Miscellaneous Essays

10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time)

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Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn’t, you try something else.

This approach lent its name to my best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.

As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.

The Ready, Fire, Aim approach obviously doesn’t apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:

• You can spend most of your time and money manufacturing a line of such collars – and only after that is done, start to think about how you can sell it.

• You can make a single collar and go down to the local flea market or your neighborhood pet shop and see if you can find a customer for it.

Most people start businesses the first way. That’s why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don’t have to worry about all the other problems that will arise in the natural course of business. You won’t have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.

Here, in a nutshell, is what I mean by Ready, Fire, Aim:

Ready: Get your product idea ready. Make it good enough to sell. Don’t worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through “back-end” marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.

That is the cycle of a successful start-up venture.

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Miscellaneous Essays

Practice
 Makes Perfect

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Renato, one of my Jiu Jitsu instructors, convinced me to get back into grappling in a kimono. “It will be hard at first,” he told me. “But after a few months, when you go back to fighting without the gi, your game will be better.”I know he’s right. But when he worked with me on it yesterday, I felt like a white belt again. He was slapping arm bars, foot locks, and collar chokes at the rate of one per minute.

At the end of my hour-long class, I was ready to cry.

I’ve been practicing this sport for seven years now. But when I put on that kimono, I regressed. Big time. Renato, who competes at 145 pounds, was tossing me around like a rag doll. And I outweigh him by 50 pounds.

I know from experience, though, that if I keep on practicing, I’ll get better. A month from now, after I’ve relearned my gi defenses and have regained a little confidence, I’ll be
giving away fewer submissions. And one day, I’ll give none.

I
 have no great natural talent for submission wrestling, but
 I am improving every day because I am willing to do what
 it takes. Making myself a better wrestler is no tougher than 
improving my Spanish language skills. I simply have to set
 myself specific goals, put in the time to practice, and keep
 at it until I succeed.

There
 is almost nothing you can’t accomplish so long as you are
 willing to put in the time. This is something I’ve been
 saying for years – and now there is a substantial
 academic work that confirms my view.

K.
 Anders Ericsson, a professor of psychology at Florida State
 University, has studied the subject of “expert performance” pretty
 much his entire professional life. Thirty years ago, he performed
 an experiment in which he trained people to hear and repeat
 series of numbers. Untaught subjects were able to remember
 about seven digits in a row. After 20 hours of training,
 their memory had improved to the point where they could remember
 a 20-digit sequence. After 200 hours of training, they could
 remember a sequence of more than 80 numbers.

Later
 experiments led Ericsson to conclude that whatever
 innate capacity a person might have for remembering, that’s
 nothing compared to how much he can learn by practice.

All
 of Ericsson’s research and findings were put together
 in an 800-page book titled The
 Cambridge Handbook of Expertise and Expert Performance. The bottom line: “Talent
 is highly overrated.”

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