A guy I met a while back used to be a drug dealer in another country, a long time ago, back when he was a young man, (He as since gone into IT which makes a twisted sense).
We were talking about pricing strategies, and he told me that he had back in the day, the best way to know when his pricing is right where it should be and he knew that he was cutting the best deal when selling. First off, we all agree that pricing is not an easy thing to do for most of us. People have all kinds of theories about how to set pricing, and how they know when they have the right price to still sell yet make the most profit. Every system feels like guess work, and no one ever says they had it perfect, but this system made sense. Some people just care to match what others are charging, basically match the market, but that is dangerous, because you don't have a system or a methodology, and what is the difference between you and the competitor? If he has better margins than you, your business is in trouble. You need to know what the customer is willing pay, and to do that, you have to know and think like your customer. Other businesses price just below others in the market, again, dangerous, as it just gets you those customers that care only about price, which means that you will lose them easily when someone else has a lower price. This is not a long term strategy. Works if your margins are better than everyone else's margins, but I wouldn't bank on it, as there is always someone out there who will compete. Any time your strategy is to be smarter than everyone else, you have a problem. There is always someone smarter than you out there. Trust me, someone is always willing to give them a lower price. You just end up in a price war that no one wins. There are theories of how to price, but the key to remember is that price is fluid, and that what you are selling on changes in value depending on who you sell to and their situation. How your customer views the product and how he uses it, and your customer's individual situation determines that customer's price. The cookie cutter one price fits all model doesn't work, and it just leaves money on the table. Which leads us back to the drug dealer. My friend told me that he always asked questions about his customers, and he knows their history, their likes and dislikes, which considering what he was doing was illegal back then, was a smart play. You only do business with other people you know well and trust, and he told me that when he discussed price, he asked them what was going on, what they were doing, and by that, got an idea where their mind was at, and then gave them a price, always slightly higher than what he felt was the market. He would sell the convenience factor, remind them of the trust between them, as the customer didn't want to keep looking, and the customer sure didn't want to have to find a new source, which is a time consuming process, and in this case, also might possibly be something that could get you put in jail. My friend said when he gave a price, if they took it right then, he knew he had priced too low. He was really happy when they hesitate and then say they have to think about it, and then they hang up. I ask him, you are happy you lost them? He said, I didn't lose that, I am happy because that is what you want, to know that the price you quote to them is close enough to make them want to buy right then, but just over what they wanted to pay, so that they say they have to think about it. Then they call up twenty minutes later and take the deal. When that happens, you know you got the most money you could out of that transaction. PS. Another point of the story, there are business lessons everywhere, listen to everyone. I do. Drop me a note, say hello. D Recording Your First Podcast
When getting started, don’t worry about fancy gadgets. You can purchase the necessary equipment for less than $100. Once your podcast gains traction and popularity, you can opt to upgrade. To create a high-quality sounding podcast, follow these seven simple steps: 1. Buy a USB microphone and plug it into your computer. Jason (Internet Business Mastery) recommends the Snowball from Blue Microphones, which is an affordable, high-quality USB microphone. To learn more and/or purchase the Snowball Microphone, visit EZ.com/snowball or use your mobile device to scan the QR code to the left. 2. Download Audacity or other software to record and edit your audio files. Audacity is a free recording and editing program you can download at Audacity.sourceforge.net. Even with Jason’s success, he still uses Audacity, proving it’s absolutely possible to record high-quality podcasts without dropping an arm and a leg to do so. Once you’ve completed steps 1 and 2, you actually have everything you need to record your first podcast. If you’re the star of the show, click Audacity’s record button, talk into the mic, play some music, and you’re good to go. If you want to take things to the next level, bring on guests and/or co-hosts. Unless they’re in the room with you, though, proceed to Step 3. 3. Use Skype and/or other software to connect with others and record conversations. If you’re going to have guests from around the country and/or the world, you want to be able to connect with them inexpensively. A popular favorite is Skype (Skype.com). Next, you need software to record your conversations. For a PC, Jason recommends Pamela (Pamela.biz/en), SuperTinTin (Supertintin.com) or Vodburner (Vodburner.com); and for a Mac, Call Recorder (Ecamm.com/mac/callrecorder) or Audio Hijack (Rogueamoeba.com/audiohijackpro). After the conversation is recorded, you’ll need to import the audio into Audacity and edit it, removing delays and other nonessential elements. Getting the hang of this may take a little while; but once you learn how, it’s easy. 4. Condense your audio file by converting it to MP3. When you’re finished editing in Audacity, you’ll have a large .WAV file. You’ll typically want to condense it to a more manageable size. The best way is to convert it to the MP3 format. For example, a 100MB WAV file will shrink to around 10MB as an MP3. Two recommended programs for doing this are WAV To MP3 Converter (WavToMP3Converter.com) and ConverterLite (ConverterLite.com). 5. Create album artwork to represent your brand. Don’t ignore this crucial step. When people listen to your podcast the album artwork and podcast description will be displayed throughout the show, so it really makes an impact. 6. Upload your podcast to an audio hosting site. Jason recommends using Liberated Syndication (LibSyn.com) as your host for two key reasons: • You can subscribe for as little as $5 per month, which provides up to 250MB of storage. • LibSyn.com offers upgrade packages to easily handle your bandwidth and upload growth. 7. Get your podcast listed on iTunes, YouTube, and other sites. While iTunes.com and YouTube.com are the most famous directories of podcasts, there are many other sites where you’ll also want your podcast to be listed. Use Google to find directories that are a solid fit for your topic. With these seven steps in place, you’re now in the podcast business. Internet Prophets: The World's Leading Experts Reveal How to Profit Online by Steve Olsher One of the fastest ways to grow your business online and off is to share your message and mission in high-visibility venues.
The hottest trends among top experts and online marketers today include video marketing, teleseminars, webinars, and the big kahuna of profit, live events. But, how can you stand up and stand out in a competitive marketplace? Oren Klaff, author of Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal, says: “A great pitch is not about procedure. It’s about getting and keeping attention.” Knowing how to grab people’s attention, share your message, and close the deal is a skill that allows you to secure expert status, shine at local networking events, speak to groups, and build your marketing platform. Be forewarned—studies show that people make approximately 11 assumptions in the first 11 seconds…and, those first impressions are long lasting and hard to overcome. Make a great first impression and people will be forgiving of later missteps. Start off on the wrong foot, and it’s a continuous uphill battle. Whether online or in person, it is important to secure a strong first impression that accurately reflects who you are, what your message is, and how you want to be perceived. While content is crucial, it’s not what motivates people to take action or what someone is actually buying. Kristin believes moving prospects to take action is the direct result of implementing the compelling combination of content, connection, and inspiration. This is what drives someone to open her wallet and take the next step. Internet Prophets: The World's Leading Experts Reveal How to Profit Online by Steve Olsher I don’t think there’s such a thing as an original artist.
We all show influences and derivations. We can’t avoid using or being used. When it comes time to express yourself, what you put forth should be done unconsciously, without thought of influences. But all this is in your blood already, in the very stream of your being. I’ve come to believe that I’m at my best, I express myself best, when I’m following the philosophy of the East, but I wouldn’t propose it as the one way. I think each one has to find his own unique route. I think the peculiar quality of an artist is that he’s both participant and observer at the same time. He’s playing a dual role always. I mean, I don’t go through life as a writer who’s always making notes in a mental diary, though I am aware of making note of things for future use. I can’t help it; it’s my nature. But I don’t enter into things in a spirit of detached research. When I participate, I do so as a human being; I’m simply more aware than most men of what’s actually happening. Henry Miller The Playboy Interview: Men of Letters by Ray Bradbury, Saul Bellow, Lee Child Kurt Vonnegut, Chuck Palahniuk We must discover whether we are on a path that will lead to growing a sustainable business.4/23/2013
Yet if the fundamental goal of entrepreneurship is to engage in organization building under conditions of extreme uncertainty, its most vital function is learning. We must learn the truth about which elements of our strategy are working to realize our vision and which are just crazy. We must learn what customers really want, not what they say they want or what we think they should want. We must discover whether we are on a path that will lead to growing a sustainable business.
In the Lean Startup model, we are rehabilitating learning with a concept I call validated learning. Validated learning is not after-the-fact rationalization or a good story designed to hide failure. It is a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty in which startups grow. Validated learning is the process of demonstrating empirically that a team has discovered valuable truths about a startup’s present and future business prospects. It is more concrete, more accurate, and faster than market forecasting or classical business planning. It is the principal antidote to the lethal problem of achieving failure: successfully executing a plan that leads nowhere. Lean thinking defines value as providing benefit to the customer; anything else is waste. In a manufacturing business, customers don’t care how the product is assembled, only that it works correctly. But in a startup, who the customer is and what the customer might find valuable are unknown, part of the very uncertainty that is an essential part of the definition of a startup. The effort that is not absolutely necessary for learning what customers want can be eliminated. I call this validated learning because it is always demonstrated by positive improvements in the startup’s core metrics. Remember that validated learning is should always be backed up by empirical data collected from real customers. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries Startups are designed to confront situations of extreme uncertainty.
Usually, companies like Intuit fall into the trap described in Clayton Christensten’s The Innovator’s Dilemma: they are very good at creating incremental improvements to existing products and serving existing customers, which Christensen called sustaining innovation, but struggle to create breakthrough new products—disruptive innovation—that can create new sustainable sources of growth. Innovation is a bottoms-up, decentralized, and unpredictable thing, but that doesn’t mean it cannot be managed. When you have only one test, you don’t have entrepreneurs, you have politicians, because you have to sell. Out of a hundred good ideas, you’ve got to sell your idea. When you have five hundred tests you’re running, then everybody’s ideas can run. And then you create entrepreneurs who run and learn and can retest and relearn as opposed to a society of politicians. The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is shrinking, and this creates an imperative for even the most entrenched companies to invest in innovation. A company’s only sustainable path to long-term economic growth is to build an “innovation factory” that uses Lean Startup techniques to create disruptive innovations on a continuous basis. I explained the theory of the Lean Startup, repeating my definition: an organization designed to create new products and services under conditions of extreme uncertainty. Brad explained to me how they hold themselves accountable for their new innovation efforts by measuring two things: the number of customers using products that didn’t exist three years ago and the percentage The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries The Lean Startup asks people to start measuring their productivity differently.
The goal of a startup is to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible. In other words, the Lean Startup is a new way of looking at the development of innovative new products that emphasizes fast iteration and customer insight, a huge vision, and great ambition, all at the same time. The first feedback loop in startups is like that in a car's engine and I call it the engine of growth. Every new version of a product, every new feature, and every new marketing program is an attempt to improve this engine of growth. New product development happens in fits and starts. Much of the time in a startup’s life is spent tuning the engine by making improvements in product, marketing, or operations. The second important feedback loop is similar to what is in an automobile and is between the driver and the steering wheel. This feedback is so immediate and automatic that we often don’t think about it., The choreography of driving is incredibly complex when one slows down to think about it. By contrast, a rocket ship requires just this kind of in-advance calibration. It must be launched with the most precise instructions on what to do: every thrust, every firing of a booster, and every change in direction. The tiniest error at the point of launch could yield catastrophic results thousands of miles later. Unfortunately, too many startup business plans look more like they are planning to launch a rocket ship than drive a car. They prescribe the steps to take and the results to expect in excruciating detail, and as in planning to launch a rocket, they are set up in such a way that even tiny errors in assumptions can lead to catastrophic outcomes. The Lean Startup method, in contrast, is designed to teach you how to drive a startup. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. Through this process of steering, we can learn when and if it’s time to make a sharp turn called a pivot or whether we should persevere along our current path. Once we have an engine that’s revved up, the Lean Startup offers methods to scale and grow the business with maximum acceleration. Startups also have a true north, a destination in mind: creating a thriving and world-changing business. I call that a startup’s vision. To achieve that vision, startups employ a strategy, which includes a business model, a product road map, a point of view about partners and competitors, and ideas about who the customer will be. The product is the end result of this strategy. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries I believe that entrepreneurship requires a managerial discipline to harness the entrepreneurial opportunity we have been given.
There are more entrepreneurs operating today than at any previous time in history. This has been made possible by dramatic changes in the global economy. To cite but one example, one often hears commentators lament the loss of manufacturing jobs in the United States over the previous two decades, but one rarely hears about a corresponding loss of manufacturing capability. That’s because total manufacturing output in the United States is increasing (by 15 percent in the last decade) even as jobs continue to be lost (see the charts below). In effect, the huge productivity increases made possible by modern management and technology have created more productive capacity than firms know what to do with. We are living through an unprecedented worldwide entrepreneurial renaissance, but this opportunity is laced with peril. Because we lack a coherent management paradigm for new innovative ventures, we’re throwing our excess capacity around with wild abandon. Despite this lack of rigor, we are finding some ways to make money, but for every success there are far too many failures: products pulled from shelves mere weeks after being launched, high-profile startups lauded in the press and forgotten a few months later, and new products that wind up being used by nobody. What makes these failures particularly painful is not just the economic damage done to individual employees, companies, and investors; they are also a colossal waste of our civilization’s most precious resource: the time, passion, and skill of its people. The Lean Startup movement is dedicated to preventing these failures. Lean thinking is radically altering the way supply chains and production systems are run. Among its tenets are drawing on the knowledge and creativity of individual workers, the shrinking of batch sizes, just-in-time production and inventory control, and an acceleration of cycle times. It taught the world the difference between value-creating activities and waste and showed how to build quality into products from the inside out. Progress in manufacturing is measured by the production of high-quality physical goods....the Lean Startup uses a different unit of progress, called validated learning. With scientific learning as our yardstick, we can discover and eliminate the sources of waste that are plaguing entrepreneurship. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries Here is a sneak preview of full automation.
I woke up this morning, and given that it’s Monday, I checked my e-mail for one hour after an exquisite Buenos Aires breakfast. Sowmya from India had found a long-lost high school classmate of mine, and Anakool from YMII had put together Excel research reports for retiree happiness and the average annual hours worked in different fields. Interviews for this week had been set by a third Indian virtual assistant, who had also found contact information for the best Kendo schools in Japan and the top salsa teachers in Cuba. In the next e-mail folder, I was pleased to see that my fulfillment account manager in Tennessee, Beth, had resolved nearly two dozen problems in the last week—keeping our largest clients in China and South Africa smiling—and had also coordinated California sales tax filing with my accountants in Michigan. The taxes had been paid via my credit card on file, and a quick glance at my bank accounts confirmed that Shane and the rest of the team at my credit card processor were depositing more cash than last month. All was right in the world of automation. It was a beautiful sunny day, and I closed my laptop with a smile. For an all-you-can-eat buffet breakfast with coffee and orange juice, I paid $4 U.S. The Indian outsourcers cost between $4–10 U.S. per hour. My domestic outsourcers are paid on performance or when product ships. This creates a curious business phenomenon: Negative cash flow is impossible. Fun things happen when you earn dollars, live on pesos, and compensate in rupees, but that’s just the beginning. The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich (Expanded and Updated). by Timothy Ferriss In the end, your goal is to identify and pierce through to what makes people unique, to understand the character and values that lie at their cores. The more you can fathom about people’s pasts and their way of thinking about things, the more deeply you can enter into their spirit. In this way you will be able to understand their motivations, foresee their actions, and recognize how best to win them to your side. You will no longer be operating in the dark. You will encounter thousands of various individuals in your life, and the ability to see them as they are will prove invaluable. Keep in mind, however, that people are in a state of continual flux. You must not let your ideas about them harden into a set impression. You are continually observing them and bringing your readings of them up to date.
Rigidity: The world has become increasingly complex in many ways, and whenever we humans face a situation that seems complicated our response is to resort to a kind of artificial simplicity, to create habits and routines that give us a sense of control. We prefer what is familiar—ideas, faces, procedures—because they are comforting. This extends to the group at large. People follow procedures without really knowing why, simply because these procedures may have worked in the past, and they become highly defensive if their ways are brought into question. They become hooked on a certain idea and they hold on to it, even if that idea has been proven repeatedly to be wrong. Look at the history of science: whenever a new idea or way of looking at the world is introduced, despite all of the proofs behind it, those who are entrenched in the old ways will fight to the death to preserve them. It is often against human nature, particularly as we get older, to consider alternative ways of thinking or doing things. Mastery by Robert Greene |
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