Tim Ferriss’s advice on starting a business:
1. It’s easiest to create a category and own it rather than trying to dominate an existing category with something incrementally better. Category Killing or Category Creation. Create a new category that is easily differentiated. * Read: The Law of Category. Blue Ocean Strategy- 20-30% is very good.
2. Don’t obsess about becoming as big as possible. Don’t worry about winning «Best of iTunes» or having «100 million downloads». Just do great work in a category (whether product, service, offering, writing, whatever) that makes you new. «Scale» and «Scaling» are dangerous words. «I CERTAINLY don’t want a gigantic business with 100’s or 1,000’s of employees that I must account for or structure an ORG chart for or manage. Those are not my core strengths nor something I enjoy.» Build the best possible product and explain it simply. * Read: Small Giants
3. Scratch your own itch. Don’t make something for an imaginary, hypothetical audience. Particularly one that you don’t really understand. «As a 39 year old single male am I going to make a podcast for single mothers? Well, I could OR I can write a book that I want but doesn’t exist such as The 4 Hour Work Week or make something I want that I cant find such as an audio version of Letters to Seneca. I may not know if others want it but I know at least one person does, ME. And if I can get excited about it and I am excited about it then I bet I can get others excited about it too.» That’s about as sophisticated as planning goes. Scratch your own itch.
4. How big does your enterprise need to be? You really only need 1,000 True Fans to fuel your life. * Read: 1,000 True Fans- Very related to Small Giants
5. How do you make decisions based on your 1,000 true fans? Have clear, measurable objectives with check ins every week, month, quarter, or all of the above so you can track your performance in those key performance indicators, those key metrics. Be VERY precise in your thinking and objectives. There’s a German proverb that translates as «Everything with measurement and objective.» . Forget about time management. Focus on the few critical things (often the most uncomfortable). Effective over efficient whether in business or personal life. * Read: The Effective Executive- This is a gold mine. The 80/20 Principle- It can be 95/5 or whatever and it doesn’t have to add up to 100.
6. You now have 1,000 customers. You thought your business was going to save you from your 9-5 but now you’re working 18 hour days. What to do? 80/20 your business. One of the first steps could be doing an 80/20 analysis on your customers. Which 20% of customers are producing 80% of the revenue? Which 20% of customers are producing 80% of the headache? Replicate the good. Fire the bad. 80/20 can be applied in a million different ways. Stay focused. You’re crafting a life, not just a business. * Read: Vagabonding- It’s easy to loose sight of why you started. Vagabonding isn’t about travel, per se. It’s about philosophy, thinking about materialism, examining notions such as «more is more», utilizing time instead of money, building that currency, etc. It can act as a course correction and if you’re working to make your business bigger without much thought it can help with that too.
Summary: To succeed in business simply do these few things. This will put you ahead of 99% of the world who is trying to start businesses. If you actually do this prep work and training in advance you stand at least a 50/50 chance.
1. Build the best possible product, whatever that is.
2. Build an easily differentiated product.
3. Explain your product simply.
4. Scratch your own itch.
5. Focus on 1,000 true fans.
6. Have clear, measurable objectives with check ins. * Check in every week, month, quarter, or all the above to track your performance in those key metrics.
7. Stay focused. You’re crafting a life, not just a business.
* As a first time entrepreneur you don’t know what you’re doing. You don’t know what you’re good at. You don’t know what others like. You throw a bunch of stuff on the wall. You try a bunch of advertising. You try a bunch of explanatory messaging. Whatever it is you try a bunch through Split testing. Then you start figuring out what kind of works. The Effective Executive helps with this as does the other recommendations.
* Measure twice. Cut once – when starting a business. You don’t want to create a monster that you have to feed. That would be creating a prison for yourself instead of freedom. It’s much harder to fix this after the fact. This is why you must Measure twice. Cut once.
* Work hard. But only when it’s applied to the right things. «Everything with measurement and objective». Pick up these books. Read them as often as I do. Craft a life, not just a business.
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