SOP 145 — Run the business at level zero — improvise

1. The stage at a glance

Item	At this stage
Stage	Improvise, the first stage; also called level zero
Headcount	One. It is just you
Your role	Researcher: working out what will work
Leadership structure	Just you
How many companies are here	Not really any; you are not a company yet, just one person working out what to do next

People at this stage often lack clarity, and research is how you get it. Some of you might already be two or three steps ahead on parts of this page; it starts from a true zero so nobody is left behind.

Flag: the headcount. Here it is one: just you. SOP 183, section 5, also gives it as none, since nobody is in the company yet, and as not applicable. This page does not settle which reading is right.

2. The functions: what holds you back, and what graduates you

Function	What it is	The constraint	To graduate
Product	The goods, services and results you deliver	You have nothing to sell	Give something away for free
Marketing	How you tell people about your stuff	Nobody knows about your stuff; you made it in the dark	Tell them about it; it is free, which makes that easy
Sales	How you get people to give you money for your stuff	You lack the skill to sell	Get them to try it for free
Customer service	How you get customers to refer, retain, review and resell	You have no customers to service	Service the free customers you have
IT	How you gather, store, analyze and display information	You have no hardware	Save up and buy your hardware
Recruiting	How you find and hire people to work for your company	You do not know how to work	Recruit yourself to work
Human resources	How you lower the chance that employees or regulators sue you	Your personal assets and credit are unprotected	Create a business entity that separates your personal assets from the business's
Finance	How you report and manage your money	Your personal money is your business money	A business bank account with money in it, and startup expenses written off

3. Product: make something to give away free

You do not have to give something away; it is a strong recommendation, and in one practice here it was done with every company, for a lot of strategic reasons.

The category. The product categories: software; media (books, content, information); a service, where you give your time away, either knowledge-based (you can do what others cannot, such as coding a website) or time-based (others can do it but do not want to, such as mowing a lawn); and physical products people can hold.

The objective. There is usually one, especially for software or a service, sometimes even media. The kinds are on SOP 13 — Choose and build a lead magnet, section 4. The examples here:

Reveal a problem, opening a loop to sell other things later: a chiropractor's assessment shows your posture is off, which sets up longer services.
A free trial: they taste the solution but lose it unless they keep paying. A website speed test shows you can cut the page load time, which raises conversions; you give seven days of it, and keeping the increase means paying.
The free step of a multi-step process: a garage sealant business might say three coats are needed and apply the first, which protects from sun, while termites, wind and the color still need the rest.

What people sell. A back-of-napkin list: services, products, access, risk, money, media, data, software. A way offered to remember services when just getting started: consumer services are things people hate doing, done for money (cleaning, cooking, laundry, lawn care, fixing things). Business services tend to be things businesses are not as good at as you: you work as a fractional expert, perhaps a consultant or a done-for-you person for one function, doing part of someone's business because you are better or faster at it, or building software that does both.

Unscalable value. With no customers and no employees, scale is no worry. Ask what one-to-one time and work you can front at your own cost, because you might not be that good yet, and get feedback from the marketplace. The objective now is to learn more than it is to earn. The mistake named is wanting to sell at once with no expertise and no proof; the best founders learn their customers' pains so they can iterate the product to make it a little better.

4. Marketing: tell people about the free thing

There are four ways to make people aware, said to be the only four: warm outreach, cold outreach, posting free content, and running paid ads. They are set out on SOP 12 — Run the four-channel grid.

Start warm. You probably want the cheapest and fastest way, which is warm outreach. You could post content, which is free, but it tends to take much longer. Reaching people who already know you is faster for any product or service, at least for getting people to try it.

How. It might be email, calls, texts or social media. The most popular way seen now is reaching people you know who follow you on social media, and the platform where you have most presence is typically where people start.
Who. Every contact from your whole life: everyone you have emailed, every phone contact, every follower. Even 200 followers on Instagram or 100 on Facebook is that many people who know you, and their affinity is very high: 100 cold leads will not get you far, but 100 people who know you, and potentially like you, can jump-start a business. It could be 100 people. Building that list is SOP 17 — Build the warm outreach list.

Drop the fear of judgment. If you have no money you should have no shame: knock, call, email, text, message, ask. Life-changing doors do not open themselves. The biggest thing seen at this phase is people avoiding warm outreach; they hear they should post content and almost use it as an excuse. The real reason is fear: being scared, embarrassed, not wanting to do the work for fear of rejection, or of what family will say. You have to be willing to be rejected. You can stay afraid of others' judgment or you could be afraid of never having a business; pick one. To graduate this phase, the advice is to let go of the fear of judgment and of shame. Starting free helps: you are only giving help away, so there should be no fear in reaching out, and it takes you a step closer to asking for money.

5. Sales: get them to try it, and find the hidden costs

At this stage, getting people to try the free thing and use it is the sales. Ask what their problems are, and offer to solve them in exchange for being told what you could do better and, if you were good, a review or a friend sent your way.

The four Rs, what you want from someone long term: a review; a referral; retention, ideally from free into paying later; and a resell, something more expensive at a higher level. For now you trade the free work for these instead of money; maybe they stay or buy more later.

The short-term objective: find the perceived hidden costs. They are called the inverse of the value drivers (SOP 3 — Diagnose an offer on its value drivers). If someone will not try it, or says they will and does not follow through, a cost is attached. Check:

Starting something they did not want to do.
Stopping something they wanted to keep, like sleeping in on Saturdays to train in the park.
Risk. Business-to-business: free ad management that still needs the owner to spend $22,000 a month on ads leaves the owner risking money.
Time and effort, such as a call they did not want to join.
Delay between your offer to help and the promised result.

These are not money, and you will often find the biggest costs of a product are not the money. Remove the rest and you can almost charge an infinite amount. The hypothetical: a button that gives you a six-pack at a click would sell to huge numbers at a huge price if you alone could offer it. Other solutions promise the same six-pack, but it takes a year, you might get hurt, and you give up early mornings, drinking and cheap food and start training and being sore. One of the easiest ways to raise value is to take away everything that sucks: make getting value as easy as possible. For every reason someone will not give you these things, find out why.

6. Customer service: serve the free customers as if they paid

What it means. Be available all the time and respond fast. No job is too small, down to cleaning the toilet if you have to. Do not resent working hard for nothing.
Act as if they are paying. They are, with their time, a review, and the chance they stay once you charge. It is often what you do when nobody is watching, for very little, that sets how successful the business becomes.
Execute ruthlessly. You are getting the better end of the deal. There is probably a better product out there with better service, so your only competitive advantage is ruthless execution: as fast and as much as possible, no limit on scope, whatever it takes to keep the person and hopefully convert them to paying later.
Drop the word scale for now, even though scaling is the whole subject; you need to work out what works. In one practice here, each time a new business was started, both owners worked customer service at ground level to learn what works. Throw everything at customers to see what they value.
Build a reputation. Blow people's minds with good service and there is a very likely chance they tell others.

The finding offered is the one SOP 144 — Hold support to five service standards and grade each rep carries in section 1: a study of why customers leave found more leave over bad service than over product or price. Someone could have a better, cheaper product, and if they have bad service you could still keep or win the customer. The real-world example given is a mobile carrier said to exist only because of its better customer service: worse coverage and lower speeds, objectively a worse service, yet it gained market share for a long time by beating its main rivals on service. Customer service here is doing whatever you have to do to get value to these customers.

7. IT: get the hardware to communicate and deliver

IT here means how you gather, store, analyze and display information: the phone numbers, emails, conversations, sales and feedback you collect. It comes up at ground zero, with no employees and perhaps only free customers. Some of you are on a public computer, which is fine; the aim is to save up for your own. If you already have hardware at home, or a phone, you have graduated.

Your tech has two jobs:

Communicate with people, to advertise and to sell.
Deliver your stuff: whatever hardware delivery takes. Mowing lawns needs a lawnmower; a makeup artist needs the kit, brushes and the rest; a coder needs a computer, an internet connection, a keyboard and maybe a comfortable chair, sitting ten hours a day.

You graduate by getting a computer, internet, a microphone, a phone and email.

8. Recruiting: recruit yourself

Recruiting yourself means early mornings, late nights, and learning to put in the work; at this point you can often beat 99% of people by out-executing them. Many people ask here who to hire or outsource. Nobody is too good to be the hardest worker in the room, whether you have done this before, had a six-figure job, or never had a job.

Work capacity is often what limits people; most do not know what working hard means. Starting at 10:00 and going until dinner, or until 5, is the picture given; the reality is that to get off the ground floor you might have to rise at 5:00 a.m. and keep going until 11:00 or 12, a sacrifice that might last 6 to 12 months ("they say years" is added, and that you can also just do it forever). Often, people in general fail to pass this level because they cannot build the work capacity the next level needs.

The principles offered, in the page's own words:

Beat 99% of people by preparing the night before, arriving early, leaving only when the job is done, remembering names, following up, and improving one thing at a time. Doing the basics every time is what lets you advance.
Work exceptionally hard, get rejected, and live below your means for three years, and you can beat just about everyone.
Beat 99% of people by working on without needing an immediate reward.
Find what works, do more of it, find what stops you doing more, solve that, repeat.
You can get good enough at almost anything with 20 hours of focused effort; most people spend a decade delaying the first hour.

Most of this phase is investing: time and money go in and nothing comes out, because you are the asset and must get better so the business can. It is stressful, with long hours, and there is no relief until things start to work; you cannot skip it. Many of the skills can be learned in about 20 hours, half a week of mornings or two full ten-hour days, yet most people put them off for years. Accept that you are bad at it, and get out of your head and into your hands: you learn more from 10 hours of testing whether something works than you would from 10 years of reading about it.

9. Human resources: form a business entity

The entity puts a wall between your things and people who might try to take them. As stated: in the US at least, it is an LLC or an S corporation for most businesses, unless you have investors, in which case this stage is probably not for you and you probably have some sort of C corporation. Go to an attorney, or use an online tool such as LegalZoom and set it up yourself, for a couple of hundred dollars. At level zero, just get an LLC so your personal assets are not tied to the business; that is what was done in one practice here.

Entity law and tax rules are not covered on this page; the statements above are carried as stated here.

10. Finance

Opening the account and writing off startup expenses are set out on SOP 150 — Set up the finances stage by stage; the constraint is in the table in section 2.

11. The bottom line

At level zero the big problem is that nothing is happening; you do not have a business yet. To graduate, get people to try your stuff for free. The next stage, monetize, is stage one, where you officially become a business.

12. What this page does not decide for you

Which product category and objective fit your business. Not established on this page.
How long the long hours last beyond the figure offered. It is offered as 6 to 12 months, with "they say years" said beside it. Not established on this page.

13. What this page does not cover

Pricing and paid selling are SOP 146 — Make the first money — monetize. Hiring anyone but yourself is not covered on this page.