Vincent Huberta: Annual Reflection 2016 –

Every night, I reflect on everything I have done for that day. It is so important that I could change the way I do something instantly. I guess sometimes we just have got to do what we need to do, even when others may think we are not consistent in our actions. Yes, because we reflect.

1. With a meaningful reason, it is always okay to change your mind even after you’ve said you’ll commit for something.

This may sound weird and contradictive with what we are told. We are told to commit, to go all in, to work 24/7/365 for something we have decided. But hey, you learn every day. Your decision in the past could be wrong. If you know you can make a new decision today with what you have learned until that day, you should always trust your instinct. It is always about creating value for others, not just about doing what we have said we will. One day, those who don’t understand will understand. The market is really fair, it craves for something of value and eventually avoids something without value (while sometimes the perceived value of something could confuse the market for a temporary period).

2. Do hard things.

Always do something hard. Hard things are more valuable. Something people won’t do, something people can’t do. Hell yes, you know how to do it, or you have the privilege to do it more than the majority of people. Do something that is hard for most people, but less hard for you. Easy things are so competitive. Something easy for everyone won’t satisfy you financially or mentally. It doesn’t excite you nor your customers. I wrote a blog post about this: Do hard things –

3. Scalability is overrated.

Scalability reaches a lot of people easily, it serves customers with zero marginal cost. Well, that’s great. What could go wrong, right? The main problem is that everyone has that privilege. With the internet, some college students in the dorm could make something that they can sell online. It could be software, SaaS, e-book, or physical goods, etc. Why would you think that something so accessible could always give you a fat profit margin?

It probably won’t. We all know that competition burns away profit. The only way to maintain the profit in a scalable online business is this: unique value proposition that others can’t create. Get back to number 2. It’s about creating value that is really hard for most people, but less hard for you.

I discussed scalability more thoroughly in this blog post: Scalability is overrated –

4. Always leverage.

The only way to create great success is by leveraging. You could get investment for your business, you could borrow money from the bank or private investor. There is no other way as of now, but when you leverage, make sure you could provide them with the interests they want!

It’s funny how startups want to raise money instead of taking a loan, as if they are afraid that the business won’t succeed, but hell yeah! Most are afraid. The reality is this: Cost of capital from equity is usually higher than debt!

What do I mean by this? If your business succeeds, every year the equity may have like what, a minimum of 15% growth? This is higher than the interests from a loan. Most startups don’t take a loan at all and go for an option with a higher cost (Some took convertible debt, though). We are not so brave after all. Think about it.

We’ve got to leverage with whatever we have. It could be money, property, loan, investment, our family, our connections, etc. That is the only way we could create great success. Adding and subtracting are good, but multiplying is even better. If someone says that you shouldn’t leverage with what your family can provide you, or some “Self-made” kind of advice, think again. No one is self-made. We are all leveraging from what we have access to.

5. Start early. There is the time value of money.

My biggest regret in personal finance is that I learn about investing since 15 years old, but I did not do it during my college times. Over the 3 years, I have lost a total of at least 90% growth in equity if I were to do it earlier. I am actively managing what I have now, better late than never.

For anyone younger than me, I am 23 at this time (going to be 24 in a few months), start earning early and investing early. With less capital, we can always invest in stocks and start a small business. When we have more, we can invest in lands and properties or larger scale business. Here is the thing, we can’t exactly rush the growth of our wealth, it usually grows organically depending on the market and our leverage, so better start early.

6. A fat profit margin is great.

The best business to be in are the ones that can give us the highest profit margin. What is a fat profit margin?  It has to be at least 50% of gross margin (from selling price). Preferably, 90% or as much as possible. Anything below 50% will not be so fun to be in.

It’s also a good sign for us, if the profit margin is too slim, there is a high chance that the business is already competitive. There are reasons why drug lords are extremely wealthy. They are selling the goods at 10x, 20x, 30x, or even 60x multipliers.

Businesses with super fat profit margin are either hard to do, or dangerous to do. Are you daring enough? The world rewards bold men with vast opportunities. What is easy to be seen, couldn’t be the most valuable thing. The ones we can’t see without the right connection, are where the treasures lie.

7. Consistent growth and cash flow are sources of happiness.

Don’t look for a homerun. Don’t look for one big win. Look for small consistent wins that get bigger every day. When we have a stable cash flow that keeps on growing, we have more confidence in innovating and investing. If we speculate on a big win that may never arrive, we are gonna lose so many opportunities in innovation and investment. We can’t be truly happy without sufficient cash, we always need to have little celebrations along the way. That is the fuel to the growth of the people within the company.

So remove the startup mentality of raise money, raise money, exit. After you exit / sold the company, so what? You buy blue chip stocks and properties and never work anymore? That sounds cool, but less than 3% could ever exit the company at a bombastic valuation. If you think you are that special, think again. We shouldn’t assume we can always outsmart or outwork others. We have no idea how awesome others could be.

8. Nobody knows shit. I don’t know shit, you don’t, others don’t.

This is the mindset we should maintain. Nobody knows shit, not your parents, not you, not me, not your lecturers, not the professors. When we face problems, we should always validate and extract the best solution and never depend on merely the opinion or experience of others or ourselves. Here is the valuable article that taught me about this: The Cook and the Chef: Musk’s Secret Sauce

You could just ignore this blog post if you think it’s full of shit, or you can validate the information further. Research, apply, ask, test, validate, make the better decision of all.

If you’re interested to read  my 2015 annual reflection, head to Vincent Huberta: Annual Reflection 2015 –



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