Category Archives: Small Business

4 Hour Work-Week Math – It doesn’t add up!

The biggest problem with The 4 Hour Work Week is the math, you see the entire book is just built on this faulty premise: a 10 cent PPC or Pay Per Click.

When you start to add up how many impressions you would get from such a low PPC you would need keywords totally in the hundreds of thousands per month to get hundreds of clicks per month.  Then with a conversion rate of a generous 2%, you might get 4-5 sales per month.

To really make anything meaningful you need to have a PPC between $0.75 and $1.00, but at these cost you only really get profitable at over $100 profit per sale, this is because your advertising cost per sale are between $75~$100.

So while I loved the book, I wish I would have read this PPC assumption before I had to figure it out by spending a few hundred dollars…

What I’m learning about sales.

As I’ve begun to sell products/services and packages I’ve come to realize how important the lesson of “The Paradox of Choice” is to selling. Take this case in point.

You have two sales man come to you to sell a widget.

  • Sales Person A – Tells you about 20 different things and how they can be customized and tweaked to get exactly what you want.
  • Sales Person B – Tells you you’ve got 3 choices, where one of those options will give you just about everything you need.

Which sales pitch is simpler? Which sales pitch will work if the person you are selling to only understands about 5 of the 20 things you just mentioned.

Less is more when it comes to selling.

New Book Idea – Market Research Something…

I am looking into a new book about market research. I have been doing so much over the past few years I thought it might be a good idea for an organized brain dump on the subject.

Basically as entrepreneurs we are always coming up with ideas for new businesses. There is always though a big leap from that initial idea to a successful business. Some of the ideas include:

  • Using Amazon PageRank to narrow your business idea.
  • Using Google Keyword tools to refine and ultimately pick your niche
  • Using Google Adwords to test your product and demographics

If you are interested in such a book, please leave a comment below, I’d love to hear more about your thoughts on the subject.

Starting a business is not about home runs!

I was talking to my wife the other day and I realized without thinking about it, that starting a business is a lot like learning how to hit a baseball.

I remember back when my father was teaching me how to hit, I wanted to really really impress him and every time I tried to hit a home run. I did not hit the ball, it was strike, strike, strike and I was on the verge of quitting when he sat down and said “Scott, you’re trying too hard, do this for me, just try to touch the ball with your bat, but don’t swing.”

Sure enough as long as I was just trying to touch the ball, and not trying to hit a home run, I could do it every time. Then next thing he had me do was just take a swing at the ball, and of course, I was encouraged and I tried once again to hit a home run, and of course, swing and a miss. He said to me, “you’re still trying too hard , don’t try to knock it out of the park, just slow down your swing.” So this time he told me he wanted me to just use one hand to hold the bat and hit the ball. Success.

The next thing he said to me changed my game forever, he said, I want you to go about 80% in your hits. So before you were giving it 100% and with one hand it was about 40%, so I want you to go about 80% on everything and never go above it. Success.

Later that year I was selected to go to the all-star game for 2nd base, I was a lock to get on base, though I didn’t hit many home runs, I could always get on base.

Starting A Business is not about hitting home runs, which is what I’ve been trying to do, it’s about taking it down a notch, getting some success, taking it up a notch or two getting more success, and so on.

— Update —

I still like the quote: “Think big because it takes the same energy as thinking small.” But to become the home-run king, you first need to connect with a bat.

Looking for opportunity? Start with problems!

Back in 2007, I wrote of searching for a problem. It seems that in the two and a half years since, I’ve only come to this realization again; the realization that any business begins with problems, not with solutions/products.

If you are starting a business there are a few ways to decide what business to go into:

  • Solve the same problem the same way as someone else by going into the same business and executing better.
  • Look for new problems to solve.

The easiest way to look for new problems is to look at what you do every day that annoys you. For me this is a problem, because I’m pretty happy on a day-to-day basis and I get annoyed by things that don’t usually annoy many people.

Business Books and Personality Type

A few weeks ago I revisited the Myers Briggs personality test. Why? I am not sure, but this was something I remember taking a long time ago to find out why I think a certain way, and how I interact with others. I took three test, on one I came out as an INTP and on two others I came out as an INTJ. I’ve come to realize that this personality type only accounts for 2-3% of the population.

It dawned on me after re-reading some fantastic books about business (4 Hour Work Week, Crush It, Meatball Sunday, etc.) that these books are geared for a certain personality archetype. They are geared for people that think in certain ways, and it’s indicative as to why certain types are more successful at strategies outlined in these books than others.

I then had this moment of enlightenment when I realized why some of the things I’ve read and tried to do, just flopped or drained me completely of energy, it’s because they were trying to get me to see and interact with the world in a way that was not natural for me (my personality).

Some books try to make Extroverts out of Introverts… Others try to tell you to see the world differently or counter to your intuitive or judging/perceiving mindset. It’s not the books fault, I mean, hey it works for them and their personality, why can’t it work for everyone? Well it can’t because we all see the world and interact with it differently.

Some Interesting Numbers: Introverts/Extroverts are rather evenly split. But people that rely on their senses outnumber people trusting their intuition 74% to 26%, and feelers outnumber thinkers by a 60% to 40% margin.

What does this mean? I don’t really know, but I think it’s an interesting observation.

The Introverted Entrepreneur

I don’t consider myself a hermit, I like being around people, just not all the time. But I especially like to go into my cave (basement/garage/home office) and work on a project and don’t like to be disturbed until I am either done with my project or I’ve achieved a significant milestone.

Entrepreneurship is about meeting with people, connecting, solving problems by communicating, this is where my energy starts to wane. It’s not a dislike for these kinds of events, I actually enjoy meeting people and talking about stuff, but it saps huge amounts of energy from me.

I am currently at a cross roads in my career as a self-employed consultant/entrepreneur and need to decide how best to combine my cave time with the right amount of extroverted social skills needed to have a successful business.

Understanding The Market

Every time I talk to someone about starting a business or about my own business the central theme comes down to “market.” Market defined as a group of people that are your customers or your potential customers.

Fundamentally every business needs to understand their market in order to be successful. There also to be a sufficient quantity people in this market with problems. The problems need to be of sufficient pain and scarcity that your solution (product or service) to that problem rises to the level of profitability.

In the past I have created what I thought were great products, only to find out that, in the end, I did not understand the market all that well. I have found out that in fact I don’t understand a lot of markets well or re-phrased, I don’t understand people that well. I don’t know why they choose one thing or another. But I do know this: Understanding the market is the key to business, or re-phrased, understanding people is the key to business.

It’s about the Individual, not The Team!

I am so tired of late hearing about how it takes great teams to succeed. Whether it’s software development, starting a business, or football, the dogma is the same: “It takes a great team to win!”. That’s baloney!

The one thing that’s often overlooked by the people preaching this non-sense is Pareto’s Law (80-20 Rule). Which states that 80% of the results, comes from 20% of the effort. The numbers are often skued even higher 90-10, 95-5, but the general rule is that in no matter what system you have, the vast majority of the results come from a VITAL FEW.

Maybe the people preaching this are there to make others feel good, or they are selling something, because after-all, 80% of the people that contribute the least to things want to feel important.

The Resistance – The Reason Why You’re Stuck.

I recently read a post over at ZenHabits, that resonated with me. It was a guest post by Seth Godin which talked about a term coined by Steven Pressman, called “the resistance”.

The resistance is that little voice in the back of your head, the one that tells you that it will never work, the one that insists you check your email one last time, the one that worries that people will laugh at you.

What I’ve found very interesting about this article is that I’ve heard this voice. I don’t listen to it much, but it becomes louder when I talk to some people about starting a business or louder still when a business venture does not end up like I had hoped.