Online or offline?

Both is my answer. You should use the synergies between the two. Not shun one or the other.

You could operate a physical café, but taking online orders. You could then install a machine that verifies the orders instead of a human being. Sure it may not be that cozy (some people think that the human presence is very important. But there are hundreds of hundreds of ways you can create that cozy feeling without a human being working in the café), but it sure is effective and it will cost you less money to operate the café. This means you will have a strong competitive edge.

Online is primairly good because of the cost cutting possibilities and because of all the automatic functions you can implement. Many of those functions can reduce necessary manpower. Some see this (firing people) as horrible and evil, but you are there to make money foremost for you and your family and it’s your neck on the line. It is in your best interest to be clever and business minded.

If you take it one step further, you could make it possible for your café visitors to earn cash referring their friends (referal marketing). This way you could spend almost nothing on marketing. That’s more profit in your pocket. Your café would be almost like a big vending machine operation at once. How cool is that:)? From a big horrible and hard operation (it is always hard operating with a lot of people involved. Please reduce manpower if possible. Your life will be easier and you will keep more money) to a simple turn-key operation that is easily scaleable. And scaleability is what you should look for, always.

Do you see why both online and offline is better than one or the other by themselfs? You need to think “both”. How can you have both? After all: People do want to meet for a coffee. It would be hard or rather boring sitting in different places, in front of the computer, drinking coffee with an old friend. I think so at least. The whole idea with certain operations is the hands-on, real-time experience. Seeing people live, not on the computer screen. No:)? So combining that with the artificial online world is perfect business.

The poorest way of thinking is when you think you need to sacrifice one for the other. Sure you need to sacrifice a little at least, but not all. You sacrifice a little here and give it to this side here. See?
Having both is the essence of creative thoughts. It requires you to be clever.

NOTE: We are back on track. A new year has arrived and I wish you all a very good year and a prosperous year:). I hope you had a good Christmas Eve and New Years Eve. This year I will be trying harder assembling a team. If you are interested in being co-owner of this blog and share in the future profits then comment on this blog and I will email you a link where you can go to register as either my webmaster co-owner or viral marketing expert co-owner. See you soon.

Wealth Spectrum – Where are you at the millionaire ladder?

Roger James Hamilton, founder of Wealth Dynamics (as you may know, I love the Wealth Dynamics philosophy), and his team have produced an enhanced version of Wealth Dynamics called “Wealth Spectrum”.

Wealth Spectrum makes Wealth Dynamics much more understandable. It brings up 9 levels of existence. Let me explain.

Let’s say you are a Creator profile like me (the Wealth Dynamic test give you an understanding of what profile you are). Just looking at the profile description may not make much sense on a detailed level. But then add Wealth Spectrum to it all and you will see that no matter what profile you are you can, with the Wealth Spectrum, see where you are in your development as that profile. After all, you usually start at the bottom and sometimes even deeply in debt. Wealth Spectrum gives you a clear understanding of how to take yourself up from poverty to riches.

In the Wealth Spectrum you will see that there are 9 levels:

Infrared – The VICTIM
Red – The SURVIVOR
Orange – The WORKER
Yellow – The PLAYER
Green – The PERFORMER
Blue – The CONDUCTOR

Then there are 3 other levels in a class called “The Alchemy prism”. In the Alchemy prism you basicly work on a very high level of business. Think “presidents, changing laws together with other powerful rich people etc”. Power status more than merely money status.

There is a free ebook for you to download on the left hand side on this website: http://www.wealthdynamicscentral.com/

Please feel free to comment on it.

Personally I like the little document. The contents in it makes sense to me.

In short, the different levels represent these things:

The VICTIM – You are more in debt today than you where yesterday. You will probably be even more in debt tomorrow.
The SURVIVOR – You break even each month, but no surplus at all.
The WORKER – You work for someone else and do have a surplus.
The PLAYER – You are self-employed and you do everything more or less yourself. This even includes your investments.
The PERFORMER – You hire people to do things for you, but you still lead the team yourself (you still act as the Head of Operations so to speak).
The CONDUCTOR – You lead only from the position of a Director. You are no longer in the daily operations.

“The Alchemy Prism” – This is where you act via ownership power and control of assets rather than performing in them.

The reason you need to know this is simple: In order to reach success from nothing you will have to master each step (no cheating and jumping levels). If you are born in to richness then you may by default start at the higher levels directly, but you will have very little understanding of how the lower levels work. That could work against you if you would end up there in the future.

Personally, I have gone from infrared level and I currently reside at green level. I was part of the yellow level for a long time. Learning how to build organisations is very important at the green level. My aim has been, for a long time, how to find someone to act as Head of Operations so that I can advance to Blue level. It is not as easy as it may seem. It is a lot about trust involved.

Now, at what level are you at? Seriously speaking? Honesty against yourself is obligatory here. This idea will have no value for you otherwise.

I always encourage you all to comment on my posts. So, comment, comment, comment:). Also don’t forget to spread the word about this blog if you like. Spread the love. Why not share some links with each other (you and me)? I have room for you all. One demand though: my link partners need to have a minimum of pagerank 3. Sorry, need to draw the line somewhere.

See you guys next Saturday.

SIDE NOTE: I write one day earlier this week due to the Christmas Holiday season. I have an important family meeting tomorrow that I am not allowed to miss:). Hope you enjoy the posting this week and I hope to see some comments from you all.

The confusion with startup valuations

There seems to be a, somewhat, confusion about startup valuations. Take Facebook for example. Facebook had a $15 Billion valuation not that long ago and now it is merely $10 Billion due to generous valuations from russian investors etc. The valuation is high due to what the partners get out of it.

Let me explain my point of view. You have a startup company of your own and you sell 1% of it for $1000. That gives the company a $100,000 valuation. So long I think we all agree that the math is correct. But what we miss is the fact that others may think the valuation is “up in the blue”. The reason they think the valuation for your startup is not nearly in the neighborhood of $100,000 is because they may not even see how they will get their money back at that valuation itself.

Take me for an example. I have mentioned in previous posts on this blog that I want 10 times my money input. So if I invest $1 I need to recieve a minimum of $10 back in my pocket pre-tax. Otherwise I am not interested in the investment. So that means that if I invested at a post money valuation of $100,000 I would need to find some reason why the startup would be worth at least $1 Million in 3-5 years (my investment time span). If I can’t see it I am out.

Many people who look at Facebook and it’s valuation say the valuation is crazy due to them not seeing how they would be be able to even remotely recieve a $20 Billion valuation out of the company. In order for most VC’s to even invest in your business they would like to see 5 times return on their money input in 5 years time (tops). That means the valuation (if they purchase shares at a $15 Billion valuation) has to be worth an astounding $150 Billion in 5 years.

How likely is it that Facebook is worth that much in 5 years? I think “Very unrealistic indeed”. That number is so crazy that even a creative guy like me wouldn’t be able to get my head around it. I mean, tell me how many companies, these days, there are that are valued at a $150 Billion valuation? Not that many, correct?

That is the non-strategic investment point of view. Then we have the strategic point of view. The strategic point of view is a lot different. In that scenario, the investment is more of a marketing device or an anti-competition device rather. It is a good thing creating a high valuation when you are trying to lock competitors out.

Microsoft did this, I am sure, un purpose to lock out Google from taking advantage of the Facebook opportunity. Smart move from a strategic standpoint. Dumb move from a money making investment standpoint. I am pretty sure Microsoft didn’t buy shares in Facebook in order to make money on the Facebook investment per se (well, not directly, but indirectly), it was more a way of blocking Google from taking market share in a very popular social marketing medium (which is considered, and I am sure it is, the wave of the future in media).

I am sure Microsoft made the investment and put it on the balance sheet instead of simply putting it on the income and expense sheet because of the absolute need to put Google in dire straits competition wise. Microsoft surely consider their investment in Facebook more as a cost of doing business than anything else. They spent their money on Facebook shares to get the upper hand in the social media market (Facebook is absolutly the front player in global social media).

So when you look at startup valuations and especially with cases like Facebook, you should look at it from these two point of views. The reason some projects are astronomicly valued compared to others is simply because the industry think those startups have something to offer and that some companies wants to block the other champions in the industry from entering the company and taking advantage of it.

Good thing, maybe, for the strategic investor, but often bad for the startup itself. You surely know the dilemma of having to raise money at skyrocket valuations? Very hard, unless you can get a new strategic investor to cut the balls of the other guy:).

A bidding contest can be great if you are smart enough to sell your own shares at those astronomical valuations (because you may not get the chance later on). Better cash out when you have a chance to take advantage.

Startup valuations are valued as they are because of function. Not because they may actually be worth the value tag they have.

Valuations are simply a result of frantic activity in the shares. Nothing more. So don’t read anything big into it, because the only value the company has is the value you think it is worth. So valuations are fake. Made up. Fantasy freaks. The valuations you see on the stock market is equally as phony as the private company valuations. It is driven by the supply and demand model as anything else that sells on the market.

Hope to see you all next Saturday. In the meantime, send me comments and suggestions of topics that you want me to cover. I want to tailor this blog as much as possible to your interests (as long as it is related to startups). If we don’t hear from each other before Christmas Eve: Merry Christmas:).

Need and Wants: Do a small market research and then deliver what the people want

Doing market research is a good way of saving cash in any business endeavour. Many of you may have heard me bash “market research” a little and sometimes a lot. But I have done that mainly because I do my market research a lot differently than many other entrepreneurs. They say Richard Branson discusses stuff with people when he meets them. Asking them about their opinions etc. That is one way of doing market research that I usually follow as well. I don’t know if that is because I am lazy or if I am just consciously a cheapskate. But it seems to work pretty well for me.

You can start by asking you friends what they need help with. Then ask them if they would pay you for helping them with it. If the answer is yes, then ask them how much they would be willing to pay. Then it is up to you to find a way to make it a feasible businessplan (be able to deliver value and at the same time profit from doing so). If you can’t find a way to make ends meet, dump it. Ask them if there is something else they would need help with and if and how much they would pay you for delivering it to them. Then make a new research study. Doing things this way you will find something to build a little business on.

Everything is a question of viral expansion from there. You ask your friends if they would be happy to refer some of their other friends and family to you for the same service and price. If they say yes, you will expand. Make it a habit to expand as cheaply as possible. They call this bootstrapping. I love the method, because it speaks to my lazyness and cheapskate mindset:). Often bootstrapping is the only method you will be able to use when starting out, because investors usually want to see revenue and profit before they invest in you. They also want to see how smart you are with money management (I can sympathize with that).

Many people think you need to work harder doing it “bootstrapping style”. Somewhat yes, but if you make things happen quickly it will not be hard work for long. Count less than a month if you can make people refer you to more business. The faster your reach more customers the sooner you can hire people and then license the concept/trademark etc and prove it is worth something for others to be involved in. And then it is easy peasy. It is all about collecting the money and keeping the licensees (and employees) happy from there on in. From there on in, the licensees (and employees) are your direct customer. Make it a habit to do monthly market research against your licensees (and employees) and make them as happy as possible (you will all gain on it). Deliver what they want. Support them.

This method builds upon the famous idea of “if it works on a small scale it will probably work equally as well on a big scale. As long as you can scale it well”.

So let us take an example:

Your mother wants someone to take out the garbage, because she is so occupied with cleaning the house. You offer to help her and ask her if she would be willing to pay you money for helping her taking out the garbage. She says yes. You then ask her “how much would you be willing to pay me for helping you take out the garbage once every week?”. She says $10 per week.

So you think to yourself, can I hire someone to do this for less than $10 a week? For me, It would be tricky, because I have a rule that says “I need to recieve 10 times my money input”. So if I get paid $10, then I would only be willing to pay someone else $1 to do it. That creates a dilemma as you might imagine. Not when it comes to a lot of money, but $1 is close to slave salary;). But you could always hire your little brother to do this for you. Or maybe you could import a chinese guy, I don’t know.

Anyhow, it all comes down to how you compensate and how many households your employe can do every hour. If you pay someone $10 an hour then he has to be able to do at least 10 households in an hour for it be lucrative for me to have him on the force. With me? So if there are less than 10 households to be done, it would probably be better for you do it yourself or find someone who would be willing to work on a minute-by-minute based salary or whatever (that would be something:)). Project based so to speak.

My answer would be: This may be a feasible business model if you could start it up yourself, with your own brute force input (sweat equity). But in order to scale it you would have to ask your mother to refer more places where you could help take out the garbage. You could do some extra research and see if these mothers would be willing to sign a long term contract with you, say 12 month contract (a simple contract, nothing fancy) and then let you come by and take out the garbage 4 times a month. At the same time you collect the $10 every week and you write a receipt for the mothers to store and one receipt for your own records.

You then create a brand and then you find likeminded licensees who would like to do what you do in their neighboorhods and pay you a fixed fee once every year. Nothing big. But let us say $100 a year. They pay you when signing the licensing agreement and then they pay you every year at a certain date. The licensing agreement could be something simple. Something you could create yourself. Maybe something like “Mathias, the owner of the trademark XX Garbage Can will license the brand name and it’s underlying concept to Mr Mark Cuban. Mark Cuban will pay Mathias $100 at signing of this document and then $100 every 31st of December during the interval period of 2009 until 2015. At year 2015, this agreement will be void unless renewed by both parties”. Nothing fancy, but practical and functional enough.

Doing market research is something we will all have to do, but you don’t have to create this mega monster market study that costs you a fortune. Just ask your family. You will have a business right there. It might not be any fancy business or any kind of Facebook or any kind of other cool business that gets mentioned in the Fortune magazine or whatever. But it will be a business created with very little money and will be funded almost from day one. With customers money.

For all of you homeless people: this is how you survive and take yourself up from the streets. Ask people what you can help them with in exchange for money. Ask them what they want and what they will pay you if you deliver to them. Then do it. Save 30% of the money for further investments and employ others to help you expand. Take referals, always. Have people spread the word about you.

I mean, I could tell you one thing about my sister. She used to ask me to babysit here newborn little kid, her son Jonas. And she paid me a little bit of money for doing so. Nothing much at all, say $10-$20 every time I did it. If I wanted to, I could have taken on her friends cute little kids as well and baby sitted them all in one sitting and have made a pretty amount of cash. No million dollars by any means, but still cash in the hand for doing a little bit of work. I could have done what I mentioned above about taking out the garbage for moms. Expanded with the same expansion idea. Easy.

The easiest way to sell something is by letting the customers suggest what they want to buy and at what price and then deliver it to them at that price (if practicly possible). I mean, you can’t find any easier sale ever. The customer actually sells you on the idea:).

I can tell you about one other thing I saw a couple of days ago (2-3 days ago). One guy had posted about a website he wanted someone to program for him. It was a lot of programming involved and I knew my brother was a systems engineer (IT) and that he could do these things in his sleep. So I contacted this fellow and asked what he wanted help with more specifically and what he wanted to pay for having it done for him. I am still waiting for an answer, but this method is a great way of letting the customer present the case and what he think this kind of service is worth and then it is up to me, the entrepreneur, to find a way of delivering the service and make a profit.

So let us say this fellow decides he is willing to pay a project based compensation. He is willing to pay, say, $10,000 for it all. If I am to get my brother involved in this I know I would only be able to pay him $1000 in total for the whole workload (because of my $10 in return for every dollar invested). Will he take it:)? Maybe, maybe not. I have a feeling he will. It’s extra cash, on top of his already existing salary. An extra $1000 is always and extra $1000. I know my brother and understands his thought process so I am certain he will take it on if he thinks he can do it. All the rest is mine to keep, minus 30% taxes (swedish tax percentage for sales income and capital gains).

All of you: send me your own startup examples. And by any means: what would you be willing to pay me for having your company URL’s noted on this blog? Nothing? OK:). $1? Fine. $1000? Perfect. Just give me a hint of where we are at. Any given bid are considered and every startup example will absolutly be read and also considered for showcasing, but I don’t guarantee I will accept the bid you give me nor publishing any startup examples. I will take the freedom to chose which startup example to showcase.

And never forget that you are a big reason why I write this blog so please, don’t be shy about comments. Rude comments are banned however, but well thought out ideas and suggestions are showcased. We are soon coming up for Christmas Eve and New Years Eve. So, what can you do business wise right now to make money from these crazy days? What can you help others with and what will they pay you if you do? Make it a mission to ask people what they want and what they will pay you for delivering it to them. And then get busy.

See you next Saturday.

Starting a company in a recession is not what it is cracked up to be

There is a hugh crowd following the advice that it is a whole lot better starting a startup in a recession than in good times. I disagree strongly. The only way you will gain anything in a recession is while being the cheapest guy in town, because only a select few people will have the purchasing power needed to buy something new and flashy. Few can afford quality items in a recession.

The best time to start a startup is in good times, when a lot of people are employed and they have money to burn and they have room in their budget to borrow money so that they can purchase big ticket items. That is when you should start a company, ideally.

I remember 3-4 years ago when I started importing mp4/mp3 players to Sweden (from China). Me and my business partner sold for $35,000 a month. That was not a typo. That is what we sold for in general each month. I wouldn’t be able to reach that same income now in these recessional times. Not a chance. I would be lucky if I sold 10% of that amount today. If I sold to the same mass crowd I did back then, that is.

They tend to say that in bad times you see who is really an entrepreneur. I say, in bad times you see those who are good at math. In recessional times like today you have to become savvy with numbers. In good times you can sell any kind of crap, because people have money to burn and they don’t really look at the price ticket. These days, all they do is look at who is the cheapest supplier. If you are the most expensive choice you are out of the game. If you sell to the mass/average affluent.

The only way to survive recessional times with an expensive, but quality, product is by selling to the cash rich people. The wealthy/super wealthy, rather than the masses. That is the only hope you have. If you fail in selling to the wealthy, then you better start becoming cheap and be very good at it. Or you are bankrupt pretty soon. That is the reality now.

But once again: Saying that it is better starting a company in a recession than in good times is just nuts as far as I can see. Why would you start a company in bad times in the first place unless you where forced to do it? Don’t you think it is better starting a company in times where customers throw money freely at you, when investors throw money freely at you etc? I think so. Why make life harder than it has to be?

Take my advice: Start a company when people spend money like there was no tomorrow. We are heading towards that Nirvana right now (business follow cycles as you surely know. We now go from bad to better again). Believe me, it will change to the better and when it does: milk the market as much as you can and store the money for times like these. You can thank me later.

Lastly, in business you have to think like those famous farmers they talk about on the internet (Robert Kiyosaki discussed the difference between a milker and a slaughterer for example). Sow, nurture and harvest and live of the harvest during the winter and until Spring comes along again. Do the same with your business.

If you sell to the average rich (the mass affluent) you have to understand the sowing, nurturing and harvest process very well. You sell things expensively in good times and lower the price and increase credit while things are going bad. Or you change buying crowd entirely (from broke to richer) and collect more money by default.

You want rich customers who don’t look at the price ticket as a rule. Sell to those people who buy because they like your product more than they like your cheapness. I have said all this before and it is always worth repeating. Repeated information becomes truth as you may know, that is why schools use the process of repetition. Because it works.

Ok, next Saturday I will continue on with a “supply and demand” inspired post. It is somewhat a continuation of the post I wrote last Saturday on how to create business ideas. So stay tuned and as always comment and ask me about startup related things and I may bring your question up in the near future and answer it. And also, if you like my blog and what I write here, then don’t be shy to bring in friends and family as well. It is all free after all. Spread the love people;).

How do I generate ideas?

I was positively surprised when I recieved a comment from a guy named
Robert. He asked:

“I would like to read something about business idea generation. How do you find your ideas for a new product or a new business?”

First of all you do a mini market study. Many companies do big scale market studies that cost a lot of money. I prefer asking my family and friends and expand from there. More about this in a coming post. Stay tuned. In short: you need to know what to solve first of all, potential customers decide this mostly. Then you come up with the solution.

The best way of coming up with new ideas is by testing scenarios. For example “What happens if we remove this and that?” or “what happens if we fill this and that with x amounts of this and that?” etc.

You experiment and you basicly act as a crazy professor. Testing many things in different ways to come up with something that hasn’t really been considered before.

For example:
An orange is usually the size of a baseball. More or less. What would happen if we made the same orange as big as a fotball or as little as a winegrape? What would happen to taste? What would happen to smell? What would happen to nutritional values? etc.

You play with scenarios all day long. That is what makes you stand out and that is what makes you able to charge higher prices than competitors. The value differential is obviously hugh between a normal orange and an orange with the size of a fotball. We can’t deny that, can we? What is odd sells. And what is odd usually sells for a higher price and probably with a much higher profit margin per sold unit as well, because it is so unique. As long as there is a demand for it as well. If you have no demand, then it doesn’t matter how much of something you have in supply. You need both variables to produce a price point (supply and demand). But if you have very little supply in relation to a much higher demand, then prices can soar very high in deed. You all know this I am sure, this is what you learn first of all in business.

Everyone can do this, but few will because they can’t stand going into the mood that it requires to be creative. I don’t think I have to tell you that creative people are scorned for being cooky. So few will engage in this enjoyment, but those who do will have a blast. I mean, why not do this? Playing around, experimenting and then sell it for cash and make a fat profit margin? It is common sense, why compete on price when you can compete on value? And value lays in the oddity combined with a high demand.

Get people involved

You will hear phrases like “don’t bring in partners, it can destroy you” and “It is always better to do it on your own”. I strongly disagree to both of them. I like to bring in partners because it drasticly improves my success rate as an entrepreneur. I will tell you why.

When you bring in more and more owners you will not be alone anymore. Being alone, one guy, in business is utterly stupid. You will be eaten alive by those who want you out of their hair. They will crush you dead easy by spreading bad rumours about you and what can you really do about it? Unless you are already rich and have a good and well regarded reputation and can hire fancy lawyers and use your good name to convince clients and potential clients that the bad rumours are just hogwash. If you are starting out in business you are highly likely near broke and probably the least trustworthy guy in the room because of your lack of experience of running a business.

But, if you bring in more owners in your business. If you own the IP rights to the idea you had in mind and if you have proved on a micro scale that you have sold some of these products/services you want to construct a mega corporation around, then you can bring in other owners (you have the evidence that commercial interest exist. You just have to scale it from there). Let these owners work with you to bring on board the best of the best in regards to Directors and Officers and of you go.

The more people that are involved as owners in your creation, the more probable your success will be. These other owners will bloody well make sure of it, because they don’t want to lose their stake in the company. No way in hell they will allow that. So everyone you bring into your little world will help you become rich much faster. Maybe rich beyond reasonable measures. You will all be in the boat together. Success or not. That is a good thing to strive for. Make it a habit.

Three questions to all of you

What do you want to read? What have I missed that you would like me to mention or develop further?

Do you have a story of your own that relates to startups? If yes, send it to me and let me look at it. Maybe I will post it on the blog for all to see. Make yourself heard.

This will be it for this week (unless I recieve something interesting to post). I am empty on stories so help me out with some inspiration.

As usual: comment on this post and I will recieve your email at the same time. I will email you back, I promise. And you can send me your written story via email.

This will be sort of a test to see if this blog is worth my time. If you think it is, then help me out:).

Want to show your own extreme startup success on this blog?

Anyone who wants to tell about their own startup success story? If yes, these are the criterias to be covered:

- The startup story has to be a “rags to riches” version. Start from scratch with more or less no money of your own and no real connections.
- Showing how you moved from a despaired state to a prosperous state.
- A little bit about how you coup today.

Comment on this blog and I will email you at the emailadress you give me (only I can see the email adress. No one else).

My idea is to start covering stories from you guys from November 28th 2009 and onwards a few weeks. So if you want to tell your story, please send it in pronto:). When I have 9-10 stories I find interesting the gates are closed.

Proving Your Concept

I am sure you have all heard about that little something called “Proof of Concept”. “Proof of Concept” is the way you get investors to even look at you. Without it investors will think you are a nutcase. Fair and simple. Don’t believe me? Prove me wrong:).

In business you can have the coolest gadget available. It doesn’t matter. If that cool gadget is not making money, then you will be the only one thinking it’s cool and perhaps a million other people who will not pay for using it. If you don’t get paid giving stuff to others, then why do it in the first place? Unless your mission is more of a generous nature (Philantrophy in short). Then it makes sense.

So let us take an example in order to demonstrate this in a clear way. Abstract discussions have not helped many. Maybe confused them, but never helped any.

Let us say you have this stone I mentioned last week. Let us then do a little mini research of the stone market. We will see that we have many stones all around the world. Probably many stones that looks just like yours. AND they are all free to pick up by anyone. So how the hell do you make this thing a monetary success? Given up yet? No? Well, if you are still with me, I guess you have some hope going for you. If not, to bad. Wish you well in life.

Let us think a bit here. What is the first thing you do if you are trying to sell something everyone else is selling? What do you do when you have a commodity type of product so to speak? Well, you create a better offer than the other guys. Remember the agreement for the stone I mentioned last week? Let us go into more detail regarding that.

Let us say that the other stone salesmen give their customers free stones. How can you compete with that? Well you give people the same stone, but with better quality attached to the stone. Being cheapest in town is bad and can easily be competed against if you offer better service or better terms or better additional items to go with it. Your competition may say “we don’t charge for stones that you can get for free in the nature”. Well, we can say “we charge for this stone because this or that person has touched it”. Can you spell “celebrity power”?

You can rent this little stone out for a lot of money if you can prove that, say, Michael Jackson or any other big hot shot celebrity has held this stone in their very hands. It’s up to you to have this occasion documented. You remember me mentioning last week that you could rent this boring little stone out for a lot of money with the right marketing offer? Well you could. And the best part is, the celebrity doesn’t have to cost you any money if you play it smart. Why not go on the red carpet and charm your way to a picture taken with you and the celebrity AND the stone? Have the celebrity sign it. Sure, the celebrity might consider you an odd guy/gal. But if it get’s you the money then why not?

Just think about it: You find a normal sized stone in the woods that you could fit in your hand. You go find a elebrity on a red carpet somewhere and you present yourself to this hot shot celebrity with a charm and innocently ask for an autograph and a picture with you and her/him.

Then just go back, find yourself som scouts and braggers who brag about your celebrity stone and the possibility for people to come and hold the very stone that this hot shot celebrity has held and actually signed their name on. Charge a couple of hundred bucks per session and you can make money hand over fist with a simple little boring grey stone.

It is all about proving the concept, people. And there are so many ways of making money with more or less garbage things. IF you are clever that is. Fantasy and oddity shall not be under-estimated. Oddity sells, people. Oddity sells. Make it your mantra. Don’t believe me? Look at American Idol or any other strange program and you will see how fanatic we are about odd occurrences. We love’em.

So when the other dumb fucks give away their stones just because “people can find those stones for free in the forrest” or whatever, you guys are making millions on a simple little rock with celebrity status.

I have said this before and I will tell you this again. Never compete on price, why compete on price when you can compete on oddity? And, in the process, become much more financially solid than your competitors who can’t think rationally. Lowering your prices in order to beat the other guys is not a rational business decision. That is called business madness and the CEO who runs such a business should be shot immediately for being really dumb.

The whole idea of running a business is to make maximum profit. Tell me: how can you make maximum profit if you lower your revenues and hence lower your profits margins?

As Dan Kennedy said in one of his presentational material “Do you know how much more volume you have to sell when you lower your profits?”. Answer: “A hell of a lot more volume”. If that makes sense to you, then you need a medical examination. Because you are not healthy. Why increase risk by lowering prices and hence profit margins when you can increase price and increase profit margins? You don’t have to work that hard when selling things more expensively AND you can deliver much better VIP service. Quality in short. That is smart for everyone involved in a deal.

Proof of Concept is the idea about proving that something works. In business and in startups it is all about proving that a business idea can make revenue and ultimately profits as well. Without this phase you can hunt for investors all day long. Few will invest. You can spend that time making revenues directly instead and then let those horrible investors convince you why they should even be allowed to invest in your business.

Start simple, start a little mini business and let your friends scout for business and brag about your excellence. Never brag about yourself, it seldom produce good outcome. I know, I have done that mistake so many times that I can’t really remember the correct number. I still do that dumb mistake even today for some idiotic reason. Don’t ask me why, because I really don’t know why I do stuff that I know is stupid. But we all do it.

Whatever you do, minimize stupid behaviour and do the things that works. Having advocates who deals for you is the best route. Always will be. The reason is simple: You get better negotiating leverage if you let others brag about you. You can say “well, you came to me”. That is powerful. Try it out. It’s really nice stuff. Because negotiating power is essential if you are going to succeed. And this advice goes for everything in life. Even in love and especially in moments when you have to beg for sex from your girlfriend:). Girls have a great advantage over us guys for one reason: They don’t need sex as bad as us. Few girls are the opposite, “nymfomaniacs” that is.

Ponder this and have a nice day. See you next Saturday.