I Miss Paris
Apologies in advance for the cliche and personal nature of this post…
Of all the places I have traveled to, Paris is not my favorite, but strangely enough, I find myself missing it the most. There is a good reason it has the charming reputation that is does…
I miss the pride that Parisians take in their efforts, particularly when it comes to gastronomy. There is nowhere else in the world that I am aware of that you can stroll down the street looking in the windows of bakeries and various displays of breads and pastries so polished and breathtakingly beautiful that you are simultaneously hesitant and eager to bite into them. The Parisians get a bad rep for being “snooty” ( prefer “formal”) but I appreciate how discerning and disciplined they can be.
Such discipline is not limited to the sweets and treats, though. The architecture is unlike any in the world, particularly one of my favorite buildings ever, The Palais Garnier. Ornate is as close a word as you could use to describe the Opera Garnier, but even that proves inadequate. And while I’m on the subject of the Opera, I had no idea how perfect the human voice could be until hearing the Paris Opera perform Mozart’s Magic Flute, and I seen it performed professionally before.
I also miss the romantic charm that Paris is known so well for. I miss walking through a seemingly endless subway corridor with La Vie En Rose echoing through the tunnels, performed by an unseen accordion player. I miss getting lost at night downtown and watching the city lights sparkle on the Tour Eiffel, or reflecting on the Seine. I miss sipping chocolat chaud and eating a croissant on the patio of some random cafe, just watching the Parisians and tourists walk by.
Paris is magic. It is paradoxically simple and complex, fast and slow paced, foreign and familiar. I’d never want to live there, and I love life in the States with cars, abundant bathrooms, drinking fountains, etc. As a matter of fact, I’m not even in a hurry to visit again soon, there are too many other places on my list. All that aside, I still miss it more than anywhere else I’ve been. (That itself is a paradox, I suppose. )
Meaning
I have recently been listening to Jordan B, Peterson, a clinical psychologist and Professor at the University of Toronto. He has a class based on a book he wrote entitled: “Maps of Meaning.” There are 12 2.5 hour lectures, each one so packed with a richness of wisdom and information the likes of which you could hardly find distilled in one place if you searched your whole life.
There is one point I want to share today, though, about how to find meaning in life. The answer is to take upon yourself responsibility. The greater the responsibility, the more meaning you can find. Dr. Peterson particularly talks about the responsibility of being a parent.
In our society, happiness is often espoused as the highest attainment one can achieve, but happiness, I’m coming to find may be overrated. Happiness is shallow compared to the depth of meaning that responsibility provides. Mankind was meant to struggle, to create, to engage problems, and to face the dangers of the unknown, and return victorious (albeit tired, and perhaps even injured) having made the world a better place!
I can’t think of any decision that embodies this concepts so much as my decision to be a parent. It is very hard at times, rife with parental guilt from the sheer weight of being responsible;e for an entire person and their education and upbringing. Happiness is of course a frequent result, but there is no question that being a parent is more difficult than simply choosing to support yourself alone.
Of course I wouldn’t trade it for the world though. It is the best and hardest thing I have ever chosen to do. This is why I encourage those who struggle with a lack of meaning in their lives to consider engaging themselves in efforts to improve the world, and take upon yourself the responsibility of doing so. Eschew the siren calls of convenience, comfort, ease, and the pursuit of your own personal happiness as your prime directive. Find meaning instead, it is definitely worth it,
Incentives and Motivation
When giving anything “extra” to employees, beware of how you go about it. Those extras have a nasty habit of demonstrating diminishing returns in motivation and employee satisfaction. Exhibit A: A holiday ham…
At a certain company which shall remain nameless for our purposes, upper management wanted to express their gratitude toward their employees for a successful year. After some deliberation, they decided to buy every employee a honey baked ham for Christmas. With a sizable number of employees, and the higher-end price tag for the hams, it ended up being a significant expenditure.
Having never received anything extra for Christmas before, the gift came as an unexpected and welcomed surprise. All of the employees were enthusiastically grateful for the gift and employee satisfaction was at unprecedented levels. You might consider this a win, until you fast forward one year….
It is the end of the year again, and this year, due to circumstances largely outside of the employees’ control, the company was not as profitable. Of course they were unable to afford such a generous gift as the year prior, but the employees now had an expectation set that was unable to be fulfilled, and morale plummeted.
While last year everyone was happy about the gift because they had never received anything like that before, now they had higher expectations and felt entitled to the hams. It had become something they came to expect, and so in not getting one, they felt ripped off. Even if the company could have bought hams for everyone again, no one would be as happy, as it would simply have been meeting an expectation.
What is the solution? I’m certainly not saying that employers should stop providing extra perks, but rather that when they do, they should be presented in a way that makes sure they will not become an expectation, but rather always a pleasant surprise.
Reward positive behavior randomly. This way employees are still incentivized to perform, but do not come to expect a certain incentive and begin to feel as though they deserve it consistently.
Negotiation, Part 7: Satisfaction With Negotiated Outcomes
This final post in a week long series might be the hardest to swallow, because the research makes counter-intuitive conclusions which are pretty much the opposite of what one would typically expect. The data make it very clear though: the more you negotiate for an out come in your favor, the less satisfied you will be with the result, and the more satisfied the other party will be.
Let me break that down with specific examples… Let’s say that you are offered a starting salary at a position of $40,000 per year, and you immediately accept the offer. You will be the more psychologically satisfied party in the arrangement, while the company you work for will be less satisfied, and ultimately have lower expectations for you.
However, if you don’t accept the first offer and negotiate for a higher salary, say $45 – $50,000, even though you are financially much better off in these circumstances, you will feel less satisfied, and your boss will be more satisfied, and have higher hopes for you. As a matter of fact, people who negotiate for higher salaries from the get-go tend to be promoted sooner and more often than those who simply accept the first offer.
One other example, lets say you are buying something in a haggling-type situation, at a bizarre, swap-meet, or street market of sorts, and you see something you would like for $100, so you go over and offer $80 and the offer is quickly and happily accepted. Right off the bat, even though you got $20 off, you will be left dissatisfied thinking: “How much lower could I have gotten it for?”
Whereas if you had simply paid the asking price for it, you would not have that same conflict, because you just assumed the asking price is the end all/ say all. But the merchant is happy to have sold his goods, and if negotiation was involved, they feel like they really had to work for it, and end up happier.
The moral of this story is two-fold. First, the more you negotiate the better outcomes you will have, but you will have to stave off and combat the inherent sense of dissatisfaction that comes with doing so. Second, the more you negotiate the more the people you negotiate with will be happy, satisfied with the transactions, and finally, they will like you and think better of you than if you don’t. Remembering the second point can go along way in combating the first.
Now, go out there and negotiate! Everyone will be happier and better off because of it.
Negotiation, Part 6: Anchoring
There is an old saying regarding negotiation: “Whoever speaks first, loses.” It is certainly memorable, but when it comes to making the first offer, it is flat out wrong. As a matter of fact, letting the other person make the first offer when you have the opportunity might be one of the worst things you can do. It all has to do with a cognitive bias known as anchoring.
Also known as focalism, anchoring describes the human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making a decision. By making the first offer, you have the opportunity to set an anchor in the mind of your opponent which, cognitively, is incredibly difficult to deviate from, even if you are aware of it.
This is a very well researched phenomenon, and even when the anchor itself if unreasonable, it still has an effect on the responses. Take for example, one study in which student were asked if Ghandi died before or after age 9 or 140. While each anchor is preposterously distant from the correct answer, the average answer of the 9 group was 50, while the average of the 140 group was 67.
Still not convinced? Other studies have found that even when people are aware of the effect, and are monetarily incentivized to avoid it, they are still victims of it. Even seasoned real estate agents under or over value homes based on false anchors.
So clearly, you want to be the one to set the anchor. Depending on your position, higher or lower, of course. But what if the other person speaks first? Is all lost? Not necessarily. The only thing you can do in such circumstances is do your best to disregard what they said and counter with an anchor of your own. It won’t be as effective, but it will help.
Negotiation, Part 5: Research
In this the part of the series, I present the most important aspect of successful negotiation. It is all encompassing, and ties together each of the subjects already covered. Since knowledge is power, it should be pretty obvious that if you want to have the upper hand when it comes to bargaining power, you need to do your homework!
This includes, as previously mentioned, knowing your reservation price, BATNA, and as much as possible as the other parties needs in case a mutually beneficial agreement is possible. Ultimately, though, the most important research to have done (and to have available during the negotiation) is that which supports your claims to value.
For this post, my first example will be buying a car from a private seller on KSL or Craigslist. The most obvious piece of information you should first obtain would be the book value, which will be the starting point of almost any such negotiation. Then you need to find as many problems with the vehicle as you can, so as to get the price down.
If the listing is clear about any issues with the vehicle, you should get quotes from mechanics stating how much it would cost to resolve those issues, then when you go to buy the car, you can present the quotes as tangible and reasonable evidence of the difference in value between what they are asking (we’ll assume the car in question here is simply priced at book value) and the actual value of the car in its current condition.
The other scenario would be a salary negotiation. As previously mentioned, having other job offers is incredibly valuable as it is solid evidence of your worth in the marketplace, but in lieu of those, you can obtain data on the value of your position, specifically that value which you will bring to the company. Particularly in situations where you are less powerful, you want to make extra sure to present your case as a value proposition to the other party.
Rather than “I need x amount of money to pay my bills,” show your potential employer how much value you have brought to others, and how much you can bring to them. Just like when you are presenting any research, real numbers are the best indicators here. Research their needs, and then figure out how you can meet them, and just as importantly, figure out how you can clearly demonstrate that value. If all you have figured out are your own needs, you will fail.
Negotiation, Part 4: BATNA
BATNA is an acronym for “Best Alternative to a Negotiated Agreement.” It is as important to know this going into a negotiation as it is your reservation price, chances are, the two are related in some way as well. In other words, BATNA is your backup plan in the case that you can’t reach an agreement at all.
Unlike your reservation price, there are circumstances where you can leverage your BATNA in a negotiation setting. For example, lets say you are negotiating for raise with your employer, it would be beneficial to go into that meeting with at least one (the more the better) offer from another company for more than you are being paid currently. Under such circumstances, your BATNA would be leaving the company and accepting that offer, but it also can be used as a value indicator to show your boss what you are worth in the marketplace so you can make your case with actual evidence backing your claims.
The other BATNA to be sure you consider is the other party’s. I have an acquaintance (let’s call him Greg) who took a trip to India and rode on an elephant. During the ride, someone took a great picture of him, and offered it to him at the end f the ride for $20. Knowing that the photographer’s BATNA was $0.00 since he couldn’t sell the picture to anyone else, he made a counter-offer of less than a dollar, and it was accepted.
As you can see, my acquaintance got an amazing deal because he considered the position of both parties. The photographer, had he done the same would have realized that Greg’s BATNA was to live without an amazing picture that captured the highlight of his entire trip, and then he could have used that knowledge to stick to his original asking price, or at least a few dollars.
The photographer had no reservation price, and didn’t consider his potential buyer’s BATNA, and because of that, he came out of the deal with much less than he could have. Don’t let the same thing happen to you!
Negotiation, Part 3: Reservation Price
Simply put, the reservation price (RP) is the least favorable outcome in a negotiation that you are willing to accept. Anything below this price (if you are the seller) or above this price (if you are the buyer) is unacceptable, and worth abandoning the negotiation over.
There are a couple of things to consider before entering the negotiation, and the first should be the reservation price itself. The second is your willingness to walk away should the terms of the agreement fall outside of the parameters of your reservation price. It may sound like common sense, but not everyone actually knows their walk away point before negotiating, which puts them at an extreme disadvantage.
Those who have decided on their RP must also commit beforehand to stick to it. This can be difficult, particularly for temperaments high in the trait of agreeableness. If you are not willing to walk away from an unfavorable offer, you should not even bother negotiating, because you have no power backing your statements.
I have had to turn down several job offers, each of which were terribly appealing, but after wage negotiations, I was simply incapable of paying my bills if I accepted the offer. (If you don’t know your reservation point, enough to pay your bills is a great place to start!) Each time was difficult, but I became stronger each time, and more confident in future negotiations.
A final word on walking away: just because you are unable to reach an agreement does not mean you should burn any bridges. Should such a case arise, always be polite but firm, and thank them for their time. There have been many offers which took place after one party walked away graciously, and even if the better offer doesn’t come your way, it is important to maintain positive relationships for future opportunities.
The last thing I have to say about reservation price is this: never reveal your reservation price in the course of negotiating! You will absolutely shoot yourself in the foot and the other party will be unwilling to make you an offer that is any more favorable than the least you will accept.
Negotiation, Part 2: Mutually Beneficial Solutions
Let’s say you have a recipe that calls for one orange, and another individual is also preparing to make a recipe that requires one orange. You both go to the store to purchase the necessary orange, and there is only one left. What do you do?
Do you try to negotiate based on your own need, which you try to convince the other person is greater than their own? Do you settle for half an orange, in hopes that your adversary will also be willing to settle and while each of your recipes will only be half as “orange-y” or will only make half as much as you need? Maybe you will play rock-paper-scissors or arm wrestle for it…
Whatever you decide, the future seems pretty bleak for at least one of you, unless you put in the effort to communicate and understand one another’s needs. For example, let’s say that in this case, what you really need is the zest of one orange, while the other person requires the juice of one orange.
Suddenly, it is a completely different story, right? Instead of adversaries competing against each other for possession of a lone orange, they have the opportunity to work together to each get exactly what they need despite the apparent scarcity of resources.
With some communication, and often a little creative problem solving, all parties participating in a negotiation can often get exactly what they want and/or need. “Often” being the operative word here. There will definitely be scenarios where the negotiation process takes place under adversarial conditions, where one parties interest is mutually exclusive with the others.
In those kinds of situations, distributive bargaining is necessary, (which will be the rest of this series will cover), but it is important to understand the value of communicating and being open to alternative, creative solutions. Mutually beneficial agreements are always preferable to zero-sum games.
For more ideas and information on mutually beneficial negotiation, check out the book, “Getting to Yes.”
Negotiation, Part 1: Everything is Negotiable
One of the most valuable lectures I have ever had the privilege of attending taught me, among other things, that everything is negotiable. One of the assignments this particular instructor assigned her MBA students was to spend a week taking advantage of every opportunity to negotiate virtually every transaction they took part in.
You may have in mind a salary negotiation or a new car buying experience, but when was the last time you heard of someone haggling over gas prices? That is the kind of experience she wanted her students to have, so that they could learn that everything is negotiable.
As bizarre as it sounds, every time the assignment drew to a close, students would share outrageous stories about actually having success negotiating lower gas and grocery prices by asking to talk to a manager, or presenting their case without hesitation.
In kicking off this series of posts on negotiation, I invite anyone reading to leave their comfort zone and practice this delicate art. Take the opportunity to negotiate something you would normally accept without question. This practice will be particularly helpful for the shy and inhibited among you. It will be terrific practice in standing up for yourself and our own best interests, which for some people (particularly those high in agreeableness) is a very uncomfortable thing to do.
Take this lesson from Tim Ferriss in his book “The 4-Hour Work Week:”
Be assertive and stand up for your own interests, particularly if that is hard and uncomfortable. Negotiation is a necessary skill to succeed at life, no one will give you what you want/need if you aren’t willing to ask for it, so get some practice! Ask for a raise, challenge a grade, make a deal with your partner/spouse, (my wife negotiated never having to do the dishes again!) haggle a bit, and of course keep coming back this week to learn more about the finer points of negotiation.
Life is Like the Seasons
Today I wanted to go over yet another lesson I learned from Jim Rohn. Life and business, he teaches, is like the changing seasons, and you can’t change the seasons. I had never considered such an idea before, but it was revolutionary. I had always longed for a life with no winters, multiple periodic harvest times, a few springs, and a summer or two for fun. Now I see, of course, that I was setting myself up for gross disappointment, because you can’t change the order or repetitiveness of the seasons.
They may vary in length and severity, but there’s no escaping a fall after summer, a subsequent winter after fall, and so on. The comforting thing Jim teaches is that while you can’t change the seasons, you can change yourself. Human begins are the only ones that can, as a matter of fact. So here are some tips to get you through the seasons…
Handle the Winter
Disappointment, failure, tragedy, loss, and scarcity define the winters of life. Some are colder and more bleak than others, but there is no avoiding their regular occurrence. You have to make yourself strong enough, mentally and physically, to power through the winter. Time will always inevitably bring winter to its end, but if you aren’t prepared to weather the storms and have food and fuel in store, it might just get the better of you before time has a chance to bring the hard times to an end.
Take Advantage of the Spring
Spring is opportunity, and if you had to choose a place to put it, right after Winter seems just about perfect. If you don’t give up, and push through the Winter, Spring will show up every single time. Just because Spring arrives doesn’t guarantee a good harvest in the Fall, however, so make sure you take advantage of it when it comes, because just like Winter, time will bring an end to Spring just as surely.
Nourish in the Summer
Just as new life and opportunity takes root in the Spring, that new life must be nourished throughout the Summer. Crops must be watered and tended to, newborn babies must be fed and cared for, and both must be protected. All Summer long you have to be nourishing your values and protecting your new life from the weeds and predators that threaten to destroy it. Vigilance is paramount.
Harvest in Due Time
Exercise patience, wait until the fruit is ripe and don’t be premature, for in due time, if you put in the work in the Spring and the vigilance in the Summer, your harvest will inevitably come. It will be your harvest though, so take responsibility for it, no matter the size or the quality. You deserve what you get at harvest time, and if it is a bountiful harvest, you earned it and there’s no need to apologize. If, however, your crop is meager, take responsibility and prepare yourself to take full advantage of the next opportunity that presents itself to you!
Discipline
One of the most influential teachers in my life was Jim Rohn. While I never met him while he was alive, his material shaped the way I viewed much of my life, particularly on the subject of discipline. There are two particularly meaningful quotes I wanted to briefly discuss today…
There are psychological reasons for the difference in “weight” that he mentions, that I might go into detail on in a later post, but it is the first sentence that stuck out to me the most. Because before then I didn’t view all of my choices as choosing between types of suffering.
“Picking your poison” as they say, though, is a terrific perspective to consider when making choices, particularly very important life choices. The sad truth of the matter is that life is full of suffering and difficulty, in addition to the happiness. If you are making choices based simply on positive results, your judgement can easily be skewed.
For example, if you are considering a career as a doctor or plumber, it may not be the wisest thing to only consider the salary or status of each position, because what you are really going to have to live with are the difficulties. So ask yourself: “what kind of suffering can I live with?” Once you have identified what it is you really want and how to get there, then it is all about disciplining yourself (which hurts) or living with the regret from not attaining your desires (which hurts worse).
Which dovetails nicely into the second quote:
There’s a game changer, at least it was for me. I always viewed success as the accomplishment of some ultimate goal, but Jim Rohn’s definition is true on a meta-level. A few simple disciplines practiced every day, are not the key to a specific success, but rather to every success you could ever hope to attain.
Which few simple disciplines do you need to practice each day? Figure them out and then consistently practice them. That’s more important than bursts of intense, passionate, effort. As simple as it sounds, though, it is certainly not easy, but it is easier than living a life of regret and disappointment.
Rallying for a Cause
In my neighborhood, there has been a lot of recent turnover because if a significant number of people moving in and moving out. This led to a lot of people not knowing their own neighbors, and with some recent history of vandalism and robbery in the neighborhood, I knew that a community of people who knew one another was more resistant to those kinds of issues, and decided that we could use something to give people a chance to work together and get to know each other a bit.
My initial thought was to form a neighborhood watch organization, but interest was generally low among neighbors I asked, so I decided an event might be a better route. I wanted to give people an opportunity to be a part of something, so I planned a fundraiser for in the form of a community yard sale.
Several neighborhood residents have family members that suffer from a variety of illnesses that can be treated effectively medical cannabis, but in Utah, that is still illegal, so we determined that all of the proceeds from out fundraiser would be donated to the Utah Patients Coalition, which is working to get people legal access to the treatment they need.
My wife and I went door to door, talking with neighbors and handing out flyers, and within a couple of weeks, we had hundreds of items donated and a growing presence on our neighborhood Facebook page. Nearly everyone that donated was enthusiastic about helping a greater cause, and it was great to see people coming over to my house with boxes full of stuff, or to get the call to come load up my car with donated items.
The big day came, and we were up at the crack of dawn setting up and making some baked good for the neighbors, since they had all been invited to come mingle as well. By the time it was all over, we were able to raise a few bucks to help one good cause, and donated lots of stuff to help another. It was great to be able to make a small difference and contribute towards solving a problem was even better to see friends and neighbors coming together, introducing themselves, and forming a community where before only existed strangers.
There is No Relationship Between Risk and Reward
One of the most common misconceptions surrounding entrepreneurs is a tendency to embrace risk in favor of a higher reward. While this may be the case with a few types of small business owners, the smartest ones minimize risk and maximize reward, knowing that there is no fixed relationship between the two.
First Myth: Financial Security Related Risk.
While the idea of being a small business owner now is much more socially acceptable than it was years ago, you may still get the reaction that being an entrepreneur does not provide job stability or financial security. Ask yourself, though (or ask the naysayers) how many people would it take to fire you? If you are like 90+% of people, then the answer is one, and very rarely is it two or more.
Just one person has to decide they don’t want to work with you and you are done, and yet this is what people generally think of as job security. Contrast that with running a business, with, lets say, 200 customers. How many people does it take to fire you now? Well, 200, of course, but 200 people all deciding to fire you at the same time in concert with each other. That seems more secure to me.
Beyond that, if a handful of people fire you (take their business elsewhere) you can always go get more to replace them, and you can grow your customer base. As a business owner, it is not unreasonable to think you can double your income by increasing sales, but doubling your income as a salaried employee? That is almost unthinkable. You tell me which one sounds riskier.
Second Myth: Starting a Business is Risky
I could just refer you to the post: “Never Bet the Farm” for this section, but as a refresher, I wanted to point out a few ways to minimize risk and maximize reward…
- Sell first, then buy.
- Never launch a business without validating your idea by actually selling it a few times. (That’s a great Idea” or “I would pay for that” are not enough, particularly from friends and family.)
- Never go into debt to start a business.
- Never delegate financial responsibility.
- Make sure you are solving a real problem.
So remember, just because you have been told all of your life that high risk equals high reward, it is simply not the case. Just as you can take very steep risks for no reward, (try responding to that Nigerian prince email), you can have very low risk with very high returns. You just have to be smart about it.
[Non-Comprehensive] List of What You Don’t Need to Start a Business
- A Loan (See link)
- A Business License: You know what the penalty for running a business without a business license is? You have to get a business license. So hold off until you actually need one, as a rule of thumb: around $10,000 revenue or when you get caught, whichever comes first.
- A partner: In telling friends and family about your idea, you may get people wanting to partner with you… don’t do it. Partly because partnering with friends and/or family is a nightmare, and partly because you never want to give someone else any control of your business. So if you must give away some equity in your business for any reason, do not let it be more than 49%. Also, if someone wants to team up with you, let them do sales and get really good commission, even 100% in the beginning because the publicity and feedback will be worth it.
- Inventory: Better to pre-sell your products in the beginning, and have orders fulfilled on demand in the long-run. if possible.
- A patent/ NDA: The more people you share your idea with, the better it will evolve through feedback and sharing additional ideas. As for patents, a patent is just a license to be sued.
- A business plan: While this can be helpful in providing direction, son’t feel the need to have everything all worked out from the get-go, starting is more important than planning everything down to the last detail.
What else would you add to this list?
Fear of Success
There are all kinds of variations of the statement that people are afraid of success. My problem is that I simply don’t believe it’s true. People are not scared to be successful, or “powerful beyond measure,” many people are afraid of losing the possibility of success.
The crazy thing is, that is a much different fear than simply being afraid of failure. Failure can be dealt with, people can justify that they gave it their best shot, reassure themselves that what they learned made the experience worth it, or even that it is a stepping stone on the pathway to success. But thanks to loss aversion (people’s tendency to prefer avoiding losses to acquiring equivalent gains) it is the natural tendency to prefer the retaining the possibility of success than actually obtaining success.
If that doesn’t make sense, let me put it this way: an average individual would be much happier to retain 10 dollars than they would be to gain 10 dollars. How does that translate to entrepreneurship, you might ask? Think of it this way: perhaps you have a business idea that you are convinced is a real winner. Each time you think about you get excited at the possibility, and you love to share your idea with others and hear their praise at how great an idea it would be.
In such a case, actually putting forth the effort to implement the idea is terrifying because of loss aversion. You might succeed, fine, but since losses are psychologically twice as powerful as gains, you are much more comfortable keeping what you have (an idea to share and think about that gives you excitement) than risking losing it by not having the business turn out like you wanted.
Of course this is not rational, but sometimes we need things pointed out to us so we can see them and overcome them. The truth to the story is that an idea is nothing at all, you can’t lose it, and there is no monetary real risk at all in giving it an effort. The only risk is emotional, and once you acknowledge and recognize that, you might be able to stop dragging your feet and actually risk a little emotional investment in exchange for the potential of a tremendous monetary and emotional gain.
What if you fail? That’s ok, the nice thing about ideas is that there are always LOTS more of them. There’s nothing scarce about ideas.
How to Think of a Business Idea
Many aspiring entrepreneurs that I have encountered feel like they are just waiting for “the right idea” as if that’s how the most successful businesses are made. Spoiler alert: that is not how the most successful businesses started.
All you need to do when thinking of a business idea, is look for a problem to solve. What are people complaining about? What do you hear people saying “someone should do something” about? What are your pet peeves, time wasters, or frustrations?
I used to think of business ideas that were based on the idea of “what will people spend money on?” This is the kind of mindset you see Tom demonstrating in the cult classic, Office Space. After pondering on the concept of the pet rock, and how the inventor made a million dollars from what was (as his associates are quick to point out) a terrible idea, Tom decides he will make his fortune by developing a “jump to conclusions mat.”
The sad thing is, every now in then, a stupid idea like this takes off for whatever reason, whether the pet rock as mentioned, the famed $55,000 potato salad kickstarter, fidget spinners, or the $85 leather wrapped rock at Nordstrom. Don’t be like Tom, hoping to get lucky off of a prank or gag. Instead, contribute some real value the marketplace by solving problems and improving quality of life. That is the calling of the entrepreneur, and it is as noble a calling as you can have.
Do not encounter any problems in your life?What if you have looked around and can’t figure out any problems that you can solve in a unique way? What is you still can’t think of an original idea? Simple solution: copy someone else’s idea, then just do it differently, and hopefully better! Almost everything that is currently being done in the world, can be done more efficiently, be better managed, or can be offered with better customer service… and that’s a problem, so solve it!
Never Bet the Farm
Generally, I’ve found that the mindset among people considering starting a business is this idea that you either need to get a loan of some kind to start it or you need to find investors and give them a portion of equity in your business, etc. Bottom line: don’t do wither of these things to start a business,
With a little creativity and some solid negotiating skills, you can start just about any business for close to $0 dollars. What is truly needed is to escape the mindset of “I need to take out a mortgage on my home to get the capital to get my start-up off of the ground.” Because that kind of “betting the farm” mindset is what can lead to your ruin.
I prefer this exercise in a group discussion setting, because individuals in the group can brainstorm a wide variety of business ideas and come up with solutions to starting them debt-free. But since I am limited my the blogging medium, I will give two simple examples, and if you think of others that you are interested in discussing, comment or drop me a line and we can discuss it, in the mean time, here we go…
Enter Wynton Dunford
Entrepreneurship is in Wynn Dunford’s blood. The Dunford family owns a Utah doughnut empire, famed particularly for their chocolate covered chocolate doughnuts, buy Wynn learned from experience the pitfalls of mixing business and family and was determined to strike out on his own and start his own business.
The problem that he saw was that certain patients in hospitals required special equipment that was not needed frequently enough for the hospital to justify purchasing said equipment, so patients would have to go without. An example was a specialized hospital bed that would slowly alternate a slight tilt in wither direction over a few hours so as to prevent the patient from getting bedsores, and encouraged proper blood circulation.
His idea was to rent this equipment to the hospitals on an as needed basis, so that the hospital could take care of their patients’ needs without having to justify a large purchase for each one. This solution saved various hospitals tens of thousands of dollars annually, and helped them manage their inventory more efficiently.
Now at this point, you may be wondering how Wynn for the equipment to rent out in the first place, and it is a good question. When simply one piece of equipment costs over $10,000, you’d think he would need to get a sizable loan to purchase enough equipment to rent out to multiple hospitals, but he knew better than to bet the farm.
Instead, after verifying the need of the hospitals and their willingness to do business with him, he went to the medical supply store and offered to buy the equipment on the condition that he could get the equipment now, but pay for it in one year. The suppliers agreed to the arrangement, happy to have sold a significant amount of product, and Wynn used that year renting out the equipment and made much more than enough to pay the suppliers and have plenty of extra as well.
The Fence-builder
Here is a smaller scale example that most anyone could do right away: Suppose you want to start a fence-building company with absolutely no money. You find someone who needs a fence built, determine the cost of the materials (say in this case it is $2,500) so you quote them $5,000 for the project, and request one half up front.
You use the down payment to buy the materials and build the fence, then what you get paid is all profit, and voila, you have started a fence-building company with no capital. Now, regular readers of this blog might object that a fence building company fails the “3 M’s” test as it is custom work, and the margins are not stellar, but I use the story to illustrate the point that you can start with nothing, and get your customers to pay to start the business for you.
Pre-sales, down payments, purchasing supplies on terms, renting supplies, etc. If you think there is not a way to start your business with little to no cash up front, maybe you just need to think about it a little bit longer.
As an aside, if you wanted to make a fence-building business 3M friendly, you could simply hire people to do the work and focus on the sales and marketing, and before too long, if you do it properly, you have removed yourself from the equation and set up a company that you can actually own, rather than simply a job.
Don’t Compete Against the Guy in a Pickup Truck
If you are considering starting a business and your primary competition is a guy in a pickup truck, you really ought to reconsider. Let me give you an example…
Let’s say Joe pickup truck wants to start a fruit stand, so her finds a supplier that sells watermelons in bulk for a dollar a piece and buys 100 watermelons, puts them in his pickup truck and drives into town and sets up shop on a corner. He realizes that he can sell a lot of watermelons by offering a great sale on them, so he sells them for 50 cents each. Naturally, they sell very quickly and Joe pickup truck is incredibly pleased with his success, so he decides to take all the money her has earned and use it to go buy more watermelons to sell.
Now, that may be a silly story, but it illustrates a simple point, the guy in the pickup truck is typically not very business savvy. He is often willing to do much more work than you for much less money. There is no competing with a guy who will take a loss in order to compete with you, so don’t even try.
Finally, if you are tempted to think that it is worth it to simply outlast the pickup truck guy because he will work himself broke eventually, you are half right. Of course Joe pickup will run out of money selling watermelons, but there’s always another pickup truck guy, best to steer clear of competing with them altogether.
What is your market?
This post ties in very closely with yesterday’s post, and I alluded to it with the Montblanc pen. Since who your customer is can be just as complex and important questions as what your product really is, I figured I needed a post on that as well, especially because answering one question, is likely to help you answer the second.
Going back to the pen, I mentioned that it is important to know that your customers are not just “rich people,” but rather, people who want to appear wealthy to those they interact with. Now, granted, there may be some overlap in those categories, but the distinction is important because knowing exactly who your market is, enables you to identify where they cluster. This is of clear importance to your marketing efforts, and asking where your customers cluster is perhaps the most obvious question many amateur marketers and/or business owners fail to ask.
The answer to that question is, however, only obvious if you actually know who your customers are. Then you can focus your marketing efforts to the place they cluster, like life insurance and jazzy commercials during the price is right.
Here’s one example to consider. Claire, a middle aged, female, real estate agent is quite successful. Working only part time she manages to sell enough high end houses in a year to make over $100,000 of extra income. Despite this, she is unsatisfied with the frequency and reliability with which she is paid, and envies her peers in other professions who, though they make half as much money as her, are paid regularly and reliably through a salary.
Learning that she is not alone, the owner of a small real estate company decides to alter the structure of the company to higher women like Claire and put them on a salaried pay structure, allowing him to keep the extra money and invest it into other projects, and allowing the women he hires to have a steady income just like they desired.
Who are the customers in this new business? At first, you might be tempted to say: “people buying homes.” But you would be wrong. In this business model, the employees are the customers, and as the business owner, you need to focus your marketing efforts on finding women like Claire who enjoy the work, and have the social network to be successful, but dislike the irregularity of pay that commission sales inevitably brings.
All businesses need to know who really pays the bills, so they can find more people like them, and keep the ones they have found happy. Sometimes the answer is more obvious than at other times, but isn’t it always worth considering?
What Are You Really Selling?
I imagine that most anyone reading this blog has heard the famous quote by Harvard marketing professor Theodore Levitt: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” It is such an excellent quote that I am tempted to end the post right now and leave you to ponder on its ramifications, but I’d hate to come off as lazy so I’ll throw my two cents in as well…
Knowing what you really sell enables you to understand your customer, and understanding your customer’s motivations for making said purchase will help you reach even more customers and communicate value effectively. For example, in marketing materials, you want to focus on the real reasons people want to buy your product rather than the product itself. A drill bit is certainly an illustrative example, though I think the analogy could be taken a step or two further. If I was marketing drill bits, showing a picture of a hole might be just as ineffective (if not more so) as showing a picture of the bits themselves.
So what is someone really buying? To find the answer, you gave to channel your inner 3 year old child for a minute. A drill bit for example, why do you want the drill bit? To have a hole. Why? To put a screw in it. Why? To attach a shelf to the wall. Why? To have more storage space. Why? To be more organized and get rid of clutter. Why? Because having a clean house gives me peace of mind.
There it is, peace of mind. That’s what this particular customer is buying, even if he didn’t know it. For me, I would buy a whole set of drill bits, but what I am really buying are all of the possibilities of the things I can build or fix to improve the life of my family.
Here’s one more example for your pondering pleasure.
How much would you pay for this pen? A dollar or two? Maybe $10 or $20? It’s clearly a nice pen. What if I told you it cost over $800? Because this is the John F. Kennedy Special Edition Pen by Montblanc and it sells for$805 to be exact.
So who would want to buy a pen for 805 dollars, and why? Clearly they are not just buying some black lines on a page, you can get those for free at a local bank, and even get a bonus lollipop to boot! You might think rich people buy them, but in reality, that is not necessarily the case. People who want to feel or appear rich are much more likely to buy a pen like that. People don’t buy a pen from Montblanc, they buy a status symbol.
Now, knowing that information, how does it affect your thought process regarding how you would market such an item? Would you sell it a Walmart? Would you put an ad in Valpak? The answers to those questions are obviously “no,” but where and how would you sell this then? Put an ad in GQ? Get a celebrity endorsement? Or even consider this, maybe you would put potential customers on a waiting list, or even turn away certain customers?
These are the kinds of questions you need to consider once you know what you are actually selling. I’ll get into the answers more in a post on marketing another day, but in the mean time, I hope this has given you enough to think about.
Money Doesn’t Motivate
Everyone has heard the phrase: “Money can’t buy happiness,” but what if I were to tell you that it doesn’t really motivate either. Many of us are operating under the illusion that money is a tremendous motivator in our lives and in the lives of our employees. Indeed, this idea is so deeply ingrained in our paradigms, that to deny it seems laughable. When Ralph Little first made stated that money doesn’t motivate, the whole class was silent, as though waiting for a punchline that never came.
However, if you want to know how to motivate yourself and others, it will come in handy to know that money is a poor motivator at best, and that you would be better off focusing your motivational efforts on alternative methods. As was his way, Ralph illustrated his point with a series of stories and anecdotes, one of which I want to share with you today.
He had a neighbor that was having a garage sale, and, recognizing the importance of building and maintaining positive relationships, he decided to attend. Now, you would think that this neighbor was holding a garage sale (as opposed to simply throwing everything away) because he wanted to make money. But Ralph knew that spending a few dollars on a trinket would not be as valuable as an alternative strategy.
Instead, Ralph picked up a certain item (for the sake of this story, it doesn’t matter what it was) and cradled it in his hands, and told his neighbor that it was such a shame that he considering parting with such an extraordinary item. It was too special to simply be sold off to some stranger who wouldn’t appreciate its true worth.
Genius. Of course the neighbor was thrilled that someone had such a sincere appreciation for an item of his, because people identify, to a degree, with their possessions. Ralph’s affirmation made the neighbor feel important and validated, a man of exquisite taste and culture, and naturally, it thrilled the neighbor that someone appreciated his possession so much that he eagerly insisted that Ralph take the item home free of charge.
Now, Ralph confessed that he did not have much of an affinity for the item, but he had strengthened a relationship profoundly, by investing something that was much more valuable to his neighbor than a couple bucks: his attention, appreciation, and interest.
You can see from the story that people’s emotions and values are what really motivate them. Money is simply a means to and end, or in other cases, a metric on a scoreboard. Most people would be happy to make less, as long as it was more than the majority of those they interacted with. Therefore, it’s not the money that motivates, but the status, the rank, the respect, the recognition, and the ability to provide for their own and their families needs.
The good news? Things that actually motivate people and make them happy are usually much cheaper than money. So you can make your employees, co-workers, friends and family, happy without giving them raises or buying them gifts.
Most people are aware of the research that shows that there is no correlation between money and happiness once your basic needs are met, and that things like raises only keep someone satisfied for a month or so, just long enough for lifestyle inflation to kick in.
If you still aren’t convinced, remember the Silicon Valley millionaires who are miserable with their 7-figure incomes, and then maybe you can start to realize that money doesn’t motivate, and you will be free to pursue more effective, and fulfilling means of helping yourself, and others perform at their best.
See also: http://tim.blog/2007/09/04/new-research-and-a-dirty-truth-read-this-before-chasing-the-dollar/
Look at the Fish
For background on this post, it is advisable that you take a few moments to read the following brief account…
The account written by one of the students of the famed Professor Louis Agassiz, who encouraged his Zoology student to engage in study by looking at a fish… For several days…
When my own Professor gave us this very account to review and ponder upon, I admit I was somewhat perplexed, but came to realize, just as Sam Scudder did, the value of that lesson and how it applies near universally, particularly in business and entrepreneurship.
The obvious lesson Professor Agassiz was teaching was how to be truly observant and the value in being so. So many of us think we see the world around us, when in reality we are only observing the tiniest fraction of our surroundings.
The context in which this comes in handy to both the aspiring and seasoned entrepreneur alike, is in observing businesses, and getting to know them. My own Professor encouraged us to never leave a business without figuring how they made money, and how much. Committing to such a venture proved to be as exhilarating and is was mentally taxing.
I spent hours in a Barnes and Noble counting books and watching how many sold in an hour, so I could estimate their profitability. I’ve made calls to get pricing quotes from an incredible variety of businesses in order to figure out their margins, and I have interviewed dozens of local small business owners in an effort to get to know the ins and outs of their business, and their industry as a whole.
This is how I have learned how business works, what problems people are facing, and how other’s have creatively solved them. This is a necessary course for anyone who wants to provide ample value to the marketplace. In order to solve problems (the core “job ” of the entrepreneur) you must first know about and understand them, as well as see how others have solved similar problems.
What industry are you in? What problems are you trying to solve?What is your fish? Once you figure that out, I think it is definitely worth the time to take another look…
Superior Customer Service is Always an Unfair Advantage
Little and Company, which was the first really successful business started by my mentor, worked with mortgage companies to correspond between them and homeowners whose payments were past due and at risk for foreclosure. Ralph Little knew how rare exceptional customer service was in the world, and particularly his industry of collections and foreclosures, and concluded that it made such a difference, that to succeed at providing excellent customer service would put him ahead of the competition so far that it would almost be considered an unfair advantage.
To illustrate this point, he tells a story about a client he had which represented a sizable portion of his businesses accounts, which goes like this…
One day he received a phone call from a long time client who said that unfortunately they were going to have to move their business to a competitor because of rising costs and they could save money by going elsewhere. However, because of the long time relationship, this client thought it only fair that he would give Little and Company a chance to lower their price and match the competitors offer. Ralph apologetically stated that they wouldn’t be able to lower their prices and the client responded that he expected that such would be exactly the case.
At this point in the story, when I first heard it I was young and immature and thought that saying something like, “good riddance!” and hanging up the phone would be an appropriate response, and unfortunately, similar responses were apparently more common than you would expect. However, Ralph’s response was so perfect that it has stuck with me through the years since I first heard it…
He explained to the client that he would be missed and thanked him for his business over the years, and said: “You are always welcome back anytime should you feel your customer service needs are not being met.” Then, after the phone call, Ralph Little called Mrs. Fields and ordered a box of a dozen cookies and paid to have them mailed to his (now former) client with the following note…
At this point in the story’s telling, Ralph always cracks a sinister smile and says, “It’s so unfair, no matter where he takes his business, they don’t stand a chance.” And sure enough, less than a year later his client called him back up and asked if it would be possible to relocate their accounts back to Little and Company. Ralph said of course, and that he would be thrilled to have them back in the family, then asked why the other company didn’t work out, and the response was that their customer service needs just weren’t being met.
Of course they weren’t, they couldn’t have been, the standard was just set too high. Even if the other company was great, they couldn’t match the relationship that Ralph Little had fostered, and maintained even through its attempted dissolution. That’s why customer service has the potential to be an unfair advantage, because to a customer, being treated like you’re special is addictive, and if you can get them hooked, they will be like a junkie always needing to come back to your for another fix.
Oh! I almost forgot the end of the story, after his petition to bring his business back to Little and Company was benevolently granted… He asked Ralph if he would be willing to send him a slice of humble pie.
The Three “M’s” of A New Business Idea: Part 3
The third and final aspect of a business model to consider is “Multiples.” Granted, it is a little bit of an awkward way to say that something is scalable, but “The two M’s and one S” doesn’t quite have the same ring to it.
Once you have established that there is a good margin, and that there are enough people who will receive value from your product, this is the element that determines whether you will be owning a business, or owning your own job.
Now, I don’t mean to disparage those who are self-employed in the least. I have great respect for them, and how hard they work, but Ralph Little wanted to teach people to start and own businesses, which can run independent of the owner, thus enabling said owner to be paid in the most enviable of ways: “mailbox money.” (Also known as passive income.)
To illustrate the principle of multiples, think about someone who is able to paint amazing landscapes…
Sure, He’ll do. Now, if Bob Ross wanted to start a business selling paintings, he could definitely succeed, to a point, but his income would always be capped rather low, because it takes him time to produce each painting. In essence, what he is doing is custom work, which is the direct opposite of a business with multiples. In order for him to make the transition from owning a job (custom work) to owning a business (multiples) he could sell prints of his paintings, which require no time (of his at least) to produce, thus removing the time cap on his income, and he can sit back and let a fulfillment company do the heavy lifting.
Now, that is a simple example, but I am glad you thought of Bob Ross, because obviously, he thought of another way to transform his custom work into a marketable, scalable consumable, namely, selling videos of himself painting. This enabled him to reach an audience and provide value to them in a way he could never have done by simply painting for individual customers.
So think about your business idea. Is it custom work? Or can the business operate independent of you following an initial investment of time and energy? If you have to do something personally for each sale, then you might reconsider launching that endeavor. Unless, if course, owning a job is your goal.
To drive the point home, here are some custom work businesses and similar models that have rely on multiples instead…
- Shooting weddings and portraits vs Selling prints and stock photos
- Fixing lawn mowers vs Paying others to mow lawn of your customers
- Playing a gig vs Selling an album or sheet music
- Teaching or tutoring vs Designing a marketable curriculum
- Cutting hair vs Renting out booths in your salon to stylists
- Graphic design for specific clients vs Stock clip art and graphics
Bonus Protip: Just like I mentioned in Part 1, information not only has a huge margin, but is infinitely scalable. Finding some useful information and presenting it in a way that is appealing to large market, is always a slam dunk of an idea.
The Three “M’s” of A New Business Idea: Part 2
How many people have thought of an idea for a new business, gotten so excited, only to find out someone else has already started a business offering the same thing, and then in disappointment they abandon their idea entirely? I admit I don’t know the exact number, but I have seen both myself and many business-minded friends fall victim to the same form of disappointment, and today I want to write about why it is not warranted.
Market
How many businesses are there in your area that simply clear out drain pipes? The answer is obvious: a whole lot. Probably every time you go on the freeway you see a billboard or truck for a place like that. Almost every mailer you get includes at least several promotions for places like Roto-rooter seeking your business. Does anyone ever consider opening a drain cleaning company and then throw up their hands in despair when they see that someone else has already opened a similar business? Of course not. A multitude of similar business makes one fact incredibly clear: There is a sizable market for this product/service.
When considering business ideas, you must consider the size of the market, and whether there is one at all. An easy way to do this is to simply look at how many people are doing something similar, or in other words, look at your potential competition. If there’s a lot of competition, and they are thriving, then there is enough for you too, especially if you have an unfair advantage like excellent customer service (a post for yet another day).
When looking at the size of your market, you must also consider what I posted about yesterday, the size of your margin. If there are only a handful of prospective customers in your market, then the margins had better be astronomical, and conversely, if the you only make 50 cents per sale, you had better have a large market.
To illustrate these points, my mentor Ralph Little asked how I would like to be the only company producing a certain product, in essence, to have no competition. Naturally, like most people, I assumed this would be a fantastic position to be in, and he showed me a paint can opener.
He told me (whether truthfully or not, it doesn’t really matter) that there was only one company in the world that made this device, and asked whether I considered their position enviable. But of course I was not, because anyone can just use a screwdriver to open a paint can and not have to buy one if these just to take up space, especially when another tool with many uses can do the job just as well as this tool with only one use. That’s when I understood his point.
If you don’t have any direct competition, (obviously there is indirect competition for everything, just like the screwdriver indirectly competes with the paint can opener) then you had better be sure there is a market for what you want to provide, or you had better provide something that can eliminate the need for several other items, in essence, sell the screwdriver instead.
To wrap things up, I want to give an example of a place I worked once that bragged about not having any competition. The company was Living Scriptures, Inc. and one of their product lines was an animates series of videos based on stories from the Book of Mormon.
A series of 13, half hour long videos that sold for $30 each, and it took them over 17 years to break even on production costs. The reason is because Mormon families are a very small portion of the market, and there are simply not enough of them to make this a profitable enterprise. For obvious reasons, their animated Bible series was much more profitable, but even still, the market was much more limited that say, a Disney movie.
A series of 13, half hour long videos that sold for $30 each, and it took them over 17 years to break even on production costs. The reason is because Mormon families are a very small portion of the market, and there are simply not enough of them to make this a profitable enterprise. For obvious reasons, their animated Bible series was much more profitable, but even still, the market was much more limited that say, a Disney movie.
Now to be fair, I know the president of Living Scriptures personally, and he had other personal motives for producing the series beyond profitability, but I use the example to illustrate this point: make sure what you are offering can be marketed to the largest group possible. 13 million Mormons worldwide might sound like a large enough number to sell movies to, but 6 Billion is better. That’s why Disney has so much money and Living Scriptures doesn’t.
The Three “M’s” of A New Business Idea: Part 1
In order to kick off my month of blogging everyday this July, I wanted to get down in writing some of the most valuable lessons I have ever learned about starting a business. I learned them from my former Entrepreneurship professor and current mentor, Ralph K. Little.
The first lesson has to do with the three “M’s” that any entrepreneur needs to look at when considering the viability of a particular business idea, and they are “Margin, Market, and Multiples.” In my post today I want to focus exclusively on the first M…
Margin
Margin simply means that there is a significant difference between your cost for a product, and what you can sell it for. Many people think of a standard markup at 100% of your cost, also known as a “keystone markup”. In simple terms, buying something for a dollar, and selling it for two. However, when Ralph Little taught me about Margin and pricing items, he said that using keystone (or any standard rule for markup) was thinking backwards. The product should be priced according to the value it provides to the customer, not according to your cost, and if the value isn’t significant enough to blow your costs out of the water, then you probably should focus on a different business idea.
To illustrate his point he told us a story about a particular piece of lab equipment used in medical testing facilities, which is a head of many thin glass tubes which pick up various fluids (such as blood samples) and drop them into test tubes containing various solutions, so that the results can be observed.
As you can imagine, the equipment must perform to very precise specifications and head attachment with the glass needles costs about $10,000 and needs frequent replacing due to the fragility of the thing glass tubes.
While working with a group of aspiring entrepreneurs in a business plan competition, Ralph encountered an a group of individuals who had designed an alternative head for the same purpose. This new model used silicon tubes instead of glass, which never broke, but were sturdy enough that liquids could be piped straight through the tubes without the need to pick up and drop off liquids individually. The cost to manufacture this new product? $2.50.
Now, in considering how much they should sell this product for, if they were to use a keystone markup, it is blatantly what a terrible idea that is. Obviously, they could sell this product for $10,000 (or more) because it saved lots of time and requited no frequent repairs or replacements. And that is exactly what real margin looks like. Selling something for $10,000 that cost you only $2.50.
The key is in providing value, obviously. There is nothing wrong with a huge margin, especially in this case, because the labs that use this new product will save lots of time and money, so both parties win. So that is the first thing to look for in an idea, does it provide enough value for your potential customers, while simultaneously being inexpensive enough on your end to be able to get a great margin when you sell it? If so, you’ve got one of three things necessary for a great business idea.
Obviously, not every idea will be for such a high ticket item, selling something for 50 cents or a dollar that only costs you a couple pennies is also great, as long as you can move enough volume, but that ties into the next two “M’s” which I will go over in the coming days.
Bonus protip: Information is the highest margin product there is, because it costs nothing (besides what you send to get it into a marketable format), so whatever you sell it for, the margin is tremendous.
My Top Three Skills
It is a thought provoking experiment to have anyone identify their “Top 3 Skills.” Having recently been so challenged, I found it less simple to pinpoint than I originally might have thought. It caused me to reflect on strengths, attributes, weaknesses, and values, particularly in determining what exactly qualified as a “top” skill. As a tool of meaningful self-reflection, I recommend it to everyone, just as it was recommended to me…
#1. Curiosity
“I have no special talent, I am only passionately curious.” – Albert Einstein
I fervently agree with the sentiment expressed in this quote by Einstein, namely that curiosity is at the root of all of his learning, discoveries, and success. I likewise consider my own curiosity among my most valuable attributes, and when applied to real life scenarios, my #1 top skill. I have a passion for understanding the world, and while lacking depth when compared to that of Albert Einstein’s, the breadth of my curiosity knows no bounds.
While listening to a lecture by the famed Jim Rohn, a single sentence resonated with me like few others ever have: “Never let it be said you didn’t find out.” I have never forgotten that, and it echos through my mind every time someone asks me a question to which I don’t know the answer. Every new problem or question I encounter triggers a thirst for answers.
Cultivating such a curiosity has led to many of my most meaningful life experiences, including most recently a series of trips to Europe. My wife had always wanted to go to Europe, and I assumed it was something that would have to wait until we had much more extra money available than we did at the present, until I read the story of how a couple had traveled to Thailand for a measly sum of money by “travel hacking.”
Once I read that last September, my curiosity was peaked and I spent days researching how such inexpensive travel was possible. And within a matter of weeks, my wife and I had four new credit cards (I had never even had a credit card before!) and within several months we had accumulated hundreds of thousands of credit card points and were able to visit Paris by Valentine’s Day. In the following months we also visited London and over a dozen cities in Spain, returning home to help my sister fulfill a many years long dream of taking her husband to see Hawaii using the same methods I had learned from my experiences.
Cultivating curiosity has also done much to help my understanding of business and commerce. Whenever I walk into a business I don’t understand, I immediately begin mentally calculating how they make money, and how much they make. I once spent hours in a Barnes and Noble taking rough inventory, calculating expenses, and watching the cashier’s desk to see how many books they sold in order to determine their profitability.
On another occasion I spent hours making calls and asking receptionists at hotels about the Certified Display boxes, each filled with tourism-themed brochures, so I could determine the business model and profitability of something many people simply disregard as commonplace. Each experience proved enlightening, and broadened my understanding of business and helped spark new ideas and solutions to problems in other areas of my personal and professional life. Which leads me to my #2 skill…
#2. Problem Solving
“If there was a problem, yo, I’ll solve it…” -Robert Matthew Van Winkle, AKA Vanilla Ice
Possessing not only a propensity for problem solving, but also an affinity for it has proven incredibly valuable for me and those I associate with. Likely rooted in my curiosity, problems stand out in my environment, workplace, and relationships much like a performing musician might hear only a single discordant note in an entire concerto. Much like that musician may feel compelled to correct the resulting dissonance, I feel the need to solve problems and correct inefficiencies to the best of my ability.
A prominent example in my life has to do with entrepreneurship. I would argue, actually, that essentially, the definition of the word “entrepreneur,” could be boiled down to “problem-solver.” One of the times I saw a problem that was not being solved stuck with me so much that I ended up coming up with an entire business model to solve it. I noticed the problem while selling consulting services to small businesses.
While outside of a granite counter-top fabricator, I noticed a large dumpster full of large slabs of granite that were left over after a counter-top had been cut. I couldn’t believe so much beautiful, polished stone was fated to simply be dumped in a landfill. Hundreds of thousands of tons of a valuable, non-renewable resource taking up space in a landfill seemed like a double-whammy of a problem to me, and so I grabbed some scraps and drove home determined to figure out a way to put them to good use.
Salt Lake Granite Recycling is what was born from my efforts. I purchased a granite stone-splitter and manufactured beautiful split stone tiles that I used and sold to adorn fireplaces, kitchen back-splashes, and even the exteriors of homes. Everything I sold was 100% recycled material (that I got for free, the joys of recycling) that otherwise would have filled the dump.
Within a few years, a man with an existing flooring business approached me about buying the business, and I agreed to sell it to him, but during those years of trying to build a business from nothing, I was given ample opportunity to solve problems on what felt like a daily basis. I had to do my own website design, my own bookkeeping, obtain various licenses and permits, design promotional materials, make sales calls to retail tile stores, etc.
Every day a new problem to solve, and that’s how I learned what it meant to be an entrepreneur, and when I decided the virtues of problem solving as a skill went beyond my tendency to restructure buffet lines at various events I attended to make things go more smoothly.
#3. Planning
“Plans are of little importance, but planning is essential.” -Winston Churchill
Of my top three skills, planning has been the one that everyone has known about me since I was very young, and one that took very little effort to discover in myself. It is such a part of my identity, I’m not sure I could even identify a time before I considered it a crucial skill of mine. In my early childhood (before age 10) I would plan out events constantly, I was the driving force behind garage sales, family gatherings, holidays, birthday parties, and even a neighborhood wide crafts fair for kids which was an entrepreneurial venture undertaken with my older sister.
I credit these early planning sessions for helping me develop the experience to grow into the planner I am today, by repeatedly planning and the executing those plans, I learned what can and does go wrong, what kinds of contingencies are necessary, and the importance of paying attention to details when planning.
I have planned and organized weddings, themed parties, corporate activities, and countless vacations for myself, my friends, and my family (I even planned a weekend anniversary getaway for a college professor at his request), and though few have gone exactly according to plan, each one has been a smashing success by any metric the participants could come up with. And while events are certainly my forte, people still call upon me to assist in planning layouts for home remodels and finishing basements because planning for efficiency, ease of use, and paying attention to detail applies largely across the board.
Of all my skills, planning is certainly the one that I enjoy using the most, if not the one I am the best at. For many people, planning can be stressful and carrying out those plans even more so. For me, though, I could plan until the hours turn to days and days into weeks, and carrying out those plans is exhilarating. What Mihaly Csikszentmihalyi describes in his National Bestseller “Flow: The Psychology of Optimal Experience” is the state where time and consciousness are altered as the participant in an activity is exerting a level of skill, well-matched to the level of challenge is exactly the state I go into while planning. Time passes without notice, I may forget to eat for long stretches of time, and I do my very best work in planning sessions like those.
That is the kind of value I want so much to provide to a business partner, as many people don’t get the opportunity to do what they are best at for the companies they work with, I feel like anything less is not only a tragedy but a missed opportunity for both employer and employee.
Thanks again for taking the time to read about me and my top three skills, if anything you read resonated with you or stood out at something that would be valuable to someone you know, feel free to share!
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