The Power of Broke: Avoid Cash Burn and other Business Blunders

I know Niggas who never been to a college. They just tryna whip a Benz outta Pyrex. – Waka Flocka “Real Quick” (0 to 100 Remix)

Business. The richest game in town right?

We’ve heard the excuse repeatedly “I don’t have enough money to start a business.” #shitbrokepeoplesay

Lo and behold! This person is in the best positioned person to start up (once he/she overcomes their self-limiting beliefs).

Unless you’re in high barrier-high marketing budget industries like Fashion and Industrial Design (but even in this Ad-crazed business there are ways to run a profitable and operationally sound enterprise.)The power of having no money is your advantage, not your inhibition.

When were you the most industrious?

When you were a kid of course! You had no money, just pure curiosity and drive to make ordinary things fun.

I have extremely fond memories of turning the couches over and building forts and cars. Making beats on pots and pans. I even designed my first bed with my dad.

It’s the idiots who go to business school to spend 5 to 6 figures for 5 years on what the internet and experience can teach a broke person in 6 months.

The Unemployed Entrepreneur vs. An Ivy League MBA.

The untrained eye would pick the Harvard MBA nine times outta ten.

But anyone with any business sense would see that the Power of Broke makes you immune to things that would naturally give an Ivy Leaguer cold sweats at night.

I could play the blame game in each department from Accounting to Marketing/Sales but when you’re in it to win it. It’s tough not to copy what your competitor is doing and try to outspend them.

The Power of Broke once you’ve become comfortable in your own skin… You simply hack things that a wealthy person could simply afford without thinking twice about. These tiny he/she purchases make and break his/her business.

There is always a better, cheaper, and more valuable way to do anything. You just haven’t thought of it yet.

When operating your business while you’re broke. You are actually less likely to cut corners and more likely to look around them and capitalize what cash cows are blind to (and sell it back to them ūüėČ ) Rich companies cut corners ALL THE TIME! Being a Broke and in business and a Broke Business are two extremely different things. We as a society deem wealthy people with expensive degrees as the all knowing, all powerful who can do no wrong. Having a piece of paper earned in a controlled environment and theories is not an indicator of if you can run a business or be a successful entrepreneur.

I’m sure you got rich friends. They spend their money on the darndest things. Expensive clothes, cars, luxury items. Ask them where they get this money. They say 1 of 2 things. “I paid for it.” or “My parents paid for it.” Upon further investigation, The “I paid for it.” camp, is deceiving you, unless you ask, “Who pays for the rest of your life?” Then they revert to answer 2 camp.

Personally, I’ve never been on a vacation or anything of the sort, I put my self through school, pay for my clothes, don’t have a car, and pay rent and bills by myself, and run a business, while being hella broke!

I am confident, that I run a tighter ship, than many of my wealthier and successful compadres. Especially in the long run.

Hey, no rich person is gonna title their blog the Power of Broke, unless they wish they were broke when they started in the first place. Most successful businesses have to earn their value by sweat equity and hackability. Which money can buy and wealthy people avoid. They can simply buy the hack. This is an interesting topic that I’ll keep short so I can explain more in upcoming posts.

I warn you, that rich people will sneer at you and berate you. Pay them no mind, being broke and persistence is the best remedy to develop thick skin.

Broke? You now have no excuses, You’re actually hold destiny in your pockets. Where the money was supposed to be.¬†

Making a Billion and Being a Billion are two different things

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Create Better Jobs So You Can Demand More (and Fire Faster)

Companies that grow people, grow profits. Companies that shrink people, shrink profits… Look at the investment in human assets to make sure it’s enough – Tom Connellan, Inside the Magic Kingdom

Make all your important jobs better jobs.¬†Make every position that involves any contact with your customers at all a really, really good job. Pay better than average wages; pay to have employees’ uniforms cleaned for them; provide a good working environment; offer significant spontaneous, unexpected, varied rewards and recognition. Create jobs people really want and that good people won’t want to lose.

Why should you do all this?

Not to be a generous soul. Not to be liked. Not to win some award. So that your bloody axe is feared and you can be fearless in swinging it. 

-Dan Kennedy, NO BS to Ruthless Management of People and Profits

$10 an Hour Job vs $10,000 an Hour Job

Time is more precious than Money.

Time is Value!

Major Tip: How’s your New Year Resolution going? I’m sure layoffs were not expected. This tip will hopefully empower you to improve on your independence. Most people don’t know the value of their time. Let alone entrepreneurs. Slave owners understood this to oppress. Your current manager may not even know the value of his/her time. Here is a goal that will steer your decisions in a better direction to impress. Step 1: Work out how much you want to make (projected sales/revenue/earnings,etc) Step 2: Multiply working days by how many hours you work (220 x 8) = 1760. Step 3: Projected Earnings / 1760 working hours = Your Base Earnings Target. Step 4: Base Earnings Target x Non Productive Factor which is up to you… (x3, x4,x5) Ex: 1,000,000 / 1760 = $568.36. 568.36 x 3 = $1704.55 an HOUR!!! Your decisions and delegation will be dramatically impacted after doing this exercise. Click below for the spreadsheet on how to actually create this type of value. $10 an hour jobs vs $10,000 an hour jobs #worldclass #timemanagement #yycbusiness

Click below to unlock your freedom and creativity spreadsheet.

Just modify the activities for your industry and your set!

Spreadsheet for Time Management and Delegation

*You should be doing this if you value your time at $30 Dollars or more.

Shout out to Dan Kennedy and Perry Marshall for all their hard work on these ideas and truths

To Be or Not To Be? Why Does Your Business Exist?

In the ideal world, businesses think like artists and artists think like business people. When differentiating yourself from the pack. Jamming or experimenting and stealing/swiping ideas is the best way to create a USP: A Unique Selling Proposition: Justifying your Reason To Exist in the World…

1. Narrowly Defined Positioning (An Oriental Rug Cleaning Service)

2. Meaningful Specifics ( An Oriental Rug Cleaning Service that makes stains vanish in 15 minutes or less)

3. Guarantee ( An Oriental Rug Cleaning Service that makes stains vanish in 15 minutes or less or your money back)

Case Study:

Travelocity.ca’s USP is simple, to the point and shows responsibility for your worries.¬†

Expedia.ca is big, dumb, slogany and more worried about making you laugh or creating a piece of art than the actual service.

Which company do you think will take more care of you when things go wrong? Where are their values aligned

Next blog post will be about utilizing the USP to gain value on your mishandled purchases.

I’ll show you how.¬†

in the next post.

Not only for a couple weeks, or years but for decades and beyond. The Durability Question… It’s a splash of cold water. Or being front row of a philosophy class. Why do you exist?¬†Descartes was a great philosopher but terrible businessperson.¬†“I think therefore I am.”¬†Most businesses think this way! They produce something therefore they’re a successful business. They think because they are operate from Monday to Friday they are doing fine. Get real! 20 percent of the businesses generate 80 percent of the profits of the world. Why? They have found from an early stage how to uniquely exist and sustain existence. This is more than having a hairy audacious goal or consultant speak. Values and Vision are critical, but narrowing and positioning the values and vision are much more important. Starting a business is easy. If you think traditionally. Make a product, advertise the product, make a website, do interviews about your product, and cash will roll in… You’ll be wiped out in 5 years… or even worse cash poor, burning through capital thinking you’re unique when you’re actually in no man’s land in a large industry that doesn’t give a shit about you. That’s not where you want to be. Neither do I. But most people think this way. They don’t fight for their existence. They become entitled to the freedoms of the world and even worse, the freedom in their world. Most companies allocate significant loans and go to zero with a bullet very quickly due to this entitlement. So Carmichael? How do you create one of those Zero to One businesses that everyone is talking about… Read the book. Then come here for a few ideas that I’m trying and in the middle of. First things first, Survey Pains and strains in the industry of your choice (I’ve covered this). Then you can take two strategies to the bank. Plan and Jam…

From Startup Leadership by Derek Lidow

Planning is to work the Business Model Canvas and visualize how your business can add 10X value immediately to the market place. If it can’t it’s not an idea or pain killer worth pursuing and wasting your time… Which is called Causal Strategy. The second is called Effectual Strategy, having a general direction and jamming (experimenting) along the way. Steve Blank says the first business plan fails. With this strategy, you form a hypothesis:

1. Do people like vegan food at shopping malls?

2. Do people ask me where to buy my food without being prompted?

3. If I get at least 200 people over 4 days, people tell me unprompted to open a store that I can rent

Mark Zuckerberg’s Facemash (jamming) to Facebook

The Demand has to outweigh the supply. Supply can always be created. Demand and Desire are elusive *more about this in future posts*

1 = A vegan farm service

2 = A vegan farm that makes by planting their own organic products and sells them from their store

3 = 100% Organically Grown and sold from Vegan Farmers on a Vegan Farm

You want to be in two businesses. Customer Attraction and Painkilling business. You create customers by killing their pains. Jam then plan, or plan then jam. Plain and simple.

Customers! Part 2: Ideas are For Idiots: Market the occupation for Revenue Celebration

From the Streets, Silicon Valley,Madison Avenue, Wall Street, and Hollywood are all major hubs around the world that people flock to, to make millions and sometimes billions and all carry timeless lessons in how to achieve customer success in your given marketplace. They are not hot spots by accident and they are all affected by your activity during the holidays.

In the persuasion masterpiece¬†Influence¬†by Robert Cialdini, he illustrates in short on how companies manipulate the customer’s behavior without them even knowing it with a simple change in operational activity. In the situation, he describes meeting his neighbor at a toy store as he is purchasing a highly sought after present for his son. Something strikes him, that the last time he saw his neighbor was at the exact same store, at around the exact same time… last year! He goes what gives? They mark it as coincidence and move on. But with Robert’s curiosity piqued, he asks a friend who was in the toy marketing business. His friend laughs and explains that it isn’t a coincidence, that toy companies’ bottom line lagged in January after everyone bought up the hallmark toy during the holiday season in December, so they came up with a tactic you may not know as scarcity.

The toy companies deliberately under stock the stores that carry the hallmark toy and overstock their complementary toys. Parents who cannot withstand the mauling and mob mentality settle for the complementary toy and leave their child disappointed. But in January, when all craze has gone away, the companies store the hallmark toy to keep the momentum of their cornerstone product.

Smart tactic, but what is even more impressive is the company’s understanding of their customer’s nature. Which was discussed in last week’s post.

Understanding the human condition is a prerequisite of successful customer discovery, and lasting enterprise success. Everyone knows that a company cannot exist without customers.

That’s why I don’t have a company. Yet. If it is a business. I’m in the customer development business and I recommend you be in the same biz.

Many entrepreneurs have ideas, or even better, their own products. Inventory full of their product. Believing if they build it customers will automatically come. Maybe the primary reason of business failure is the chicken before the egg thinking that puts you and your business behind the 8 ball, or in a rear naked chokehold before the match even started. Talk about screwing yourself over.

Customer Development is rarely talked about, I even have to come at Dan Kennedy as his writing assumes you have a service or product already in the marketplace. But what if you’re smart and think like a business person and study customer profiling before you invest capital into a product.

Here’s Steve Blank’s Customer Dev Funnel.

Steve Blank's Customer Dev Funnel
Steve Blank’s Customer Dev Funnel

From now on, because it makes sense, I’m going to assume you don’t have an idea or a product/service yet and good for you.¬†Find your customer first then tailor the idea of a product/service to that customer.¬†It will save you hella time and money and you will gain valuable people skills by gaining the¬†hustler’s eye and ear¬†in the process.

Observance:¬†Michael Bloomberg, billionaire and philanthropist credits working in the financial markets by finding that¬†his customer/occupation didn’t have a life, because of the old school and time-consuming method of analyzing markets digitally. He developed an idea after finding customer and created the Bloomberg Terminal and software that provided massive value for financial analysts’ careers and free time for a social life with more efficient digital analytic products. In turn, made Bloomberg one of the richest people in the world. I’m not saying the same result will happen with you or I, (hopefully)… But success is much smoother than creating a product, borrowing money (that you have to pay back), market the product, find out the market doesn’t like some things, alter it, spend more money, and hope that it works out, which 9 times out of 10 doesn’t work.

Businesses fail because they follow the failing businesses protocol without even knowing it, because it worked for the 1 out 10 business. A lot of businesses would succeed if they learned this easy marketing play. It could save your job that you don’t have to quit that you may find a struggling and out dated way the business is doing things and Bloomberg your way to the bank!

Most of you reading this may be like there are plenty of businesses that start with a product before the customer! Look at Bill Bowerman, co-founder of Nike created the innovative waffle grip for runners that added tremendous value to their times. Product before customer right? Nope, do you think Mr. Bowerman ever spent a day away from the track? He understood the runner’s ambitions: Faster track times, comfort, grip to the track. Customer or occupation before the product leads to more experimentation and chance of accidental breakthroughs that led to the waffle grip trainer. Action:¬†Conceptual playing with two or more unrelated ideas and combining them.

¬†¬†¬†If you’re patiently waiting to make it through all the hating
Debating whether or not you can even weather the storm
As you lay on the table they operating to save you
It’s like an angel came to you sent from the heavens above

Eminem – Patiently Waiting – 50 Cent, Get Rich Or Die Tryin’

That’s the feeling of Customer Development, it may suck in the beginning. But all the hard work and persistence will give you better options and mitigate the risk that you take. You may be able to fund the idea yourself. win/win!

¬†50th Law: Know Your Environment –¬†Wherever your market is, there are the outsiders and the insiders. The insiders not only understand the inside, but the outsiders as well. In short form it’s empathy for all humans in your market. Because they are customers. Hawk’s do not see more, they see more detail. The closer you are to your market, the better you get to know their needs, ignore your primal need for superiority and become a man of the people, camouflage/chameleon. Then you iterate your product around their needs…

I just listened to this.

I guess hustlers think alike.

Books to read: The Startup Owner’s Manual by Steve Blank

The 50th Law by 50 Cent and Robert Greene

Crossing the Chasm by Geoffrey Moore

Understand It’s Nature Part 1: Serial Killers and Customer Psychology

A great clip to really get to heart of what most businesses need to survive but scared to admit.

They don’t know their customer! They hire data analytic teams to figure it out. Gets complex.

But they are just not looking closely enough, they are not thinking like their prospect/victim

Symptoms of a bureaucratic, power player in the industry. Advantage to an outsider, who’s got nothing but time to surround himself with books and his own thoughts.

Big Corps grow arrogant. Most lose or sell the empathy they started up with.

Enter Hannibal Lecter, an empathetic serial killer.

That’s why Silence of the Lambs was such a good film.

Notice how he keeps Clarice hypnotized in his story, but never giving the answer to her questions. But pushes her in the right direction. That’s what the audience loves in a good murder mystery!

This is business and dating tips. Give your significant other everything he or she wants and see what happens.

You’ve been warned.

Have you ever liked a song on an album and they make a video for it and you lose interest in the song?

That feeling!

It’s why women find boyfriends and make their husbands cuckolds.

It’s why men have women on the side in a marriage.

 

The water well can overflow and spoil the crops!

George Costanza and the The Opposite was a good move in the idea of this.

Ralph Lauren made a fortune of bucking trend of what customers were currently wearing (thick ties) and designed (thin ties).

I wouldn’t be surprised if this was an inspiration for the Model T.

The customers told Henry Ford they wanted a faster horse…

The needed doesn’t want what they need. They need what they want.

The best companies understand this, and provide value that is tailored to their values and add the right amount of challenge to their product. Apple challenged customers with their sleek design of the i-Phone. YouTube challenges their subscribers to build mini-media empires, Fashion designers design tapered jeans for you to hit the gym.

Your and my products need to challenge the end user, not to the point of frustration and confusion. But in a way that creates a desirable bond.

Remember those TNA pants that gave the notion that a girl’s butt looks automatically look great in terry cloth?

Ever wonder why you only see bigger women in them now?

It became too easy, and now people who should lose weight to fit into pants don’t because their mind tells them their butt looks great in those pants and have taken the allure away from the brand almost overnight.

Why I’m switching back to Nike trackwear?

I see too many smokers, unfit and rather basic people in Under Amour.

It’s become a commodity.

It’s maintaining identity. Can you control who buys your product? Yes and no. But mostly yes.

Most of the successful brands do.

Never see this behavior in jeans. Jeans don’t have elastic waists (challenge)

Does my butt look big? Is music to a fashion designer’s ears.

On the male side, it’s the simple challenge and pursuit of power and authority.

“What does you do?”

I’m an entrepreneur.

“Oh so you’re unemployed.”

– the social network

But the challenge to them freedom and autonomy is the allure to males (and more and more females these days)

The ONLY way achieve this, is through all-in entrepreneurship as

all Revolutions require warfare and violence.

Entrepreneur as you show know, is no different.

The same with customers. All Customers have pain. They deal with it in unique but universal ways.

Because human, not data, that’s what companies complain about market uncertainty.

Their analysts can’t find the data to back it up!

Big businesses target markets. Entrepreneurs target a certain customer/occupation

The customer is always right is the mantra of most businesses, but ask the question… What do they want.

Customers can be women, and women are accused to not knowing what they want.

Know why? They have so many options! They eliminate and men accumulate. In theory.

Ever see this?

They can’t tell the good ones from the bad ones

Neither can a regular customer

Chaos!

With advancements in psychology and neuroscience, there is much to the human condition that we don’t know about.

I just blogged about how neuroscientists found the area where the emotion Confidence is located in the brain.

What are the Human Secrets People Don’t Tell Me?

ACTION: Create Customer Profiles and Scenarios like Detectives with their Serial Killers 

Understand the nature of humans and you’re that much closer to knowing more about what you don’t know about your customer, because like serial killers and the detectives and attorneys who make their living off them, they can make or break your career.

Books to read: Seduction by Robert Greene

Marketing to the Affluent  by Dan Kennedy

Imagination and Heart: Decide, Disrupt, Destroy/Deliver

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Don’t everybody like the smell of gasoline?
Well burn, motherfucka, burn — American Dreams
Don’t everybody like the taste of Apple Pie?
Well snap for your slice of life I’m tellin’ ya why
I hear that Mother Nature now’s on birth control
The coldest pimp be looking for somebody to hold
The highway up to Heaven got a crook on the toll
Youth full of fire ain’t got nowhere to go, nowhere to go

-Andre 3000 (“Gasoline Dreams” – OutKast’s Stankonia)

There’s more business books, theories, principles, facts, opinions, and laws that you can fill your mind with.

Trust me I’m on this track. But I just read a refreshing article that Malcolm Gladwell wrote for http://www.inc.com

Here it is:

Gladwell on The One Thing

It may sound simple, but it’s not the brains, the money, the resources or power that disrupts or makes a change in the world, or your environment. But it’s the decision to, mean it and drive through it with heart and imagination.

The endurance and persistance of the imagination is the key part, that I could imagine, including myself, have a problem with and I haven’t even been critiqued or released a product or service in the world yet. *Maybe this is why I’m writing to confront this issue. But it’s true, to succeed in the world, it requires two things. Imagination and Heart.

Failure sucks, but instructs. – David Kelly, co founder of IDEO.

If a young child knows he can do anything.

If he knew what you at 25 know (or may not know), the potential would be endless

If you had the attitude of a child your possibilities would be endless.

Children have heart, no matter how blind or ignorant it may seem.

Kids’ body of work is amazing when you think about it.

It’s really when you are told what to do, you stop producing, and become ensconced in the

events of life instead of the activities in life that produce everlasting results.

And look forward to a short-term vacation to remedy your sense of autonomy.

You can‘t do it unless you can imagine it. – George Lucas

No one cares about your handi-cap but you.

No one cares about your trip to a festival.

No one cares about your trip to Paris.

Some may call them inspiration trips, but I don’t buy it.

It doesn’t take much imagination or heart to do these things.

Ignore those blogs and articles that say that you should go travelling to find yourself.

It’s bullshit.

You find yourself by mining the imagination and courage within you.

In the simple things, that you label as boredom.

Yogi’s teach this. It’s nothing new.

Being in the moment, without the help of external things who do not care about you!

It takes courage to create something completely from scratch.

The world rewards these two attributes, but more important of all

It the only reward that you receive and can give instantly.

They start to care.

Politicians know this! It’s the fundamentals of leadership.

It’s not charisma, this is by product of the new found self-confidence of the nuggets of courage and imagination you mind in the process.

These are things that no one can take from you.

To do the thing, you will have the power- Ralph Waldo Emerson

Do the courageous thing. It doesn’t take courage to goto France and visit for 2-3 weeks.

To each is own, but chances are you come back and work the same job that you that you left with.

Not courageous or imaginative at all.

Do the thing that is seems impossible.

Even if you don’t achieve it. You will have the power to achieve something of just as much importance.

It’s like hitting the gym and taking on new weight. It takes courage to challenge yourself.

You’re disrupting your body, to grow!

You’ll be able to deliver strength and confidence with everyday things.

People or may not notice, in this case, it’s not the point. You’ll be able to deliver when it counts.

Avoid the gloss and get dirty in the obscure, you’ll be respected for it. I guarantee it.

He who is not courageous enough to take risks will accomplish nothing in life –¬†Muhammad Ali, World’s Greatest Boxer

Earth Travel is not unknown.

Playing beer league is not unknown.

Your job is probably not unknown.

Making copious amounts of money

It’s been done before.

The courage to imagine

The imagination to be courageous is what creates genuine greatness in the world

Hope lies in dreams, in imagination, and in the courage of those who dare to make dreams into reality. – Jonas Salk

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