establish reliable processes.

Let’s explore each goal in detail.

Goal #1: Acquire and Learn From Customers

You might assume that your first goal when developing your business should be to perfect your product or service so that you can sell it. Squibb warns against this approach because it may lead you to waste time and money perfecting something that no one wants to pay for. He says that you should instead attempt to sell an incomplete version—like a prototype—of your idea as quickly as possible. Selling early will support the development of your business by letting you:

• Keep costs low by helping you test your assumptions about how profitable your product or service will be before you invest significant time and resources in its development.
• Create a more profitable product or service by helping you collect feedback on how to make it more appealing to potential customers.
• Pay for resources by helping you build your customer base and generate sales.

(Shortform note: Eric Ries (The Lean Startup) expands on how selling an imperfect product or service improves your chances of success. He says one of the most common reasons new companies fail is that they overlook chances to learn and adapt their business strategies. Instead, they assume they already know what customers want, go into business with a single plan, and don’t adjust to customers’ actual preferences. Like Squibb, Ries suggests you can avoid this pitfall by running release-and-refine cycles: Release your product or service, learn more about what your target customers want and are willing to pay for, and then adapt your offer to align with those preferences.)

Squibb offers a three-step method for achieving this goal: Define your target customer, sell a low-cost prototype, and refine your product or service. (Shortform note: In Exponential Organizations, Salim Ismail recommends you advertise on crowdfunding sites to manage these three steps simultaneously. This approach will enable you to quickly find out how many people are interested in your product, make sales with a preorder campaign, and gain market data and valuable feedback. If your campaign isn’t a success, you can cancel it at minimal cost to yourself (and no cost to your customers), adjust your offer, and try again.)

Step 1) Define Your Target Customer

First, Squibb says you need to define who you’re selling to so that you know where to focus your efforts. To do this, consider who will want to pay for your product or service—do they have particular interests, income levels, or professional backgrounds? The more specific you are, the easier it will be for you to find them and make contact. For example, if you know your target customers like to homebrew beer, you might be able to reach them through brewing forums or local events.

(Shortform note: Marketing experts recommend two strategies for learning who your customers are and where to find them. First, use SEO tools to analyze how many people are searching for similar products and services to yours and what businesses and distribution channels they use to research and fulfill their needs. Then, sign up for social listening tools and make use of analytical reports and demographic data to learn more about potential customers’ interests and backgrounds.)

Step 2) Sell a Low-Cost Version of Your Offer

Once you’ve made contact with potential customers, attempt to sell them a prototype or pared-down version of your product or service. For example, if you eventually want to sell a complete homebrewing kit, you might start by selling individual components, like a bottle capper or fermenter. (Shortform note: A popular approach for creating prototypes is to design a minimum viable product (MVP). Ries (The Lean Startup) explains that MVPs are not necessarily functional offers, but rather simplified versions that allow you to elicit feedback from potential customers. This could be in the form of an informational video or a website that generates interest in the offer, or a mockup that demonstrates how it would work.)

Squibb explains that this pared-down approach will help you quickly and cheaply confirm whether people will pay for your offer, while also providing opportunities to gather feedback on what people like or dislike about it. (Shortform note: Rob Fitzpatrick (The Mom Test) adds that the best way to gather feedback on what customers really think of your offer is to have casual conversations with them about their lives. According to him, when directly asked about a product or service, customers tend to say what they think you want to hear. However, when talking about their daily experiences, they tend to give honest insights and reveal their true feelings.)

Step 3) Refine Your Product or Service

After you’ve attempted a few sales, look through the feedback you received from both the customers who paid for your offer and those who didn’t. Then, adapt your product or service to accommodate this feedback and attempt to sell it again. Squibb recommends that you repeat this process until you feel confident that your product or service aligns with what your target customers want and are willing to pay for—even if that means pivoting from your original idea.

(Shortform note: In their feedback, customers will make many requests. It will be tempting to meet every demand and capture every potential sale, but you can’t please everyone without losing revenue or ending up with a generic offer. To avoid making unnecessary refinements and changes, Seth Godin (Purple Cow) suggests you keep the specific value you intend to provide in mind and aim just to serve your smallest viable audience. This will help you focus on the most profitable refinements and accelerate the process of arriving at the final version.)

Goal #2: Establish Cheap and Reliable Processes

As you work on acquiring customers, you’ll also need to set up consistent, cost-effective processes that enable you to serve them. Squibb recommends three tips:

1. Create checklists, templates, and reminders: This will save you from having to think through each key task before you do it. They’ll ensure you don’t forget important details and make it easier to delegate tasks as your business grows.

2. Keep costs low: Use free or cheap resources whenever you can, spending only on resources that help you refine your offer and generate more sales. Spending on anything that doesn’t add to your net profits will only eat into your budget and slow your progress.

3. Reinvest your profits: Funnel any income you generate toward optimizing your processes—for example, by purchasing equipment that improves efficiency or quality. Such investments will save you time and money in the long term, enabling you to serve more customers.

Advice on Establishing Effective Processes

Josh Kaufman (The Personal MBA) offers advice that will help you implement Squibb’s three tips.

To create checklists and reminders, you first need to understand all the tasks your business relies on. Consider your product or service and write down all of the steps it takes to:

• Create it: This includes designing, manufacturing, and ensuring quality control.

• Market it: This includes your branding and media campaigns.

• Process orders: This varies depending on whether you deal directly with your customers or use intermediaries to handle your orders.

• Deliver it: This depends on the nature of your product or service and whether you’re reliant on distribution channels to fulfill your orders.

• Follow up on it: This includes providing customer support and troubleshooting problems.

Once you’ve outlined all of the tasks involved in running your business, consider how you can make incremental improvements to save time, effort, and money. Kaufman suggests considering ways to:

• Streamline tasks: This might include automating some of the tasks or eliminating unnecessary tasks.

• Cut costs while maintaining quality: This might include cutting intermediaries out or changing suppliers.

• Improve processes: This might include investing in resources such as equipment or more employees.

After doing all this, you’ll be able to reinvest your profits in the improvements that will make the biggest difference to your efficiency and profits. However, in Profit First, Mike Michalowicz suggests that you shouldn’t reinvest all your profits because doing so reduces the amount of cash you have on hand in case you need to pivot in response to changes in the market. Instead, Michalowicz argues that limiting the funds available for business expansion forces you to spend more wisely.

Part 3: Grow

Once you’ve aligned your product or service with what customers want and are regularly making sales, you’ll be ready to focus on your business’s long-term growth and profitability. Squibb recommends three strategies: Make existing customers happy, pursue expansion opportunities, and build a team. Let’s explore each strategy.

Strategy #1: Make Existing Customers Happy

Squibb argues that making existing customers happy is essential to the growth and success of your business. Happy customers are more likely to become regular customers who offer a reliable source of revenue, promote your business by recommending you to others, and offer feedback that will help you create more profitable products and services. He says that the best way to keep customers happy is to provide excellent customer service and always deliver more than you’ve promised—for example, by completing orders ahead of schedule, including extras they didn’t request, or giving them early access to your latest products and services.

(Shortform note: Like Squibb, business experts Ken Blanchard and Sheldon Bowles (Raving Fans) stress that businesses must make customers happy by providing excellent service and exceeding expectations. The authors explain that these methods support growth because they help foster emotional benefits (like trust and loyalty) that encourage customers to become emotionally attached to your business. The more emotionally attached they feel, the more they want to interact with you and contribute to your success.)

If resource or time constraints make it difficult to provide this level of service to every customer, focus your efforts on your most profitable customers—the ones who pay the most for your products and services. Squibb explains that, out of all your customers, only a small percentage contribute to the majority of your profits, so investing your resources in keeping those customers happy will pay off more than spreading yourself thin across everyone.

(Shortform note: While Squibb suggests that the most profitable customers are the ones who pay the most, other business experts argue that a customer’s profitability depends more on how much it costs to serve them. A customer who spends less without requiring additional support tends to be more profitable than one who pays more but needs constant attention. These experts say the most profitable customers tend to place single large orders instead of multiple small ones and commit to their orders without asking for modifications post-sale. They pay up-front rather than through installments and require minimal attention from sales and post-sales teams.)

Strategy #2: Pursue Expansion Opportunities

Another way to ensure long-term growth and profitability is to expand your business by offering more products and services or reaching more customers. Squibb says you can come up with expansion ideas by reflecting on four questions:

1. What do your existing customers ask for that you don’t currently provide? (Shortform note: If you’re short on feedback here, C.K. Prahalad and Venkat Ramaswamy (The Future of Competition) suggest inviting customers to contribute ideas for new products or improvements to existing ones. In addition to generating potentially profitable ideas, this approach will increase customer engagement and loyalty by making them feel like active partners in your business.)

2. Which other customer groups might be interested in what you already offer? (Shortform note: While catering to new customer groups does support growth, research shows that focusing solely on acquiring new customers can be an expensive strategy: Attracting new customers is much more expensive than pleasing those you already have, and the likelihood of making a sale to a current customer is three to six times more than the chance of converting someone new. This suggests that it might be more profitable to provide existing customers with what they ask for than to seek out new customer groups.)

3. Are there geographical locations you’re not currently serving? (Shortform note: Alexander Osterwalder and Yves Pigneur (Business Model Generation) suggest that the most effective way to increase your online presence and cover more geographical locations is to expand your marketing, sales, and distribution network. If you don’t have the resources to expand your network, the authors recommend partnering with external marketing agencies, vendors, and distributors to manage customer relationships on your behalf.)

4. Are there different marketing methods you can use to reach more people? (Shortform note: Figure out if you’re missing opportunities to reach your target customers by finding out what marketing channels they use and when they use them. You can achieve this by tracking, collecting, and integrating data—such as demographic, psychographic, or clickstream—about potential customers and the circumstances in which they make purchases of similar products and services.)

Once you’ve come up with some options, Squibb says to evaluate each one by weighing its potential benefits against the resources it would require. Then, pick an option you can realistically pursue with your current resources and test it on a small scale before committing to it fully. For example, you might test out a new marketing method by running a single campaign to see how many inquiries it generates before investing in a full-scale advertising strategy.

(Shortform note: One way to follow Squibb’s advice is to use a prioritization matrix to objectively rate and compare your options according to the criteria you choose, such as how easy they’ll be to implement, how many resources they’ll require, or which ones have the best chances of success. When you’re ready to test an option, Matthew Syed (Black Box Thinking) recommends using randomized control trials (RCTs). To run an RCT, establish a control and introduce a variable to measure its impact against that of the control. For example, compare the results of your current marketing method (your control) against your new marketing method (your variable) to determine which one is more effective.)

Strategy #3: Build a Team

As you expand your business, you’ll eventually need to hire people to help you manage the workload. Squibb offers three methods for building an effective team: Prioritize candidates who care, share ownership, and delegate daily management.

Method 1) Prioritize Candidates Who Care

While qualifications and experience are obvious factors to consider, Squibb says it’s more important to hire people who care about what your business does, as they’ll put in more effort than those who work just for money. He says you can distinguish between candidates who care and those who don’t by asking them to complete an unpaid project during the interview process. Those who really want the role will demonstrate their enthusiasm and abilities, while those treating it as just another application will decline.

(Shortform note: While employees who care about their work do tend to be more engaged and productive, asking candidates to complete unpaid projects may not be the best way to judge their enthusiasm. Research shows that strong candidates often can’t complete unpaid projects due to time or financial constraints—so requiring them to do so often filters out the talent you need. Employment experts suggest that you can gauge a candidate’s interest and capabilities without alienating them by asking for examples of relevant work projects or offering paid trial periods.)

Method 2) Share Ownership

Once team members prove themselves capable, keep them from leaving by offering them equity or profit-sharing arrangements. Squibb explains that employees with equity feel more invested in the success of your business. As a result, they take more initiative, care about long-term results, and stay committed through difficulties. If you’re worried about giving up ownership, remember that you’ll get more out of owning a smaller percentage of a thriving business than all of one that fails because you couldn’t hold onto good employees.

(Shortform note: Daniel H. Pink (Drive) warns that this approach can backfire by causing employees to lose interest in the work. He explains that any sources of external motivation (like profit-sharing arrangements) reduce employees’ subjective sense of autonomy by making them feel like the work is something they have to do to get more rewards. This makes the job itself less appealing and consequently demotivates workers. Instead, Pink recommends fostering your employees’ internal motivation by giving them more autonomy at work—for instance, by letting them work on projects of their own devising for 20% of their time.)

Method 3) Delegate Daily Management

Once you have a solid team in place, gradually delegate all your responsibilities and take a step back from day-to-day operations. Squibb explains that this strategy supports your long-term success by ensuring all business functions run efficiently without your direct involvement. This, in turn, enables you to focus on pursuing opportunities that fuel the ongoing growth of your business.

Autonomy, Performance, and Creativity

Delegating day-to-day operations, as Squibb recommends, doesn’t only help you pursue growth opportunities—it also motivates your team members to do their best work. In High Output Management, former Intel CEO Andrew Grove explains that the most effective and lasting motivation is one that fulfills the human desire to achieve competence or mastery and contribute to a stellar result. By allowing your team to work autonomously, you give them opportunities to improve and overcome challenges, effectively supporting them in their pursuit, as Grove would put it, of self-actualization.

As previously stated, Daniel Pink (Drive) concurs about the benefits of delegating and granting autonomy, suggesting that employees who have control over aspects of their work are more motivated to contribute valuable ideas. This increased engagement naturally leads to more innovative thinking and problem-solving, as employees feel personally invested in improving the processes they interact with daily. Additionally, autonomous employees are more likely to voice their ideas, knowing their input is valued and could potentially influence their work environment.

Moreover, reducing your role provides you with the space to leave the business and pursue new opportunities. Why would you want to leave something you’ve worked so hard to build? Squibb explains that after you’ve established your business and achieved what you set out to accomplish, you may reach a point where continuing to lead it no longer satisfies you—the work that once excited you might become routine, or your interests may evolve in new directions. (Shortform note: Derek Sivers (Anything You Want) adds that you’ll know it’s time to step down when you routinely fantasize about doing something else. If you reach this point and don’t walk away, you’ll risk damaging everything you’ve worked so hard to build.)

By establishing a team capable of running operations without you, Squibb says you’ll create the flexibility to transition out smoothly when that moment arrives. This will ensure your business continues thriving while you move on to whatever comes next.

(Shortform note: Several business authors suggest that entrepreneurs can sustain growth by relinquishing control. Jim Collins (Good to Great) says that great leaders build companies that can thrive without them—they achieve this by identifying and grooming successors to take over their CEO roles. Bo Burlingham (Finish Big) argues that entrepreneurs should plan to exit their companies from the very beginning by building strong leadership teams, developing succession plans, and preparing their companies for sale or transfer.)