Derek Sivers, coach and author: “Abraham Maslow had a great quote that he said something like, ‘Life presents us constantly with a choice between safety and risk’ and he said, ‘Make the growth choice a thousand times a day.’ Reading something like that when I was 17 and just knowing him and his pyramid of self-actualization I kind of went all right. “Again, that’s like a rule of thumb or recipe for what to do and how to make your decisions in life. Make the growth choice a thousand times a day, okay, got it. I guess I kind of just run all of my daily decisions through that kind of filter.
Frank McKinney, who does ultramarathons, talks about exercising risk like a muscle. It’s something that can be strengthened. Your comfort zone can grow. You start to build up a tolerance and then it starts to become comfortable. I see this over and over again. That’s why it’s easier for serial entrepreneurs, even if there is big risk involved in the new companies. They have done it before. They have more confidence and more skill managing risks. That doesn’t mean there isn’t fear, but they mitigate that as well.
The key difference between them and others though is just like I said earlier: They don’t let that stop them! They continue to grow and get better. You need to make sure you can rely on yourself and your own powers. The way to do that is to keep relying on yourself over and over again so you start to trust yourself. Once that trust builds, your confidence builds.
It takes practice. The more practice you get in, the more times you step up to the plate, the more times you’ll have to look back on to show yourself that you did it. That also means that practicing that sales call or practicing that presentation makes a difference, too. Another piece that tends to play a part in confidence is how much you value the opinions of others. If you take others’ opinions of you to heart, then either you will be too worried about what they think to even try, or you will be so focused on what others think that you can’t be confident in what you think. If this seems to resonate with you, then this is a piece that needs to be worked on!
An opinion is not fact. Everyone has his or her own perception of reality. Just like asking eye witnesses to recount an accident, there will be differences based on their feelings toward the event. You will never be able to please everyone! Don’t let the opinion of others get in the way of you creating the business you want. As you grow as a business owner you’ll rely more and more on yourself and care less about the opinions of others.
Whatever scares you, go do it, because then it won’t scare you anymore. With almost anything, once you do it, it’s not as scary as you thought it was. —Derek Sivers
The Eventual Millionaire: How Anyone Can Be an Entrepreneur and Successfully Grow Their Startup
The 10X Rule is about pure domination mentality. You never do what others do. You must be willing to do what they won't do—and even take actions that you might deem “unreasonable.”
Any goal you set is going to be difficult to achieve, and you will inevitably be disappointed at some points along the way. So why not set these goals much higher than you deem worthy from the beginning? If they are going to require work, effort, energy, and persistence, then why not exert 10 times as much of each? What if you are underestimating your capabilities?
Remember: A person who limits his or her potential success will limit what he or she will do to create it and keep it. As long as you are alive, you will either live to accomplish your own goals and dreams or be used as a resource to accomplish someone else's.
When you have underestimated the time, energy, and effort necessary to do something, you will have “quit” in your mind, voice, posture, face, and presentation. You won't develop the persistence necessary to get your mission accomplished. However, when you correctly estimate the effort necessary, you will assume the appropriate posture. The marketplace will sense by your actions that you are a force to be reckoned with and are not going away—and it will begin to respond accordingly.
Never reduce a target. Instead, increase actions. When you start rethinking your targets, making up excuses, and letting yourself off the hook, you are giving up on your dreams!
The 10X Rule assumes the target is never the problem. Any target attacked with the right actions in the right amounts with persistence is attainable.
I know you've probably heard this before, but success does not merely “happen.” It is the result of relentless, proper actions taken over time. Only those who operate with the appropriate view and corresponding actions will have success. Luck clearly has something to do with it, but anyone who is “getting lucky” will tell you that their “luck” is directly proportional to what they've done. The more actions you take, the better your chances are of getting “lucky.”
The 10X Rule: The Only Difference Between Success and Failure
Increasing Your Income There are many ways to increase your income. I cover the three that worked best for us.
1. Selling things.
You probably have a lot of stuff you didn’t even realize you had. I admitted that I had more stuff than I thought and when I actually let go I decided to get rid of things. We sold everything we could, from furniture that wasn’t necessary, to old computer monitors, to our kayak. When you can start to let go of the excess stuff you own, you can start to feel better. You feel more organized, and you feel like you are in control of things. As you downsize, it’s important to show appreciation for what you do have. There are so many people with much less, even if you are living paycheck to paycheck. Taking old things and donating them to Goodwill or friends in need may not help your budget, but it will help your mind. Giving during a time of scarcity is a great experience.
2. Increase your wage at your current job.
I know the economy isn’t great, but if you are providing a lot of value to your employer, it doesn’t hurt to ask for a raise. I remember I was only three months into working at my company, and even though I was making more money than I ever imagined possible before, I asked for a raise. I even asked for a big raise. I’m not usually someone who enjoys risk, so it seemed a bit out of character for me. However, when I looked at the risk logically, I realized the worst they could do was say no. They had loved me as an employee so far. In fact, they hired one of my friends from college based on my recommendation. If they said no, then they would at least see my eagerness to improve. Although I was very nervous when the words came out of my mouth, just a few short days later, they said yes.
If you want to ask for a raise, here are a few tips: Make sure you are going above and beyond your current job description already. Employers love to see eager workers and know that they have people they can count on. They don’t want to lose people who are willing to go above and beyond. Make sure there is no ultimatum implied. When asking for a raise, it may sound like you aren’t happy with your current salary or that you are unhappy with your job. To keep things peaceful, make sure you validate that you appreciate your current situation, too. You can alienate your boss or company if they think you dislike the work and just want more money to justify it. Go in prepared and use numbers. Make sure you go in knowing what you are asking for. Don’t just say, “I want a raise.” Your employer needs to know how much you are looking for. Use numbers to show how much value you are delivering. If your job has any direct relation to creating gross revenue, make sure you explain how much you are bringing in. If you have had a direct impact and have created happier customers or fewer problems with software, and so on, make sure you back up your claim with numbers. You want to make it a no-brainer for your employer to give you a raise, even if they don’t have the funds to pay you now. This will give you a good chance to show how valuable you are. If you don’t feel like you have anything to show them to justify a raise, then go create more impact in your company before you ask for one. If you can’t show your value to an employer, then don’t ask for a raise. If your company is holding you back so you can’t show your value, then ask them for more responsibilities!
3. Starting a business.
If your goal is to start a business, start it now as a side hustle. The next few chapters go over finding a solid idea and how millionaires started their businesses. Ahead, you’ll also find help with goal setting and creating a three-month action plan. You want the side hustle to start now so you can start to learn a lot about business while you have the security of your job. It also allows for more income so you can pay off your debt faster. That way you can set yourself up financially to quit your day job.
The Eventual Millionaire: How Anyone Can Be an Entrepreneur and Successfully Grow Their Startup
We had a working engine of growth. The gross numbers were small because we were selling the product to visionary early customers called early adopters. Before new products can be sold successfully to the mass market, they have to be sold to early adopters. These people are a special breed of customer. They accept—in fact prefer—an 80 percent solution; you don’t need a perfect solution to capture their interest.
Early adopters use their imagination to fill in what a product is missing. They prefer that state of affairs, because what they care about above all is being the first to use or adopt a new product or technology. In consumer products, it’s often the thrill of being the first one on the block to show off a new basketball shoe, music player, or cool phone. In enterprise products, it’s often about gaining a competitive advantage by taking a risk with something new that competitors don’t have yet. Early adopters are suspicious of something that is too polished: if it’s ready for everyone to adopt, how much advantage can one get by being early?
As a result, additional features or polish beyond what early adopters demand is form of wasted resources and time.
This is a hard truth for many entrepreneurs to accept. After all, the vision entrepreneurs keep in their heads is of a high-quality mainstream product that will change the world, not one used by a small niche of people who are willing to give it a shot before it’s ready. That world-changing product is polished, slick, and ready for prime time. It wins awards at trade shows and, most of all, is something you can proudly show Mom and Dad. An early, buggy, incomplete product feels like an unacceptable compromise.
Minimum viable products range in complexity from extremely simple smoke tests (little more than an advertisement) to actual early prototypes complete with problems and missing features. Deciding exactly how complex an MVP needs to be cannot be done formulaically. It requires judgment.
The lesson of the MVP is that any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.
The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
"That's been one of my mantras -- focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains."
"Picasso had a saying: 'Good artists copy, great artists steal.' We have always been shameless about stealing great ideas...I think part of what made the Macintosh great was that the people working on it were musicians, poets, artists, zoologists and historians who also happened to be the best computer scientists in the world."
Steve Jobs-- 1994
I like this small paragraph because it tells us something critical, all interactions on the web are marketing opportunities. Not just to sell, but to network, and to build communities.
"Community management is marketing. Tutorial posts are marketing. Facebook updates are marketing.
E-mailing other Makers in related fields is marketing. Of course, it’s not just marketing: the reason that it’s so effective is that it’s also providing something of value that people appreciate and pay attention to. But at the end of the day, everything you do, from the naming of your product to whose coattail you decide to ride (like we chose Arduino), is at least partly a marketing decision. Above all, your community is your best marketing channel. Not only is that the source for the word-of-mouth and viral marketing that you’ll need, but it’s also a safe place to talk about your own products, as enthusiastically as you want. If you’ve given people a reason to gather that serves their needs and interests, crowing about your cool new gizmo isn’t advertising, it’s content!"
Makers: The New Industrial Revolution by Chris Anderson
Digital Product Pricing - focus your efforts on making money as soon as possible than on borrowing startup capital
As we’ve seen, it’s usually much more important to focus your efforts on making money as soon as possible than on borrowing startup capital.
The more I focus on these things, the better off I am.
In short, they are as follows:
1. Price your product or service in relation to the benefit it provides, not the cost of producing it.
2. Offer customers a limited range of prices.
3. Get paid more than once for the same thing.
Principle 1: Base Prices on Benefits, Not Costs
In Chapter 2, we looked at benefits versus features. Remember that a feature is descriptive (“These clothes fit well and look nice”) and a benefit is the value someone receives from the item in question (“These clothes make you feel healthy and attractive”). We tend to default to talking about features, but since most purchases are emotional decisions, it’s much more persuasive to talk about benefits.
Just as you should usually place more emphasis on the benefits of your offering than on the features, you should think about basing the price of your offer on the benefit—not the actual cost or the amount of time it takes to create, manufacture, or fulfill what you are selling.
Principle 2: Offer a (Limited) Range of Prices
Choosing an initial price for your service that is based on the benefit provided to customers is the most important principle to ensure profitability. But to create optimum profitability or at least to build more cushion into your business model, you’ll next want to present more than one price for your offer.
The key to this strategy is to offer a limited range of prices: not so many as to create confusion but enough to provide buyers with a legitimate choice. Notice the important distinction that naturally happens when you offer a choice: Instead of asking them whether they’d like to buy your widget, you’re asking which widget they would like to buy.
Principle 3: Get Paid More Than Once
The final strategy for making sure your business gets off to a good start is to ensure that your payday doesn’t come along only once—you’d much rather have repeated paydays, from the same customers, over and over on a reliable basis. You may have heard of the terms continuity program, membership site, and subscriptions. They all mean roughly the same thing: getting paid over and over by the same customers, usually for ongoing access to a service or regular delivery of a product.
(Note: Don’t get too hung up on the exact numbers here. The point is that in almost every case, a recurring billing model will produce much more income over time than will a single-sale model.)
The key to this model is not market share. It’s share of the customer. And to gain more of each customer’s budget, you first have to zealously treat every customer as a “best” customer, no matter which ones actually end up becoming the proverbial “customer for life.”
The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future by Chris Guillebeau
One of the first mistakes budding Makers make when they start to sell their product is not charging enough. It’s easy to see why, for all sorts of reasons. They want the product to be popular, and they know the lower the price, the more it will sell. Some may even feel that if the product was created with community volunteer help, it would be unseemly to charge more than it costs. Such thinking may be understandable, but it’s wrong. Making a reasonable profit is the only way to build a sustainable business. Let me give you an example. You make one hundred units of your delightful laser-cut handcrank toy Drummer Boy. Between the wood, the laser cutting, the hardware, the box, and
the instructions, it costs you $20 to make each one. Let’s say you price them at $25 just to cover any costs you may have missed, and start selling.
Since it’s a fun kit and pretty cheap, it sells quickly. You suddenly realize that you’ve got to do it all again, this time in a batch of one thousand. Rather than putting up a couple thousand dollars to buy the materials, you’ve got to put up tens of thousands of dollars. Instead of packing the kits in your spare time, you’ve got to hire someone to do it. You need to rent space to store all the boxes, and you’ve got to make daily trips to FedEx. Now your hobby is starting to feel like a real job. Worse, the popularity of your kit has come to the attention of some big online retailers, and they’re asking about buying in batches of one hundred, with a volume wholesale discount. You’re thrilled that your kit is so popular and flattered that these retailers, who can reach many more people than your own website, want to sell it. But if you’re selling it at $25, that’s the market price—the retailers typically can’t sell it for more. The retailers ask for a lower price because they need to make their own profit on each one, usually around 50 percent. So they need to buy them at no more than $17 each. But that would mean you are selling each one at a loss! Your costs, which were once within the limits of hobby spending, are now at risk of driving you and your business into debt. What entrepreneurs quickly learn is that they need to price their product at least 2.3 times its cost to allow for at least one 50 percent margin for them and another 50 percent margin for their retailers (1.5 × 1.5 = 2.25). That first 50 percent margin for the entrepreneur is really mostly covering the hidden costs of doing business at a scale that they hadn’t thought of when they first started, from the employees that they didn’t think they’d have to hire to the insurance they didn’t think they’d need to take out and the customer support and returns they never expected. And the 50 percent margin for the third-party retailers is just the way the retail market works. (Most companies actually base their model on a 60 percent margin, which would lead to a 2.6x multiplier, but I’m applying a bit of a discount to capture that initial Maker altruism and growth accelerant.) In other words, that $20 kit should have been priced at $46, not $25. It may sound steep to you now, but if businesses don’t get the price right at the start, they won’t be able to keep making their products, and everyone loses. It’s the difference between a hobby and a real, thriving, profitable business.
Makers: The New Industrial Revolution by Chris Anderson
"So how do you manage a cold call?
First, it’s all about attitude. Your attitude.
You’re never going to be completely ready to meet new people; there is no perfect moment. Your fears will never be completely quieted, because inviting rejection is never going to be appealing. There are always a hundred reasons to procrastinate. The trick is to just plunge right in. Remember, if you don’t believe you are going to get what you want from the call, you probably won’t. So, in the words of Caddy Shack, “Be the ball.” You have to envision yourself winning to win.
And second, cold calls are for suckers. I don’t call cold—ever. I’ve created strategies that ensure every call I make is a warm one.
In fifteen seconds, I used my four rules for what I call warm calling:
1) Convey credibility by mentioning a familiar person or institution—in this case, John, Jeff, and WebMD.
2) State your value proposition: Jeff’s new product would help Serge sell his new products.
3) Impart urgency and convenience by being prepared to do whatever it takes whenever it takes to meet the other person on his or her own terms.
4) Be prepared to offer a compromise that secures a definite follow-up at a minimum.
Here are some of the rules I follow fleshed out in more detail:
1. Draft off a reference. The reason a cold call feels like torture was set out in vivid detail fifty or so years ago in an advertisement, recalled by Harvey Macka, in his book Swim with the Sharks. It pictures a corporate killjoy facing the reader, who is cast in the role of the salesman. The killjoy says: I don’t know who you are. I don’t know your company. I don’t know what your company stands for. I don’t know your company’s customers. I don’t know you company’s products. I don’t know your company’s reputation. Now—what was it you wanted to sell me? You can see the total lack of credibility one has when making a cold call. Credibility is the first thing you want to establish in any interaction, and ultimately, no one will buy from you unless you establish trust. Having a mutual friend or even acquaintance will immediately make you stand out from the other anonymous individuals vying for a piece of someone’s time.
2. State your value. Acquiring a reference or institution to draft off of is only a starting point. It will help you get your foot in the door. Once you have someone’s commitment to hear you out for thirty seconds, you’ll need to be prepared to deliver a high-value proposition. You’ve got very little time to articulate why that person should not try to get off the phone as quickly as possible. Remember, it’s all about them. What can you do for them?
3. Talk a little, say a lot. Make it quick, convenient, and definitive. You want to impart both a sense of urgency and a sense of convenience. Instead of closing with “We should get together some time soon,” I like to finalize with something like “I’m going to be in town next week. How about lunch on Tuesday? I know this is going to be important for both of us, so I’ll make time no matter what.”
4. Offer a compromise. In any informal negotiation, you go big at the outset, leaving room for compromise and the ability to ratchet down for an easier close. I closed my pitch to Serge by suggesting that even if he didn’t want to hear anything about digital content, I’d love to get together with him just to meet, given our mutual friend’s admiration and respect."
Never Eat Alone: And Other Secrets to Success, One Relationship at a Time by Keith Ferrazzi, Tahl Raz
Chris Anderson announced today he was leaving editing Wired magazine to go run his electronics business. As I read about it in his book Makers I not only see why, but I get jealous.
"It was time to start our own factory. I started a proper company, 3D Robotics, with a partner, Jordi Muñoz (of whom much more later). In a rented Los Angeles garage, Muñoz started building our own mini Sparkfun. Rather than a pick-and-place robot, we had a kid with sharp eyes and a steady hand, and for a reflow oven we used what was basically a modified toaster oven. We could do scores of boards per day this way. As demand picked up, we outgrew the garage. Muñoz moved the operation to commercial space in an industrial park in San Diego, which was nearer the low-cost labor center of Tijuana.
In came real automated manufacturing tools: first a small pick-and-place machine, then a bigger one, and finally an even bigger one with automated component feeders. The toaster oven gave way to a proper automated reflow oven with a nitrogen cooling system for perfect temperature control. And for that we needed a nitrogen generator, of course. And so it went, with more and more professional tools, which Muñoz and his team learned to use by finding tutorials on the Web. By this time we had outgrown the first space and expanded to a bigger space next door. Then we outgrew that, too, and today 3D Robotics has a factory that sprawls over twelve thousand square feet and a second one of nearly the same size in Tijuana. The facilities are buzzing with robotic assembly machines run by factory workers, and teams of engineers developing new products. Pick-and-place robots build circuit boards, which are baked in automated reflow ovens temperature-regulated by a nitrogen generator. Laser cutters, 3-D printers, and CNC machines make quadcopter parts.
These are real factories now, just three years after Muñoz started hand-assembling boards on his kitchen table with a soldering iron. From Maker to millions In our first year, we did about $250,000 in revenue; by 2011, our third year, we had broken $3 million. In 2012 we’re on track to break $5 million in revenues. Growth continues at about 75 to 100 percent per year, which is common for open-source hardware companies like ours. We’ve been profitable from the first year (it’s actually not that hard in the hardware business—just charge more than your costs!), but try to reinvest as much of the profits as possible into building new factory lines. Because we’re online, we’re global from the start and tend to grow more quickly than traditional manufacturing companies because of the network effects of online word of mouth. But because we’re making hardware, which costs money and takes time to make, we don’t show the hockey-stick exponential growth curve of the hottest Web companies. So, as a business, we’re a hybrid: the simple business model and cash-flow advantages of traditional manufacturing, with the marketing and reach advantages of a Web company. We’re still a small business, but the difference between our kind of small business and the dry cleaners and corner shops that make up the majority of micro-enterprise in the country is that we’re Web-centric and global. We’re competing in the international market from day one."
Makers: The New Industrial Revolution by Chris Anderson
“We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.
— Charles T. Munger”
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