NEW YORK – I live in the heart of Silicon Valley, where the main industry seems to be starting businesses. I’ve seen a lot of startups come and go – and I’ve started a few myself – so I’ve had quite an education. I’ve had friends who’ve started businesses they’ve built and sold for millions of dollars. But even more frequently, I’ve seen startups fail. As a result, I’ve learned quite a bit of what NOT to do if you want to succeed in your startup.

Of course, failing once in a startup is no shame. Most successful entrepreneurs have failed in the past, and they love to tell war stories of startups they worked on that failed. Indeed, I’ve had venture capitalists tell me they won’t fund entrepreneurs who haven’t experienced failure because they want them to “learn on someone else’s nickel.”

But while one failure is acceptable, repeated failures are a sign you’re doing something wrong.

I’ve had the rare opportunity to observe someone who has had at least five failed startups. It wasn’t that he had bad ideas. Not at all. In fact, other entrepreneurs have later built successful businesses on the same ideas. So I’ve been able to see the kinds of business decisions, and the personality traits, that have almost inevitably led to his repeated fiascos.

Of course, most people can’t afford to be “serial failures.” After your first or second failed company – no matter how you spin it – investors aren’t going to be eager to risk their funds on you.

What have I learned from observing an entrepreneur who has failed repeatedly?

1. Your good idea isn’t good enough. You’ve got to be a businessperson, not just an inventor. You may have identified a need in the market, and you may have come up with a truly inventive solution, but that doesn’t necessarily mean it can be the basis of a successful business or that you’re capable of running it.
2. Don’t be a “disruptor.” Sure, the news media may tout the success of multibillion-dollar startups that disrupt industries – Uber, Lyft, Airbnb, Netflix – but those are the rare exceptions, not the norm. Most entrepreneurs succeed by improving on already proven concepts.
3. Be willing to go out there and make sales. No matter what kind of inventor, entrepreneur or businessperson you think you are, if you are not willing and able to make sales, you won’t succeed.
4. Believe people. When people who have more experience in an industry or field caution you about the pitfalls of your idea and the difficulties you’ll face – in execution, in reaching the market, in making a profit – listen. In fact, be sure to solicit such insight.
5. Don’t believe people. When asking potential customers if, once you develop your product or service, they’ll be customers, don’t believe them. Sure, they love the idea now, but once it comes to handing over real money, they’re far less eager.
6. If you’re going to be selling to consumers, you’ll need a lot of money. It’s expensive to reach consumer customers – whether in a brick-and-mortar store, online or through social media.
7. NEVER self-fund more than one unsuccessful business or product line. If you can’t get someone else to believe in your idea and your ability to grow a business, then don’t risk your money a second time.

Most importantly, don’t be stubborn.

It takes a special kind of entrepreneur to fail five or six times, and the trait most responsible for that kind of serial failure is stubbornness.

If you believe you’re always right, you’re wrong.

Copyright 2019, USATODAY.com, USA TODAY, Rhonda Abrams

WASHINGTON – Certain home sales of $400,000 and below will no longer require an appraisal, under a new rule that took effect this week. Homes that qualify for the appraisal exemption can receive an evaluation instead.

It’s the first time in 25 years that federal regulators have increased the property value limit for homes that require an appraisal as part of the selling process. Federal regulators cited price appreciation in residential real estate transactions for the change.

The new rules likely apply to about 40% of home sales, regulators estimate. For properties that qualify for the exemption, the agencies require institutions to obtain an evaluation that provides an estimate of the market value of the real estate property.

The new exemption does not apply to loans sold or guaranteed by the Federal Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae or Freddie Mac. These will all still require an appraisal.

Under the previous rule, appraisals weren’t required on home sales of $250,000 and below. The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve approved the new threshold over the last two months, and the rule appeared in the Federal Register this week, making it official on Wednesday.

The National Association of Realtors® has advocated for a city-specific rule – that any loan limit related to an appraisal exemption be tied to specific markets rather than a blanket number for the whole country. Depending on average housing values, a $100,000 limit might be reasonable in some parts of the country, while a $500,000 limit might be reasonable in others, NAR says.

Read the final rule.

Source: “It’s Official: Appraisals Are No Longer Required on Some Home Sales of $400,00 and Under,” HousingWire (Oct. 8, 2019)

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

MCLEAN, Va. – All mortgage rate averages declined this week, with the average 30-year fixed mortgage dropping 8 basis points to 3.57%. Last week the FRM was 3.65%.

“Despite the economic slowdown due to weakening manufacturing and corporate investment, the consumer side of the economy remains on solid ground,” says Sam Khater, Freddie Mac’s chief economist.

“The fifty-year low in the unemployment rate combined with low mortgage rates has led to increased homebuyer demand this year,” Khater says. “Much of this strength is coming from entry-level buyers – the first-time homebuyer share of the loans Freddie Mac purchased in 2019 is forty-six percent, a two-decade high.”

The 30-year fixed-rate mortgage averaged 3.57% with an average 0.6 point for the week. A year ago at this time, the 30-year FRM averaged 4.90 percent.

The 15-year fixed-rate mortgage averaged 3.05 percent with an average 0.5 point, down from last week when it averaged 3.14 percent. A year ago, it was 4.29 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.35 percent with an average 0.3 point, down from last week when it averaged 3.38 percent. A year ago, the 5-year ARM averaged 4.07 percent.

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