Breaking Big: The “Ready-Fire-Aim” Strategy That Took One Company From $8 Million to More Than $1 Billion

Thursday, November 15, 2018

Chapter 1, Part 1

The 5 Stages of Entrepreneurial Business Growth

Delray Beach, FL.- For the first half of my business career, I spent almost all of my time doing. I was an incessant innovator and that required a lot of practical thinking. But I eschewed the theoretic. My M.O. was experimentation: Begin with a hypothesis about how to make something new or better. Test it to a reliable degree. Then make adjustments.

Since I knew very little about business, I had the advantage of testing theories that were outside the box of recognized business truths. This taught me two things: Traditional practices are usually there for a good reason. And when new ideas work, they can work big.

In the year 2000, I began to write a blog (called Early to Rise) about what I had learned about business. It forced me to think more abstractly about my experience, and gave me an opportunity to step back and see patterns. And after doing that on a daily basis for five or six years, I was able to see patterns in the patterns.

One of the great pleasures of writing those daily essays was knowing that I was refuting some long-held beliefs and introducing (what seemed to me to be) new ideas about how to launch and grow businesses in the digital age.

It was then that I got the urge to host a very special, very high-priced seminar where I could explain my insights to smart and successful entrepreneurs who wanted to grow their businesses.

The goal was not financial. I could have charged little or nothing to attend. But I wanted to attract serious people, entrepreneurs with enough success in business to challenge my ideas if they didn’t make sense.

It was a four-day event and the fee was $10,000. Since this was the first time I would be charging this kind of money for my expertise, I was more than a little worried.

But I told myself that I would be okay. All around me, self- proclaimed business experts were charging $1,000 to $5,000 for seminars and getting plenty of eager people to pay up. I knew many of those experts. And most of them, in my humble opinion, were one-trick ponies – zero-down real estate gurus, direct-marketing pundits, or motivational speakers. Few of them had my depth or breadth of experience. If they could get away with charging as much as $5,000, I reasoned, I should be able to charge $10,000.

So I spoke to MaryEllen Tribby, the woman that was running Early to Riseat the time, and she helped me put it together. Three months later, she had everything set up and 30 tickets sold.

[Marketing Tip:The easiest way to create profits in your business is to sell your best customers a higher-level version of something they have already bought. MaryEllen’s marketers did that by sending out a special invitation to a limited number of Early to Risesubscribers who had already spent $2,000 on a three-day conference with various business writers. My seminar was positioned as more (four days) and better (with me only). And it sold out in a matter of weeks.]

The only thing left was to come up with an agenda that would justify an investment of $10,000 by each attendee. When I reviewed the credentials of the 30 people who had signed up, doubt once again gripped me. What could I do for them that would be worth what they had paid? The saying “Pride comes before the fall” haunted me.

Aside from the fact that all 30 had achieved a great deal in their careers, each had a different sort of business. Some were beginning new businesses. Many were growing modest-sized companies. And some had well-established $10 million to $25 million enterprises.

And if that were not challenging enough, their businesses ranged from professional services to publishing to manufacturing. Even to restaurants!

On the one hand, I had, by that time, such wide experience in business that I felt confident I could be helpful in some way to each of them individually. But this was a group event. And we had limited time.

I certainly could not dumb down the discussion to the basics of entrepreneurial success. Most of these people were well beyond that. I had to create a program that was both high level and fundamental, with ideas that were universal to all entrepreneurial businesses but also specific enough to satisfy each and every attendee.

I thought about it for several days, but I could not come up with a satisfactory approach. I called in two colleagues – senior writer Charlie Byrne and contributing business management expert Richard Schefren (both superstars in their domains) – and I explained my problem to them.

The specific question I posed was:

Continue Reading

A “Simple Question” With a “That Depends” Answer

Monday, November 5, 2018

Delray Beach, Florida.- “I have a simple question,” RS wrote. “How can you calculate the odds for losing your money before you start a business or invest your capital? I’ve read what you said about it, but I can’t figure out how to do it! (I can, though, tell you that the odds to roll a 6:6 with two dice is 2.77%.)”

I like the critique implicit in RS’s question. The answer is that you cannot mathematically calculate the odds of losing money in a business. But you can figure out if the odds are in your favor.

I told him to start with this:

* Have you ever started the same or a very similar business before?

* If not, have you worked as a senior person in the same or a very similar business?

If the answer is no to either question, the odds are against you.

If I feel the odds are against me, the only way I will invest in a new business is if I can do a series of marketing tests to identify its optimal selling proposition within a timeframe and a budget that I can afford.

That will be different for everyone. For me, the timeframe would normally be up to but not more than 2 years. And the dollar limit would be $50,000 to $100,000.

Continue Reading

The Perfect Partnership Formula

Saturday, October 27, 2018

Delray Beach, FL– Talk about teamwork… In 1995, a young man named Howard Marks got together with another young man, Bruce Karsh, and the two of them built a $100 billion asset management firm from scratch.

Tim Ferriss asked Marks: “So what was the secret to your partnership?”

Marks had an interesting answer, one that made a lot of sense to me. He said that the best partnerships are those in which “the partners have the same values but complementary skills.”

In their case, they had the same idea of the sort of business culture they wanted to create and they had the same ideas about how to treat clients. But they differed in skill sets. Karsh was a slow thinker, Marks said. And he was a fast thinker.

The combination of intuitive and analytical thinking, Marks said, made their decision making stronger.

But, he added, it “couldn’t have been done without trust and humility.” You need to trust that your partner has the firm’s best interests at heart and you have to trust his judgment. “You also have to understand the limits of your own capabilities. You have to accept the fact that you may be wrong about almost anything.”

I’ve often said that you can’t entirely trust what successful CEOs say about what did. You’ve got to wonder whether they’re telling you the truth or a burnished version of it.

Still, the Marks/Karsh formula rings true for me. I’ve had many successful partnerships in my business career and a few that went bad. Those that failed did so precisely because somewhere along the line we realized we had different values: different ideas about product quality, treating employees, and making deals.

And the successful ones were all unequal partnerships – unequal in terms of our talents and knowledge and skills, so that the sum of our two heads were better than two.

If you are in a partnership now or thinking about getting into one, it might serve you to think about whether you do, indeed, have similar values and different talents and skills.

Continue Reading

How to Accept the Death of Your Good Ideas

Wednesday, October 10, 2018

Berlin, Germany– The first time I put on one of these forums in 2014, it was a great success. It was an open conversation between one of our most successful US-based marketers with a dozen of our marketing directors from all around the world. Everyone came eager to learn. And they did. I took copious notes myself

But 15 minutes into this morning’s presentation, I knew that it was time for a change. Because of the success of the past three forums, attendance had more than tripled to 40 people. As a result, the room had to be arranged seating style (rather than as a single roundtable), and the presentation was no longer an intimate conversation but a lecture.

After the first break, I asked a few of the attendees what they thought. “It’s really good,” everyone said. But I knew they didn’t mean it.

“But did you think it was a little boring?” I said.

“Yes, it was a bit,” they agreed. And this time I could see that they meant it.

There are two basic ways of responding to change:

  • The hard way (resistance/anger/defensiveness)
  • And the soft way (acceptance/amusement/relaxation).

If one has an ego-investment in the status quo, the tendency toward resistance will greater. And since this forum was my idea, I could hear the hard side of my brain telling me to ignore the Elephant of Boredom standing in the room. “These people are not bored,” it was saying. “They just look bored. You’re paranoid.”

But as 15 minutes turned into an hour and then three hours, even this part of my brain could not deny the factual details: the postures, the droopy eyelids, the clicking and clattering of cell phones and tablets and laptops.

“Okay,” my hard brain admitted. “They are bored. But it’s not because of the format. It’s because of the attendees.”

“Pearls before swine!” my hard brain shouted.

Change is difficult for business. And for a good reason: It opens the door to chaos. It lets in not only light and air but also the possibility of stormy weather. It can result in the disintegration or even the destruction of programs and protocols that have worked perfectly well for years.

In other words, change is not, as some believe, an intrinsically good thing. Like atomic energy, it can be good or it can be terrible. And that’s why people – including very smart people – tend to resist it.

But here’s a fact every experienced entrepreneur knows: When businesses grow, things change. And when things change, businesses must adapt.

So although my hard brain wanted to blame the attendees for the boredom that I was witnessing, my soft brain was whispering: “Don’t kid yourself. They are bored. And the problem is this format of yours. It worked well for three years, but it’s no longer working. If you want this meeting to go well, you have to change it.”

So we changed the format – both the physical arrangement of the seating and the structure of the presentations – and the vitality of the second half of the week was much improved. More voices were heard. Eyes were focused on whoever was speaking. The fidgeting with phones diminished. And the questions at the end of each two-hour session were good and earnest.

If it’s not already evident, making these changes quickly had two positive effects. It made the presentations stronger and better received. But it also made me feel good about myself, since I had accepted the need for change instead of resisting it.

I learned how to do this 20 some years ago when I first went to work with Agora Publishing. About six months into it, I recommended a marketing idea that bombed. I felt terrible about it. So terrible that I insisted on paying the company the $70,000 it lost on MY idea. Some months after that, we lost as much or more on an idea Bill had. Looking at the results for the first time, we were both shocked at how badly it had done. I expected him to carry the same guilt I had with my idea. Instead, he smiled and shrugged and said something I’ll never forget. He said, “Gee, I guess that wasn’t such a good idea after all!”

That was one of the best experiences I’ve ever had in business. It helped me understand, almost instantly, the freedom that comes with separating your ego from your work. In the years since, I’ve coached into action countless ideas that didn’t pan out. And each time that happened, I repeated Bill’s words: “I guess that wasn’t such a good idea.”

The challenge when facing the need for change, especially when what needs to change is your idea, is to tune into that soft side of your brain. And the only way to do that is to reduce your ego attachment to the idea.

I’ve never been able to detach completely from my own ideas, but I’ve made progress. And that’s been helpful.

The next time you introduce a successful idea into your business, give yourself a day or two to feel good about it. Then mentally kiss it goodbye. Let the idea become the property of the business by desisting from referring to it as “my” idea. Talk about it as if it is the idea of everyone involved. And give credit to everyone that helps realize it.

Of course, that means you get less glory when the idea is working. But the benefit is that the hard part of your brain will be less resistant to recognizing and accepting the problem and coming up with a new solution.

Change is difficult, but it’s necessary. When your business is growing at a moderate rate, a need for change will likely be years apart. But when growth is fast, as it often is with entrepreneurial companies, you might have to recognize (and suggest) the need for change as frequently as every six months.

Continue Reading

Breaking Big: The “Ready-Fire-Aim” Strategy That Took One Company From $8 Million to More Than $1 Billion 

Tuesday, October 2, 2018
Delray Beach, FL

Introduction

In 2010, John Wiley published a book I had written several years earlier called Ready, Fire, Aim. Of the 20+ books I’ve written on business and wealth building, Ready, Fire, Aim has had the longest tail. Although it barely made it to the bestseller lists that year, it has sold conti nuously since then.

The tail was also wide. It’s been republished in more than a dozen countries, recommended by dozens of digital newsletters and magazines, and has been used in business schools, book clubs, and even churches!

My goal with Ready, Fire, Aim was to explain my theory about starting and growing entrepreneurial businesses.

My thesis was that all entrepreneurial businesses have some commonalities in terms of the challenges they face at various stages. And I argued that if you, as an entrepreneur, recognize those commonalities,  you would have a significant advantage over your competitors and a favorable chance of success.

In looking at the way businesses develop over time, I identified four levels of business growth, based on revenue:

Continue Reading

Creating a Culture of Profit

Monday, October 1, 2018

Delray Beach, FL – You own four businesses in the same industry. They have the same sort of products. The same access to marketing intelligence. And they have unlimited access to cash. Three of them have been steadily growing their profits. One has not.

So you devote extra time and energy to that business. You work with the key people. You suggest ideas, make introductions, etc.

You feel certain that they are all working hard and with integrity. But even with your assistance, the bottom line is always red.

You wonder: What’s going on?

I have a theory about that…

It’s untested. It may be wrong. But it may be right.

Continue Reading

Get Better by Todd Davis

Friday, September 28, 2018

 

Delray Beach, FL–I purchased the book because I liked the title – Get Better: 15 Proven Practices to Build Effective Relationships at Work.

It seemed like it was going to be the sort of book that contains observations and advice that are sensible but not remarkable. Like it was going to be a book made by taking a listicle and expanding each bullet into a chapter.

And that’s what it turned out to be. Not a bad book. But one that could be scanned (rather than read word-for-word) without fear of losing much.

Below, you can see seven of its ideas along with my reactions…

Idea #1: To be a good relationship builder you must start by identifying the various roles you play, both within your business and in your personal life.

Me: Half right. Building a good life requires that sort of thinking. Building a business affects your personal life (and vice versa), but there’s no rule that you have to pay attention to it.

Idea #2: Learn to differentiate between non-important urgencies and those that matter greatly in the long run.

Me: Yes. This is extremely important in terms of personal productivity and achieving goals. I’m not sure why the author included it, since it’s only marginally related to relationship building. But, yes, very important.

Idea #3: Focus on collaboration, not competition, by thinking how everyone can benefit.

Me. Yes. Competition has its place in business, but cooperation is much stronger and much longer lasting.

Idea #4: Become a good listener.

Me: I hate this advice. But I think it’s true. So long as by being “a good listener” you mean listening so that you understand what is being said (and not being said) with the goal of advancing the business relationship, not taking care of the other’s psychological needs.

Idea #5: Work hard to make your employees feel that you trust them.

Me: Yes… unless you don’t. If you don’t trust them, get rid of them.

Idea #6: Promote a safe and respectful work environment.

Me: This is a good thing to do if by “safe” you mean that people feel safe to work hard and contribute to the business. If you take “safe and respectful” to mean they don’t have to worry about getting their feelings hurt, you are focusing on the wrong thing. Every hour you spend dealing with gender pronouns, for example, is an hour better devoted to creating profits.

Idea #7: Learn not to react too quickly. Learn to mull things over before you respond.

Me: Right. I wish I could have learned to do that. I managed to grow my businesses without this skill, but it is something that would have helped me. I’m working on it and probably will continue to work on it till I fall over.

Continue Reading

Every Problem Should Have a Simple Solution

Monday, September 24, 2018

Delray Beach, FL – On August 15, I published an essay titled “Growers and Tenders” in which I suggested that there are two kinds of employees. I wrote:

This is an exaggeration, but I like to say that, in business, personalities can be divided into two camps: those that value growth and those that value order.

Those that value growth (the growers) want to make everything bigger. Those that value order (the tenders) want to make everything better. And you need both to enjoy unstoppable success. But the ratio depends on where in the business lifecycle your company is.

This idea is, of course, a simplification. But there’s nothing wrong with that. In business (as in almost any context), simple ideas are almost always better than complicated ones because:

Continue Reading

Hiring Creatives? Standard Practice Doesn’t Work

Sunday, September 16, 2018

Delray Beach, FL– He needed a new editorial director. I asked him how the search was progressing. He said that someone was “currently reviewing resumes” for him.

That worried me.

Because when it comes to hiring members of your creative team, you are not looking for a specific set of skills. You are looking for superstars and potential superstars. And for them, conventional recruiting methods don’t work.

Academic credentials mean nothing.

Resumes don’t mean squat.

Relevant work experience is generally overrated and problematic. (Superstars are usually treated like superstars and therefore rarely appear in the job market.)

And re the initial review process… you have to be careful. You don’t want a sensible person doing that. They will cull out the “unqualified” and the “oddballs.” But superstars and potential superstars are usually both… so you have to make sure the reviewer understands what you are looking for.

What are you looking for?

You’re looking for temperament and talent. Someone who is very smart. And naturally contrarian. Also, someone that can play well with others.

You’re not looking for good. You’re looking for great.

Continue Reading

An Unavoidable Hazard of Success

Wednesday, June 20, 2018

Delray Beach, FL – If you’re smart, hardworking and persistent, you’ve got what it takes to be successful at any career you choose. But as you climb the ladder, you’re likely to face a problem they don’t talk about in business schools: too many attractive opportunities.

For 90+% of the population, this is a problem that will never arise. But you – you are in the top 10%. And the farther you travel down the road of success, the more opportunities will come your way.

I’ve heard this complaint from good people I’ve mentored for years. Just recently, GR, an up-and-coming copywriter, put it this way:

As one becomes successful, it seems more and more opportunities present themselves. It’s tempting to want to go after every single one of them.

    So how do you spot the opportunities that are right for you? 

Or, how do you decide which ones to say “no” to and which ones to place your bets on?

Here’s a quick answer, the answer I gave to him…

I don’t think there is a failsafe strategy for selecting and rejecting career opportunities.

If you are a thinking person, you will recognize in every opportunity a complex assortment of costs, risks, and benefits. The most obvious of these will be financial. But there are emotional, intellectual, political, and social costs, risks, and benefits too.

If you did a matrix that included all of these variables, it would quickly become very difficult to read. And that’s one reason smart people like GR have trouble deciding which opportunities to take and which to reject.

Here’s the thing. Opportunities are inherently complicated. You can’t un-complicate them.

Continue Reading