UNSCRIPTED®
THE GREAT
RAT RACE
ESCAPE
From Wage Slavery to Wealth:
How to Start a Purpose Driven Business and
Win Financial Freedom for a Lifetime
~V.
MJ DEMARCO
Author of the International Best-Seller The Millionaire Fastlane
OINISICI MP eB) > 1iaile (laveeaMf
RAT RACE ESCAPE
FROM WAGE SLAVERY TO WEALTH: HOW TO START A
PURPOSE DRIVEN LIFE AND WIN FINANCIAL
FREEDOM FORA LIFETIME
MJ DEMARCO
IPERIQN
Publishing Corp.
CONTENTS
Preface
Introduction
ELEVEN MINUTES
1. The Conventional Wisdom Principle
2. The New Pen Strategy
THE BRIBE
3. The Comfortable Pain Principle
4. The Someday Principle
THE HONEYPOT
5. The Economic Religion Principle
6. The Honeypot Principle
DEATH BY A THOUSAND PENNIES...
7. The Scientist Strategy
8. The “Lost Principle” Principle
THE “FTE”
9. The Unscripted Strategy
10. The Discounted Time Principle
11. The Financial Fanaticism Principle
LEAVE IT TO BEAVER...
12. The 1/5/10 Strategy
13. The Offense/Defense Principle
14. The Money-System Strategy
15. The Escape Number Strategy
IGNORANCE IS BLIND
16. The Profit Locus Strategy
17. The Bad Math Principle
18. The Specialized-Unit Strategy
19. The Business System Strategy
20. The Knowledge Gap Strategy
A NEW HOPE
21. The Asymmetric Returns Strategy
23. The Consumer/Producer Principle
THE MONEY CHASE
24. The Polarity Strategy
25. The Passion Principle
26. The Value Marriage Strategy
27. The Job Proxy Principle
WILD PITCH
28. The Thirsty Rat Principle
29. The Process Principle
30. The Problemology Principle
31. The Shortcut Principle
THE STORM
32. The Value Skew Strategy
33. The Commodity Principle
34. The Easy Goes Hard Principle
35. The Moat Strategy
36. The Negative Skew Strategy
37. The Imperfection Principle
38. The Stakeholder Principle
39. The Sucks to Bucks Strategy
THE RED PILL
40. The “Force Doesn’t Awaken” Principle
41. The Hot Stove Principle
42. The Dual Change Strategy
43. The Hardline Strategy
44, The Fastlane Strategy
FROM FANTASY TO PLANASY
45. The Rules and Risks Strategy
46. The Small Wins Strategy
FROM ZERO TO ONE
47. The Feedback Loop Strategy
48. The MacGyverism Strategy
49. The Marketing Tiebreaker Principle
MY BROTHER ONCE STARTED A BUSINESS...
50. The Done Kills Doubt Principle
51. The Execution Principle
THE KNIFE AT THE GUNFIGHT
592. The Old Friends, Old Ways Principle
53. The Hunting Ground Strategy
54. The Drake Equation Principle
95. The 3A Strategy
56. The Expected Value Strategy
THE DESERT OF DESERTION
57. The Desertion Principle
58. The Baseball Principle
599. The Probability Hacking Strategy
RESOLVE, STEELED
60. The Napkin Strategy
61. The Optimum Experience Strategy
LOVE WORKS AS WELL AS HATE
63. The Engagement Strategy
64. The Cinderella Principle
IN THE HEAT OF THE NIGHT
65. The Critical Path Strategy
66. The Right Book Strategy
67. The Action-Faking Principle
68. The One Problem Strategy
69. The 1/2/3 Marriage Strategy
70. The Search Cipher Strategy
THE “BRO-MARKETING” ENCOUNTER
71. The Productocracy Strategy
72. The No List Principle
THE BREAK ROOM RUSE
73. The Ethical Envelope Principle
74. The Payment Proves Principle
75. The Forgiveness Principle
JUST A FRIENDLY COMPETITION...
76. The Environmental Hacking Strategy
77. The Finicky Felines Principle
A BRAND IS BORN
78. The Personality and Purpose Strategy
79. The “Good Isn’t Good Enough” Principle
A PARTY FOR A PAYDAY
80. The Gold Star Strategy
81. The Fruit Tree Strategy
82. The Demonstration Strategy
83. The Gamification Strategy
ONE GIANT STEP FOR TROTMANKIND
84. The Leap of Zeroes Principle
85. The Millionaire Paycheck Strategy
EFFIN’ GRANDMAS?!
86. The Fired Customer Strategy
87. The Hindsight Strategy
JUST ANOTHER DAY AT THE OFFICE
88. The Triangulated Value Strategy
89. The SCAIDA Strategy
90. The Asymmetric Traction Principle
BURNING OUT...
91. The Commitment & Balance Principle
92. The Self-Directed Pink-Slip Strategy
93. The Storification Strategy
WHAT IS SEEN CANNOT BE UNSEEN
94. The Burnt Bridges Principle
95. The Going Wide Strategy
96. The Purpose Driven Strategy
97. The Porous Beliefs Strategy
BENDING THE KNEE WITH GLEE
98. The Three Strikes Strategy
99. The Observed Modeling Strategy
100. The No Judgment Strategy
THE RAT RACE LOSES ITS QUEEN
101. The Choosing Happiness Strategy
102. The Wealth Acceleration Principle
103. The Big List Strategy
VIVA LAS VEGAS
104. The Phone and FedEx Strategy
105. The Win-Win Strategy
106. The Apologize Later Strategy
107. The Weakness & Tripwire Strategy
108. The Great Dishwasher Principle
NEW MONEY, OLD HABITS
109. The Diderot Principle
110. The Cornbread Strategy
LOADING BULLETS IN THE BARREL
111. The D.A.R.E. Strategy
112. The Backseat Principle
113. The Low Expectations Strategy
FEAR BETRAYS THE PAST
114. The Perseverance Strategy
115. The Financial Army Strategy
COVID-190,000,000
116. The Cost of Money Strategy
117. The New Horse Strategy
118. The 3T Financial Strategy
119. The Monogamy Strategy
120. The “Living the Dream” Principle
EPILOGUE
APPENDIX A
Go Unscripted
Notes
Also by MJ DeMarco
PREFACE
Ugh. I’m an idiot. A masochistic idiot. And I’m proof that
anyone can escape the rat race. If this idiot can do it, you
can too.
No, seriously. This isn’t false humility.
You see, this book, in part, is my first attempt at
storytelling. But unlike a normal person, I didn’t write a
romance. Or a mystery novel. Or something with known
archetypes and well-worn story arcs. Nope.You see, this
idiot chose to write the hardest story ever. A book that has
no genre. A book half fictional story, half nonfiction business
book. A book about entrepreneurship, building wealth, and
escaping the rat race. A book that has no known example to
observe or model.
The first rule of authorship is “show, don’t tell.” Problem
is that business books are mostly “telling”’—do this and
don’t do that. This makes them hard to understand and
finish. Hard to demonstrate a “big picture” and change the
reader’s life. Hard to convince the reader of what is
possible. So I challenged myself to deliver a story that not
only “tells” but demonstrates the “show.”
And a challenge it was. I mean seriously. How exciting
could a story about starting a business be?
He had an idea and registered an LLC. She placed some
Facebook ads.
No, this is not my new writing style. No, I’m not writing
like James Altucher because I lost a bet.
Anyhow. When I began this journey, it was the middle of
2017. I expected this project would take me three months
to write. It went nearly four years.
Because I’m an idiot.
This book could have been titled The Idiot’s Guide to
Escaping the Rat Race. But since I don’t like lawsuits from
the good folks at Penguin Random House, 1 went with
something different: UnscriptedTM: The Great Rat Race
Escape.
Inside, you’ll witness the rat race poison a marriage and
chew up dreams. Inside, you’ll find a story about an
ordinary couple seeking an extraordinary escape. Inside,
you'll get a front row seat to how the 99 percent becomes
the 1 percent. Embedded within the story are 120
strategies and principles to show you the way. So you too
can have a Great Rat Race Escape. And live happily ever
after.
If this idiot can, you can.
INTRODUCTION
Every day, someone tries to start a business. And every day,
someone fails at business. Some people go on to make a
decent living with their business, others own a grind that
pays the bills for the month, only to repeat until some
godforsaken retirement age, or worse, death. But few
people start a business as a way to escape the rat race.
Not only will Unscripted™: The Great Rat Race Escape
show you how, but it will also demonstrate how one married
couple (with a baby on the way) makes it happen.
This book is actually two books blended into one. That’s
right—a “two for one” deal! The first is a fictional narrative,
a story of awakening for one family, the Trotmans, who
discover that the life they’re living isn’t the life they’ve been
sold. As they struggle to navigate the rat race and its
pervasive dogma, their journey is chronicled as they
leverage Fastlane entrepreneurship for their escape, from
idea to launch to execution to scale.
As you can imagine, writing a story with business as the
central theme has the potential to be incredibly dull. As
such, I’ve created characters dealing with their own
personal demons as they navigate a struggling marriage
rife with boredom, bills, and unfulfilling work. Some
readers might be uncomfortable with the marital conflicts
the husband-and-wife team face, as well as the touchy
subjects they address. Caution: Some reader discretion is
advised.
As the Trotman’s story unfolds, rat race busting
strategies and principles related to their struggles are
integrated throughout. Some of these pertain to life itself,
not just business because a successful venture alone
doesn’t automatically translate to happiness. Each concept
is prefaced with an icon that represents its informational
category.
e Strategy: An action or process
that can help deliver results,
either near-term or long-term to
your business or your life.
e Principle: A governing rule to for
implement or a new way of looking
at something, often questioning or
disproving a well-established
belief, which itself is often
propagandized by the rat race vila
paradigm. ‘ 4d
Each strategy and principle is
geared toward helping you (and the
characters) escape the rat race
Unscripted—lasting financial freedom
independent of politics, economics, or
stock market returns.
If the tumultuous year of 2020 was good for anything,
it’s that it exposed the rat race’s systemic conspirators, a
powerful group of entities from tech tyrants to corporate
media professionals to politicians, all deeply invested in
grooming an obedient populace subject to submission,
suppression, and servitude. In other words, the rat race is
the world’s economic cult, and every cult thrives as long as
enough fools obey its dogmatic preachers.
The good news is you don’t have to obey. You don’t have
to turn on the television and listen to the latest rat race lies,
from “save $100 a month for fifty years to retire rich” to
“get a college degree and a good job” to “how
entrepreneurship is risky,” (but outsourcing your paycheck
to a non-essential corporation isn’t.)
If you’re dissatisfied in your life, either with your job or
your business, and seek a meaningful new path that
rewards your mortal life with deep purpose, soulful
happiness, and real financial freedom, read on. If any of the
following apply, this book was written for you.
You hate your job and don’t see any path forward.
You seek to do meaningful, purpose-driven work over
meaningless, debt-driven work.
You would like to control your own destiny with your
own business.
You realize that “saving $100 a week for fifty years”
is an untenable idea wrought with peril.
You don’t want to work most of your life only to retire
in life’s twilight when your energy and health are on
the downslide.
You'd love to follow your passions without needing
them confirmed by demand, money, or cultural
approval.
You desire a more affluent lifestyle not subject to
soul-crushing frugality, disciplined saving, and years
of stock market optimism.
e You’d rather invest your time in an effort that could
yield financial independence in five or ten years, not
40 or 50.
e You’ve always been a hustling entrepreneur but
never made the leap into six, seven, or eight-figures.
e You’re an entrepreneur who has yet to crack the
code to a viable idea or a venture worthy of
exploding sales.
That said, if you’re already an entrepreneur with a
growing business and millions in sales, this book, while
helpful in some respects, probably isn’t going to move your
needle. The last thing I want to do is sell someone a Ferrari
when they were expecting a Lamborghini. Particularly, if
entrepreneurship has not yet changed your life, this book is
for you. If it already has, then probably not.
Over 25 years ago, entrepreneurship changed my life.
And it made me financially independent, to the point where
I never need to work ever again. I’m not talking about the
latest “early retirement” orthodoxy dependent on lifestyle
mediocrity and stock market returns, as most financial
bloggers now promote. I’m talking about the kind of
“retirement” that is rich in luxury (dream houses and cars
are nice!), but also rich in time and resources. For me,
going Unscripted meant I could pursue my writing passions
free of financial validation and editorial control. Looking
back, I wouldn’t change a damn thing.
I want to be clear: starting a business is the hardest
thing you will ever do. Growing it will be the second. If
you’re going to challenge yourself with these tasks, you
want your reward to be transcendent. Your venture needs
to offer a prize that has the power to help you escape the
tyranny of the rat race, either through a millionaire-making
income or a life-changing liquidation event. This book is the
story of how you can do just that, complete with 120
strategies and principles to make it happen.
Don’t let the rat race and its demagogues proclaim your
life as non-essential. Don’t let the rat race entice you to
save your life away for the promise of an elderly retirement.
Don’t let the rat race lull you into a tedious existence
medicated by television, video games, and trivial sporting
events. Go Unscripted and build a business that not only
changes your life, but perhaps also the lives that come after
you.
ELEVEN MINUTES
MONDAY, NOVEMBER 10TH, 2008 - 5:34 AM
Jeff Trotman jolted awake, shooting up from bed, panicked.
Sweat soaked his nightshirt despite the cold outside. Did I
oversleep? His old alarm clock on his night stand was
retired, replaced with a new iPhone 3G. Was the alarm set
correctly? He squinted around the room, but the Monday
morning darkness remained. Rain plunked a tormenting
chorus against the window, an opera of lost dreams and
smothered souls.
He flung his legs to the floor and fumbled for the phone
in the dark. Finding the device, he pressed it on. The time
cracked the darkness: 5:34 AM, eleven minutes remaining
before it was set to scream. He rubbed his face and glanced
at the empty sheets. His pregnant wife was not in bed
beside him. An ER nurse at Chicago’s Northwestern
Hospital, she’d left hours earlier for the graveyard shift.
While her pregnancy advertised that they were a happy
couple who often frolicked in the sheets, they weren’t. The
last time they made love was the likely conception date of
their unborn daughter: a distant six months ago. His
marriage, his career, his happiness—nothing was going as
he expected.
He lumbered out of bed and toddled to his bedroom
window. It was cracked and frosted over, its chaotic
fractures stippled like a map of Rome drafted by a drunk
cartographer. The shattered glass was a reminder of
another thing he had to fix. And pay for.
The acid in his throat intensified. He plunked his
forehead onto the glass and gazed vacantly at the empty
street, still illuminated by lampposts. The frozen window
impaled its chill on his skin. His forehead begged for mercy,
but he didn’t care. It only exposed what he’d long
denied: he was alive, but he wasn’t living.
A lone van slowly chugged by, newspapers fed to their
driveways. The nearby freeway growled with rush-hour
traffic. The cold slowly numbed his forehead, robbing him of
the only sensation that felt real.
Bella, their black Labrador puppy, snored on her
backside near the window, all four of her legs raised
skyward. He watched her rhythmic breathing and jealousy
singed his brain. Sleeping without a care in the world. His
wife Samantha, or Sam as everyone called her, had insisted
on adopting the dog from a no-kill shelter just weeks ago. If
the local law had allowed it, she’d have twenty dogs in their
home. There wasn’t a living creature that Sam didn’t love
or try to save, and that included terrifying insects. A melon-
sized tarantula could roam the house, and she wouldn’t kill
it. She’d bottle it up and try to find it a home. Yes, she was
that neurotic. She claimed it was compassion.
As for Bella, he suspected his wife wanted the puppy
because their three-year-old marriage was lifeless. Their
work schedules afforded little time together. They no longer
kissed or hugged. Meals were eaten alone. Jeff’s jokes,
always worth a laugh from his wife, suddenly weren’t funny.
The passionate banter that had sparked their courtship
depreciated into small talk—the weather, household chores,
and petty pleasantries. He loved Bella but suspected the
dog was an emotional plea, a distracting bribe from his wife
to fill the void plaguing their relationship.
The cortisol that abruptly awoke him was now gone,
replaced by fatigue and wooziness. Anxiety and regret
draped over him like a wet blanket. He loathed what he’d
become, an obedient bill-paying rat in a meaningless job
and a crumbling marriage. Weekend entertainment and
mindless shopping could no longer conceal the reality: his
life was work, sleep, pay bills, and repeat. His life had been
reduced to a commodity, a cog that got its grease each
paycheck and every weekend.
He exhaled against the window. His breath condensed on
the cracked glass, shape shifting into tombstone. He lifted
his head and shook it in disgust. Even the universe taunted
at his soul. When Jeff was young, he’d promised himself that
he would fight for his dreams. And he had many to choose
from. His father taught him woodworking, and by his late
teens, Jeff could fashion a Mona Lisa from a tree stump. He
saw himself building furniture or carving sculptures for the
rich and famous. He also played the saxophone and
dreamed of being in a jazz band. If none of that panned out,
Jeff saw himself as an author, writing fantasy-fiction novels
or realistic science fiction, not the Disney crap that passed
for Star Wars nowadays. No matter which, he envisioned an
exciting future of meaningful work, the kind that could lead
to a life of luxury and leisure.
Instead, Jeff abandoned his creative proclivities and
earned a college degree in accounting. He was good with
numbers but didn’t exactly enjoy them. Still, his father
would argue, “Accounting is where the money’s at!” and Jeff
agreed. He loved exotic vacations, fast cars, and designer
clothes. Starving artists lived in sheds and drove Priuses.
Right out of college, he snagged a job as a transaction
auditor for a large drug company. You know, the one with all
the lawsuits. Sorry, I guess that doesn’t narrow it down.
Unfortunately, his career didn’t get him the Ferrari or the
Fiji vacation. After four years of number crunching for
insurance companies and government’ bureaucrats
combined with pay raises that made inflation giggle,
framing houses suddenly appealed more.
The thought of the looming day was suffocating: the stiff
suit he had to wear, the frigid drive to the train station, the
snow-soaked shoes while waiting on the platform, the hour-
long train commute with the other miserables, and the
disquieted elevator ride to the 67th floor, where eight
grueling hours of trivial number-crunching would unfold.
Jeff and his wife tolerated their jobs, and both were
reasonably paid. But both were reasonably unhappy and
reasonably broke. Still, they put on quite a show. Between
the three-bedroom house in the suburbs and the late model
cars, him a BMW 3-Series, his wife a Lincoln Navigator, by
all appearances they lived the American Dream. But behind
the white picket fence, it was an American Nightmare.
In college, Jeff’s wife had wanted to be a veterinarian.
But her dream, like Jeff’s, would die early. When she
couldn’t afford medical school, she chose nursing. After
graduation, she was hired by a nursing consortium that
might as well been a corporate cartel. Nursing proved
quickly to be a mistake. Doctors roamed the halls like
pharaohs and expected to be fanned with date-palms and
robed in gold. Worse, patient care was profit-care—patients
were numbers on a clipboard, hurried along as if a gurney
was an assembly line.
Jeff lumbered back to the edge of the bed and sat. The
sleet continued its heckle through the window. The soft
linen sheets joined in the humiliation and tempted him like
a cookie would a child: Why don’t you nap for a few
moments? You saw your phone, you have eleven more
minutes to sleep peacefully, why waste them before going
to work? Join me, Jeff, join me, and in that eleven minutes,
we can rule the galaxy as father and son!
He slumped farther to the edge of the bed and rubbed
his head, calculating how he would manage the extra
eleven minutes. Would he sleep through his alarm? Had he
even set it right? If not, could he trust himself to wake up
after the eleven minutes? How much time did he really have
after all these mental gymnastics? Once he realized he was
having a debate with himself, the rain, and Darth Vader
masquerading as a bed, he hung his head and damned
himself with another question: is this what my pathetic life
has become, a negotiation for eleven minutes?
‘Eleven freaking minutes,” he mumbled as he trudged to
the bathroom. After brushing his teeth, he confronted his
self-hatred in the mirror. Even his reflection radiated
hopelessness. Dark circles underlined his brown eyes and
gave him the appearance that he’d lost a fight. His posture
slumped, his 6’3 stature deflated without confidence.
Friends teased him because of his Jesus-like silky brown
hair, but he didn’t see a prophet or a savior; he saw a
mugshot of Charles Manson, dead stare included. He was
only 27 but looked 40. Worse, he felt 70.
He cranked the shower on and sunk to the rim of the
bathtub waiting for the hot water, the day’s only joy. He
glowered at the tub’s mildewy drain. It needed to be
cleaned, another “to do” on his list. The water swirled into a
void, mirroring the first 27 years of his life. He’d followed
culture’s unwritten rules precisely as designed, only to get
sucked into an abyss. He’d gone to college, gotten the good
grades, the prestigious degree, the respectable job, the
middle-class trinkets, the storybook marriage, and the cute
house notwithstanding the 29.4 years of payments
remaining. To his peers and his family, he feigned success,
but his soul begged his brain for a truthful confession. His
life was cursed like a weekly television rerun, broadcasting
the same boring episode over and over. It was death by
mediocrity.
A quote nagged in his head, something he once heard
but didn’t understand: Most men die by twenty-five but
aren’t buried until seventy-five. The toys meant to bribe his
misery or to peacock affluence—a new set of golf clubs, an
electronic doodad, a day at Wrigley Field watching
millionaires hit a ball—had lost their effect. Like a drug
needing bigger doses for the same high, his purchases
doped him for days, but their side-effects lasted for years.
His only gasp for air was a short vacation subject to his
wife’s crazy schedule or an occasional staycation, a
weekend furlough of freedom which sped time, only to slow
Monday morning.
As for retirement, the Trotman’s idea of planning were
trips to the riverboat casino and Powerball. Retirement was
not on their radar; survival was. And how to do it while
looking prosperous and well-heeled. But between him and
his wife, they had no heel. They were broke, unless you
jointly counted the $3,000 in their 401(k)s. With eleven
charge cards between them, the credit flowed like the
cheap imported goods from China and Mexico. From the
Nordic Trac exerciser that sat rusting in the basement to
the Louis Vuitton purse he’d bought his wife for Christmas,
his spending seemed to spend an eternity with his friends at
MasterCard and Visa. They had two car payments, a
mortgage, and Mercedes taste on a Mazda _ budget.
Altogether, they had no net worth, no financial plan, and no
clue.
With a baby on the way and more responsibility like
diapers and doting moms who forget their husbands, Jeff
felt the charade he showboated was about to become
impossible. He loved the idea of becoming a father, but he
hated the game. He hated that the chains that enslaved him
to a dying marriage and a suffocating career were about to
get tighter. Unless he miraculously won a CEO job with a
CEO salary, the hedonistic theatrics and the credit cards
that funded the ruse would need to continue.
Ding-Ding Ding... Ding-Ding Ding...
The alarm on Jeff’s phone screeched, jarring him from
his trance. The eleven minutes were over. And so was his
will to live. Like a good little rat, he put on his best suit and
drove to the train station. Except he wasn’t sure if he would
get on the train or step in front of it.
CAP el |
THE CONVENTIONAL WISDOM
PINES | Le
CONVENTIONAL WISDOM RARELY GETS YOU AN UNCONVENTIONAL LIFE
| t was 2005. A plumber was at my home to fix a faucet.
While he lay on his back and jostled with the pipes, he
couldn’t stop talking about how much money he was
making from real estate. For me, this random moment of
insignificance held great significance. I knew in that instant
that the great housing boom was at its end. And sure
enough, a few months later, the housing market crashed.
Trillions of dollars were lost, and millions of bankruptcies
followed. Today, a similar scenario unfolds as the stock
market exuberantly hits record highs while negative
interest rates scour the planet.
In mathematics, “the wisdom of the crowd” has immense
value in finding accurate judgments, specifically in
mathematically based problems. Unfortunately, while the
crowd might accurately guess the number of gumballs in a
jar, they won’t accurately guess how you can escape the rat
race. Conventional wisdom is spewed from the crowd, and
the crowd represents the mean, otherwise known as
mediocrity. If the crowd knew any better, they wouldn’t be
two paychecks from broke and wasting half their life in
front of a television.
The Conventional Wisdom Principle is about the stone-
cold truth: Jf you follow conventional wisdom from
conventional people living conventional lives, you will get
exactly that: a conventional life. And conventional lives are
not underwritten by dreams, but by servitude—the rat race.
Your penance in this obligatory game is an unfulfilling job.
Your cheese? A scant paycheck, a mediocre weekend, and a
retirement fantasy that pays forty years later. You know,
after the knee replacement, after the receding hairline or
the wrinkles, and after most of your life has been wasted in
a job you hate.
Look at the people in your life. Family, friends, co-
workers, your comrades stuck in traffic. Is anyone living a
full life flourishing with meaningful work? Anyone happy on
Monday morning? Is anyone walking into the Porsche
dealer, pointing to “the red one” and paying cash? Know
anyone free of financial stress, someone who doesn’t need
to finance the furniture for 60 months and the house for 30
years? If you’re honest, the answer is likely a resounding
NO. And that’s because our culture thrives on mediocrity
and obedience. It is the world’s business model.
Whether you know it or not, your existence has been
programmed from diapers to death. Behind this truth a
pervasive operating system grinds, a cultural conditioning
scheme called the Script. And conventional wisdom is its
code language. Such “wisdom” like go to college and earn a
degree regardless of cost, economics, or employment
forecasts. Get a good job with benefits. Work hard Monday
through Friday, play harder Saturday and Sunday. Cheer
for your favorite football team, watch the hottest Netflix
drama and get outraged at the latest news agenda fed to
you. Pay your taxes, finance a car, mortgage a house, have a
few kids, and eat according to the USDA food pyramid.
Drink your milk. Let a billionaire software mogul stick you
with a vaccine and stamp you with a digital ID. Wear your
mask. Live frugally and invest all your saved pennies at Wall
Street firms, preferably in a low-cost indexed fund, where
one day, you’ll retire rich. Of course, assuming the stock
market never crashes, and you survive long enough to enjoy
it...
... welcome, my friend, to the operating system of the rat
race.
Because this gospel bankrolls the economy, it is deified in
every echelon of culture: lower and higher education, news
and financial media, entertainment and sports, and
government. Worse, you’re likely surrounded by Scripted
humans, devout believers in the world’s economic religion.
From famous financial celebrities and educators to family
and peers, there is no escape.
But be warned. If you’re okay forsaking your youthful
dreams for an elderly retirement dependent on thankless
jobs, stock market performance, and _ bankrupted
government pension programs, conventional wisdom buys
that lottery ticket. Except this lottery ticket is sponsored by
the rat race.
The Script is the rat race’s puppet master, a cultural
existence engineered for herding purposes. And herds—
sheep, cattle, pigs, chicken, bees—are organized for
economic objectives: slaughter and servitude. Your life is
worth more than trinkets, taxes, and television ratings.
Don’t let the gospel of the rat race, the world’s economic
religion—the Script—hijack it. If you want to Live like the
1%, you can’t think like the 99%.
KEY CONCEPTS
e The “wisdom of the crowd” advocates for the rat
race, not for your freedom.
¢ Question conventional wisdom or have it lead you
into a conventional life.
e The Script administrates the rat race and is culture’s
default operating system, bankrolled by powerful
institutions and corporations.
Cre 2
ime NEW PENS AneGy
WRITE NEW WORDS OR SUFFER THE SAME STORY
&
| n the winter of 1995, I contemplated suicide.
It was nearing midnight, and I was driving a
limousine for a small company in Chicago. Only I wasn’t
driving; I was stuck on the shoulder of the road in a
blizzard. Only the rhythmic hum of the windshield wipers
played to my disquieting silence. As I waited for the
snowplows, I deliberated on my miserable life. I had two
business degrees and had graduated near the top of my
class. But here I was, stuck working a menial job, a job I
could have snagged straight from a high school detention
hall. College didn’t educate me; it indebted me and gave me
the expectation that I deserved more. But the only “more”
in my life was more debt, more embarrassment, and more
failure. By my mid-twenties, I expected to be moderately
successful, in a good relationship, and on my way to
financial freedom. But none of that existed. I was broke.
Worse, my long-time girlfriend dumped me for a successful
radio executive. And yes, she was perfectly justified in doing
so as I floundered from one dumb idea to the next. While
my college peers were deep into a seemingly successful
middle-class life, I was deep into Mom’s basement.
If you died today and your life was narrated in a story,
how would it read? Would it be a one-star story filled with
generically posthumous platitudes like, “Joe was such a nice
guy”? Or would it be a compelling tale that someone
couldn’t put down? Since you’re reading this book, I can
guess that you aren’t happy with how your story is being
written.
As I sat on the side of the road, I realized my story was
going nowhere.
It was then that I contemplated suicide: how I would do
it and the note I’d write explaining it. After a few ominous
visions on how I’d murder myself, a .380 to the mouth, or a
plastic tube affixed to my car’s exhaust, it hit me. Even
suicide and its method of execution was a choice. I had free
will and the power of choice, an endowment that up to that
point I had denied. Everything in my life, including how I
thought and felt about it, was a choice. If I wanted a
different life with a different story, I needed to make
different choices. But more importantly, what beliefs were
causing me to make those choices? What beliefs were
laying the groundwork for the failed choices that were
causing my broken life?
Wherever you are: suffering a dead-end job, tolerating a
loveless marriage, studying law in college, or living a
dream, your existence is moored on one truth. The results
you suffer today (or enjoy) unfolded from your beliefs and
the choices they conceived. The internal environment—your
thoughts—cause the outside environment and acts like a
flight plan for your life.
Belief > Choice > Consequence > Your Life
This sequential relationship amounts to hundreds of
choices daily. And they all evolve from your beliefs. For
instance:
What food to shove in your mouth...
What media to feed your eyes...
Who to be friends with...
What books to read or not read...
How to tackle problems...
How to handle rejection...
How to feel about money...
What you do with your free time...
Altogether, your beliefs and the choices they compel
write The Book of You—your story. In your book, the
various pens writing your story are your beliefs. Each word
penned to the paper would be a thought, each sentence a
choice, each paragraph an action, each chapter a habit.
Your life story is the total of your actions (or inactions),
which in turn are caused by those pens transcribing your
beliefs. If you’re armed with a pen that believes drinking
three Dr. Peppers every day is okay, what kind of story gets
to the paper? A tale of health, or a tale of diabetes?
While each of us is born into varied circumstances, we
retain the rights to the pens writing our story. A rich kid
might choose to squander his privilege in heroin while the
poor kid decides to be the one dealing it. If you don’t like
your life’s station or where it leads, you need to change the
pens writing your story. And the only way to change those
pens and the choices they write is to change your beliefs.
Namely, you need to expose your poison pens—Scripted
beliefs that are condemning your life to mediocrity, misery
or worse, death.
For example, a family friend is battling morbid obesity,
high blood pressure, and diabetes. He refuses to change his
diet despite a heart attack, multiple stent surgeries, and a
dozen prescription medications. His “diet” is a combination
of fast food and gas station fare: donuts, fried chicken, and
wieners that have been roller grilled for six days. The last
time his mouth saw a vegetable was when the Berlin Wall
fell. If two heart attacks and multiple hospital visits aren’t
enough of a crisis to compel a dietary change, what crisis
is? Stroke? Death? When asked this question, he revealed
his flawed belief. My poor genetics cause my health
problems, not my food choices. In other words, he believes
a Nigerian prince needs his bank account number to help
him flee a military coup.
Sadly, this flawed belief will have a big cost, and I’m not
talking money. The worst poison pen is the one that will kill
you. Fact: The harsh truth doesn’t care about your beliefs.
If you believe you can fly, you’ll jump off a cliff and die.
Truth is independent of belief.
The same applies to freedom from the rat race. If a
broke blogger says “doing what you love” is the secret to
success, and you believe him, you might fail twenty
businesses. If you believe relying on a faceless corporation
isn’t risky to your freedom, but relying on your business is,
you'll settle for the job. When beliefs misfire action, reality
has a way of smacking you in the face. As such, misfired
beliefs have fiery consequences and write dire stories. In
self-help circles, they call them “limiting beliefs,” but
clinically speaking, they’re delusions.
Give me 30 seconds (or 30 words when it comes to my
forum), and I can immediately predict if someone will be a
lifetime rat racer. No, I’m not clairvoyant. But after
interacting with tens of thousands of people over the last
decade, I can spot a headspace that precedes failure. The
internal environment—your thought words—cause_ the
outside environment—the story. If you’re packing poison
pens from the rat race, you won’t write the blockbuster.
For example, as a teenager, my poison pen was that only
a specific group of people could get rich quickly, and hence,
get rich young. People capable of this feat were celebrities,
athletes, and musicians. If I didn’t aspire to act, dribble, or
sing well, I was out of luck. Wall Street’s fifty-year plan of
Saving patience would be my fate. That is, I’d end up a
perfect rat.
Luckily for me, I exposed this poison pen in my teens.
Everything changed when I encountered a young man who
owned a_ ridiculously expensive sports car—the
Lamborghini Countach. Popularized by the classic Burt
Reynolds movie Cannonball Run, the Countach was my
dream car because it was closest to a Star Wars land-
speeder. After spotting the car at an ice cream parlor, I
stalked the owner in the parking lot. When a young man
approached the car, I boldly asked him what he did for a
living. Expecting to hear something relating to my false
belief (actor, athlete, et al.), he revealed he was an inventor.
What, an inventor? I was stunned, and the poison pen was
exposed. And then replaced. At that moment, I knew I could
“get rich young” because “get rich quick” existed outside
the box of celebrity. New belief, installed. I had a new pen
and as such, new choices with which to write a new
story. And it did, at least until I got stuck on the side of the
road and contemplated suicide.
Two more poison pens lurked behind my struggles,
however, corrupting my story. Yes, I knew entrepreneurship
could produce financial freedom fast. Except I wasn’t
pursuing business ventures with my own grit and creativity.
Instead, I skipped from one inferior business scheme to
another. Things like network marketing, low-rent franchise
opportunities, and real estate investment strategies
plucked from late-night infomercials. I falsely believed that
there was a turnkey plug-and-play system that could lead to
success. Turns out, the only people getting rich from these
“systems” were the entrepreneurs peddling them. I had a
gun but was loading blanks. Which is why I wasted years
failing.
Second, I suffered from seasonal depression. If the sun
wasn’t shining and I wasn’t working, you could bet I was
sleeping. Or doing nothing productive. A belief deep inside
my head was responsible for my lack of progress: I believed
that I couldn’t emigrate from Chicago because I was born
and raised there. Arguments heckled my brain, things like
You can’t leave Chicago, your family is here! or You love the
Chicago Bulls, how could you abandon them? As if an NBA
franchise cared about my fandom.
After canceling my suicide, I confronted these two poison
pen beliefs and killed them. First, I vowed never to rely ona
third-party for my business success. No MLM or affiliate
bullshit. No franchise opportunities or late-night business
schemes. Second, I severed the invisible handcuffs that
kept me in Chicago. Within a few months, I moved to
Arizona. And because I crushed these two beliefs, my life
instantly changed.
If the winds of mediocrity are directing your life, ask the
hard questions. What Scripted beliefs are writing your
story? And who is reinforcing those beliefs? Your parents
who insist you become a doctor because it carries a certain
cultural status? Is it an educational system that advocates
spending $120,000 for a medieval theology degree? Is it
that hypocritical guru who made_ millions _ selling
motivational seminars and yet, tells you that millions can be
made by patient investing?
The point is, are the witches of conventional wisdom,?!
the Script, poisoning your story with sub-plots amenable to
rat race outcomes?
Building a business is risky!
Saving $100 a month will make you rich!
You can be happy living in a shed down by the river with
no plumbing or electricity!
The rat race is filled with liars. Your first step is to stop
lying to yourself.
KEY CONCEPTS
The internal environment—your thoughts—cause the
outside environment and is like a flight plan for your
life.
The Book of You is your life as it is today, an
aggregate of your beliefs and the choices they
created.
Truth doesn’t care about your beliefs.
Every day you make thousands of choices, including
what to think and feel. These choices are like the
words, paragraphs, and chapters of your unfolding
Story.
Poison-pens are Scripted beliefs that are responsible
for the poor outcomes in your life.
(in sie leie
SUNDAY, NOVEMBER 16TH, 2008 - 2:10 PM
(6 DAYS LATER)
Jeff boarded the train four more times that week. Each
day’s commute further deadened his soul. He didn’t read
the newspaper or people watch; he slept. On Friday’s
commute, he fell asleep and dreamt he was eighteen again
after high school graduation. It was the happiest summer of
Jeff’s life, before college, expectations, and responsibilities.
That summer, he played tenor saxophone in a jazz trio ata
local wine bar. The invite was for one weekend only, but
after playing to sticky crowds with big wine appetites, the
bar asked them to play all summer. Still, Jeff’s parents were
adamant that he attend college for business, or as Jeff’s dad
would say, “where the money is.” Despite having a talent for
music and storytelling, Jeff agreed. Seth, Jeff’s older
brother, passed on college when his drug habit stole the
opportunity. Jeff’s parents insisted their kids go to college
and “do better” than either of them. His father was a
framing carpenter nearing retirement, not because it was
time to quit, but because his aching back could no longer do
the work. His mom worked as a retail manager at Dillard’s,
code for overworked and underpaid. With an income at the
poverty line, Jeff’s parents had easy access to federal grants
and student loans. This shifted the costly burden of college
to Jeff, and then to Kaycee, his younger sister, who would
attend two years later. When the passenger next to him
nudged him in his ribs, Jeff woke up docked at Union
Station. After collecting himself back into reality, it was as if
he had blinked, and ten years had disappeared, just like his
hopes for a life worth living.
At home on Sunday afternoon, Jeff sat stooled at the
kitchen island and stared aimlessly at a_ television
commercial. After watching the Bears get slaughtered 37-3
by the Green Bay Packers, he felt the tension start to grind
its way up into his chest. His sporting distraction was over,
and only reality remained. He hated Sunday night as he felt
like a Scottish Jacobite waiting to be hung by a redcoat. At
least those Scotsmen had their agony end. For him, he felt a
perpetual noose around his neck: hung every Monday,
loosened Friday, retightened Sunday night, rinse, repeat.
He looked around and felt ashamed. First-world
problems, he thought. By all measures, he and his wife were
successful. They had a beautiful home, nice cars, a
refrigerator filled with food, and good-paying jobs. He even
had Bears tickets for their next home game.
But deep down, he knew the truth. His soul whispered in
moments of quiet reflection, during a hot shower or alone in
his car. If the last five years foretold the next fifty, he was
going to die a bitter, regretful old man. After three different
jobs since graduating college, it was clear his career might
as well been a job on an assembly line during the industrial
revolution. Except he didn’t assemble parts or pull levers,
he moved numbers and audited inventory manifests. Heck,
he didn’t even believe in the drugs his company
manufactured. He felt like an infantryman who would die on
the front line waging a war he didn’t believe in. There has
to be more to life than filing reports and waiting for a
weekend football game, he thought. And now he was about
to become a parent. He worried for his unborn child who, if
things didn’t change, would have a walking corpse for a
father. With his marriage taking on water, Jeff knew it was
time to confront his wife about his feelings.
His wife was heating a plate of beans and rice at the
microwave. She was in her “off day” pajamas, a shabby pink
flannel ensemble with smiling lambs for polka-dots. Jeff
thought his wife’s PJs were cute when he first saw them
years ago, but now it was homely and unappealing as an
unflushed toilet at O’Hare Airport. While normal wives liked
dogs and dolphins, his wife had a thing for lambs. They
were like her talisman, and she would adorn her world with
them, from necklaces to shirts to hairpins. The hundred or
so lambs screen-printed on her tattered PJs were so faded
that they now resembled dirty snowballs.
After some idle chat about hospital gossip, Jeff spoke
about his morning battle with his alarm. “Eleven damn
minutes!” Jeff shouted over the buzz of the microwave as he
sat on the kitchen stool. As Sam waited, Jeff continued, “I
sincerely would have sold my soul to stay in bed. Not sure
how much more I can take doing what I do, or this job.” The
microwave dinged off. He continued, “And riding that damn
train every morning into the city. Did you know that on
Friday I fell asleep and the guy next to me had to wake me
up?” He didn’t let Sam answer and picked up a pile of
envelopes stuffed in the kitchen’s organizer. He filed
through them and sneered, “Mortgage, electric bill, water
bill, car insurance, property taxes, it never fucking ends.
We’re like rats on a treadmill.”
Sam chuckled, “You’re having a mid-life crisis at 27?”
“T’m serious Sam. We should talk.”
She put her plate of beans down and wiped her hands on
a dishtowel. Her crystal blue eyes narrowed as she leaned
her tall and slender frame against the granite counter. “Uh
oh,” she remarked crossing her arms.
Not a good sign, Jeff thought.
She quipped, “Is this about Carolyn?” Jeff’s boss was a
dead-fish he likened to Nurse Ratched of accounting.
“Tt’s about everything. My job. My boss. Your job. Our
life. Becoming parents.” He paused and clenched his jaw.
“And our finances are a shitshow. We owe so much money,
and it’s never going away. We both hate our jobs, and I
never see you. And...” His voice trailed off.
Sam sat next to him now, eyes piqued and asked, “And?”
she asked, fidgeting her fingers on her arms. He hesitated
for a few seconds but couldn’t contain the feeling.
“And our marriage sucks,” he said bluntly.
Jeff’s candid assertiveness was double-edged. Sam
admired that he took charge and spoke his mind, but it
often got him in trouble. In third grade, an “unspoken social
mores” discussion went south when his civics teacher called
on Jeff for an example. He blurted, “Like how you look like
Ms. Piggy?” He was suspended for one day. Sam would
always tease him about having “no filter.”
When Sam heard that “sucks” was her husband’s
opinion of their marriage, she winced. But she feared to
admit that it did suck. And it haunted her thoughts when
life wasn’t offering a distraction.
Jeff carried on, “It’s almost Thanksgiving and we’ve had
sex twice this year. And you haven’t called me ‘RyRy’ in two
years.”
RyRy was the nickname Sam had given her husband in
college because he reminded her of Ryan Reynolds, except
with flowing locks of hair and four inches taller. RyRy was
an endearment that Sam would quip throughout their
dating history and early in their marriage. Whenever Sam
voiced his nickname, it was code for friskiness, the kind of
frisky that usually ended up with clothes on the floor.
Sam’s eyes teared as she silently held Jeff’s gaze. He
knew mentioning RyRy would stir her heart because it
represented a time when they were in love. Not that she
needed much help in the tears department. She was the
penultimate “easy crier.” Jeff once smashed a grasshopper
who insisted on chirping during his Cubs game. When the
guts splattered, Sam cried bloody murder for an hour.
After she wiped her tears and gathered herself, she
spoke plainly. “We had sex after Scott’s New Year’s party.”
Scott was Jeff’s coworker and sports buddy, a walking
encyclopedia of all stuff baseball. If you’d asked Scott about
the starting lineup for any random World Series Champion,
he’d tell you—right down to the year, game, and inning.
Jeff continued his interrogation. “And after that, you
know where?”
Sam glanced at her pregnancy bump but said nothing,
wiping another emerging tear with her sleeve. “Yes, exactly.
The Ritz Carlton, that little staycation we went on. It was
the last time we had any fun, and I’m not just talking about
getting naked.”
She sniffled and tried to compose herself, bitter that her
husband seemed to be more interested in naked time than
their marriage. She remarked sarcastically, “Tell you what,
let’s name the baby Ritz or Carlton. That way you won’t
forget such a rare sexual escapade.”
Jeff chewed on her words for a minute, then jested, “Well
it’s a good thing we didn’t stay at Motel 6.” His humor
always made Sam smile. They stared hard at each other as
if engaged in a mental tug of war. But her seriousness
drained away as Jeff tried to restrain a weak smile. When
he sensed the calm in the storm, he placed his hands on her
knees. He said, “Look, I understand we don’t see each other
a lot, so that’s partly to blame, but we’ve got to do better.
When the baby is born, things are going to get tougher. We
have to work on our marriage. Do you want your daughter
to have the kind of childhood you had?”
Born in a small town outside of Twin Falls, Idaho, Sam’s
childhood was a mystery she rarely discussed. But Jeff knew
it was bad. When he tried to crack that shell of Sam’s past,
which was often, she’d deny him of any details other than
that she claimed her parents were heartless religious nuts.
When Sam refused to go to her father’s funeral while they
were in college, Jeff just assumed his wife’s trauma was
child neglect. The mystery deepened when Sam’s newly
widowed mother didn’t show at their wedding. “Revenge
because I blew off my dead father,” is how Sam explained
her absence. Sam’s side of the wedding party featured no
family but three cousins and an aunt and uncle. About two
dozen of her sorority sisters filled the void and spared them
the awkwardness. Their marriage, which was consummated
three years ago in San Diego at the Coronado, was a blast
as the party lasted well past midnight. Unfortunately, with
no support from the bride’s family, to this day, part of the
$30,000 wedding tab still festers on their credit cards.
Sam tried to remain stoic after her husband mentioned
her childhood, but her nose twitched and her eyebrows
furrowed almost imperceptibly. Not allowing her to answer,
Jeff continued, “Neither one of us would have got married if
we knew this was how it was going to be.”
After another moment, Sam finally broke her silence and
conceded, “I know things aren’t good, but I don’t want it to
stress the pregnancy. I figured we could address it after the
baby is born.”
“T don’t see this conversation getting any easier after we
become parents,” Jeff said dimly. “We should address this
now.”
Sam sighed. “It’s hard to be happy when we rarely see
each other, and when we do, we’re both spent.” She paused
and rubbed her forehead. Continuing, she said, “After we
graduated, we took road trips on your Harley, we played
softball, we went to jazz clubs, and we had date night every
Saturday.” She paused, reflecting. Then, “You used to
serenade me with sultry sax before every date, remember?”
Jeff answered, “Yes, and then the student loans came
due. And then the mortgage, and then your overnight shift
began.” He huffed angrily and added, “And then we stopped
eating out when you went on your vegan diet.”
Sam sighed and shook her head in disgust. She
corrected, “Again, Jeff, for the nth time, it’s not a diet; it’s a
lifestyle.” She twisted in her chair and looked away from
him, her voice dry. “You knew I was vegetarian when I met
you and before you married me. I don’t want to hear it.”
Jeff snapped, “But now you’re vegan, not vegetarian!”
He loved his pizza, the meat-lovers special at Lou Malnati’s
specifically. When Sam graduated from vegetarian to vegan,
their regular pizza visits ended. Ever since, Jeff had
grudged her decision even though he was free to eat
whatever he wanted.
Sam ignored his factual retort.
Tartly, she stated, “Well, food is a lot cheaper without us
going to the steakhouse every week, isn’t it?” She didn’t let
him answer. “We should start being mindful about money
moving forward if we’re going to be responsible parents.”
She glared, her wide-set eyes narrowing. “And I don’t want
to work in a hospital for the rest of my life.”
Jeff crossed his arms. “And what about college for the
baby? How much do you think that’s gonna cost in eighteen
years?” He huffed hard. “Our lives seem to be nothing more
than an insufferable amount of work that will never end.”
Sam feigned a half-smile, but Jeff knew how to read her.
Whenever she sucked in her cheeks as if she was smoking a
cigar, it was a concession that Jeff was right. She said flatly,
“This is our life and we need to make the most of it. Be
happy, in a few months we'll have a daughter, and
everything will change.”
“Actually, it won’t.” He snuffed. “It will just be more of
the same: more work, more bills, and more stress.”
She placed her palm on his wrist and nodded at her
belly.
“Someday, after your daughter is born, we can take
some chances.” She paused and raised her head to think.
“Tell you what, why don’t we go to Vegas at the end of the
month? One last hurrah before we clamp down. We can go
for a weekend to relax and recharge.” She winked and
threw him a coy smile. “We can grab you a meaty pizza and
I’ll even let you place a few bets on the Bears game.”
“You will let me?” Disbelief filled his voice. “Since when
do I need permission to manage our money?”
She crooked an eyebrow and looked at him pointedly.
She motioned to her belly again.
Jeff understood and tried to think about Las Vegas. He
needed an exciting weekend. Gambling, fine dining, betting
on NFL games... his brain instinctively lapped up the idea
and issued a comforting smile to his face.
His wife smiled back and stood up, walking away.
“Great,” she said. “I’ll book it next week.”
Jeff remained in his seat quietly, but his stomach groaned
in pain. Not because he was hungry, nor because his wife
had an authoritarian streak likened to Stalin, but because
he knew he was pliant to the bribe. Little did he know a new
type of pain awaited in the new year.
Cle Mela ©
Wale OOMPOR TEI ie Tes\N
PI UINES | Le
MEDIOCRE COMFORT IS A SILENT DISEASE THAT POISONS DREAMS
| n my early twenties, I bought a sports car I couldn’t
afford: a black Mitsubishi 3000GT. At the time, I had a
job that paid more than I had ever earned before. I was so
proud of myself, not realizing I was being a dumbass.
Instead of saving my paycheck or investing it in my business
ideas, I spent it on a car which incidentally, I parked on my
Mom’s driveway. I wanted to fake outer success while my
inner battle was one blizzard away from suicide. The
gambit failed miserably. The car sacked me with debt and
hindered my choices, but worse, it made me comfortable in
my pain. The illusion of fake success marred my motivation
to work for real success.
The Comfortable Pain Principle: Give a man a tolerable
job that pays just enough to provide mediocre comfort and
I’ll show you a man who won’t change a damn thing. New
words might appear in his head, but those words won’t
write a new story.°? Make no mistake: if you’re moderately
comfortable in your pain, you’re feeding the beast that is
mediocrity. And that beast slowly suffocates your dream.
Your willingness to turn off the TV, switch jobs, take risks, or
do whatever is necessary dissipates. When dreams can be
faked in a six-minute event, or in my case, however long it
took to sign the auto loan, my desire to actually work for the
real thing evaporated.
Mediocre comfort, just enough to lull you _ into
complacency, is designed to cement you into the same rut
week after week, year after year. The regular paycheck and
its buying bribes: the college basketball games, the four
days in Las Vegas, and the bet on the Chicago Bears—all of
it keeps you at the desk with the same pen, the same words,
and the same plot. In the end, time passes, but the story
remains the same.
This scheme, orchestrated nearly a century ago, is how
our slavery is sealed, and our dream bribed. In 1926, in an
interview published by the World’s Work magazine,
industrial titan Henry Ford admitted why he reduced his
workers’ labor load from six days and forty-eight hours to
five days and forty hours, all while keeping pay the same.
He said:
It is the influence of leisure on consumption which makes the [five-
day] workweek so necessary. The people who consume the bulk of
goods are the people who make them. That is a fact we must never
forget, that is the secret of our prosperity.
He continued:
The people with a 5-day week will consume more goods than the
people with a 6-day week. People who have more leisure must have
more clothes. They must have a greater variety of food. They must
have more transportation facilities. They naturally must have more
service of various kinds. This increased consumption will require
greater production than we now have. Instead of business being
slowed up because the people are ‘off work’, it will be speeded up...
This will lead to more work. And this to more profits.
A six-day workweek makes our slavery (and _ its
discomfort) too obvious, so we’re gifted an extra day of
comfort and consumption to engorge our complacency.
Truth is, the modern five-day forty-hour workweek is a
scheme that would make the devil smile. Shrouded in
busyness, the presumptive work week keeps’ you
moderately sheltered, diabetically fed, and addictively
entertained—just enough to keep you obediently passive
and ignorant to this system. And as long as we’re
comfortable in our busyness, our weekend bribe (and its
distraction) continues while change becomes nothing more
than a dead dream and an empty political slogan. Suddenly
Instagram likes from strangers are more important than
the only like that matters... a like from you.
Another fact: Most people will never escape mediocrity
and its economic cult unless it triggers an FTE or a “fuck
this event.” A “fuck this event” is a traumatic incident that
takes you over the edge. It is the ultimate disrupter of
comfort, a pejorative “punch the wall” episode usually
accompanied by such phrases as: “F-this!” or “I can’t live
like this anymore!”
My FTE slapped me upside the head when I silently
endured a blizzard on the side of the road. Your FTE could
come from an airport bench, your new plastic bed for the
evening, as you’re stranded by weather thousands of miles
from home, a revelation that once again, your child lacks a
father and your wife lacks a husband. Other times, your
FTE is shared by many like a worldwide pandemic that
causes you to lose your job, your savings, and your sanity. If
mediocrity feeds on comfort through a feeding tube, the
FTE rips it out. It sears your brain with a new reality: the
pain of the status quo (and comfort’s diminishing medicinal
effect) finally exceeds the anticipated pain of its escape.
Congratulations, the first step in escaping a soul-suffocating
religion is to realize you’re in one.
KEY CONCEPTS
e A person who lives in moderate comfort will rarely
find the motivation to fight the status quo.
¢ Comfort fuels mediocrity and a life mired in
mundanity.
¢ The modern five-day work week is a Scripted tool for
obedience and complacency.
e A “fuck this event” (FTE) is a traumatic event where
the pain of the status quo is perceived to be worse
than the pain of escaping it.
CHAPTER 4
ale SOMr Bey? iswiNiC lie =
REGARD SOMEDAY AS A LIAR WHO REALLY MEANS NEVER
A ew months ago, I attended a funeral for a family
member who by most measures died too young. If you
ever want some urgent life perspective, spend some time in
a cemetery. As I walked around the cemetery examining the
headstones of the dead, many of whom also died young, I
was struck with an incredible sense of regret. Not for
myself, but for the lost souls who didn’t live the life they
dreamed. Dreams which most likely died in the world of
someday—someday I'll do this, someday I’ll do that,
someday after the pregnancy, someday when the debts are
gone... someday.
And yet, someday never came.
Someday needs to be removed from your vocabulary. It
is a distant sunrise in the theater of your mind, an excuse
for inaction, a mental bribe to dismiss today for an unknown
future that never arrives. The problem with someday is it’s
a liar. Like a mathematical fractal, someday is a reiterative
and recursive function that continues infinitely. When one
precondition is resolved, another appears. And as old
preconditions are met, new ones arrive and someday
remains.
e “I’m waiting for the new year...”
e “I’m waiting to finish school...”
e “I’m waiting for my wife to get a job...”
e “I’m waiting for a better job...”
e “I’m waiting for a promotion...”
e “I’m waiting for my kids to be older...”
e “I’m waiting for the pandemic to be over...”
e “I’m waiting for a new President to be in Office...
e “I’m waiting for the economy to get better...”
e “I’m waiting until I fix the hot-water heater...”
e “I’m waiting until my vacation...”
e “I’m waiting to retire...”
The common thread is always the same ... “I’m waiting.”
Someday is a bribe to pacify your soul into believing a
future possibility. And it’s a big fat lie that’s birthed in
Latersville that dies in Neversville. Stop trusting “someday”
because your tomorrow knows it’s a liar.
The Someday Principle regards someday as never. The
timing will never be perfect. Someday must come today.
Now. Seven “todays” is a week and 365 make a year. Fail to
transform someday into today, and expect a new excuse:
“well, I’m just too old to start.” The next thing you know,
there’s a funeral. And you end up dead in a cemetery, your
dreams buried with you.
KEY CONCEPTS
e Someday is a lie, code for never.
e Someday is an excuse for inaction, a mental bribe to
dismiss today for a tomorrow that never comes.
e Someday is like betting on a fractal to end.
e Someday must become today.
allen ON) seo
SUNDAY, SEPTEMBER 26TH, 2010 - 5:31 PM
(Two YEARS LATER)
Samantha would never book that trip to Las Vegas.
Just days after Jeff spoke to his wife about their marriage
and their lives, the stock market crashed. Then a few weeks
later, the market crashed again. Neither had investments,
but by the time the smoke cleared, Jeff had lost his job.
With no emergency savings and Sam’s paycheck their
only income, they triaged their bills. First, they defaulted on
their cars. When it was over, the 3-Series Beemer and the
Navigator were replaced by a Civic and a Corolla. Worse,
the Corolla was a stinking cigarette beater owned by Seth,
Jeff’s older brother, who loved Newport 100s more than life
itself. Not that Seth didn’t drive, but he was doing ten
months in Cook County jail for armed robbery after trying
to steal ten cartons of said cigarettes from a 7-Eleven. Don’t
ask.
Of course, while the markets were free-falling, the
financial pundits pleaded “Don’t panic!” and “Don’t sell at
the bottom!” but for Jeff and his wife, they had no choice.
Sam had a recession-proof job as a nurse, but she was also
pregnant. After giving birth to their daughter Madison, Sam
used all her maternity leave as well as her vacation days.
Because the recession lasted nearly two years, her job
alone wasn’t enough to keep the creditors away.
To survive Jeff’s unemployment and the recession’s
masterful haircut of housing prices, they dug into what little
they saved in their 401(k)s. When the recovery slunk in, it
was too late. They would lose their home to foreclosure. The
401(k)s—gone. All signs of affluence—gone.
Forced to downsize, they rented a _ two-bedroom
townhome in Palatine, which Jeff considered sacrilege.
Their landlord was Dave Bliss, Sam’s old college boyfriend.
Jeff insisted Dave still had eyes for his leggy wife who, after
a MAC Makeup hour, could stunt for Cameron Diaz. And
because Bella was built like a horse (and ate like one), they
struggled to find a rental that would allow large dogs. In
Sam’s words, “Dave owed me a courtesy.”
When Jeff questioned the details of Dave’s mysterious
“courtesy,” a crossfire erupted. After a few minutes, Sam
finally waved off Jeff’s insecurities. Nonplussed, she said,
“I’m sorry, Jeff, but I told him we had a foreclosure. I told
him you lost your job. I told him no one will rent to us
because of our Bella. I told him our sob story, and he was
sympathetic. And because we'’re still cordial on Facebook,
he did me a favor.”
Jeff deadpanned, “Well, I hope that’s the only thing he
did.”
To make matters worse, their two-story townhouse was,
in Jeff’s words, “a shit-hole,” a big downgrade from the
house they’d just lost. The main living area was on the
second floor and only accessible by a long narrow staircase
abutted with a downstairs garage. The floors were a grimy
mustard linoleum and the kitchen cabinetry was a flaky
matte white made of pressed board, the kind you’d find ina
mid-century asylum. Worse, the townhouse overlooked
Northwest Highway, one of the busier roads in Palatine.
Quiet was scarce, swallowed by emergency sirens, growling
traffic, and Harleys with dual pipes. Still, Sam didn’t
complain. Her childhood home in Twin Falls was a double-
wide trailer on sixty acres that looked more like a junkyard
than a farm. For her, a fourteen-hundred square foot
townhome was still an upgrade. As long as she had a gas
stove to feed her culinary hobbies, she was good.
Now parents of a two-year-old daughter, Jeff, 29, and his
wife, 28, found themselves in a position worse than before.
The recession quickly stifled the marital conversation they’d
had before the birth of their daughter. Instead of trying to
improve their marriage, they were now working to survive
it. The recession ushered in a “new normal” of mundanity,
but it also cracked their egg of ignorance; their daughter’s
birth fried it. They had another human to care for, feed,
nurture, and educate. When their daughter turned 18,
college tuition would be in the six-figure realm. Life couldn’t
remain business as usual. Something had to change.
Once they settled into their “shit-hole” townhouse, they
agreed to seek guidance.
Jeff tuned into CNBC frequently and listened to a variety
of financial experts. They all parroted the same talking
points, despite reports of many investors losing their life
savings. And their jobs. The central theme seemed to be a
combination of disciplined saving, frugal living, and
patience. As Jeff sat and watched another financial sermon
from his bed, his blood pressure rose, and his head
throbbed. The last straw was when a Wall Street money
manager, who just happened to manage $600 million in
assets, pleaded for everyone to “invest more,” followed by
“be patient.” He flipped the TV off and slammed the remote
control against the nightstand. He turned angrily to his
wife, whose back was to him while she rifled through the
dresser.
“These fuckers. It’s easy to sell patience from a yacht
when those buying it are the ones stuck on the Titanic.”
Sam glanced up and looked at him in the mirrored
reflection. “We can talk about it after dinner,” she said,
shoving the drawer closed.
After Jeff washed the dishes and Sam put Madison to
sleep, they met at the kitchen table. Sam sighed and gazed
at the ceiling, eyeballing a small spider web dangling from
the corner. Or maybe it was dust. She wondered if there
was a spider to catch and toss outside as Jeff didn’t share
her benevolence for saving anything that crawled. With
Jeff’s new job starting tomorrow, it was time he stopped
playing Mr. Mom. The status quo for the last two years was
a treading-water story. She supported the family, and credit
cards bridged the gap. Meanwhile, Jeff changed diapers
and pushed resumes anywhere they could be pushed. They
both knew the recession had exposed them, and they
wanted a new plan with a new direction. It was time to
make some decisions.
After an uncomfortable silence, Sam opened. “Going
forward,” she said, flicking a pencil, “we’ve got to save
every penny.” She nodded to her husband’s old iPhone. “No
more upgrading things we don’t really need. No more
eating out. We won’t buy a new car until we need to. HBO
and your MLB Season Pass, sorry, that will have to go too.”
Neutered by a stretch of financial struggles and a wife who
had carried the load since shit hit the fan, he protested
weakly. “Wait a sec, you were actually listening to those
CNBC fools? Is that where this is coming from?”
Sam replied, “Partly. I’ve been listening to a radio show
on the way to work, this guy named Dave. He says we need
to have an emergency fund. And if we pay off all our debts
and start saving at least a hundred dollars a month, he says
we'll have millions by the time we're sixty-five. Millions!”
Jeff barked, his eyes pried wide, “Sixty-five? I’m
struggling to get to thirty!”
Sam rambled on. “So, after listening to a few shows, I
read his website. And then I found other websites that said
similar things.” She paused and looked at Jeff pointedly.
“Did you know if you stopped going to Starbucks and we
saved that money, we’d have thousands of dollars in forty
years? And all that money you waste going to Cubs games,
how much will that be worth years from now?”
Jeff gestured to Bella, sleeping near their feet. Snippy, he
exclaimed, “How wonderful, Samantha, why don’t we just
dump Bella off at the pound? You know how much money
we can save on dog food?” His face tensed as he bit his lips,
giving his wife a hard stare. Whenever Jeff called her
“Samantha,” she knew he wanted her attention.
She dismissed him and continued. “Anyway, here’s how it
works. We’re going to pay off all our debts and save
everything we can. Then we invest it. Something called an
indexed fund. Starting now, Jeff”—she lifted a finger in the
air—“every dime must be accounted for.” She paused and
flicked him on the wrist with the same finger. “Accounting,
Jeff, you’re the numbers guy!” She smiled pleadingly. “We
can do this!” Bella looked up from her nap, hoping Sam’s
exuberance signaled a forthcoming cookie.
Jeff sized her up. “Says who? Do I have any say in this?
Why are you suddenly going Feminazi on me and dictating
our finances? I like my pizza and my Cubs game.” Then he
yelled. “And my coffee!” He flashed her a look of contempt.
Whoops.
Sam took a deliberate slow-motion sip of her coffee—
time for Plan B.
“Jeff,” she stated measuredly, “we tried it your way for
the first five years of our marriage. What did that get us? A
pile of debt, I’m stuck doing graveyard at the hospital, and
you lose your damn job. I’ve supported us for the last two
years, SO now we’re going to do it my way. We haven’t even
paid off our wedding yet!”
Jeff’s voice now boomed. “You wanted that wedding!” He
mimicked the memory of his wife’s plea in singsong, “Oh
Jeff wouldn’t it be great if we can get married at
Coronado? And then it just blew up into some big party you
could throw with your sorority sisters.” He shook his head,
disgusted.
Sam nervously repositioned herself in the chair and
lowered her voice, trying to appear reasonable. “Look,
we’re both culpable for our situation. I admit that. When
you gave me my Louis Vuitton purse for my birthday, I loved
you for it and didn’t complain. When you surprised me with
a big SUV, I didn’t object. I was good with it because you
knew I was tired of rolling around in junk cars my whole
life.”
“Oh?” Jeff says, surprised, “The Grand Am or the
Accord?”
“Both,” she paused. “If we’re going to provide for our
family”—she gestured to the closed bedroom door—“which
is now three people, we have to start being smart about the
future, from our retirement to Madison’s college. This is
how everyone Says it’s done.”
Jeff clenched his jaw. “Everyone?” He scoffed hard and
slammed his hand on the table. “What the fuck do they
know? Everyone is in the same shitty situation.”
Clave els: Ss
ithe be@NOMIG RELIGION
Pl UINES be
THE RAT RACE IS THE WORLD’S ECONOMIC RELIGION, AND CULTURE IS
ITS CHURCH
U
. - ‘ 7
~ e-
| n 2020, a viral video surfaced of a young man receiving
his first paycheck. As he tore open the envelope, his
wide-eyed smile and joyful gaiety were immediately
replaced by a frown. He’d expected the entirety of his
earnings and was utterly disappointed when he discovered
taxes took a big chunk of it. In his angry words, “They
finessed me!”
Like this youngster, you too were “finessed” to partake in
this insanity, the world’s economic religion, or what’s
commonly called the rat race. And the Script is its gospel,
and media and culture are its church. Behold the Economic
Religion Principle: the rat race is a life theology where your
participation is conscripted, and then expected. At birth,
you inherited this religion from your parents. With your first
breath, you were immediately stamped with a barcode, a
Social Security number. From then on, it is presumed that
you will willfully partake in the rat race paradigm as one of
two players:
1. the shopping-rat, someone who is promised
happiness, respect, and fulfillment as a function of
conspicuous consumption, i.e., Neiman Marcus over
Walmart, Mercedes over Honda.
2. the savings-rat, someone who believes that saving a
hundred bucks a month from her job while penny-
pinching will make her rich, provided she patiently
invests it in a Wall Street-sponsored indexed-fund for
many decades.
The shopping-rat enjoys his cheese every weekend. He
scurries around the rat race seeking to improve his cheese,
and as fast as possible. Meanwhile, the Wall Street savings-
rat minimizes his cheese consumption. He doesn’t spend his
money on rat race bread-and-circuses, no, he invests his
money in corporations who provide the bread-and-circuses.
It’s completely diabolical! No matter which role you play,
you’re groomed for one purpose: Free-range economic
slavery.
Unbeknownst to most, we’re wards of the state. Yes,
property. Collateralized by our labor, debt, and
consumption, we’re owned by our respective country. While
this fact sounds like a radical conspiracy theory, it isn’t. Try
leaving your Fatherland without a visa or a passport. Try
buying food or gas without paying the sales tax. Don’t
renew your driver’s license, or worse, stop paying your
property taxes and see what you really own. You are
biological chattel securitized by a lifetime of taxation. Free?
Ha, no, barcoded and enslaved.
In return for our compliance, culture has made rotten
cheese seem palatable. If you play the game as a shopping-
rat, your cheese is Friday night, Saturday, and a dreadful
Sunday that fears Monday. If you’re a savings-rat, your
rotten cheese is an elderly retirement promised decades
later. Regardless of the role played, your indoctrination
began young. Consecrated by our parents who are devout
believers, we’re told to follow the rules and listen to
authority. Advancement of the agreement is then reinforced
by an inescapable, omnipotent church. From education, to
media, entertainment, and government, the dogma is the
same: Success comes from a good education at a good
college, followed by a good job and a good house in a good
neighborhood, eclipsing with a good investment portfolio
grown over a good 40 years. Despite all those “goods,”
nowhere in this implied social contract is freedom and
soulful happiness. Of course, none of this happens with your
knowledge, much less your consent. The best way to keep
slaves obedient is to make sure they don’t know they’re
slaves.
As with all religious dogma, deviation has consequences.
Just ask any teenager who forgoes college and wants to
learn how to install HVAC systems, fix cars, or unclog
toilets. Ask any college graduate who doesn’t interview for
a job and instead starts a business. Altogether, this cultural
superstructure is the most potent deception ever foisted on
humanity: an economic cult known as the rat race.
Here is the script behind the Script, the gospel that
powers the scheme:
. [S]JCHOOLING
. [CIONSUMERISM
. [RIESPON SIBILITY
. LI]GNORANCE
. [PIROMISES
. [TIAXATION
OorPWN FE
SCHOOLING
It’s no mistake that you are schooled Monday through
Friday for eighteen years just so you can work Monday
through Friday for the next fifty. All levels of education,
from elementary to university, normalize you into the
Monday-through-Friday work scheme. Formal schooling
tells us that intelligence is correlated to rote memory and
repetition, and that such behavior is rewardable. School
tells us that truth comes from authority. School teaches us
how to be an obedient rat in the system, a good employee in
the hive-minded, media-fed citizenry. With critical thinking
abandoned, we’ve become smart enough to do the work,
but not smart enough to question those who tell us how to
work.
For example, every so often, I get stuck listening to
financial talk radio. On one particular show, a caller
complained that he and his wife owned nearly one million
dollars in college loans and credit card debt. And yet, both
of them had advanced degrees that cost them nearly
$300,000. So, over a quarter of a million dollars spent in
“schooling” and they’re about as advanced in managing
money as a chimpanzee. Score two more rats for the Script.
CONSUMERISM
As a child, we’re taught to associate happiness with toys—
dolls, Lego sets, Tonka trucks. As a teen, this association
grows, as do the prices: XBOXs, electric guitars, bicycles.
By the time we hit adulthood, this association continues,
except now the toys require financing: entertainment
systems, cars, boats, houses. As they say, insanity is
financing a house for thirty years so you can enjoy it only on
the weekend because you’re too busy paying for it. While
your home might be lovely, its three-decade mortgage isn’t
just a lien on the property; it’s a lien on your labor, not to
mention the lifetime lien from the state, commonly known
as a property tax.
RESPONSIBILITY (AND SURVIVAL)
The more responsibility undertaken, mortgages, student
loans, car payments, children, the stronger the Script’s grip
becomes. Existence, such as food, housing, healthcare, baby
shoes, is damn expensive. Deviously, the Script snags you
young. With six-figures in student loans and a crappy job
that can’t move the needle, what better way to imprison
yourself? The yoke of responsibility is the Script’s MVP
because it forces labor and consumption. In America, a
college degree can cost six figures or more. The cost of
raising a child can eclipse a quarter-million dollars.
Weddings now can cost an upwards of $50,000. Worse, you
can’t get sick. Your health insurance is about as useful as a
chain-link fence is at stopping mosquitos. Oh, the joy of
paying $700 for an ibuprofen pill just because the hospital
dispensed it. Few escape this cruel joke and its avalanche of
debt. It strips you of choice, putting a Scripted pen*? in
charge. The work/pay bills/die scheme is now operative.
You’re forced into labor, or you live in a trailer, or in today’s
culture, you live with your parents.
IGNORANCE
Ever wonder why no school or university taught you how to
win your freedom? How to get rich? How to build a legacy
while tapping into happiness and soulful fulfillment? How to
think outside the box created by our thought-policers? Ever
notice most information on wealth involves jobs, saving, and
stock market patience? Why is the only version of financial
freedom sanctioned by the Script the “save and invest”
narrative? Ignorance is a Scripted goal. Authority pushes it,
and consensus Seals the deal.
In 1961, the Milgram Experiment revealed a troubling
truth. When given orders by an authority figure, the
average person will follow them. Without question. Even
when those orders are harmful, even fatal, to innocent
participants. Obedience to authority starts with our parents
and is enforced during schooling. As long as the authority is
recognized as legal and legitimate, people will obey. And
there is no shortage of Scripted apostles preaching the
gospel of the rat race: Yahoo Finance, Marketwatch, CNBC,
Forbes, Reddit, and a multitude of rat race approved books
from best-selling authors. When the crowd says, “this is
how it’s done,” then it must be the truth. Omission of the
truth by authority leads to consensus.
PROMISES
The Script survives on lofty (and often distant) promises.
The promise that the six-figure degree you just earned will
score you the job of your choosing. The promise of lofty
stock market returns, a vibrant economy, low inflation, and
a growing job market. The promise that if you buy this car
or that tech gadget, you'll be happy. And the dazzling
promise that tops them all: invest all your savings with Wall
Street (funding companies that support the Script) for
thirty, forty, or fifty years, and then one distant day, you'll
retire rich and win your freedom. Meanwhile, the central
bank just printed another $3 trillion in fiat money, your
alma mater just signed a new football coach for $20 million,
and that hedge-fund billionaire wrote another book on how
indexed-funds are the greatest invention since electricity.
TAXATION
The rat race’s primary purpose: Taxation and _ the
confiscation of your labor, your risks, and your
consumption. When you get your paycheck, you’re taxed
(payroll tax). When you buy food and life’s necessities,
you’re taxed (sales tax). When you take investment risks
that pay off, you’re taxed (capital gains tax) but get no
benefit when they don’t. When you buy a home, you’re
taxed indefinitely (property tax). When the Federal Reserve
prints more funny money, you’re taxed (inflation). And
finally, death—up to half of whatever pittance remains after
all these insane taxes—is taxed again (inheritance tax). If
confiscating 100 percent of your economic output makes
Slavery, at what point does it stop being slavery? 80
percent? 50 percent? 39.6 percent? No matter the number,
we’ve become human collateral to keep the sovereign debt
printers churning.
Once the Script snags you into its web and the walls of
the rat race grow taller, mediocre comforts? bribe you with
its Pavlovian rewards: an addictive HBO series, a sporting
event, a financed Audi that impresses the impressionable.
Life slowly deteriorates from our childhood objective,
happiness maximization, to nearly every adult’s reality,
misery minimization. Truth: your lifetime role has been
Scripted for an uninspiring, tax-paying performance
compliments of a Machiavellian system engineered for debt
and dependence, not dreams. Niccold Machiavelli would be
impressed. Once you understand the religion and _ its
priestly operatives, you can plot an escape.
KEY CONCEPTS
Regard the rat race like an economic religion, a cult
of unwitting participants.
You participate in the rat race in one of two roles: a
shopping-rat or a savings-rat.
A shopping-rat is a slave to consumption (of goods
and media), a savings-rat is a slave to his savings and
portfolio.
When a shopping-rat questions the rat race, culture
promotes the other rat race role, a savings-rat.
The Script, or rat race dogma, has six components:
[S]chooling [C]onsumption, [R]esponsibility
[I]gnorance [P]Jromises, and [T]axation.
lal el
Wile iON mor PRINCE) =
THE RAT RACE IS THE WORLD’S ECONOMIC RELIGION, AND CULTURE IS
ITS CHURCH
U
. - ‘ 7
~ e-
W hen driving into my neighborhood, there’s a sign you
wouldn’t expect to see in a subdivision filled with
seven-figures homes. It reads, Warning: Bait Cars May Be
Present. If you’re not familiar with computer terminology, a
honeypot is a security measure designed to deflect and
counteract unauthorized access to computer systems. The
police also deploy honeypots in the form of sting operations,
or in my case, parking bait cars in areas where thieves may
troll for opportunity. In effect, the Honeypot Principle is a
scheme that tempts divergent behavior—but it still is part
of the system.
The rat race is equally clever and has its own honeypot.
Its default orthodoxy is consumption: unconstrained
materialism with the illusion that such consumption will
make you hotter, healthier, and happier. Work, buy, pay
taxes, repeat. But if you’re smart enough to expose that
scam and attempt divergent behavior, the Script ushers you
into its fail-safe honeypot—becoming a fanatical savings-rat
who will invest every dime into the stock market.
Open any best-selling finance book, a financial website,
or a money magazine. Honeypot dogma is everywhere.
e If you save 10% of your paycheck every month and
invest it into the stock market, it will be worth
millions in fifty years! You can retire rich!
e If you stop drinking Starbucks and invest your
savings in an indexed-fund, you'll have six figures by
the time your 65!
Behind the honeypot scheme is another rat race
conspirator: compound interest, or what I call the Slowlane.
The Slowlane is the financial plan of optimizing mediocrity,
a stale creed that if you live poorly today, depriving yourself
of daily lattes, new cars, nice restaurants, and regular
vacations, you can live richly later. Then, such magical
futures are backed by magical charts, which undoubtedly
show your financial empire magically ascending into the
stratosphere after four or five magical decades. Great in
theory, not so much in application. Fact is, the capital
markets were never designed to make you rich. According
to Investopedia, a capital market is “a medium to channel
savings and investment between suppliers of capital such as
retail and institutional investors, and users of capital, like
businesses, government and individuals.” The definition
says nothing about getting rich as the financial zealots
promise.
Simply put, compound interest is a dormant
mathematical calculation with little to no impact on small
numbers. The only thing that weaponizes compound
interest is a large number. And people stuck in the rat race
have no access to large numbers. Consider the following
chart which shows the compound-interest payday for
various lump sums at a five percent yield.
5% INTEREST MONTHLY INCOME
$500 $2.08
$5,000 $20.83
$50,000 $208.33
$500,000 $2,083.33
$5,000,000 $20,833.33
Five percent interest on $5 million dollars is a decent
chunk of change. Problem is, most rat racers will never get
there, and those who do, will need forty, or fifty years.
You’re not going to escape the rat race turning nickels into
dimes while waiting for a geriatric ward—for compound
interest to truly invoke its power, you'll need millions, and
you'll need it fast.
To make matters worse, pushing the Slowlane honeypot
as a career is terribly lucrative. For example, I once came
across a video from Forbes, a magazine featuring
entrepreneurs and self-made business hotshots. This video,
aptly titled “How to Get Rich,” pushed the “save for fifty
years” narrative. After watching the video, I could only
chuckle at the unspoken hypocrisy that escapes critique. So
I did a little research into Forbes cover models. You know
how many Forbes millionaires and billionaires actually
followed this advice as recommended in the video?
None.
Subtract the entrepreneurs, the inheritors, the sports
and entertainment titans, the corporate insiders, and those
that serve the financial industry over investing in it, and
you'll find exactly what I found: the stock market isn’t
making investors wealthy. Jt makes its sycophants wealthy.
As expected, not one Forbes cover model got rich from the
Slowlane honeypot. But a massive basket of them got rich
pushing the advice.
Champagne hypocrites preach rat race constructs (jobs,
stocks, frugality, patience) while they get rich with
leveraged entrepreneurship (book _ sales, money
management fees, seminars, financial products). For some
reason, I don’t think that money guru who lives in Fiji and
has houses spread around the world is depriving himself of
coffee, nice restaurants, and Swedish massages. In other
words, stop drinking $5 coffee so we can buy our $5000
champagne. Beware of champagne hypocrites—
propagandists who get rich selling you a “get rich” strategy
that didn’t make them rich. Sounds like a mouthful, but if
what your money guru sel/s and what your money guru
does are two different things, you need a new guru.
Unfortunately, the consumption and compound interest
doctrines are symbiotic to the rat race regime, two sides of
the same rigged coin. It’s infallibly devious. Two doors,
same slaughterhouse. No matter which side you play, you’re
being conned. Instead of consuming and shopping for
happiness, you’re saving and waiting for freedom. Adding to
the irony, all your excess labor (savings) is invested into the
stock market to help grow the companies facilitating the
consumption paradigm.
While compound interest is a powerful mathematical
truth (I do have a finance degree), in the context of
economic realities it’s the Script’s biggest lie. Not because
the math doesn’t work (it does) but because its application
is never put into a realistic context. In effect, compound
interest is the financial world’s version of the Drake
Equation; it’s dependent on variable savings rates, variable
jobs, variable returns, variable market instruments,
variable inflation, variable political and economic climates,
and finally, a variable life expectancy.
True, compound interest via market investments might
build a portfolio over the decades. But compound interest’s
evil twin—inflation—is also gnawing away at your real
purchasing power. If you start saving at twenty-five in year
2021 and end with millions by your sixty-fifth birthday (year
2061) your millions won’t be worth what it is today. A
million today gets you a decent house. A million in 2061
might only snag a decent car.
Second, compound interest assumes a lot of “constants.”
Constant employment, constant health, constant saving,
constant economic booms, and constant controlled inflation.
With all those stars in an unlikely alignment, you’re better
off rolling dice in Las Vegas. Reality kills dreams. And it kills
compound interest calculations on that stupid index card.
Empirically, ask yourself this. If compound interest was
so effective, where are all the sixty-five-year-old multi-
millionaires? Why aren’t at least half of the retired, rich?
Are your grandparents multimillionaires?
According to a 2018 study by Northwestern Mutual, a
third of Baby Boomers in retirement, or approaching it,
have less than $25,000 saved, or worse, nothing. It begs the
question: If 33 percent can barely scrape up and invest
25Gs, how much do the other 66 percent have? According
to 2019 data from the Federal Reserve’s Survey of
Consumer Finances, a retiree in the 65-74 age range has a
retirement account of a paltry $164,000. Where are all
those millionaires? This data unmasks the scientist. Multi-
millionaire survivors of compound interest and its ridiculous
demands on savings and frugality are probably less than
one percent—and that one percent gets the front page of
Yahoo Finance and Marketwatch.
The truth is, Wall Street won’t make you rich—unless
you work on Wall Street. Market operators are the
scientists, and they’re not in the business of funding your
posh retirement. They’re in the business of funding their
posh Hampton estates, their yachts, and their Italian villas.
Metaphorically, if the world’s economic religion had a
heaven, compound interest would be the sacrament. Its
preacher—the financial industry (and their media
benefactors)—collects the tithes.
So when that radio host who is on 500 radio stations and
lives in a mega ten-million-dollar mansion encourages you
to scream on the phone because you haven’t dined at a
restaurant for three years, all in the name of being debt
free, ask yourself this: Is this person financially free
because that’s precisely what they did? Or is he wealthy
from selling books and preferred provider endorsements on
a nationally syndicated radio/TV show?
In the same way a prison doesn’t give their inmates
instructions on how to escape, don’t expect the rat race to
advertise its escape. A financial guru likely lives a
spectacular life not because of their advice, but because
they’ve sold it to enough fools who believe the lie. Don’t
consent to be imprisoned for the first sixty-five years of your
life so you can enjoy the last ten. Hope, patience, and
deprivation are not a financial plan. It’s bondage.
KEY CONCEPTS
Compound interest, or the Slowlane, is the idea that
one dollar saved today will be worth millions in the
distant future.
The spending- and savings-rat are symbiotic, two
sides to the same rigged coin.
Inflation, time, and many lofty assumptions neuters
compound interest.
Data supports that compound interest, when applied
in real life with real life circumstances, is grossly
ineffective.
The stock market isn’t making investors wealthy; it
makes its sycophants wealthy.
Via mass marketing, champagne hypocrites get rich
selling a “get rich” strategy that didn’t make them
rich.
In the same way a prison doesn’t give its inmates
directions for escape, the rat race doesn’t either.
Bee el ehe7\ WirlOU Sy SIND! Peni Nes.
SATURDAY, SEPTEMBER 26TH, 2015 - 2:00 PM
(5 YEARS LATER)
Jeff peered out the second-floor window, his back to the
kitchen table while his wife sat next to him. The sky was
mostly overcast. One sunbeam tried to escape, but the gray
cumulous quickly swallowed it. He glimpsed down to the
backyard and watched his daughter Madison, now seven,
playing fetch with Bella. He sipped his whiskey, his second
of the day. It burned his throat, but he didn’t care. Alcohol
was his truth serum, and it pulled no punches today.
As he watched Maddy, it struck him that he didn’t
recognize her. It seemed just months ago she was crawling.
Now she was almost five feet tall and fast-growing into his
wife’s mini-me. He was saddened that he had little memory
of his daughter growing up. She was a spark for his spirit,
the light that made his mundane day tolerable, but he
didn’t spend nearly enough time with her. His heart stung
as he remembered that he and his wife have been
promising Maddy a Disneyland trip for three years. After
failing her again and again, Maddy just stopped asking. Jeff
continued his forlorn gaze.
Maddy’s long blond hair swirled in the wind as she won a
tug-of-war with Bella. It reminded Jeff of riding on his
Harley with Sam saddled behind him. Of course, that
motorcycle had to be sold after the 2008 economic crash.
And today, under Sam’s oppressive savings and investment
scheme, a motorbike was deemed a “non-essential” item.
Worse, Sam had insisted that he sell his saxophone so they
could pay off credit cards. He’d vetoed but was overruled.
His saxophone was his last refuge of sanity, and now it sat
on sale in the window at Saul’s Tire and Pawn.
After a victorious tug with Bella, Madison threw the
chew toy across the yard. Bella leisurely plodded after it.
Even Bella had changed.
She never used to lose a tug and could typically out-pull
a Ford 150. And she could outrun a bullet. But something
happened in the past five years... something Jeff couldn’t
quite explain. Bella went from spry to slog in a blink of an
eye. It was like years of pages were added to his story, but
the pages were blank—his memories sparse and vague. As
the thought marinated in the whiskey, it occurred to him
that “sparse and vague” embodied his life. Joy, love, thrill,
passion—sparse. His marriage, his life’s purpose, his
relationship with his daughter—too vague.
He turned from the window and faced his wife, who was
swiping through her phone. They were still stuck in their
“shit-hole” townhome. Jeff, now 34, and Samantha, 33, were
five years into Sam’s autocratic financial strategy, a
strategy she’d insisted on and enforced while Jeff
ambivalently obliged. He couldn’t contain the resentment
that suffused his face as he glared at his wife. Feeling Jeff’s
piercing eyes, Sam looked up from her phone.
“Drinking again?”
He mumbled something she couldn’t hear. She managed
a dismissive nod and returned to her phone.
Jeff wondered why she continued the charade. He knew
her better than she did. A lot had changed in five years, but
nothing good. A faulty water heater stole Sam’s regular hot
meditative baths. A loud neighbor who played afternoon
Call of Duty stole her peaceful sleep. And their hellacious
work schedule stole what remained of their listless
marriage. He knew she couldn’t be happy, but she was
hiding it. Or maybe it was denial?
Jeff opened his journal flamboyantly, a journal he’d toted
around for his entire life. Named “Neve” (after the actress
Neve Campbell, whom he’d crushed on in his teens), the
notebook contained various confessions, doodles,
calculations, and vision boards. A faded Chicago Cubs decal
smudged the cover, its pages frayed and wrinkled. Sam
glanced at him as he flicked his pen on one of the pages
filled with numbers.
He placidly reported, “Unless we hit the lottery or I start
throwing 100 mph fastballs for the Cubs, we’re going to be
working for the rest of our lives.”
Sam gave him a furtive look, ending her phone scroll.
Jeff continued clearing his throat. “I’ve done the
numbers. Even if the stock market kept rising for another
ten years, we’re still screwed.”
Typically dismissive of her husband’s overly dramatic
situational reports, Sam, for once, was listening. For the
last five years, they’d done as all the pundits preached.
They saved, they lived frugally, and they invested their
excess savings in indexed funds. In exchange for their
obedience, their life became increasingly mundane and
dispirited. Their reward? An investment account that wasn’t
growing fast enough because they couldn’t save fast
enough.
Jeff pointed to Neve, a chart scribed on a page, “This
market has been on a tear in the last five years and all we
have to show for it is $33,000. For your plan to work, we’ll
need decades to make this happen, and that’s assuming the
market continues going higher for the next twenty years!”
Sam placed her phone aside and admonished him, “Well
that’s $33,000 more than we had five years ago.” She
glared at him sternly. “We’re making progress—they said it
wouldn’t happen overnight.”
Jeff rolled his eyes and then angled into his wife,
whispering as if he were speaking near eavesdroppers,
“Samantha, let me ask you a serious question, and I want
you to be honest. How many great memories can you
remember in the last five years?” He glanced out the
window at Maddy. “Our trip to Disney with Maddy? How
about our Harley road trips in October, you know, when we
used to go up to Wisconsin and admire the changing
leaves?”
She glared at him with confusion as if he’d just told her
they lived on the moon. “Exactly.” He slammed Neve shut.
“Because there aren’t any great memories. We haven't
done any of that stuff. And we never will because every
dime we earn, we save.” His voice grew louder. “It’s the
same crap. Instead of work, sleep, spend, pay bills, repeat,
it’s work, sleep, save, pay bills, repeat. We’ve replaced the
spend with the save. It’s the same god damn rat race.”
He furrowed his brow and took another sip of his
whiskey.
Sam shifted in her seat, angling away from him. After the
silence lingered for an uncomfortable moment, she grabbed
his whiskey. She chugged what remained and then
exclaimed exasperatedly, “Maybe you’re right.”
She swallowed hard and scratched her eye, her mind
wrangling with the confession. When her lips said nothing,
Jeff flashed her an I’m waiting expression. She relented. “To
be honest with you, I don’t know how to feel joy anymore. I
don’t send my daughter off to school in the morning, and
when I do see her, I’m resting in bed trying to sleep off the
nightshift. I feel like Maddy is my only joy, and if it weren’t
for her, I’d probably be strung-out on anti-depressants. We
don’t even see each other anymore, so it’s not your fault.”
Samantha’s nursing career was a grind and had only
worsened in recent years. Reality erased her childhood
visions of being a thoughtful and loving caregiver who
starred in a Nicholas Sparks novel. Healthcare was
corporatized and hence, profit optimized. Salaries, benefits,
perks, and worse, patient care were all slashed. What
wasn’t slashed were expectations and patient load. She’d
often complain, “If I didn’t know better, you’d think I
worked at McDonald’s. But instead of pushing fries, we’re
pushing pills while pushing to get to the next patient.”
After going second shift for three years, she’d returned
to the graveyard shift because it paid an extra $3 per hour.
When they discussed—or more like argued—about the
move last year, Sam would contend, “We have to save
more!” Jeff objected because he knew what the late shift
did to her and their relationship. San would rebut, “We
need the extra money if we’re going to pay off all our debts.
I know you hate this townhouse, and we’d like our own
place.” She continued the spin, “I heard on the news that
interest rates are at all-time lows. And I watch the stock
market every day. It keeps going up. If we follow the rule of
72, our $30,000 will turn into $60,000 in just six years!”
But her face betrayed the confidence in her voice.
Jeff laughed, “Yeah, and then what?” He nodded toward
the garage and argued, “By then a new Corolla will cost
$40,000. And a 3-bedroom house $1,000,000. And I’m tired
of twilight-crosses!”
Their nightly “twilight-cross” was their rendezvous of the
workdays. When Jeff got home from work, usually at six or
seven at night, Sam readied for work at 11 PM. It was the
few hours they had together. But by the time Jeff slugged
home, he craved silence, not communication.
Worse, the graveyard shift meant their weekend was
mostly ruined. A Friday 11 PM _ start could have
repercussions well into Saturday evening. The return to the
graveyard shift drained what little optimism that remained
in their marriage—it was death by a thousand pennies, of
course, all saved.
Back at the kitchen table, she continued the spin. “Jeff,
we’ve just got to be patient.”
But, in reality, she was trying to convince herself.
Pointing to her phone, she remarked, her voice still shallow
in conviction, “That’s what Warren Buffett says, and he’s a
billionaire.”
Jeff stood up from the kitchen table, the chair making a
screeching noise as it dragged against the yellowed floor.
He ignored whatever was on her phone and walked away.
Stopping abruptly, he glared back at his wife, sneering, “I
don’t think Warren Buffett is a billionaire because he saved
five bucks on coffee and diddled with a job he hated for
forty years.” He slapped Neve on the counter and stomped
into the bedroom, the door slamming behind him.
CoA Geka?
ele SCleIN IS) Sav aGiy
DON’T PLAY THE RAT, PLAY THE SCIENTIST
&
A s I walked into my bedroom with my laundry, a small
movement at the rear window caught my eye. A fly
banged against the windowsill, trying to escape to the
world outside. While I reunited my clean socks, I noticed
the fly’s persistence. Over and over, he smashed himself
into the glass, hoping the effort would yield a different
result. I paused and watched the fly repeatedly struggle to
free himself. With each crash into the window, the insect
expected a different outcome from its prior attempts.
Clearly the fly’s issue wasn’t motivation or a shabby work
ethic. Regrettably, “trying harder” or “hustle and grind”
won't give the fly his freedom... and he will die trying.
Like the trapped fly, our predicament within the rat race
superstructure is similar. In scientific experiments, a rat
race is a maze defined by predetermined corridors. Within
those corridors an occasional reward appears. The rat
noses a button, and cheese pops out. The rats appear to
make choices, but their choices are bound to a sSelf-
contained system. Once the rats resign themselves to the
system, they’re given the illusion of choice. Some choices
are rewarded, but most of them are “walled-in,” or scripted,
by the maze itself.
As comedienne Lily Tomlin once said, “The trouble with
the rat race is that even if you win, you’re still a rat.” To wit,
only rats win rat races. Winning the cheese at the end of
the week, or in our case, a paycheck and a weekend,
changes nothing. The victory is’ transient and
inconsequential. Because next week, we’re at it again.
Worse, if you recognize the foolishness of the shopping-
rat and its happiness illusion, the Script will usher you into
an alternative grind: becoming a mediocrity optimizing
savings-rat.?© Now instead of working for a weekend that
arrives in five days, you’re working for a retirement that
arrives in five decades. Winners (what few there are) get to
retire old at seventy on 40 percent of their normal income
while hoping inflation hasn’t whittled away their purchasing
power. Of course, all this assumes you maintain a high-
paying job while being frugal as a Scrooge, as disciplined as
a monk, and as patient as a snail.
The answer to this purposeful entrapment isn’t a
strategy for winning, much less playing. Instead of playing
either rat role, consuming for happiness or patiently saving
for retirement, refuse to be cast for either. Instead, take the
position of the scientist.
You probably work a lot harder than me, yet I get paid
more. The problem isn’t your work ethic. The problem is
that you’ve accepted your role as the fly, a player in the rat
race. Your effort is handicapped by an inefficient system—
the rat maze, or rat race economics. Sit Usain Bolt on a
child’s tricycle and someone who hasn’t raced 100 meters
in his life could suddenly beat him. It’s not that Bolt lost his
speed, it’s that he’s been burdened by an inefficient system.
Is this insanity any different than the fly?
Trying harder doesn’t change the system.
The harsh truth is, this “ineffective” system is very
effective at maintaining containment. Like a religion that
promises heaven behind a comet after drinking the Kool-
Aid, the only winning move is not to play. Excommunicate
yourself from the church and renounce your role as a rat
race participant. Stop banging your head against the
window and hoping for a different outcome. Reject the rat
race paradigm. Instead, resolve to learn the methods and
the means of the laboratory—become the scientist.
KEY CONCEPTS
e The rat race is similar to an actual laboratory rat
race, complete with pre-determined corridors and
cheese, or rewards.
e Only rats win rat races where victory is a weekend
or a distant retirement.
e Hard work in an inefficient system is rendered
impotent, sometimes worthless.
Forsake the two rat race roles and refuse casting for
either. Instead, take the position of the scientist.
lm Ale IMelrt i
ele ens eR INe IP ls
Pl UINES 2 be
A RAT RACE INVESTMENT PAYS NEGATIVE RETURNS AND LOST
PRINCIPLE
U
. - ‘ 7
~ e-
VY ox friend offers you a $500 investment with the
promise to pay you back a week later. Because he’s
your friend, you accept. After the week passes, he gives you
$200 and says, “Thanks, buddy!”
Confused, you ask, “Wow, is this $200 my return?”
Your friend laughs. “Sorry, no, that’s what’s left of your
investment. It didn’t work out, and the $300 we lost is gone
for good. Would you like to invest again?” After slapping
your friend across the face, you tell him to get lost.
Behind this story, you know there is a scam. Your
“investment” earned a negative 60 percent. And if your
friend ever offered such an investment again, fists might fly.
But when it comes to the rat race, we willingly accept this
horrible investment. No, not with our money, but with our
time. You see, anytime you trade Monday through Friday to
earn Saturday and Sunday, you’re earning a negative 60
percent. That’s spending five to earn two. And unlike money
which can be created over and over, time cannot. Once
those five days are spent, they’re gone. Forever. The Lost
Principle Principle states that a standard rat race
investment is subject to a negative 60% return. Just like
your friend’s bad investment.
So why wouldn’t you hold your time to the same
standard? The Script has fantastically convinced you that
time is a commodity worth trading, no more valuable than
an old rusty wagon at a flea market. If you exchange five
days of work for two days of weekend freedom, you’re
transacting at a negative 60 percent ROI—and it is an
expressway to bankruptcy. No wonder no one has time.
We’re conditioned to repeatedly invest our precious time at
negative rates of returns.
Each of us is gifted with 86,400 seconds a day. No one
gets more, no one gets less. It is the great equalizer
because no one can make more time. Imagine that: you, me,
Jeff and Sam Trotman, Taylor Swift, Jeff Bezos, Chairman
Kim Jong-un; we all have something in common: We each
get 24 hours a day. While most of the world spends those
hours leveling up on the latest hot video game or
medicating their drab existence in mindless television
dramas, others invest those hours in a life with meaning,
purpose, and freedom.
Instead of tolerating a negative 60 percent return on
your time because that’s what your masters told you to
tolerate, why not work to shift the balance to a positive
return? Is it possible to reverse the deal? Work two days
and get five in return? How about working for ten years so
you can earn the next forty?
Yes, it is possible. I’ve done it.
And you can too.
The first step is to prioritize time like you would the king
on a chess board. To win at this game, protect the king!
Money is the queen: super-important, powerful, and
flexible. But time determines the victor. In typical rat race
“retire early” circle-jerks, time is marginalized like a
commodity, no better than a sacrificial pawn. Protect your
king as if it were life or death... because it is.
KEY CONCEPTS
e An investment in the rat race earns a negative 60
percent: you sacrifice Monday through Friday for
Saturday and Sunday.
e Unlike money, time cannot be reclaimed once lost—it
is always lost principle.
e Time is the great equalizer; all humans possess the
same quantity per day.
e Treat time as you would the king in a game of chess,
and money as the queen.
Teh ey 0 ped lee
FRIDAY, JUNE 24TH, 2016 - 5:56 PM
(8 MONTHS, 29 DAYS LATER)
“What’s wrong?”
It was Friday evening before Sam was to leave for the
hospital. After walking upstairs from the garage, Jeff
immediately noticed something was amiss. While she was
dressed in her burgundy scrubs, her hair was wild and her
elbows were planted on the table, her head wrapped in her
hands. More concerning, Pinky the Lamb, a tattered stuffed
animal Samantha had had since childhood, rested in her
lap. The stuffed animal’s presence alarmed Jeff. Whenever
Pinky came off the shelf, he knew his wife was grappling
some intense emotions.
Jeff glanced at the bedroom. “Is Maddy okay?”
She looked up from the kitchen table, eyes glossy. She
said flatly, “She’s fine. In her room.” Jeff spied a torn
envelope and a letter in her hand.
“What’s that?” Jeff gestured, moving forward, anxiety
now chiseling his face. She folded it quickly and placed it
atop Pinky, avoiding eye contact.
After a moment, she muttered, “It’s my test results.”
Jeff gasped, and his mouth dropped, his face draining
pale. A week earlier, he remembered Sam mentioning a
mammogram appointment. Before he could speak, Sam
waved him off. “I’m okay, I’m okay. I just had a scare.
Nothing to worry about.”
Jeff’s face softened as relief washed over him. He loosed
a “Whew!” His wife forced a labored smile while she
maintained a dead stare on the floor. He dropped his work
bag next to the chair still standing over her. “Then why all
the gloom? When I saw you pulled out Pinky I got worried.”
Sam smiled weakly but her gaze remained locked on the
floor. She spoke softly. “Before I opened the envelope, I got
Pinky out of the closet. You know she’s my good luck charm,
and she came through for me again.”
Jeff nodded but his wife remained frozen. Voice louder,
Jeff said, “Well, we should celebrate your clean bill of
health! Let’s go grab some margaritas at Pancho’s—” he
stopped mid-sentence and dropped into the chair like a
sack of potatoes, startling Sam out of her trance. He
continued sardonically, “Oh wait, that’s right... we can’t go
to Pancho’s because we have to save every dime. I’d like to
sax you a happy song of health, but you know, seeing you
sold the one joy I have left in this world, I can’t.”
He jerked away in his chair as it creaked and wobbled.
They’d needed a new dining set, but their spending celibacy
put that expenditure into the ‘never’ column.
Sam’s face painted horror and she leered at him
flabbergasted. She finally blustered, “Did you hear anything
I said? I just said I had a cancer scare and your first
thought is about your sax? Can’t you even fucking fake it
and act like you care anymore? About me? About our
marriage?”
Tears welled from Sam’s eyes. Just like clockwork, he
thought. Her crying always made Jeff uncomfortable, but it
softened him and always put him into a reality check. Deep
down, he knew his wife was the kindest soul on the planet,
and it was something he loved her for. Recognizing his
selfishness and how he knee-jerked the situation, he took a
deep breath. “Of course, I care. I care that you couldn’t
even tell me. I care that you went through it all alone.” He
grabbed her hand and pleaded for forgiveness. “I’m so
sorry for being an inconsiderate asshole, you want to tell
me about the test?”
Sam’s head fell to her chest, and she mumbled, “No.”
A healthy lab report shouldn’t be tearing her apart.
Puzzled, Jeff let the silence linger. Then, “Is there
something else?”
More silence. She gripped Pinky tighter, and Jeff noticed
it.
The low growl of freeway traffic outside was consumed
by a clicking hum from the ceiling fan. As she held back the
tears, her eyes turned red. She wiggled herself in the chair
and turned, facing her husband. She seized a large breath
of air and finally spoke.
“T can’t do this anymore.”
Fear melted into Jeff’s face and his heart sunk. He
quickly dropped her hand as if it were a molten pipe. The
big “D” word usually followed the phrase “I can’t do this
anymore.” Instantly he thought of divorce lawyers, custody
battles, and visitation rights for his daughter. Then his
marriage flashed in front of his face—not the daily
monotonies, but the moments that deepened his love for
Sam. In his thirty years of life, he’d known nobody more
kinder or trusting. His wife was a stunner physically, but
she had a kind-hearted soul that would give Mother Teresa
a run for her money. Jeff’s eyes got glassy and he swallowed
hard. Sam noticed and placed her palm on his knee,
clarifying, “No, not us.” She eyeballed the room, surveying
the townhouse appraisingly.
“T’m talking about what we’ve been doing for the last five
years. We’ve been living like zombies, sacrificing the best
years of our lives, for what? Some type of retirement
fantasy thirty years from now? What the hell are we doing?”
She turned away from Jeff and collapsed her head back into
her hands. She muttered, “I’ve never been so unhappy in
my life. Everything sucks the life out of me. We haven’t been
on vacation in years, our jobs are killing us, our financial
plan is like slavery, and our marriage is on a respirator.”
The tears finally broke. Sniffling, she muttered, “And I don’t
know how to fix our marriage if we never see each other.”
She quickly sleeved off the tears now soaking her face.
Collecting herself, she pulled out her phone and pointed to
the stocks app. It was all red. She said, “You see what
happened in the stock market today? I watched two years
of savings disappear in a matter of hours.” She shook her
head, her face disgusted as if she’d just stepped in dog poo.
“We went from $36,000 to $27,000 in a matter of hours.
You know how long it takes us to save $9,000? It reminded
me of 2008 when we watched our 401(k)s disappear week
after week.”
Jeff sat silent, his voice stolen with relief that her issue
wasn’t the big (D)ivorce or worse, the big (C)ancer. She
continued and sucked in her cheeks, her trusty tell that she
was about to admit Jeff was right about something.
“Remember what you said last year? About how we
replaced the spending with saving? And that it’s all the
same rat race?”
Jeff nodded yes, maintaining his silence.
After two years of graveyard shifts, Sam had finally
appeared to buy what Jeff had tried selling eight months
ago. The nighttime hours at the hospital were consuming
his wife. Subtle wrinkles angled into her cheeks while
crow’s feet taunted her eyes. Her sleep was shallow and
non-restorative. Always pulled into a ponytail, her blond
mane was thin and frayed, suffering constant duress under
the fluorescent lights of Northwestern Hospital. Occasional
gym visits turned into no visits. After a long night at the
hospital pumping stomachs in the ER, the last thing she
wanted to do was pump iron in the gym. Sam knew aging
would arrive in some year, just not this one. All this for an
extra $3 per hour or an extra $352 a month—the going rate
of selling your soul to the overnight shift for some future
retirement fantasy.
She continued, “And if I’m watching the stock market
every day and worrying about every move, how is that
going to give us financial independence?” She scoffed. “It’s
more like dependence. If it crashes again, we’re screwed.
Just like in 2008. Nothing has changed except now our life
revolves around everything we can’t do until some future
moment. We’re wasting our life working at jobs we hate so
we can finally live, what, after we retire? And who says we
even get old?” She hesitated then eyeballed her test
results. “I feel like I’m sixty, and this, right here, woke me
up.” She tottered in her seat, a nervous energy freeing
itself “Last year you said you blinked and Maddy grew up,
like you missed it.” She sighed, the disgust still painting her
face. “And you were right. We did. Life is too short for this. I
don’t want to take a passive role in Maddy’s life. I don’t
want to live my life waiting, hoping, and saving for some
unknown date and in an unknown future that we might not
even see. I’m tired of doing work that means nothing.”
“You’re a nurse, what you do is important,” Jim
commented.
She laughed. “You have no idea how bad healthcare has
gotten. I can’t make a difference because I’m not allowed to
make a difference. My profession doesn’t allow for heartfelt
discussions or the kind of personal care that inspires my
soul—it’s on to the next patient now or get fired.” Her eyes
flared fear as if she were on a sinking boat. “Jeff, we have to
do something. I can’t live like this anymore.”
Jeff sat quietly and only nodded.
It was then that the curtain fell, and the unspoken truth
crystallized.
The system the Trotmans trusted wasn’t designed to
provide freedom and purpose. It was designed to enslave
them—either as a slave to their lifestyle or a slave to their
investment portfolio. Hard work wasn’t going to make a
difference. They already worked hard, and it had no impact
and rewarded little joy. The “system” was a life sentence for
meaningless work with a distant retirement parole that was
more illusion than reality.
Suddenly they knew the challenge they faced. And as
long as they continued playing by culture’s rules, the game
would remain unwinnable. It was time to do something
different, or suffer the same existence, till death do us part.
ClmbANe iene 2
imeONSCR Few Sih ieG,
REWRITE THE RAT RACE SCRIPT AND MAKE LIFE YOUR ADVENTURE
&
K urt Searvogel is an ultra-distance competitor who set
a goal to bike every day, an accumulated trek of over
75,000 miles. In 2016, he went further and broke the world
record for miles biked in one year. As Kurt’s story grabbed
attention, readers begged to know: How does he afford it?
And find time? The rat race has a systematic way of
destroying audacious goals. His answer was as I expected:
He’s an entrepreneur
Kurt’s experience as an entrepreneur might seem
unusual. I assure you, it’s not. A new economic class has
emerged in the world. I call it The Unscripted 1%. It is a
growing class of entrepreneurs who built businesses from
nothing but sweat, an open mind, and a willingness to learn.
But these businesses aren’t typical enterprises like a corner
coffee shop or an eBay store. They’re businesses that allow
their owners to take charge of their life in all meaningful
capacities: life purpose, financial freedom, the pursuit of
passions (often unrelated to business) and more
importantly, free time. Entrepreneurs dabbling within the
Unscripted 1% usually enter the Economic 1%.
If you’re not familiar with the Economic 1%, it
represents wealthy individuals, usually $10 million (USD) in
net worth or more. Conversely, the “99 percent” represents
the working class. Professions like truck drivers, teachers,
even your neighborhood dentist. While I’m part of the
Economic 1%, I’m much happier to be a part of the
Unscripted 1%. Why? Unscriptees prioritize time as their
king in life’s chess game.
There are three types of Unscripted Entrepreneurs.
Each graduate to the next, and you should aspire to move
through them all. They are:
THE UNSCRIPTED 1%
LIBERATED UNSCRIPTEE
FASTLANE UNSCRIPTEE
UNPLUGGED UNSCRIPTEE
TYPET: THE UNPLUGGED UNSCRIPTEE
Have you had your FTE??? Congratulations. The moment
you become aware of the rat race system and commit to its
escape, you become an Unplugged Unscriptee. Everyone
starts as a Type 1, and it is the point of no return. In
Hollywood parlance, it’s when Andy Dufraine starts to dig
his way out of Shawshank prison. If you need another
movie, it’s Neo swallowing the red pill in The Matrix. You
wake up. And there’s no going back.
TYPE 2: THE FASTLANE UNSCRIPTEE
A Fastlane Unscriptee is someone who has graduated from
awareness to execution. At his point, you are someone who
is succeeding at entrepreneurship using the Fastlane’s
CENTS Framework (later in this book). For instance, a 29-
year-old entrepreneur on my forum owns a couple of
duplexes and an eCommerce website. He _ recently
purchased his second Lamborghini which in his words, “has
been my dream since I was 16.” While this young man
might not be in the Economic one percent, he’s in the
Unscripted one percent. He authors his schedule and can
do (and buy) what matters to him, all without sacrificing his
youth, or his future.
The move from Type 1 to Type 2 could involve many
failures and take years. It begins when your business starts
to change your lifestyle. It begins when you can start
exercising authority over your free time while having the
means to pursue things that matter. While that’s different
for everyone, an Unscripted business as engineered in this
book can earn you this elusive power.
TYPE 3: THE LIBERATED UNSCRIPTEE
Once a Fastlane Unscriptee accumulates enough wealth to
cover their living expenses for the rest of their life—their
Escape Number—they become Liberated Unscriptees.
Retired. Free from the rat race with total financial
independence. Work—optional.
Still, Liberated Unscriptees often start other businesses
or passion projects. Then profit isn’t a priority, but
contribution, purpose, and charity. And just like a Fastlane
Unscriptee, we work flexible hours, make money 24/7, and
continue to write the rules to our life. There are no bosses,
no vacation limits, and more importantly, no debt burdens.
Moreover, we can pursue ventures without the confirmation
of money or cultural validation.
In my case, I started a business forum and a publishing
company that allowed me to pursue my passion for writing.
This book (and the ones before it) are examples of that
effort. I don’t have to follow a script put forth by an editor
or a publisher. In other examples, some of the most famous
entrepreneurs in the world are Liberated Unscriptees. They
zealously pursue philanthropy, venture capital financing,
wild passions, and other outrageous ideas. For instance, Bill
Gates suddenly is a vaccine expert, and Elon Musk is
fiddling with rockets. Derek Severs, a Liberated Unscriptee
himself, wrote the following on his blog in 2012:
Some might say I’m retired, because I haven’t earned (hardly) any
money since 2008. And in some sense it’s true: I don’t want any
more money than I’ve already got. And I don’t want more fame,
recognition, or anything external. So in that sense, I’m done.
Retired. No longer working for money. Now my ambitions are
entirely intrinsic and intellectual. I work as hard as ever, but just
for my own learning, creating, and giving.+
As you can imagine, Liberated Unscriptees like Derek
and I are not dependent on macroeconomics. For instance,
a market crash and a ten-year depression wouldn’t change
my life. Yes, I still leverage and invest in the capital
markets, but I’m not held hostage by them. During the
2020 COVID-19 pandemic, I had no panic. In fact, my
income and net worth increased. Yes, increased. If you have
to update your resume if the stock market crashes or after
a four-year recession, you aren’t financially independent,
but financially dependent.
Fact: If your financial freedom is dependent on
something you can’t control, you’re not free. Don’t confuse
a Liberated Unscriptee with the financial world’s newest
retirement buzzword, FIRE. If you’re not familiar with the
“financial independence, retire early” movement, here it is
in a nutshell: Supposedly you can retire early by leveraging
extreme frugality, regimented saving, and regular stock
market investments. Then after you quit your job, you live
off your stock market returns. In effect, it’s a Wall Street
Savings-rat who decides to swap their dependency from an
employer to the stock market. One dependence is replaced
for another. And still a rat. Right neighborhood, wrong
house.
Your idea of financial freedom should not be about
optimizing mediocrity, stock market returns, withdrawal
rates, and a whole host of other uncontrollable variables.
Liberated Unscriptees have no co-dependencies. The only
threat to our existence is a global financial apocalypse or an
extinction event. At which point we're all in deep trouble;
the new currency would be guns, ammo, and food.
The beauty of Unscription is that its three tiers can
happen to anyone and at any age. You don’t need to be a
notable Silicon Valley entrepreneur, or someone with
money. You don’t need a college degree or access to
venture capitalists. You don’t need a breakthrough idea.
You only need the knowledge of what works, and what
doesn’t. To win an unconventional 1% existence you can’t
think like the conventional 99%.?! Remember, a new story
needs new pens to write new words.*? Let’s find them.
KEY CONCEPTS
e The Unscripted one percent is a new economic class
that leverages Fastlane, CENTS-based
entrepreneurship.
e There are three levels of Unscription, each
graduating to more freedom.
e Type 1: An Unplugged Unscriptee is aware of the rat
race, like a red pill.
e Type 2: A Fastlane Unscriptee owns a profitable
business that affords schedules to be malleable,
offering more freedom.
e Type 3: A Liberated Unscriptee is liberated from the
rat race and never has to work again, usually
through a large income, or one or many exit events.
e FIRE swaps dependency from a job to the stock
market.
e A Liberated Unscriptee is immune from most
economic events.
Glave elec ie
Pal= BNSCOUN ey MMi=
PINS 24
TRADING GOOD TIME FOR BAD IS A TERRIBLE LIFE STRATEGY
W hen I was at college earning a finance degree, one
concept was repeatedly drilled home: Money today
is better than money tomorrow. This concept, the
discounted time value of money, is universally taught
worldwide, no matter the university. The concept is simple:
Given a choice, rational investors prefer X dollars NOW
over X dollars LATER. One million dollars today is light-
years better than one million dollars fifty years from now. If
you ever played the lottery, you’ll recognize _ this
phenomenon: the winner doesn’t get the $10M prize
immediately but over 30 years. If they want all of the money
now, they’ll only receive about half. When time is involved,
future money is discounted by an arbitrary interest rate.
Back to our first example, one million dollars received fifty
years later and discounted at a mere five percent interest is
worth only $87,000 in today’s money. If there was any
evidence proving that TIME is a horrific partner for wealth,
look no further than the prior sentence.
Yet when it comes to time itself, a more valuable
resource than money, it enjoys no such discounting. No
school teaches the Discounted Time Principle: future
“elderly” time is not as valuable as today’s youthful time.
No author would dare discount time like money, but I will.
Think of it this way. If a genie granted you a lifetime of
financial freedom, would you want it at thirty years old? Or
at seventy? Isn’t freedom better while you’re young and
vibrant and not in life’s twilight when health and energy
might be precarious?
The truth is, the rat race has branded time as a trivial
commodity. Money’s time value is beholden by every
rational investor, but freedom isn’t. One poison pen*” that
needs swapping is the prioritization of life’s resources: Time
first, money second. You can always earn more money, but
you can’t make more time. It’s time to stop trading our time
just for money, our time needs to earn both money AND
time.
Whenever some rat race media outlet is preaching about
financial freedom decades from now, be warned. You’re
getting propagandized and numbed into believing freedom
at twenty-five is exactly the same as freedom at seventy-
five. If every school taught the discounted time value of
time like they did money, Wall Street’s “live poor die rich”
honeypot?® wouldn’t survive. Entire industries and
economies would go bankrupt because the rats would
finally figure out that their time is too valuable for trading.
Yes, youth isn’t wasted on youth. It’s wasted on cultural
norms that celebrate the exchange of youthful time for
elderly time. Trading good time for bad time is a terrible life
strategy. Demand different, work different or live the same.
KEY CONCEPTS
e The time value of money states that money today is
always more valuable than money later.
e The time value of money is a universal concept
taught at every university on the planet, while the
discounted time value of time isn’t taught anywhere.
¢ Freedom young is always more valuable than
freedom old.
e Whenever the rat race marginalizes time and treats
it as a mathematical variable for financial freedom,
you’re being propagandized.
CEA PlER
tae FINANCIAL EAN An Gls
Pl UINES Le
FINANCIAL ASCETICISM IS NOT FINANCIAL FREEDOM
| n early 2021, I got sucked into reading a financial news
article featuring the newest form of honeypot dogma;
the "retire early" orthodoxy. In this particular story, it
profiled a young childless couple who claimed to be
financially independent. To achieve this nebulous financial
independence, they had to downsize their entire life. The
husband, who self-admittedly enjoyed fast cars and daily
restaurant visits, had to sell the vehicles and stop visiting
his favorite eateries, to the point only one visit was allowed
per month. Other downsizing included selling the house
and moving into a ten-year-old trailer. As I read, it was clear
that this young couple had micromanaged every dollar in
and out of their daily existence. Everything had a budget—
food, entertainment, gas—in fact, the financial asceticism
was so extreme that the husband proudly confessed that he
and his wife no longer exchanged gifts.
Folks, this is not financial freedom. This is financial
fanaticism.
The definition of "freedom" is without restraint. If your
daily existence is ruled by money, defined by money,
budgeted by money, sorry, you're not financially free. And I
don't care how you define it. Like an authoritarian dictator
who owns his serfs, this couple is not free of money, they
are owned by money.
Do not confuse time freedom with financial freedom. An
unemployed college graduate living at home with his
parents has time freedom. So does a homeless beggar living
on skid row in a tent. These people might own their time,
but money owns their choices.
One of my favorite stores is Costco. When I walk in, I
have the financial resources to fill my cart with whatever I
want. Sometimes I leave with just a few items; sometimes I
leave having spent thousands. The point is, "budget" is not
in my vocabulary.
Unscription is about both time freedom AND financial
freedom. You can dine at a different restaurant five days a
week. You can buy that fast car. You can live in a luxury
house and eliminate the word "budget" from your life. You
can walk into a store and buy whatever you want.
If you meet the following five guidelines, congratulations,
you are financially independent. If not, you're likely lying to
yourself and redefining words to become the next newest
coach pushing honeypot dogma.
Lifestyle Freedom: You can live freely in your
desired lifestyle without needing a regular income
from a job or a business.
e Budget Freedom: The word "budget" isn't in your
vocabulary for daily existence —trips to the store,
filling up the gas tank, nights on the town.
Experiential Freedom: You don't need to
"downsize" your lifestyle and sell things that you
enjoy, the motorcycle, the saxophone, or the
Corvette.
Mobile Freedom: You can travel for months and not
have it impact your financial situation.
e Economic Freedom: Your lifestyle wouldn't change
in a stock market crash and an ensuing three-, five-,
or ten-year economic recession.
While our young "retired" couple should be commended
for their saving prowess and having won time freedom,
don't fall for the spiel. Time freedom without financial
freedom is like visiting Disneyland but you can't ride the
amusements or eat the goodies. When you have financial
freedom, you know it. You feel it. You live it. And believe me,
you will love it.
KEY CONCEPTS
The time value of money states that money today is
always more valuable than money later.
The time value of money is a universal concept
taught at every university on the planet, while the
discounted time value of time isn’t taught anywhere.
Freedom young is always more valuable than
freedom old.
Whenever the rat race marginalizes time and treats
it as a mathematical variable for financial freedom,
you’re being propagandized.
Dee ie INO) see ie|aia
SUNDAY, JUNE 26TH, 2016 - 2:16 PM
(2 DAYS LATER)
“Our ten-year wedding anniversary is next Sunday.” Sam
smiled in her dingy pajama outfit. Having just finished
dinner and with no late shift that night, the family was at
the kitchen table eating dessert, a mango sorbet.
Jeff raised an eyebrow and chuckled, “I know, I didn’t
forget.” He eyed her up and down and then laughed.
“Maybe I can get you some new PJs? You know, something a
bit sexier?” He spooned a mouthful. Sam pursed her lips
and delicately gestured to Maddy who was buried in her
sorbet. She didn’t hear the quip.
After finishing their sorbet, Jeff retrieved a box of
colored Expo markers and a whiteboard from the
downstairs garage. It was their first spending extravagance
in years. He placed it on the table and uncapped the red
marker.
Maddy’s face lit up and asked, “What are we drawing?”
“Your Mommy and I are doing some planning,” Jeff
answered.
Maddy looked suspiciously at her parents and asked, “Is
it going to be fun?”
“Probably not pumpkin,” Jeff said, “but you’re welcome
to stay and help us with the drawings.”
“What kind of drawings?”
Jeff pondered the question a second and then answered,
“We’re going to draw the future, things like when you’re a
big girl and going to college. Mommy and Daddy want you
to be happy.”
“Yuck,” she frowned shaking her head. “College? That
doesn’t sound fun.” She quickly got up from her seat and
spoke plainly, “I’m going to practice.” Jeff yielded into a
warm smile and kissed her on the forehead before she
retreated into her room.
“So,” Jeff asked returning back to Sam, “where do you
want to be in ten years?” He wrote TEN YEARS on the
whiteboard. “If you could snap your fingers like a genie and
make it happen, what would your life look like?”
Since their wedding, life’s comforts distracted the
Trotmans. Any kind of planning, financial or otherwise, just
wasn’t necessary. But when a recession spawned a
downward spiral, comfort shifted into discomfort. They
went from a strategy of deceptive affluence to a strategy of
sacrifice and suffocating mediocrity. Little did they know
that their saving and investing scheme was just a different
demise from the same death camp. After six years of
neurotic saving, the results were the same. Actually, worse.
Instead of working their tails off to look rich young, they
were working their tails off to die rich old. Nothing
changed. Not their meaningless work, not their middle-
class pay or wealth, and certainly not their relationship. It
was time to make a plan, a plan that would help them
escape the system they had trusted for their entire lives.
Sam thought for a bit, a smile overtaking her face.
Before she could speak, Madison started playing her flute
inside her bedroom. Jeff had tried to lure her to study
saxophone, but Maddy insisted girls don’t play sax. After
her dad corrected her with several YouTube videos of
Candy Dulfer, one of the best female saxophonists ever,
Maddy still vetoed. Jingle Bells melodied through the
townhouse, which Jeff thought was odd, considering it was
June. Sam motioned for the marker, and Jeff handed it over.
She scribbled on the whiteboard as one horse open sleigh
finished its rhyme. A bunch of boxes with four legs emerged
on the board, followed by another box with the number 50
in it. She finished with what looked like a church—except
crossed it out with a big black X.
Jeff said, “Your dream is a bunch of tables, 50 million
dollars, and a world without religion?”
Sam laughed and then pointed to each of the four boxes
with the four legs. “That’s a dog, there’s a lamb, and that’s
a cow and a sheep.”
“You want to own a zoo?”
“No, an animal rescue.”
Jeff nodded, not surprised by his vegan wife’s answer.
Sam’s veganism was more about animals than nutrition,
and she’d embarked on that quest long ago when milk
didn’t need propaganda ads to stay viable.
“And the canceled church?” He pointed to the crossed-
out church. “Rebellion against your parents?” She smacked
him on the shoulder. “That’s not a church, that’s a hospital.
And that’s me not working there ever again. EVER!”
Jeff raised an eyebrow. “You mean done with the
hospital, or done with nursing?”
“Done with nursing,” she said resolutely, rubbing her
hands together as if she could taste it happening. Jeff
nodded, not surprised.
“And that?” He pointed to the box with the 50 in it.
She demurred and blushed.
Another tune belted out of Maddy’s bedroom. “The
Imperial March” from The Empire Strikes Back. They both
looked at each other and snickered. “She’s getting better,”
Jeff commented. The song was executed flawlessly, but the
flute didn’t do the dramatic song any justice and rang more
like a theme from Sesame Street.
“Well?” Jeff asked, nonplussed. “What’s the big FIVE
OH?”
Her cheeks still rosy, she laughed sheepishly. “You ever
watch Leave It to Beaver on television?”
He mushed his mouth at the curveball and then nodded.
“Sure, the Cleavers. I saw a few episodes when I was a kid.
Wasn’t my favorite.”
She continued, biting her fingernail. “Then you know it
was an old sitcom from the late fifties. About a married
couple with two boys. The dad worked while the wife was a
stay-at-home mom, did all the stereotypical stuff for a wife
in that era, cooking, cleaning, taking care of the boys. When
I was in the doghouse with my parents, I’d lock myself in my
room and watch TV. Only a few channels came in clear, we
didn’t have cable—just a big antenna outside. I remember
Hart to Hart would be on first, then 77 Hooker, and then
Beaver would come on after. Anyhow, I think I’ve seen every
episode five times.”
Jeff raised an eyebrow. “Okay and?”
She sighed and then gazed at him, reticence filling her
eyes. “I just wish life was that simple again.”
Jeff scratched his head. “I don’t get it,” he says,
gesturing to the whiteboard. “What’s this got to do with
50?”
“The 1950s,” she reported. “I wish I could be a mom
from the 1950s. I’ve always wanted to be a stay-at-home
mom, you know walk my children to the bus stop, watch
television with them, cook them different meals, do their
laundry,” she chuckled, “and maybe even light my
husband’s cigar after his long day at work while he sits in
his easy chair.”
Jeff erupted in laughter and slapped the table loudly.
“My liberal wife wants to be a domestic housewife? Who will
not only light my cigar, but let me smoke it in the house?”
He laughed again, slapping his knees. Flashing her an
incredulous look, he spouted, “Are you serious?”
“No joke,” she assured, her face restraining
apprehension. “You know my parents were tyrants. Six
seasons of Leave it to Beaver was like my pacifier to
distract me from my own childhood.”
Jeff interjected, “I thought that your filthy stuffed animal
was your pacifier?”
Sam gave him a scornful look and corrected him. “Shut-
up, Pinky isn’t filthy.” She shook it off and continued,
“Anyhow, I dreamed I had loving parents like the Cleavers,
and I knew it was something I wanted when I had kids.”
Her tone went gentle. “I’m guessing it made me
idealistically traditional about motherhood and how I
wanted to raise my own children.”
Jeff’s smirk faded as his stomach started to groan. He
forgot about Sam’s apathetic parents and their emotional
abuse. He readily forgot that his wife’s best childhood
memories probably came from the television. Jeff knew
little, only that Sam grew up as an only child on a ranch in
the middle of nowhere Idaho. Her parents weren’t the
typical backwoods couple; they were worse. As Sam told the
story, her father was a failed farmer turned truck driver
who was rarely home. Based on the arguments she
overheard, Sam suspected a lot more than truck-driving
was going on. Except at church when beguiling a role, Sam
couldn’t remember a time when she saw her parents smile.
Sam said her Pops wanted a boy and got her. It was the best
guess she had for her father’s stableboy treatment of her,
not to mention the name “Sam”. “Samantha” was a
reserved word rarely spoken by her father— it was only
yelled in the midst of an angry tirade. Verbal abuse was
normal in the household, and Jeff never dared to ask if
there was something more. Sam once revealed that her
father backhanded her boyfriend in the face after he gave
her playful tap to the butt. After kicking him off the front
porch, Sam’s father called her a whore. Not only did Sam’s
mom permit it, but her silence defended it, as if she sought
approval from her coldhearted husband.
After a lingering silence, Sam cleared her throat. “So
where are you in ten years?”
Sam’s husband grabbed the marker and drew a curly
Shape in front of what looked like an audience. Sam
nodded, knowing it represented him playing saxophone to a
crowd. He then drew a triangle atop a rectangle with a
crossed-out dollar sign at its door. “That’s our dream house
without a mortgage,” he volunteered. “And that little box
with the wrench is a huge workshop, filled with tools—rich
man tools like lathes, planners, and drill presses!” He drew
two stick figures holding hands and a palm tree. “That’s us
on vacation for as long as we want.”
She snickered and pointed to the stick figure. “Looks like
you lost some weight.”
“Funny,” he said, continuing. “And these”—he drew what
looked like a stack of rectangles—“are my best-selling
books. I’d love to write fantasy novels, give Mr. George
Martin a run for his money.”
Curtly, Sam stated, “I don’t think Mr. Martin would be
aware that he was in a competition with you.”
Jeff shook her off, but his eyes sparkled as he gawked at
the drawings.
Ten minutes later, they had their ten-year vision.
Surprisingly, it mostly centered around freedom—
freedom to watch their daughter’s flute recitals, freedom to
travel, freedom to direct their day, and the freedom to do
work that mattered. They weren’t seeking mansions and
Mercedes, and they weren’t seeking to “retire early” to a
golf course. They wanted expansive financial options free of
debt, the kind reserved for the one percent of society. If Jeff
wanted to spend three years writing fantasies about
unicorns and ogres, he could. If he wanted to buy a Tesla,
he could. If Sam wanted to adopt twelve dogs, she could.
Jeff stood up and held the whiteboard in front of him.
They both marveled at their potential future, optimistic and
invigorated by the new plan, but ultimately confused. After
disappearing into the garage, Jeff returned with a hammer
and hung the whiteboard on the wall.
The loud noise brought a curious Madison out of her
room, flute in tow. She studied the board, which intruded
partially into the hallway. “What’s that?” she asked.
Jeff smiled at her mother, then back at his beautiful
seven-year-old daughter. “That’s the future Mommy and
Daddy mapped out for our family.”
Sam chimed in, “I don’t want to throw a wrench into our
plans, but how on earth are we going to do all that?”
Jeff shrugged. “I don’t know....” He picked up his
daughter and seated her on his arms. Looking at Madison,
he said, “But we have every reason to find out. And $36,000
to help us get started.”
Sam corrected, “No, $27,000.”
Ome Melet I
THE 1/5/10 STRATEGY
ENGINEER A 1/5/10 PLANASY TO DIRECT DECISION-MAKING
&
* [re last time I packed for a move, I found an old crate
crammed on a Shelf in the back of the garage. Inside
was forgotten memories; stuff from college, old awards,
past art projects, and an ancient relic of my youth: my
journal. Intrigued, I sat down and read it in a torrential
sweat (it was over 100 degrees that day). Inside was mostly
frustration and anxiety with few victories. And between all
the angst, I found something that lit a smile on my face:
My 1/5/10 Planasy.
A big goal envisioned ten years from now is a fantasy.
That same goal reverse-engineered down into multiple
time sequences is a Planasy—a detailed plan to actually do
it.
So many people wander through life clueless to where
their programming is taking them. We act on expectation
and tradition, not what’s in the best interest of our
happiness. If you don’t take the lead in engineering your
future, your story will be ghostwritten by the rat race. And
you aren’t going to like that future.
As an Unscriptee, your future can be whatever you want.
We’re not stuck wandering within the rat race walls, we’re
dangling the cheese. As for visualizing your optimal life and
how to get there, the 1/5/10 Planasy is your weapon. And
it’s something I’ve been using for decades.
It works like this. Envision your dream goals in ten years,
but then break it down into its five-year, one-year, and one-
month components. First, buy a poster board, a hardback
notebook, or a journal, something durable that can
withstand time. Today I use a piece of paper which I seal in
a plastic sheet cover. No digital devices! Second, transport
yourself ten years into the future and visualize your dream
life as a Type-3, Liberated Unscriptee.°9 If everything went
as well as it could, what would your life look like? What kind
of work would you be doing, if at all? Where do you live and
how? What do you drive, or maybe, fly? What kind of people
are in your life—and not in your life? How is your health?
Write it all down. Draw, clip pictures, do whatever crafts the
vision. And be specific and bold about what’s essential in
your life. Ten years is a lot of time for radical
accomplishment.
Now, underneath your Unscripted ten-year vision, draw
a line and write five years. In this space, repeat what you
just did except craft your goals as a Type-2 Fastlane
Unscriptee. What personal and business goals do you need
to get HALFWAY to your ten-year vision? In both time
frames, keep your goals and visions challenging, exciting,
yet achievable within the scope of your. current
circumstances. If you’re broke with zero skills and living
with your parents, your five-year picture shouldn’t be a
Malibu mansion on the Pacific Coast. A better forecast
might be six figures in investments and a growing business
with significant profits.
Next, repeat the process for ONE YEAR. What goals
would you need to hit to have the groundwork laid for your
five-year vision? Your first customer? Your first software
coded? What do you need to learn? How much do you need
to earn?
And finally, repeat the process for ONE MONTH. In the
next 30 days, what actions do you need take? What actions
have to stop, like video gaming or eating highly refined
sugar? How do you need to reorganize your day? What
education and skills must you start honing to get you
moving toward that one year vision?
1 Month 5 Year 10 Year
What do you Where do you Visualize your
need to doin NEED to be inS optimum dream
the next 30-days years to be life in 10 years,
to get started HALFWAY to personally,
toward your 1- your 10-year professionally,
year vision?
vision? and financially?
THE 1/5/10 PLANASY
After laying out all four goals and_ visions,
congratulations. You just accomplished what most people
never do... You’ve created a decision-making framework for
your life, a guiding light for all future actions. It will answer
all your “whats.” Namely, does this action get me closer to
my one month goal? What must you do tomorrow? Next
week? What decisions oppose your one-month goal and its
future? From this point, everything you do should get you
closer to the one-month and one-year future, which brings
you Closer to the five- and ten-year versions.
For example, my five-year vision (as I wrote two years
ago) consisted of a beautiful timber cabin overlooking
Sedona’s red rocks. Today (as of early 2021), I own the land
and am in the architecture phase. Within the one-year
vision, I’ll be interviewing builders. The following year,
construction. Altogether, the 1/5/10 Planasy helps me make
decisions today that put me closer to the five-year reality.
The 1/5/10 Planasy is the decisional roadmap. But be
warned: A ten-year vision without its one-month and yearly
subsets is not a Planasy, but a fantasy.
Back to that hot garage and my ten-year vision as I
wrote many decades ago... I wanted to wake up when I
want to wake up. Lamborghinis. Nice house, pool, no
mortgage, no debt, and the ability to do meaningful work
without worrying about money. Sound like a pipe dream?
The plan was written eight years before it happened, and
that’s the point. Mostly everything came true, while other
things disappeared as I changed and no longer wanted
them.
Your 1/5/10 Planasy should be flexible and shifting. As
the years pass, your goals will change. If you’re doing life
right, your goals will meander and morph as you progress,
as you discover new things about yourself, and as you
expand your awareness. Consider your 1/5/10 Planasy as a
living document.
Keep your visions updated and keep the 1/5/10 decision
framework at the forefront of your life. Do that, and I
guarantee this: you won’t recognize your life in ten years,
much less a year from now.
KEY CONCEPTS
e The 1/5/10 Planasy envisions your optimum life in
ten years, reverse engineered in five-year, one-year,
and one-month increments.
¢ Your 1/5/10 Planasy is a living document and will
change as you change.
e The 1/5/10 Planasy acts as a decision framework for
your life.
lake el 1s
Ale ORFENS =, DEFENSE
Pl UINEC 24 Le
OFFENSE WINS, DEFENSE PRESERVES
* [he first time I ever profited $10,000 a month was
paradigm-shifting but not shocking. Then $50,000 a
month, then $100,000, then $200,000. When _ the
acceleration happened, it became clear that my theories
about wealth were true: wealth accumulation was mostly
about the quality of the numbers attached to your life. It is
these numbers that determine if you ever have a chance to
become a part of the Unscripted 1% .°9
The Offense/Defense Principle mandates that real
financial freedom®!! not subject to devout frugality or
minimalism only happens with a potent offense. Offense is
income and/or asset explosion. Instead of earning $50,000
a year, you start making $50,000 a month. This is how the
wild future you envisioned in your 1/5/10 Planasy°!? can
happen. Unless you plan on becoming the next Brad Pitt or
Lebron James, this only occurs in control of a business.
Defense, on the other hand, is about expense reduction
and buzz-killing frugality. Oddly, a defensive player
somewhat perceives his role in the rat race and opts to live
life in the cheap seats, limiting their cheese. Cheap
unhealthy eating, cheap airline tickets on Southwest, cheap
shoebox apartment, cheap vacations (if any), cheap this,
cheap that. Then the game becomes about moral victories.
If you can’t do, eat, watch, travel, or buy what you want, do
you really have freedom? Don’t let the rat race’s
honeypot?® convince you this is a winning strategy. It’s a
tool in the toolbox, but it won’t build the house.
A popular phrase in personal finance circle-jerks is “live
within your means.” True with one nuance: Live within your
means with the intent to expand your means. Two people
earning $35,000 and $350,000 a year respectively can both
be living within their means. Yet one lives extravagantly
with champagne and caviar while the other medicates their
survival with bread and water. When Elon Musk boards his
private jet, he’s “living within his means.”
Unfortunately, the offensive/defensive relationship is a
one-way street. A porous fiscal defense can ravage a strong
offense. Yet a strong offense can do little to temper a bad
defense. Poor money management can’t be medicated with
more money. It’s like throwing deck chairs off a sinking
Titanic. Eventually, the boat sinks. This is why many lottery
winners and athletes go broke just years after acquiring
millions. A strong offense is suddenly shut out, combined
with a reckless defense, and wham, bankruptcy follows. A
potent offense can cover your ass, but as they say, when the
tide retreats, you eventually see who’s been swimming
naked.
Defense is squeezing nickels from dimes. And because
our working life spans roughly a short fifty years, saving
nickels doesn’t work. Dollars are needed. That’s earning a
life-altering income or building a multimillion dollar asset.
Then, and only then, will defense take its sacred role:
wealth accumulation for Unscripted purposes followed by
wealth preservation. Yes, both are important: Offense wins
the game in ten years or less, defense preserves it for the
next fifty.
KEY CONCEPTS
Financial freedom is won on offense (income/asset),
not defense (expense/debt reduction).
e« “Live within your means” with the intent to expand
your means.
¢ You can live a luxurious life and still live within your
means.
e A poor defense can destroy a strong offense, as in
the case of famous athletes, lottery winners, and
celebrities who go bankrupt.
CHAPTER 14
ele MIG Neos is Tem
SI RAieGy
DON’T USE MARKET INVESTMENTS FOR WEALTH, USE THEM FOR INCOME
&
W hen I was a child, my great-grandmother would give
me a five-dollar bill every time I saw her. I would
deposit those bills at the bank in a passbook savings
account. In between deposits, I noticed that the bank added
more money to my account. This “free money” that
mysteriously appeared in my savings account was an
interest payment. While it was only a few cents (which is a
lot to a ten-year-old), it fired a few neurons. I then
understood that old money gave birth to new money. And
with no effort or work, other than waiting for next month.
This childhood memory was a profound moment for me. It
crystallized that I could receive a lifetime paycheck without
working.
As I got older and earned a bachelor’s degree in finance,
I soon learned there was a big problem with this strategy:
to earn a large regular paycheck, it required a ton of cash,
like millions. And if I wanted a luxury lifestyle immune from
economic recessions? More millions. A four percent yield on
$10,000 is only $33 a month. That wouldn’t pay my electric
bill for one week. On the other hand, four percent on
$10,000,000 is a whopping $33,000 a month. That would
pay for a lot, and with some leftover. Looking back, my free
money realization was my first encounter with investment
income—not the business of products or services, but the
business of money—or a money-system.
A money-system is an investment portfolio that pays you
for renting or investing capital. In return for your rental,
you get paid monthly interest, capital gains, profits, or
dividends. And the payment is entirely passive, like my first
“free money” experience. Such capital investments could be
a bond, a dividend-paying company, a public partnership, an
investment fund, or a real estate investment trust found on
the world’s various stock markets.
Fast forward about forty years. Every month for the last
fifteen years, my money-system pays me a big paycheck, or
what I call my paycheck-pot. I purposely have this payment
mailed to my home in the form of a paper check. Better, I
will receive this paycheck for the rest of my life. They say
that money won always feels better than money earned. I
can attest to this truth. Except I’ve never won any money,
but I feel the rush of “free money” every month when I get
my money-system paycheck. The payment varies monthly,
but every year it adds up to a nice chunk of change, about
the average salary for a C-Suite executive at a mid-sized
corporation.
For example, a lot of my cash is invested in bonds: tax-
free municipals, corporate, emerging-markets, and closed-
end funds. Other investments are in dividend stocks, like
Abbie Vie (a healthcare company) and a nice allocation of
real estate trusts. This capital allocation gives me
diversification where my money isn’t parked at one place
and solely denominated in cash. For example, one of my
favorite money-system investments is Southern Company.
This electric utility powers many southern American states.
I own thousands of shares. Its yield hovers around five
percent, and as of this writing, the dividend is about $2.66
per share a year. The company hasn’t cut its dividend in
nearly 70 years. Seventy years! Ten thousand shares equal
$27 ,000 a year, completely “sit on your ass” income. Yes,
the “free money” fantasy my great-grandmother sparked
with her five-dollar gifts has been my reality for years.
Here is a chart that shows the monthly returns for a
money-system at varying interest rates—and this is
theoretically without touching the principle.
Return $2,500,000 $5,000,000 $10,000,000
3% $6,250/mo. $12,500/mo. $25,000/mo.
4% $8,333/mo. $16,666/mo. $33,333/mo.
5% $10,416/mo. $20,833/mo. $41,666/mo.
6% $12.500/mo. $25,000/mo. $50,000/mo.
But wait, didn’t I say stock market investments are part
of the Slowlane honeypot? And that compound interest, the
concept behind the rat race’s “live poor die rich model”?® is
an inefficient wealth creator? Yes, but the difference is in its
purpose and application. As scientists, we’re not using the
stock market for wealth creation, we’re using it for income,
liquidity, and inflation protection. We're not trying to turn a
hundred bucks into $10 million over forty years, we’re
trying to turn $10 million dollars into a $30,000 paycheck
every month. Specifically, don’t use the capital markets to
make you rich, use it to keep you rich.
My money-system is only a small portion of my net worth.
At any given time, I don’t have more than 25 percent
invested in the stock market. As this book asserts, the stock
market is risky place for your life savings. Should the
markets crash, my life wouldn’t change. I’m not dependent
on Wall Street. Remember, we’re scientists looking to serve
the rat race, not be held hostage to it. The money-system’s
purpose is to beat inflation, to keep money liquid, and to
grab an income doing it. Escaping the rat race is a job for
our business, not the stock market.
KEY CONCEPTS
Old money, or savings, gives birth to new money,
often completely passive.
A money-system is the business of renting capital, a
considerable cash sum invested in income-producing
assets (dividends, bonds, real estate trusts) that
produce regular monthly or quarterly income.
For compound interest to be effective, you need to
start with a large sum.
A boring four percent return on $5,000,000 is more
than $16,000 monthly, without touching the
principle.
Your money-system should only represent a small
portion of your net worth.
Your business is for creating wealth; the capital
markets are for renting your wealth which pays you
passively.
Chaya Pela (s
ile ESCANPe INUIMisielr
Sin Gy
TURN FREEDOM INTO A REAL NUMBER, NOT A FORTY-YEAR PIPE DREAM
&
6 2,050.
Excluding travel, clothes, and toys, that’s the carrying
cost for my Liberated Unscripted lifestyle®? per year. If you
think $62K isn’t much, let me add some details. I live well
and pay cash for everything. That means I have no debt,
including every vehicle I own. I own property but carry no
mortgages. My home has everything you could imagine.
Things like a pool, basketball court, sauna, ten-car garage,
even an orchard. This number doesn’t include a multi-
million-dollar timber cabin under construction in Sedona.
Although I have no biological children, I have two teens
living in the house who eat as much as two gorillas. Despite
the money pit I’m building in Sedona, I have more money
between my businesses and investments than I know what
to do with.
Still, even without life’s three biggest expenses
(children, mortgage debt/rent, auto financing), $62,000 is
still a chunk of change. It represents pure “existence
expenses” mandated by breathing. Things like real estate
taxes, licenses, medical services, food, gas, utilities, a litany
of insurance and trust products, maintenance and repair
services, and other miscellaneous life overhead.
If you want to escape the rat race as a Liberated
Unscriptee like myself, you’re going to need a ton of money.
In that case, you need at least $1.2 million, earning at least
five percent yearly to pay for the annual overhead. You'll
also need to come up with several million dollars to buy the
houses and cars on top of that. And you’ll need a safety net.
Add another few million there. I’m not saying all this to
brag, but to shed light on what many refuse to accept.
Freedom is not free, but damn expensive. Existence costs a
ton of money. And if you desire a luxury lifestyle (cars,
dream house, vacation place, etc.), we’re now in the mid-
seven to the eight-figure realm. As the popular meme
posits, yes, “The rent is too damn high!”
So, how much money do you need to enjoy your optimum
lifestyle as designed in your 1/5/10 Planasy? This answer is
widely different for everyone. Countless entrepreneurs on
my forum are not motivated Mercedes Benzes and
mansions, but freedom.
In truth, I think everyone is motivated by freedom. For
some, a Mercedes S-Class parked in front of a 10,000
square foot house reflects that freedom. Either way, it
doesn’t matter. To make that freedom a reality, you need
money— and lots of it. But how much exactly? Have you
ever taken the time to figure it out?
Now you can and it’s called your Escape Number. An
Escape Number is the dominant goal that represents the
amount of pretax money you need to earn to escape the rat
race in the desired lifestyle specified in your 1/5/10 Planasy.
Here is the equation:
Escape Number = PTEA + Money-System + POM
The variables are as follows:
PTEA = The pre-tax income you need to EARN to
purchase the assets you specified at your ten-year
vision.
Money-System = The pre-tax earnings you must
earn which must be SAVED in a lump sum investment
which pays the yearly carrying costs of the assets plus
the yearly lifestyle and existence expenses.
POM = The “Peace of Mind” variable is an arbitrary
percentage of your money-system which represents
liquid, surplus cash providing you with insurance
from lengthy economic recessions and/or stock
market crashes. This is also calculated on a pre-tax
basis (divided by [1 - tax rate]). In Unscripted Book
One, I called this the “fuck you” pot—money you can
use to pursue passion projects or hobbies.
Because these numbers are based on pretax figures, the
escape number can seem quite sizable. Taxes are a rat race
reality, ignoring them is not. Here is how you solve for the
equation:
STEP 1: CALCULATE THE PTEA- Reviewing your 1/5/10
Planasy, calculate the pre-tax earnings needed to purchase
the assets you envisioned at your 10 year vision. To
calculate the tax rate, divide the asset cost by top tax rate
in your country subtracted by 1. At 40%, you would divide
by .6, or 60%. Example:
Nice house= $2,250,000
Vacation condo= $500,000
Four cars= $250,000
After-Tax Cost of Assets = 2,250,000 + 500,000 + 250,000
= $3,000,000
Before Tax Cost = 3,000,000 / .6 = $5,000,000
Translation: To purchase $3,000,000 in assets, you will
need to earn $5,000,000 before taxes.
STEP 2: CALCULATE THE ASSET CARRYING COST -
Looking at your ten year vision again, now calculate your
yearly carrying cost for the assets described above by
multiplying by 1.5%. This covers insurance, utilities,
property taxes, and miscellaneous repairs. Next, add your
carrying costs for your lifestyle and existence costs. These
are costs like health insurance, food, clothing, and
entertainment. If you plan to have children, add $15,000 to
the carry cost for each child. And finally, to calculate the
after-tax carry cost, divide total cost by the respective tax
rate on passive investments in your country subtracted by
1. At 40%, this is again a division by .60, or 60%.
Asset Carry Cost (1.5% x $3M) = $45,000
Health Insurance = $10,000
Lifestyle/entertainment = $10,000
Existence expenses = $10,000
Three Children (C) = $45,000
For each child you plan to have, add $15,000.
Annual Carry Cost = $120,000
Gross Carry Cost Before Tax = $200,000
Translation: You need pre-tax earnings of $200,000 a year
to net $120,000 and support your the 10-year lifestyle
outlined in your 1/5/10 Planasy.
STEP 3: CALCULATE THE MONEY-SYSTEM THAT FUNDS
THE PTEA CARRYING COST - Now it’s time to calculate
your money-system, or the paycheck pot, the after-tax lump
sum savings needed to generate $200,000 in yearly
investment income. This is accomplished by dividing the net
carry cost ($200,000) by .05, or 5%, the expected yield on
safe, non-volatile investments, divided by the expected tax
rate minus one.
Paycheck pot = [Carry Cost ($200k) / Expected Yield (5%)]
= $4,000,000
$4,000,000 / [1 - 40%] = $6,666,666
Translation: You need pre-tax earnings of $6,666,666 to
save $4,000,000 yielding 5% to generate $200,000 in
yearly passive income which then again is taxed down to
$120,000.
STEP 4: CALCULATE THE POM - Finally, multiply your net
money-system investment by your “Peace of Mind”
percentage, and then again, divided by an expected tax
rate. Because Liberated Unscriptees are not dependent on
investment returns, this metric is your insurance policy and
immunity from economic recessions. The smaller the
percentage you use, the more risk you undertake with stock
market calamities and other uncontrollable market events.
At least 50% is recommended as POM figure. I use more
than 200%.
POM = Paycheck Pot x 50% = $2,000,000
$2,000,000 / [1 - 40%] = $3,333,333
Translation: $2,000,000 is your “peace of mind” cushion
which is obtained by pre-tax earnings 0 $3,333,333.
STEP 5: CALCULATE THE ESCAPE NUMBER - The last
step is to calculate your exact Escape Number by adding
the PTEA to your money-system number.
PTEA + Money-system + POM = Escape Number
$5,000,000 + $6,666,666 + $3,333,333 = $15,000,000
Translation: To escape the rat race and enjoy your
dream vision in your 1/5/10 Planasy, you'll need to earn
roughly $15,000,000 before taxes. This assumes
$4,000,000 is invested in passive income investments, you
saved a $2,000,000 “POM” cushion, and you own all your
homes and cars without loans or mortgages.
As you can see, freedom enjoyed luxuriously, is
ridiculously expensive, especially if you want children. If you
want to feel better about your Escape Number, you can
transform it into an after-tax savings number. To do so,
simply divide your Escape Number by [1 - TaxRate]. In our
example above, $15,000,000 adjusted by a 40% tax rate is
$9,000,000. Translation? Save $9,000,000 and you'll hit
your escape number and make your 1/5/10 Planasy a
reality.
Review Appendix A to see just how expensive freedom
costs—even if it involves frugality and living in a trailer
park. Any other expectation will be a lit wick to
disappointment. But don’t get frustrated: This book will
light the dots... all you need to do is connect them.
KEY CONCEPTS
¢ Basic existence expenses are terribly expensive,
even in a minimalistic living situation.
e Expect a life of unrestricted freedom and relative
affluence to cost millions.
e The Escape Number is the sum of the pre-tax
earnings needed to purchase the assets specified at
your ten-year vision, plus the pre-tax investment sum
which funds the carry-cost for your dream lifestyle,
plus additional pre-tax funds for economic immunity.
e When calculated on a pre-tax basis, the Escape
Number can seem incredibly large.
IGNORANCE IS BLIND
MONDAY, SEPTEMBER 5, 2016 - 4:43 PM
(71 DAYS LATER)
Thump!
Sam dropped four books on the kitchen table.
“They all pretty much say the same thing,” she reported
to Jeff.
He looked up from his cereal, still chewing his Raisin
Bran.
“Apparently the whole world thinks not drinking coffee is
the key to getting rich,” Sam said flatly. Jeff lifted an
eyebrow. Sam started with the Starbucks trope. “If we stop
drinking coffee and save—”
Jeff held his hand up and interrupted. “Stop. I don’t need
to hear the same bullshit, the old live like a monk for forty
years so I can retire rich as an old geezer.” He paused, then
continued, “Am I right?”
Sam nodded, frowning.
Determined to change their lives and finances, the
Trotman family spent their Labor Day reading. They
agreed: Their current trajectory was’ unacceptable.
Identifying the status quo as the problem, Jeff and Sam
became voracious readers. Sam focused on finance books;
Jeff gravitated to books on career advancement. They had
an audacious dream, and they wanted it done within the
next ten years. Great in theory, but it felt like they were
searching for a leprechaun in Alaska. So they sought the
advice of best-selling authors.
Sam read (and then skimmed) three personal finance
books. The first was from a tall cheeky guy with pearly
white teeth who made a fortune selling motivational
seminars. Then another by a hedge fund billionaire, and
then another from a nationally syndicated television
personality with orange skin and an annoying voice. After
reading the same stale argument over and over, she told
Jeff the bad news. “Living poor so we can die rich old seems
to be the central theme of all of them.”
Jeff laughed. “Yeah, and all of those authors aren’t rich
because they cheapskated and saved for four decades.
What bunch of fucking hypocrites,” Jeff barked as Sam
walked away with the books. “Been there, done that.
History repeats, and when it does, we won’t be in its way.
There has to be a better way, something that doesn’t involve
risking our entire life savings in the stock market just so we
can just give it to a nursing home forty years later. Maybe
Forex trading? Or wait, Bitcoin! I’ve been hearing a lot
about that lately.”
“You’re right,” Sam sighed, dropping the books in the
trash. “I’m tired of the penny pinching, and I’m tired of
killing myself at the hospital.”
She studied her husband. “Maybe you can rob a bank.”
He bounced back, “Or maybe you can work at a
gentleman’s club.”
She raised a curious brow and then said, “Funny...
notice how anything with ‘gentleman’ in it is code for
douchebag?”
“Huh?” Jeff asked, confused.
“A gentleman’s club?” she asked rhetorically. “It’s a place
where disgusting men ogle women. And a ‘gentlemen’s
ranch’ is a piece of land where a bunch of dickless men
hunt defenseless animals with high-powered rifles.” She
scoffed, “How fair is that? If you want to show your brave
masculinity, why the gun? Just go kill ’em with your bare
hands. As far as I’m concerned, ‘gentleman’ is code for a
pussy who can’t get no pussy.”
Jeff gaped at his wife, shocked, but not. Her tangent
wasn’t unusual, but he knew whenever she_ spoke
vulgarities, she was passionate. Flatly he said, “Well, I guess
that’s a NO on the strip club.” He paused and then
snickered, “Which leaves me to rob a bank.”
Sam huffed. “I’ll head back to Amazon and search for a
different answer.”
He nodded, then opened his laptop. “I’ll look into this
Bitcoin thing. In the meantime, you should probably dig
those books out of the trash. You could probably sell them
on Craigslist or donate them.”
Sam feigned a smile, feeling no more confident than ten
minutes ago.
Nearly a month would pass, but their financial ignorance
would remain the same. Sam couldn’t sell those finance
books on Craigslist as there were no buyers, not even ata
buck apiece. She guessed ubiquitous advice is, well,
ubiquitously cheap. She ended up donating the books to
Goodwill.
It was now the first Saturday of October and Sam was
returning from a walk with Bella.
“Whew, it’s getting cold out,” Sam reported as she
rubbed her hands to warm up. She removed the leash, and
the Labrador rushed Jeff at the kitchen table and sidled up
to his leg. Bella begged on her haunches expecting a post-
walk cookie. Jeff glanced at her but did nothing. The
begging continued until Sam intervened. “You just going to
ignore her? She wants her treat.”
Jeff gestured to the pantry. “I’m busy.”
Sam glared at him. “Fine.”
After tossing Bella a treat, Sam loomed over her
husband, her hands on her hips. Her cheeks were flushed
from the cold. “You and Bella have the same personality.
Stubborn, transparent, impulsive... easy to fluster...” He
looked up, unfazed. She continued, “What’s got you pissy on
the computer?”
“About five million dollars,” Jeff reported, crossing his
arms. He nodded at the whiteboard. “Our cute little plan we
designed a few months ago. That’s how much money we
need to make that happen. And that’s being conservative.”
Sam stood back. “Jesus, five million dollars?”
“Yeah,” Jeff scoffed. “We’re coming up about four million
short, and that’s assuming we work until we’re eighty years
old.” He snuffed in disbelief. “I already feel eighty. I imagine
if I live that long, I will feel ancient.” He cornhole-tossed a
dishtowel onto the chair and shook his head, grimacing.
“Not sure how I can make any more money. My company
isn’t promoting anyone. Hell, they’re not even hiring. And
my salary is more than I’d earn if I quit and started
somewhere else.”
He looked up at his wife, fingering his temple. “Maybe I
should go back to school and get my MBA. The senior VP in
my division has one and he makes almost a $90K a year.
With the year-end bonus, he probably makes more.”
Sam scoffed, “MBA?! We’re still paying our student
loans, and you want to take more? And waste two years
studying for it? For what, $20,000 more than you’re making
now? No way.”
He paused, processing her passion. “You’re right. We’ve
already circled these wagons for five years.” He thought
about his dream workshop and pointed to the vision board.
“So I’m still lost on how we’re going to do that. At the rate
we get paid, in won’t happen in thirty years, much less ten.”
Sam sat down where they both sat in silence for several
moments.
The television murmured behind Maddy’s_ closed
bedroom door.
Bella snored.
A throaty muscle car growled as it drove by on the street
below.
Disgusted, Jeff said, “I just don’t know our next step and
I feel...” His voice trailed off.
Sam leaned toward him. “Helpless?”
“Not really, maybe, I can’t explain it.” He ran his hands
through his hair, pondering the emotion. “I feel blind even
though I have eyes. I can hear the world, taste it, smell it,
that there’s this beautiful universe out there, but no matter
how hard I look, it remains hollow and one-dimensional.”
He chewed his lip, giving the unremarkable wall a hard
stare.
She unenthusiastically offered, “I can take on a second
job bartending. I already work nights, so it wouldn’t be too
disruptive to my real job.”
Snapping out of his trance, Jeff blew a raspberry. “You
can’t be serious; didn’t we just end that insanity? You
already work four ten-hour shifts, and now you want to
sling bottles at some dive bar on the other three?” Jeff
huffed, “Heck, Maddy and I barely see you now. We’re not
doing that again.”
She curled a strand of hair behind her ear, her jaw
clenching in frustration. “I just don’t know what the answer
is besides spending our every waking hour working for
more money.” She sighed as she felt her stomach roil.
“Did you look into that Bitcoin thing?”
Jeff gave her a disappointed nod. “It’s way _ too
complicated. I felt like I needed a computer degree to
understand it.”
Sam commented, “I think I understand what you meant
about being stuck in the darkness no matter how hard you
look. It just doesn’t seem fair.”
Jeff laughed, “Fair? The media is bought and controlled
by either Wall Street, the politicians, or the mega-
corporations. You were expecting them to give you some
golden truth into paradise?”
Sam didn’t answer. After a long silence, she jested, “Well,
which will it be? Chase or Wells Fargo?”
Jeff shot her a puzzled look.
“The bank we’re robbing.” She stood up and faced their
ten-year vision on the wall. “Because there’s no way I’m
giving up on this.” She turned and peered at her husband.
Jeff shrugged and then winked. “You tell me, Mrs.
Cleaver.”
lal Ate Wala Ile
Viale rial WOU Ss evs a Gig
CHANGE YOUR LOCUS, OR STAY BLIND
&
[be first sports car I bought was a Corvette. After a few
days of driving it, I started seeing Corvettes
everywhere. Turns out, the car wasn’t as unique as I
thought. Of course, more Corvettes weren’t on the road—
the only thing that changed was my perception. Namely,
awareness—my brain was no longer blinded to this visual
stimulus. This is why the car you own seems more common
than it actually is.
Every day, your brain is flooded with billions of bits of
data. To survive the chaos, your mind has to ignore most of
it. Put another way, you’re blind to what hides in plain sight.
This phenomena, known as your reticular activating system,
simply means that once you’re made of aware of X, you
brain no longer filters for X and X becomes highly visible.
Think of it like a radio—while there are hundreds of
frequencies, you only hear the one you’re tuned to.
In much the same way, the rat race has trained your
brain to perceive the frequency it wants you to hear. Your
brain is blinded to the solution it needs to hear, even though
it is right in front of your face. In the Trotmans’ case, their
brains are trained to see Toyotas and Hondas when they
need to be looking for Corvettes.
Each of us possesses a Jocus of money, and it presages
how you attack money problems. When more income is
needed, what is the plan? Better job? Better wage or
salary? Your money locus is like your reticular activating
system for wealth—if it is tuned only to see cars owned by
the rat race, that’s what it will see. Further, your money
locus also gives you a default identity for operating within
the rat race. This rat race identity gives you the golden
ticket to escape, or the golden handcuffs to remain. Namely,
you can’t go from a rat to a scientistS’ until you hone the
right locus, giving sight to where there was once blindness.
Here are the three loci...
The Wage Locus
Rat Race Identity: The Worker
Rat Race Reality: The Unskilled Job Hopper
Monetization: Wages for Unspecialized Labor
With a wage-locus, you identify as a worker in the rat
race, an unskilled job-hopper paid by the hour. If you earn
$15 an hour and trade ten hours of your life to your job, you
get $150 in return. Money is always a function of time
traded at a job, jobs which are often paid poorly. Retail
clerks, delivery drivers, cashiers, construction laborers, and
fast-food cooks—all jobs where your boss views you as a
disposable body, an easily replaceable cog in a system. And
likewise, the employee returns the favor by viewing the job
as equally disposable—jobs come and go based on who pays
the most. With a wage-locus, financial distress is attacked
by looking for a new job with better wages. Carry a wage-
locus through life, and your likely rat race outcome will be
poverty.
The Salary Locus
Rat Race Identity: The Professional
Rat Race Reality: The Skilled Salary Optimizer
Monetization: Salary for Specialized-Skill
Rats with a salary-locus identify as professionals. They
link money to a profession, a skilled labor mindset which no
longer commands cash by the hour, but by the year. Money
is framed as a function of the specialized-skill and the salary
commanded by the craft, specialized fields such as
dentistry, engineering, pharmacology, or _ software
development. Upward mobility is linked to specialized-skills
and the company that employs them. Folks with a salary-
locus often go to graduate school to seek expanded skills
and/or credentials. With any skill that commands a salary, a
salary-locus tends to lock that person into a career for life.
While some change careers mid-life, few do. Unlike their
unskilled job-hopping counterpart, a_ skilled _ salary-
optimizer seeks to maximize their pay by the year, not by
the hour. Money problems are narrowly attacked by
existing skills and experience, and hence, narrow solutions
are found. Case in point: the Trotman family. The likely
outcome for those carrying a salary-locus is mediocrity.
The Profit Locus
Rat Race Identity: The Entrepreneur
Rat Race Reality: The Value-Creator
Monetization: Profit for Net Perceived-Value
View the world with a profit-locus, and money won’t be
an esoteric concept linked to your time. It will be seen as a
function of profit earned as an entrepreneur. While this
might seem obvious, it isn’t because profit has become a
politically incorrect pinata. So, let’s examine that word...
profit.
Profit is net perceived-value (NPV)—the margin between
the value you create and the value you sell it for. If you
invent a gadget that sells for $50, but it costs $20 to get to
market, your net perceived-value, or profit, is $30. If you
sold 500,000 over ten years, your profit is $15,000,000.
Sadly, profit (or NPV) is a double-edged sword. If you sell
ten gadgets in ten years, you make three hundred bucks
while losing valuable time.
Net perceived-value by way of net profit also represents
enterprise value. If you sold 500,000 widgets, your
company might be worth $3,000,000. If you do sell that
many, $3 million becomes realized net perceived-value or
profit.
With a profit-locus, you identify within the system as an
entrepreneur who creates value. Income is not linked to
jobs, your skills, or your experience, but profit, which is a
function of value delivered. Carry a lifetime profit-locus, and
wealth and freedom will be your prize.
To identify your locus, ask this: If you needed to earn an
extra $25,000 by next year, how would you do it? Here are
how the different loci react to this question.
The Wage Locus:
I need a better job that pays more per hour! Anyone
hiring? Can I get more hours at work?
The Salary Locus:
I need to go back to school and learn a new skill, one
that pays a better salary! Time to call the head-
hunter!
The Profit Locus:
I need a better product that is more valuable to more
people!
Locus determines focus. It unblinds and gives sight to
possible solutions. The Trotmans aren’t struggling because
they’re lazy. They struggle because their loci is still owned
by rat race. And hence, the Trotmans are stuck dithering as
they discuss advanced degrees and second jobs. As the old
saying goes, when you’re the hammer, everything looks like
a nail. Better jobs or better careers isn’t the answer, seek a
better profit through a better product with better value.
KEY CONCEPTS
Awareness, or your reticular activating system, gives
you sight to things that normally would remain
hidden.
Your locus of money is how you tackle money
problems.
A wage-locus sees money as a function of unskilled
labor earned by an hourly wage.
A salary-locus sees money as a function of
specialized-skills earned by yearly salary.
A profit-locus sees money as a function of profit from
units of net perceived-value and unlocks the door to
a rat race escape.
Your locus determines focus.
CHAPTER |?
THE BAD MATH PRINCIPLE
NO LEVERAGE, NO CHANCE
‘Loe me what you do for work, and with near certainty,
I’ll predict if you’ll ever escape the rat race. How? I
simply look at the type of personal leverage you have, if any.
The Bad Math Principle reveals that every person stuck in
the rat race is subject to unscalable and uncontrollable
math, namely, no leverage. Truth is, every Unscriptee who’s
successfully freed themselves did so through some type of
mathematical leverage. And no, I’m not referring to
business leverage such as investment margin or real estate
loans. These are three rat race anchors that keep the Bad
Math Principle active in your life.
Anchor one:
Income and wealth are correlated to time.
Carry a wage- or a Salary-locus and the rat race will
convince you that the only way to make money is to trade
your time for it, either by the hour or the year. When I had
a job stocking shelves at Sears, I only made money if I
clocked in. No work, no progress. My income was limited by
the hours I traded and the hours available, both
uncontrolled and unleveraged. Similarly, a respectable
profession, say a manager, wouldn't be paid by the hour, but
by the year. Wealth creation is directly correlated to how
much time you trade. If more money is needed, more time
must be traded.
Anchor two:
Time cannot be scaled.
When you have a wage-paying job, your income is limited
by the number of hours you work. Theoretically, the upper
limit per day is twenty-four, but realistically, it is about eight
to twelve. Likewise, if you are paid by a yearly salary, the
same constraint exists: the theoretical maximum number of
years you can work is just fifty or sixty. Realistically, it’s
about forty years. Forty hours and/or forty years is what I
call, bad math.
40 hours a week @ 20/hour = $800 a week
40 years of work @ $50,000 a year = $2,000,000 lifetime
earnings
If time was scalable...
400 hours a week @ 20/hour = $8,000 a week
400 years of work @ $50,000 a year = $20,000,000 lifetime
earnings
No matter how energetic you are, you can’t work 400
hours a day, or 400 years. Time cannot be scaled.
Anchor three:
Rat race economics cannot be scaled.
The rat racer’s reaction to these punitive problems is to
seek a higher wage or a bigger salary. In doing so, they will
switch jobs, seek new careers, or even go back to college
and blow a fortune on an advanced degree. Now, problem
three stands in their way. Instead of being constrained by
time, now the rat racer is constrained by rat race
economics. Namely, excess supply, weak demand. When a
gazillion people can do what you do, you have no leverage.
You won’t make $20/hour one day as a short-order cook,
and next week, you’re paid $1,000/hour because suddenly
short-order cooks are in high demand and short supply. If
you earn a yearly salary, the same economics apply: if you
make $60,000 this year as a transaction auditor for a drug
company, you'll never make $600,000 next year because
suddenly no one can do your job. Thousands of college
graduates would be standing in line waiting to take your
job. In both instances, you cannot control or scale dollars.
For example, let’s simplify our financial journey and
assume your Escape Number is $5 million. In this
scenario, you can safely save your money under a mattress,
and there are no taxes or inflation. If it takes you 30 years
to save $5 million, it will be just as valuable as it is today.
Let’s examine the math and see how poor leverage plays
out in various careers and jobs. Keep in mind, these figures
are BEFORE any taxes and presumes a generous 10%
savings rate.4
Career/ Profession __ Average Pay Years toEarn $5M Years to Save $5M |
Architect 87,130 57 yrs 574 yrs
Auto Mechanic 46,760 107 yrs 1069 yrs
Carpenter 54,200 92 yrs 923 yrs
Chef / Head Cook 58,740 85 yrs 851 yrs
General Medicine MD 211,000 24 yrs 237 yrs
Dentist (Employed) 180,000 28 yrs 278 yrs
Elementary School Teacher 65,300 77 yrs 766 yrs
Insurance/Claims Adjuster 70,650 71 yrs 708 yrs
Loan Officer 76930 65 yrs 650 yrs
Retail Salesperson 31,200 160 yrs 1603 yrs
Commercial Pilot 110,830 45 yrs 451 yrs
Software Developer 109,950 | 45 yrs 455 yrs
As you can see, if you make $31,200/year as a retail
salesperson, expect to trade 160 years of your life to gross
$5,000,000. That’s 41,666 eight-hour shifts every single
day. Add life overhead (taxes, inflation, basic necessities),
and saving $5,000,000 at a ten percent savings rate, you'll
need a cosmic 1603 years. In other words, to amass a
freedom-making fortune today, you'll need a early fifth-
century start, a time when Attila the Hun ruled. As you can
see, driving the rat race with a wage-locus is a death
sentence.
The news isn't better with a salary locus. Suppose you
have a respectable job as an architect. In that case, you'll
need 574 years to save $5,000,000, assuming a generous
ten percent savings rate. Perhaps the experts who push this
method of getting rich consulted the Old Testament first—
those Biblical folks supposedly lived to 900. With a $87,000
salary, your best-case scenario is hardwired in the rat race
system—and that scenario is mediocrity. Wage- and
salaried-rats are stuck with what I call Uncontrollable
Limited Leverage or ULL. And “ULL’ means you'll never
escape.
Professional athletes and celebrities are one of the few
professions that can disrupt ULL. When there’s only one
person on the planet with Lebron James’ skills, and
everyone wants him for basketball or endorsements (low
supply/high demand), Lebron James is not subject to
Uncontrollable Limited Leverage. As such, he gets paid a
leveraged amount. This is why most people desire fame but
don’t know why. Fame equals leverage and favorable
economics. Who doesn’t want to make $5 million per movie,
$500K per speech, or $50K per game? The human talent
itself is the system of leverage, usually as an outlier skill,
like pitching a baseball over 100 mph. When it comes to
average Joes like us, we have no such option. I’ll never sing,
act, or play baseball. If you want any chance of a rat race
escape, bad math, or Uncontrollable Limited Leverage
cannot be part of your existence.
The truth is, the Bad Math Principle isn't taught at
university. It would never be revealed in some financial
“stop drinking coffee” best-seller. Most educational sources
promote bad math strategies: save a hundred dollars a
month, invest for forty years, hope for eight percent
returns, blah blah blah. Numbers like 100, 40, and 8%
doesn’t create wealth fast, it creates wealth old, or never.
Bad math handicaps wealth and becomes a bad offense.?!3
A motivational quip might inspire you for a day or two, but if
your numbers aren’t right, it doesn’t matter. Mathematics is
absolute and universal. As they say, running enthusiastically
in the wrong direction is, well, the wrong direction.
KEY CONCEPTS
There are three anchors to bad math: 1) Income is
correlated to time, 2) Time (hours/years) cannot be
scaled, and 3) Rat race economics (wages/salary)
cannot be scaled.
Even in respectable, good paying professions, saving
$5 million dollars at a 10% savings rate would take
centuries.
Celebrities and athletes are not subject to ULL, or
bad math.
Financial gurus or universities do not teach
Uncontrollable Limited Leverage.
ClalAle Per is
int SeEeI A IZED=OINili
SnAeGy
PUT LEVERAGE INTO YOUR LIFE: MORE MONEY, LESS TIME
&
im or most of my early twenties, I struggled with money,
paying debts, and building wealth. While I had a profit-
locus,°!®I wasn’t offering perceived-value. The fancy car
didn’t help either. But everything changed when I taught
myself a specialized-skill, web development, and then
transformed it into a specialized-unit. It was my first
significant step at fielding a powerful, life-changing
offense.?!3 How? Anytime you transform a specialized-skill
into a specialized-unit, you weaken the rat race’s anchors
and its bad math.?!’ There are two types of specialized-
units—one weakens time’s grip on your income, the other
fires it.
1. The second-order specialized-unit
2. The first-order specialized-unit
THE SECOND-ORDER SPECIALIZED-UNIT
After I taught myself a specialized-skill, web design, I
sought to sell that skill. I sold websites to clients who
needed them. Through a second-order specialized-unit, I
multiplied my return on time. Here’s how: With a wage-
locus, I could take my specialized-skill in web design and
seek a part-time job designing websites. The outcome is
$15/hour. With a salary-locus, I might seek a full-time
position with benefits. The outcome is $42,000/year or
about $22/hour—an improvement over the wage-locus but
costing much more time.
However, if I charged an average of $2,500 per website
and spent an average of ten hours delivering it, I would 10X
my return on time. I’d go from $22/hour to $250/hour.
More money earned; less time spent to earn it.
Despite this nice 10X pay bump, a_ second-order
specialized-unit is still subservient to time. If I can’t find and
sell clients who need websites, I’d earn nothing. The
second-order specialized-unit is also limited by time since I
can’t code 24 hours a day, and many of those hours are
needed for the sales process.
Similarly, tools can also create second-order specialized-
units either through ownership or competence. Think
sewing machines, welders, scissor lifts, or lawnmowers. An
entrepreneur on my forum mows lawns for $150/mo. Seems
cheap eh? Maybe, but he’s smart and has done the
numbers: With his crew, it takes him 15 minutes, 20 times a
year, for $1,800 in revenue. Total time spent is just five
hours to earn $1,800 or $360/hour. He admitted that few
people would hire his company if they worked out the
numbers—$150/mo. is reasonable, $360/hour is not—that’s
the power of a specialized-unit. A second-order specialized-
unit is a decent start to breaking rat race economics.
THE FIRST-ORDER SPECIALIZED-UNIT
A first-order specialized-unit can be anything with a
demand as long as this product/service can eventually
survive disconnected from your time. Think software,
franchises, physical products including food, games,
information, books, clothing, gadgets, inventions—anything
that exists separate from you, the entrepreneur.
This book offers a good example. If I carry a salary-locus
and my specialized-skill is writing, I could seek a writing job
and make $30,000 a year. Or, with a profit-locus and a
second-order specialized-unit, I could charge 100 clients
$500 per project and earn $50,000 a year as a freelancer.
Problem is, I can’t work 50,000 hours or freelance 50,000
jobs—time remains in control. Or I could make $500,000 a
year selling my specialized-skill 50,000 times packed as a
first-order specialized-unit, a book.
Ultimately, the specialized-unit is a three-pronged attack
against the rat race anchors. Unlike time and rat race
economics, specialized-units possess scaling power. From
foodstuffs to software subscriptions to grooming products,
your creation must have the theoretical power to be sold in
massive quantities, which transforms bad math into good
math. The right first-order specialized-unit can be
replicated, used, consumed, or sold repeatedly. This fact
puts rat race economics on notice: more dollars, less time.
KEY CONCEPTS
e« There are two types of specialized-units which can
help you 10X your return on time: first- and second-
order.
¢« A second-order specialized-unit transforms your
specialized-skill into a finished product or service,
like a website, a copywriting service, or a freelance
project.
e A second-order specialized-unit is usually
subordinated by time.
e A first-order specialized-unit is a product or service
severed from your time and can theoretically be sold
in massive quantities, and often repeatedly.
ClayNe ele (e
Wale BUSINESS Sis em
STRATEGY
FIRE TIME: MAKE PROFIT TIMELESS AND UNENDING
&
M y stepson is a great writer of fantasy. Like, Game of
Thrones material. And as the owner of a publishing
company, I’m dying to publish his work. The more he
endures college (which he hates), the more he writes. He
senses a job isn’t in his future. Surely that has nothing to do
with his stepdad. :-)
Anyway, by itself, a book is worthless. So is a video game,
a mobile application, a food product, or an invention.
Ultimately, a specialized-unit?!’ needs to get into the
hands of buyers who need it. If a specialized-unit weakens
the rat race, the business system kills it. A business system
is responsible for getting your specialized-unit into the
hands of the right audience.
For my publishing company, the business system consists
of my forum, my customer list, my eCommerce website, my
social media accounts, and all the business channels that
sell my books like Amazon, Ingram, and Baker & Taylor,
including several dozen foreign publishers outside the USA.
My stepson could write the best book ever written, but
without a business system to sell it, it’s untapped potential.
If you owned a food product, your business system would be
your eCommerce website, your marketing initiatives, as
well as the wholesale distributors and retail channels like
Target, Kroger, or Safeway. Here are some examples of
specialized-units and their business systems.
Specialized-Unit | Business System
A mobile app Apple store, Google play, your website, your mailing list
A book Amazon, Audible, Ingram, bookstores, your blog, your mailing list
An invention Your website, retail stores, distributors, your mailing list
A clothing line Your website, retail and wholesalers, your mailing list
A movie Netflix, YouTube, movie theaters, TV networks, syndicators
Like your specialized-unit, a business system is not
constrained by time, namely, your time. It dissolves the rat
race’s first anchor. The systems used to sell this book exist
in perpetuity, essentially becoming hundreds, perhaps
thousands, of full-time salespersons who never stop
working, never go on break, and never need a vacation. My
publishing company earned a tiny paycheck the moment
you bought this book. Who knows what I was doing at that
moment—sleeping, writing, walking the dog?
In effect, the business system puts you “on the clock”
24/7 for the rest of your life. The business system trades its
time for money, replacing YOU as the method for trade.
Whereas a specialized-unit invalidates rat race economics,
rendering the last two rat race anchors null and void, a
business system gives you power over time. For example, I
wrote the book The Millionaire Fastlane more than ten
years ago, and it still provides me with a six-figure annual
income. The writing time I invested in this specialized-unit
occurred over a decade ago, but the business system is still
working, giving me a positive net return on my time, not the
standard negative 60 percent.?8
Ultimately, I could sell millions of specialized-units, but
pushing those sales comes down to driving demand and the
business system I employ. For example, there are millions of
authors who have tried self-publishing, uploading one book
into the Amazon eco-system and waiting. They ultimately
sell little to nothing. They have the specialized-unit (the
book they wrote) but they don’t have the business system.
Publish a book on Amazon and wait is not a business
system, it’s a lottery ticket. I spent years building my
business system. From advertising mediums to retail
channels, to wholesale distributors, to marketing strategy—
the grind doesn’t end at the specialized-unit, it begins. A
specialized-unit without its business system is like ying
without its yang.
KEY CONCEPTS
e A business system is an all-encompassing system
from sales channels to marketing initiatives and is
responsible for getting your specialized-unit into the
hands of the right audience.
e A specialized-unit combined with a business system
gives you power over time and limited leverage.
e A specialized-unit and a business system are both
needed to break the three rat race anchors.
CHAPTER 20
ihEAKN@ WEED GE GAP
S RAG Y
MIND THE KNOWLEDGE GAP OR FALL BEHIND
&
Y ou didn’t tell me exactly how you did it!
Some years ago, a reader griped that my book failed
to reveal the “exact” methods I used to grow my business.
Clearly, the comment was from someone who had never run
a business, much less worked in marketing or sales. The
fact is, the business building strategies that I used years
ago, even months ago, will no longer help me today. A sales-
shattering tactic that worked in 2018 won’t work in 2021.
In short, yesterday’s beneficial knowledge is_ today’s
worthless knowledge.
Behind this truth is what’s called a knowledge gap. The
knowledge gap is the divide between what you need to
know but don’t. This could range from a skill you lack, to a
poorly executed marketing strategy, to a misinterpreted
data point on a cultural trend. The knowledge gap carries a
natural expansion bias and is correlated to change. Because
technology, economics, societal norms, consumer tastes,
and behavior are all dynamic, the knowledge gap is
continuously expanding. Jeff looked into bitcoin and
relented that it was “too complicated.” In the future, this
will be a big missed opportunity simply because he wasn’t
willing to close his knowledge gap. Just because something
seems complicated, doesn’t mean you can’t learn it.
Learning anything new always seems complicated!
For example, every success I enjoy today was earned
yesterday by minding the gap. I was in constant pursuit of
knowledge: I learned how to code, learned new industries,
learned marketing, and learned how to adapt. In another
example, the 2020 COVID-19 pandemic has blown a
massive chasm in the world’s collective knowledge gap.
Ever hear the phrase “the new normal?” This adjunctly
references the knowledge gap and its rapid expansion.
How do you shrink your knowledge gap? The first step is
to acknowledge its ever-expanding existence. The second
step is persistent learning. How many books have you read
in the last month? If you think about it, anytime you read a
book, you’re getting a personal one-on-one mentorship with
the author. In other words, countless experts, billionaires,
scientists, and other leaders are willing to mentor you and
help you close your knowledge gap. New education, and
therefore, new opportunities are always just a few googled
keystrokes away, a bus ride to the library, or just being a
keen observer.
Regrettably, Scripted rat racers don’t mind the
knowledge gaps; they mind the cultural ones: the latest
celebrity news, royal weddings, and dumb football games
that won’t matter a mere week later. In fact, the larger your
knowledge gap, the deeper the rut your life will suffer. The
origin of a rut relies on the same knowledge that got you
there in the first place. Mind the gap or get swallowed by it.
An old education rarely fits a new opportunity.
KEY CONCEPTS
What works today doesn’t work tomorrow.
The knowledge gap is the ever-growing space
between what you don’t know and what you need to
know, caused by shifts in tastes, technology, and
human behavior.
Only persistent learning can shrink a knowledge-
gap, preceded by acknowledging its existence.
And old education rarely fits a new opportunity.
PONE Vy aalO lee
SATURDAY, NOVEMBER 12, 2016 - 8:11 PM
(43 DAYS LATER)
Sam sat down in the booth across from her husband. Her
hair was wild as if she’d arrived by motorcycle, and her face
was pale without its usual makeup. She tore off her jacket.
Underneath, she wore one of her preachy vegan ‘T-shirts
which read, “INTELLIGENCE DOESN’T GIVE YOU THE
RIGHT TO MURDER—DO YOU WANT AN ADVANCED
ALIEN SPECIES EATING YOUR CHILDREN?” Jeff glanced
at the shirt and tried to remain expressionless as his wife
usually kept her militant shirts confined to the house.
Between the shirt and her disheveled appearance, it looked
like she was ready for household chores, not a night out.
They were at their favorite restaurant, Pancho’s Mexican
Cantina. After Sam pressed for a “date night,” they met for
dinner. Jeff arrived straight from the gym on Sam’s urgency,
his shirt stained with sweat, his hair messy.
“You couldn’t wait until I got home and changed?” He
sized her up and didn’t let her answer. “You look as bad as
me.”
Sam gleamed, ignoring the dig. “Looks like you had a
good workout.” He had been on the treadmill when his wife
beckoned to meet, and she’d insisted—no drive home to
shower, no change of clothes, and no explanation for the
urgency.
“Yes,” he said, dressing his lap with a napkin. Looking
around, he said, “First time we’ve been here in years. We
loved this place, you know, before we became Mr. and Mrs.
Scrooge, except without the fortune.”
Sam’s eyes twinkled, detached from her husband’s
flippancy. When the waiter came by, she ordered a
margarita, a deviation from her usual Cabernet. Jeff
ordered his typical whiskey. After the waiter shuffled off,
Jeff stared at her pointedly. “Okay, let’s have it. What’s up?
Since we’ve sat down you’ve had this shit-eating grin. And
you didn’t order a glass of wine, which is your chill-out
drink. The margarita suggests a celebration.”
Sam veered in, her eyes sparkling. She whispered as if
discussing national security, “I found it.”
“Found what?” Jeff eyed her incredulously, his tone just
as hushed. “You found the floor plans to the bank? You
found you’re long-lost English royalty?” He chuckled.
“No.” She fell back into her booth, “I found the answer to
our problem.”
“Our problem? Which one? Last I checked we had a few
hundred.”
“Escaping the rat race,” she reported.
Jeff motioned to their drinks, which had just arrived.
After the waiter took their food order, Jeff continued,
“Seeing we ordered twenty-dollars in drinks, I’m guessing it
doesn’t have to do with living like broke coeds for the rest
of our lives?”
“Right.” She licked the salt on her margarita and sipped.
“I found the answer in a couple of business books.”
“Business books? Like how to climb your way up the
corporate ladder and get promoted to CEO? I don’t—”
Sam held up a hand, interrupting. “No, this is not about
working in a business, but starting one.”
Jeff didn’t flinch. “What books? Anyone I know?”
“No, probably not. This first book was called The
Millionaire Fastlane, the second was called Unscripted.” Jeff
eyed her suspiciously. She continued, “At first, I dismissed
the author because of the cheesy title, but once I dug into
his message, it really made sense. The writing is a bit
juvenile for your taste, but the math made perfect sense
and—”
“The millionaire what?” Jeff snapped, “Please don’t tell
me this is one of those pyramid things. Everyone in our
family hates your cousin because she’s always peddling that
skin care crap on anyone who breathes.”
Sam shook her head and then smiled. “No, Jeff,
Unscripted isn’t a pyramid. More like we'll be building our
own. According to the author, we need to start our own
business, a particular type of business which can yield
asymmetrical returns.”
Jeff curiously spiked his eyebrow. In a million years, he
never expected his wife to utter the phrase “asymmetrical
returns” and it raised a red flag. Was she falling victim to
scam? She continued, her pace increasing. After a twenty-
minute overview followed by their dinner’s arrival, she
asserted, “Read the books and you'll see what I mean. We
can do this in ten years or less. And it won’t involve the
stock market or living like hippie cheapskates.” She sipped
her margarita and continued. “We’ve been approaching this
rat race thing from the wrong angle, blindly following a
bunch of strategies suggested by the scientists who control
the lab rats. It’s time to turn the tables and be the ones who
make the rules. And the rules are all based on math.” She
held up her drink as if she was toasting. “And you’re the
math guy, not me.”
Unconvinced, Jeff’s eyes narrowed as he bit into his
quesadilla. His wife and math mixed like chores and a
spoiled brat in the middle of video-gaming. Sam said,
measuredly, “I’ll give you the books when we get home so
you can read for yourself.”
Jeff followed with a glare as if he was a child
begrudgingly tasked with a week’s worth of homework.
“Start a business? Rats and scientists in laboratories?” He
wiped his mouth with his napkin. “Sounds, ahem”—he
cleared his throat exaggeratedly—“interesting.”
Clue Mele 21
ES MIME IR Geri I UIRINS
STRATEGY
CONSTRUCT A LEVERAGED VEHICLE: ONE UNIT OF EFFORT, FIVE UNITS
OF PAY
&
WV renever I drive to the post office, I pass a small
fashion boutique in a strip mall. The street is lightly
traveled, and the parking lot is always empty. One day after
breakfast at an adjacent café, the wife dragged me into the
store. While inside, I managed to ask the owner, an older
woman, if she sold online or had a website. She admitted
she did not and flashed me a sideways grimace as if she
expected me to sell her one.
After leaving the store, I could deduce with certainty
that this clothing store owner will never set herself free
from the rat race. Why? She’s stuck in an inefficient
business system with bad math.?!’ Suppose the boutique
averages 100 customers a week, which is a function of both
foot and auto traffic near the store. Because this boutique
doesn’t sell on the Internet, I can make a _ foolproof
prediction: there’s nothing the owner can do to scale those
100 customers into 1000. Or 10,000. Not by next week,
next month, or next year. The owner could be a genius
marketer and it still doesn’t matter. There is a zero
probability that this business owner could earn $2,000,000
next year, much less $500,000. This boutique owner has a
silent partner, and it’s bad personal leverage.?!’ While our
boutique owner owns a business, she’s failed to annul rat
race economics!.
The fact is, most business owners are struggling like
their wage and salaried counterparts. Having a profit locus
isn’t enough, especially if bad math governs your business
model.
Ultimately, you don’t want to trade your time selling your
skills; you want to invest your skills in a specialized-unit and
its business system. Instead of increasing the frequency
(more hours) or skilled value (more salary), work to expand
the reach (more people) and external value (more impact)
of your specialized-unit. This transformation creates the
potential for asymmetric returns—one unit of work, five
units of pay. The rat race’s primary ally, ULL, is replaced
CUL, or Controllable Unlimited Leverage.
In a business system, our specialized-unit,°!® could be
sold repeatedly and infinitely through time. Create a
specialized-unit with $50 of net perceived-value,°2© and
you’d earn $50,000 if you sold two to three of them per day.
Sell fifty per day and the number explodes to $912,500 and
only a short sixty-six months to earn $5 million.
Average Profit Per Unit Average Units Sold Daily Years to Earn $5M
50 11.0 yrs
$25 100 5.5 yrs
200 2.7 yrs
50 5.5 yrs
$50 100 2.7 yrs
200 1.4 yrs
50 2.7 yrs
$100 100 1.4 yrs
200 8.5 months
My internet business: $6 900 2.5 yrs
When I owned my internet company, 20,000 people
would routinely visit my service daily, and each visitor was
worth and average of $6. My conversion rate was around
4.5%. Looking at the chart above, how fast do you think I
built wealth and hit my Escape Number?*!° I had influence
over the numbers implicit in my rat race escape. Time was
not in control, I was. Math was not limited, it was unlimited.
That same physics exist with my publishing company.
First, “units sold” is a variable that scales into the
stratosphere. I can theoretically sell millions. I can’t sell the
hours or years in my life by millions, but I can sell my
creative contribution. Second, I can increase unit profit on
each book I print by price shopping, changing formats, or
producing shorter books. For example, I recently switched
book printers, which saved me about 60 cents per book.
That might not seem like much, but if you’re selling 200,000
units in one year, that’s a whopping $120,000— all because
I requested one quote from one different printer. One hour
of work yielded a $120,000 return and created a leveraged
earning event.
And finally, I can expand my leverage by adding more
authors and more books to my publishing company’s library
of offerings. The leverage is continually growing, evolving,
and is always pliable to my effort. And it is chock-full of
specialized-units.°!® Not bragging, just illustrating the
power of Controllable Unlimited Leverage as it relates to
scaling wealth.
Sell a million of anything, and yes, you will earn millions.
Impact millions, make millions. These four words are the
simple secret. The more people you affect, either in scale
(width) or magnitude (depth), the more money you earn.
Scale, or width, refers to the volume of sales you can
possibly make—ten million phone cases sold at $1 profit on
each equal ten million dollars. Your market size and
leverage potential is denominated by how many people
want phone cases, not by margin. On the other hand,
magnitude represents the gravity of the impact and is
reflected in a much larger unit profit. One thousand bronze
sculptures sold at $10,000 profit on each is also ten million
dollars. With magnitude, the potential leverage is both in
the market size and the margin. Scale minimally impacts
many; magnitude maximizes impact on a few. Both lay the
foundation for asymmetric returns.
Here’s another way of looking at it. Imagine our rat race
as an actual marathon across a vast countryside covering
thousands of miles. For your participation, the Scripted
gangsters promise you a wonderful “retirement” at the end
of this journey, a retirement filled with wealth, freedom, and
mobility. Put another way, the number of miles you need to
travel is your Escape Number. Have a three-million-dollar
Escape Number? Great, your marathon is three-million
miles. As you can imagine, this long marathon could take
decades. And progress is randomly dependent on weather
and road conditions. Plotting a route will be the hardest
thing you’ve ever done. Getting lost is easy—frustration,
even easier. Most die during the marathon, their soul
crushed and their body broken. Others complete the
marathon at the end of their life, arriving old and
exhausted, their freedom confined to a nursing home.
When we take to the marathon with a wage-locus, we’re
walking with sandals. Our progress is unleveraged and
symmetrical—one unit of effort, one unit of movement.
Going faster, or running, is nearly impossible. If we go to
college and earn a degree, we graduate with a salary-locus
and upgrade to a pair of nice sneakers. Now we can walk
faster, or better run. One time-based unit of effort is still
rewarded one unit of movement, just a larger unit. In both
cases, constant effort is required and based on time
“pounding the pavement.” While running longer or faster
for a higher wage or salary might be possible, the rat racer
is still stuck doing labor. Take a day off, and the movement
stops. But more telling is this: Neither method has the
capacity for leveraged, asymmetrical movement. You can’t
run at 40 mph or travel 500 miles in one day. One unit of a
time-based effort will always generate one unit of
movement.
Moreover, a foot marathon puts you at the mercy of
uncontrollable environmental forces like rough roads, steep
hills, and stormy weather—unpredictable events like job
losses, economic recessions, inflation, and now, pandemics
that cause worldwide shutdowns. A bad storm (recession)
could halt your trip or a steep road (inflation, cost of living,
etc.) can drag movement to a crawl. Altogether, these travel
methods lack the speed and control needed to get across
the country, at least within five years.
If you want a chance at freedom, you’re going to need to
ditch the conventional travel methods and upgrade to a
faster, more efficient means of movement—a Jeveraged
vehicle. Instead of wasting your time running the marathon,
invest your time in a system that will leverage your effort,
and eventually, run the marathon for you. When you invest
your time in a specialized-unit, the engine, and a business
system,°!9 the vehicle, you’re ditching the “time for money”
orthodoxy. While your foot-based peers might get off to fast
start and seem further ahead on their marathon, eventually
you'll overtake them. Soon, one unit of effort can translate
into ten units of movement—output goes asymmetrical.
Better, when you build a business system, you can assign
an operator to drive it. Or, put it on autopilot. You can make
progress on your journey while not at the helm. That’s like
having someone climb the Stairmaster for two hours while
you enjoy the fitness benefits.
The point of this marathon analogy is to demonstrate the
losing gambits. People don’t struggle because they’re lazy.
Working five days a week for fifty years is not easy. People
ultimately struggle because they’re stuck in the rat race on
foot. Sandals and sneakers aren’t solutions—the levered
vehicle is. You can’t move mountains with your bare hands
when moving mountains needs a bulldozer.
KEY CONCEPTS
e A business with bad math is also subject to rat race
economics.
e Replace a time trade with a time investment in a
specialized-unit and its business system and
asymmetric returns become possible—one unit of
work earns you five units of pay.
¢ Impact millions of lives, and you will make millions.
e Asymmetric returns are possible when Controllable
Unlimited Leverage replaces Uncontrollable Limited
Leverage.
e Consider a rat race escape like a long-distance
marathon across the country.
e With a wage-locus, you walk the marathon in
sandals, with a salary-locus, you jog the journey in
sneakers, and with a profit-locus, you take the road
in a leveraged vehicle.
e An operator can drive a leveraged vehicle, giving you
a tool for freedom...
lala lela, A
Walle POL MIGrete eG PA
Pl UINES Le
INVEST IN TIME, STOP TRADING IT
B ill Gunton is the actor who played the corrupt warden
in the famed classic, The Shawshank Redemption, a
movie I’ve seen at least fifty times. Recently, he disclosed to
a journalist for the Wall Street Journal that he still earns
nearly six figures a year for his supporting role. At the time
of filming, his acting talent earned a leveraged amount
because it was a second-order specialized-unit.°!® Still, the
time he spent acting for the role was_ considered
monomorphic pay, a direct trade of time for money. If he
wanted to earn more money acting, he needed to invest
more time into more movies. Time still was in control.
The good news is the actor also contributed to a first-
order specialized-unit—the movie—which could be licensed
over and over, the business system. The specialized-unit
and its ability for replication and repetition allowed the
actor to enjoy a lifetime dividend in the form of royalties. In
Unscripted terms, the Polymorphic Pay Principle is when a
past time investment continues to yield future income.
Sometimes indefinitely.
Trillions of dollars are spent every year in finance, from
accounting to money-saving techniques to investment
research and strategy. If you could turn a buck into a buck-
twenty (a 20 percent return) year after year, you’d be
considered an investment rockstar. The world has no
shortage of resources willing to educate you on how to
invest your money.
However, when it comes to investing your time, your
most precious asset, there are no resources. Absolutely
nothing.
What few realize is that you can invest your time just like
money. And the yield on a good time investment pays more
time, namely free time. Money earned while not working is
a payment of free time. And this phenomenon only comes
from business systems.°!9 If you make $1,000 overnight
from a business system (your past time investment), that’s
$1,000 you don’t have to earn in the future. If you value
your free time at $50 per hour, you just earned twenty
hours of free time: 20 hours X $50 = $1,000. Income
earned while not working pays free time—the work time
spared from your future. Likewise, money-systems®!* pay
polymorphic pay, just not very well. If you bought one share
in a dividend-paying company that pays $2 a year in
dividends, a third-party business system, your past time
investment pays you polymorphically for life.
Monomorphic pay, on the other hand, is the rat race’s
default method of payment—trade time, earn money.
Culture has easily conditioned us to associate time as a
monetary means of barter. Work is rationed by the hour or
the year, linked to one sequence of cash. McDonald’s is
hiring at $15 per hour, Raytheon is hiring an engineer for
$110,000 a year. Monomorphic pay is the only approved
narrative for earning money inside the rat race. Hence,
time, as it is culturally sold, is a conspirator against your
freedom.
To convert time into an ally, you need to invest in time,
not trade it. Anytime you invest in a business system
through a _ specialized-unit, whether successful or not,
you’re an investor of time seeking to get a yield of
polymorphic pay... eventually. This multi-payment oddity
exists in few professions, and those careers that do possess
it rarely achieve it. An inventor can get paid license fees for
past inventions. The specialized-unit is the invention and
the channels that sell it are the business system. An actor
can earn residuals on scenes acted long ago, as in widely
syndicated television shows. An author can earn royalties
from a book written years ago. My books have been
translated into over 25 languages, and I get royalties on all
of them. The book is the specialized-unit, the foreign
publishers are the business systems... all working around
the globe for me, 24/7. When someone buys my book in
Thailand or Korea, I’m likely sleeping. But I’m earning
polymorphic pay—1) the small profit and 2) the time I don’t
need to work for it in the future. If you formulate a product
that sells in stores nationwide, the same applies. You’re
earning polymorphic pay because that product can be sold
all day, every day.
In “making money” circles, this concept is often
romanticized into passive income, but don’t be fooled.
Notwithstanding Warden Norton and his windfall, passive
income is anything but passive. Passive income is often put
forth by hucksters who sell five-figure coaching programs
to a growing tide of wannabe entrepreneurs, or what I call
dreampreneurs. After dealing with thousands_ of
entrepreneurs over the years, I’ve come to learn that
passive income seekers are also, ironically, quite passive.
When dreampreneurs discover that “passive income” can
take years to foment, they often quit, seeking easier
pastures. All my business systems that pay polymorphically
took years to build—a period where the pay was poor and
the work long. Passive income is for amateurs, polymorphic
pay is for the professionals.
KEY CONCEPTS
Monomorphic pay is income earned for a direct
trade of time for money, either by the hour, by the
year, or by the unit.
Polymorphic pay is income earned from a past time
investment.
Like money, you can invest “time.”
Anytime you invest in a a specialized-unit, whether
successful or not, you’re a time investor seeking
polymorphic pay.
Polymorphic pay is romanticized into its popular
twin, passive income.
Polymorphic pay isn’t as easily obtained as its
“passive income” hucksters would advertise.
ClAk Ren. 25
THE CONSUMER/PRODUCER
Pl UINES Le
MATH DOESN'T LIE, AND NEITHER WILL YOUR ANNUAL REPORT
M ath doesn’t lie, but people do. This was proven
during the 2008 housing crisis when most
foreclosures weren’t from people on the fringes of poverty,
but affluent and well-educated buyers, according to a study
by the St. Louis Federal Reserve.+ The crisis was less about
predatory lending and more about buyers overreaching for
appreciation and affluence with “liar loans.” Without the
numbers to verify the truth, the fiscal “health” of any buyer
was relegated to their honesty, or I should say, dishonesty.
When you want to investigate the health of a corporation
or assess an investment, you look at its annual report—the
math: cash flows, income statements, balance sheets,
margins, profits, revenues, debt, rate of return—all data
points which offer an unassailable look underneath the
hood. By law, corporations need to report the truth, or it’s
fraud. The bigger question is, if you had to tell the truth
about the numbers in your life, what would they say about
the team you’re playing for?
The Consumer / Producer Principle states that your
annual report reveals your role in the rat race. Rats play for
Team Consumer, scientists play for Team Producer.
Whatever team you profess, your rat race role—as it stands
now—has a definitive, foolproof lie detector test. It’s called
math, and math doesn’t lie.
Despite our corporate status as human chattel barcoded
with a Social Security number (SSN), we simply don’t
examine the mathematics hitched to our life. But we should.
If you had to organize a personal annual report exposing
the numbers in your life, what would it look like? What
would the numbers say concerning how you generate
revenue, spend money, and invest in your future? If your
personal financial situation, You Inc., traded like a stock on
the stock market, would an investor buy it? Hell, would you
buy it? Or would You Inc. have already filed bankruptcy and
gone the way of Blockbuster, Enron, or Leeman Brothers?
The fact is every human on the planet is backpacking an
invisible annual report which bears our numbers. But
unlike a corporate report with hundreds of numerical
variables, there are only five you need to worry about. And
they will reveal your role as either a rat on Team Consumer,
or a scientist in Team Producer. They are:
1. Gross Annual Production (GAP)
2. Gross Annual Consumption (GAC)
3. Annual Net Existence (ANE)
4. Net Worth (NW)
5. Research and Development (R&D)
GROSS ANNUAL PRODUCTION (GAP)
Your gross annual production (GAP) represents the total
production value you and your assets generate in the year.
This could be your job salary, investment returns, business
profits (and its corresponding valuation), a real estate
holding, anything that has sellable value. Altogether, the
GAP represents your offense in the offense/defense pair.?!%
In the past, I’ve interchangeably referred to Gross Annual
Production as a Wealth Creation Equation.
For example, let’s say you’re a stonemason with a salary-
locus®!® derived from a specialized-skill. Last year you
earned, net of taxes, $50K, and your home appreciated
$10K. Your GAP on that prior year’s annual report would
simply be:
GAP = After-tax salary ($50,000) + Net Investment Gains
($10,000)
GAP = $60,000
GROSS ANNUAL CONSUMPTION (GAC)
The second variable is your gross annual consumption
(GAC), or total expenses, such as food, cars, housing,
healthcare, and entertainment. This number also includes
any liabilities incurred. Going back to your hypothetical job
as a stonemason, if you spent $40,000 that year and
financed $30,000 for a new truck, your gross annual
consumption is $70,000.
GAC = Living expenses ($40,000) + New Truck Loan
($30,000)
GAC = $70,000
ANNUAL NET EXISTENCE (ANE)
The third variable is your annual net existence (ANE). This
number reveals your net production or consumption for the
year. A negative ANE means you consumed more than you
produced for the year. A positive number means you have
produced more than you consume. Here’s the equation:
ANE = Gross Annual Production - Gross Annual
Consumption
Here it is for our stonemason:
ANE = $60,000 (GAP) - $70,000 (GAC) = - $10,000
For that year as a stonemason, you were a net consumer, or
a shopping-rat.
NET WORTH (NW)
Your net worth is the infallible lie detector test, the
definitive truth serum for outing rats and _ scientists.
Technically your net worth is the cumulative sum of every
ANE figure since you were old enough to work. Or it is
simply your assets minus liabilities. If your net worth is
positive, congratulations, you’re a producer—you’re playing
the game as a scientist. Negative? Sorry, that means you’re
a consumer and navigating the game as a rat.
Net Worth = SUM (ANE)years Or
Net Worth = Total Assets - Total Liabilities
ANNUAL R&D (R&D)
The final number is the annual sum of hours you spend
developing yourself—namely, the knowledge and skills for
excelling in a_ scientist’s world. Remember, culture
automatically drafts you to play as a rat for Team Consumer.
As a shopping-rat, your cheese is the weekend, for the
savings-rat, an elderly retirement. In both cases, you’re
consuming either material goods or investment products.
However, when you defect from Team Consumer to Team
Producer, it’s like learning a new language. Studying how
scientists play the game will require a constant education in
resources not easily found. Yes, they exist, but they must be
doggedly sought. This means becoming a lifetime student of
production, the language of scientists. For instance, when
you read an advertising message that persuades you to buy,
examine it from the producer’s perspective. What specific
reason made you buy? A label? Price? A benefit? A good
story? Why didn’t you buy the competition’s offer? How
does this company make money? What psychological tactics
are used in its marketing? What kind of operational
processes are involved in offering this product or service?
Is this company making a profit? What is the revenue
model? Is this product manufactured overseas or locally?
Once you take on a scientific role of production, suddenly
you won’t be buying products on Amazon, you’re selling
them. Instead of chasing the trend, you’re serving the
trend. Instead of taking a class, you’re giving a class.
Instead of investing in a hedge-fund, you’re the one
managing it. Instead of consuming investment research,
you're offering it.
Additionally, R&D could be self-improvement, from
learning how to write or speak better to learning code to
getting yourself in tip-top shape. In the business world,
companies who invest nothing in R&D die. Likewise, people
who invest nothing in R&D die in the rat race. No
corporation can survive without a purpose and, ultimately, a
profit. Look at yourself in the same manner! Altogether,
these five variables reveal your financial life. Moreover, they
expose (and then prove) your current rat race status.
Are you a rat? Or a scientist? And are you progressing or
regressing?
Like math, your net worth won’t lie.
KEY CONCEPTS
Math doesn’t lie, people do.
Rats play for Team Consumer, scientists for Team
Producer.
Your annual report represents the numbers in your
financial life and determines your chances of a rat
race escape.
The five key numbers in your annual report are
Gross Annual Production (GAP), Gross Annual
Consumption (GAC), Annual Net Existence (ANE),
Net Worth (NW), and Annual Research &
Development (R&D).
The rat race automatically drafts you to be on Team
Consumer.
To succeed on Team Producer, focus on your R&D
and aim to learn the language of scientists...
business, finance, marketing, management, etc.
Your Annual Net Existence determines if you are a
net producer or a net consumer for the year.
Your net worth, the sum of ANE, indicates your
current role in the rat race; positive = scientist,
negative = rat.
inte) MON 2) (imps =
WEDNESDAY, NOVEMBER 16TH, 2016 - 6:15 PM
(4 DAYS LATER)
“I’m boiling water for tea, you want some?”
Jeff sat quietly rubbing his chin while staring blankly at
his notebook, Neve. Today’s twilight cross was unusual.
Instead of retreating to the bedroom from the day’s work,
Jeff sat at the table and started doodling in his journal. Sam
had seen the expression before, the last time he attempted
his taxes.
“Hello?” She walked to the table and pulled out a chair
next to him. “If this is about Thanksgiving, I said I’d take
care of it, cooking, cleaning, all of it.”
“No, not about Thanksgiving.” He shrugged. “You said
we should start a business, so I was just trying to figure out
what we can start that will make us some quick money.” He
opened Neve and pointed to a bulleted list. “I’ve been
reading up on hustles. Everyone on the Internet talks about
following your passion. So I’m thinking you could start a
blog about organic gardening or vegan diets. Or maybe I
can start a podcast about the Chicago Cubs, or do YouTube
videos on playing saxophone.” He scratched his head. “I just
don’t see how any of that’s going to make us money. And
enough that we can retire early and afford to send Maddy
to DePaul.” He closed his notebook. “I mean, do I just throw
some videos up on YouTube? And they pay me? It’s all
pretty foreign to me.”
Sam chuckled, “DePaul? You’re already making college
decisions for Maddy and she’s not even out of elementary
school yet?”
“T know, but with this business thing we’re planning, I
thought we’d axe one thing off the to-do list.” He chuckled,
“You have a problem with our alma mater?”
They’d both attended and met at DePaul University in
Chicago. Coming from the Idaho tundra, Sam wanted a city
experience, complete with the cold. Jeff tried to avoid the
cold and wanted to attend the University of Texas. When he
was 17, he’d spent some time in Austin and loved it. Surely
South Padre Island and the spring break that followed days
later had nothing to do with his college preferences. His
parents vehemently vetoed the choice, and DePaul was the
compromise.
Jeff didn’t wait for her to answer about college and
carried on. “You love gardening, and the amount of food
that we get from a tiny patch of land is amazing. Between
the tomatoes and carrots, you’ve saved us a fortune. Your
garden know-how certainly has to be worth something. Or
maybe we start selling at the farmer’s market?”
His wife swallowed hard. She strayed over to the
window.
Now gibbering at her back, Jeff added, “Or wait a sec,
how about we sell custom mirrors? Didn’t you say your
nurse friend worked for a manufacturer in L.A.? Mirrors
can be pretty expensive—I’m sure there’s got to be some
good profit margin there.”
Sam gazed through the glass from their second-story
window. It was already dark, and flurries had started to fall.
The oak trees surrounding their neighborhood were
already bare, their naked branches weaving up into the
dark sky like tentacles. She could feel the cold night
touching her through the window. She stood silent as her
husband rambled on for another minute. Tuning his voice
out into a muffled mess of nothingness, Sam’s gut churned
with anger. Her husband meant well, but he didn’t like
being told what to do. Clearly, he had no clue. Sam had
given him the DeMarco books, literally dropped them in his
lap as he lay in bed. But if the empty coffee mug that sat
atop them for four days was any tell, she doubted he’d read
them. She sighed and turned back to him, trying to hide her
disappointment. “Jeff, you’re not going about this business
thing the right way.”
He looked at her as if she’d just told him to jump into a
lake in mid-January. “What’s the right way? We need to
start a business and make money. You said it yourself.” His
eyes narrowed. “My new boss has been a complete asshole.
Ever since the last audit underperformed process review,
he’s been hell at work.” Jeff crinkled up his napkin and
threw it at his empty dinner plate. “I can’t take it anymore.”
“It’s not that simple.”
“Sure it is.” He leered at his wife, tone forceful. “We find
something and sell it. T-shirts, some trinkets from China, I
don’t give a shit. We can put it on eBay or something. You
wouldn't believe some of the crap people buy nowadays.”
He paused and then cracked the evening’s first smile. “And
then I can march into my boss’s office and tell him to take
his job and shove it.”
He motioned to the whistling kettle. “Oh yes, and I’ll take
some tea.”
She frowned at him, a dubious look painted her face.
“Get it yourself.”
CHAPTER 24
inle OMAN E Ip Silayale.Gne
REVERSE YOUR POLARITY TO ATTRACT MONEY
&
Pp tolemy, famed second-century Greco Roman
astronomer, is best known for his “Earth-centered” or
geocentric cosmology. He postulated that the earth was not
only stationary, but it was at the center of the universe. His
model, however, wasn’t entirely conjecture as it contain
numerous mathematical models to account for the erratic
paths of the celestial bodies. In hindsight, it was a theory
made of human hubris.
Unfortunately in today’s entrepreneurial culture, that
hubris remains. Countless aspiring entrepreneurs remain
aspiring because of their own selfish preoccupations—they
are operating as if they were the center of the universe.
Whenever you enter a market selfishly, you risk becoming a
Ptolemy money-chaser.
Many years ago, when I sat on the shoulder of the road
contemplating suicide, I didn’t know I was a Ptolemy
money-chaser. My reasons for starting a business were
purely selfish.
I want be my own boss.
I don’t want to wear a suit and ride a train downtown.
I'd like to help my mother retire early.
Whatever motives you have for starting a business, I’ve
have sad news. No one gives a shit. Well, except maybe for
your mom or your wife.
Ptolemy money-chasing is a poison-pen®* and is a
business mindset guided by me-centered introspection
instead of a market-centered extrospection. This poison pen
framed my early entrepreneurial days, from “following my
passion,” to wanting to own a Lamborghini, every business I
failed was centered on my selfish desires and needs. I never
paused and considered market needs because I was too
busy considering my own.
As an owner of a business forum with nearly 1,000,000
posts, I read a lot from aspiring entrepreneurs. It only takes
me a few words to know if they are Ptolemy money-chasers.
How? If their words reflect a positive charge toward money,
then I’m betting they bust. Take, for example, the following
statements, typical money-chasing:
e How can I make money starting a business?
e What hustle can I start with $500 and still make $5K
per month?
e I have a friend who manufacturers widgets; you
think I can make money selling them?
How can I make passive income?
e What’s a good product to import so I can sell on
Amazon?
e What’s the best business to start on a shoestring?
I knit a damn good sock; how can I sell them?
All these questions reflect a positive charge toward
money—Ptolemy money-chasing— as if money were
something to be captured, like a lost dog or a feral cat.
Sadly, money is also positively charged. And what happens if
you take two magnets of the same charge? They repel.
A rat race isn’t a rat race without its cheese. When a
scientist arrives at his laboratory on Monday morning and
drops a rat into the maze for the day’s study, he needs a
way to motivate the rat. Give it a reason to run. A reason to
work. Instinctually, rats are hungry for cheese. In the real
world, this cheese is money. As humans, we have an
instinctual, positive charge toward money-chasing, no
different than that rat seeking cheese. And it doesn’t matter
who holds the cash—the broke college student or the
billionaire philanthropist—cash always carries a positive
charge.
If you want to attract money instead of repelling it,
deploy The Polarity Strategy and reverse your polarity.
Instead of accepting culture’s positive charge and its failing
instincts, become negatively charged. How? Drape yourself
in value like you would a golden cloak. Value is negatively
charged, giving its owner gravity. Think of it like a drug-
dealer without the illegality.
While humans are positively charged to money, money is
positively charged to value. So if you or your business offers
perceived-value, the money will pour into your life. Namely,
what do you have that other people want? What solutions,
conveniences, or hungers are you filling? How many lives
have you impacted, even if minimally?
Think of it this way. Attacking money with a positive
charge is akin to chasing a finicky cat around the
neighborhood who outwits you in every pursuit, up the tree,
behind the bushes, under the car. This is how most people
attack the rat race, but it’s the wrong way to win the chase.
Instead, grab the cat’s attention. Offer the feline something
he wants. A can of tuna? Catnip? With a polarity reversal,
suddenly, the cat scampers right into your lap. Chase not
required.
When you carry rat race loci into the game of
entrepreneurship, you also bring with it its positive charge.
Instead of being need-focused, solution-oriented, and value-
driven, you’re “me” focused. Oh, it’s always been my dream
to own a sports bar, so I’m going to open one! Sorry but no
one gives a fuck. You’re chasing cats.
The harder you try to earn cash with me-centered
fantasies, the more it will elude you. You can’t win this game
if you can’t oust your selfishness. If you’re too busy focusing
on what you want, you'll never see what other people want.
The marketplace is a hungry, self-centered brat. And one
hungry brat doesn’t need another brat to join him. He
needs an adult to fill his needs. Be the adult. Feed the brats,
and they'll stop crying while paying you for the privilege.
The world simply demands its mediocre comfort’?’—provide
it, and you will enjoy magnificent comfort.
KEY CONCEPTS
Nobody gives a shit.
Ptolemy money-chasing is a poison pen marked by
selfish internal motives, not external market gaps.
People are positively charged to seek money, like a
rat would cheese.
Money is also positively charged, and two positive
charges repel, not attract.
Value, which is negatively charged, reverses your
polarity and attracts money.
If you’re too focused on what you want, you won’t
see what others want.
Gayle els 2s
Wale PASSION! eieINC le =
BUT PASSION DOESN’T GUARANTEE WINNING
walked into the bank, my guitar case strapped to my
back. The security guard eyed me suspiciously, and
deservedly so. I walked up to the teller and handed her
three coupons from my mortgage payment. “I’m behind on
my mortgage, I need to catch up,” I said.
The teller nervously glanced at the guitar case on my
back and then grabbed the voucher. She entered my
account number into the computer and, after a few clicks,
said, “With late fees and interest you owe $5,253. How
would you like to pay?”
Without answering, I whipped around my guitar case
and flipped its latches. The teller’s eyes widened as she
lurched back in her chair. The security guard jumped off his
stool and darted toward me. Expecting to see a rifle in the
guitar case, the mortified teller threw her hands up. But
instead of a gun, it held a banjo. I whipped it out and
started strumming Dixie.
The teller lowered her hands slowly and said, “What on
earth are you doing?”
I said, “You asked how I wanted to pay my mortgage.
This is my answer: I’m paying with passion.”
Okay, this story is not true.
I don’t play the banjo, but worthy to note: Beware of self-
help nobodies preaching passion as something to be
followed. The Passion Principle states that passion is a
horrible business model. Please, for the love of God, stop
following your passion. Because more than likely, that
passion won’t pay well, or it won’t pay at all. Trust me,
there’s no passion when you can’t pay the electric bill or hit
the Olive Garden once a month. Worse, you can ruin your
passion by lynching it to money, responsibility, and
mortgages.
When I was young, I loved driving as it represented
freedom. As such, many of my early jobs were behind the
wheel, from delivery driver to a limousine chauffeur. In a
few short years, my love for driving turned into a hate. And
decades later, it remains a hate.
The first problem with passion is that the markets
represented by passion are jam-packed. A glut of supply
means three things, all seeding a bad opportunity: 1)
Increased competition due to everyone chasing the same
passion, 2) Depressed margins due to commoditization and
limited differentiation opportunities, and 3) Diminished
leverage and poor probabilities.
First, the idea of getting paid to do passionate things is
juvenile and idealistic hooey. How many teenagers would
love a fat paycheck for playing hoops, riding horses, or
strumming guitar? Step in line behind the other gazillion.
When there are thousands, perhaps millions who are and
want to be doing precisely what you do, you have no
leverage?!’ and rat race economics are in play. Remember,
a crying infant doesn’t need another whiny infant in his
crib. He needs an adult.
Second, commoditization risk. When value is ubiquitous
and undifferentiated, the lowest price often wins. Think gas
stations, air travel, T-shirts, data storage, even personal
training. For a small business, a race to the bottom is a race
to poverty.
Third, wherever there is high competition, low margins,
and commoditization, your probabilities for success
plummet, as well as leverage. Remember, your annual
report and the math you put into it plays a huge role in your
success. If there are 70 million other “digital marketing”
companies you’re bidding against, expect leverage to be
thin and probabilities to be poor.
Adults are value-focused, and they don’t follow passion.
They follow needs, wants, desires, and solutions with a
production focus. They understand that passion doesn’t
come from doing, but from accomplishing. It comes from
being better today than yesterday. It comes from self-
development, overcoming fears, learning something new,
and solving the world’s problems one person at a time.
Jobe Stevens followed his passion for 12 years and now
works at Walmart as an assistant manager. Never heard of
Jobe? Well, that’s because he failed, and his passion
couldn’t pay the bills. His passion, abstract finger painting,
then became a hate because he no longer did it from the
depths of his soul but from the urgency of his bills. Don’t
expect Jobe Stevens’ failure to be featured on the front
page of Yahoo Finance where he shares his secrets to
success, one being, “follow your passion.”
Don’t let the publicized few (the survivors of the ill-
famed survivor bias) convince you otherwise. But what
about Steve Jobs, MJ?! He said, love what you do! Of
course, he did. But he was also a billionaire who created
massive value worldwide. Would you be passionate if half
the planet found value in your creative contribution? And
what if in a parallel universe, Steve Jobs is actually Jobe
Stevens? Someone who followed his passion but couldn’t
sell a damn thing and pay his bills? Is there passion for
losing? For failing? For someone telling you that your
product sucks? Think Steve Jobs would be on a stage at
Stanford University inadvertently immortalizing the horrific
business advice, “follow your passion?”
Conventional wisdom is wrong again, and like many
things, has it backward. Enduring determination doesn’t
come from passion but from purpose. Your effort itself must
induce passion. When you win or exceed your expectations
—winning a game, acing a final exam, or completing a
grueling exercise routine—the passion flows. Specifically,
winning and self-growth generate passion; losing and
marinating in comfort does not. Stop following passion;
have passion follow your effort.
KEY GONCEPTS
Passion is a horrible business model.
Passionate pursuits likely have increased competition
due to surplus supply, depressed margins due to
commoditization, limited differentiation, diminished
leverage, and poorer probabilities.
Lasting, enduring determination comes from
purpose, not passion.
There are no passionate losers who get the stage
and the spotlight.
Passion should follow your effort and its favorable
results from self-improvement and character
building.
Clmbate ie ae 26:
THE VALUE MARRIAGE
SRAEGy
PARTNER RELATIVE- AND PERCEIVED-VALUE TO MAKE MONEY
MAGNETIC
&
D> you know who Wolfgang Druckenheimer is? You
should... he cured cancert?.
His formula had the potential to save millions of lives.
But it didn’t.
Why?
Wolfgang failed at understanding the confusing world of
value. And that failure prevented him from being the most
revered person ever to live. Wolfgang and his cure died
together.
The fact is, you can wildly succeed at “creating value”
but fail at delivering it.
I’ve read hundreds of business books over the years,
including college textbooks required for two business
degrees. In all of them, I never read about perceived- or
relative-value. And it’s criminal. To succeed in any business,
you must combine these two variants of value. Or take your
value to the grave.
When I wrote my first book more than ten years ago, the
generic phrase “creating value” was a novel concept. Fast
forward, and today it’s now regurgitated by every twenty-
year-old YouTube guru with an iPhone. Still, entrepreneurs
repeatedly get “creating value” wrong. They think value is
monolithic when in fact, it’s nebulously varied. How you
deal with these variants will mark the difference between
attracting money ethically, chasing or stealing it, or worse,
suffering the same fate as Wolfgang.
The five variants of value are:
e True-value
e Utility-value
e Surplus-value
e Relative-value
e Perceived-value
The first and simplest is true-value.
True-value is the total value that your product delivers
when used as intended. The true-value of a cancer cure is
just that; cancer is eradicated. With software, it’s when all
of its functionality is used as designed to affect a solution. If
it’s a bottle of water, it’s thirst solved plus the bottle. With
any book, it’s every chapter and all its concepts in full
comprehension and deployment. If someone quits reading
after ten chapters, true-value—the book’s solution—is never
realized. In this case, true-value degrades to utility-value.
Utility-value is the customer experience after using your
product. As such, it is the most uncertain variant and often
subjective. If you used Wolfgang’s cancer formula and were
cured, the utility-value is a clean bill of health. If you used
his formula but didn’t get cured because you failed to follow
the precise instructions, utility-value fails true-value. In
another example, when I owned my marketing company,
some customers underutilized my software. Some didn’t
use certain features, others ignored customer leads. Utility-
value didn’t measure up to true-value. Suppose someone
stops reading this book at page fifty. In that case, utility-
value degrades from true-value, a value gap caused by their
skepticisms, biases, and expectations—not because I
delivered a book with three hundred blank pages.
Conversely, for someone who fully comprehends this book
and escapes the rat race, utility-value equals true-value.
Next, relative-value is the matriarch of value variants. It
is the true-value of your product as compared to other
products in the marketplace. Does your true-value have
relative worth when compared to what already exists? Or is
it exactly the same? Or worse? If Wolfgang’s cancer cure
was one among one million others, relative-value doesn’t
exist. Likewise, suppose you start a business selling T-shirts.
In that case, you fail relative-value because the world
already has four million entrepreneurs offering the same
thing. Does the world need another business selling T-shirts
on Facebook? It doesn’t. Instead, you create another value
variant: surplus-value—the dog in the value family.
Surplus-value is found in commoditized fields where
typically the best price wins. Surplus-value always struggles
to find a bid because there are hundreds, perhaps
thousands of alternatives.
The final value class is perceived-value, the patriarch.
Perceived-value is your product as advertised and viewed in
the marketplace. Optimally, it is your best demonstration of
true- and relative-value. This is your website, product
labeling, marketing, advertising, and messaging. When a
customer buys from your company, they always act from
perceived-value, hoping that what you advertise and boast
is what you deliver.
Perceived-value is the only value variant that can
polarize your charge from positive to negative.S2* Yes, a
profit-locus with a specialized-unit is a start.S'® But the
circuit only closes when relative- and perceived-value are
partnered. This is where Wolfgang failed. His cancer cure,
while truly valuable, failed at delivering perceived-value.
The truth is, no one believed his marketing campaigns. No
one believed his messaging or his delivery. He couldn’t
secure a hearing with the Food and Drug Administration,
much less get approval for the cure. True- and relative-
value remained hidden in the marketplace.
Perceived-value is king. And as such, it is often abused by
Shady marketers and wannabe entrepreneurs. When
companies’ struggle with true- and_ relative-value,
perceived-value becomes their hustle. Overpromising and
underdelivering, they often use deceptive marketing,
questionable claims, and shady behavior. A perceived-value
scam always rings “too good to be true.”
The 2017 Fyre Festival is a great example of a
perceived-value scam that didn’t deliver relative- or true-
value. Using a combination of influencer and social media
marketing featuring beer, beaches, and bikinis, a bro-
marketer (“bro” = boiler room operation—a huckster who
operates a perceived-value scheme) successfully sold
millions of dollars in tickets to a defunct festival on a tiny
Bahamian island. When festival goers arrived, they were
met with a barren wasteland with no stage, no beach, and
no Instagram-worthy selfies. Instead, they got processed
cheese sandwiches served in a FEMA crisis tent. Festival
experience? Ha, more like a prison experience. Perceived-
value gets the fish to bite. It’s negatively charged to money,
and the scammers know it. Great marketing, garbage
product.
Still, perceived-value can transform surplus-value into
relative-value. If you’re the best marketer in the fitness
industry, putting a unique spin on a stale concept, suddenly
your blog (surplus-value) might be perceived differently,
hence creating relative-value.
As entrepreneurs, our perfect scenario is the marriage
of relative-value, which is_ perfectly perceived
(communicated) and then used. If the marketing is
inadequate or the product is not used properly, utility-value
sinks below true- and relative-value. And then customers
start asking for refunds or calling you a scammer. If this
happens, it could signal issues in marketing, customer
support, and/or onboarding. Likewise, if you offer incredible
relative- and true-value but have no sales, you’ve got a
problem with marketing and messaging—the marketplace
doesn’t discern value. And finally, if you’re rolling in cash
but have 200 employees dedicated to chargebacks,
complaints, and lawsuits, you have serious issues. True-
value being one of them. Don’t be a scammy “bro-
marketing” shyster: Provide relative- and true-value, and
then communicate it effectively. You will make a killing.
Better, you won’t have to worry about the FBI knocking on
your door.
KEY CONCEPTS
Value has five variants, true-value, utility-value,
surplus-value, relative-value, perceived-value.
Perceived-value is the king value variant as it
exposes your relative-value to the right audience.
Marry relative- and perceived-value to become a
money magnet.
Perceived-value that doesn’t deliver relative- or true-
value exposes operational deficiencies, or is a scam.
The greatest entrepreneurial tragedy is to create
relative-value but fail at perceived-value.
Cae ent 27
Welle VOB PROV Ie RINGiely =
JOB PROXIES ARE A LOADED GUN: KILL OR BE KILLED
| n 2018, Amazon stopped paying commissions on rogue
authors gaming the Kindle Unlimited program. Within a
few days, entire author libraries were deleted along with
their author accounts. Revenue streams to the tune of
millions disappeared overnight. Not surprising, not just for
the sketchy tactics, but because these money-chasers chose
to build a job proxy.
The Job Proxy Principle is when your company’s entire
revenue stream is sourced from one patriarchal company
and subject to instant ruin. If you make thousands a month
as a network marketer and your paycheck comes from one
company, you have a job proxy. If Amazon represents 100
percent of your business revenue, you have a job proxy. If
you have the #1 ranking on Google for widgets, and all your
revenue comes from that favorable search result, you have
a job proxy. If you’re an inventor, and Walmart is your only
customer, again, you have a job proxy.
Job proxies are no different than having a job. Instead of
a human boss, you have a corporate boss. That boss
determines everything: your rate of pay, the rules and
regulations, and more importantly, your relationship. When
the boss decides to change commissions, procedures, or
terms, you’re stuck with the outcome. Usually with little to
no recourse. Worse, they can fire you altogether. That’s not
why you wanted to own your own business, is it?
Imagine the horror of growing a business (and
supporting a family) built solely on the Amazon platform.
Then one day, the dreaded email arrives: Your Amazon
account has been terminated. Within seconds, years of
work is lost, and your income goes from hero to zero. To
add insult to injury, your ability to reinstate your account
and resurrect your business lies in the hands of some low-
level employee in Mumbai.
Search the internet for entrepreneurial horror stories,
and you'll find job proxies as a common cause. Google
changed their algorithm and my search traffic dropped to
zero! Facebook changed the rules on API calls! Our MLM
founder was indicted for fraud! T-Shirt Emporium
terminated my account for supporting Alex Jones! My
YouTube channel was cancelled!
As an Unscripted entrepreneur, you should be
innovating and creating value. Hitchhiking aboard another
company that is actually doing the innovation and value-
adding is a risk. Turn-key opportunities are turn-key for a
reason: You’re either the product, or you’re the cog. Yup,
more rat race illusions.
When one person in one company can instantly kill your
business with one decision, you’re playing Russian Roulette.
Sure, job proxies can be lucrative. A big YouTube channel is
a great asset and it can thrive for years unblemished. Just
be aware, you’re dancing to the bank with a loaded gun.
One day, it might kill you.
KEY CONCEPTS
e A job-proxy is a business that is subject toa
patriarchal corporation that can essentially disrupt
or end your business with one decision.
e Job-proxies expose you to catastrophic risk but can
run profitably for years.
WILD PITCH
TUESDAY, NOVEMBER 22ND, 2016 - 12:19 PM
(6 DAYS LATER)
Kading-ding!
Sam’s phone chimed. Then again.
Kading-ding!
She opened her eyes, and once she saw the early
afternoon sun peeking through the blinds, her anger
seethed. It was after another graveyard shift and another
lousy sleep. She confronted the phone for the time—1:49
PM—eleven minutes before the alarm would strike. Her
rage sharpened to a target once she unlocked the phone
and saw the text message was from Chase Bank. She
cursed, “Damn bank robbed me of eleven minutes.”
After tossing the phone on the bed, not caring to read
whatever the bank thought so urgent as to wake her, she
closed her eyes and groaned heavily. The fatigue she’d felt
six hours ago still nagged. Nightmares of Gertrude, her last
patient, haunted her sleep. She’d walked into the
emergency room with a migraine; three hours later, she
was in the morgue. In between was an aneurysm, and Sam
had witnessed it all. The aftermath was worse. When the
family was told the news in the waiting room, anguished
children and _great-grandchildren cried _ inconsolably.
Gertrude’s husband of forty-seven years collapsed on the
hospital floor. He was rushed into the ER, his fate unknown
to Sam.
She tried to quarantine the thoughts. Her mind quickly
argued for eleven more minutes of sleep, but she disagreed.
A short slumber wouldn’t do her any good; she needed
eleven hours. Then she snickered, remembering the
struggle Jeff had once had with eleven minutes. She now
knew what he was talking about. It was eight years ago, but
it felt like twenty. And her life had been nothing but a suck-
fest for the whole time.
Kading-ding!
“Ugh!” She slammed her hand on the bedsheet near her
phone.
“Fucking leave me alone!”
She sat up and glanced at the phone, still taunting her.
The text from Chase Bank read: A $499 charge was just
made on your VISA credit card from Tee-Shirt Emporium.
Sam fumed. The bank didn’t instigate the text, it was her
husband and he knew not to disturb her after a graveyard
shift. Sam dropped back to the bed and dialed him. He
should have been at the end of his lunch hour.
“Hey,” Jeff answered, “why are you awake?”
Sam huffed, unable to be tactful. “You don’t know,
asshole? Is this what you woke me up for? A five-hundred-
dollar charge from some T-shirt place?”
There was silence on the line as Jeff realized that his
credit card purchase woke up his wife. “Yes!” he tried to
report excitedly, hoping to dispel her anger. He forgot that
his wife wasn’t to be disturbed in the afternoon after a
night shift. He continued, “It’s an internet company that
prints and drop-ships T-shirts; all we have to do is sell them!
We’ll make as much as $7 per T-shirt. If we can sell a
million, that’s $7 million dollars!”
Sam jerked the phone away from her ear and tilted her
head to the ceiling. The dizzying fan offered more intrigue
than Jeff’s venture. Phone back to her face, voice stern, she
said, “Our business? I’m sorry Jeff, did I miss something?
When did we decide to sell T-shirts? Or did the other zillion
T-shirt companies suddenly go out of business?”
Jeff wasn’t sure why Sam sounded upset. He thought
she’d appreciate his initiative and even his use of math. His
wife, never fond of math, had suddenly started talking
about it, gross annual production, wealth equations,
probabilities, and other terms she usually wouldn’t utter. “I
signed up while at work. My asshole boss left early, and I
figured I’d work on our business.”
“Our business?” She let loose a disgusted sigh that could
swell the seas. Jeff dared to say nothing. His wife urged,
“Can you get a refund for the five hundred-dollar lottery
ticket you just bought? Because clearly you haven’t read a
damn thing I asked you to read.”
“Read?” Jeff asked quizzically.
“Exactly. You don’t even fucking remember.” After a
silence, Sam clarified, “Hello? The DeMarco books I asked
you to read?”
He offered several lame excuses—something about not
being a “bookworm,” Donald Trump’s surprise Presidential
victory, and even a lousy bean burrito. Sam challenged him
on all of it, and they quarreled for what seemed like an
eternity. But it wasn’t. When Sam’s alarm started to scream
for her scheduled awakening, interrupting their argument,
she knew exactly how long they’d argued. Eleven minutes.
CHAP WER 28
Vimle ells DC RV) PIRUINICIIP Le
YOU CAN LEAD A RAT TO WATER, BUT YOU CAN’T MAKE HIM DRINK
Af W hat was the last book you read and when?”
You’d be amazed at what people ask when you
drive a car that costs more than a house. It’s as if an
expensive car turns you into an instant life coach or career
counselor. Whenever this happened to me (and often), I
would gift the asker a book... my book. After a few years of
this, I stopped. Not because I was cheap or short on books,
but because I realized it was a waste of paper. When I
asked curious bystanders about the last book they read,
most couldn’t recall or admitted they didn’t read.
The fact is, if I had a buck for every time I heard, “Hey, I
gave your book to my friend, but he didn’t read it,” I’d bea
billionaire, not a multimillionaire. The Thirsty Rat Principle
is as it’s been said, you can lead a rat to water but you
can’t get him to drink. Your friend/colleague/family member
just isn’t thirsty enough. Of course, this has nothing to do
with my book or any book, for that matter. No amount of
begging, cajoling, or bargaining can make someone read
something they don’t want to read. Even if you have a
solution to their problem. A book that challenges their
identity, or worse, challenges their excuses will not be read.
In short, mediocre comfort’? and/or the promise of freedom
half a century later?’® has made them docile and compliant
—the perfect rat.
There’s only three ways to get someone to read a book
they haven’t selected themselves: timing, curiosity, and
bribery.
The first is timing, namely, after an FTE.?2 When your
friend loses his job because the government decided to
close all “non-essential” businesses due to a pandemic,
that’s the best time to drop a book. Teachers appear when
the time is right because the best time is a post-FTE.
The second is to snare your target in a curiosity play.
Unfortunately, you can’t do this until you’ve succeeded in
whatever you’re peddling.
“Damn Greg, how’d you afford this gorgeous estate?
It’s freaking amazing!”
“Yes, I paid cash.”
“Oh my God, how? Is business that good?”
“Yes, you remember that book I recommended four
years ago?”
Think your friend would read it now? Of course he would.
“Damn Greg, you look great!”
“Yeah, I lost one-hundred pounds.”
“Wow, I’ve been trying to lose weight for twenty
years.”
“Remember that book I recommended a few months
ago?”
And the final method that helps spur someone to read a
book they’ve been gifted? Bribery. Sex, food, money,
whatever it takes. If your husband doesn’t read a gifted
book, keep your clothes on. Likewise, if the wife is giving
you problems, stop massaging her toes or rubbing her
back. Of course, I’m partly joking, which means I’m partly
not.
Stop giving books away to comfortable, satisfied people.
Give them to uncomfortable, dissatisfied people who’ve
endured the pain of an FTE.
KEY CONCEPTS
e« You can gift or recommend a book to a rat, but you
can’t make him read it.
e Timing, curiosity, and bribery are three ways to get
someone to read a book they don’t want to read.
Clave [Mele Ze
mE PROCESS PaINGIREE
SWEAT THE PROCESS, AND YOU’LL WIN THE STAGE
W hen Michael Phelps won his twenty-third Olympic
gold medal, the world record, he was celebrated on
a winner’s podium and then around the world on television,
in magazines, and on websites. Millions in endorsement
deals followed. Fame, fortune, respect, and more.
The secret to Phelps’s success and that of other high
achievers is no secret. It hides in plain sight, and if you train
your Unscripted*? senses, you can always find it buried in a
paragraph or a footnote. The Process Principle denotes that
every success story started with a big goal followed by a
disciplined process of many trials, repetitions, unseen
failures, and adjustments. The disciplined grind is the
ordinary drudgery that never makes headlines.
In Phelps’s story, we see the events (gold medals, fame,
endorsements), but we aren’t told about the process, the
hardship, that created them. The daily training in place of
sleep or video games. The post-swim ice baths. The
regimented diet. The missed parties and social hours. The
dolphin kicks in the pool with a 10-pound weight strapped
to his chest.
As I write, Michael Phelps’s Wikipedia page is over
19,000 words. Yet only 27 of them reveal the process details
like the ice baths. Twenty-seven freaking words! That’s one-
tenth of a percent (.001) for the entire Phelps story, the
lonely 27 words that made the other 18,973 words possible.
In other words, his private story®? is not the public story
being showcased.
Like anything in life, there are no shortcuts to a
masterpiece. Especially when it comes to starting a
business. If it takes you five minutes to start your business,
you don’t have a business. You have a commoditization
grind, or worse, you’re just a cog in someone else’s
business.
Newsflash: Here’s another divergence between the 1%
and the 99%—one-percenters are process-oriented, while
ninety-nine percenters are event-driven. Namely, the 99%
focus on the results, the desired goal and potential
shortcuts for its achievement, while the 1% focus on the
process, the activities that derive the outcome.
Everything significant starts insignificantly: with one
solitary action, one small win, and one move forward. My
forum started with just one user, one post, and in one
thread. Now it has nearly a million messages. War and
Peace by Tolstoy? A single word breathed life into a
5987,287-word novel. No matter your goal, success is
hundreds of good but small choices that compound into a
big picture. The little things done daily? They cause the big
things yearly. Many pixels create the photo.
The same can be said about starting a business that
grows into a strong offense,?!3 one anchored by a
specialized-unit with polymorphic?22 components. If
creating and then communicating net perceived-value was
one event—just one choice—everyone would do it. This is
why drop-shipping, affiliate marketing, and “click and
you’re in business” businesses are weak pursuits. Creating
specialized-units of relative-valueS2®© is a process that
cannot be bought. Your effort will need to be consistently
ordinary to produce something extraordinary.
The event/process relationship is like the difference
between a wedding and a marriage. The wedding is an
evening, the exciting event. The marriage is lifelong, the
compromising process. Events are like a supermodel who
gets the spotlight and the headlines while Miss Process is
underneath the stage grinding as a seamstress, a personal
trainer, a dietician, a publicist, and a makeup artist all
rolled into one. The event shines on stage, the process
sweats.
For example, losing weight is simple: Fat right and
exercise. And then make it a habit. Process equals
disciplined persistence, which becomes a lifestyle. That’s
the ordinary process. Straightforward and succinct. There
are no shortcuts. The struggle is the struggle, but it works.
It’s shamefully comical: the secret to success is no secret, it
just never finds a headline.
KEY CONCEPTS
e The event is a short, visible, and celebratory
accomplishment; the process is the enduring sweat
and grind that made it happen it.
e Culture is event-oriented, often derelict or
neglecting process.
e The secret to success is no secret, it just never finds
a headline.
Cie Mele 28)
Welle PRO le) MOM
Pim UINES 2 Le
PROBLEMOLOGY: THE NEW CAREER FOR THE NEW 1%
A fter I sold my company for the second time, I reflected
on the journey and concluded I was no entrepreneur—
I was a problemologist. From idea to launch, the entire
process from management to growth was just one problem
after another. How do I implement this feature? What are
the best advertising mediums and the best converting
message? Should I hire someone, and if so, how do I deal
with the nightmarish human resource complexities such as
payroll, taxes, and employment law? How this, how that?
The day the problems ended was the day I sold it. (Well,
maybe not—the tax bill was a fortune.) Later, I started a
publishing company and a business forum. And then the
problems started again.
The Problemology Principle asserts that the moment you
decide to be an entrepreneur is the moment you decide to
be a lifetime problem solver. A problemologist studies
problems and learns how to solve them. Entrepreneurs
solve big problems and offer their solutions for profit. In
solving those problems, you’ll encounter dozens, perhaps
hundreds of smaller problems. Each micro-problem solved
brings you closer to solving the macro-problem.
The first moon landing is a classic example of
micro/macro problem solving. The macro-problem “How do
we land a dude on the moon?” embodied hundreds of
micro-problems. From inadequate rocketry to freezing
hydraulics to even the seemingly banal, like what if moon
dust is flammable? Thousands of tiny problems had to be
fixed so one big problem could be solved.
Entrepreneurship is the same way. A business is dozens,
perhaps hundreds of solved problems which aggregate into
solving a larger problem. The problems can be both
external (can someone manufacture this?) to internal (how
do I learn how to manufacture this?). Altogether, this
solution represents many things: your relative-value,>?°
your specialized-unit.S!8 and your medium for polymorphic
pay.P22
Unscripted Entrepreneurs are problem solvers. It’s
another piece of the hidden process’29 that is never
advertised or mentioned in those guru seminars that sell for
an arm and leg. The choice is clear: you get a self-taught
Ph.D. in problem-solving or update the resume and pray to
the Wall Street gods.
KEY CONCEPTS
e Entrepreneurs are problemologists.
e An entrepreneur solves one macro-problem, their
relative-value, by solving dozens, perhaps hundreds
of smaller micro-problems.
Clave ele) oy
ele Sr VERN leIN Cir =
STOP WORKING HARD TO FIND A SHORTCUT, AND START WORKING
HARD ON THE PROCESS
| graduated from college jobless. Despite having no job
(and no business), I went on a shopping spree
compliments of my Chase credit card. No, my shopping
spree wasn’t spent on beer, clothes, or stereo equipment. I
blew it on shortcuts; get rich quick infomercials, seminars,
and anything that promised an easy path to wealth. Waving
a “quick start video” in my face was like offering an
alcoholic an all-you-can-drink pass to a distillery. In any
event, my lenders and the seminar hustlers got rich. I got
poor.
Take a guess at the biggest multi-trillion-dollar industry
on the planet? Is it oil? Healthcare? Finance? Nope, the
largest industry in the world is the business of shortcuts.
From pharmaceutical companies who pill our ailments to
banks who finance our saving impatience to gurus who
promise wealth without the risk to the diets that pledge
results without sacrifice (you can eat your favorites!) to self-
development books that tickle our fantasies, trillions are
spent yearly looking for a shortcut, a hack, or a super-duper
secret that will shorten (or eliminate) the process. The
Shortcut Principle reveals that anytime you search for a
shortcut, you'll likely go on a detour and get unsatisfactory
results. Shortcuts are events looking for the results of a
process. And it’s the easiest sell in the world.
Wouldn’t it be great if you could just pop a pill once a day
and get the body you want? What if you could just write a
few plot lines and get a full-length novel? The fact is we all
want the same thing, we just don’t want to endure the same
processes that get there. Everyone wants to rock the six-
pack abs, but few want to sweat the cardio. We want health
but we also want pizza for dinner and ice cream for dessert.
We want a successful business, but we also want a
comfortable weekly paycheck. It’s a pickle that doesn’t
compute.
Sadly, because society and its media accomplices are
event-driven and process-blind, achievement and rewards
get the spotlight, but not the processes that birth them.
Remember Michael Phelps’s Wikipedia page only had 27
words dedicated to the process.?29 As such, our minds
become attracted to sexy events, often causing a
misdirected focus on shortcuts or “hacks” that claim to
soften (or skip) the process. As a result, we operate from an
event-modality, seeking quick fixes and solutions to things
that have no quick fixes or solutions. Here are just a few
examples of how an event-modality tries to shortcut the
process:
e Cheating on the exam is an event; studying for it is
the process.
e Planning a wedding is an event; enduring a marriage
iS a process.
e Financing a car is an event; saving for the car is the
process.
e Swallowing a pill to lower your cholesterol is the
event; changing your diet to lower your cholesterol
is the process.
e Posting your New Year’s resolution on Instagram is
an event; posting your New Year’s Resolution results
is the process.
When we perpetually search for a shortcut that doesn’t
exist, we go on a detour. Real achievement and their
processes are stymied. Expectations are not met, and
frustrations boil. My infomercial spending spree funded my
poison-pen®? and put me on the road to suicide, delaying
my personal growth. J was working hard to find a shortcut
but not working hard to build a process.
KEY CONCEPTS
¢« The largest industry on the planet is the business of
shortcuts, anything that is marketed as an aversion
to the process, for example, weight loss drugs.
e Seeking shortcuts, or event-driven actions, are
detours—an ineffective event looking for the result of
a process.
Winh= SiO) a)
FRIDAY, DECEMBER 2ND, 2016 - 7:37 PM
(12 DAYS LATER)
“We need to talk,” Jeff said out of breath, rain dripping from
his hat. Bella greeted him, tail wagging hard, but Jeff
ignored her. He tossed his hat on the kitchen table and
plunked into the chair, his wet jacket dripping on the floor.
Sam sliced cucumbers at the cutting board in the kitchen.
She had a few hours before her late shift and was already in
her black scrubs. With Jeff’s arrival from work, their
twilight-cross began.
She tightened her grip on the knife and stared at her
husband, eyes wide, worried and waiting. The last time Jeff
said, “We need to talk,” he’d confessed to getting laid off—a
week after the fact. Sam felt a tear well in her eye and her
gut wrench as if expecting the worst. For the last week, Jeff
had returned home late from work, including today. And
then he’d recently bought new underwear, not the ugly
white ones, but the kind that should raise the suspicions of
any sexless marriage.
A rolling thunderclap boomed, and Jeff waited for it to
finish. Stormy weather was forecasted, and their home on
Ridgeway Court was in the path. In the bedroom, Madison
started fluting a cheery melody. Perfect timing as Jeff hoped
it would ease the mood.
Avoiding eye contact, Jeff let it rip. “I lost $1,400.”
Sam firmed up from her slouch, eyes flaring. “What?
How? Like, stolen? Where?!”
Jeff eyeballed the knife still locked in her hand, which
was now trembling. “Uh, no,” Jeff apologized sheepishly, “it
wasn't stolen, but I feel like it was. I lost $1,400 advertising
our T-shirts on Facebook.” He quickly corrected, “My T-shirt
business I signed up for. That’s why I’ve been late all week.
I’ve been running this side business after work. I thought
I’d surprise you with some good news, but after fifteen
hundred dollars and six thousand clicks, it was clear I made
a big mistake.”
Sam’s eyes flared, and she slammed the knife on the
counter. She threw her husband a disgusted glare as if he’d
just picked his nose. No words were needed.
Jeff continued groveling, “You know I’m a political junkie,
so when I kept hearing authors say I should ‘follow my
passion,’ I was really stoked about selling T-shirts.” He
opened his satchel and held up an ugly chartreuse T-shirt
with “Trump Sucks” on it. “I thought I’d sell T-shirts with
political memes, but as soon as people started commenting
on how stupid and unfunny my designs were, I got scared.”
He paused then, carefully selected his words knowing his
wife liked President Trump as much as a teenager loved a
zit on prom night, “You know, a lot more people like Trump
than we thought.”
Sam tilted her head. “You think? Only 66 million people
voted for him.” Neither Sam nor Jeff voted for Trump, but
neither voted for the criminal cartel known as The Clintons.
Between Bill’s friendly travels to Epstein Island and
Hillary’s penchant for destroying innocent iPhones used
solely for discussing the day’s yoga plans, they both passed
on the election circus.
“Anyhow,” Jeff maintained, “the ad money just started to
disappear. They asked what my budget was, and I didn’t
know, so I just typed $100. Within minutes, it was mostly
gone. So, I tried again, next time $200. Same thing.
Nothing but hate mail, no sales. It was miserable. I kept
staying late after work trying to dig myself out of it.
Different designs, different ad targeting options, nothing
worked.”
“So you didn’t sell anything.”
“Actually, I sold two T-shirts.” He laughed satirically. “But
thanks to my expensive finance degree, the one I’m still
paying for, I figured out that spending $1,400 to make $9
isn’t a path to success. And then I knew I had to break the
bad news to you.”
Lightning flashed outside, and silence consumed the
townhouse.
Seconds later, the thunder boomed.
The storm was here. And Sam spoke not another word.
male ae ey
inte “oA SIGE) SS RVA eG
OUTPERFORM THE COMPETITION: ONE IMPROVEMENT MAKES A
BUSINESS, SEVERAL MAKE AN EMPIRE
of
"| be other day I bought a bag of tortilla chips. I know, not
interesting. But what is interesting is why I bought
them.
Whenever you have a buying decision, your mind
undergoes a value competition to determine where the
better value lies. The value threshold—the point at which
you pick one product over another—is determined by one
attribute or many. Sometimes that attribute is “the best
price” or “the best ingredient,” but most consumers judge
based on many factors, both primary and _ secondary.
Whatever weighs strongly with your value hierarchy wins
the race.
That bag of tortilla chips? Here is a list of attributes that
filled my decision process:
e One bag of chips was $.89 cheaper. (Primary
attribute)
e One used biodegradable packing, the other did not.
(Secondary attribute)
One used canola oil, the other avocado. (Primary)
One used corn as their main ingredient, the other
cassava (Primary)
e One had a funny story on their packaging.
(Secondary)
e One had a more visually appealing package design.
(Secondary)
e One had a NON-GMO label on their package, the
other did not. (Primary)
The bag I chose was more expensive and didn’t have the
best packaging. But I bought it because it specified NON-
GMO ingredients. Specifically, one attribute took me from
shopper to buyer.
Add another item to the I wish I knew this when I was 20
list. To succeed at entrepreneurship, you don’t need to
reinvent the wheel. You don’t need to launch the next
Facebook, invent the electric car, or find the cure for
cancer. The secret is simple: Relative- true-valueS2® is
engineered through a value-skew. A value-skew is any
attribute in your specialized-unitS!® perceived better than
the competition. More positively skewed attributes—the
more runners in the race who can cross the finish line first
—equals more sales.
Each of the attributes listed above, including every
ingredient, is a potential value attribute. Because health is
strongly held in my value hierarchy, I buy the chips boasting
the NON-GMO label. On the other hand, environmentally
conscious people might pick the chips with the social
mission and biodegradable packaging. The point is this
variable value competition is highly subjective and different
for everyone. You never know what attributes are running
the race and which one(s) will cross the finish line. Your
goal is to have as many runners in the race as possible. Yes,
you can’t be everything to everyone, but you have to be
something for someone.
© QO ey) e .
ant
1)
<
o
Cc
o
Better Better Better Better 4
packaging service pricing ingredients a
O
WH
all
12)
Most important Most important Most important oO.
to Buyer X to Buyer Y to Buyer Z
i) @ 2
ale PL PL ee mY
r= te ve Ae
THE VALUE-SKEW
To add runners, skew value, and win sales, identify all
the potential value attributes for your offer and industry. No
matter how insignificant. Start with primary attributes:
your product deconstructed down to its core components.
Is there any component or ingredient that you can improve
vis-a-vis competitors? Better features, better user interface
(UI), better price, better color’ options, better
craftsmanship, better raw materials? Every component is a
skewing opportunity.
Next, attack secondary attributes, which consist of the
product’s marketing and delivery to the customer.
Marketing is the most important secondary attribute
because it is the tiebreaker between identical (or similar)
value-skews. He who wins eyeballs wins sales. Other
secondary attributes include your website’s order process,
photos, shipping/return policy, your company’s story,
customer service, sales copy, Yelp reviews, and social media
posts. Anything comparable to the competition that isn’t a
primary attribute is secondary! Where can you be better
in the eyes of the consumer? Remember, every customer
has a different value hierarchy. So it’s best to brainstorm
them all.
While having the “best price” is a powerful runner in the
race for sales, it isn’t as preferential as you think. “Best
price” is an analytical metric, whereas most decisions are
based on emotional appeals. A strongly skewed emotional
attribute can justify significant price premiums. Think
Apple, Nordstrom, Audi, Ferrari, or Louis Vuitton.
In a commoditized industry, value-skew is the only way to
differentiate and create relative-value. For example, the
low-market beer is commoditized. It’s fascinating to watch
these mega-beer manufacturers attempt to create skew.
Coors has a specialized can with a mountain that turns blue
when the beer is sufficiently cooled. During the 2019 Super
Bowl, Budweiser advertised its beer free of corn syrup in an
attempt to create skew.
Bottom line: Skew two or three value attributes
favorably, and you have a business that will win a few races.
Skew four or more value attributes and you might head to
the Olympics with an empire. Even better? Value-skew isn’t
taught in business school. Advantage: YOU!
KEY CONCEPTS
e To win sales, you must take your customers over a
value-threshold.
e Many value attributes are evaluated in a consumer’s
buying decision, all weighted differently.
e Primary value attributes relate to the product itself;
secondary attributes relate to its presentation,
distribution, and delivery.
e When you “skew” a value attribute, you do
something better than your competitor which is
discernible, and sometimes obvious to your potential
client.
e You never know what skewed attribute will draw
your customer over the value threshold.
e The more attributes you skew, the more runners you
have in the race for sales across the value threshold.
ClalANe el aio8)6)
Pele COM MOI. Pe RUINGVelL =
COMPETE FOR PROFIT, NOT POVERTY
[= the late 2000s, I had a forum friend who sold
rubberized cell phone cases. While he made a decent
profit in the first months of operation (he was early to the
market), he eventually quit selling them. I asked what
happened. He reported that within a year, his margins got
squeezed so tight by competitors (many from China and
Indonesia) that, suddenly, he would have been better off
working at Taco Bell. For him, the only value-skew*?? he
had was price—cheaper, cheaper, cheaper... out of
business.
The Commodity Principle affirms that if you sell a
commoditized product, you ultimately won’t compete for
profit but for poverty. A commoditized product or service
appears homogeneous among providers. Think data
storage, a ream of paper, insurance, taxi service, gas. Value-
skew is thin, and as such, the only skew is the price. To win
sales, I have to be the cheapest!
I recently switched insurance because my provider
raised my rates for no reason. I left a six-year relationship
for a new company with the same benefits for a mere $500
bucks. Air travel is another example: Most people aren’t
loyal to any airline; they’re loyal to the best price. An
economy fare on Southwest Airlines and United Airlines
both gets you to Chicago in identical discomfort—so lowest
price wins. Loyalty is easily bribed for a few bucks.
Hitching your wagon to a commoditized product is a
race to poverty because the price is the only value-skew.
This one-dimensional attack puts entrepreneurs into
recursive bidding wars, marginalizing their offers with one
goal in mind: to be the cheapest. Competing in a
commoditized climate is a race to the bottom as margins
deteriorate with each player deciding, “How small of a
profit am I willing to accept to survive?”
I’d guess that half the crap on Alibaba (and then sold on
Amazon) is commodified goods, patiently waiting for
another wannabe entrepreneur to join the flooded ranks of
commodity pushers hoping to win the “Cheapest Price of
the Day” award. Winners win poverty with ever-weakening
margins and an eventual self-extinguishing profit. Worse,
when a commodity pusher finally decides to exit the market
rationalizing, “Enough is enough!” they are quickly
replaced by another entrepreneur yet to discover the same
insanity.
As Peter Drucker said, “In a commodity market, you can
only be as good as your dumbest competitor.” As an
entrepreneur, ask yourself: Why do you exist in the
marketplace? What value are you skewing? And who will
yearn for your company should you close up shop? Or would
your sudden market absence be met with eerie silence?
When dreampreneurs ask dumb questions like, “What’s a
good product to sell on Amazon?” they’re begging to
become commodity pushers. Think you’ll be the only one
selling it? Nope, you'll be one amongst a mob. Leave the
circular firing-squad to the unfortunate folks who aren’t
reading this book.
KEY CONCEPTS
e A product that has limited skew potential is ripe to
be commoditized to the “best price.”
e« Selling a commoditized product is a race to
determine who is willing to accept the least amount
of profit, or worse, losses.
CHAPTER 34
THE EASY GOES HARD
Pl UUINES, Le
ACCEPT EASY NOW, SUFFER HARD LATER WHILE HOPING FOR LUCK
ALONG THE WAY
W hen I was going through my failing years, I spent
some time selling at flea markets. Chicago had
several import wholesalers. During the week, I’d visit them
and buy an assortment of random items. “Random items” =
junk. Then I’d try to sell these goods at the weekend swap
meet. Few people stopped at my booth. Fewer bought. The
return on my time was less than the minimum wage.
However, an older merchant several booths away from me
was killing it. His booth was always crowded. Moreover, I
saw cold hard cash being exchanged often. Back then, a
$100 bill was quite a lot.
The difference between myself and _ this’ other
entrepreneur? I was chasing money. The goods I was
selling were a commodity, cheap framed art, knickknacks,
stuff easily found elsewhere. Worse, other merchants at the
market were selling the same commoditized junk.??? That
other guy who was making money hand over fist at his
booth? He was offering relative-value. Specifically, he was
selling hand-crafted furniture and other wood-carved
statues. What he sold was unique and couldn’t be bought on
the cheap at some warehouse in Chicago.
Looking back, I wish I’d known the Easy Goes Hard
Principle—the easier it is to start your venture, the harder
it will be to succeed at it. First, if anyone can compete with
your company because they invested a few hours or a few
dollars, like visiting a Chicago wholesaler, then you’re not
starting a business. Any Joe Blow could have done what I
was doing. I was joining a crowd filled with positively
charged rat racers.°2* If there is no difficulty in starting
your business, you probably aren’t solving any problems or
skewing value.*?2 And if you aren’t doing either, the market
won't perceive relative-value.°2° You’re just another fish in
a barrel hoping to get lucky.
As problemologists,?2° our problem-solving careers as
an entrepreneurs should be a process.°2° A business that
provides genuine relative-value can take weeks, months, or
years to build—not hours. “Sign and drive” opportunities
are cattle calls, often selling commoditized surplus-
value.®2© And surplus-value is bought on the bid, not the
ask. If half the ladies on your block are selling the same
essential oils, you’ve put yourself in a saturated position
with zero skew. Sales is like a single-number bet at the
roulette wheel.
Second, the easier it is NOW to enter a business, the
harder it will be LATER to make money. An “easy” startup
process has a high price. More competition. Depressed
margins. Saturated marketing noise and_ elevated
advertising costs. More stress and less pay. For example, I
started my business forum over ten years ago. It was easy
to start: Pay for the software and hosting, and voila, it’s up
and running. Yet getting it off the ground, growing it, and
keeping it active was (and still is) extremely difficult. Like
blogs, most forums are graveyards. Worse, my competition
is Facebook groups which are even easier to start. One of
the toughest things I’ve ever done was to start a forum; I
talked to myself for months!.
Anytime a process?29 is potentially “easy” or “fun”
(including the syrupy platitudes like “follow your passion”
and “do what you love”), expect to be exceptional if you
want to free yourself from it. Not the top half, not the top
ten percent, not the top five percent... We’re talking about
the top one percent, or exceptionalism. Why? Once again, it
comes down to the math, namely, probability. Go on to
YouTube and look for piano players. You’ll find hundreds of
highly skilled pianists, but only a few of them will hit the
big-time and get to play to a sold-out theater.
Think about it from the viewpoint of a professional
athlete. All sports are offshoots of the “do what you love”
and “follow your passion” platitudes. Anyone, rich or poor,
can shoot a basketball. The field for that profession is
flooded worldwide, perhaps hundreds of millions. Anyone
who plays the game would love to make millions playing
professionally. I know I would. Yet you know how many
basketball players are in the NBA, the pinnacle of the
profession? A trifling 494.
If one percent of the world loves hooping (a conservative
estimate), that means only .0007 percent of the world gets
to play on the big stage. The entirety of the world’s
exceptional basketball players on any given day could fit
into a small hotel ballroom. To succeed in a crowded market
like basketball, you need to be exceptional.
Exceptionalism is being the best at what you do among
millions. And it’s the only way to shine in a crowded market
with zero entry barriers. To wit, be so good they can’t
ignore you. My flea market neighbor did great work and
couldn’t be ignored. My cheap imported picture frames? I
was ignored.
Easy is hard because easy is crowded. And likely a job-
proxy.?26
Easy might be easy to enter, but exceptionalism is a
probability nightmare. Anyone can sell dropshipped_T-
shirts. Anyone with ten grand can start trading foreign
currencies. Anyone with an internet connection can install
WordPress or toss some gadget on Amazon. Simple, easy,
with zero entry barriers like picking up a basketball. Yet,
thousands of entrepreneurs make less than minimum wage
doing it. Only a few make the _ fortunes. Why?
Exceptionalism is the process. Claiming your new CEO title
with a fresh WordPress install is the event.
Carry the right expectations. Starting a business (solving
problems, improving products, and skewing value) is like
losing thirty pounds—think weeks or months, not hours or
days.
KEY CONCEPTS
The easier it is to start your business, the more likely
it is that it doesn’t solve problems or skew value, and
the harder it will be to profit.
“Turn-key” or “sign and drive” businesses are likely
commoditization grinds offering surplus-value.
Exceptionalism is being great at what you do ina
crowded market which improves probability.
Starting your business should be a process that
takes weeks or months, not minutes or hours.
Cie bites
THE MOAT STRATEGY
CREATE WITH DIFFICULTY, REPLICATE WITH EASE
&
A fiend of mine owns Hemingway Accoutrements and
Barberry Coast Shave Company, which sells
proprietary shave creams and colognes. I’m an avid user,
not because he’s my friend, but because he’s created—
pardon the barstool expression—“panty-dropping” scents
and aromas. His formulas are difficult to reproduce and
took him months of experimentation. Still, if demand
warrants 1,000,000 orders, he could make it happen. His
specialized-unit is hard to copy competitively, easy to
replicate internally.
Tell me how easily and how many times you can replicate
your specialized-unit or how many people can use it, and I'll
tell you how rich (and free) you'll become. I can print this
book a million times without much effort. My forum, same
thing: it can handle an exponential increase in eyeballs
before bandwidth and resources become an issue. Likewise,
my business service enjoyed the same structure: more
users equaled more money. The mathematics are
unlimitedly scalable while zero leverage and zero
probability?!’ are eliminated.
Optimally, your specialized-unitS!® should be hard to
create but easy to replicate or use. This is also a function of
problemology’?° and the inverse correlation between
startup ease and execution difficulty.?33 After enduring your
creative build process, its replication (or use) should
possess nearly unlimited mathematics within the scope of
your niche. If you’re targeting guitarists, every guitarist
might find value in your offer. That’s millions. Please note:
ease of replication is not about scaling customers or sales
(which is always difficult) but about scaling potential
demand.
This simple relationship ensures not only leverage,?!’
but protected leverage. You want your product/service hard
to copy competitively but easy to replicate internally. New
competitors must endure a process, not an event.
KEY CONCEPTS
e Your specialized-unit should be hard to create and
get to market, but easy to replicate.
e “Hard to build; Easy to replicate” offers protected
leverage.
ClnlA els Sie
hRE NEGATIVE SKEW
STRATEGY
MINIMIZE NEGATIVE SKEW TO MAXIMIZE BUYING PROBABILITIES
of
magine being single and dating a successful, tall, dark,
and handsome man. After a date or two, you think you’re
in love. But by the third date, you notice a pattern: He’s
rude and belittling to anyone he doesn’t know. Waitstaff,
doormen, valet parkers, even the grocery cashier. For you,
this negative attribute is an immediate deal-breaker. All his
positive features—hotness, richness, style—are invalidated.
One negative value attribute can destroy ten positive
ones. While positive attributes frame the house, negative
attributes are the lit match that burns it down.
The same cognitive gymnastics happen with buying
decisions.
When a customer uncovers negative attributes
associated with your company, positive skew is weakened,
and sales are lost. Instead of entering runners in the sales
race, they join the opposing team. Yes, you send sales to
your competition. Worse, most negative attributes are
asymmetrically forceful, creating “deal-breakers” and
immediately giving victory to your opponent. Just like our
hot guy who is rude, one negative trait can kill dozens of
positive ones. Like positive skew, you never know which
negative skew will trigger your potential customer and send
their money elsewhere.
In business, some examples of negative skew could be
inadequate product labeling, a questionable ingredient,
lackluster customer service, a polarizing political position,
such as endorsing or condemning the right to own guns, or
even a spelling error on a website. All are negative
attributes that endanger the positive ones, giving a client
more reason to say, “Meh, I’ll pass.”
For instance, let’s say Bill recommends my first book,
The Millionaire Fastlane, to his co-workers, Sandy and
Tyler. Tyler nods and says he will check it out. But in his
mind, he’s already dismissed it. For Tyler, the title The
Millionaire Fastlane sounds cheesy and like a “get rich
quick” scam. He ignores Bill’s recommendation based on
his judgment of the title, which, whether I like it or not, isa
negative value attribute to Tyler.
On the other hand, Sandy finds the title intriguing. She
investigates and finds the book’s website and reads it over.
In her reading, she spots two spelling errors. For Sandy,
this oversight is a monster negative attribute, and she
weighs it heavily, opting not to buy. Despite Bill’s
recommendation, I lose Sandy and Tyler as new customers
due to negative skew.
The politicization of your company is also a dangerous
form of skew. In 2017, Nike hired Colin Kaepernick to
endorse a new line. The hiring created immediate skew,
both positive and negative. For Nike’s disapproving market,
it created immediate negative value-skew, causing many to
burn their Nike gear. Some said they’d never shop Nike
again.
Conversely, many customers rallied to Nike’s defense
and loved the decision, hopefully compelling more sales.
Either the marketing execs at Nike are forecasting this
action as a net positive, or they’re derelict in their
knowledge of skew. Either way, politicization is a dangerous
skew unless your company is politically based or if you’re
hoping the politicization could generate billions in publicity.
Here are some deal-breaking negative skews that sent
my money to competitors:
e The product had an undesirable ingredient: Red 40,
Aspartame, Maltodextrin, GMO corn, milk powder,
animal products.
The product was packaged in thick jailhouse plastic.
The company was actively engaged in political
activism against my beliefs.
e The product had too many negative reviews.
Again, all skew,°32 both positive and negative, is
subjective and unique to each customer. Every attribute
skewed positively while eliminating the negative ones
improves your unseen probability for crossing customers
over the value-threshold®32 while expanding your total
buying audience. And boom, the advantage goes to you.
KEY CONCEPTS
e A negative-attribute is something about your product
or offer that strikes someone unfavorably.
e One negative-attribute can invalidate dozens of
positive ones.
¢ Eliminating negative-attributes can help you get
more customers over the value-threshold leading to
more sales.
ClalNe eae 7)
ale IMreRirec VON INCI Phe
IMPERFECTION IS THE SEED OF SKEW (AND A NEW BUSINESS)
"| tere ‘s a huge shortage of T-shirts in the world, said no
one ever. And if no one ever said it, that means starting
a T-shirt business is a money-chasing grind reflective of a
positive charge.
Every day I see opportunities worthy of a money-making
fortune simply because I know opportunities are a function
of imperfection. And imperfection is ubiquitous. Unless you
found Utopia, it is everywhere. From the shitty health
insurance you begrudgingly bought, to the bland Mexican
food you ate at lunch, to the lack of reliable babysitters,
imperfection is perfectly pervasive. If you defected from
Team Consumer to Team Producer??? this truth isn’t
upsetting but insanely exciting. The Imperfection Principle
asserts that anything that can be improved is a business
opportunity.
If you visit my forum, you will notice a shared struggle
amongst aspiring entrepreneurs—namely, finding business
ideas.
What business should I pursue?
I don’t know where to start!
Everything is already being done!
Such statements reflect entrepreneurial ignorance.
Entrepreneurship isn’t about inventing the light bulb or
engineering the next iPhone. Anywhere imperfection lives,
relative-valueS2© opportunities await. That’s complaints,
inconvenience, problems, wishes, hates—all of it is relative-
value’s language of opportunity. Learn this language, and
suddenly, opportunities are everywhere.
Even similar products that solve identical problems with
comparable prices can be skewed®*22 through their
secondary attribute pool. Offer a better website, a better
story, a better label design, a better user interface, a better
customer service experience, a better return policy, a
better this, a better that, and you'll win sales. Again, you
never know what value-skew will compel your potential
customer to buy—the more positive skew you create, the
better your probabilities become.
KEY CONCEPTS
e« Imperfection is the scent of a skewing opportunity.
¢ Identical products can be skewed by way of their
secondary attribute pool, things like better design,
UI, story, return policy, customer service, or an
owner who isn’t a billionaire tyrant.
CoAr GER 56
Wale SWAS= pO Dies rial el eke
ADULTEROUS CORPORATIONS HAVE UNHAPPY CUSTOMERS WANTING
DIVORCE
M any years ago, I was a customer for a mid-sized
hosting firm that managed my web presence. Their
prices were reasonable, their customer service exemplary.
Foremost, a human answered calls to their support line.
Second, technical issues were solved fast. I felt this
company was a trusted partner. Then one day, something
seemingly innocuous happened. I received an email from
this company, headlined something to the likes of “Exciting
news!” Inside wasn’t exciting news, but bad news: A larger
corporation had acquired them. Indeed, the bonanza was
exciting for the corporate owners, but not for their
customers.
Within months, everything changed. Inbound calls
suddenly were met with a voicemail or long wait times.
Support requests went from answered in minutes, to hours,
to days. My inbox blew up with “Upgrade Opportunities!”
and every support call seemed like a sales pitch. The
relationship ended when my website went down for more
than two days while “we’re working on it” was the de facto
response. Clearly, I was no longer important.
I’m betting you have a similar story because this
scenario is common. The Stakeholder Principle is when a
business abandons its customer as a top priority in the
stakeholder chain. Practically every company traded on the
stock exchange is an adulterous corporation. Adulterous
corporations are one of many market imperfections?*° ripe
for opportunity as they cheat their customers in favor of
other mistresses: shareholders, employees, C-Suite
Executives, investors, and Wall Street analysts. For
privately held companies, priority stakeholders could be
partners, VC investors, private equity firms, banks, or even
spouses.
If your favorite company goes public—be warned. Expect
higher prices and lower value—new, external stakeholders
must be appeased. As soon as a corporation looks to allay
anyone other than the customer, they become adulterous.
This is the exact moment when the platitudinal mission
statement on the CEO’s wall goes from stretched truth to
absolute bullshit. The value-driven, customer-centric
policies that precipitated exponential growth is suddenly
abandoned after the banker’s claws bite into management.
Ever do business with a private company, and after they go
public or attract millions in investment, suddenly everything
changes for the worse? Sonos, the wireless stereo company,
is one such example. After they went public, they quickly
abandoned their customer-centered philosophy. In an email
to customers, they informed them that their old Sonos
equipment would soon need to be upgraded or suffer the
consequences. Bluntly speaking, if you spent $6,000 as I did
a few years ago, you’re fucked. And you’ll need to spend
thousands all over again—planned obsolescence. Worse,
when they informed their customers of this snake-oil scam,
they insulted them with a cute email that was received as
well as a sledgehammer to the ankles. Good thing Kathy
Bates lives in Los Angeles.
This phenomenon is called the squeeze. The customer is
squeezed off the value throne, replaced by everyone else
who demands a return on their investment... namely Wall
Street. From there, you can expect a systematic extraction
of money through increased prices and fees, cost-cutting,
reduced product quality/quantity (the old cereal trick: same
price, smaller box), and diminished relative-value. This is
what happened with Sonos and my web hosting company.
Customer service went to hell (cost-cutting), and the sales
prodding (we need more sales!) jetted to the sky.
Of course, not everyone will agree. Some “thought-
leaders” say that employees should be top-stakeholder.
Ridiculous. What happens when you have 100 happy
employees and O satisfied customers? The happy employees
become unhappy—because they’ll soon be out of a job. Ifa
business was an organism, your customers are its heart and
your employees, the brain. An organism can survive while
brain dead but can’t without a heart.
The billion-dollar natural-food business is a_ direct
consequence of such squeezes. Fed up with processed
laboratory food, consumers now consider natural sources
or local artisans. The industry is rife with small companies
disrupting the space because BIG-agriculture is too busy
zombifying ingredients while appeasing shareholders. Of
course, stakeholder demotions aren’t just found in food and
agriculture, they are anywhere entrenched corporations
have lost sight of their purpose. Rejoice. If your competition
has lost its allegiance to the customer, its stakeholder
demotion and an instant value-skew*?? for you. You cannot
serve two masters at once.
KEY CONCEPTS
e When a business abandons its customer as a top
priority in favor of investors or shareholders, it is
stakeholder demotion.
Stakeholder demotion is likely with most public
companies and is a skew opportunity.
“The squeeze” is when a corporation tries to squeeze
its customers for more profit through increased
prices, reduced services and value, and other
measures designed to appease higher stakeholders.
Cy eie nao
Wal SUES 1hO) ewe Ss
STRATEGY
TRANSFORM “SUCKS” TO “SUCS” FOR BUCKS
Thank you for calling Evil Banking Corporation. Your call is
important to us, so much so that we outsourced your call to a
mininum wage employee halfway around the world. Press [1] to
speak to a guy who hates his job, press [2] to speak to a person who
can barely speak English, or press [3] to speak to a rep who will
read you a scripted corporate policy. No matter what you press,
your current wait time is 42 minutes.
S ound familiar? It should. When a major corporation
disowns you as their primary stakeholder,’?’ “sucks” is
the result. So, when I called Chase Bank recently,
something happened that shocked me silly. On the first ring,
my call was promptly answered by a cogent human being. It
left me speechless. Such an event is what I call, SUCS—or
sudden unexpected customer service.
When your company provides SUCS, you’ll turn SUCKS
into BUCKS. As you know, customer service in the modern
world is frustratingly terrible. But don’t fret. This repeating
world history is your advantage because you’re in the
know... crappy customer service is a huge skewing
opportunity.°32 In fact, I’d argue that customer service is
the most critical skew in the secondary attribute pool.
No one wants to be treated as an ambiguous number on
a computer screen, and yet this is normal for most
corporations. When two identical products face off, the
company that provides better customer service will win.
Excellent customer service is a value-skew and makes
relative-valueS2® more likely. Moreover, it entitles you to
higher prices.
Exceptional customer service is one of the skews that
helps me in business. My first company was known in our
industry for super-fast customer service—phones answered
and emails addressed within minutes. Some customers
called us just to test our speed. Even today, I use this
technique. My forum stays active because I am there every
single day, contributing and interacting with my readers.
Good luck getting that kind of attention from any
entrepreneur who has sold millions of anything.
The formula for transforming SUCKS into SUCS is
simple:
1. Identify your client’s customer service expectation
profile and then
2. Violate it.
First, your customer’s customer service expectation
profile is simply the industry standard for service. My Chase
Bank interaction was such a breath of fresh air; it violated
my expectations. Before I dialed the bank, I immediately
identified expectations for the call. Here was my
“expectation profile”:
e I expected to hear a recorded message or an
automated attendant.
e I expected to press a never-ending menu of buttons:
press [1] for this, press [2] for that, press [3] for
something else.
e I expected to be shuttled from one person to the
next.
e I expected to speak with someone in broken English.
These are my low expectations. Corporate monoliths get
away with crappy service because it is the expectation
profile. But when Chase violated that profile, including a
resolution within minutes, the end result was wow-worthy. I
entered the call with pure dread and left with sheer
satisfaction.
It needs to be said: Beware of syrupy mission
statements. They mean nothing. The loaded weapon for
customer service is your employees. Great customer service
only happens on the frontlines with first and final contact
with the customer. A great example of this is the West Coast
hamburger chain In-And-Out Burger. Every employee
greets you cheerfully and asks you how you're doing, food is
delivered with a smile, and you’re left with “Have a great
day.” The mission statement on the wall is executed
downstream to the frontline.
Violate customer expectations, and you’ll amass repeat
loyal buyers, and ultimately, disciples for your business.
That’s like getting free advertising. Morph SUCKS into
SUCS and you'll get BUCKS. One skew, but one step closer
to grabbing the sale.
KEY CONCEPTS
Sudden unexpected customer service (SUCS) is
when your company provides service that exceeds
industry expectations.
SUCS is a value-skew.
To execute SUCS, identify your customers’
expectation profile as evaluated by industry
standards, and then violate it.
SUCS must be more than a mission statement on the
wall, it must be executed downstream by employees.
Gmie lave:
THURSDAY, DECEMBER 15, 2016 - 6:03 PM
(13 DAYS LATER)
Madison lay on the floor with Bella near the Christmas tree,
the Labrador staring at her human sister as she nibbled on
a tortilla chip. Jeff smiled, thankful for the appearance of
normalcy. But his wife was a different story. More like a
story of Queen Cersei. Or maybe Marie Antoinette.
After Jeff lost $1,400 on a failed T-shirt venture, his
wife’s personality took an icy turn. Conversations were curt,
eye contact was cutting, and doors slammed harder. If
given a chance, he wasn’t sure his wife wouldn’t throw him
off a building or bend him over a guillotine.
Jeff found the motivation to read between his wife’s
recent transformation and the VISA bill yet to arrive. He
treated the books his wife suggested like a make-or-break
final exam before graduation. At this point, he didn’t expect
the DeMarco books to help other than removing the curse
that besieged his wife.
With the fire at his ass, he only needed a few days to
complete the books. Left behind was a confusing tapestry of
feelings that didn’t blend. It was anger with hope. Regret
with relief. Fear with excitement. Sureness’ with
unpredictability. While he didn’t have a word to express the
emotion, he knew it was a net positive. He felt lighter. And
the thought of Cersei Antoinette no longer tortured him.
That night on their twilight-cross, Jeff pulled out a chair
with his dinner and positioned it next to his wife. As usual,
the chair screeched as it dragged the linoleum floor. Sam
jumped, startled from her Instagram feed. She glared at
him expectantly. Below her furrowed brow, upshifted pupils
were black holes, her lips tight. Shame! echoed in Jeff’s
mind.
He tapped her on the knee and smiled. “I finished the
books you wanted me to read.”
Sam’s expression didn’t flinch.
“The books you recommended,” Jeff clarified. He stirred
his soup, still steaming hot. She nodded dismissively but
said nothing. Before her hair could turn into live serpents,
he conceded. “I’m an idiot. Had I read this stuff weeks ago
when you asked, you wouldn’t be eyeballing daggers at
me.”
She returned her gaze back to her phone, swiping away.
After several photos of scenic gardens rolled by, she
deadpanned, “Is that so?” She continued swiping, her focus
on the phone too intense for Jeff’s comfort. After the Royal
Botanic garden flew by, she finally looked at Jeff, head
cocked. Not expecting much, she asked, “And what have
you concluded?”
Unsure if it was a trick question, Jeff exhaled deeply. He
muttered, “I think if I had read them when you asked, it
would have saved us $1,400 dollars.” He took a guarded
slurp of his soup and waited until Samantha’s face
surrendered its hardness. When she curled her lip in a near
smile, he continued, “Everything makes sense, including
why you yelled at me for the T-shirt thing.”
“Would have saved you,” Sam corrected, now with a
smile, placing her phone on the table. “I’m not paying that
off. Your Visa, your mistake.” She turned her body in the
chair and faced him with a self-satisfied grin.
Jeff nodded, relieved at her demeanor shift. Ding-dong
the witch is dead! Now he knew what Dorothy felt like
standing over a freshly melted puddle. She remarked, “I
didn’t yell at you to steal your enthusiasm. I had to slow you
down and redirect it.” She laughed then pinched his thigh
with her fingers. After Jeff yelled a juicy Ouch! she winked,
leaving the table to fetch her toast.
While Sam chewed into her evening breakfast, Jeff
slurped at his dinner. He wanted to talk about the DeMarco
books, but his wife’s soup had a hypnotizing effect. Asian
Tofu Udon. Might sound nasty, but it was one of Jeff’s
favorites. Tofu? Leeks? Udon? The idea that he could like
something as much as sirloin or pizza seemed ridiculous.
But here he was, buried in his bowl as if he were a starved
prisoner. Despite his wife’s hectic schedule, Sam always
found time to cook the most delicious meals. Jeff felt
fortunate for his epicurean luck considering Sam refused to
cook anything that had animal products in it. His delight
with Sam’s vegan lifestyle was on par with his pleasure for
pulling weeds or unclogging a toilet. He loved meat as
much as any red-blooded American with a poor lipid panel.
The thing is, his wife’s meals might have been dairy- and
meat-free, but they never lacked for flavor. He wasn’t sure
how she transformed kale, quinoa, and tofu into something
he’d gulp down with glee.
He drank his last drop and clanked the spoon in the
bowl, pushing it away. Reclining back in his chair, he rubbed
his chin with an unsettling grimace.
Sam glanced at the empty bowl, and then at him, one
eyebrow spiked. “Didn’t like the soup?”
He shook his head as if to awake from a trance. “Oh no,”
he snuffed, “it was delicious as ever.” Wrestling with his
thoughts, he piano pecked his fingers on the table. Still
eyeballing his finger dance, he said, “I was just thinking
how sad it is that we don’t question everything. How we just
assume the system has our best interests.” His restless
fingers continued. “From news and Netflix to education and
sports.” He shook his head in disgust. “I mean seriously,
why the fuck do I care about the Chicago Cubs?” He finally
looked up at his wife. “Samantha, I’ve spent months,
probably years of my life caring about something that
means absolutely nothing in the grand scheme of things.”
He straightened up. “I mean seriously, what do I get when
the Cubs win? Money? Vacation? A free month of Hulu?
Nope, I get nothing but a dopamine high that helps me
numb the miserable life I’ve accepted.” He tapped the
spoon against the bowl. “I would have sent Maddy to
DePaul no matter the cost.” Madison glanced up from her
art project inquisitively. Jeff glanced at her fondly and
continued. “Didn’t even think about it, just accepted it
blindly.” He loosened his tie and pulled it half off. “And
marijuana, don’t you love how they vilified that shit for
years? I’ve always dismissed your cousin and thought she
was just a pothead, but she always said weed cured her
depression.” He paused. “She was serious?”
Sam looked at him pointedly and spoke singsongy. “You
mean my cousin Jaime who ‘everyone hates’ and sells ‘that
skin care crap’? Yes, she was serious.”
Jeff cracked his neck, deaf to the comment. He gazed
down at his hands on the table, his fingers fiddling again.
He carried on, pace faster and louder. “And the thing about
Saturday and Sunday being the paycheck for Monday
through Friday, I never thought about time that way. How
we spend our days. If I lost half my money in an investment
every week, I’d say, ‘Fuck no,’ and yet, here we are, pissing
our time away and not thinking twice about it. And for
what? Some stock market bullshit that pays off at the end of
our life?” He flicked the spoon in his bowl, giving it another
clank. Sam watched him intently but she let him continue
his monologue. “Misery is the business model of the human
race, and we live it like marionettes on puppet strings. They
got us enslaved or addicted to something: fast food, TV,
video games, social media, and just like good little rats, we
go along with it, medicating our misery with whatever
salvation they produce. And if we get fat or depressed
medicating our emptiness?” He laughed, “Well, the drug
companies have a product to sell you too.”
He shook his head in disbelief and carried on. “But what
really pisses me off is that the escape to this insanity boils
down to math.” He turned to his wife. “Freaking math. I’ma
finance guy, and I didn’t even bother to analyze the
mathematics of life. Of existence. It’s a literal equation, like
a formula for cracking the code to wealth. And time is
nowhere in it.”
He turned and grabbed his wife’s wrist, a little firmer
than she’d like. He yammered on, bug-eyed, “It’s like we’re
dropped into this world and told that we’re free. But we
aren’t free and it’s just a lie.” His caramel eyes swelled
wider. “Because the world itself is just a brilliant scheme to
keep you working, spending, and saving. And when you’re
smart enough to figure that out, the scam advertises a way
to escape, but it doesn’t help you escape. It keeps you in it.
Grows tighter the harder you try.” He leaned in closer to
Sam, wild-eyed. “Like one of those Chinese finger traps!”
Sam coiled back in her chair as Jeff bellowed on.
He went on for another minute and finally concluded
with a snicker, “Thank you for coming to my Ted Talk.”
Sam blew out a roomful of air as if emerging from a pool
and then snickered. “Jeff, are you high?”
“No!” he asserted. “But the whole fucking system is so
clever, so deviously orchestrated, so meticulously devised
that it had to be invented by someone who was.” He flopped
his head back, now facing the ceiling, mouth open.
Exasperation rushed out. “We’ve been living our entire lives
based on a Script.”
Sam laughed, now confirming her suspicions. He was
pontificating over the DeMarco books. “Well, you called it.
You’re an idiot. I told you to read the books, but you thought
selling Trump Sucks T-shirts on Facebook was a better
business.” She shook her head, still chuckling, and covered
his fiddling fingers with her palm. He glanced down at his
wife’s smothering hand and back at her. “Great to have you
on the team, Jeff. Now let’s talk business. Something that
makes sense.”
Jeff corrected, “You mean CENTS?”
CHAPTER 40
neo RCEDOES NT)
AWAKEN” PRINCIPLE
TALENT AND SKILL IS EARNED, NOT BORN OR AWAKENED
‘m not good at writing.
I once mentored a young man who said this. To which
I replied, “Of course you aren’t good at writing, you never
studied it. You never tried it, and you never practiced it. Did
you expect to be ‘good’ at something without ever trying?”
My reply was not about exposing laziness; it was about
exposing his external locus of control. He expected talent to
be genetic. I told him to expect talent to be earned.
In psychology, the locus of control is the degree to which
you think you can _ influence life’s outcomes and
circumstances. It also dictates your view on skills and
talent. With an internal locus, you control the pen writing
your story.°* New skills, talents, and successes are possible
in the right system, combined with hard work and good
decision-making. Moreover, health, happiness, and hope are
also associated with an internal locus.
Conversely, if you have an external locus, you see life’s
situations as static. Decision-making has little effect. You’re
merely a victim of the system. The pen writing your story is
ordained from luck, fate, genetics, or environmental
changes. Caught drunk driving? If you blame your arrest on
the police or your dad who bought you the car, you have an
external locus. Or maybe the blame rests on that hot guy
who bought you five Cosmopolitans at the club?
The “Force Doesn’t Awaken” Principle mandates that
talent and skill doesn’t emerge or awaken, it is earned. The
birth of Wolfgang Mozart did not include a piano. Tom
Brady did not pop out of Mom with a football. Jerry Seinfeld
didn’t say hello to the world with a joke. In all cases of
future excellence, it was earned in the past through a
disciplined process?29 in pursuit of exceptionalism.’
Regrettably, most people believe talent is genetic or
born. They wait for talent to strike them like lightning. Ever
hear someone Say, “That’s not my thing?” Of course, it’s not
your thing; you gave up after two tries! If you falsely believe
talent is coded into your DNA and you’re waiting for its
emergence, you'll wait forever. Worse, you’ll never work
hard to get talented. Likewise, if the competition was born
with talent, but you weren’t, why bother? The only uneven
playing field exists in your head.
Hollywood promotes this pervasive myth. And it is a
Trojan horse that kills dreams. For example, in Star Wars:
The Force Awakens, within hours, Rey wields a lightsaber
as if she trained for years. But she didn’t. She grabbed the
weapon and wham—instant skill. If only life was so
forgivingly accurate. Sadly, most people go through life with
this expectation—they hope some mysterious talent
“awakens” within them so they can skirt the disciplined
process. Thanks, Hollywood!
With this hereditary view of talent, you are likely to live
your life talentless. Why? Because you aren’t interested in
earning talent; you’re interested in discovering it.
The fact is, you can succeed and learn how to build a
specialized-unitS!® as much as you can learn how to play
piano, knit blankets, or plant flowers. Unlike hitting a
baseball or singing to a sold-out crowd at Madison Square
Garden, there are no physical limitations. You don’t need
the right voice, the right height, the right strength, or the
right genetics. None of that matters. Simply put, nothing is
stopping you from learning the skills you need to become a
talented entrepreneur.
Nothing.
I wasn’t born an entrepreneur. Or a writer. Likewise,
doctors, lawyers, athletes, engineers, teachers, cooks,
dishwashers—no one is born anything. While you might
have a physical attribute better suited to a particular
profession, we’re all born in complete ignorance. Even the
infant who giftedly grows up to be seven feet tall still has to
learn how to put the ball in the hoop.
Fact: Entrepreneurship is entirely learnable, as are the
skills within its practice. In fact, every skill and talent which
helped me Unscript and become financially free I learned
after college graduation. My education didn’t end at
graduation; it started. My true skill-building and learning
began when I leaped into the world of entrepreneurship.
While most of my early business ventures failed, my skills
and knowledge accumulated: programming, Excel,
Photoshop, wordsmithing.
Regardless of your business venture or its industry, there
are two core skills you need to target:
DECISION-MAKING AND PROBLEM-SOLVING
The willingness to become a scientist, the ability to analyze
data and situations, and set a course of action.
COMMUNICATION
The ability to sell, from customers, to investors, to
employees, to partners. The selling never ends.
Once again, the secret to success is there is no secret.
No shortcut. No unique DNA or special genetic code will
get you what you want. You might not have been born the
sharpest pencil in the box, but you’re surrounded by pencil
sharpeners. The world is already yours, but only if you seize
it. Accept what is and just do the damned work. Pursue
talent and skill as if your life depended on it. Because it
does.
KEY CONCEPTS
Individuals with an external locus believe life’s
circumstances cannot be influenced, that
circumstances arise from luck, fate, genes, or
environmental randomness.
Individuals with an internal locus believe life’s
circumstances can be influenced through good
choices and hard work in an efficient system.
Talent is earned, not birthed—no one is born with
any particular expertise.
You can learn entrepreneurship.
Education doesn’t end at graduation; it starts.
You will probably need to learn new skills to escape
the rat race.
CHAPTER 41
Wale inlOiP SON IRIN Cllizde =
THE BIG-ED SWINDLE: HANDLE COLLEGE LIKE YOU WOULD A HOT STOVE
H ere’s some food for thought: The most lavishly
expensive real estate on the planet all enjoy massive
profits, but only one of them is treated like a business. I'll
let you guess which one that is. They are:
1. Government buildings
2. University campuses
3. Churches of all religions
4. Casinos
When you walk into a casino, you know there’s a target
on your back. They are designed to extract every dollar out
of your wallet. There are no clocks on the wall, sandalwood
scented air is pumped into the gambling hall, and the floor
is laid out like a maze. Heck, some still offer free drinks. The
point is you know you’ve walked into the belly of the beast,
and the odds of you leaving with more than you came with
are unlikely.
Deviously, the same can be said about “Big-Ed,” or
formal university education.
Like casinos, they too want your money, and they want
you to spend it just as frivolously and void of critical
thought, just as if you were rolling the halls of the MGM
Grand.
If the rat race was a prison (and in many ways it is), Big-
Ed would be the bus that got you there. Worse, your
parents are the ones who perp-walked you to the bus-stop.
Big-Ed is the educational industrial complex that has
essentially become an indoctrination camp. This human
assembly line is charged with the mass manufacturing of
obedient rats,?° rats who are educated just enough to earn
their cheese in the five-for-two slave system?® but not
educated enough to question it.
The sad reality is that there’s only one degree that might
be worth the high cost of college, and that’s a degree in
relative-value.S2© Everything else is worthless and merely a
debt scheme that irreversibly commits you to rat race
superstructure, no better than a big bet at one of those
Casinos.
Never heard of a relative-value degree? Don’t worry;
every university offers them. The problem is most
universities are diabolically pushing their alternatives:
lottery and greater-fool degrees. More on that later...
A relative-value degree is any degree that is based on a
skill or expertise that has marketplace demand. Relative-
value in business and relative-value in job hunts are no
different. Your education must give you skills that are
relatively valuable in the marketplace. Otherwise, your
degree is worthless. Think science, technology, engineering,
medicine, robotics, Al, or anything that requires specialized
knowledge for practice AND has a vibrant job market.
Obviously, if you want to be a great medical researcher or a
civil engineer, you’re going to need college.
Regrettably, the Big-Ed racket has marginalized relative-
value degrees to favor lottery degrees, which feature more
leisurely and passionate pursuits. A lottery degree entails a
specialized-skill in a narrow field with an existential job
market, and the competition for such jobs is likened to
winning a lottery. Degrees in oceanography, anthropology,
archeology, astronomy, and fashion design might sound like
passionate pursuits. Still, just like all followed passions,?2°
you’re joining a stampede trying to thread a needle. Sure,
your sports management degree might help you manage a
professional baseball team, but how many baseball teams
are hiring? In short, you’re rolling the dice and betting that
you can be “the chosen one.” If there are two million
psychology graduates but only one hundred jobs nationally,
you’re rolling dice with a five-figure price tag. Utility-value
exists, relative-value does not. Lottery degrees are low
probability career bets with high probabilities for debt and
underemployment; bartending, cashier, or any other low-
skilled job.
While relative-value degrees are the good and lottery
degrees are the bad, greater-fool degrees are the ugly.
A greater-fool degree is any study, usually liberal arts,
that denies both economic reality and relative-value. Not
only is the degree lacking useful value, but some would also
argue that the field has no job market at all! Philosophy, art
history, gender studies, critical theory on 19th-century
feminism, renaissance poetry—all topics that might win you
a debate in a sociological discussion over a beer, but they
won’t win you a thriving career. Students pursuing greater-
fool degrees deny the reality outside of the cloistered
bubble of academia. In contrast, their university denies
them the truth while taking their money with a smile and a
promise worthy of Wonderland. Worse than a _ lottery
degree, the only market for greater-fool degrees is in fact,
the greater fool market: teaching the field to other greater-
fool degree seekers. Graduates exit college debt-ridden and
jobless, looking for a job that simply does not exist.
As an employer, I don’t care about degrees. I care about
the value your skills can offer my company. Show me a
great web application you coded and boom, you’re hired. I
don’t care if you skipped college. Likewise, Elon Musk said
in a 2014 interview, “There’s no need to have a college
degree... at all4” Tech giant Google has even started to shift
away from the ideology of college degrees. When they
analyzed job performance, they found no relationship
between GPA or college affiliation within the first years on
the job. In fact, Google’s senior vice president echoed a
similar sentiment, saying, “GPAs are worthless as a criteria
for hiring, and test scores are worthless.2”
Sadly, we’re indebting an entire generation of kids with
college degrees they can’t use for jobs they can’t get.
Meanwhile, student-loan debt tops a trillion, and thousands
of well-educated youngsters are lined up at the job fair
competing for jobs they could have snagged out of high
school. A college degree doesn’t produce jobs out of thin
air. It entitles you to nothing. Nada!
If you’re going to college, don’t roll dice and don’t deny
reality of the Hot Stove Principle: handle college as if it
were a hot stove—it can cook you something good, but it
can also burn you. Don’t get burned, get educated on
something that makes you relatively valuable.
KEY CONCEPTS
e Casinos and universities enjoy massive profits and
own the most expensive real estate on the planet.
¢« The only degree worth pursuing is a degree in
relative-value; skills that have a strong demand in
the marketplace, usually STEM related.
¢ A lottery-degree is a skill or profession that has
excess supply with little to no demand which makes a
job in the field like a casino bet.
¢« A greater-fool degree is a skill or a profession that
has little market value other than teaching it to
others, creating a “greater fool” market.
e Approach university like a hot stove, or worse, a walk
into the casino.
ChAr TER-42
Welle DOV NUS CWA Ge Save Gir
EMBRACE THE TWO SIDES OF CHANGE AND PUT LUCK IN YOUR LIFE
&
[ ox had the misfortune of tripping over someone’s
opinion. I didn’t seek it; I was tagged on social media.
Somebody opined that my success was entirely attributed
to luck. Namely, “MJ was lucky to be ‘there’ when the
Internet was just starting to get popular.” There meaning I
was alive during the late nineties. As if I was the only
person alive in the late nineties, not one of six billion. Ladies
and gentlemen, these idiots vote. And they breed more
idiots who vote.
Anyhow, the real luck in my story and its continued
evolution has nothing to do with luck. It has to do with how
I interact with the thing that causes luck: change.
Notice anything in common with the following
statements?
e Sarah got lucky when the Internet was just starting
to get popular...
e Joe got lucky when blogging was just starting to get
popular...
e Craig got lucky when self-publishing was just
starting to get popular...
e Lucy got lucky when Amazon was just starting to get
popular...
e Harry got lucky when vlogging on YouTube was just
starting to get popular...
e Michele got lucky when bitcoin was just starting to
get popular...
The common theme in all these appearances of luck is
the entrepreneur took advantage of an emerging change in
the environment. They weren’t the late adopters in the
business cycle; they were the innovators and early
adopters. Moreover, change, and the luck that comes from
it, is constant. If you can ride the change, you also can get
lucky.
Think of it like a coin flip. If a coin rests tails-up on a
table, there’s a 100 percent certainty it will remain tails.
Only change—picking up the coin and flipping it—can
change the probability and the potential outcome. If you
have the wherewithal to recognize when (and where) the
coins are flipping, you give yourself a chance to call the
outcome correctly. And get lucky. That said, taking
advantage of change is a complementary system, like yin
and yang. Both are needed to conjure luck.
The first is yin, or extrinsic changes in the environmental
such as shifts in tastes, culture, and technology, all of which
cause the knowledge gap’s®2? natural expansion. All the
statements above sprung from extrinsic changes where
emerging sweet-spots turned into fortunes. And yes, such
changes existed in the '90s, as they did in the '00s, the '10s,
and now the '20s. Behind every millionaire and billionaire,
you'll find one constant: they built a business system®!9 that
took advantage of an extrinsic change, or they were the
catalyst behind the change. And because change _ is
constant, guess what: so is opportunity!
As humans, we’re wired to prioritize comfort and
efficiency.?? This cognitive shortcut makes us naturally
averse to extrinsic changes, keeping us pliant to
convention.?! When our favorite website is changed and
redesigned, we feel anxiety, even if it is beneficial. Are you
sending Instagram hate mail because they changed their
newsfeed? Are you hoping that Fortran jobs will suddenly
make a remarkable corporate comeback? If so, you’re
covering your eyes and not seeing the coins flip around you.
Change adversity is why we take the same route to work,
drink the same coffee, read the same genre of books, and
watch the same television shows.
To take advantage of change and the ever growing
knowledge gap, the best tool I’ve found is a PESTLE
analysis. PESTLE is a textbook strategic model that can
help you identify changes, opportunities, or threats to any
business.
Political - What political dynamics are likely to
affect the business?
e Economic - What supply and demand considerations
will likely affect the business?
e Sociological - What cultural shifts and/or tastes are
likely to affect the business?
e Technological - What technological changes (or
disruptions) might affect the business?
e Legal - What current or future legislation could
affect the business?
e Environmental- Will environmental shifts or trends
might affect the business?
Answer these questions and external changes won’t be a
threat, they will be an opportunity.
The yang of the dyad is intrinsic change— how much
have you changed lately? When you perceive extrinsic
changes, how does your mind react? Do you notice the
difference and adapt? Resist? Analyze it? Are you closing
the knowledge gap as change modulates around you?
Here’s a question that needs answering: How different
are you today than five years ago? Your answer exposes the
truth with how reactant (or non-reactant) you are to
change. For instance, TODAY ME is different from the OLD
ME of five years ago, ten years ago, and so forth. When I
reread my first book (written in 2009), I felt like I didn’t
write it. While I stand behind every concept, I didn’t like my
“voice.” What changed? Not the book, but myself.
Remember, the R&D numbers in your annual report???
reflect your disposition toward change.
Ignore change’s yin and yang and I guaranteed you will
be the same person year after year. As such, I can predict
that your life, including your financial situation, will also
stay the same. Master martial artist Bruce Lee once said:
Empty your mind, be formless, shapeless, like water. If you put
water into a cup, it becomes the cup. You put water into a bottle, it
becomes the bottle.
If change isn’t changing you every couple of years, you
stand to star in a stale television rerun, repeating the same
job with the same salary, the same skills, and the same
routine, all with the same two-week vacation. Un-fucking-
watchable.
If you need an easy reminder, remember Change equals
Cha-ching! There’s always some “hot” cultural shift that can
make you a fortune: from plastics, to fax machines, cell
phones, to blockchain, to Amazon, to cannabis, to whatever
else soon arrives and is labeled the next new thing “so-and-
so” got lucky with. When I saw the culture coins flipping, I
learned new skills,?29 spotted imperfection,?°° skewed
value,°32 and offered relative-value.52© I took a stake in the
outcomes. You should too.
KEY CONCEPTS
Change is dual system and the impetus for conjuring
luck.
Extrinsic changes are environmental and/or cultural
shifts, the force behind the knowledge gap.
A PESTLE analysis can help you identify extrinsic
changes.
Intrinsic change is your annual report’s R&D
number, self-development, new skills, knowledge,
and perspectives.
Change, and adaptation to it, is what creates
millionaires and billionaires.
CHAPTER 43
Welle TalVV DIE Me eva eleny
CONSIDER HARDER HARDLINES AS THEY ARE RIPER
of
| get dozens of reader emails per day. Some of these are
just words of thanks, some success stories, and some
questions. At least one or two of these emails always seem
to come to an errant conclusion regarding my books. That
conclusion? Start an Internet business!
The core message in my books isn’t about starting an
Internet business. The Internet is a business channel, and a
necessary one. It is a medium that fixes bad math?P!”. In
other words, leverage. Sadly, as the Internet has grown, so
have the money-chasers, and now I see better business
opportunities in hardlines—physical products that might sit
on a store shelf. Hardlines also include local brick and
mortar businesses where scale would require multiple
locations, franchising, or chaining. Yes, hardlines pose more
scaling challenges than their Internet counterparts, but the
competition is less intense. When everyone is chasing after
the low-hanging fruit found on the Internet, better
opportunities exist higher up the tree.
Stop ignoring the real world over the digital world.
If you profit ten million dollars from a physical product
over a digital product, the money spends exactly the same.
KEY CONCEPTS
¢ Don’t ignore physical products or businesses that
sell from a storefront simply because they aren’t
digitally delivered.
CHAPTER 44
Pile PAS TEAM = S aval etGyy
MAKE IT CENTS, AND YOUR BUSINESS WILL MAKE SENSE
&
C) ne of the greatest challenges I had as a young
entrepreneur was not knowing which ideas to pursue.
Would my idea be worth the effort, especially if you have to
work seven days a week to get it off the ground? I’m
guessing your objective for starting a business isn’t to just
pay bills. It is to set yourself free. Regrettably, most
businesses are no better than a rat race job. In fact, they
could be worse if the owner remains lynched to time while
having no leverage.?!”
This is why I created the Fastlane Strategy, a business
framework designed to change your life and set yourself
free. Powering the Fastlane Strategy is the CENTS
Framework, a set of five commandments that evaluates
business ideas and their veracity for Unscripted outcomes.
Each commandment represents several strategies and
principles. If your business idea meets all five
commandments, congratulations. Your idea packs potential
for a 1% outcome. The commandment definitions and their
constituents are as follows:
THE COMMANDMENT OF CONTROL
No one should rule over your business. If one decision from
one person or company can instantaneously destroy your
business, you’re violating The Commandment of Control.
Optimally, you want your entire operation insulated or
diversified from disruption. From product development to
marketing to distribution, no third-party should be able to
incite a catastrophic incident. If Amazon cancels your
account and you lose 99 percent of your revenue, you’re
violating Control. This commandment is about risk
mitigation, effectively giving you black-swan insurance. The
Commandment of Control lets you sleep well as a
scientist.°’ The following strategies frame the
Commandment of Control.
The Scientist Strategy
The Specialized-Unit Strategy
The Job Proxy Principle
The Shortcut Principle
The Commodity Principle
The Easy Goes Hard Principle
The Moat Strategy
THE COMMANDMENT OF ENTRY
The Entry Commandment provides insight into where real
opportunities hide. As the entry barriers to any business
weaken, so does the opportunity. Simply put, the easier the
opportunity appears, the worse the opportunity is.
Conversely, as difficulty increases, so does the opportunity.
The following strategies frame the Commandment of Entry.
The Specialized-Unit Strategy
The Process Principle
The Problemology Principle
The Shortcut Principle
The Commodity Principle
The Easy Goes Hard Principle
The Moat Strategy
THE COMMANDMENT OF NEED
The Commandment of Need states that if you provide
relative-value through a specialized-unit, satisfying needs
or wants, money magnetizes toward you. Growth, profits,
and an explosive offense are likely to follow. The following
strategies frame the Commandment of Need.
The Profit Locus Strategy
The Specialized-Unit Strategy
The Consumer/Producer Principle
The Polarity Principle
The Passion Principle
The Value Marriage Strategy
The Problemology Principle
The Value Skew Strategy
The Negative Skew Strategy
The Imperfection Principle
The Stakeholder Principle
The SUCS to Bucks Strategy
The Dual Change Strategy
The Hardline Strategy
THE COMMANDMENT OF TIME
With the Commandment of Time, you commit to a mid- to
long-term vision of having your income and wealth
detached from time. This is done through physicality—your
specialized-unit sells on its own through a_ business
system,°!9 eventually detached from your labor. The
following strategies frame the Commandment of Time.
e The Lost Principle Principle
e The Specialized-Unit Strategy
e The Business System Strategy
e The Discounted Time Principle
e The Bad Math Principle
¢ The Polymorphic Pay Principle
THE COMMANDMENT OF SCALE
The Scale Commandment holds that your specialized-unit
must be replicated in a significant quantity and profitably.
The following strategies frame the Commandment of Scale.
e The Offense/Defense Principle
The Bad Math Principle
The Specialized-Unit Strategy
The Business System Strategy
The Consumer/Producer Principle
The Asymmetric Returns Strategy
The Moat Strategy
The fewer commandments met, the worse the idea, and
hence, the worse your business potential. While a
CENTSless business might pay bills or provide some great
experience, it becomes probability challenged. Meet more
commandments, and chances improve, either for that
business or the one that follows. That said, you could violate
one or several commandments with the goal of eventually
solving them. For example, a restaurant could meet four
commandments (CENT) but lack (S)CALE. As such, your
vision should be many restaurants, accomplished either
through franchising, chaining, or duplication.
When you combine CENTS with your 1/5/10 Planasy,
something remarkable happens... you install a dual decision
framework. The 1/5/10 Planasy guides your life; CENTS
guides your business. So if it makes CENTS, it makes
sensel,
KEY CONCEPTS
e CENTS is a business framework that can help you
improve your probability for building a business that
creates massive wealth with Unscripted outcomes.
e CENTS is a blend of twenty plus strategies and
principles.
e The Commandment of Control says that no entity
should hold a patriarchal position in your business
with the power to shut it down.
e The Commandment of Entry says that your business
should be a process to start which offers a moat, or
barriers to new competition.
e The Commandment of Need says that you need to
skew value, solve problems, and fill needs.
e The Commandment of Time says that eventually your
business needs to operate disparate from you and
your time.
e The Commandment of Scale says that your core offer
should be hard to create, but easy to replicate
among millions, if not, thousands.
e Opportunities improve as the commandments are
met.
FROM FANTASY TO PLANASY
THURSDAY, DECEMBER 15, 2016 - 9:15 PM
(3 HOURS LATER)
Jeff didn’t move from his seat at the kitchen table. For the
next thirty-minutes, his mouth did all the moving. Even
when Sam retreated into Madison’s bedroom to kiss her
goodnight, Jeff simply raised his voice and carried on. He
recited all flavors of the red pill, from the hot stove of
college to the role of mathematics to the futility of time.
When Sam returned to the _ kitchen, she finally
interrupted. “Sounds like you’re 100 percent sold.” He
wistfully looked at her as if she just offered him an hour-
long massage.
“Yes,” he said. He then gestured to the vision board on
the wall and continued, “We need to fix that mess.”
Sam nodded. “Well, it was a nice start.”
Jeff stood from his chair and walked to the vision board
and pulled it down. He laid it on the kitchen table. “We need
to nail this down to next year, then five. Otherwise, it’s just
wishful thinking.”
“Agreed,” Sam said, sitting next to him, a black marker
between her fingers. When they originally mapped out their
ten-year dream, they’d failed to dissect the plan into the
near-term timeframes. Now they were no longer focused on
some nebulous future decades away but next month and
year. Jeff spied his wife dressed in her mint-green hospital
scrubs. “How long until you leave for work?” She glanced at
her watch. “Little over an hour.”
Jeff nodded. “Well I’ll start and say by this time next year,
we should have a business that meets, or will meet, all of
the CENTS commandments.”
Sam furrowed her brow. “All of them? I can see that
maybe at three or five years, but just getting started? It
might be hard to pull off, especially since we’ve never done
this. And we don’t have a lot of money.”
Jeff thought about it. “You’re probably right. But our
product has to be good, it has to be scalable in the millions,
and we have to own it. I don’t want our business copied in a
few days by some punk living in his mom’s basement.”
Sam chuckled because he’d just described CENTS. She
intervened. “So how do we know we’ve met this milestone?
A product or a prototype? A finished website? Our first
inquiry?” She paused. “We should be specific, something
that demonstrates legitimate progress. Owning a business
that loses money is not progress. For example, your T-shirt
business.”
Jeff pointed at her. “There you go. In a year from now, we
will own a business that enjoys a profit.”
“How much profit? Thousands? Millions?”
“A few bucks, it doesn’t matter. Let’s just build the
foundation, a springboard so to speak.”
Sam rubbed her forehead. “Okay, so in one year we will
own a business, and that business will have at least one sale
which delivered a profit. Right?”
Jeff nodded. “Yes. We can worry about the millions after
the hundreds. Once our business generates a profitable
sale, we can go from there.”
He commandeered Sam’s marker and started scribbling
on the whiteboard, drawing various arrows, symbols, and
numbers. His voice buzzed with enthusiasm as he spoke,
lending him an unusual cadence as if he were already free
of the rat race. His wife gazed at him, impressed at his
newly found initiative. “Wow, where’s this confidence
coming from?” she asked. He smiled and revealed that he’d
consumed hours of information at several entrepreneur
forums. Between Facebook groups, the Fastlane Forum and
Hacker News, he suddenly felt dangerously competent.
As he continued drawing on the whiteboard, the thick
black marker squeaked. Its odor wafted through the room
and reminded Sam of college, when she’d met Jeff in a
communications class. Stuck in a group project, Sam had
been instantly impressed by jJeff’s leadership,
outspokenness, and confidence. He’d volunteered to lead
the group, kept them focused, and acted like he knew the
outcome would be an “A.” And when a group member
slacked, Jeff called him on it. The slacker fell in line, and
ultimately, they did get that “A.”
Jeff finished writing on the board and stood back to
review his handiwork. He barked, “We nail it, and then we
scale it!”
The whiteboard now clarified near-term goals. In the
next year, they weren’t looking to become millionaires with
a million-dollar business. They wanted to create and control
a great product that could be sold at a decent profit.
Jeff was still studying the whiteboard with a wry smile,
rocking back and forth on his heels as if besieged by a
nervous frenzy. He glanced at his wife, who seemed to be
drinking him in. Her wide-set eyes sparkled as she gleamed
at her husband with as ifin a trance.
Jeff felt like a child the day before Christmas. And it
made him realize that his spirit had been dead for the last
ten years. This wasn’t like the misplaced optimism of their
first plan. This was a real plan, a plan they could direct and
control. The road was visibly difficult, but visible
nonetheless. Instead of relying on time, jobs, and stock
market returns for their dream life, they now would depend
on themselves. He and his wife would become
entrepreneurs.
As a kid, Jeff had concrete dreams, dreams that seemed
doable. He’d pictured himself in a jazz band, blowing away
at the saxophone. He saw himself fabricating impressive
pieces of furniture in a huge woodworking shop. Now he
dreamed of something esoteric: freedom and the liberty to
make those concrete dreams possible—without the crucible
of money.
He took the marker back to the whiteboard and loudly
proclaimed each mono-syllabic word while underlining it.
“Nail. It. And. Then. Scale. It.”
Sam gazed at her husband, biting her lip fondly. It
intensified the memory back to the classroom when Jeff was
a force of nature: the resoluteness, the unshaken fervor, the
vigor. The smell of marker waxed as it squeaked on the
whiteboard, the memory growing more vivid. Jeff’s faced
glowed with passion. He suddenly looked thinner, his long
flowing locks of hair messy, but still dapper in a cover-model
way, complemented by a dark evening shadow. He grinned
at her with reverence, a look she hated to admit she hadn’t
seen since their wedding vows. It reminded Sam of when
life had hope and promise. A time when the rat race hadn’t
chewed them up and spit them out. Fearlessness oozed
from her husband. And it melted something in her.
Sam had a mask, just like culture and all its facades. Just
as all humans do. Cognizant of her shift in less than one
hour, she glanced at her watch and then flashed Jeff a
cocked eyebrow. The thought ran free in her brain like a
fenced puppy who finally saw the open gate. She let it fly.
“So, RyRy... is there anything else you want to nail?”
CHAPTER 45
REIN @EES AND IRISKS
STRATEGY
BREAK RULES TO BREAK THROUGH THE NOISE
&
YT ites Did MJ just mean what I think he meant? I did.
I know you’re not reading this book to hear about a
married couple’s flirtatious foreplay, but it segues perfectly
into the next strategy. Rules are meant to be broken.
They’re part of the Script, and that exists to keep you
contained in the rat race.
Of course, this isn’t about breaking laws. It’s not against
the law to encourage your kid to be a plumber. It’s not
against the law to drive your Lamborghini to Costco. It’s not
against the law to go to an empty movie theatre on a
Monday morning. I’m talking about the rules of culture and
business that define the Script’s prevailing wisdom and
keep you obediently confined in a bubble. Are the rules
you’re following based on cultural inertia and tradition, or
are they evidence-based?
The interesting thing about bubbles is this: They have
shape and appear structured, but they’re easy to break out
of. From diet bubbles to political bubbles, to religious
bubbles, few bubbles are self-developing but self-hindering.
I believe the world would be a much better place if
people knew the theology they followed and why they
followed it. Know why most people follow a particular
religion? Is it because they studied the world’s religions in
an exhaustive search for truth? Or is it because they just
happened to be born in a particular region on a particular
planetary landmass? In America, Christian; in Utah,
Mormon; Latin America, Catholic; the Middle East, Muslim;
East Asia, Taoism or Buddhist. Particularly, Mom and Dad
say X, so X it is. There is no search for truth, just blind faith
and a random chance that God put you on the planet
exactly where the absolute truth equals your spiritual truth.
No, I’m not an atheist nor do I have a religious axe to grind,
but I’ve had my share of ignorant evangelists who don’t
know a damn thing about the religion they endorse except
what’s preached from the pulpit.
The point is, I’ve broken countless rules in this book.
The last paragraph on religion was one.
Putting a fictional story in this book is another, not to
mention an outspoken vegan who asks her husband about
getting “nailed.” Equating humans to rats in a maze—yes,
risky. Using a new distribution and production methodology
to bring this book to market, another risk (Yes, I’m doing
that!). The cover, as always, anything that I touch cover-
wise is risky. The lengthy subtitle, yes, risky. I’m willing to
break the rules because I know rule-breaking has a better
chance of breaking out.
A great example of this is in my industry, the book trade:
I recently strolled into a bookstore, one of the few
remaining in my area, and couldn’t help but notice the self-
help section. Books titled with curse words littered the
Shelves. How to Unfuck Your Life, The Subtle Art of
Fucking Your Spouse, The Fucking Book on Kick-Ass Book
Titles, Fuck This, Fuck That... | found it funny and a bit
ironic. You see, someone discovered that using “fuck” in a
book title broke the rules and killed it doing so. Now that
that rule has been broken, it becomes part of the Script. A
convention. A path already traveled. Simply put, rule-
breaking slowly degraded into rule-following. Sorry, but I
believe the use of swear words in book titles is a coin that
has flipped and landed. Do that, and you’re not being novel
or edgy; you’re being seduced by a new set of rules. Rules
are for rats. Change is for scientists.
KEY CONCEPTS
e Rules are like flimsy bubbles.
¢ Know why you follow certain rules... tradition,
culture, or evidence based?
e Rule-breaking gives you a better chance at standing
out from the crowd.
CHAPTER 46
THE SMALL WINS STRATEGY
AIM FOR MINOR IMPROVEMENT: THE LITTLE THINGS CAUSE THE BIG
THINGS
&
() ver the years I've read thousands of messages from
aspiring entrepreneurs. A common thread I read
follows the following format:
I have 3 ideas, X,Y, and Z. None of them meet all of the CENTS
Commandments. X is missing entry, Y is missing scale, and Z is
missing a mix of both. I don't know what to do.
The end result is the person does nothing.
The problem with this mentality is that it causes you not
to engage the market. And market engagement is what
causes you to grow, gain skills, and uncover better
opportunities—opportunities that abide by the CENTS
Framework. Just because an opportunity isn't CENTS
initially doesn't mean you should ignore it. CENTS can
come into play after years of engagement, not in your first
week.
If you’re new to entrepreneurship, much less working at
a job, set your expectations for small wins. A small win is
any entrepreneurial endeavor that yields you a profit. Buy
something old at the thrift store, clean and polish it up, and
sell it for a $50 profit... small win. Paint a picture and sell it
at Etsy for $30... small win. Ring a doorbell and offer to
clean your neighbor’s garbage bins for $15... small win.
Don't complicate this. CENTS is a guiding framework for
entrepreneurs who are looking to do things bigger than
they've ever done. But if you've never done done before,
don’t set yourself up for failure. Attempting to start the next
billion dollar social media company simply because it
complies with CENTS is a zero probability endeavor.
Do something. Anything. Small wins, small profits. Take
swings at the plate, learn how to make contact. Once you're
ready to go into the deep end of the water, let CENTS be
your insurance policy so that your effort pays life-changing
wealth versus bill-paying profits.
KEY CONCEPTS
e Market engagement is what causes you to grow, gain
skills, and uncover opportunities.
e If you’re new to business, it might be best to target
small wins before a full fledged CENTS opportunity.
PRO MEZA O Ore NE
SATURDAY, DECEMBER 24, 2016 - 9:11 AM
(9 DAYS LATER)
It was Saturday morning, the day before Christmas. Melted
snow flurries speckled the windows. A white Christmas it
would not be. Loud hissing from an air compressor echoed
throughout the townhouse. Family photos rattled on the
walls. In her “off day” pajamas, Sam lay on the family room
floor with Madison under the Christmas tree. Nuzzled next
to them was Bella, trembling and ears spiked like antennas.
The noise from the garage had her unnerved.
Unlike years past, the Christmas tree was not real and
didn’t tower to the ceiling with lavish decorations. Two
strands of white string lights and a fraying gold garland
garnished its plastic branches. Some years ago, Sam had
sold her collection of handcrafted ornaments, some of them
heirloom memorials of past holidays with friends. At the
time, she believed that every surplus dollar in her life
should be saved and then invested. She took that advice to
the extreme, going as far as selling things that no family
should sell. Now the tree stood nakedly.
Adding to the tree’s bare was the lack of gifts under the
tree for Maddy. When Sam was a child, Christmas was a day
for chores. Her memories consisted of scrubbing floors and
pitchforking chilled hay while her father stood sentry. And it
wasn’t like her parents didn’t celebrate Christmas. No, they
were devout parishioners to a small Pentecostal church
where everyone was into everyone’s business. Still, Sam
couldn’t ever recall seeing a Bible in the house. It’s almost
as if they used their church attendance to justify their awful
parenting and sinful life.
On the other hand, Jeff reported much happier holidays.
He wasn’t spoiled by any measure, but it was a holiday
where his parents let him know that he was heard. The
things that sparked his interest throughout the year would
mysteriously show up underneath the tree. When Jeff
marveled about a new woodworking tool, it had a way of
showing up at Christmas. Like Jeff’s parents, Sam wanted
to encourage Madison’s interests. But she couldn’t. First,
they were broke. Second, the last several years had been
ruled by cheapskate insanity. They didn’t manage money;
money managed them. She grimaced at the memory as it
deadened her heart with regret. Madison deserved more.
“You can’t fix it?” Madison whimpered, examining her
dollhouse. Sam jerked out of her memory, studying Maddy
and her concern. “I’m sorry. Maybe Daddy can fix it.” She
knew they couldn’t afford a new dollhouse. Sam picked up
the structure to examine it. She muttered under her breath
as she saw the tiny sticker under the floor: Made in China.
The loud banging and hissing from the garage
continued, adding torment to her Christmas anxieties. She
stood up and marched downstairs to the garage door. With
a nail gun in his hand, Jeff was stapling carpet onto a sheet
of plywood.
Hiss bang! Hiss bang!
Sam stared a few moments and then interrupted, “What
the hell are you doing? You’re going to wake the
neighbors!”
After blasting several more nails into the wood, he
paused, still facing his project. “I’m making one of those cat
condos,” he said flatly. He pulled the trigger again.
Hiss bang! Hiss bang! Hiss bang!
Sensing the death stare from his wife, he slammed the
gun down and threw her a menacing look. “It’s nine in the
morning; the neighbors should be awake.” He turned back
to the carpeted wood and jacked another nail into the shag.
Hiss bang!
After two more nails, he straightened up and examined
his workmanship. Sam jumped at the silence and snarked,
“Uh, are we adding a kitty to the family for Christmas? I
hope not because we can’t afford it. And Bella won’t like it.”
“Nope, not adding a cat,” Jeff stated matter-of-factly, his
eyes locked on the feline fortress. Without looking at his
wife, he added, “I’m trying to add some money to the family.
So we can afford stuff. I can sell this on Craigslist and make
some quick bucks.”
Remembering Jeff’s last unilateral business venture
involving T-shirts, Sam blasted him with a salty look. Not
again, she thought. But before she could go vocal, Jeff held
up his hand as if to signal a “stop.” He clarified, “I know
what you’re thinking, so sit tight. We need all the money we
can get if we’re going to start a business. Starting a
business is risky. And expensive. So I thought I’d run a little
experiment to see if I could create something of value and
sell it.” He fawned over his creation. “This didn’t cost me
anything to build but a few hours, so we have nothing to
lose.”
Sam nodded, but the silence lingered as Jeff waited for
her to respond. It took Sam a minute to process the
situation. Her husband was taking the initiative. He was
being proactive and thinking long-game for the family, and
here she stood, subjecting him to a bitchy interrogation.
She’d let the broken dollhouse, the pawned heirlooms, and
the gift deficit sour her mood. And her interaction with Jeff.
Her husband wasn’t a dolt. He had creativity with periodic
streaks of analytical brilliance. She wasn’t giving him the
benefit of the doubt. Sam moved closer and smirked,
reverentially holding up her hand for a high-five. “Glad to
see you want this badly.”
He sized her up, his face chiseled with seriousness, her
arm still hanging. Jeff eyed her palm and finally slapped it,
but kept his grip in her hand, pulling her closer. His face
was serious. “Yeah, I want it bad,” he said firmly.
Unsure if this was a continuation of their reinvigorated
sex life, Sam playfully grabbed his shirt and asked
quizzically, “Oh? How bad?”
Jeff snickered, shaking his head. His wife was either hot
or cold, and she could change temperatures like a faucet.
He had a project to finish, and he had to turn down the
heat. He answered, “So bad I’d crawl through a Shawshank
shit-pipe for it.”
Sam’s face lurched back, disgusted. “Gross,” she said as
she turned on her heel. “But I’m glad to hear you’re all in.”
Two days later after Christmas, they were back at the
kitchen table, ready to resume their strategy for escaping
the rat race. It was their first “board meeting,” a weekly
conference to discuss progress and their objectives for next
week. To keep each other accountable, they’d agreed to
meet every Saturday. Alone. While Maddy wasn’t a child
who needed constant supervision, they knew their best
thinking would be done in a controlled environment.
They’d also decided that their weekly board meeting
could occur at a restaurant, if not their home. Sam
suggested it. But Jeff guessed she was scheming for more
visits to Kabuki, her favorite Japanese restaurant with an
extensive vegan menu. In truth, they both knew it without
saying—it gave them an excuse to spend time with each
other. Since Madison’s birth more than seven years ago,
date night had gone from a monthly event to a yearly one.
They hoped their weekly meeting would not only launch a
business, it would relaunch their marriage. Sparks had
already fired.
Luckily for them, the day after Christmas is the best day
to get an eight-year-old girl to disappear into her bedroom
for hours. A new tablet pre-loaded with musical apps did
the trick.
Up until this point, there wasn’t a lot of action, but a lot
of thinking. Back on the wall was their newly modified
1/5/10 Planasy. Each was armed with a pencil, and Jeff had
Neve open to a blank page. Time to brainstorm. Their goal
was to find an idea that had skewing opportunities, an idea
that could be transformed into relative-value and sold at
scale. It seemed awfully simple.
“T can’t believe it sold that quick. And at full price,” Jeff
reported, smiling as if he’d just stolen a cookie out of the
jar. Sam’s lips pursed in satisfaction. “Well, you didn’t build
a cat condo; you built a towering palace fit for the Lion
King. Did you make sure the person who bought it had at
least 12-foot ceilings?”
“Yes, I made it clear about the size, weight, the whole
thing. They pick it up tomorrow afternoon.”
“So you don’t have the $300 dollars yet?”
“No.” He started to unwrap a protein bar. “They'll pay
me tomorrow after they load it.”
“Well, let’s not celebrate too soon. Wait until you get the
money.”
Jeff took a small bite of his protein bar. He was used to
his delinquent brother shrugging off his accomplishments,
but his wife?
He finished chewing and swallowed. “Everyone loved it
and said it was the coolest cat tree they’d ever seen. After
reading about value-skew, I just didn’t want to build a
boring old cat tree. I wanted something unique that could
command a bigger price.” Another fast bite and a swallow.
“IT had seven inquiries on it. And it was during a holiday. If
the guy doesn’t show up tomorrow, I got six people waiting
in the wings.” After a brief silence, he suddenly jabbed the
half-eaten protein bar in the air as if it were a magic wand
and said, “It feels great to be appreciated. To have your
work praised and demanded.” He chomped another forceful
bite and leered at his wife. Before she could defuse his
verbal affront, he continued, “The Cat Mahal took me only
four hours. That’s $75 an hour.”
Sensing he was throwing her another pitch she could hit
and not miss, she remarked, “You should be proud of
yourself. You’ve always been good with your hands.” She
raised her eyebrows. “Seventy-five dollars an hour is more
than we both make at our jobs.” She snickered. “It’s too bad
we can’t crank out thousands of them. We’d hit our goal
pretty quickly.”
He raised his forehead. “Yeah, you know I love
woodworking, but if I had to build those day-in and day-out,
I’d hate woodworking in a few weeks. I’ll build a few more
as a side-hustle but that’s all it will be—you know, a nice
way to grab a few bucks.” He crinkled up the protein bar
wrapper and put it in his pocket. “And if I might say, it feels
great to kill your own meal.” He lobbed his wife a
mischievous wink.
Sam shook her head and flung him a pooh-pooh look.
She let the poorly placed vegan joke wash through her.
“Okay, so no cat condo business. How about a book
sampling service?” Sam asked. Jeff said nothing but
lowered his gaze. She continued, “I’m so sick of buying
books that I never finish. It would be nice to read more than
a few chapters before buying.”
Jeff said, “Don’t all the big online retailers already let
you do that? I know I always read the sample before I buy.”
“T was thinking more than just a few chapters, like half
the book.”
“Tf the book is bad, why not just return it?”
She fiddled with a pencil, thinking. Then, “I guess you’re
right. Amazon can set their preview settings at whatever
they want and just like that our skew would be gone. And it
never occurred to me that I could just return a bad book.”
She slowly tucked a blond lock of hair behind her ear and
then scratched her forehead. “Bad idea, never mind.”
“Not at all. There are no bad ideas when brainstorming.”
Jeff wrote the idea on his notepad then turned to her,
tapping his pencil. He paused in thought and then said
hesitantly, “The other day I found myself cursing while
cutting through a piece of salami and then—”
Sam interrupted, “—because you knew I’d hate you for
eating it?”
He scoffed at his vegan wife. “Sorry, no.... You have your
diet, I have mine.”
“Damnit, Jeff! For the tenth time, it’s not a diet!” She
playfully jammed her heel on his foot under the table.
“Ow!” he yelped. He grabbed the wrapper out of his
pocket and threw it at his wife. She swerved, and the
wrapper landed on the floor. Bella raised her head from her
slumber but wasn’t pressed to get up.
After composing himself, Jeff spoke measuredly. “Anyway
Samantha, as I was saying, the other day... well... I was
cutting a huge block of meat, and the knife sucked ass. Dull
as a doorknob. Like a damn butter knife. And then I thought
God, I hate sharpening knives! The noise, the little metal
shavings that always get under my skin, it’s a royal pain in
the ass.” He paused for effect. “But in that moment, I
wished there would be a service that would come to our
house and sharpen our knives.”
Sam nodded her head, perhaps too exaggeratedly.
“That’s actually not a bad idea. We might be able to work
with that.”
Pencil back in his hand, Jeff wrote the idea down in Neve
and said, “Oh my dear Samantha, what little faith ye have in
me.”
“Don’t get your hopes up. I’m sure there’s a business like
that, we just don’t know about it.”
“Marketing is a skew. If we don’t know about it, or have
never heard of it, then there’s an opportunity.”
“True. Or we can spin it entirely. Maybe a mail order
service? Send the knives away dull and get them back
sharp? Or how about a subscription service of some type!
Those are really popular nowadays.”
They talked for another ten minutes about dull knives.
By the end of the hour, they had eleven more business
ideas brainstormed, thirteen total. By next week’s kitchen
table conference, they hoped to have it narrowed down to
one. They weren’t getting any younger, and it was time to
jump into the deep end of the pool.
CHAPTER 47
tne SEEDER ACGK BOO r
S RAG Y
CONNECT YOUR FEEDBACK LOOP TO SPARK PASSION
of
* [be first time I had to speak to a large audience was the
scariest thing I ever faced. As an introvert, public
speaking ranks up there with colonoscopy minus sedation. I
spent hours preparing and practiced in an empty room. I
stumbled on words, crisscrossed ideas, and quickly lost my
train of thought. But I worked through it. And when it came
time to speak, I did just fine.
But what happened afterward was interesting. As I left
the podium amongst applause, I was intoxicated with a high
that I imagine rivaled heroin. Power. Relief. And then
jubilation. Altogether, this particular “high” is called
transformative passion. And it fuels the Unscripted process.
Think of the last time you accomplished something, the
last time you conquered a fear or exceeded your
expectations. After it was over, remember how you felt? I’m
betting you felt incredible, like jumping up-and-down
incredible. That’s transformative passion. Cognitively, it’s
fired from a positive feedback loop—when your effort is
connected with a positive result.
Here’s another example that might be familiar. Jill
worked her butt off for four weeks eating right and
exercising. While she lost eight pounds, she could barely
see it in the mirror. Jill was ready to quit until she met Rose,
a friend who hasn’t seen her in two months. When Rose
regarded Jill, she beamed, “OMG Jill you look great, how
much weight have you lost?” Instantly Jill felt inspired,
passionate, and motivated. So she continued working out. A
few weeks later, Jill fit into a pair of jeans she’d last worn
years ago. Again, she grinned, her heart warmed, and the
passion flowed. Compliments of a rewarding feedback loop,
first from Rose (externally) and later from herself
(internally), Jill continued to exercise and eat right. Weeks
later, the action turned into a habit. Months later, it became
a lifestyle. Altogether, the transformative passion pushed
Jill from action to habit to lifestyle.
The reality of personal transformation lies within a
connected (or disconnected) feedback loop. When you fail
to lose weight, gain a sale, or win a game, your feedback
loop is severed. Passion does not fire. And the only way to
connect your feedback loop circles back to that ugly word
we all hate: process.
Process®28 holds that anything worthwhile comes
attached to habitual action. And that process will test your
mettle. After you’ve conquered a challenge, becoming
someone new and improved, the transformative passion
arrives. Ironically, passion is process’s event. That’s solving
a problem that took you weeks to solve. That’s getting your
first sale, your first “your book changed my life” review or
your first million saved. That zinger you feel zipping up your
Spine is freaking passion. Congrats, you did it.
The other type of transformative passion is winning.
Whether it’s a scholarship, a sporting competition, or an
Academy Award, winning inspires passion. Losing does not.
Ever see an athlete grimace in misery after winning a
championship? There are no miserable winners.
And yet, the process for winning is anything but
passionate. In the case of professional athletes, that’s
endless hours of training, early mornings, restrictive diets,
injuries and rehab, and of course, losing games. Their
passion doesn’t come from the art; it comes from the art’s
event—improvement, draining buckets, hitting home runs,
winning, and being better than the competition.
But once again, culture has it backward: passion doesn’t
lead your effort; it follows it. If you insist on “following your
passion” or “doing what you love,” you will avoid the
transformative pain that forces growth. Yes, the key to
success isn’t “doing what you love” but doing what’s
uncomfortable, and yes, sometimes hated.
For instance, I’m a mechanical idiot. From changing a
filter to a faucet, I’m about as skilled at household chores as
Queen Elizabeth is at walking amongst the plebs at
Wembley during a football match.
Recently, I made a daring purchase: I bought four bidets
for my four bathrooms. The purchase itself wasn’t gutsy. It
was that I aimed to install them myself. As a practitioner of
my own advice, I recognized an opportunity to grow and
spark a positive feedback loop. The first install took me
nearly an hour. The second, thirty minutes. By the time I
completed the fourth, it was just minutes. After finishing, I
won more than a clean butt. I won increased confidence,
personal growth, and identity recalibration. Maybe I’m not
so mechanically challenged, eh? Like my loathed public
speaking gig, I transformed hate—plumbing—into passion.
The truth is, the more you’re willing to suffer, willing to
endure, persevere, and challenge yourself, the more you
will succeed. I can “do what I love” for the next fifty years
and not worry about money confirming that love. How? J
was willing to do what I hate.
Transformative passion is like nitrous oxide in a
sportscar. Or rocket boosters. And in cases where
motivation starts to wane, it is a jumpstart to a dying
battery. Don’t mistake this for intrinsic motivation, which
must come internally from a purpose. For example, Jill’s
intrinsic motivation for losing weight might not be vanity,
but about health—a wish to grow old and have grandkids.
Once you understand the cognitive mechanics behind
superficial passion (I want to race cars!) and transformative
passion (I’m going to fight until I get one small victory,
connecting my feedback loop) you’ll win more battles.
Achievement and_ selfdevelopment sparks passion—
wallowing within comfort, an agent of mediocrity, does not.
Master your mind, and the right passion will serve you for
life.
KEY CONCEPTS
Transformative passion fuels the Unscripted process.
Transformative passion fires from a connected
positive feedback loop when your effort yields a good
outcome.
A severed feedback loop blocks transformative
passion and stunts motivation.
The more you’re willing to endure and challenge
yourself, the more you will succeed.
If you’re willing to “do what you hate,” you'll be able
to “do what you love” without a fiscal or cultural
confirmation.
Superficial passion is about activities that bring you
joy, like playing the violin or skiing.
CHAPTER 48
THE MACGYVERISM STRATEGY
COMBINE LOW VALUE TO CREATE HIGH VALUE
&
@) ne of my favorite shows from the 1980s was
MacGyver. MacGyver was American television drama
featuring a scientist who had a knack for assembling
common household items to get an uncommon result. Lock
MacGyver in a cluttered basement, and within hours he’ll
build you a rocket to the moon.
MacGyverism is the key to innovation and creating value
where there is seemingly none. In many _ ways,
entrepreneurship is the same. It’s scientific and all about
discovery. You have to look at ordinary things so you can
“MacGyver” them and make extraordinary solutions.
Consider this an experiment in value and sales. Before
you dive into entrepreneurship intending to compete with
Uber, try MacGyverism. Innovatively combine low-value
items to create high-value. For instance, remnant carpet
and scrap wood could become a cat condo. Old tree stumps
could be fashioned into furniture or coffee table legs. Old
wooden skids, the raw materials for a decorative accent
wall. Old denim, insulation; old tires, landscape mulch; old
CD covers, killer wallpaper for a teen or an old guy like me
looking to stay young. Heck, some dude in Oregon is selling
tumbleweeds. Because my home is in the Arizona desert, I
just saw at least $200 roll by.
The purpose of this exercise is simple: Impact one
stranger’s life, and you will impact your own. Further, you
can’t impact millions of lives until you learn how to impact
one. Remember, small wins®*° creates big wins. If you can
create value—something self-made, self-procured, or self
engineered—and_ sell it just once to someone,
congratulations. You will fire transformative passion.°*°®
MacGyverism usually involves products that don’t scale
easily. Assembling a cat condo in your garage is time
intensive. Scaling is one major problem to solve. But if not,
it’s a great side hustle and an exercise in becoming value-
focused. Many years ago, I learned how to code HTML,
CSS, SQL, and a wee bit of JavaScript. Those individual
skills “MacGyvered” into a specialized-skillS!® that I could
sell at a healthy hourly rate. While MacGyverism might not
put you into a bungalow on the beach, it might reorient
your compass that way. You can earn hustle cash and score
some small wins, and more importantly, fire transformative
passion.54©
KEY CONCEPTS
¢ Before you can impact millions, you have to learn
how to impact one.
e MacGyverism is the transformation of low-value
items into something higher value.
e MacGyverism can help you spark transformative
passion with some small wins.
CAPER 49
Wile MVANet Se WING Ue ciate ey elm
Pl UINES | Le
REGARD MARKETING AS A MEGA-SKEW
C ongratulations. You’ve just invented an awesome
gadget that will make you millions. Perhaps billions.
Unfortunately, three other people also invented the same
exact gadget, and at the same exact time. And get this—you
all have the same amount of money to spend on your
invention.
If there could only be “one winner” in this competition,
what would determine the victor? Since our four inventors
have created an identical gadget and have the same
amount of money, the winner can be determined with one
variable... marketing. In other words, the best marketer
wins—it is the tiebreaker.
The Marketing Tiebreaker Principle asserts’ that
marketing represents a basket of value skewing
opportunities. Furthermore, marketing creates perceived-
value,°2° the value variant responsible for magnetizing*7*
money. Marketing, by itself, is a value-skew,°°? perhaps the
biggest one in the attribute pool. In my first book, The
Millionaire Fastlane, I equated business success to the
game of chess. Marketing is the queen. If you’re playing
without your queen, winning is difficult. Why? Because
marketing itself encompasses many variables for value-
skew.
Attractive product labels
Persuasive copy
An emotional story tied to your company’s mission
Attention-grabbing headlines
Solid testimonials
Each of these variables can be skewed positively. Your
product could have a more attractive label or packaging, it
could be sold with better ad copy, better headlines, and so
forth. Marketing is just one word, but it represents dozens,
perhaps hundreds of potential skews.
If there is ONE discipline to master, it is marketing. If
you can’t, hire someone who has. Marketing can turn
surplus-valueS2® into relative-value. Put a spin on
something old and commoditized, and it suddenly could be
perceived differently. Marketing can make your one blog of
amongst 4,000,000 others stand out.
Ultimately, you can have the best product in the world,
but if you can’t sell it, you will have problems. Remember
Wolfgang Druckenheimer hypothetically cured cancer but
couldn’t sell the cure. Initial momentum needs sales. Buyers
need convincing. All things held equal, the best marketer
will win, and not just sales. Customers always need to be
sold, but so do secondary stakeholders.
e Potential investors
e Potential employees
e Potential suppliers
e Potential acquirers
e Potential lenders
e Potential contractors
At the end of the day, your career as an entrepreneur
also needs to be a career in marketing. Focus on the
marketing discipline, and you expose yourself to multiple
skew opportunities, even in crowded fields.
KEY CONCEPTS
All things held equal, the best marketer wins.
Marketing generates perceived-value, and
perceived-value is what magnetizes money.
e Marketing consists of many value attributes with
skewing potential: product labels, website design,
corporate mission, etc.
e Marketing also has a big impact on secondary
stakeholders: investors, employees, suppliers, etc.
MDC Tele nllelas UN Cle SIVAN ule) 74\
BUSINESS.
TUESDAY, JANUARY 3, 2017 - 3:30 AM
(9 DAYS LATER)
As Sam microwaved her 3 AM morning lunch in the
hospital’s employee cafeteria, she gazed vacantly through
the microwave’s glass door. She looked haggard and drawn.
She hadn’t slept well, and the early morning hours were
when fatigue would strike. The bright fluorescent lights of
the hospital showered on her like acid rain. A pop from the
microwave and the smell of black beans jolted her out of
her trance. Before she could open the door to the
microwave, its’ reflection mirrored her _ co-worker
approaching from behind.
Janice was Dr. Middleton’s PA and a convicted gossiper. A
nice woman and a good worker but a typical representation
of many people in healthcare: duly charged with the health
of others, but oddly couldn’t maintain their own. Janice was
two Butterfingers away type-II diabetes. At the tender age
of 34, she was already waddling like a penguin who hit the
all-you-can-eat buffet too often. As Sam removed her beans,
Janice spoke over her shoulder. She whispered, “Hey, Sam,
what do you think about the buyout?”
Janice was referring to the new management that had
recently assumed hospital administration. The transition
was anything but smooth, and there were rumblings that
Dr. Lantzman, one of Northwestern’s most respected
surgeons, had quit abruptly over corporate
gerrymandering and quota-pushing.
Sam answered, “I honestly don’t care as I plan to get out
of this racket.” She carefully plated her beans and then
swiveled to face Janice. She continued, “Jeff and I are
starting a business.”
Janice shot Sam a dumbfounded look, eyes weary and
narrow, lips contorted as if she was eating something sour.
Sam remembered the last time Janice had flared that
expression. It was when Sam had admitted that she didn’t
eat meat. Janice’s shocked response was, “Oh my God, no
bacon?” Then she’d jested, “Who can live without bacon?”
Sam had quickly rebutted with a smile and affirmed, “Me,
Janice. Last I checked bacon comes from a dead pig. And
pigs are equally as smart as your Bessie.” Bessie was
Janice’s dog, a great Pyrenees. Janice’s dissonance filter
had been operating efficiently and quickly severed the
connection. She had retorted unabashed, as if she was
reporting the day of the week, “Well, I can’t live without my
bacon.” Sam had smiled facetiously. “Well, it’s a good thing
that McDonald’s isn’t serving any fried Pyrenees
sandwiches. We certainly wouldn’t want to ruin your lunch.”
Back at the microwave, Sam smiled weakly and spooned
her beans onto a plate with some chips. Puzzled, Janice
said, “A business? Like Avon or something?”
“No, a real business. We haven’t decided quite yet what
we'll be doing.”
Sam waited for a glib response from her co-worker, but
Janice stood silent. Sam volunteered more, “Jeff and I plan
on retiring by the time we’re 40.”
Janice eyeballed Sam’s black beans as if she were eating
dirt. Then she smirked whimsically, a “bless your heart”
bemusement, as if Sam just confessed believing in Santa
Claus. Janice offered, “My brother tried to start a business
for nearly ten years. Was always talking about some
nonsense. First, it was some hocus-pocus about attraction
and positive thinking, then one of those pyramid things,
then he started talking about some rich dad. After losing a
bunch of money in real estate, he just stopped working
altogether.” Janice paused, lost in thought, then shook her
head. “He was always looking for some fastlane to success
and yet he was convinced he could do it only working four
hours a week.” She sighed exasperatedly, looming over
Sam, careful to make sure she heard her. Loudly, she
muttered, “He ended up going bankrupt and now works
down at the mall. A janitor.” She paused for effect. “You got
to be pretty lucky to start a business, much less get rich
from it. You know they say that most new businesses fail
after a few years. My brother—”
Sam interrupted, “—I know the odds,” she said, looking
up from her beans. “We have a plan to beat them.”
Janice’s lips pursed, and she shrugged. As if to console
Sam, she gently patted her on the shoulder twice and then
said dismissively, “Well, good luck.” She pirouetted and
tottered away but spoke over her shoulder, audibly
singsonging, “You'll need it!”
Cale Mela a0.
alle BION & IES IER! si
PIntINES | Le
STOP TALKING, START DOING
M-» business was exploding, and I needed a new
employee. In the meantime, my mother helped. Her
job was accounts receivable. Backstory: Mom always
doubted me, but justifiably so. She’d witnessed too many of
my harebrained schemes fail, so let’s just say she was
supportive but jaded. As she compiled vendor invoices and
receivables ramped beyond $100,000, she asked, “You’re
owed all this money?” I nodded, and her eyes lit up. In an
instant, all doubt she held for my entrepreneurial visions
vanished. Several years later, I paid off my mother’s
mortgage with one check. The Done Kills Doubt Principle
asserts that visible success kills doubt and nails it in a
coffin.
The point is, save your breath.
And don’t bother with that social media post.
The unsettling truth is this: not only does no one care,?*9
but no one believes you. Even if they support you,
congratulate you, like your post, or say nothing, they’re
skeptical and as doubtful as aliens wandering Earth. And
they’re expecting you to crash and burn.
I’m talking about the announcement of your lofty goals,
your business ideas, your Unscripted visions, and your
dreams to be financially free within ten years. Yes, everyone
will think you’re delusional. Announce a promotion or a new
job on Facebook, and you'll get hit with a pile of likes and
comments. Say something about quitting your job to starta
business, and you'll get crickets. Worse, your family, spouse,
or parents will try to talk you out of it. Some go as far as
making threats: divorce, eviction, denied financial support.
You see, whenever you defy conventional wisdom, the rat
racers cursed by convention?! will try to knock some sense
into you.
e Get rich quick is a scam!
e Nobody really retires in their 30s with millions!
e 95 percent of all new businesses fail!
e You never started a business!
e MJ DeMarco exemplifies a survivor bias and is
selling lottery tickets!
This reaction is entirely justified. And it will always be
justified because talk is cheap. Advertising your lofty goals
is an event; accomplishing it is a process.?29 You can’t make
unbelievers believe with chitter-chatter. You can throw this
book in their face and expect them to read it. The only way
to eliminate doubt from doubters is to transform it into
done.
Done shows up on your parents’ driveway with a brand-
new Ferrari without the loan. Done is hiring your uncle
because you’re growing too fast. Done is doing. Done is an
achievement. Done kills doubt. Never live within the
parameters of someone else’s opinion unless you want to
live within the parameters of their existence.
KEY CONCEPTS
e Expect no one to believe your lofty goals, and expect
some to dissuade you.
e Advertising your goals or aspirations is an event;
achieving them is a process.
¢ If you want to convert doubters, achieve visible
results.
Clare ely 21
Wels = lee WAT LOIN) PiRvINCIPIE=
YOUR IDEA SUCKS UNTIL EXECUTION SAYS IT DOESN’T
A round 2007 I made a big mistake. That mistake? Oh, I
lost a few million dollars, perhaps billions. At the time,
I was having a conversation with a female friend about
online dating. We both were on a dating service, and she
complained about the number of inquiries she was getting.
It was overwhelming—to the point where she would have
missed Brad Pitt’s message mixed in the “hey baby” and
“yo” garbage. Because I recognized her complaint as an
opportunity,°°’ I immediately thought of the idea for a
dating service where only the women could instigate a
conversation. Fast forward seven years and Bumble was
founded, a dating service where men cannot make first
contact, saving millions of female inboxes worldwide. Today
Bumble is worth billions. I had the idea seven years earlier
and now it’s worth nothing but a regretful paragraph in a
book.
The Execution Principle asserts that all ideas suck unless
brought to life by execution. Yes, even that CENTS idea is
worthless. No, not because it won’t work, but because right
now, you haven’t done a damn thing about it. After my
conversation with my lady-friend, I did nothing with that
idea. Ideas with zero execution behind it are worth exactly
that: zero.
Sadly, all ideas are still events,?29 even well-researched
ones with business plans attached. Once you’ve adopted an
Unscripted production??? mindset, ideas start popping up
everywhere. They become easy. Too easy. The worst mistake
you can make is thinking that your ideas mean anything.
They don’t. As such, no one will give you capital for it. No
bank will loan on it. And no, you can’t swap 900
programming hours from a coding genius in lieu of 50
percent of your business, which at this point, is just a
neurological Christmas tree in your head.
In a blog posted many years ago, Unscripted
entrepreneur Derek Sivers! perfectly highlighted the
relationship between ideas and execution. Execution is
where the asymmetrical meat is, while the strength of your
idea is just a multiplier.
Idea Value Execution Multiplier Potential Value
Greatidea= $100 Poor Execution= $1 $100
Goodidea= $75 Fair Execution= $10,000 $75,000
Okay idea= $50 Average Execution = $100,000 $5,000,000
Fairidea= $25 Good Execution= $500,000 $12,5000,000
Pooridea= $1 Great Execution = $1,000,000 $1,000,000
As you can see, a great idea with poor execution is worth
little: $100 (100 X 1) while an average idea (think surplus-
value) with astounding execution is worth $50,000,000 (50
X 1,000,000).
The idea is nothing; its execution is everything.
Remember, done kills doubt.?49 Talk is cheap. If you want
anyone to pay attention, demonstrate a talent for executing.
Show sales.
Show a prototype.
Show a website mockup and ten pre-orders.
For the love of God, show something!
KEY CONCEPTS
e Your great idea is absolutely worthless until
execution says it isn’t.
e Your idea is like a multiplier, while execution is
where the money goes asymmetrical.
e A mediocre idea with great execution could be worth
tens of millions.
Tale <INIPE IMT Vale GUNF RST
SATURDAY, JANUARY 21ST, 2017 - 6:51 PM
(18 DAYS LATER)
Tell me lies, tell me sweet little lies...
As Fleetwood Mac sang overhead, Jeff’s friend and co-
worker, Scott was yapping away. They were at O’Boyles
Gastropub, a crowded bar with live music, cheap beer, and
cute waitresses dressed in sexy Irish kilts. Jeff and his wife
scheduled their weekly business meeting at the pub. Jeff
arrived first while his wife ran an errand prior. Scott was at
the bar and joined Jeff when he spotted him alone. After
Scott sat down and ordered a beer, he went on an
agonizing diatribe. Mostly about how everything sucked: his
job, their boss and their employer, his pay, his love life, and
his lack of television time. It appeared that Scott’s most
pressing problems were Showtime canceling some political
drama and the Chicago Bulls’ losing preseason bleeding
into the regular season.
Jeff’s chest tightened with anxiety.
After telling Scott about his business goals weeks ago,
Scott never inquired how it was going. Never asked about
Sam either. Instead, Scott dragged on about how he had to
wait six hours outside of Best Buy for the new Call of Duty
release. That’s when Jeff knew. He’d finally had enough. He
interrupted Scott’s latest rant about how his four-year-old
Chevy Malibu was cramping his style as if he saw himself as
the next incarnation of 007.
“Scott, let me ask you something.” He paused, taking a
swig of his beer. “Where do you see yourself in five years?”
Scott’s face drew a blank as if he were just asked to
solve a differential equation. After a crooning David
Coverdale chorused, Is This Love? Scott straightened up
from his slouch and said, “I don’t know really.” He sipped
his Bud Light and continued, “I guess I’m hoping to move
up the ranks at work. Get one those corner offices with a
window. And a Mercedes G-Wagon, the kind the pro
athletes drive!” He paused and smiled as if he were a child
reciting a Christmas list to Santa. Jeff said nothing, face flat.
Scott slapped the table and continued, “And courtside
tickets to the Bulls next to Bill Murray! Did you see the
trailer for his new movie? It looks pretty bad ass!”
Jeff failed to mask his annoyance and crimped his lips.
Scott’s smile disappeared, clearly upset Jeff was unable to
ratify his idyllic life fantasy.
“Scott, do you remember anything I said last time we
talked?”
He hesitated in thought. Then, “You mean at work when
you said you wanted to quit and start a business?”
“Yes.”
“What of it?” Scott asked, looking irritated.
“Well, since you’ve been sitting here, you’ve done
nothing but complain. Your job sucks. Your pay sucks. Your
car sucks. Your dating life sucks. Sucks, sucks, sucks, and
yet, your idea for the future is to double-down on the same
shit that is making your life suck? It makes no fucking
sense. Do you have any goals? A dream? Something better
than an office with a window?”
His expression dulled. After a moment, he sneered,
“Dude, what’s with the attitude?”
“T’m serious. What do you want to do with your life?”
“T don’t know.” He shook his head. “I’m just trying to
survive and have a little fun along the way.”
Jeff folded his arms and snapped, “Well, I don’t want to
just survive, I want to live, like really live. I want to be free
of the BS, free of the bills and the job, and yeah, free of the
stupid basketball games that mean absolutely nothing to
me. I’m not gonna wait until some godforsaken age to retire
and then finally live.”
Scott’s face reddened in anger, but he sat quiet.
“Let me ask you something, Scott. What benefit do you
get knowing every baseball statistic since 1970?” Jeff didn’t
let him reply and continued, “What benefit do you get if the
Bulls win the next ten world championships? A huge
payday? Respect? A hot wife? Vacation time? Seriously, I
want to know.”
He gave Jeff a befuddled look. “I get bragging rights.
And it’d be hella fun to watch.”
“Bragging rights?” Jeff huffed. “Over who? Over some
other bumpkin in another part of the country who is sitting
on a couch like you? Do you hear yourself?”
His tone changed into a stern whisper, “Do I hear
myself? Do you hear yourself? You’re dissing me because I
know baseball stats and like basketball, but suddenly you
don’t? Because you read some damn business book?” He
looked around, fearful as if someone would overhear. “Look
Jeff, this is life. You get up, you go to work, you pay your
bills, save a litthe money, and maybe you get ahead at some
point. Your fantasy about building this big business and
getting rich is a pipedream. If you ask me, you’ve been
watching too many internet videos with that Ty Dopez guy.”
Jeff shook his head in disgust and retorted, “This isn’t
about stupid cars and tickets to some dumb game that will
be forgotten a week later. It’s about living a life that I won’t
regret when I’m seventy years old. Culture and tradition
ain’t gonna write my story; I’m gonna write it.” Jeff
gestured at him and continued, “You? You’ve given up. You
have no dream other than some overpriced car that looks
like a toaster on wheels. It’s sad because you don’t even
realize you’re already dead—you just aren’t buried.”
Scott shuffled back and twisted his face as if Jeff had just
told him he’d cheated on him with his wife. He then angled
in, snarling, “Are you fucking done? Because I am.” Scott
stood up and threw a ten-dollar bill on the table. “That’s for
my beer, and you can keep the change and put it toward
your business.” Before marching away, he sneered. “I’ll see
ya Monday morning, champ.”
By the time Sam arrived, Jeff had finished his Guinness.
He smiled weakly as his wife slithered into the seat next to
him. Her hair was freshly salon styled, and her lips painted
a candy apple red. Her face was dolled up and glowing. She
was wearing dress pants and an oversized turtleneck
sweater with a smiling lamb embroidered on the front. The
bulky sweater transformed her leggy frame into a beefy
presence, but Jeff thought it was cute. Silver earrings
dangled from her ears, not shoulder dusters, but Jeff was
surprised by the impression. It made him forget about the
terse conversation with Scott.
Sam sized up the bar’s patrons, and Jeff saw her scrunch
her nose. The place was packed and stank of stale beer and
cabbage. Jeff loved it, but his wife considered the odor as
offensive as a porta-potty at a traveling carnival.
Jeff gestured to her. “Why you made up to the nines?”
She looked at him curiously. “What, a girl can’t look
fabulous once in a while?”
Jeff laughed, “Here? It’s an Irish dive bar that plays
music from the last century.”
Sam studied her husband. His hair was pulled back in a
ponytail, his eyes darker than usual, a sign he was into his
second or third beer. She nudged into him and slapped him
on the knee. “Wow, it’s like we’re dating again. Did you
order me a margarita?”
“You sure you want to drink? Remember New Year’s
Eve.” Jeff stated it like a suggestion, not a command. He
had had to carry Sam home from a neighbor’s party. But
not before she puked on the street, her vomit splattering on
a parked Prius.
“T’ll be careful.” She winked. “Promise.”
Once they settled in and the waiter delivered their
water, they started talking business.
“T can’t believe how easy it is to spot ideas,” Jeff
volunteered. “Ever since I started thinking like an
entrepreneur, I get a business idea practically every day.”
He considered his wife and then asked, “You sure you’re not
hungry?” Before they left, Sam said she would only order a
drink. “Yea sure,” she said, surveying the restaurant.
“There isn’t a plant-based meal to be found in this place.”
Jeff smiled at the memories of when she’d curl up next to
him in a booth no matter the restaurant. It was a time when
she would listen to his every dream, and she would cheer
him on. A simpler time without the mortgage, the jobs, and
the pressures. Sitting next to each other in a booth for the
first time in eight years set a positive tone for the night.
After a thorough review of their ideas over several
drinks, it was decided.
They were going into the knife sharpening business.
There was a need, one that every household in the country
could use. They reasoned that, like Jeff, people don’t want
to be bothered with this household task, from the
inconvenience to the noise to the equipment hassles. They
didn’t bother with a business plan. But Jeff scribed a
CENTS analysis into Neve, which he now carried with him
at all times. It read:
e [C]JONTROL... No major dependencies
e [EJNTRY ... Sharpening knives requires special tools
and is a bit of a skill
e [NJEED... Sharpening knives is inconvenient, and
they always go dull and offer a repeat customer
component (re-orders, yah!)
e [T]IME ... Big unknown, must address this later once
we learned more about the industry
e [SJCALE... The most potent commandment: every
household has knives, and they repeatedly go dull.
Maybe franchise this nationally?
When clarifying the size of the market, Jeff riffed an
impersonation of the newly elected US President, “Billions
and billions.” His wife grimaced. Jeff loved playing the
Trump card; it was a button he could push to rile Sam. But
he stopped short, careful to not ruin the productive tenor.
Once the knife business was decided, they identified
multiple value-attributes to potentially skew, from mail-
order services to pick up and drop off concierge to good
customer service. They just couldn’t decide which.
Nonetheless, they were stoked.
“How the hell do we start?” Jeff questioned.
Sam toasted her half-empty margarita into the air, her
third in the last hour. “Got to hand it to you, baby, I feel like
this idea is worth millions.”
“Well, I guess we’re officially problemologists now.” Jeff
snuffed a half-hearted giggle, “Because I don’t know a
damn thing about sharpening knives.”
Coat Genes
Welle OMD) elas OMB) Wives
Pl UINES 2) Le
BEWARE OF OLD RELATIONSHIPS AS YOU FIGHT FOR A NEW YOU
| once had a friend who laughed at me because I wanted
to start a business. In his words, “You’re wasting your
college degrees,” and “You should grow up and get a job.”
Then I had another friend. His best idea for wealth was to
join one pyramid scheme after another. Each conversation
was about some hot ground floor opportunity. BTW, if you
ever hear the phrase “ground floor opportunity”—run the
other way. Anyways, these folks are no longer my friends.
The Old Friends, Old Ways Principle explains that as you
grow and morph into a NEW you, old relationships will
fight for the OLD you. Anytime you arm yourself with new
pens for a new story,°* the stagnate relationships in your
life will resist. They will fight you, question you, and tease
you. Dead weight is people who belittle your dreams. They
don’t support your growth or success, they encourage the
status quo. They don’t want you losing fifty pounds or
becoming financially free. Leaving the rat race plantation is
a threat to their self-worth and forces them to confront
their own mediocrity. As the old saying goes, misery loves
company.
Dead weight could be co-workers, childhood friends, and
even family. And you never know who dead weight is until
they catch wind of your ambitious goals. Worse, if you go
from done to doubt,?49 old relationships can set you back
into old ways. Ever read the headlines of professional
athletes who always get in trouble after the off-season, or in
retirement? As the athlete advances in life, they hold on to
old troublesome relationships, old relationships which
keeps him mired in the old ways.
Once you take to the road to escape the rat race, and let
it be known, pay attention, the dead weight will emerge
from the shadows to set you straight. You’re wasting your
time! Dropping out of college is a mistake! Yes, big dreams
will have big doubters. That’s normal. Playing devil’s
advocate is a good exercise, and doubters can serve that
purpose. However, when doubters cross the line into dead
weight, you have to cut the anchor loose. Hanging out with
losers will likely keep you a loser.
KEY CONCEPTS
¢ Dead weight, people who belittle your dreams or
don’t support you, should be left behind.
e Hanging on to dead weight can cause you to regress
into old ways.
e Dead weight surfaces when you make your dreams
known or when your dreams start gaining traction.
Cie bei
THE HUNTING GROUND
STRATEGY
HUNT WHERE MANY RATS ARE BITING
&
ik impact millions, you must reach millions. And have
something they want. The key to asymmetrical-
returns®4! is to hunt where there are plenty of biting rats.
Okay, perhaps the rat analogy is too crude. Let’s be
politically correct: consumers.
The volume of consumers who can use (or want) your
product is demonstrated by your market’s size for your
specialized-unit. In business terms, this is called your total
addressable market, or TAM. If the target audience for your
business is harp musicians who are seven feet tall, you’re
fishing in a pond the size of a thimble. The market is poor, if
not non-existent. While your product might solve a
desperate need for towering harp players, its TAM muzzles
leverage.?!7
TAM is like fishing in a body of water. The larger the
watering hole, the more fish can be caught. The four bodies
of water that lend to larger TAM sizes are as follows:
e The pond (your customers are in the
city/county/community)
e The lake (your customers are in the state or region)
e The sea (your customers are in the country)
e The ocean (your customers are in the world)
There are three questions to ask in estimating your
specialized-unit’s TAM.
ONE: If geography or proximity was no issue, how many
people would find value in your specialized-unit? This
determines your total unreachable market, or TUM. For
example, if you owned an Indian restaurant, your TUM is
everyone on the planet who enjoys Indian food. Your TAM,
however, is only the local city.
To estimate TAM/TUM figures, you will need to do some
research from a top-down approach. Start with industry
sources or marketing research companies like Gartner or
Forrester. Then narrow the whole into its relative subset.
For example, if your product served owners of poodles, all
dog owners are the whole, all poodle owners are the subset.
A couple of internet searches should give you a good idea if
your idea is worth pursuing.
TWO: If TUM does not equal TAM, what needs to be
done to transform TUM into more TAM? Franchises?
Chains? Internet orders? Change business models?
Remember that fashion boutique in my small town? I asked
the owner if she sold on the internet and she replied, “NO.”
TAM was not siphoning from TUM so I could mathematically
deduce the venture was making little profit, if any.
THREE: Can you effectively reach your TAM? If your
relative-value offer can’t reach your market through
marketing, the size doesn’t matter. Even if you had an
excellent product for seven-foot-tall harp players, how
would you get your message or product in front of them?
Unfortunately, TAM and TUM figures are wildly variable
and speculative. There are two best practices: Target
markets large enough to make your estimates
inconsequential. For instance, my books target people who
want financial freedom. I’m also writing a mystery. A friend
of mine sells dog accessories. These markets are large
enough that our TAM estimates don’t matter. There are
millions, perhaps billions of fish in this ocean. Put another
way, if you’re dropping a nuclear bomb, you don’t need a
bullseye.
Second, larger bodies of water will always have better
TAMS. And inaccurate estimates are easily forgiven. Given a
choice, it’s easier to start in a larger body than to graduate
from a smaller one.
Going back to our Indian restaurant, to increase your
TAM from TUM, you would have to open _ several
restaurants. Or start selling franchises. Instead of starting
in the pond (city), perhaps there are better opportunities in
the ocean? Selling your secret Indian herbs and spices on
the internet with worldwide distribution? An _ Indian
cookbook? An Indian food product that could be sold
worldwide?
With my publishing company, I sell licenses to foreign
publishers for non-English speakers who want to become
entrepreneurs. With over thirty around the world, this
transforms TUM into TAM.
The Trotmans decided to start a knife sharpening
business. Their initial TAM will be dependent on how they
structure their business model. Their TAM could be the
entire country, or it could be their city. Yes, big decisions
are ahead.
A significant TAM is a key to asymmetric returns, which
is the key to leverage and large expected values. This is
how your income can go from $42,000 a year (my one
Indian restaurant) to $42,000 a month (my line of Indian
spices). If you want to catch more fish, you’ll need to put
yourself in a bigger body of water.
KEY CONCEPTS
Your total addressable market (TAM) is the total
audience who has an interest in your product or
service.
Your total unreachable market (TUM) is people who
might have an interest in your product, but don’t
have access to it due to logistics or geography.
Typically, the larger the TAM, the more potential for
asymmetric returns.
Chains, franchises, distribution, units, and licenses
can transform TUM to TAM.
CHAPTER 54
Wele BEV C= SOUVAIIGIN
Pl UINES 2) Le
A BUSINESS PLAN IS ENTREPRENEURSHIP’S DRAKE EQUATION
S uppose Frank Drake, the mind behind the astronomical
Drake Equation, started a business. In which case, he’d
no doubt spend considerable time preparing and
researching. Probably too much time. That’s because
entrepreneurship has its own Drake Equation. It’s called a
business plan.
If you’re not familiar with the Drake Equation, it’s a
mathematical equation with many immeasurable variables.
Its purpose is to speculate on the number of intelligent
civilizations in the universe that exist. The equation is:
N=R*efpoenerflefiefoeLl
Each variable represents a wild guess, like the fraction
of stars with planets and the galaxy’s average star
formation. As such, the “N” or the hypothesized answer also
varies wildly. The Drake Equation Principle affirms that a
business plan is like a modern-day Drake Equation with so
many immeasurable variables that such a plan is practically
useless.
The market represents millions of minds, each with
different value hierarchies. Individuals buy items based on
different value-skews and the perceived-value
communicated.*2°® It is an unpredictable and unforecastable
body.
No business plan survives first contact with the market.
It’s like that Mike Tyson quote: everyone has a plan until
they get punched in the face. And when the market chews
up and spits out your business plan, you'll discover another
truth... You shouldn’t have wasted six months PowerPointing
a business plan so perfect it should be in the National
Archives.
So unless you’re seeking venture capital or investors, I’d
skip the business plan. Instead, here are seven things to
identify:
1. Does it make CENTS?°*
2.Is the TAM large enough to change your life? How
can TUM be expanded into TAM?S°3
3. How many value attributes can you skew? And at
what cost?*32
4. Can you reach the market? Are there viable
mediums and channels? Can you communicate or
demonstrate your value-skew?
5. How easy is it to replicate your solution once
created?%?°
6. Does this potential business align with your
decisional framework established in your 1/5/10
Planasy?®!2
7. Do you have an exit strategy that can help you hit
your Escape Number?®!° And who would be a
potential suitor for that exit?
Spend a few hours on these questions, and you’ll have
the best business plan you can buy. And you can leave the
Drake equations to the cosmologists.
KEY CONCEPTS
e Business plans are as wild and speculative as the
Drake Equation.
e As soon as the business plan is executed into the
market, it becomes invalid.
e CENTS, TAM, skew, medium, replication, vision, and
exit ideas suffice for a sufficient business plan.
Gave els 25
inl= OAS AVA eG
ACT, ASSESS, ADJUST: SOLVE PROBLEMS WITH THE SCIENTIFIC METHOD
&
V ears ago, I taught myself how to code. It started at the
library and then advanced to the internet forums. It
was a decision that launched my mini-empire, first through
a specialized-skill, then a _ specialized-unit. Behind my
blueprint for success, there was a simp le formula that I
relied on. This recursive formula should be the foundation
for your entire entrepreneurial career, from idea to growth
to liquidation. And if you want to succeed, you need to use it
too.
It’s called the 3A Method. It mimics one of the most
widely known procedures for knowledge and _ skills
acquisition: the scientific method. Remember,
entrepreneurs are problemologists’?° which are pseudo-
scientists.°’ Except your laboratory isn’t a room with test
tubes and beakers, but the many marketplaces that offer
the rats their cheese. The 3A Method is the experimental
process for interacting within this lab, consisting of three
steps:
1. Act
2. Assess
3. Adjust
ACT
The first Act is the experiment itself.
Anytime you launch action into the marketplace, the rats
react, or they don’t. This reaction creates your “problem,”
which needs to be analyzed and then solved. For instance,
let’s say you launch a clothing line, and after $500 in
advertising, you have zero sales. In rat race parlance, your
Cheese didn’t draw sniffs. It wasn’t appealing. The
experiment’s result is a non-reaction from the marketplace.
It’s also a problem.
ASSESS
The second tier within the 3A Method is Assess.
Once you’ve identified the problem (no sales!), then
identify possible causes for the problem. Is your clothing
line unappealing to your target market? Did you reach the
right target market with your advertising? Is your
advertising a compelling message for that audience? Is your
website not designed to convert? Is your branding
ineffective? The list of potential causes can be quite
extensive. Your job as a scientific problemologist is to test
these variables.
ADJUST
The final step is Adjust.
Once you’ve identified the problem and its potential
causes (there should be many), you adjust one variable in
your strategy. For instance, you might hypothesize that your
advertising failed because you didn’t target the right
audience. As such, your adjustment might be to test a new
marketing channel.
Make the adjustment, act again, and repeat the
experimental cycle with the new variable. If changing
channels doesn’t improve results, you might determine your
advertising needs a new headline. Another adjustment is
made. Altogether, these strategy tweaks might entail
learning new skills, a lot of internet research, or reading
books. You could recursively go through this process dozens
of times before striking gold.
After your first sale, then the process restarts.
Instead of asking, Why am I getting no sales? the 3As
narrow into more specific problems. Your new problem
could be, Why is only one percent of our traffic converting?
Or Why are we getting a lot of returns and refunds? Strictly
speaking, acting, assessing, and adjusting has no end date.
Some years ago, the word “pivot” became an
entrepreneurial buzzword and was bandied around like
some phenomenal new concept. The scientific method
(similar to the 3A Method) has been around for centuries.
Adjust is the infamous “pivot” which is derived from the
assess.
But be warned. If you are acting, assessing, and
adjusting, you will travel in a much different direction than
intended. You get into business to sell X and then you end
up selling Y. For example, when I started my Internet
company, my vision wasn’t lead generation, but I ended
there. Had I not sold the company, lead generation would
have morphed into online reservations and ride-sharing.
Likewise, Amazon started solely in the book space. When
PayPal first launched, its original intention was payment
processing for eBay’s top sellers. Instagram started as a
check-in location app and then deviated into photo sharing.
Countless businesses start with one objective, but the 3As
take them elsewhere.
This is why business plans are overrated and like relying
on a fair-weather float-plan to get you through a hurricane.
You can read countless books on startups, marketing, and
business, but nothing will prepare you for the market’s
volatility. No matter how tight a vehicle you run, your
vehicle cannot change the weather and its data. If you’re
driving to China but the market is signaling you to Spain,
stop fighting it. When the experiment gives you clues, the
scientist doesn’t resist; he adjusts.
69 The Marketplace
THE 3A METHOD
In 2015 on Chinese television, Elon Musk was quoted as
saying that ideas are mostly wrong—and that they must be
adapted and refined, and that success was_ basically
recursive selfimprovement+. Namely, the 3A Method. It is
that mysterious process*2° I continue to reiterate. Learn it,
and you will succeed at whatever you do. The 3A Method is
entrepreneurship, and everything great in my life is
because of it. First, it trained me to be a master
problemologist, a scientist. Second, with each iterative
cycle, I expanded my skills and knowledge base. Soon
problems are solved easier, and things progress faster. Past
failures shrink knowledge gaps. Don’t pivot, experiment.
Then act, assess, and adjust.
KEY CONCEPTS
The execution process for Unscripted
Entrepreneurship is like applying the scientific
method indefinitely, not in a laboratory, but a
marketplace.
The 3As mimic the scientific method consisting of
Act, Assess, and Adjust.
Act is the experiment itself—your offer placed in
front of the market.
Assess is the experiment’s evaluation.
Adjust is a minor shift in strategy which retests the
original experiment.
The 3A process is iterative and never ends.
Coat GER 6
ie XPEGTIEDEY ARUIE
SnAeGy
MAXIMIZE EXPECTED-VALUE: MATCH YOUR POTENTIAL SKILLS WITH THE
LARGEST POTENTIAL OUTCOME
of
B efore leaving Chicago for Arizona, I had _ the
opportunity to buy a business which also happened to
be my employer, a small limousine service. The owner gave
me a smoking "no money down" offer, one that I seriously
considered. But ultimately, I declined—and without the
superpower of hindsight, I know it was the right decision.
How?
Had I bought that limousine service, I would have
subjected myself to a business system where asymmetrical
returns were nearly impossible. My income ceiling in that
business was hampered by geography, hours in the day, and
the number of cars I could finance. Even in my early
twenties, I knew I wanted to go bigger—and buying a
glorified taxi service was akin to me buying a job.
Here's a big secret that no one will ever try explaining to
you: Asymmetrical returns are impossible unless you match
your near-term potential skills with the largest potential
outcome. This does two things: First, it ensures that when
execution is average or better, your profit is life-changing.
Second, a large potential outcome gives you the largest
expected-value for your effort, even at low probability, such
as < 1%.
If you're not familiar with expected-value (EV), it is a
statistical concept that quantifies the nominal value you can
expect from any action, especially if repeated many times.
For example, a Las Vegas casino's expected value for
gambling is about 5%. The casino stands to win five cents
for every dollar you bet. Bet $100,000 over the night in
many bets, and you'll likely leave a loser with $95,000 or
probably worse. Before I continue, keep this in mind: A 5%
expected-value built Las Vegas, a city beautified in luxury
and richness. In our case, starting a business is an action—
but few entrepreneurs ever consider expected-value in
their business opportunity selection process. Here's why
you need to.
If you play it safe in a business opportunity with a small
TAM, you cheat both asymmetrical returns and expected
value. In fact, the expected value could go negative, despite
higher probabilities. The totality of your effort is
marginalized with weak rewards. In my case, buying a
limousine service would have rewarded me with a middle-
class existence, and that was if I executed better than
average!
Here's another way of looking at _ it, purely
mathematically speaking. When it comes to _ business,
evaluate opportunities like you would various games of
chance with different awards and odds based on how well
you play. Let’s call it a value game. In our value game,
prizes aren't awarded by a single organization but by a
global marketplace. And the global market routinely takes
ordinary people and makes them millionaires and
billionaires.
Let's say you're reviewing two business opportunities,
each with a startup cost of $5,000. The following chart
outlines the opportunity's ten-year profit outcomes and
their theoretical probabilities for execution. After reviewing
these two scenarios and approaching it as if this were a
game with awards, which “game" would you play?
EXECUTION LEVEL GAME/BUSINESS “A” GAME/BUSINESS “B”
Reward Odds Reward Odds
Excellent Execution $1,000,000 05% $20,000,000 025%
Good Execution $250,000 1% $10,000,000 125%
OK Execution $50,000 3% $5,000,000 1.85%
Fair Execution $5,000 5.95% $50,000 3%
Failed Execution ($5,000 LOSS) 90% ($5,000 LOSS) 95%
All potential outcomes = 100% 100% 100%
At a glance, logic appears to say that Game A or Business
A is a good choice. With the given odds, you have a 10%
chance of minimally doubling your money, best case, a
return of 50X. Additionally, your odds of profit are double
(10% vs. 5%). Game/Business B, on the other hand, has a
bigger risk of failure (95% vs. 90%) and only gives you a 5%
chance of profit.
If you think Game/Business A is the "safer bet" you'd be
terribly wrong. When these opportunities and probabilities
are analyzed, the expected value clearly says that
Game/Business B is the best bet, not just marginally but by
a staggering amount.
EXPECTED VALUE
Game / Business A: -$1,078 (-21.55%)
Game / Business B: $106,750 (2135%!)
These figures represent the power of asymmetry as it
deals with expected outcomes. Despite bad odds and super-
low probability, your best bet is always to choose the
opportunity with bigger outcomes as it blows up expected
value, and the possibilities of your effort. Remember, Las
Vegas is built on a 5% EV—Business B has an expected
value of 2135%, while Business A is negative. Potentially
outsized returns are the key to asymmetrical returns, even
when you don't execute exceptionally.
Of course, this analysis requires some self-reflection. If
you never started a business and your first business idea is
to take your $5,000 and start the next Amazon, you're
delusional. Yes, you've attacked a market with huge
potential outcomes—but you've failed to match your
potential skills with reasonability. Your probability for
success in that venture is exactly zero—potential outcomes
are irrelevant.
TAKE ON AMAZON!
Execution Level Reward Odds
Excellent Execution $100,000,000,000 0%
Good Execution $250,000,000 0%
OK Execution $50,000,000 0%
Fair Execution $5,000,000 0%
Failed Execution ($5,000 LOSS) 100%
All potential outcomes = 100% 100%
The optimum decision in both business and this game
scenario is a careful balancing act. First, take the
opportunity wherever your maximum potential meets non-
zero probability. For clarity, "maximum potential" is
knowledge and talents you can reasonably learn with
discipline and practice. Specifically, the business you should
start isn't the easiest one— it’s the one that you feel gives
you the most considerable reward for your effort, even if
you execute averagely. Second, you have to be honest with
yourself—is your first business a delusional stretch that is
forcing your odds of success at zero, and your odds of
failure at 100%?
Of course, the entrepreneurial reality isn't as simple as
playing a game with a five thousand dollars entry fee. But
our analogy isn't much different. Whenever you engage the
marketplace with a business venture, you're buying game
tickets with tremendous odds that no government
organization could ever offer—only the global market can.
The question is, are you buying tickets for our value game
that appear to have better chances but offer lower
rewards? Or are you challenging yourself in a game where
excellent execution, or worse, average execution, can
change your life? Decent execution in a large TAM
opportunity might change your life—decent execution in a
small opportunity might pay your bills.
Every company I started cost less than $5K to form, just
like this game. And each one of them had the potential for
asymmetrical returns, even if I executed just averagely.
Going back to our decision between Business A and
Business B, that was the choice I was faced with many years
ago. Business A was buying that limousine service; Business
B was starting an internet company serving the limousine
industry.
BUY LIMO SERVICE START WEB SERVICE
Execution Level Reward Odds Reward Odds
Excellent Execution $1,000,000 05% $20,000,000 025%
Good Execution $250,000 1% $10,000,000 125%
OK Execution $50,000 3% $5,000,000 1.85%
Fair Execution $5,000 5.95% $50,000 3%
Failed Execution ($5,000 LOSS) 90% ($5,000 LOSS) 95%
All potential outcomes = 100% 100% 100%
My execution was good and I was rewarded with a
lifetime of financial freedom?!!, instead of a middle-class
existence of survival. Don't play the rat race to optimize
mediocrity, play to change your life. Asymmetric returns
need_ significant potential outcomes which drive up
expected values. If you have no business experience, job or
otherwise, start smaller and turn zero probability into a
probability. That's perfectly OK. Overall, we're matching
your potential skills, what you can learn, with opportunities
that have largest outcomes so "no chance" becomes "a
chance". Do so, and success won't be a matter of luck, but
of probability and expected value.
KEY CONCEPTS
e Match your skills, or potential skills, with the largest
potential outcome to maximize asymmetric returns
and expected value.
¢ Working with a large potential outcome, even at low
probability (<1%) gives you the largest expected-
value on your effort and can make average- to above-
average execution worthwhile.
e Avoid opportunities that have zero probability for
success when referenced against your near-term
potential.
e The expected value of “playing it safe” or dabbling in
a small TAM is often negative, despite higher
probabilities.
e Expected value requires many attempts (failures and
misfires) to be valid.
lime BESERM OF DESERIMGN
SATURDAY, JUNE 17TH, 2017 - 8:03 PM
(148 DAYS LATER)
It was a Saturday night at the kitchen table, the scheduled
date and time of the Trotmans’ weekly board meeting. But
neither Jeff nor Sam were talking business. Five months
had passed since deciding to start a knife sharpening
business.
But Jeff saw their meeting as progress. The last time
they met to discuss their business venture was three weeks
ago.
With Madison at a friend’s sleepover, Jeff and his wife ate
their late dinner alone. Aside from an occasional drooling
beg from Bella who stalked their meal, an eerie silence
hung over the table. Jeff wondered if he had done
something wrong. His wife slurped her pasta while eyeing
her phone vacantly; oddly, it was locked with a black screen.
Jeff saw no messages displayed and spied his wife’s
reflection, an empty gaze as if she was hypnotized by the
dark abyss.
Enough of this, he thought.
For the last few weeks, his wife had been distant and
dour. Melancholy, he speculated, thinking it was the fitting
word. He wasn’t happy with their business progress either,
but he didn’t let it affect him. Not like this. Even culinary
hygiene was abandoned; red sauce soiled the outside of her
mouth.
Her fork clinked and clanked against her dinner plate
again and again, its chaotic song disrupting the quiet.
Clank. Clink. Clink.
With each, the weight of what Jeff knew grew heavier.
He felt like quitting the knife venture and feared
broaching the subject. His wife’s gloom indicated she might
have felt the same. Gone was the energy and the
enthusiasm they felt about their business venture. Also
gone was the excitement of setting themselves free, as the
DeMarco books described. It felt as if each week’s problems
and their challenges were a slap to reality.
Months earlier, they’d agreed that they’d start a
subscription knife sharpening business. They weren’t sure
about the logistics, just that the process had to be seamless
for the customer: drop dull knives in the mail, get them
back sharp a week later. The first problem they
encountered was the high cost of sharpening equipment.
Another problem quickly followed: the prohibitive shipping
cost and the custom boxes they needed for the task. With all
the costs involved, not including the actual time spent to
sharpen a knife, Jeff just couldn’t get the numbers to work.
A few weeks ago, Sam had joked as she reviewed her ‘to
do’ lists and their associated costs, “There’s a ton of issues
here, issues which won’t be easy to solve.”
“Assuming we get that far,” Jeff added. Tone snarky, he
asked, “And who’s sharpening the knives, me in the
garage?”
Despite the business problems begging for a solution,
life added to the problematic minutia. Sam’s nursing group
was transferred to Mercy Hospital, which lengthened her
commute time twenty-five minutes. With the added stress,
dealing with new doctors and procedures, she had little
energy left to give to the dream.
They started missing their weekly Saturday meetings.
Soon, it was implied that neither had any progress to
report. No action, no results. Worse, Madison caught an ear
infection, which landed them in a pediatric ER for seven
hours, followed by multiple doctor visits. As such, they had
to cancel her 9th birthday party. With life in the way, they
were closer to Uzbekistan than their Unscripted dream.
Back at the kitchen table, Jeff looked up from his
sandwich, still chewing, and broke the silence. “The
numbers don’t work.” She paused from her phone, her eyes
shifty and unfocused. He mashed his lips and knocked on
the table. “Hello? Our business, this knife thingy?”
Sam slowly nodded as if time had stopped, seemingly
calculated, her thoughts miles away. Her face hardened,
and her blue eyes grayed as if she was looking through Jeff,
not at him. She answered monotone and despondent,
“Yes... our business.”
Jeff instantly noticed the distress telegraphed by her
face. Shock, confusion, sadness, but reserved and
controlled, as if resigning to fate. The expression seemed
oddly familiar. After a moment, he realized it was from the
famous Titanic movie. Sam had the same sullen expression
the captain gave to a passenger when asked about the
sinking boat’s fate.
Sam rubbed the back of her neck and then turned back
to her smartphone. She fixated her gaze on the looking
glass again, as if betrayed by her own reflection. Jeff put his
palm on her wrist but said nothing. He sensed something of
gravity, something beyond knives, lathes, and custom
mailing boxes.
“Samantha,” he asked softly, “what’s going on?”
She looked up facing him, eyes withdrawn, tears welling.
Gently placing her palms on her husband’s knees, she
pressed her lips and swallowed hard. Hesitation again as
her eyes wandered at the wall.
She finally spoke.
“T’m pregnant.”
Cale ern a7
ime DESER TON RING FIRE
BEWARE OF CURVEBALLS HURLED FROM THE DESERT OF DESERTION
| n many ways, your first customer as an entrepreneur is
like your first kiss or your first love. My first customer
was Julie from Melbourne, Florida. I remember her name
because as my first customer, Julie helped me escape the
Desert of Desertion. It was paid not only in money, but
water.
The Desertion Principle is an expectation that your
business process will be difficult, and motivation will wane,
to the point of quitting. When it happens, you’re lost in the
Desert of Desertion. The Gods of Mediocrity are attempting
to steal your dream. As the name implies, the Desert of
Desertion is a phase of intense struggle. It is when you feel
your goals are slipping away, or worse, lost. It’s when life
gets in the way, from a child with a common cold to a hard
day at work, to unexpected bills. There is a lot of work
ahead and many problems to be solved. Altogether,
motivation is sparse, and the dream has been scarred by
life’s minutiae.
Be warned.
The Desert of Desertion is a rite of passage. Every
Unscripted success story has gone through it. And you must
as well. The longer your feedback loopS*® remains
disconnected, the tougher the desert is. Unfortunately, most
who enter this arid land die with their dreams. The Desert
of Desertion is a cemetery of unfilled aspirations, and its
hell is a lifetime of weekday horrors. If you “try” to be an
Unscripted entrepreneur and fail at business once and quit,
the Desert thanks you for adding your dream to its tapestry
of quitters. You were at milepost one on a forty-mile journey.
From a hanging curve like a pregnancy to a slider like a
job loss, curveballs are the Desert’s way of testing your
mettle. It wants to know if your purpose is strong and your
sacrifice worthy. It wants to know if you want it badly
enough. It wants to know if The Book of You*? is a story fit
for newspapers or a story fit for the garbage bin. The
Desert of Desertion awaits... defend your dream or have it
die in the sand.
KEY CONCEPTS
e Expect a period called the Desert of Desertion, a
phase where the feedback loop is disconnected,
motivation sparse, and quitting seems likely.
e The Desert of Desertion is where all dreams die.
CHAP WER 93
tHe BASEBALLS RING BIEE
ONE SWING DOESN’T MAKE A SEASON
| n 2013 at the age of 33, David Reichart taught himself to
make mobile games while he parked cars as a valet!. He
worked to close his knowledge gap®?° and expand his
skills.P39 In six months, he built 40 games and found himself
in the Desert of Desertion.?°’ Those games only earned
about 40 dollars, and asymmetric returns®?! were nowhere
to be found. Color Switch was his 41st game, a game that
eventually would break through the desert. It would be
downloaded over 200 million times. Good thing David didn’t
give up after his 40th at-bat.
If you ever played baseball (or softball), you know that
one swing at the plate, one at-bat, or one game does not
make a good player. Many seasons make a career for the
pros—each filled with many good games and many bad
ones.
The Baseball Principle states that one swing at business,
or better, multiple swings, does not make you an
entrepreneur. In one game, you might go O-for-3, popping
out and striking out twice. One try is one action, a solitary
swing: you register a domain, read a codebook, or write
down an idea. An at-bat is you launching a website, placing
a Facebook ad, or making a blog post. A full game is the
outcome of that action series and how you react to it. Only a
season is meaningful: a business executed to real failure or
real success.
Success typically demands several seasons, and the level
of success in any season can be classified likewise: a single,
double, triple, or a home run. The problem is, some quit
after the first swing or one at-bat, but most quit after just
one game. And your first game will be lousy.
Like baseball, entrepreneurship has a lot of ups and
downs, streaks and slumps, wins and losses: you lost $1000
on a bad marketing channel, your manufacturer botches an
order, or you cold-called a great new client. Yes,
entrepreneurship is bipolar.
So, if the late Joe DiMaggio was your hitting coach,
would you quit on him after a foul ball or a strikeout? After
one bad game? Remember, for the entire mathematical
system of expected value,°°® asymmetrical returns®?! and
improved probability are dependent on many occurrences;
otherwise, randomness will win a short time series.
For instance, losing two coin flips in a row (25 percent
chance) would not be unusual. Remember that outcome is
neither lucky nor unlucky. But losing all seven calls, well,
that’s probability .007815, or seven-tenths of a percent. No,
you don’t need to fail 1000 businesses. But “one try” rarely
works, and it won’t test inflated expected-values. It’s like
taking one blindfolded swing at a pinata and expecting to
hit it open. Every game David Reichart built, regardless of
success or failure, was another flip of the coin which
improved his probability for striking leverage.
In better news, failing seasons are much shorter than
successful seasons. In two years, I endured six failing
seasons. That means I had six seasons of experience and
education, making each subsequent season more probable
for success. I had a good seventh season that lasted four
years, my eighth season seven years, and my ninth and
current season, eight years and still going. I’m three for
nine (batting .300), and I’d classify all my hits as just singles
and doubles. As reported by entrepreneurs on my forum,
the average number of business failures before profit is
around eight.
Nothing great ever comes from “one try.” One try can’t
lose two hundred pounds and it can’t bake a great soufflé.
One try is like a drug, a quick dopamine hit of fleeting-feel-
good. If you’re shopping for a baseball bat, but deep down,
you know you’re going to be one-and-done, keep the job
and save your time. This Unscripted*® stuff is not something
you try; it’s something you live.
KEY CONCEPTS
Succeeding at entrepreneurship is like baseball: One
or two swings at the plate is not enough practice for
success, much less competence.
Your entrepreneurial career should be segregated
into at-bats, games, and seasons.
To take advantage of big expected values, multiple
at-bats and games will likely be required.
Nothing great or lasting comes from “one try.”
Cle Mela a2
THE PROBABILITY HACKING
Sine eGy
STOP DREAMING FOR LUCK, START MANIPULATING PROBABILITY
&
W hile speaking at the 2020 Fastlane Summit, I asked
for a volunteer to come up on stage. I’d guess only
20 percent of the room raised their hand. After picking a
volunteer, a man came on stage, and I promptly gave him a
crisp $50 bill. I told him, “Thank you, that’s yours—you can
sit down.” The audience laughed but was a bit
dumbfounded. I then polled the audience to see why only a
few volunteered. The answers varied, but three common
ones were “uncertainty,” “comfort,” and “introversion.” And
this was in a room full of entrepreneurs!
Behind this exercise is a harsh truth: All the reasons why
you aren’t succeeding are the same reasons why most
people did not volunteer. Yet, after giving this man $50 for
doing nothing, can you guess how many hands would have
gone up if I’d asked for another volunteer? I’m betting near
100 percent—all because uncertainty disappeared and
probabilities became visible. Did the man who got the free
$50 get lucky, or did he just manipulate probability by
raising his hand?
Here's another way of looking at it. Suppose I offer you
$5 million dollars to correctly call a coin flip. And you lose.
I'm guessing you'd curse yourself unlucky. This type of
missed opportunity would sting for a long, long time. Now
let’s assume that I give you another chance to call the coin
flip. And you win! Except you don’t win $50, or $5 million,
you win a measly dollar. Now, be honest: Since you won,
would you now label yourself as lucky? I’m guessing this
pyrrhic victory wouldn’t change your unlucky viewpoint of
losing the earlier $5 million dollar coin-flip, if anything, it
probably salts the wound.
Yet, in both cases, the probability of calling the flip was
exactly the same. The only difference between the two flips
was the reward and the emotions tied to the outcome. In
other words, despite identical probabilities, luck will be felt
when there is a significant outcome. Put another way, luck
is emotional, probability is logical.
In the lottery, one winner won $10 million, and 10 million
people lost. Neither the winner nor losers were lucky or
unlucky, but mere participants in a probability event. The
ten million losers don’t curse themselves “unlucky” because
they know the probability is one in a gazillion. But
undoubtedly, the winner will be cast as lucky. Someone had
to win, and the guy who does gets the luck label. As
rewards rise for any probabilistic event, so do the emotions.
Like emotions, luck is ethereal and only exists as a mental
construct, a human fabrication as much as humans invented
Monday through Friday as presumptive workdays. For
many people, luck is a fancy word that explains a significant
result with unknown, often low odds.
The only thing that truly exists is probability. The fact is,
if you can influence probability, you can influence outcomes
and the appearance of luck.
Think of it this way. Every day you drive, there is a real
probability that you will get into an accident and die. Let’s
say it’s 1 in 1,000,000. But today you choose to hack
probability and drive drunk. Congrats, you just manipulated
probability, which now stands at 1 in 100,000. Further, you
choose to drive twice the speed limit. Wham: Probability
moves again; now it’s 1 in 1000. But that isn’t enough.
You’re a master probability hacker and choose to run every
red light you encounter. Suddenly probability is 1 in 3.
Is luck anywhere? Or just probability? Probability is like
oxygen or radio waves—it exists but stays hidden. Despite
this, you can hack probability. And if you can hack the odds,
you can rig the game and summon the appearance of luck.
Here’s how: Every choice you make hacks probability,
either positively or negatively. When you make the right
choices, day after day, probability continually improves. At
some point, low probability becomes a fair probability. Make
the wrong choices, and you hack probability against you. In
either case, luck will be blamed, and emotions will boil.
As an entrepreneur, you have this magnificent power to
move probability, including the outcomes that they
represent. Think about that for a moment. You can
manipulate the variables in this game!
Going back to our hypothetical value game,°2° you can
1) dictate the opportunities you pursue (the potential
reward via TAM), and you can 2) dictate your effort as long
as you're willing to pay the game fee. Probabilities are
improved by playing more. More coin flips! Remember, the
entrepreneur who shoots once and gives up does not take
advantage of larger expected values or _ probability
manipulation. I tried the DeMarco CENTS methods, and it
doesn’t work! He sucks!
The problem with many entrepreneurs is_ they’re
stepping into the batter’s box and swinging once for little
rewards. Yes, there are many variables you cannot control,
which also affect probability. No biggie, that’s life. But
probability hacking is NOT about controlling the
uncontrollable, but controlling what you CAN.
e You can control hard work in a system with potential
leverage.
You can control the industry you work within.
You can use CENTS as a framework, or not.
e You can control consumption-based money-chasing
versus value-adding.
You can control how many “tries” you input into the
system.
e You can control how you spend your time.
You can control where you live within your country,
sometimes outside as well.
e You can control how your mind thinks and how it
classifies events.
e You can control working in a system where non-zero
probabilities are eliminated, and favorable EV bets
are made.
e You can control how you regard luck and its
probabilities.
e You can control how many principles in this book you
follow.
While you might not see the odds improve like a flashing
neon sign, they do. It’s freaking mathematical wizardry, and
your choices are the magic wand. In the simplest terms,
think of it this way: Great business opportunity selection
gives you better rewards and outcomes. The marketplace’s
coin-flip fairy isn’t offering $1,000 to win a flip; she’s
offering $10 million.
e Great choices give you two chances to call a coin flip.
e Average work gets you one.
e Laziness gets you zero.
Make choices that give you the mathematical edge. The
only law that matters is mathematics. Pursue opportunities
with high EV outcomes,*°® so effort pays asymmetrically, °2!
eliminate zero probabilities,?!’ and hack probability®°? by
flipping coins more often. You’ll change your outcomes.
Business is like me standing on stage handing out cash—
you know raising your hand pays off. Raise it enough times
and luck will call on you.
KEY CONCEPTS
Every choice you make hacks probability, either for
better or for worse.
Luck is emotional and abstract; probability is
concrete and logical.
As rewards rise for any probabilistic event, so do the
emotions.
Probability hacking is about changing the odds
regarding things you can control, like how you spend
your time, the opportunities chosen, and the friends
you keep.
Probability exists, even though you can’t see it.
Better choices give you better probabilities, and
hence, induces luck.
RESO VE Slr EEE
SATURDAY, JUNE 17TH, 2017 - 1:12 AM
(5 HOURS LATER)
After hearing Sam’s pregnancy confession, Jeff lurched
from his seat. Not in shock, but fear. His wife’s glum
reporting twisted his heart in worry. After Sam reeled back,
he hung over her and gently placed his hands on her
cheeks. Breathlessly, he huffed, “Oh my God, is the baby
okay?”
Sam sat silent, her face telegraphing bewilderment.
After she removed her husband’s hands from her cheeks,
she shook her head and said, “Jeff, I’m not even six weeks
in. I haven’t seen a doctor yet.” She hesitated, her face
softening as if a backpack of bricks had left her shoulders.
Confused, she swayed her head and looked up at him.
“You're not upset I’m pregnant?”
Jeff’s face returned the confusion. Then, “So your...
depression...” —he waggled his fingers at her—“is because
you think I’ll be upset?”
She proffered her “red-handed” smirk, a look Jeff had
seen many times. Jeff called it red-handed because Sam had
the worst poker face on the planet. Whenever she fibbed or
had to admit a mistake, Sam’s smirk would not only give it
away, but her face would flush crimson. When she brought
Bella home as a pound-puppy, she insisted it was temporary.
In her words, “We’re only going to be foster parents until
she finds a good home.” Insert a red-handed smile, and Jeff
knew that Bella was staying.
When Jeff caught her pale skin darken red, his smile
faded. He charged, “Wait a second, was this something you
planned behind my back? I thought you were still on birth
control.”
Her eyes flared shock, and she stood. “No, no!” she
asserted.
“No, you aren’t on birth control!?”
“T meant no, I didn’t plan it. And no, I’m not on birth
control anymore. When we stopped making love years ago,
I didn’t renew my prescription. It’s only this year that we”—
she hesitated—“well, you know. Started going at it like two
college kids again.”
Jeff sank to the kitchen chair. He peered up and asked,
“So what’s this all about? You’ve been walking around here
like someone killed your puppy. You should be happy; we’ve
always wanted two children.”
Sam sat again and explained.
Surprisingly, no tears flowed.
Jeff understood, and the mood turned from helplessness
to happiness.
Sam admitted that she’d thought another baby would be
the death of their dreams. She feared Jeff would insist on
playing it safe and revert to the status quo, cowering in fear
back to a Scripted existence, the one where lovemaking and
flirtation were not, well, part of the script. And it had
saddened her for weeks, leaving her pale and without
optimism. She thought it was over: their marriage, their
business, their dream, and their sanity. Life would once
again relapse to a weekday hell punctuated by a weekend
bribe. They’d become caretakers of their kids and nothing
more, other than hoping their kids would grow up to live
boldly different.
Jeff made himself a margarita and gave his wife one—
sans tequila, of course. They toasted, and then Jeff
reassured her, “I’m in this Unscripted business till death do
us part,” he said chummily. “Or I die trying.”
Turns out, expecting another baby steeled their resolve.
Before they got married, they’d agreed on two children. But
now, they wanted freedom, the freedom to build a sane
existence inside an insane world.
On Sunday morning, they conferenced and reaffirmed
their weekly business meeting.
Jeff looked at his wife. She was wearing a pink Bulls
jersey and matching pink headband which pulled her blond
hair back. She was out of her dingy pajamas, which meant
her mood had improved. The summer sunshine glowed
through the window and illuminated her face, her bereft
cloak melted away.
Jeff opened Neve and presented the business numbers
to Sam. After reviewing it, they agreed to drop the knife
idea. Even if they solved the logistical issues, the numbers
didn’t seem to work. And it felt as if they were creating
themselves a job. Jeff volunteered, “I say we go back to the
drawing board, find a better idea.”
Sam massaged her chin deep in thought. Then, “But
maybe our idea is fine, we’re just giving up too early. Or not
solving the problems we’re facing. We’re supposed to be
problemologists, but we haven’t solved any problems.” She
hesitated then remarked, “I was so sure we were on to
something—I hate sharpening knives.”
Jeff shook his head. “No, you saw the numbers. It just
isn’t going to work.” He lifted up Neve to his face. “I’m
going to loop through my notebook again at the ideas we
had. In the meantime, let’s keep our eyes peeled for
anything that might work. Remember,” he = said,
“opportunity hides in language like ‘I wish’ or ‘I want’ ”
“And ‘TI hate,’” Sam added.
Jeff nodded. “We’ve just got to keep our ears peeled.”
With a flowery smile, Sam concurred, “It’s good to be
back in business.”
lal te Wales 0)
Wile NVAeISIN| SIMevay etGiy
RUN THE NUMBERS OR HAVE THEM RUN YOU
&
R ecently an inventor visited the forum and unveiled his
product. It was an apparatus that stored bath scales
on the wall. For folks with small bathrooms, the product
appeared to solve a need. It struck up some mixed reviews,
some likes, some dislikes. But what the group did agree on
was its price point: its relative-value wasn’t worth $99, its
price point, but more like $19 or $29. Looking back—and
this is my personal opinion (I’d love to be wrong)—this
inventor probably shouldn’t have proceeded with the idea
unless the product could be produced at an appealing price
point AND provided enough profit for the inventor.
Here are the numbers you should run to determine if
any idea is worth pursuing.
e The sales price—the relative- and perceived-value at
which the consumer will need to buy. Is this price
realistic based on the value received? Or is it an
arbitrary price designed to make you a profit, but
few sales? The former should set the price, not the
latter.
e The manufacturing price—the cost to produce one
unit.
e The net profit, per unit. (Sales price - manufacturing
cost)
e The customer acquisition cost—the cost to find one
customer via marketing.
e Is the TAM large enough to boost expected value?
e What are the initial costs to go from idea to market
to your first sale? Is this reasonable with your
financial situation?
e The lifetime value of a new customer. Do they buy
over and over? Or just once?
e Are there channels/mediums to reach your audience
with an offer?
You’d be surprised how many entrepreneurs visit my
forum seeking business riches yet never run the numbers.
Is your effort worth the potential profit? Enough to pay the
bills? Change your life? Does the time you’re investing
warrant the potential payoff? Or are you just building
yourself a job?
In the case of our scale apparatus, the numbers simply
don’t work well on paper. Yes, the product might solve a
need, but it doesn’t do so in a meaningful way that BOTH
gives the customer value and gives the entrepreneur a
significant profit. One must be sacrificed for the other.
Worse, once purchased, the customer (currently a family
unit) is unlikely to buy more. It’s a “one and done” product.
Remember, entrepreneurship is tough, from inventing to
CENTS-based enterprises to a pizza joint on the corner. If
you’re creating a specialized-unit®!® and a business system,
ascertain that the numbers are working for you, not against
you.
KEY CONCEPTS
e Before pursuing any business, you should run an
extensive analysis of the numbers implicit in the
business model: sales price, manufacturing and
acquisition costs, TAM, ad mediums, etc.
e A great business idea isn’t a great idea if the
numbers cannot induce leverage and asymmetric
returns.
ClmlAte Dale ey
ines © PaiMiCiMeex ERR EINGE
Sn ieGy
SELECT A BUSINESS: MODEL THAT OPTIMIZES THE CUSTOMER
EXPERIENCE
of
| n early 2007, Netflix started offering online streaming as
it began to “adjust”®°° its business model away from
mailing DVDs. As technology and bandwidth improved, it
became clear that mailing physical DVDs was an
unsustainable business model. Had the company not
shifted, Netflix would have failed like Blockbuster. Speaking
of failure, did you know in 2000 Netflix offered itself as an
acquisition to Blockbuster for a mere $50 million? They
declined.
Anyhow, a great business idea strapped with the wrong
business model, or soon-to-be wrong, is destined to fail.
You’re in the right neighborhood, but at the wrong house.
And business models can be great in one year, but suck in
another. This was the predicament I found in my own
business. AS consumer expectations changed, I knew I
wasn’t offering the optimum customer experience— the key
to uncovering the optimum business model.
Whenever you solve problems with your business, start
with the customer experience as if you were a “snap-your-
fingers” genie. If money and resources were unlimited,
what would the best customer experience look like? When
you work backward from the best customer experience, it
can help you uncover the right business model. Question is,
does that business model work with the numbers?*°©°
Sometimes it works, sometimes it doesn’t.
Let’s use the knife sharpening business as an example.
I don’t know about you, but I can’t see myself packing a
bunch of knives in a box and dropping them in the mail. Yes,
dull blades are a problem, and I hate sharpening them.
That’s the right neighborhood. But packing them in a box
and waiting a week or so to get them back? That rings like
the wrong house.
If we work back from the optimal customer experience,
how would that look and feel? What is the most convenient
customer experience to have dull knives sharpened? Does it
seem logical from a functional perspective for people to
send knives in the mail? What knives do you use while
they’re gone? Sure, these are challenges to solve, but are
they worth solving? Would you wait a week for your car’s
tires to be replaced?
The answer to these “problems” might be a personal
home visit and a roving mobile unit. The technician arrives
at your home, sharpens the dull knives in his mobile van,
and then returns them a mere hour later.
Once you identify the optimal experience, you can then
work backward on the problems presented by that
experience. Can you sharpen knives in a van? What are the
challenges? What is the price point and the cost of
performance, from labor to vehicle expenses? How many
can you do in a day, and can it be scaled with multiple vans,
multiple regions, and multiple states?
The optimal customer experience (and their solved
problems) exposes the numbers and will tell you
immediately if the numbers work or not. If they do, start
solving problems.
KEY CONCEPTS
e You can have a great idea based on needs and
problems, but the business model for executing that
idea can still suck.
¢ To identify a business model, reverse engineer the
solution evolving from the best customer experience
and problem solve from there.
e Once a business model is identified from an optimal
customer experience, it must also be mathematically
feasible to profit and scale.
BOVE WORKS AS WEEE AS faite
THURSDAY, JUNE 22, 2017 - 2:45 PM
(5 DAYS LATER)
Meet tonight instead of Sat???
The text was from Jeff. Moments later, another chime.
We need to chat ASAP
Sam texted back. I work at 11. Can’t we just wait until
Saturday?
Yes, I know. But this can’t wait.
Sam texted back a thumbs-up. She wondered about the
urgency. Did he lose another $1,400 on some harebrained
T-shirt business? For the next three hours, she couldn’t
relax. Her mind ran wild with all kinds of speculation. She
figured Jeff had made another impetuous’ unilateral
decision and was going to lobby some position.
Sam situated herself at the kitchen table and waited for
Jeff’s arrival. She only had to wait two minutes as he was
early. After Jeff galloped to the top of the stairs, he
regarded his wife and sat immediately. His tie was still snug
on his neck, his suit jacket slung over his shoulder. He
dropped his briefcase and immediately sat down next to her
—no bathroom break, no refrigerator detour for a snack, no
tie loosening, nothing. He smirked, pulling out Neve and a
pencil. Frenetically, he started thumbing through its pages.
Relief washed over Sam when she realized her husband
was excited, not distressed. She asked, “Well? What
couldn’t wait until the weekend?”
Jeff shifted to face his wife, nervously tapping the pencil
on the table. He said, “Remember DeMarco said
opportunities hide in language. Things like ‘I hate’ or ‘I’m
tired,’ phrases of dissatisfaction. For the last week I’ve been
busting my balls, hoping to hear something, anything. But I
heard nothing.” He peeked back at Neve then continued,
pace quicker. “So then I started thinking about the past
year. Was there a hate I missed there? At work, in life, here
around the townhouse? My _ thoughts’ drifted’ to
Thanksgiving dinner, the one last year when my family was
here.”
Sam interrupted. “You mean last year’s Thanksgiving
travesty when you got into a debate with your dad about
Trump, then you argued for an hour about the Cubs/White
Sox rivalry?”
Jeff laughed. “Yes, but I recall it wasn’t just about
politics. Or baseball. When my mom forgot you were vegan
and you refused to eat the turkey stuffing, you embarrassed
me and said food jammed in a dead bird’s carcass wasn’t
appetizing.”
She winced. Jeff continued, “Anyway, the tension was so
thick you could slice it. And then I remembered something
about that night because it was brutally cold out, something
that stood out against all the negativity.”
He rocked his seat forward and then asked, “What if
opportunity isn’t just in the language of hate, but in the
language of love? And what if that love could solve a hate?”
His eyes flickered with anticipation, now expecting Sam to
figure out his cryptic story.
“Think, Samantha! Amongst all the family bickering,
what was loved at the Thanksgiving we hosted?”
Sam narrowed her brow in thought. She stared at the
floor, trying to reflect back on a stressful family night that
she wanted forgotten. A moment turned into minutes. And
then, like a subtle knock at the door, it occurred to her. As
she remembered and put it together, the knock became a
pounding. Then, like an avalanche, it broke through. She
lifted her head, her eyes now as wide as Jeff’s. “Oh my God,
you’re right. How could I not see it?”
She shifted back in her chair and stared hard at the
ceiling in disbelief. She confirmed what Jeff alluded to.
“Everyone loved the soup we had before dinner. Your
parents, your sister and her family, my cousin, they all
wanted the recipe, and heck, they’re not even vegan.” She
scratched at her temple in more thought, then added,
“People at the hospital love my soup too, again, people who
aren’t even vegan.”
“You mean Janice?”
“Yes, even Janice.” She turned to Jeff swiftly. “And you
love my soup and you're as finicky as anyone.” She rubbed
her mouth, eyes sparkling.
“Yes, but this is more than non-vegans liking your soup,”
Jeff added. “You know how long you’ve been complaining
about no vegan soups at the store? Years! And then when
you want it, you complain about having to make it?”
She affirmed. “True. It’s a pain in the ass.” Then, “Hey,
there’s that negative language DeMarco talked about.”
They both flashed self-satisfied smiles at each other until
Jeff’s melted away. Instantly his whole demeanor changed
as if he’d just learned his winning lottery ticket was for the
wrong week.
“What is it?” Sam asked.
“Maybe it isn’t such a good idea.” He reflected. “What if
plant-based food is just a fad? Hot today, but cold
tomorrow?”
Sam vigorously shook her head. “It isn’t. I’ve been
vegetarian most of my life and vegan for at least five. I only
see it growing. It will be mainstream in a few years.”
Jeff mocked, “But you’re biased. Of course, you think
that.” He nodded at her and then continued, “I’m married
to a vegan, and I have no intention of giving up my burgers
or pizza.”
She pursed her lips. “I know, but many people like me go
vegan because of the animal atrocities. Then there’s climate
and environmental reasons, and of course, the health
benefits.”
“The health aspect is debatable,” he said. “There was a
Joe Rogan podcast and—”
She interrupted, “I know”’—she shrugged—“but the
animal and climate issues are stone cold facts.” She paused
and let him process, his mood lightening. The night-shift
nurse continued, “And besides, who’s in better shape with a
better lipid panel, me or you?” She cinched the two inches
of belly fat careening over his belt.
He sneered, “Aw c’mon, that’s not fair.”
She smiled. “Anyway, half the young girls I work with at
the hospital are either vegetarian or vegan. It’s a trend
being driven by younger generations, and I expect it to
continue.”
Jeff sighed, “You sure? This is a big decision for us.”
“T’d bet my unborn child on it.”
“That sure, huh?”
She cast a self-assured smirk. “Absolutely.”
Jeff’s smile returned. “Well, that decides it. This could be
our gold mine. If people who aren’t vegans love your soup,
can you imagine what your fellow vegans will think? We’ve
found a need, and you have a delicious solution.”
Jeff quickly turned to Neve and flipped its pages
frantically toward Sam. He confessed, “I didn’t sleep last
night and got nothing done at work today.” Sam saw a
colorful menagerie filled with graphs, pictures, addresses,
telephone numbers, and other indecipherable scribbles. He
grinned slyly and declared, “And I’ve never been so excited
about something vegan in my life.”
Cela ent O
ele Sle SS Mave Sue
SR AtEGY
DON’T WAIT TO BE STARVING TO FEED AN APPETITE
&
| f you don’t know Chip Wilson, he’s probably the most
loved man on the planet. And get this, he’s loved by
other men. And the rest don’t know who he is. You see, Mr.
Wilson is Lululemon’s founder, the company who pioneered
“yoga pants” way back in 1998. I haven’t read his recent
biography, but I’m going to take a wild guess that Mr.
Wilson is not an avid user of his product, stretchy black
tights.
In short, you don’t have to use your specialized-unit of
relative-value; you only have to be sure of its worth to other
people. Namely, feeding an appetite doesn’t require you to
share the same hunger. One who sells a bottle of water
doesn’t need to be thirsty himself.
The world’s insatiable appetite for wants, needs, and
desires are yours for the filling. To quench others’ thirsts,
you only need to see and understand their thirst. You don’t
have to share it. Nowhere in the entrepreneurial rule book
states that you have to be an avid user of your product. Yes,
you must believe in your product and its worldly value-skew,
but you don’t necessarily have to be its own customer.
It’s like an atheist who sells thousands of dollars in
Bibles. Toast the champagne glass—true story. The founder
of Keurig K-Cups, John Sylvan? He recently reported that
he doesn’t use them. Me? I spent ten years in the limo
business. Know how many times I’ve rented a limousine?
Once. You can sell pet gear and own no pets. Opportunities
hold no prejudices.
Relative-value®2® doesn’t care if you love an industry,
share a gender, or use the product yourself. Bob can sell
brassieres, and Jane can sell jockstraps. Let the market sort
it out while you roll in the dough.
KEY CONCEPTS
e You don’t have to be an avid or “passionate” user of
your product or service.
¢« You only have to be passionate about the results of
your effort: the value you provide to your customers,
the difference you make for the world, and your
family.
CInl-AN Pel 18.5
Pinle = NGAGE MeN TS Mev eG
ENGAGE THE WORLD AND OPPORTUNITIES WILL NEVER BE A PROBLEM
of
S ince becoming an author more than a decade ago, I’ve
come up with hundreds of ideas and opportunities in
the book publishing space. Many of those ideas would later
come to life as other entrepreneurs took advantage of the
same voids I saw. Likewise, since adopting a plant-based
lifestyle, the same thing happens today: I see dozens of
opportunities in the plant-based industry ripe for solutions.
In fact, I’m so flush with ideas that I have my own “Neve”
notebook filled with them.
If you want an endless book of ideas waiting to be
exploited, start engaging the world. Get out of the house.
Take on a new hobby, a new job, a new purpose, or a new
project. Anytime you engage the world, you set yourself up
to spot ideas. Every venture I’ve undertaken occurred
because I was engaged—from jobs to market interactions
(with multiple failures) to engagement in specialized and
observable knowledge. When people complain about having
no ideas, it means they are stuck in their own bubble, and
not engaging the real world. In short, you don’t spot ideas
sitting on your couch stuffing your face with Pringles while
watching Netflix. You don’t spot ideas sleeping until noon
and watching YouTube videos all afternoon. The Trotmans’
discovered several ideas (both of them _bonafide
opportunities) simply because they observed their own
struggles. Dull knives suck. Having no plant-based soups on
store shelves sucks. Get out into the world and see what
sucks and what needs fixing. As Captain Picard of Star Trek
fame says, Engage!
KEY CONCEPTS
e New ideas or opportunities are unearthed through
any type of engagement, jobs, hobbies, or otherwise.
e You can’t spot ideas or opportunities confined in a
bubble.
CHAPTER 64
Wile SCN Delete ey ete INCH ke
A BUSINESS WITH AN EXPIRATION DATE IS NOT A GOOD BUSINESS
W hat would you say if I told you I was going to start a
leg warmer business? How about a business focused
on BMX bikes, lava lamps, or blow-up chairs? You’d
probably tell me I was crazy. And yet, entrepreneurs chased
these fads as they peaked and then later plummeted.
Newsflash: If you’re selling a fad today, you won’t be selling
one tomorrow. Fads die, as do their businesses. The
Cinderella Principle holds that a business based on a fad
has an expiration date because they have a _ self-
extinguishing demand. Once the clock strikes midnight, the
company turns into a pumpkin.
Starting a business is challenging enough. Handicap
yourself with a Cinderella business, and you strap yourself
to a TAM®? that is naturally designed to shrink and
eventually expire. If your total market size is ten million
people, by next year it might be half. The next, nearly gone.
Think of it as the sands in an hourglass. Would you consider
a similar declining industry that exhibited the same type of
behavior? Of course not, but fads get a pass.
For example, if you were exclusively selling BMX racing
bikes in the eighties (think E.T) you’d be out of business by
the nineties. Each year would be worse than the prior.
Waiting forty years for its resurgence is not an option. You
either reinvent into a different line that might appeal to
your customers, or you shut down. Particularly, teenagers
who dropped their BMX bikes in favor of the next new thing
probably wouldn’t be interested in your shop’s new line of
cruiser and tandem bikes. As with most reinventions, you’re
starting over with a different audience.
So how do you know if you’re targeting a fad or
something with longevity? The best method for identifying
fads, trends, or mega-trends is to identify the trend’s utility-
value®2® and its cultural relativity. Will culture
(government/media) support the trend through time? And
will that evolution change society? Or is the utility-value
static and a function of taste or trend? Think cars over
horses. Email over postal mail.
In our fictitious story, plant-based food (or meat
replacements) is considered a more environmentally
friendly food source. There’s an argument that culture (and
politicians) will support its evolution. Of course, this is
debatable, but what isn’t debatable is that better
environmental options (as well as better health options) are
a value-skew. What isn’t debatable is that there is no
“humane” way to kill a sentient being that doesn’t want to
be killed. As more people awaken to this spiritual
enlightenment, it’s more likely that Sam’s assumptions
about the trend are correct.
Fashion always falls into the category of static utility-
value—if men (or women!) suddenly find long lumberjack
beards grotesquely ugly, the beard businesses will find
themselves with a fast-shrinking market.
Mood rings, fidget spinners, and fanny packs might have
made their original entrepreneurs rich, but those who came
later chased fewer buyers with fewer dollars.
An Atkins diet center might seem like a great business
opportunity at the apex of its fad, but the clock is ticking,
and the pumpkin is ripening. Lock yourself onto a
Cinderella business and you'll need to go beyond the
change dyad**2; you have to reinvent and, most likely, start
over. Don’t make business harder than it already is by
slapping an egg-timer on your business.
KEY CONCEPTS
e Fads, or short-lived trends, are poor business
opportunities unless you are the innovator or the
instigator of such fads.
e A Cinderella Business is a business that has an
expiration date based on the trendiness of the fad.
e Atrend’s utility-value and its cultural support will
determine whether a trend is expiring or a valid
consumer shift that is worthy of investment.
IN. Tale alee Ol Walle ING
THURSDAY, JUNE 29TH, 2017 - 8:41 PM
(7 DAYS LATER)
“What are you reading?” Jeff voiced loudly from the kitchen
while pouring himself a cold beer.
Three fans buzzed around him, one on the kitchen
island, one in the living room on the coffee table, and one in
the door of Madison’s room, who now was hopefully asleep.
Their air conditioning had stopped working two days ago,
and their townhouse was now an oven. A humid 94 degrees
in the concrete suburbs of Chicago might as well have been
110.
“Yo!” Jeff waved his beer in the air. “What you reading?”
Sam was on the couch, nearly naked. Not because she
was in a seductive mood, but the native Idahoan always ran
hot. From behind, Jeff could see the sweat on her neck. He
was surprised she was on the couch, much less reading. For
Sam, this kind of oppressive heat was worse than a visit to
the rodeo.
It was time for their weekly business meeting, and Jeff
was hoping she’d suggest calling a sitter and leaving for a
cooler spot. While a Top Chef episode softly played on the
TV, Jeff stood up and walked in front of her, seating himself
on the coffee table in front of the fan.
With her airflow blocked, she nodded _ curiously.
“Something wrong with the couch?”
“T asked you what you were reading. Can’t you hear
me?”
She glimpsed at the TV, and then at the fan that Jeff was
now blocking. “Sorry, I didn’t.”
“T figured.” He gestured at the book. “Doesn’t look like
your usual femme fatale.” She held up it up and waved the
book as if Jeff knew what it was. He lifted an eyebrow.
“Employer Law for Entrepreneurs? ”
She sighed, tossing the book down next to Jeff, still
perched on the coffee table. “You should read it. I haven’t
had this much fun since reading Deuteronomy in Sunday
School.”
Jeff smiled in admiration and then regarded the room as
if it were a sauna. “Are we meeting here?”
For the last three twilight-crosses, they’d plotted their
new venture: a plant-based soup business. Their hope? Get
it on every grocery shelf in the next five years. To Sam’s
surprise, Jeff had already done a lot of research. His plan
made sense to her, and this time, the initial numbers
worked out. Moreover, Jeff had an answer for her every
question, her every concern. But one still nagged her.
She shifted up from the couch closer to her husband,
who still sat on the edge of the table. Sweat dripped from
her nose. Sam ignored her husband’s question about the
meeting location. Her face etched concern, she asked, “As I
said, I love the vegan soup idea, but I have to wonder...”
She paused to wipe her face. “Do you expect me to slave in
a hot kitchen while making big vats of soup?”
Jeff furrowed his forehead. “Kind of like you expected me
to slave in the garage sharpening knives?”
She simpered embarrassingly. Jeff put his hand on her
knee and reassured, “To answer your question, no, not for
long. Only to get us started with the right recipes.
Eventually we’ll partner with a co-packer. A food processor.
They manufacture the soup; we merely give them the
recipe. Or I should say, you give them the recipe.”
A dead stare didn’t soften her face. “Co-packer? What’s
that?”
“A co-packer manufacturers food on behalf of other
companies.”
She quickly followed, “But how do I know if canning my
soup would work? What about shelf-life? Do I need to know
anything about preservatives?”
Jeff answered surely, voice confident as if he had done it
a hundred times. “Most co-packers have consultants on
staff. And I already found two food chemists that can be
hired by the hour just in case our co-packer doesn’t have a
consultant.”
“So you already found one of these co-packers?”
“Actually, I found five. We just need to decide which fit
our needs—you know, cost, ingredient selection, minimum
order quantities that kind of stuff.”
“Five? How on earth did you—”
“Google. Started with searching for ‘food processors’ but
ended up with nothing but Cuisinarts and Vitamixes. After
two hours down a rabbit hole I learned a ton. Everything
you could possibly want to know is out there. You just need
to know how to search for it.”
“Okay, so how in the world are we going to sell it? What
do we know about soup? Or food merchandising?”
Jeff grabbed his ragged notebook off the coffee table.
Sam noticed the iconic Steve Jobs photo with his finger on
his chin covered the old Chicago Cubs decal. Her husband
flipped to a page and pointed. Sam spotted a bunch of
numbered items but couldn’t read the text. She shrugged
but said nothing.
“That’s our marketing plan. There’s a ton of ways we can
reach our market.” He beamed. “And a ton of money
awaits.” He rubbed his palms together like a cunning
scientist who just found a cure to cancer.
Her stern expression finally melted into a smile.
She thought, Nice, he did his homework. Jeff's take-
charge attitude rattled lose another fond memory long
buried by diapers and late shifts, a memory that
memorialized the week when Sam fell in love and knew Jeff
was marriage material.
It was 2003.
In a stubborn streak of take-charge spontaneity, Jeff took
the reins and surprised her with a spring-break trip to
South Padre Island. Not a bad idea in spirit, but a bad idea
when you’re driving a twelve-year-old Pontiac. Long story
short, their car died in Gum Springs, Arkansas, with a
ruptured oil pan gasket, and with it, their dreams of
beaches and margaritas. Instead, they spent the next three
days at a Fairview Motel that doubled as a hair salon,
which, mind you, was in the middle of fixing a broken water
main. Jackhammers woke them up every morning. Water
pressure drizzled like a leaky faucet. To get their car back
on the road, an auto mechanic tried to sell Jeff a new
transmission. Worse, their motel neighbor in Room 2C...
well, let’s just say Sam didn’t know that two tattooed
teardrops meant that they were bunking next to a two-time
murderer. Still, Jeff remained in control. Showed no fear
and never angered or showed frustration. Despite the
situation, Sam felt 100 percent safe. After four days, they
were back at DePaul, and Sam knew Jeff was “the one.”
Even in the hot townhouse, Jeff’s forehead was dry. Once
again, calm with no fear. Her husband was finally beating
back at life; suddenly, the broken air conditioners, the
dreadful Sunday nights, and the old Corolla weren’t
winning. And for the first time in years, she too felt as if her
dream was an actual probability. Indeed, not a sure thing,
but better than five or ten percent perhaps? She asked, her
voice giddy, “Okay, RyRy, so what’s next?”
He fired her a slick grin and then raised his hands as if
to signal victory. “The fun part! You get in the kitchen and
start making soup. I figured we should start with three
recipes. So start there.” He gestured to the stove. “Just do
what you normally do but record your ingredients and their
amounts. We will need several formulas.”
She huffed, shaking her head. “I hope you don’t expect
me to cook until the A/C is fixed. This townhouse is like a
sweat lodge.”
“The repair guy comes tomorrow.”
“Great,” she said, standing up, glistening. She slinked
over to the bedroom door and looked back at her husband,
still planted on the coffee table. “I need a cold shower,” she
whispered. “Care to join your pregnant wife?”
Cia rane Reo»
Tine CRISES nl Sieve Gp
IDENTIFY THE PATH TO YOUR FIRST CUSTOMER AND LIGHT THE
ROADMAP FOR ACTION
&
P roblem: Your car is stranded in the desert with a flat
tire, and you don’t know how to fix it. If you could
instantly download knowledge into your brain (aka The
Matrix), what would you download? How to Bake a Soufflé?
or How to Fix A Flat? This flat-tire problem is relevant
when it comes to planning and action. Ultimately,
entrepreneurs fail because they drip-feed themselves with
information that has nothing to do with the problems
they’re facing. Instead of downloading How to Fix a Flat,
they’re assimilating other knowledge, knowledge that
doesn’t get them moving. Soufflé knowledge, while perhaps
interesting, doesn’t solve the immediate problem.
Like our flat tire, if you’re led by the need or the problem
you are solving, you'll always know what to do next. And you
will never get lost. When the tire blows, you assess the
problem immediately. Instantly, you go into problem-solving
mode, and “What do I do next?” becomes clear: You exit
traffic, pull to the shoulder, and change the tire. Or you call
Triple-A or your friend for help. You don’t sit on the
shoulder of the road and google “Is a subscription to AAA
worth it?” or “What cars are more reliable than a Chevy
Malibu?” Your problem defines your next course of action.
Without a defined problem, the solution (and _ its
roadmap) will also remain undefined. This is why aspiring
entrepreneurs binge books while never doing anything.
They never get started, launch a business, or make a profit.
Why? They fail to put themselves in the face of a problem,
either externally in the market, or internally with a
deficient talent.
Another common question I hear from readers is,
“Where do I start?” or “What do I do next?” It leaves me
wondering if I’ve failed as an author or if the reader failed
comprehension. When you are a problemologist??° looking
to solve problems, improve processes, and offer relative-
value®2©, what to do next becomes crystal clear.
e I’d like to create a pure, all-natural supplement line
that doesn’t use artificial colors, sweeteners, or
chemicals.
I'd like to invent a gluten and dairy-free pizza line.
I want to write a book exposing the charlatanism of
Scripted finance.
e I’d like to start a sports bar with an ancient Roman
theme.
As soon as you identify your relative-value objectives and
their value-skews,°°2 the roadmap appears. It is your GPS.
And just like any roadmap highlighting how to get from
mediocrity to Unscription, it will have many permutations of
streets, roads, and freeways. If you’re not paying attention
to the problem at hand, it’s easy to get lost or go on
unnecessary detours.
Simply put, the correct course of action is the shortest
path to your first customer—the critical path. Doing so
highlights all the dots that need connecting, and maybe
some that do not. Do you really need a Delaware
corporation, a richly appointed mahogany desk with a red
leather pin cushion chair, and a nice set of letterhead on
woven linen stationery?
It is your job to connect each dot that matters while
ignoring the rest. One dot might be hiring a CAD designer,
another sourcing manufacturing, another learning how to
market to your target audience. Because connecting the
right dots might take days, weeks, or even months, you
must eliminate the ones that aren’t on the critical path.
Does this action get you closer to your first customer?
Identify the relative-value you seek to provide, and you'll
identify the roadmap—the critical path—the next steps, and
the right steps.
KEY CONCEPTS
¢ If you’re led by the problems you seek to solve, you'll
always know what to do next and rarely get lost.
¢ If you don’t know “where to start” then you have
already failed.
e The critical path, which is like GPS navigation, is the
shortest distance between your idea and your first
customer.
lal els (ole
Wale allGle UP siQlOic sav eGny
READ THE BOOK THAT SOLVES PROBLEMS, NOT THE BOOK THAT
WASTES TIME
&
(5 uess the most common question at my forum? There
are two that stand out. The first is always about
finding ideas. The second is about books, namely, “What’s
the next best book I should read after reading Unscripted?”
Hopefully, the next two minutes will stop this insanity.
The answer to the “next best book” is “Depends.”
As an entrepreneur staring a business, you will face an
endless array of problems. If you’re using the 3A Method, it
will give you a good clue about the book you should read
next. When people ask me what book I’m reading, they
expect to hear the latest bestseller or the current month’s
trendy book pushed by the mainstream. That is never my
answer because I’m busy solving problems. And problems
demand more specific silos of knowledge and action. For
instance, the last three books I read had nothing to do with
entrepreneurship or finance. They were all fictional thrillers
because that’s the side project I’m working on. Because I
never published a thriller, my problem—how do I write
thrillers—started with me reading fiction. Not just for the
story, but for the style, structure, and plot.
Instead of mindlessly reading books for the sake of
reading them, read them to solve your front-facing
problems. Whatever problem stands in your way—the book
with the solution is the book you need to read! Read the
book that moves you up the mountain. You can’t climb mile
two until you climb mile one. What’s the best persuasive
language to use in advertising campaigns? How do I
leverage sales funnels, onboarding processes, and email
marketing? How do I hire good employees? Your answer—
your solutions—are found in books and material scattered
across the internet.
If you’re not facing problems (yet), the same concept
applies. Read whatever moves you forward on life’s journey.
If the book isn’t a business builder, make it a character
builder. For me, such books are on world history, health and
nutrition, and meditation.
What you know today is never enough for the problems
of tomorrow. And when you opt to be an entrepreneur, you
opt to have a ton of problems. Books solve problems, but it
must be the right book. Read the book that fixes the flat tire
and advances your 1/5/10 Planasy.°!2
KEY CONCEPTS
Stop reading books for the sake of reading books.
The best book you should read next is the one that
will solve the problem that blocks your progress.
The 3A method exposes the subject matter of next
book you should read.
What you know today is never enough to solve
tomorrow’s problems.
SlnlAVe Pel 7
THE ACTION-FAKING
PIRIUINES |e
STOP SHARPENING NEEDLES, START MOVING THEM
W hen I was in my early twenties, I was failing at
business often. Interestingly, with each business
failure, I had to throw away thousands of newly minted
business cards. My pattern back then was simple: get a
business idea and then make business cards—even if the
business idea didn’t need business cards.
The Action-Faking Principle asserts that any action or
expenditure that doesn’t move you closer to the critical
path is an action-fake. Namely, you’re not moving the
needle, you’re just sharpening it. When a sewing needle is
moving, it’s knitting itself closer to a completed quilt. On
the other hand, while sharpening the needle might help in
some small indiscernible way, it gets you no closer to the
quilt.
The fact is most failed entrepreneurs are needle
sharpeners. Instead of moving the needle and getting
closer to a quilt worthy of sale, they’re busy grinding the
lathe for a sharper needle.
Instead of focusing on the critical path,S©° they’re
focused on ancillary activities that serve other purposes:
building confidence, sparking motivation, or inflating egos.
Action beats activity. And the only step worth taking is
the one that moves the needles found within the critical-
path. If it doesn’t, it’s an action-fake. Action-fakes are
activities that lie outside of the critical-path. Action-faking
can be many things, from trivial busywork to data research
to reading books—none of which gets you deeper into the
critical-path. Such “action-faking” could also be business
plans, investor slide-decks, or even LLC formations. Such
activity might make you feel good for two hours, but it gets
you no closer to your first customer, much less a salable
value-skew.°?2
Sadly, some aspiring entrepreneurs have made _ book-
binging a form of action-faking. They’re not reading the
best book to solve front-facing problems.°©® Instead of
grinding the _ difficult critical path, they’re fooling
themselves with dopamine games no better than a video
game or a bag of greasy potato chips. Activity wastes time:
action attacks the critical path. At some point, you have to
stop reading about swimming and jump in the pool.
KEY CONCEPTS
e Any action outside of the critical path is an “action-
fake.”
e« Action-faking gives you a faux sense of
accomplishment, often stimulating a dopamine
release with ineffective action.
CRAP TER 6s
Pele We PRO mMel| Sina
STOP SHOPPING FOR FERRARIS, SHOP FOR ONE SOLUTION
A common triteness you'll read at my forum is, “What
color Ferrari should I buy?” This odd statement is
often dropped into a thread whenever an entrepreneur
fixates on a distant problem, one predicated on dozens,
perhaps hundreds of successful actions prior. Here are just
a few examples:
What kind of accounting firm should I hire if my
company goes public?
Didn’t you say your finished product isn’t for sale yet?
What should I know about employment law?
Aren’t you months away from hiring your first employee?
Any asset protection strategies I should use to
protect the millions I'll make?
Don’t you live at home with your parents and work at Taco
Bell?
All these questions are examples of Ferrari shopping.
Stop worrying about distant problems when you haven’t
even made your first buck or found your first customer. Put
another way, stop ignoring the elephant in the room while
stressing about the others, which are miles away.
The only problem worth worrying about, and thus, worth
solving is the one that has stopped the needle from
moving.?©’ Attack problem #1 before problem #99.
Worrying about a distant unknown, say payroll law, when
you are months or years away from hiring your first
employee, is a neurological exercise in futility. Worse, some
don’t focus on the mountaintop and its many problems, but
its tantalizing reward: high living and fast cars. When
you’re focused on rewards that may or may not happen in
the distant future, you’re Ferrari shopping.
As a problemologist’?° who seeks to solve a macro-
problem, only one problem matters... the one that stops you
from advancing on the critical path.S!©° While having a big
picture vision as designed in your 1/5/10 Planasy®!? is
essential, focus only on the problems that directly impact
the critical path, or advance you to the one-year vision. As
they say, the best way to eat an elephant is one bite ata
time. Notwithstanding that no one should be eating
elephants, looking at the big picture “the elephant” causes
paralysis, overwhelming fear, and needless distractions.
Fact is, if you wait to have all the answers before starting,
you'll never get started. It’s like waiting for all the traffic
lights to be green before starting a road trip.
Relative-value starts with one. One paragraph starts a
novel, one bar a musical piece, one scene a play, one mile a
marathon. So stop stressing about how you'll afford new
clothes after losing the thirty pounds. Lose one pound first.
Stop fretting about how much tax you'll owe on a million
bucks in profit. Profit one hundred dollars first. Incremental
progress of one problem and action underwrites the
process®2® while connecting your feedback loop and firing
transformative passion.°*© Small wins turn into larger wins.
Momentum builds, and before you know it, you’re at the
mountaintop.
KEY CONCEPTS
¢« “Ferrari Shopping” is focusing on a distant problem
instead of the problem in front of you.
¢ You'll never get started if you require all the answers
to the future problems.
CHAP GER=69
THE 1/2/73 MARRIAGE
STRATEGY
EXECUTE 1 HOUR, 2 DAYS, 3 YEARS BEFORE MARRYING
&
You are the CEO of You Inc., not just your business. And
one of You Inc’s biggest expenses is getting married.
Even bigger is getting divorced.
Even if you never Unscript or start a business, the
following piece of advice is worth 1000X this book’s cost.
Here it is: If you want to get married, follow The Rule of 1
Hour, 2 Days, and 3 Years. It will save you a bad marriage, a
lot of emotional turmoil, and perhaps a fortune.
THE RULE OF ONE HOUR
Before getting engaged, spend one hour discussing the five
relationship killers of failed marriages. They are:
1. Politics
2. Religion
3. Children
4, Career/money
o. Diet/Fitness/Nutrition
Do your political and religious philosophies align? Does
your potential spouse believe your children need to be
raised in a strict Catholic tradition while you’re agnostically
Buddhist? Do you even want children? Are you a purebred
capitalist while your partner thinks communism got a raw
deal in the last century? Is your partner a carefree spender,
but you’re a cheapskate? Do you want to take risks as an
entrepreneur and live Unscripted®? while your partner
insists that 50 years of Wall Street?® is the better option? Is
your partner a vegetarian who is at the gym five times a
week while you’re sitting on the couch eating hot dogs and
pizza?
I’m batting perfect when it comes to predicting failed
marriages. Whenever a divergence occurs in the five
breakpoints or becomes known, divorce follows. Just some
examples I’ve witnessed on the periphery of my life... 1) the
wife suddenly shifts to fitness and nutrition while the
husband continues a lifestyle of junk food and laziness. She
transforms her body and energy levels. The husband does
not... divorce... 2) The husband wants to_ spend
discretionary income on entrepreneurial risks while the
wife insists on spending every surplus dollar on fashion fads
and brands... divorce... 3) The wife wants kids. After four
years of marriage, the husband finally confesses he does
not... divorce.
No, I’m not psychic, I’ve just old enough to have seen it
over and over again.
THE RULE OF TWO DAYS
The Rule of Two Days asks that you must spend two days
with your partner in hell before getting married. You must
endure each other in the worst of conditions and the most
trying of circumstances. For example, my wife and I were
once stranded in Belize at a small airport. If you have never
been to the airport in Belize, it’s terribly tiny, hot, and
lacking basic amenities—for starters, a clean toilet. For the
next 48 hours, we had to endure long lines, humidity,
mosquitoes the size of hummingbirds, and a temporary
overnight stay at a decrepit Days Inn infested with
cockroaches. I thank United Airlines for the nightmare!
Bottom line, we saw each other at our worst. If you survive
trying times, like being stranded in a small town on spring
break, it’s a sign she/he may be a keeper.
TRE-RULE OF TAREE YEARS
And finally, The Rule of Three Years asks that you regularly
date for at least three years before marriage. And by
regular, I mean at least seeing each other several times a
week, if not living together. Three years is long enough to
witness your partner’s habits, idiosyncrasies, and, more
importantly, their change-cycle.**2 If you discussed the five
relationship killers in The Rule of One Hour, the three years
of dating will prove it. Have you grown together or apart?
Are divergences emerging in the discussion from the Rule
of One Hour? Moreover, in three years, you will likely
experience a situation covering The Rule of Two Days.
Too many young people visit my forum talking about
marriage with partners they haven’t known but for one
lunar cycle. Are you nuts? What’s the damn rush? If she’s
great today, she’ll be great the three years from now. If it’s
meant to be, time won’t matter, and neither will a piece of
paper from the government. Be patient and be rewarded.
Marriage can be one of the most important decisions of
your life. Don’t rush what doesn’t need to be rushed. Meet
the 1-2-3 Rules, and I’ll bet your marriage will last a
lifetime. Ignore it and pay dearly later.
KEY CONCEPTS
¢« Getting married is one of life’s biggest expenses;
getting divorced is another.
¢ Before tying the knot, apply The Rule of 1 Hour, 2
Days, and 3 Years.
¢ The Rule of 1 Hour is a detailed discussion about
“marriage-breaking” topics such as politics, kids,
diet, money, and religion.
¢ The Rule of 2 Days is spending two full days with
your future spouse in the most trying of
circumstances.
¢« The Rules of 3 Years means to date a minimum of
three years to validate your partner’s Rule of One
Hour admissions, as well as their change cycle, if any.
Clave Mela: 72)
ele Se AeClel (Clirial els
S I RAnEGY
HUNT FOR SEARCH CIPHERS TO UNLOCK UNLIMITED KNOWLEDGE
&
D o you know what “kiting” is? No, it’s not someone who
flies a kite.
It’s the process of assembling a product together before
it can be sold. For instance, let’s say you invented a talking
teddy bear, and there are four central components: The
bear suit, its stuffing, its exterior parts (like eyes, nose,
paws), and its electronics. The likelihood that this item
would roll off an assembly line as a finished product is slim
and none. A “kiting” company would likely be responsible
for its assembly. How would you know this? You probably
wouldn't.
And that’s where search ciphers come into play.
A search cipher is an official terminology that unlocks
business-advancing knowledge when performed at any
search engine. With the right search cipher, the world’s
knowledge is at your fingertips. In our fictional story, the
correct search ciphers for producing results that advance
their soup business on the critical path are “food co-
packers” or “soup co-packers.” Jeff started with “food
processors,” and it sent him off on a wild-goose chase.
Luckily for him, he didn’t give up. After a half-dozen more
searches, he eventually searched for “food manufacturing
processes.” This uncovered results, results which lead him
to expose the correct search cipher... a food co-packer. That
search turned up gold.
Unfortunately, the right search-cipher takes some
investigation to uncover. Back to our teddy-bear example, if
you do need assembling services, a google search for
“assembling services” likely won’t produce the right
answers. To find the cipher, you probably have to search
many variations of what you’re seeking. Start with a
description of what you need. Then move to the industry
itself, prefixed with phrases such as “how are [widgets]
made?” or “[widget] manufacturing process.” The correct
cipher might be buried in an article on page two in your
fifth search. It is indeed a rabbit hole. Yet the right search
cipher “kiting services” dropped into any search engine
would produce the problem-solving answers... immediately.
If that doesn’t work, try search operators. Here are
some effective ones to deploy.
e “site: [keywords]“ - Find and limit results contained
to a specific website
“intitle: [kKeywords]“ -web pages with a certain
keyword in the title
“inurl: [keywords]“ -web pages with a certain
keyword in the URL
“filetype: [keywords]“ - web pages with a certain file
type, useful for finding poorly ranked PDFs.
The challenge as a problemologist??° is always figuring
out what you don’t know. Namely, the official terminology of
what we have to learn so we can move forward. Without the
correct search terminology, our hunt will not snare the
information we need. But it will put you on the scent. Follow
it down the rabbit hole. The answers are there.
KEY CONCEPTS
e Unlimited knowledge is accessed with the correct
“search cipher” at any search engine.
¢ Discovering the right search cipher often requires
multiple searches and guesswork, like following a
scent down a rabbit hole.
e Use search engine operators for more targeted
search results.
THE “BRO-MARKETING”
ENCOUNTER
WEDNESDAY, JULY 5TH, 2017 - 5:14 PM
(6 DAYS LATER)
“$1,700!?”
Jeff sneered as he stood in the foyer of his townhouse.
The townhome’s rental agreement specified they were
responsible for all repairs, up to a maximum of $2,500— it
was why Dave Bliss, their landlord, gave them a break on
rent, not to mention his lustful intentions with his wife.
Beside Jeff was an HVAC technician from Precision Air
Conditioning. Dressed in navy maintenance bibs with
“Harvey” stitched on the pocket, the technician looked
more like a Wall Street banker than a repairman. Jeff had
called Precision Air because they advertised in their weekly
advertising mailer, an envelope chock full of coupons from
plumbers, pizza joints, and home remodelers. Jeff was also
familiar with Precision Air because he heard their radio ads
every drive to and from the train station.
Still writing on his clipboard, the technician continued,
“You have a bad capacitor. And your coils are dirty; they
need to be cleaned. Your unit is about six years old. I doubt
they were ever serviced. The seventeen hundred dollars is
to replace the capacitor, clean your coils, and give your
overall system a tune-up.” Still scribbling on his clipboard,
he continued, “With your ten percent off coupon, it will get
you under $1,600.” He finally looked at Jeff and with a
simper said, “How would you like to pay?”
Jeff studied Harvey up and down. Without saying a word,
he walked three steps to the door, opened it, and fanned his
hand outside. The technician stood motionless as the silence
hung, but then he nodded in resignation. He walked out,
the slam of the door the only thing spoken.
Their air conditioner would remain broken for the next
three days. In an act of sweaty desperation, Sam called
Dave. Turns out, Mr. Bliss wasn’t so bad after all. He
recommended a reliable HVAC company, and they were out
the next morning. And as Jeff expected, they didn’t need a
capacitor or a “coil cleaning.” Rats had chewed through the
feed wires. The bill came to $180.
Later that evening and in her newly air-conditioned
space, Sam would begin cooking.
The delightful odor of Italian bistro and beachside
seafood brought Jeff to the stove next to his wife. He kissed
her on the forehead and nodded to the pots simmering atop
the burners. “Right there is our escape. Our freedom. Our
ticket out.”
Sam elbowed him in the ribs playfully. “Okay, moneybags,
why don’t you try it first before you make your way to the
bank?”
Jeff mouthed a spoonful, spilling some on his loosened
tie. “Yum. The Asian Tofu Udon?” Sam nodded. He gestured
to another pot. “What’s this one?”
“Italian Minestrone.” Jeff spooned it in and tasted. He
gave an approving grin.
“And this?”
“Creamy Potato Kale.” Jeff dipped his spoon and sipped it
carefully. “Mm, tastes like lobster bisque.” After savoring
the mouthful, he dipped and sipped another spoonful.
Afterward, he looked at Sam, puzzled. “I’m confused. How
do you make something so nasty as kale taste this good?”
“Put the damn spoon down,” Sam chuckled, “and quit
eating my inventory.” She leaned on the counter and then
winked. “With the right blend of seasonings, I can make
your poop taste good.”
Jeff’s eyes popped, glancing back at the stove. “Well now.
In that case, I hope I’ve flushed the toilet this morning.”
Sam grinned, another time machine back when her
husband’s humor had tickled her heart. “These will be
ready tomorrow afternoon. I have to let them sit overnight
so they soak in the flavors.”
The next night, Jeff arrived from work and found his wife
on the couch with Madison. Sam heard him ping-pong up
the long narrow stairwell from the garage with something
in tow. A large box. Sam and Maddy flipped around to spy
on the commotion. They watch him unload three stacks of
circular cardboard quarts, the kind you might get at a
delicatessen or for food takeout. Names of restaurants
decorated the boxes: Sakura Japanese, The Neighborhood
Garden, and Romano’s Italian Bistro.
Sam asked, “What on earth are those?” Maddy added
dryly, “Mommy already made dinner.”
He smirked wryly. “This, my wonderful queens of the
house, is how we’re going to figure out the one soup we'll
manufacture.” Confused, Sam asked, “One? I thought we
were doing three.”
He shook his head and then grimaced. “We can’t afford
to manufacture three, much less two. When I was doing
research on co-packers, they all had pretty steep minimum
order requirements.”
“How steep?”
“Steep enough that it’s going to be a stretch for us to
produce just one soup.” He saw the distress on his wife’s
face. “Leave the numbers to me. Just worry about the
soup.”
She raised her voice. “Leave the numbers to you? Like
your knife idea, or worse, your “Trump Sucks’ venture?”
Jeff glanced away, but she saw his cheeks tense. Sam
caught it, then corrected herself. “I’m sorry.” She got up
from the couch and walked to him, tousling the hair in front
of his eyes. “You’ve been working your tail off, and I see it.
I’m proud of you. And I love getting back the man I fell with.
It reminds me of college when we felt the future was
whatever we made it.” She paused, allowing the moment to
absorb. Stepping back, she gestured to the cardboard
restaurant cartons. “So what’s with these now?”
He smiled cleverly. “I had those made up after work. It’s
how we'll test our soup and get unbiased feedback.”
Sam furrowed her brow, hoping what she was thinking
wasn’t what he was thinking. “Is this going to be legal?”
Jeff winked. “Perfectly.”
CHAPTERS
ale ROI ICC RVC 1
Sin EG
AIM FOR A PRODUCTOCRACY: A PULL PRINTS MONEY, A PUSH
ADVERTISES FOR IT
&
S ome years ago, I ran an unofficial experiment as a
scientist. Because I listen to the radio often, I get stuck
listening to a lot of commercials. For this experiment, I paid
close attention to the advertisers. Over the next week, I
recorded all the businesses who advertised frequently. I’m
talking dozens of times per day, every week. Many
advertisers even had radio personalities endorsing their
companies. After I created my list, I investigated the public
reviews (Yelp/Google) for these advertising behemoths.
What did I find?
The average review for these frequent advertisers was a
dismal 1.8 stars out of 5. Some reviewers even accused
these companies of being blatant scams. The point? If a
company advertises heavily, flooding the market with
coupons and other “in your face” activities, more than likely,
they’re pushers. And pushers aren’t selling relative-value;
they’re marketers of perceived-value.
As an Unscripted Entrepreneur, your objective is its holy
grail: the Productocracy. A Productocracy is achieved with
a unique and recognizable value-skew*?? that isn’t offered
elsewhere. The value-skew can be one attribute, or a
combination of many. Perhaps your HVAC repair company
provides free consultations and operates with complete
honesty. Maybe your eCommerce company offers a no-
questions-asked guarantee and return policy. Or it could be
as simple as a good product at a good price. When the
market reacts to this favorable skew, your current
customers become the primary driver for your business
growth through reviews, referrals, and recommendations.
In other words, they pull, not push.
Create relative-value worth recommending, and you'll
gain a miraculous ability... the power to print money.
Suddenly, one happy customer turns into two, three, or
more. And _ disciples (customers who love’ your
product/service) have the best return on investment. No ad
Campaign or marketing strategy can match it.
While sales and profits are essential, a Productocracy
ultimately determines how fast you grow and if that growth
is accelerated with improved margins. When one happy
customer refers a new customer, miraculous money-making
math occurs: your new customer has zero acquisition cost.
And the first customer’s acquisition cost halves. If your first
client cost $10 to obtain and he recommends you, suddenly
his cost drops to $5. One satisfied customer who creates
two additional ones lowers the aggregate acquisition cost
by two-thirds. In short, your product contagiously sells
itself. Productocracies move probabilities,5°9 they
magnetize money,°24 and they create to-the-moon
leverage.?!7
For instance, if you scan the many reviews for my books,
you will find a common theme. Many readers report that
someone recommended the book. This is how I sell books
year after year: Not slick advertising or big Facebook ad
spends—a Productocracy.
Likewise, every podcast and interview I’ve ever done
happened because I was invited. I didn’t send a cold email
and beg to be interviewed. Translation licenses, same deal:
Publishers solicited me, asking to be a part of my book’s
success. My book did the selling, not me.
Behind this phenomenon is a business dynamic called a
push-pull polarity—the mechanism determines if your
company grows spectacularly, a Productocracy, or struggles
to survive. Companies held hostage by advertising yoke
themselves to a push. Companies that grow like weeds and
enrich their founders boast the pull.
Not long ago, whoever spent the most on advertising
won the sales. If the AC broke, you searched for HVAC firms
in the Yellow Pages or phoned the one that had sent you a
coupon in the mail. If you found a new food product, it was
advertised on television or was slotted favorably in the
grocery store. Both required deep pockets. To sell large
volumes of products, corporations had to buy large volumes
of advertising. Advertising pushes its product to the masses,
driving sales.
Conversely, the pull in the push-pull polarity is a
Productocracy where your relative-value has
recommendation power. Customers come to you. With each
new customer, the expansion loop and its network effects
strengthen. Your company starts to get gravity. The pull is
word of mouth, social proof, and satisfied users. If clients
are recommending and sharing your products on social
media, congratulations, your product is pulling. And it’s
proof of a Productocracy.
The most important questions for your business are:
1. Are customers recommending my products?
2. Are people tweeting about it or raving on social
media?
3. Are people sending you love emails?
4.If applicable, are people reordering?
If they aren’t, get deep into the 3A Method®°° until they
do. Otherwise, you take the risk of becoming an ad-
dependent boiler-room. I’m skeptical of any operation that
advertises heavily. I’m not suggesting that advertising is
negative or evil. Just be leery of massive advertising. The
standard I apply is the three Os. If it’s obtrusive (cold calls,
door knocking), obvious (OMG I’m sick of this commercial!),
or outrageous (seems too good to be true!), I avoid it. Heavy
advertising reveals you aren’t likely dealing with a
Productocracy, which is why a scammy $1,700 repair bill
follows.
Don’t build a business that becomes a churn-and-burn.
Replacing old fools with new fools is not a business model;
it’s a marketing racket.
KEY CONCEPTS
e Pushers are sellers of perceived-value, not relative-
value.
e A Productocracy demonstrates a unique and
recognizable value-skew not offered elsewhere.
e A Productocracy’s value-skew can be one attribute
or a combination of many.
e Happy customers, or disciples, earn the best return
on your investment, as one customer equals two.
e Productocracies boast a pull which magnetizes
money and creates explosive leverage.
e Evidence of a Productocracy is customer
recommendations, reorders, fan mail, and favorable
social media posts.
Cre rien 2
Wise NOUEIS [RUINS EL =
THE ROAD LESS TRAVELLED HAS NO MAP, NO LIST, AND NO ESCORT
L, ife’s problems are problems for a reason: They’re
difficult to solve. And as the truth states, there is no
fucking list that will help you solve them. Whatever
specialized-unit you seek to offer or problem sought to be
solved, be warned. The No List Principle asserts that there
is no list, no exacting roadmap, and no mentor who will
hold your hand to a successful business. One-size-fits-all
solutions are marketing gimmicks and _ perceived-value
hustles.$26
Practically every week I see a post from a Jist-looker, an
aspiring entrepreneur who has this great idea, and now
they are on the hunt for this coveted and mysterious “list”
that will show them the exact steps to make it happen. If
your idea is some phenomenal invention or a new business
with just a few positively skewed attributes,°%2 it doesn’t
matter: There is no blueprint for its execution. If there was,
would it be an idea worth pursuing in the first place?
Be happy there is no list telling you what to do, how to
do it, and where to do it. This is your moat to stop the drive-
by entrepreneurs from entering your space. Remember the
Commandment of Entry within the CENTS Framework**?:
The more difficult it is to start and launch, the more potent
the opportunity. If it’s easy now, it will be hard later.
For instance, as I write this, selling on Amazon is the
current hot business-du-jour. As such, everyone is trolling
Alibaba, looking for some hot magical product that will put
them into seven figures a year while lounging on a beach in
Bali. Except, guess what? Everyone else is on Alibaba
looking for the same damn thing.
If someone is selling you “a list,” be wary: everyone else
is getting the same list, which means everyone else will be
your competitor.
Similarly, the most common threads at my forum are
book threads. What book do I read next? What book will
help me the most? The motive behind these book queries is
usually a combination of list-looking and _ needle
sharpening.?©’ While many books are helpful, ultimately,
most of them (including this one) are only dots, like
Signposts in an entrepreneurial wilderness. The chasm
between these signposts is your knowledge gap,°2? which
can only be closed with engagement: trial and error,
adapting, and skill-building. Seeing the dots is one thing;
connecting them is another.
KEY CONCEPTS
e There is no list that will give you the step-by-step
plan for success, and if there was, everyone would
have it, it solves no problems, or it’s a scam.
¢« Books, such as this one, only offer signposts in an
entrepreneurial wilderness.
THE BREAK ROOM RUSE
FRIDAY, JULY 7TH, 2017 - 6:55 AM
(2 DAYS LATER)
Two days later, Friday’s ride into work made Jeff terribly
uneasy. Outside of his T-shirt gaffe some months ago, his
wife generally liked his take-charge attitude. But he had to
admit it. The bluster and bravado he’d peacocked to his
wife was more illusion than reality.
He swallowed hard as the freeway traffic slowed to a
crawl. He mostly took the train to work, but today’s
experiment called for him to drive. As he remembered,
bumper-to-bumper traffic usually started at the Geico
billboard. That was at least four miles ahead. WTF?
He shifted in his Corolla’s cloth seat, which was dotted
with cigarette burns and reeked of them as well. He didn’t
smoke, but his older brother, who’d had owned the car
before him, did. Tension and anxiety needled his gut. He felt
moisture swell in his armpits, his antiperspirant no match
for the fear and apprehension he felt. A glance to his mirror
revealed a drop of sweat fleeing his temple. He rarely
sweated. But today felt different. Like sitting on needles,
the plodding traffic amplified his angst because it also
heightened the weekday pain he wanted to escape. But it
wasn’t the source.
His plan that day was to pull a lunch-hour ruse on his co-
workers. A covert operation. In his back seat were eight
quarts of his wife’s soup, the Asian Tofu Udon. At about
10:45 AM, his plan was to send an office email to all
employees at his workplace. The email would read:
Lunch on me! Free, delicious soup, first-come, first-
serve! Hey everyone, I got the entire office some tasty
Asian Tofu Udon soup from a new Japanese restaurant, help
yourself! Heat 2 minutes and enjoy. If you like it, let me
know as I know the owner! - Jeff Trotman (Audits - 402)
He wasn’t afraid of the ruse itself; he was fearful of its
outcome. He felt as if he was poking a bear. Would they like
it? Ignore it? Would the eight quarts sit there untouched?
Assuming half the office ate in the breakroom, he calculated
that eight quarts would be plenty. Perhaps too plenty.
As the traffic crawled into the city, the odd anxiety
swirled in his stomach and intensified with each mile. At
first, he compared the emotion with a drive to the dentist
for a root canal. But that wasn’t it.
Up ahead, the flickering lights of fire trucks and police
cars came into view. As Jeff approached, he saw an 18-
wheeler jackknifed in the opposite lane. Every driver
gawked. While an accident on Chicago’s freeways wasn’t
unusual, what was unusual was the spectacle it caused. Its
trailer was split open as if a superhero had ripped it apart,
its cargo splattered across the freeway. Fruit and their
sloppy innards painted the road a vivid orange. He guessed
it was mangos. When he crank-opened the dirty window of
his Corolla to get a better look, the sweet smell of
cantaloupe floated into the cabin. The scent was welcoming
and soothed his stomach, guiding his thoughts back to his
childhood summers. Before his brother went the way of a
juvenile delinquent, they’d spent a month at his uncle’s
cabin in Wisconsin. After swimming for hours, his aunt
would roll down to the lakeside with a platter of fresh
cantaloupe, watermelon, and other fruits he didn’t know
existed. The fruity aroma sparked a fiery reminder of what
he was working for... his family’s freedom. His childhood
summers were all about creative exploration. The ability to
do nothing or do everything. The kind of freedom that exists
only before the rat race steals dreams and bribes souls.
His youthful reminiscing also struck him with additional
insight. His apprehension and stomach pains weren’t about
fear, they were about judgment. Like the kind of judgment
when you go to a new school, and the principal stands you
in front of the classroom and says, “Boys and girls, meet
Jeff, he’s new.”
He left his window open until diesel fumes from passing
semi-trucks overtook the scent of cantaloupe. The fruity
fragrance disappeared, but so did his worries. Judgment,
fear of failure, all of this was just part of the process, he
thought.
Once he arrived at work, the morning’s workload moved
effortlessly. Instead of fearing the 10:45AM email, he
anticipated it. The message was armed, queued, and
waiting. He watched the seconds tick down to 10:45 on the
old-school clock outside his office, and on the button, he
sent it. Whoosh! sounded the “email sent” notification.
And then he exhaled relief and waited. And hoped.
A few minutes after 11, Hank peeked into his office and
knocked on the open door. About forty, Hank had the body
of a twenty-year-old Bulgarian weightlifter but the face ofa
sixty-year-old cardiac patient. His face glowed a deep shade
of red and acne scars pockmarked his square cheeks as if
someone had targeted it for BB-gun practice. With a gray
buzzcut and flat jawline, Hank could have been a military
drill sergeant. If not, Central Casting was missing out.
“Hey boss, where’s this new Japanese place? I googled it
and found nothing. That soup was dope.”
Jeff looked up and smiled. “Actually, that soup is from a
dear friend of mine who is starting a soup business. She
wanted feedback, so she asked me if I could put some in the
break-room for people to try.”
“She’s starting a Japanese restaurant?”
“No, a soup business,” Jeff answered. “Canned soup.”
“No shit? It didn’t taste like it was from a can.” He
scratched his temple. “So why does the carton say it’s from
a Japanese restaurant?”
Damn! Jeff reflected as he nervously tapped his foot
underneath his desk. He paused, realizing he didn’t really
plot this strategy thoroughly.
“She said she wanted an unbiased opinion and to see if
the soup could pass as restaurant quality.”
He laughed, “It did. Where can I buy a few cans, a
Trader Joe’s or something?”
“Not yet, she’s still working on getting them into the
stores. If you want to pre-order a few cans, I can tell her.
She’s giving 20 percent off on all pre-orders, four bucks for
a 12 oz can.”
Hank nodded and then swiftly pirouetted, exiting Jeff’s
office.
Damn! he thought again. Did Hank take offense to the
fake Japanese restaurant label? Or maybe it was because
he was acting as a middleman, something sounded scammy,
like an MLM, nota soup startup. Before Jeff could reach any
conclusion, Hank returned. This time he didn’t knock; he
stormed in and slammed his palm on the table. Wham! The
loud percussive noise rolled Jeff back into his chair,
knocking over the photo behind his desk. His co-workers
outside his window stole several inquisitive looks as if they
hoped to witness office drama. But there was none—only
triumph.
Hank announced, “Count me in for five cans.” He lifted
his palm, and a twenty-dollar bill was left lying on the table.
By the day’s end, Jeff would leave with $248 in cash from
eleven co-workers who would order sixty-two cans total.
He’d also get six interoffice emails about the soup, inquiring
about the mythical Japanese restaurant. With thirty-five
employees at his branch, Jeff thought eleven orders plus six
queries were phenomenal. Nearly half, he reasoned.
Moreover, he adequately explained why there was no
restaurant behind the soup. His “fib” was mostly met with
indifference. Only one person was angry—not because of
the experiment but because she was stoked about a new
Japanese restaurant opening. He profusely apologized in all
cases.
“But that’s not even the good news,” he chimed to his
wife after work. “I only brought enough soup for 24 people.
If 11 people asked about it, that’s nearly half a thumbs-up
rate. I don’t know what’s normal for the food business, but
that sounds pretty damn good.”
Seated on a kitchen stool, Sam legged a swivel toward
Jeff, her eyes narrow and arms crossed. “So let me get this
straight. You lied and said my soup was from some
restaurant? And then you didn’t even admit it was from
your wife?”
Jeff explained that he devised his ruse because he was
looking for solid, unbiased feedback. “When I deliver the
soup, I will tell them it is from my wife. I will explain
everything just as I explained to you.” He paused, but joy
was not dressing his wife’s face. He continued, “Put it this
way, Samantha: you buy stuff from friends and family
because you feel obligated, not because you like the
product.” He motioned downstairs toward the front door.
“We buy Girl Scout Cookies from our neighbors out of
obligation, not because we like them.” He snuffed, “Well, I
like the cookies, but you don’t.”
She finally softened and then asked, “Promise me you'll
tell them the truth.”
“T will.”
“To be honest,” she said after uncrossing her arms, “I’m
not surprised it was a hit. People at the hospital love my
soup too. But half your office liking it seems too good to be
true.” She flipped a blond lock out of her eye, her lips
pursed. “Wait a second. What if they went back for seconds
or had more than a serving? Then half your office didn’t like
it. Didn’t you say this Hank was a big beefcake?”
Jeff nodded. “Yeah, built like a brick shithouse. If anyone
ate more than a serving or two, then the percentage of
people who liked it would be less.” He scratched his temple.
Then, “Not sure if the data tells a story, but people liked it
enough to buy.” He held up cash, beaming ear to ear. “Our
first sales, baby! Should we frame it on the wall?”
Sam grinned like she was holding back laughter.
“I’m serious!” Jeff said, holding one of the dollars up
toward the 1/5/10 Planasy on the wall. “I say we pin this up
there to remind us why we’re doing this.”
“T don’t need a reminder,” she replied, “I just hope when
you deliver the product next week and tell the truth behind
your little trick, the,”—she raised her fingers in quotes
ae
—“‘the brick shithouse’ doesn’t put you in the shithouse.”
Creal S
Waele fe Pell GN le Wie HOP te
Pl UINES |e
PUSHING ETHICAL GRAY AREAS CAN FOMENT NEGATIVE SKEW
| n my first book, The Millionaire Fastlane, I mentioned
that I listed fake employees on my website. When my
business was growing, I hired my best friend for customer
service, and as such, there were many office jokes. One of
these jokes evolved with several fake employees being
listed on my website. As the months passed and the joke
faded away, I realized that these additional employees made
my company look larger than it was. This might have been a
skewS32 when others (or potential competitors) were
evaluating my business. I didn’t think much of it except
when I wrote my book years later.
Sometimes authenticity can bite you in the ass. What
some see as “rule breaking” others might see as pushing
the ethical envelope. As with many things in life, the Ethical
Envelope Principle affirms that ethics are subjective and
what one finds acceptable behavior another will find it
unethical. In short, there is no right answer.
After my book was published, I soon learned that some
readers found my “funny but fake” employees unethical,
despite my humorous motives. It wasn’t illegal but broke
unwritten rules. For some of my readers, my confession of
this practice turned into negative-skew.°3© While I have no
regrets, I completely understand their opinion. Whenever
you break the rulesS** and it becomes public, people might
take offense. Thus negative skew is created.
In Jeff’s case, using fake restaurant cartons to gauge
market feedback could create negative-skew with potential
customers, assuming they find out. Fibbing about “buying
lunch” also is a risk, one I wouldn’t take. The point is,
anytime you authentically break the rules and test ethical
boundaries, some will take offense. Ethics are subjective. If
you think an action might be ethically sketchy, here’s a rule
that I always use: If your action became public, would you
regret it, or would you need to apologize profusely? If yes,
it’s probably an action you should avoid. In my case, I
willingly broadcasted my “fake employees” story in my book
because I knew I meant no malice. Breaking rules doesn’t
mean breaking laws, but it could test the gray area of
ethics.
KEY CONCEPTS
e Ethical gray areas can create negative skew and lost
sales.
e If your questionable action became public knowledge
it would require an apology, it is probably something
you shouldn’t do.
CHAPTER 74
tae Ay MENTE R@W ES
PlmUINES | ee
MONEY TALKS, OPINIONS WALK
| n 2009, my friend was in pre-launch mode for a new
product in personal security. Tens of thousands of people
voiced an opinion on how great the idea was. He even
received national press. He presumed to be sitting on a big
winner. However, when it came down to actually buying the
product—spending the cash—buyers stood on the sidelines
with their wallets locked. Ultimately the product was a
failure. He validated the idea in the arena of friends, family,
opinions, and email addresses instead of in the arena of
proof—money.
The Payment Proves Principle asserts that in business,
the only opinions that matter are the ones attached to
money. Money is a verifiable vote. Of course, money doesn’t
have an opinion, but its possessors do. And when money
flows into your pockets, money is given a voice. It says, “Yes,
you’ve convinced me of value so here is my hard-earned
money.”
So, when Mom says your business idea sounds great,
don’t believe her. When Jimmy the bartender says your idea
about a new liquor line sounds awesome, be skeptical.
A trivial-validation is when someone voices a positive
opinion about your idea, including someone within your
target market. While trivial-validations might be
encouraging and feedback loop connecting,5*® they still
constitute an opinion, making it no better than buying Girl
Scout Cookies from the next-door neighbor. If trivial-
validation is the only data you have for your idea, that’s
okay. It just means your idea remains riskier and more
speculative than one with money behind it. Sadly, high fives
and Facebook likes don’t pay bills or put kids into college.
Trivial-validation can be exciting, and it can jumpstart your
business. However, the first milestone worthy of champagne
is when trivial-validation turns into cash-validation.
Cash-validation turns presumptions, speculations, and
hypotheses into truth. Money is the only thing that validates
an idea 100 percent: a sale, a pre-order, or an investment.
While an email address is the next best thing to a payment,
it’s still trivial. Yes, you can work with a massive list of email
addresses, but ultimately those email addresses need to
convert to cash. Just like done kills doubt,’42 payment
proves. And in the competitive marketplace for ideas,
money constitutes an official vote at the ballot box. Winning
polls doesn’t make victors; winning elections does.
KEY CONCEPTS
The only proof of a valid idea is actual cash-
validation, or money—pre-orders or sales.
Trivial-validation is any favorable response that isn’t
money—an email address or likes and comments.
An idea supported by trivial-validation is riskier than
one validated by cash.
Likes, comments, opinions, and email addresses
don’t pay bills.
CHA EER?
PE FORGIVENESS eR INGIP RE
LET RELATIVE-VALUE FORGIVE YOUR SINS
D ave’s Killer Bread was co-founded in 2005 by Dave
Dahl, a high school dropout, an ex-meth addict, and a
convicted felon. If you’re not familiar with Dave, he
successfully relaunched and rebranded his family’s bread
business. It went from a floundering local company to a
national brand in thousands of stores worldwide.
He didn’t allow his negative backstory to dampen his
enthusiasm or steal his future. Instead, he leveraged his
story as a part of his value-skew and brand, organic, non-
GMO, healthy bread. Dave’s Killer Bread was acquired in
2015 for $275 million. And now, one-third of Dave’s
workforce are ex-convicts, making their hiring practice a
piece of their branding skew and world-changing mission.
The point of this story is The Forgiveness Principle: If
you offer the world something valuable, the world doesn’t
ask about your past transgressions. Relative-value is utterly
ignorant to your faults and historical failings, or your life
demerits.
A life demerit is anything that you perceive as
detrimental to your self-worth as a person or an
entrepreneur. It’s that negative voice in your head
promoting the negative narrative so your dead dream can
stay dead.
In any transaction where you are the value provider, the
only thing exchanged is money. Buyers don’t ask for your
college transcripts or your credit scores. They don’t ask
about your bad driving record, your loveless marriage, or
your last five failed businesses. They don’t need a play-by-
play on your last church confessional. Everything—from
excuses to misdeeds—all are blasted out the window. When
you have something people want, you’re never too young,
too old, too broke, too uneducated, too straight, too gay, too
white, too black, too short, too introverted, too this, or too
that. Can you solve my problem and at what price? Ex-cons
take note: value wipes the slate clean.
Please don’t confuse this with negative skew®°—
negative skew is advertised and public; life demerits are
private and personal. When someone has what you
desperately want or need, their backstory can fade to black.
In the case of Dave’s Killer Bread, their relative-value
proposition wasn’t lifesaving at all—it was freaking bread. It
proves that all our excuses about why we can’t get started
are all self-funded delusions. When you have what the
market wants, you’ll earn more than money; you can earn
an unseen and unadvertised benefit: redemption.
KEY CONCEPTS
¢ If you offer relative-value, the world generally
ignores your past transgressions and personal faults,
or life demerits.
e Seekers of value don’t know (or ask) about your life-
demerits—if you have what the market wants, money
will flow.
e Relative-value is incredibly redemptive, especially for
those with troublesome histories.
JOSIE ee RiEN DEY tG@ Mir Ei @iNe
SATURDAY JULY 15TH, 2017 - 8:44 AM
(8 DAYS LATER)
The next week, on an early Saturday morning, the
Trotman’s would repeat the soup experiment. This time, it
would be Sam at the hospital. The break-room soup-drop
would be minestrone. Sam reported that the minestrone
from Harlucci’s Italian Deli was a second-shift favorite at
Mercy when she worked those hours, so it was a good
gambit to push minestrone to the third shift.
By the end of her night and into the morning, she had
nothing to report. While some ate the soup, no one asked
her about it. When she came home that morning to tell Jeff
the bad news, she found him at the kitchen table behind his
beefy desktop computer. To his side were an HP printer and
a multi-slot attaché, an old-school adding machine, and a
stack of papers with Neve on top. Soft jazz spirited the
background.
“This your new office?” Sam questioned.
“Our office.” He peeked up from the computer and then
glanced at the whiteboard on the wall with the framed
dollar bill. “I need an actual office, a real space that
reminds me of our goals.” He muddled his lips. “Our little
desk in the bedroom wasn’t working. Whenever I go in
there, I feel like sleeping, not working.”
Sam scanned the table. “Not a lot of room to eat.”
He motioned to the other half of the table and the two
empty chairs. “There’s plenty of room. I don’t mind eating
at the counter or behind the computer.” He started clacking
at the keyboard and returned his gaze to the screen.
Sam dropped her bag on the table with a noticeable
thud. Jeff’s head didn’t budge, but his eyes peered up. He
noticed her hair was straggled; her black scrubs she
normally wore was replaced with hospital-grade mint
scrubs. Jeff noticed the overnight change of clothing and
beckoned, “What happened to you?”
Sam laughed, “Oh, just another day at the office. One of
my patients had an excavation site cave in on him, burying
him alive. Everyone in the ER was covered in mud and I had
to change.”
Jeff’s eyes widened. “Dead on arrival?”
“No, no.” She winked. “The medics saved him.”
Jeff nodded nonchalantly and then threw her a pointed
look. Sam knew what he was asking without him saying it.
And for the next two minutes, she told her husband the bad
news. The minestrone experiment at the hospital was a
failure. Sam clarified, “I’m sure it’s the work hours. People
on the third shift have strange appetites. The wee-morning
is more suitable for donuts and coffee than minestrone.”
Jeff surprisingly brushed it off. “Not a big deal, I’ve been
getting quotes for production and we’re looking at
thousands of dollars per SKU.”
Her eyes narrowed, puzzled. Jeff smiled deviously and
asked rhetorically, “Oh, you want me to explain?”
“Yes, but please, no mansplaining. I have a degree in
nursing, not an MBA.”
Jeff clarified, “A SKU is each soup flavor we produce. The
minestrone is a SKU, the Asian udon, the creamy potato; we
only have money for one SKU. And since I already presold
24 cans of the Udon, our decision is simple. Your Asian udon
is Our winner.”
“How much are we looking at?”
Jeff looked at his notepad. “I’ve talked to three co-
packers. The smallest minimum order quantity is 100 cases.
Each case has 32 cans.” He flick-tapped his pen on the table
and continued, “No one would give us an exact price until
seeing the recipe, but we’re looking at a fixed cost as low as
$1.19 per can or as high as $2.30. At 3200 cans that’s about
$3800 on the low side and $7,360 on high.”
Sam’s mouth gaped, her face shocked. After grabbing a
handful of pistachios from the bowl on the kitchen table,
she said, “That’s our entire emergency fund. We’ll need to
dip into our retirement accounts.”
Jeff nodded. “I figure we use half our emergency fund
and don’t touch the retirement account. We put the rest on
your Visa. Mine is still hurting from my T-shirt accident.”
She cracked a couple nuts and tossed them into her
mouth, unfazed. “I don’t understand,” she said, chewing.
“Why can’t I just cook for myself to get started? That way
we can afford as many SKUS as we'd like.”
“Tt’s against the law. You can’t sell food cooked from your
home kitchen.”
Sam shook her head. “No, I’m not talking about our
kitchen, but a kitchen we rent.”
“Rent what?”
Sam laughed. “You want me to girlsplain?”
He smiled weakly and then nodded. Sam continued, “We
rent a commercial kitchen.”
Jeff froze and looked up. “There’s such a thing?”
“Yes, and I’m not talking about one of your co-packers.
My cooking shows I watch on TV always mention them. We
can find a commercial kitchen that rents by the hour and
we can cook our own small batches and start selling small
from there. Maybe we can get some good feedback before
we make a big order with a co-packer.”
Jeff wedged back in his chair, rubbing his forehead
almost embarrassingly.
Unsure of he was stunned or just confused, Sam leered
at him. He broke the silence with a hillbilly singsong. “Well,
gawd damn.”
“What?”
“T didn’t know that. Strong work, darling. This makes
things a lot easier. We can really tinker with the recipe
before committing big dollars to a large order. You want to
be in charge of finding the kitchen since you’re the one that
will be in it?”
“No problem.” She smiled then walked into the kitchen
to the coffee maker. “What are we thinking of naming the
business?”
She poured herself a cup.
Jeff shrugged. “It’s probably one of the most important
decisions we’ll make. It needs to be perfect, something that
embodies a mission.”
Sam interjected excitedly, “How about Kindly Kind
Kitchen? Our mission is to be kind, and all our soups will be
vegan and responsibly sourced. And I want a portion of our
profits to go to an animal rescue or some type of charity.
And I want our label to be earthy and happy.”
Jeff butted in. “Whoah, hold on. Lots of ideas but I don’t
think Kindly Kind Kitchen is a good idea.”
“Why?”
“Duh, Kindly Kind Kitchen? What if we have a bunch of
lazy customers who don’t want to say all that and instead
say KKK? KKK is a bad association, and I don’t think we
need to have that type of implication lingering around our
brand.”
A light-hearted flute melody started playing from
Madison’s bedroom, an odd juxtaposition with the current
topic.
“Good point,” Sam admitted. “I never thought about how
others might perceive the name, just how I wanted it to be
perceived.” She sipped her coffee then asked, “How about
Happy Farms?”
Jeff shook his head reluctantly. “It’s not bad, I guess. Just
doesn’t move my meter much, and we don’t own a farm.
Don’t think we should settle for anything but the best.”
“Hmm, how about Vegan Varieties?” Sam offered.
“Not bad again, but we should avoid the word ‘vegan’ as
it is another word that could have negative associations.”
Sam retorted loudly, “It’s not negative!”
“Listen, Sam, I’m not talking about the word and what it
means to your other vegan friends. I’m talking about non-
vegans. Say vegan to a non-vegan and they immediately
think dry, bland, chewy, and tasteless. Had I mentioned our
soup was vegan at work, we probably would have lost half
our sales. Let’s just stick with the word plant-based. That
way we can appeal to a larger audience and not alienate
others.”
She set her cup down on the table. “You’re right.” She
begrudgingly nodded and smiled. “Again. You’ve been on a
winning streak, and I don’t like it.”
He dropped Neve to the table. “Let’s give the business
name a week or two to think about.” He hesitated then
smirked wily. “In fact, I say we turn it into a competition.”
Jeff, always the competitor, loved beating his wife in trivial
matters: who could hold their breath longer, who could
balance an egg on their forehead, a round of corn hole in
the backyard. Whenever she’d lose at something, no matter
what it was, he’d blame her vegan diet, alleging she was
missing protein or fogging her brain up with too much tofu.
Of course, Sam cared about Jeff’s impromptu competitions
as much as she cared about dairy farmers. Jeff declared,
“The person who thinks up the business name gets an hour
massage from the other.” He rubbed his hands together,
devilishly, and then added, “For every week for the next
month.”
She popped another pistachio in her mouth with
confidence. “Deal.”
lala Pela: 6
THE ENVIRONMENTAL
HACKING STRATEGY
CHANGE THE WEATHER TO MAKE PROGRESS EASIER
&
M y 600 Pound Life is a reality show on the A&E
Television Network featuring morbidly obese
patients and their struggle to lose weight. Anytime I watch
it, I want to throw my drink at the television screen. Even
rationed viewings destroy my faith in humanity.
Anyway, the goal for the patients on the show is to lose a
moderate amount of weight. Then they can get approved
for gastric bypass surgery. Most of the patients fail at
sustained weight loss, even after the surgery. Every failure
shares a commonality, and I’m not talking about excessive
junk food consumption. After Dr. Nazzicharian warns the
patient of the mortal urgency for a proper diet, they go
home to an environmental nightmare.
Every failure is preceded by an environment that doesn’t
encourage change, but a continuation of the status quo.
Each patient is surrounded by enablers consisting of
friends, family, and even parents. My favorite is that the
family claims support for their obese family member but not
enough to stop filling the house with Oreos and Ding Dongs.
Oh, we love Johnny and don’t want him to die of a heart
attack, but we don’t love him enough to stop buying the
junk that is killing him.
In one case, the poor man was 850 lbs. Mostly
bedridden. Couldn’t walk through doors. Terrible
lymphedemas. But the most disgusting and frustrating
thing of all wasn’t this man’s plight. It was that his mother
enabled him.
Oh, he gets angry if I don’t get him what he wants.
Are you fucking kidding me?
Your kid is eating himself to death, and your only
concern is to not make him mad? You want your four bacon-
double cheeseburgers? Great, I won’t be your courier; go
get them yourself. It’s like trying to rehabilitate an alcoholic
in a bar or a crackhead in a crack house.
Even after losing 200+ pounds and getting the help he
needed, this poor guy above ended up suffering a heart
attack and dying on the show. Tragic but not unexpected.
But hey, at least his mother didn’t make him angry, and she
was helpful enough to bring him two loaves of bread, six
perogies, and three bags of Skittles.
If you want any chance at success, from weight loss to
Unscription, your environment must be engineered to help.
Not hinder. It’s called environmental hacking.
For example, I never write unless my workspace is clean
and organized. Over the years, I noticed a pattern in my
writing effort. If I wrote in a cluttered and disorganized
workspace, my writing would also suffer from similar chaos.
Worse, no writing would happen at all.
If your goal is to eat carrots every day, your environment
will largely determine success or failure. If eating carrots
means a daily visit to the store, I’m betting you'll fail. The
target goal is environmentally inconvenient. If you bought a
big bag of carrots and laid them in the middle of your
refrigerator, I’ll bet you’ll meet your goal. One environment
is designed for failure, one for success. This is why
bodybuilders prep their meals a week in advance: they’re
reshaping their environment to make goals more
attainable.
The first key to manipulating your environment is to
understand that you have the power to do so. Yes, your
setting can be controlled. But only when you’re willing to
confront your sacred excuses.
For instance, my life has two chapters. My life in Chicago
was the depression chapter. The dream chapter began in
Arizona. I recognized young the need for sunshine in my
life. I changed my location and hence, changed the weather.
But before doing so, I had to embrace the change dyad**2
and confront my sacred excuses...
Oh, you can’t leave Chicago, you grew up here!
You don’t know a soul in Arizona!
But you won’t see your family for months on end!
Once I realized every excuse was not a real reason for
staying, I left. I knew I needed the sunny weather to
succeed. Without it, my career as an author would not exist,
and to be honest, I’d probably be strung out on Prozac due
to a vitamin D deficiency.
The point is, manipulate your environment so that you
move probability toward success.5°9 Find the city that
empowers you to seek excellence and new skills.P?9 Apply
to a startup incubator. Tweak your grocery list and arrange
your refrigerator so you eat the best diet. Find the gym that
gives you the best workout. Planet Fitness is brilliantly
branded as a non-judgmental gym for those who don’t want
to be around grunting bodybuilders and bare-waisted
fitness models. Their value-skew is _ literally an
environmental hack for the self-conscious. Surround
yourself with people who uplift your goals and don’t belittle
them. If your friends are Scripted rat racers who troll your
dreams, it’s time for new friends, or keep them a few zip
codes away. My forum has thousands of people who are
pursuing Unscription. Visitors get a daily exercise in
environmental manipulation.
You can’t win a race towing a wagon filled with bricks.
You know your optimum environment—find it or make it.
Never ignore it.
KEY CONCEPTS
¢ If you want to improve your chances at success, hack
your environment.
e Environmental hacking makes positive action easier
and progress-stalling inaction harder.
Clave ela: 7
INKY SEE IEINES
Pl UINES 2's
TWO FINICKY FELINES DOESN’T MAKE A MARKET
C hristmas 2020. I purchased an expensive cat condo for
my family’s two house cats. After the large box arrived
on our doorstep, we spent an hour putting it together. This
cat-tree came equipped with ladders, dangling mice, and
private cubby holes perched high in the sky. I almost wished
I was a cat. After finishing, we placed the towering tree
next to the cats’ favorite window and then watched. And
waited. And waited more.
Within minutes, my cats both started fighting over the
new item in their space. Except they weren’t fighting over
this lavish cat-tree, they were fighting over the cardboard
box it came in. Fast forward a few weeks, and they still
haven’t touched the cat-tree, but damn, they sure love that
box!
I mention this story because my cats’ behavior best
symbolizes how you should approach any market: like a
room full of finicky cats. Remember, magnetizing money°2*
doesn’t involve chasing cats, but making them come to you.
Whenever you poke the market, or what I call the
marketmind, you'll never know what comes back at you.
The marketmind represents the total market that should be
interested in your product. My cats should like a cat-tree.
The Finicky Feline Principle is a reminder that even the
best products or services will have a considerable breadth
of dislikers.
Whenever you interact with the marketmind, dangling
cheese, baiting worms, or offering soup, expect your share
of finicky cats. You expect one thing (They'll love this cat-
tree!) and get another (Darn, they love the box, not the
tree!) Many times, these unexpected outcomes don’t reflect
a true market consensus. And false flags may appear in the
form of negative opinions or indifference.
Think of it this way.
The marketmind is like the stock market. Outside of a
few companies, the market moves as a holistic entity based
on macroeconomic and geopolitical events. The market can
be up two percent for the day while one stock is down 40
percent. Yes, a plummeting stock is a tiny piece of the
market whole, but it doesn’t prove the consensus. It’s like
taking the Pacific Ocean’s temperature in Costa Rica while
expecting it to be the same in San Francisco.
As such, when your product interacts with the
marketmind, you never know if you’re getting an accurate
consensus of the marketmind or just a tiny reflection of a
few individuals. Furthermore, the marketmind only reacts
on the basis of perceived-value.
A phrase I always preach to aspiring entrepreneurs is
this: Not everyone loves coffee. Despite coffee being a
global $150+ billion-dollar business, not everyone finds
coffee tasty. If you harvested the most delicious coffee on
the planet and offered it to someone who simply doesn’t like
coffee, you'll get rejected. As a collective, nobody can
predict how fragments of the marketmind will react to a
given stimulus: your advertising, your product, how your
customers use your product, customer service, brand, and
packaging; everything is a variable! This is why business
plans are about as accurate as monkeys throwing darts at
the stock pages.
The best you can do with the marketmind is to go fishing
and see what happens. Drop a piece of cheese into the rat
race construct and then watch. When a marketmind
fragment expresses an opinion about your offer, apply the
3A Method.*°° Is there something actionable or skewable?
S32 Ts it someone who doesn’t like coffee? Is this opinion a
pattern reflective of the collective or a random stock? Is
there meaningful-validationS®? to outweigh negative
opinions? Don’t let two finicky cats make you errantly
believe that the other 63 million cats in the world would
rather have a $3 box over a $300 cat-tree.
KEY CONCEPTS
e The marketmind is like a stock market, but instead of
representing all stocks, it represents all people who
are in your target audience.
e One opinion represents a tiny piece of the
marketmind, but it doesn’t prove the consensus.
e Not everyone loves coffee represents a divergence in
the marketmind from the consensus, which may or
not be known.
e Marketminds react holistically on the basis of
perceived-value, not necessarily to true- or relative-
value.
A BRAND IS BORN
MONDAY, JULY 24TH, 2017 - 4:44 PM
(9 DAYS LATER)
Home from work early, Jeff found his wife lying atop their
bed. She was wearing nothing but her Ritz Carlton
bathrobe as if she were chilling at the spa. Her hands were
clasped behind her head as if she’d just had the best sex of
her life. Monday was her day off, so it wasn’t unusual. But
she wasn’t watching television or reading a book; she was
gleaming with a shit-eating grin. Jeff looked around,
confused. “Where’s Maddy?”
“Band practice.” She twirled her hair. “She’ll be home in
an hour, RyRy.”
Jeff’s eyes flared wide with anticipation.
“You feeling frisky?” He quickly loosened his tie.
“No, keep your shirt on.” She snickered. “I’m actually
feeling stiff.” She rubbed her neck and sat up, maintaining
the grin. “Our bet. You lost and I want my prize.” She
gestured to the nightstand. Jeff spied a bottle of massage oil
and an exfoliating brush.
He frowned and then sat next to her on the bed, glaring
at her intently. “Wait a sec, we have to agree on a business
name. You don’t win just because you say you win. We
haven’t discussed anything.”
She laughed again, “Oh, I win. Because I found the name
of our business and our brand story. It isn’t just good; it’s
excellent. And if you don’t like it, I’m firing you as CEO. And
as a husband.” She tried to flick her forefinger on his
temple, but he jerked away.
He let loose a dramatic sigh. “Fine, let’s hear it.”
Sam folded her legs like an eight-year-old about to
reveal a secret. “Heroic Kitchens.” Jeff’s nostrils flared but
he said nothing. She repeated, “Heroic Kitchens. It’s
perfect. Any time someone buys one of our soups, we will
donate a portion of the profit to an animal at a rescue
sanctuary.”
Jeff’s frigid stare remained. He asked, “You’re allocating
our profits when we don’t even have any?” He grimaced,
but Sam’s smile remained. Jeff carried on, “So you want to
donate a portion of our profits to animal shelters like the
humane society or the pound? That is”—he said rubbing his
face—“assuming we even make a profit?”
Sam said, “No, we’re not donating profits toward pets,
but animals who somehow escaped the meat trade—cows,
pigs, chickens, any animal who we can give a story and a
name to.”
“So we’re rescuing farm animals?” He shook his head.
“I’m confused.”
“No, not like that.” She angled closer. “There are
hundreds of animal sanctuaries around the world. Many of
their rescued animals have incredible stories of survival. A
lot of them need medical attention, or at least food. We
simply sponsor one of the animals and include that as part
of our mission. I say we even go as far as putting the
animal’s story on our labels, so the customer knows exactly
who they are helping when they buy a soup from Heroic
Kitchens. We can fill our website with these stories, a list of
all the animals we help. And we’re helping people be
healthy. It’s the perfect business that makes a difference.”
Jeff restrained a nod. Sam continued, pace quickening,
“And with a name like Heroic Kitchens, we can move into
other plant-based lines, like snacks or cookies. Maybe even
ice cream. Not just soup!” Her husband sat silent and shook
his head, glaring at the floor. Sam’s felt her chest get heavy,
anger swelling into throat. This name was perfect, and Jeff
was feigning indifference. Her smile melted into a dead
stare.
Jeff slapped his palms on his knees and then lurched up
from the bed, frowning.
“What? You don’t like it?” Sam rebutted, anger creeping
into her face. Jeff unbuttoned his shirt and threw it on the
floor. Confused, Sam scowled, “Uh, what exactly are you
doing?”
He walked to the nightstand shirtless and grabbed the
bottle and the exfoliating brush. “I’m thinking I don’t want
to get massage oil on my good shirt.”
He climbed on the bed and commanded, “The CEO of
Heroic Kitchens wants you to disrobe.”
CoARTER 73
ele Mer SON AEN: ANIC
PURPOSE SiTRAIVEGY
HUMANIZE YOUR CORPORATION WITH A PERSONALITY AND A PURPOSE
&
S ome years ago, I sold my Lamborghini. After a mild
summer with plenty of sunshine, I realized that I no
longer drove it. Yes, it sat in the garage collecting dust.
When I first bought the Lamborghini, the brand resonated
with my Unscripted, “defy society” identity. I saw it as a
symbol of divergence and uniqueness. But it also
represented gaud and ostentatiousness. For me, as an
introvert, those traits were not desirable. I sold it because
as I aged, I preferred obscurity over unwanted attention.
I tell this story because all successful brands do a great
job at honing a corporate personality and a purpose that
ratifies their customer’s identity. As consumers, we don’t
want to do business with corporations; we want to do
business with entities who have relatable stories to ours. Or
we do business with brands that affirm our identity or
purpose.
In my case, the Lamborghini brand and what it
represented didn’t change—my identity did.
Productocracies®’! go hand in hand with a powerful
brand image. Behind every disciple,5°9 a clear brand
identity reinforces loyalty. Branding, however, is a
complicated business—so complicated that people make
careers of it. For amateurs, branding means a slick logo, a
pithy slogan, and some gold-foil stationery. For experts,
branding is more... Jt is the art of personifying a business
with human qualities and characteristics, so it reflects or
affirms your customer’s identity. A well-executed brand
identity reinforces your customer’s identity and, as a result,
becomes a value-skew°*? in the buy decision.
Consider the brand Harley-Davidson. How would you
describe their core group of customers? Risk-takers or
conservative “play-it-safe” types? If you live YOLO and
carefree, would buying a Harley enhance your identity or
damage it? How about Nike? As a highly recruited athlete,
would a fortune spent on Nike clothing arm your identity or
weaken it? How about the person aspiring to get fit? The
Nike brand becomes an extension of identity. Think about
how these brands weave into identity: Louis Vuitton, Apple,
Wrangler, Ferrari, Volvo.
While branding isn’t within this book’s scope (there are
many books on the art, and it is an art) it starts with
profiling your target customer’s identity. Who is your
perfect customer? What do they wear, where do they live,
what does their life look like? What goals do they have, or
who do they aspire to be? From there, give your business a
personality and a mission that would affirm or build on that
identity. Would a vegan or an animal lover like to buy soup
that also donates money to rescue shelters? Absolutely. The
company’s mission goes beyond the product and is purpose-
driven with an identity as if it were an actual person. And
because its target customer shares a similar identity, skew
and brand value is created.
People are loyal to brands and relationships, not
corporations or businesses. Make your business feel like a
person with a soul and a personality. Build friendships, and
those friendships will turn into money.
KEY CONCEPTS
e The more your corporation is “branded” like a
human personality, the more the marketmind will
view your business favorably.
¢« Your brand personality should affirm or strengthen
your customer’s identity, creating an additional
value-skew.
e People naturally want to do business with people, not
faceless corporations.
Cie ite ine? 2
ine GeCopisnN FGeob
aNOUGirl PRINCI RIL =
AIMING FOR A “GOOD” LIKELY ENDS IN A MEDIOCRE
* [he day I wrote this principle, I received one email that
grabbed my attention. Now mind you, between my
forum and my books, I get dozens of emails per day, from
testimonials to solicitations to administrative nuisances.
This particular email had the following subject line:
Your books are more valuable than my MBA! (No, not kidding!)
When I opened the email, a reader (thanks, Chris!)
reported that my books were more valuable to him than his
major university MBA. He went on to say the following:
... | have gained more practical and valuable business knowledge
and actionable ideas from these books (and from reading the posts
on your forum) than I did from my entire MBA program...
..these are not just books; they are invaluable reference
manuals too. My journey to Unscripted begins today.
As you can see, this reader believed my work delivered
tremendous value. He would classify my books as
“excellent.” Such an email is_ indicative of a
Productocracy®’! as well.
I tell this story because if you want to succeed at
anything in life, you have to do good work. Or better,
excellent work. That doesn’t matter if you’re a lawyer, an
entrepreneur, or a short-order cook.
Sadly, the secret to “good work” cannot be found on the
Internet. In fact, if you go on the hunt for it, you'll instead
find the gateway to mediocrity.
Let me explain.
Ever hear the cliché “done is better than perfect?” Or
the variant, “perfect is the enemy of good?” Google the
“perfect enemy” phrase, and you’ll get 184 million page
results. The good folks parroting this platitude aren’t saying
anything new or novel, and they aren’t helping you build a
Productocracy. Remember, 99% thinking won’t get you 1%
results.
Here’s the big problem: Perfection is often confused with
excellence. As such, people don’t shoot for the stars, they
shoot for “good enough.” The “Good Isn’t Good Enough”
Principle asserts that if you aim for good, your likely
outcome will be mediocrity or worse, poor. How likely? My
guess is about a whopping 84 percent chance. The fact is
whatever performance standard you target becomes your
best-case scenario. Think about that.
If I want to make $10,000 more next month or lose ten
pounds, these targets become my best-case results. Hence,
they become outlier outcomes. If we plot potential
outcomes on a normalized distribution curve, the “best
case” would be at the flat end of the bell curve.
Mathematically, it’s a two, or worse, three standard
deviation outcome. However, the expected results occur in
the curve’s meat—the middle. The “meat,” or the center of
the bell curve has a 68% probability of occurring. Simply
put, if you make “good” your target, you subconsciously
handcuff yourself with a 68 percent chance of producing
mediocrity. Worse, you strap yourself with a 16 percent
chance of producing garbage.
When "GOOD" is the
goal, it becomes the
"best-case" scenario
or an outlier, and
"EXCELLENCE"
Likely outcome
JUNK POOR GcooD EXCELLENCE
MEDIOCRITY
—_——— _———__ = —_—_—_
16% 68% 16%
"GOOD" IS THE GATEWAY TO MEDIOCRITY
The answer to the plague of good is simple: Target
excellence as your best-case scenario. Make excellence a
goal. Don’t confuse this with perfection. Excellence is about
doing the best you can do. Once excellence becomes your
objective, then the middle of the bell curve shifts to good,
the most likely outcome. Mediocre and poor also shifts,
nearly becoming improbable, a one- and two-standard
deviation outcome. This is how you end up with the “good”
in our trusted aphorism.
When "EXCELLENCE" is
the goal, it becomes the
“best-case scenario"
or an outlier, and
"GOOD" becomes the
likey outcome.
Likely outcome
POOR MEDIOCRITY GOOD EXCELLENCE LEGENDARY
16% 68% 16%
"GOOD" IS THE GATEWAY TO MEDIOCRITY
So how do you aim for excellence? Treat the minor
details of your project with excellence, and the major result
will turn out pretty damn good. For instance, writing
excellent scenes is guaranteed to give you a good
screenplay. Writing excellent code subroutines and
functions will get you good software. Not perfect, maybe
not even superior, but good enough to incite markets and
maybe hit a Productocracy.
When minor details are approached with a “good
enough” philosophy, your major outcome will likely degrade
to fair, or poor. The sum of the fair parts doesn’t create
excellence, much less good. Twenty mediocre scenes won’t
make a good screenplay. The result is ineffective relative-
value®2®, And that doesn’t sell inventory, it doesn’t
magnetize money, and it certainly doesn’t create value-
skew.
For example, here’s how I approached excellence in
writing this book. I role-played as if I was a college senior
with weeks before graduation. To graduate, I absolutely
need an “A’ on a short life principle that might help a new
entrepreneur succeed. Every chapter in this book is written
with this premise: Make it an “A” or don’t pass and
graduate.
With this performance strategy, I know many readers
will think my book, the final outcome, is good. Some, like my
reader Chris with the MBA, might think it’s excellent. And,
of course, some will think the book is just okay. But here’s
the hook... very few (2 percent) will judge the book as
sucks. Moreover, I can sleep well knowing I did my best,
regardless of the market outcome.
Target excellence and shift your potential outcomes.
Good becomes probable, mediocrity, improbable.
KEY CONCEPTS
e When you target “good” as a goal, you make good
the best-case scenario.
e If an action-series were standardized on a normal
bell curve distribution, the “best case” outcome
becomes an outlier, and the expected outcome is the
middle, or mediocrity.
e If you aim for good, you are 84 percent likely to
produce mediocre or worse work.
e If you aim for excellence, you are 68 percent likely to
produce good work, and a significant portion of the
marketmind will find value in your work.
IPA De Olt ey [Pee Byasi
JANUARY 1ST, 2018: 12:01 AM
(5 MONTHS, 8 DAYS LATER)
“3 -2-1- Happy New Year!”
A crowded dance floor of drunken partiers cheered in
celebration. Confetti rained from above, blotting out the
massive steel and glass windows which plated the dark sky.
A stranger next to Samantha blew a whistler far too close to
her ear, but she didn’t care.
The Trotmans kissed and then hugged, their long
embrace immune to the revelry around them. The crowd
jumped and yelled like newly minted lotto winners. Jeff
stood back and eyed his wife’s protruding belly. He held up
his champagne and gestured a toast. After another long
kiss, they slow-danced, despite the frolic circling them. The
rowdy crowd chorused Auld Lang Syne. Sam gazed into her
husband’s glimmering brown eyes, a clue he also felt the
scene. She rested her head on Jeff’s shoulder as if they
were in the third verse of Open Arms by Journey. She
whispered, “I can’t remember the last time I was this
excited about a new year.”
When the Trotman family first decided to start a
business nearly one year ago, they didn’t expect to be here.
Not this soon, especially after false-starting with a knife
sharpening business. How they ended up at a New Year’s
Eve party at the Grand Hyatt was a story in itself. Even in
tight financial times, they were closer to their dream than
they could have ever imagined.
Their failed knife sharpening idea was soon replaced by
a vegan soup business, a clear gap in the market that Sam
identified as a vegan herself. Better, they had a recipe that
was proven to be damn tasty, as verified by both vegans and
non-vegans alike.
Still, their business barely had $17,000 in sales. With
startup costs and many mistakes, their company also lacked
a profit. Furthermore, they weren’t ready to hire a co-
packer. After Sam located a commercial kitchen, she was
cooking once a week, canning, and labeling. Many obstacles
still laid ahead, but many were overcome. They were
overjoyed by their progress. They both felt alive. Mornings
weren’t as disquieted. Food tasted better. Their real jobs
were more tolerable. Life had optimism and hope.
The last six weeks leading up to their celebratory New
Year’s Eve was a blur. Jeff had extra time to devote to the
business because of the holidays while Sam cashed in
vacation days. During that time, they solved one problem
after another: from their brand positioning to authoring a
story behind the company to getting a website launched
with order-taking ability.
Their credit cards hemorrhaged at the growth, and the
$33,000 they had saved over five frugal years was now
down to $21,000—not because they’d spent it, but because
December was a blood-bath for the stock market. When the
Trotmans saw their balances decline from the increased
volatility (and the loss of control surrounding it), it steeled
their resolve. Still, their frugal ways adopted in their “lean
years” now played a significant role—instead of money
going into a market they couldn’t control, it was going into
a business they could. They aimed for those mysterious,
asymmetrical returns.
Still, their burn-rate could have been worse. Jeff almost
overpaid a “web developer” $6,000 to build an eCommerce
website. Neither Jeff nor Sam had a clue about how
eCommerce websites were made, so the $6,000 price tag
seemed reasonable. After Sam did an hour of research, it
turned out their web developer was simply installing
WordPress with a WooCommerce plugin, something they
could do on their own. If not, they could hire someone very
inexpensively to do it. Certainly not $6,000. Bullet dodged.
Then a failed Kickstarter campaign cost them money.
Despite paying $997 for a terribly expensive crowd-funding
training seminar, the Kickstarter project didn’t meet their
threshold goal. Jeff followed the tactics precisely as
suggested by the training materials, but it failed to deliver
any meaningful sales. Jeff wasn’t sure if he had been
conned by a bro-marketer or just failed at marketing
messaging. He lamented, “Hard to sell a taste they can’t
taste.” He wanted to try again with a new campaign angle;
Sam wanted to try a new channel. They would need to
decide later.
Then a big disaster came as an unfortunate surprise.
After canning, their soup only had a shelf-life of 15 to 17
days. No one got sick; thank the rancid smell for that. But it
was their first major problem, an unnerving one that shook
the foundation of their resolve. But it didn’t last long. Sam
solved the issue just days later. Because they didn’t hire a
co-packer (or have access to their consultants), Sam hired a
food chemist for one hour. She discovered all the details on
flavoring and preserving secrets, what spices to use and not
use, what plant-based food is susceptible to spoiling
quicker, and other tricks of the trade. “It was the best $250
I ever spent,” she recalled. And she was right. She tweaked
her recipe, and the soup stopped spoiling.
Meanwhile, Jeff started implementing one of his
marketing ideas: exhibiting at weekend craft fairs and art
shows. Since it was winter, he only found two to attend. The
first one was an epic failure, one for the Guinness Book, if
ever such a world record existed. After six hours, Jeff had
sold exactly zero cans of soup. Yes, zero. Foot traffic wasn’t
a problem, the place was jam-packed, and Jeff ran out of
business cards. “Business cards don’t pay bills!” Sam would
later heckle when Jeff reported 190 disappearing business
cards as a ‘bright side.’
Sam had named the company, exposed their near-fatal
website hire, and solved their spoiling soup problem. As
such, Jeff felt his biggest challenge was getting out-hustled
and out-smarted by his wife. Sure, they were a team, but he
wanted to be the Captain Kirk of their business. Hopeful for
a different outcome at next week’s craft fair, Jeff knew
something had to change. He had to assess the problem,
then adjust. As the old saying went, it’s insane to expect
different results when you repeat the same thing. So he
changed tactics.
Next week at the fair, Jeff would sell out of every can of
soup he’d had in stock—120 cans total in two hours. He’d
leave early with nearly $600 in sales, a far cry from the zero
cans sold last week. A drastic change in tactics changed the
outcome drastically—all because Jeff gave a free sample to
anyone who walked by.
As Jeff left the craft show early, his chest fluttered in
excitement and anticipation. A smile was plastered on his
face that didn’t crack the entire drive home. He thought to
himself, This soup is like a drug—all I have to do is get
someone to sample it, and they’re hooked. As he sped
home, he saw himself jumping on the mattress like a pre-
teen boy with tickets to a new Star Wars flick. His small win
at the craft show fired something in his soul that went
beyond monetary rewards. It was a passion and a tolerance
for the process, a self-respecting peace knowing he was
making a difference. Working on his business was now a
habit, as much as watching Cubs games had been ten years
ago. And though he still had a thankless job as a thankless
auditor at a thankless company, that job suddenly became
more bearable. It was no longer the ends; it was the means.
And yet, all these feelings curiously confused him. He
wasn’t passionate about this plant-based stuff like his wife.
But he was on fire for this business and what it
represented. It gave his life a purpose and a direction, all
while the world found value in it. He couldn’t imagine what
he’d feel like if he sold millions of cans, not hundreds.
When Jeff returned home from the art fair, his wife was
seated on the couch with Madison watching TV together.
Jeff laughed as he saw The Brady Bunch airing, specifically
the episode where Jan gets biffed in the face with Greg’s
football.
Jeff dropped his briefcase and asked, “So is this what you
guys do when I’m gone, The Brady Bunch?” Sam put her
hand on Madison’s knee, a signal to pause the TV. Sam
glanced at the clock on the microwave and then scoffed.
“Oh, boy.” She grimaced. “You’re home early. That can’t be
good.”
Jeff grinned and threw his hands in the air, releasing a
wad of money that rained like confetti. Madison giggled and
leaped up from the couch and tried to catch a few bills. Jeff
continued, “Sold out baby! In only two hours!” He firmly
fixed his hands on his waist as if he was about to battle a
rival rapper. “Check. Your move.”
Sam smiled incredulously, but her eyes twinkled. Jeff’s
competitive insecurities were amusing, if not ridiculous. Jeff
gyrated his hips flamboyantly as if he was pole dancing.
Sam chuckled. “My move? How about we celebrate at the
Hyatt on New Year’s? You can educate the peasants on how
you made it rain money.” She hesitated and then motioned
to his hips, still pulsating in ridiculousness. “And if you want
to get lucky, I suggest you leave your goofy dance at home.”
That New Year’s Eve was the Trotmans’ first “paycheck”
from their business. Of course, none of them took a
paycheck, but it was their reward. As the last confetti fell,
they continued their embrace until Jeff retreated and faced
his pregnant wife. As if divine timing was paying attention
to the moment, the song changed, a more fitting melody to
their mood: Eric Clapton’s Wonderful Tonight.
He smiled and asked, “May I have this dance?”
She pulled him close. “You may do as you please.”
CHAPTER 80
Niele (GOED SIVAN Sone eG
CELEBRATE VICTORIES COMMENSURATE WITH THE WIN
&
| n elementary school, good work was rewarded with a
gold star. In business, you need to do the same. Every
expensive car I’ve ever owned, from Vipers’ to
Lamborghinis, has been a “gold star” gift to myself. While
your build your business, it’s essential to reward yourself,
even for the small wins. It might be months, perhaps years
before you can draw a steady paycheck. The same applies
to asymmetric returns. As such, you'll want to reward
yourself for milestones reached. Here are some milestones
you should celebrate.
Your first prototype
Your first product ready for sale
Your first successful import, if applicable
Your first sale
Your first great review
Your confirmation of a Productocracy (a big
celebration!)
Your first profit, even a few bucks!
Your first polymorphous pay
Your first paycheck
Your first employee
Your first lucrative partnership or distribution
agreement
Your first profitable month
Your first profitable year
Your first sign of asymmetrical returns
A business valuation that exceeds $1 million, $5M,
and beyond
e Your net worth exceeds $1 million, $2M, $5M, and
beyond
e Your liquid savings exceed $1 million, $2M, $5M, and
beyond
e You sell your company
Obviously, the cost of your gold stars shouldn’t endanger
your progress or limit future options. Rewards could be a
massage, a nice dinner at a restaurant, a weekend
staycation, or a New Year’s Eve party. Better, a reward that
fits into your 1/5/10 Planasy*!2 is a great idea. Once the
asymmetric returns begin, the gold stars can get more
extravagant, and you can start crossing off 1/5/10
milestones.
KEY CONCEPTS
e Celebrate personal and business victories with “gold
stars,” or rewards commensurate with the victory.
e Rewards should not endanger or regress your
progress.
e A reward that fits into your 1/5/10 Planasy is a great
reward.
Clue Melrt |
Welle ie GIN intele 3S) nwa eGne
HUNT FOR FRUIT TREES, NOT PEELED FRUIT
of
| read a book recently about business growth strategies.
Much of it, while entertaining, was peeled fruit tactics.
For instance, one startup grew by hacking Craigslist—while
that worked in 2011, it doesn’t work in 2021. Likewise, if I
wrote a book detailing how I built an Internet business from
zero users to millions, most of it would not be very helpful.
The methods and strategies I used five years ago, much less
fifteen years ago, are peeled fruit tactics. What’s actionable
today, most likely, won’t be actionable tomorrow.
The unfortunate reality we face as entrepreneurs is that
actionable advice has the lifespan of peeled fruit. Once the
fruit is peeled, and marketers get a hold of it, the clock
starts ticking. Within years, sometimes months, that
particular strategy stops working.
While some peeled fruit is worth investigating and
deploying, most of your growth will come from fruit trees.
Fruit trees are new strategies, mediums, or channels that
haven’t been mass promoted into the mainstream. And you
only uncover them via the 3A Method®°°. If there is a new
social media platform that isn’t yet mainstream, there’s a
good chance it could be an emerging fruit tree ready for
exploit—years ago it was Facebook, then Instagram, then
SnapChat, then repeat forever... Remember, change is
constant*** and is the launching pad for new millionaires
and billionaires.
For instance, on my forum, an entrepreneur posted his
experience finding a fruit tree: legal voice-mail marketing.
He reported insane ROIs. Within days as people discovered
the fruit tree, the thread grew to three pages, and dozens
of comments as people rushed in to use it. At some point,
the tactic will become adapted and overused. The “insane
ROI” will disappear.
Once the tactic becomes saturated, peeled fruit
marketers swoop in and sell the strategy as some super
cool new marketing tactic. These marketers will often use
fresh fruit tree tactics to sell their past, rotten fruit tree,
which has now become peeled fruit. Once their current fruit
tree loses its effectiveness, the whole process repeats—find
a new fruit tree to sell the older one that no longer works.
Meanwhile, they make a fortune selling the cycle. There’s a
good chance that Jeff’s $997 Kickstarter Masterclass was a
peeled-fruit strategy. I’ve yet to hear of any entrepreneur
who exploded his business because they paid $4997 for a
super-secret marketing tactic plus six free bonuses. As
entrepreneurs, we have to be on the prowl for any strategy
that can grow our business, peeled fruit, or otherwise. Just
be wary of marketers selling marketing strategies—you’re
better off observing their methods over buying them. You
don’t want to invest $10,000 in a fruit tree when in truth,
you’re getting peeled fruit about to go rotten.
KEY GONCEPTS
e« Strategies and tactics that work today won’t work
tomorrow.
e Usually, effective strategies of yesterday (peeled
fruit) are packaged into expensive programs and
marketed as effective strategies of today.
e Fruit trees are unique marketing strategies or new
media channels not bastardized by internet
marketers and guru schemers.
Gale [lela te
ale Be MICS Tava IGN
SI RAlEGY
DEMONSTRATION IS GOLD, DESCRIPTION IS DIRT
&
* [be last time you bought a car, I'll bet you test drove it.
The last time you sprung for some cologne or perfume,
I’ll bet the same thing. You smelled it. Roll the towering
corridors of Costco, and you’ll smell tasty morsels at a
sampling cart staffed by a grandmotherly attendant. Eat in
the aisle, pay at the cashier.
The most powerful sales strategy for a Productocracy*’!
is a demonstration. This can be a video walkthrough, a free
trial, or a free sample. The Demonstration Principle serves
to minimize risk, present pre-purchase value, and foster
reciprocity. It’s like arming the sales process with a laser-
sighted rifle.
The first demonstration perk is risk elimination.
What is more likely to compel a sale? A sign in the
window that reads, “Our Unscripted Cookies are a
decadent mix between creamy peanut butter and rich dark
chocolate imported from Belgium,” or a free sample? End
risk for your potential customer, and you’ll grab more sales.
In this case, eating a sample before buying guarantees that
the customer’s relative-value®2® expectations will be met.
The second perk is it allows your customer to see what
life is like without your value. If your customer freely
samples the product and instantly loves it, you win a sale
along with a guaranteed non-return occurrence. Trust
comes before lust. And if consumers are lusting after your
product(s), you could also charge a slightly higher
premium.
In the application and video game _ business, a
demonstration is the industry’s backbone with the
“freemium” business model. Here’s how: 1) get your
customers to try it for free and 2) get them hooked, so they
want to pay for it. A video game that has you entertained or
enthused in minutes will hook you into paying. My business
also used the freemium tactic long before freemium was
even a buzzword. My most significant value-skew,°%2 the
Unique Selling Proposition, or USP allowed advertisers to
try my service risk-free. Getting advertisers to join was a
breeze because, at the time, the industry standard was “Pay
100 percent upfront.” My customers only paid when I sent
them a customer. My purpose was demonstration: give
potential clients a risk-free evaluation and hook them into
paying for the service only after they found valuable
customers.
No matter what you’re selling, you must apply some
form of demonstration. In the infomercial business,
potential product placements that can’t be demonstrated
are principally rejected. Without the demonstration’s visual
power, these big infomercial companies know that they’re
going to war with sticks and stones. You have to go into
battle with the laser-sighted rifle.
In another example, my publishing company gives away
the first five or six chapters for every book I write. My
purpose is to reduce the risk for my reader. After a chapter
or two, a potential reader should know if they like the
content and my voice. Second, I’m trying to hook them. In
every book I write, I pay strict attention to the early
chapters because that is where the demonstration occurs.
It is where the sale is made or lost.
The final demonstration perk is reciprocity. Psychological
studies show that if you do something free for a stranger,
they are more likely to return the favor. While the other
bullets exude more sales power, everything helps.
Studies have reported that the power of demonstration
is impressive. One firm said that beer sales were boosted by
71 percent when national retailers hosted beer sampling.
Frozen pizza samples? Exploded sales by a whopping 600
percent!4 Mind you, this is what corporations are willing to
reveal. It’s unlikely that any company would announce a
sales strategy capable of spiking sales by hundreds of
percentages.
Of course, none of this matters if your product is
garbage. Demonstration and its results can often be the
first sign of a Productocracy, or lack thereof.
KEY CONCEPTS
e A Productocracy’s most powerful sales tactic is
demonstration.
e An effective demonstration lowers or eliminates
customer buying risk, gets buyers hooked, and taps
into reciprocity—all of which improve probabilities
for sales.
e« The “freemium” business model is a form of
demonstration, particularly in video gaming.
CAR GER 65
elle (GAMINUF IG AIIOIN Save Giir
PLAY LIFE LIKE A VIDEO GAME TO BE WON
&
LJ mnereas of aspiring entrepreneurs visit my forum
daily where they freely post their questions and their
struggles. A common struggle voiced on my forum is video
game addiction. A phenomenon once_ reserved for
teenagers, we now have grown adults joysticking their lives
down the drain. And they can’t stop. My unscientific theory
into this epidemic is a combination of three things. First,
video games are a coping mechanism for the realities of rat
race life. Just like junk food, sports, and television. Second,
video games can be played in relative comfort’? where
failure is anonymous and consequence-free. Fail at a video
game, and you press RESET to try again. Success is
marginalized to a RESET button, all while eating pizza and
reclining on a La-Z-Boy. Third, and most importantly, video
games are designed for addiction. Like most coping
mechanisms, addictive components fire our feedback
loop,®*® giving us a false sense of success. These are the
Same elements that drive success and _ transformative
passion, spiking dopamine. Once you taste fictional success,
your brain wants more.
The more I study technology, religion, and science
(quantum physics is a real mind-bender), the more I
wonder if life is a technological simulation. All of us could be
avatars for some advanced civilization, and God isn’t some
ephemeral bearded man on a throne but a pimply-faced
teenager who pressed the “ON” button. Regardless of what
you believe, our reality is what we process through our five
senses. And those senses should be telling us that life has to
be more than working five days a week for half a century,
paying bills, and then dying.
Once you realize your role in the rat race religion,?°
your goal should be crystal clear: Win your freedom and be
happy in its pursuit. Yes, happiness NOW, not LATER. Attack
entrepreneurial life as if it were a role-playing video game
(RPG). Do so, and you move probability®°? because the
same “leveling-up” mechanics apply. In any RPG, you have
to become a problemologist’?° to advance through the
game. As such, you’re continually investigating, identifying
problems, acting, assessing, and adjusting®®°°. As skills and
resources accumulate, so do your opportunities and their
results.
Many RPG video games are a team effort involving
parties. A warrior will join with an elf who offers
complementary skills. When the warrior can’t cast a spell,
he joins with a_ wizard. Likewise, to win at
entrepreneurship, you'll also need a team: employees,
freelancers, contractors, joint venture partners. In
business, wherever you are weak or in need, hire or
outsource. Many entrepreneurs want to “do it alone”
because they also want control or fear delegation. Going it
alone might win some battles, but it rarely wins the war.
Finally, the game of entrepreneurship is riddled with
resets and game restarts. No one wins the game on their
first play. They play and repeatedly fail until skills are
honed, learning is done, and wisdom grows. Over time, your
character builds and gets stronger. Problems are solved
more comfortably, gold starts to accrue, and bigger wins
are scored. Leveling up is one step closer to a rat race
escape. And then one day you'll discover, hey, my life is so
incredible I don’t need junk food, television, or video games.
KEY CONCEPTS
e Video gaming is endemic to how dismal and hopeless
life is for most people.
e« Video gaming is destructive because it allows
unlimited anonymous failure while stimulating our
dopamine centers with fictional success.
¢ Look at life as a real video game with problems to
solve, rewards to be won, teams to build, and
freedom to obtain.
CINE GIANT Sle FOr
TROTMANKIND
MONDAY, MARCH 5TH, 2018 - 10:11 AM
(63 DAYS LATER)
Beachball in her belly, Samantha was weeks from birth.
Instead of taking unpaid maternity leave, she opted for a
lighter workload, going from four days a week to two. The
extra days gave her time to work on the business. Jeff
continued to utilize his lunch hours, often cold-calling
distributors and other “whale” accounts. Without a
dedicated full-time employee, progress was slow, albeit
steady.
The sun peeked out from the gray sky for the first time in
months. Despite a brisk temperature that couldn’t crack 60,
spring freshened the air. Sam glanced out the window and
saw convertibles with dropped tops. People walked about
without jackets. After five months of unmerciful Chicago
cold, 59 degrees might as well be 82. She texted Jeff: Sunny
day = good omen.
Like a changing season, the Trotmans entered a new
phase in their business. And new phases come with new
risks. Today was the big day: Their first order with their
selected co-packer, two SKUs costing nearly $10,000 for
100 cases each of Asian Tofu Udon and Creamy Potato
Bisque. After weeks of sampling and about a dozen FedExes
back and forth with their co-packer, they finally got their
two recipes nailed down. While their co-packer wasn’t the
cheapest, they offered organic ingredients plus storage and
fulfillment. Shipping two skids of bulky cans from North
Carolina to Chicago and storing them in a townhouse
garage was, as Jeff put it, “amateur.”
Since their New Year’s Eve celebration two months ago,
they’d cautiously moved ahead. Now, hard decisions needed
to be made. While their sales were growing, it was a slow
crawl with peaks and valleys. While five or six orders a day
from their website was encouraging, it put them in a gray
area. They weren’t selling enough to warrant a big order
with a co-packer, but they were selling enough to make
Sam’s weekly visit to the commercial kitchen a royal pain in
the ass.
“This is starting to become a chore,” Sam reported. “You
know I love to cook,” she said to Jeff, “but these weekly
visits to the kitchen are starting to take their toll.” Jeff
followed with a confession of his own. “I haven’t been
marketing as much. I know every sale means less inventory,
and less inventory means you need to go back to the
kitchen. And with you being on the verge of birth, you need
to start going easier, not harder.”
Sam agreed. “Yes, I don’t think we can continue with this
‘dip our toe in the water’ strategy. We need to dive in and
just do it. Freeing me up from the kitchen will also give me
more time to get our message out. I’d like to implement
that influencer strategy you mentioned.”
Most of their sales were coming from the unlikeliest of
places, their businesses’ social media accounts, Instagram,
TikTok, and Facebook. Sam would post soup photos or make
plant-based memes and tag them with vegan-related tags,
and like clockwork, two or three sales would trickle in with
each post. The strategy’s effectiveness had Sam considering
hiring a marketing and public relations firm, at least until
they wanted a $15,000 retainer.
In the meantime, Jeff was trying to secure commercial
wholesale accounts.
They understood that their venture’s real growth
wouldn’t be from occasional website sales but in getting
their soups on the store shelves where plant-based soups
are virtually non-existent. Jeff cold-called and emailed food
distributors, but no one was biting. At this point, he would
have loved to hear back from someone and get a literal
rejection instead of a literal ignore. It seemed as if the food
industry was like a high-school clique; if you weren’t sitting
at the cool-kids’ table in the cafeteria, you had to fight your
way there or do something shocking. But for Jeff and Sam,
they felt they were being ignored. According to Jeff, always
the numbers guy, the soup had a 50 percent conversion
rate on anyone who sampled it. But Sam wasn’t sold on that
metric and reasoned it was an anomaly. She argued, “The
old ladies at Costco who do the free sampling are always
fighting off a mob. And a lot of that junk is processed. I’m
afraid you’re just catching people when they’re hungry.”
But she would later become a believer. Jeff showed her
their customer list, which at the moment was just under
4,000 people. “See these marks?” He pointed to a column
on the spreadsheet. “Those are repeat buyers, and
according to the numbers, our reorder rate is already at 21
percent. And we don’t even know if the other buyers
already ate the soup.”
This data sold Sam, combined with a slew of emails from
random strangers raving about the soup, statements like
“OMG it’s about time!” or “My carnivore husband loved it!”
It was time to charge ahead.
When it rolled into the lunch hour, Sam’s phone rang.
“It’s done,” Jeff said flatly on the line as if he’d just made an
appointment for a prostate exam. “Next month you’ll have
an $8,900 charge on your Visa. We’ll have to dig into
whatever's left of the emergency fund.” He paused. “By this
time next week, we’ll be the proud owners of 6,400 cans of
soup.”
“T thought our first order was going to be ten thousand
dollars?” Sam asked.
“IT begged the manufacturer to do better. Told him how
we’re a struggling small business living in a dump.” He
laughed. “Guess he felt sorry for us and waived the credit
fees plus gave us a three percent discount.”
“Nice,” she said, walking over to the window and moving
the curtain aside. The sun was even brighter, the melting
snow reflecting its rays into a blinding sheen.
“Well, I should get back to work,” Jeff said. “I loathe
thinking about that credit card bill when it comes next
month. Between the Fed-Exes and the kitchen rental, we’re
near our limits.”
“Or you can look at it from the bright side like today’s
sunshine,” Sam stated. “When we sell all those cans, we’ll
quadruple our revenue. And have $25,000 in profit to buy
more. And who knows, maybe pay some of it off.”
She paused and then glanced at the whiteboard on the
wall. She spoke forcefully. “Remember Jeff, it’s nail and
scale, not worry and scurry.”
CHAPTER 84
Wale ee Ole Zie| iO) es)
Pl UINES Le
DON’T FEAR MORE ZEROES
| once found an uncashed check in my car for $11,000. As
I told this story in the first Unscripted book, the check
was squashed between my seat and the center console.
After I got over the shock of not missing it for a month, I
could only smile. I’d made the Leap of Zeroes many years
earlier. When I started my business, a two-zero expense,
say $500, was a lot of money. Now, it is about as significant
as buying a Slurpee from the Quik-Trip.
At some point in your evolution from consumer to
producer??%, you will need to make a Leap of Zeroes. Like a
leap of faith, The Leap of Zeroes Principle is an inflection
point in your business when bigger decisions with bigger
price tags must be made. This could be new equipment,
hiring new employees, a warehouse lease, or a seven-figure
loan. My first Leap of Zeroes was years ago when I was
broke. I spent thousands of dollars on a premium domain
name. At that point in my life (and business), it was the
largest purchase I had ever made, and making it felt like
going “all in.”
If you’ve ever swum in a cold pool or a lake, you know it’s
better to just dive in. An inch-by-inch “toe-dip” creep into
the frigid water prolongs the pain and amplifies the fear.
Furthermore, it also gives you a chance to talk yourself out
of it. At some point, you need to steel your loins and just
jump.
If your business proves to be a Productocracy*®’! while
showing signs of leverage?!’ and asymmetric returns,°>?!
don’t fear making the Leap of Zeroes. And yes, it will feel
like a huge risk. But it isn’t when given some rat race
perspective... Investing $10,000 on two skids of plant-based
soup is risky, but financing $50,000 over six years on a new
Chevy Tahoe isn’t? As they say, people spend more time
planning their week-long vacation than they do planning for
their financial futures.
The problem is your transition from consumer to
producer doesn’t automatically cancel the scarcity mindset.
It doesn’t cancel your memory of financial struggles. It
doesn’t swap perspectives on what constitutes a good
investment... buying soup to build a business? Or buying a
Tahoe to build your ego? When you’re taught to pinch every
penny and save every dime, the idea of spending $10,000
for a business venture seems foolish. Risky. Outlandish. This
is normal... but expected.
So how do you know when a Leap of Zeroes is needed?
Two criteria: 1) Reasonable and 2) Necessary. First, the
expense must be reasonable. There is nothing unreasonable
about buying inventory for your new business. It is also
necessary. Without this “leap,” the Trotmans cannot move
forward. Most often, a Leap of Zeroes is required to move
the business to the next level. This is an important
distinction—some large expenses are neither reasonable
nor necessary. Yes, spending $15,000 to retain a public
relations firm might help the business. But is it reasonable
and necessary? No, neither.
When significant sums of money with more zeroes
appear in your life, both on the expense and revenue side,
it’s part of the Unscripted process. If you don’t fear the
zeroes in business, then the zeroes in your personal life will
also start to change. And one day you might find yourself
unfazed at finding five or six figures stuffed in between the
seats.
KEY CONCEPTS
e At some point in your business, you will need to make
a “Leap of Zeroes,” which is a large expenditure that
is required to move your business forward.
e A “Leap of Zeroes” expense should be reasonable
and necessary.
e As your business grows, so will your personal “Leap
of Zeroes” by way of larger numbers—more income,
more saving, and more taxes.
Cla Mele ks
Wiel MUNIN Ede: Tey) 4 Cllete ls
STRATEGY
HIRE YOURSELF FOR SECONDS AND GET PAID MILLIONAIRE RATES
&
| once earned $180,000 an hour. I kid you not. Here’s how
I did it, and here’s how you can make a similar rate of
return on your time. Every few years, I host an annual
Unscripted conference at a beautiful resort in Arizona. If
you haven’t hosted a fairly large event at a hotel before, let
me be clear. Everything is overpriced, from food to
audiovisual equipment. Before you guess that I profited
$180,000 in ticket sales, let me correct you pronto. This
conference is basically run at cost, and I barely draw a
profit.
As I prepared for the conference and reviewed my order,
I noticed a line item for curtains that backdropped the
speaking stage. It was a whopping $1,500. My jaw dropped.
I immediately fired off an email to the event coordinator. I
asked, “Can you do better for this price? $1,500 for
curtains is a bit exorbitant for a curtain rental, considering
we’ve hosted this event at your venue for many years.”
The event coordinator was happy to remove the $1,500
curtains from my bill and still provide them. Boom! Just like
that, 30 seconds earned me $1,500. If you “hourlyize” that
rate of pay, it comes to a staggering $180,000 an hour.
[30 seconds X $1,500 = $3,000 a minute]
[$3,000 a minute = $180,000 an hour]
If someone offered you a temporary job that paid
$180,000 per hour for some risk-free work, would you take
it? You would instantly, as I would too. That fact is, anytime
you’re about to spend money, hire yourself. Take a few
seconds, at most a minute, and seek a discount, a promo
code, or a negotiation. If you’re successful, you will earn a
staggering return on your time, usually an hourly rate that
amounts to thousands.
Last year, I purchased a software subscription that
retailed for $129 a month. Before I clicked “Submit” on the
order page, I did a quick internet search for a coupon code.
I found one that discounted the service to $89 a month.
Within thirty seconds, I saved $40. If you “hourlyized” the
return on my minor fragment of effort, thirty seconds, it
amounted to a return on time invested to a whopping
$4,800 per hour.
[30 seconds X $40 = $80 a minute]
[$80 a minute = $4,800 an hour]
And because it’s a monthly subscription, the 30 seconds
continually pays $40 in savings every month. Seconds of my
time kept $40 a month in my pocket, residually for as long
as I remain a customer.
Hiring yourself also goes beyond coupon codes and
Internet shopping. As Jeff was faced with his first order’s
daunting cost, he asked for a better price. Those seconds
paid handsomely. Negotiating for a new car or a new
appliance? Uttering the phrase Is that the best you can do?
only takes seconds, but the hourly return on those seconds
can amount to hundreds, if not thousands. In real estate, a
few days of patience can yield tens of thousands of dollars.
Whenever you make a purchase, hire yourself, and aim
to get it for less. No, you’re not cheap, but you do want an
instant payday at millionaire rates of return. Keep in mind:
This is a defensive strategy,?!3 and the game is won on
offense. However, money is still money. Not seeking
millionaire paydays is no different than tossing money out
the window of a moving car. Transform tiny blocks of your
life into millionaire paydays, and one day, you will be a
millionaire.
KEY CONCEPTS
Anytime you spend money, hire yourself and earn a
huge rate of return.
Combined with an offensive approach, negotiating in
all circumstances can earn huge rates of return,
usually at millionaire pay rates.
Searching for coupon codes, having patience, and
merely asking Is this the best you can do? can save
you thousands and earn you a huge return on your
time.
EFFIN’ GRANDMAS?!
MONDAY, MARCH 12TH, 2018 - 3:01 PM
(7 days later)
Before the co-packer could pack their order, Jeff and his
wife noticed an immediate shift in their approach. While
they were already committed, they went from a brisk walk
to a sprint. Having 6,400 cans of soup stored in a North
Carolina warehouse (and a pending credit card bill) added
another layer of seriousness. Jeff would mention, “Can you
believe we’re doing this? It feels surreal. My stomach is in
knots, and I’m not sure if it’s excitement or fear.”
But with each day, each order, and each email raving
about the soup, the excitement would chip away the fear.
Until one day, it simply disappeared. They had a new normal
working alongside their current jobs; Jeff would deal with
operations and wholesale acquisition, Sam marketing and
outreach. Their business amounted to a second job, but
oddly, they didn’t quite equate their business work with
actual work.
Jeff would spend lunch hour at his job submitting orders
into their fulfillment processor. If there was any time left
over, he’d make a call or two to a food distributor or a
specialty grocer. On the days she worked graveyard, Sam
would spend the later hours of her afternoon prospecting
and marketing. On her days off, Sam would work the
business in the afternoon and evenings as if it were her own
job. Jeff tasked her to focus on plant-based influencers with
a large social media presence. They learned fast that when
an Instagram or YouTube user raved about the soup, it
would generate instant sales directly proportional to their
followers. The first time it happened, an Instagram user
with 3,900 followers posted a photo of the soup and raved
about it. It generated 12 sales nearly instantly and ended
up being one of their biggest sales days.
When it happened again a mere four days later, the
Same math repeated. Someone with 11,000 followers
generated 41 sales... Another new record.
Once Jeff analyzed the numbers, he remarked, “Oh my,
it’s like printing money. We just need slew of influencers to
taste it.” If anyone raved about the soup on social media,
Jeff deduced that minimally one-third of one percent (.003)
of their followers would buy. He barked more numbers at
Sam. “If we can get one of these skinny soy-boys with one
million followers to plug us, we can sell 5,000 cans in a
matter of minutes. At a $2 margin, that’s an instant profit of
$10,000, for mere minutes of work!”
Sam shook her head and then glared at her husband’s
douchebaggery, remarking rhetorically, “Soy-boys?” She
crossed her arms. “Mr. Jeffrey Trotman, let me warn you.
You can’t be saying stuff like that. If one of our customers
heard you, we’d be done in a flash.”
His eyes peered over the desktop computer still parked
on the kitchen table. Sam saw his face flash worry. He
reclined back in his chair, his lips contorting into mush.
“Crap, you’re probably right.” He paused then clarified,
“When I was at work and gave Hank his soup order, he
laughed when I told him the soup was vegan. He said, ‘Wow,
I liked soup for soy-boys?! Amazing!’”
“No need to explain, Jeff, I forgive you. Try to remember
you’re the CEO of a company now, not a playground bully.
Be mindful of what comes out of that mouth of yours.
Strangers who feel betrayed won’t be so forgiving.”
Two days later, they would get their first big break. Sort
of. It was a call from Philadelphia. It wasn’t a big break in
terms of money—the order was only for one case—but it
was more of a beaver dam breaking, complete with a
message from the beaver. When Sam got the call from Papa
Tony’s Italian Deli at 5 PM, she couldn’t believe it. She
asked for clarification. “Pardon me if this is none of my
business, but why would an Italian deli in Philadelphia want
to order a plant-based soup?”
“South Philadelphia,” corrected the man on the phone in
a Rocky-like ‘Yo Adrian’ Italian accent.
“T’m sorry,” Sam offered, “South Philly. You get a lot of
requests for vegan soup?”
The question drew silence. Sam imagined the man on
the line to be about 300 bills, a jogging suit that had never
been jogged in, and a pinky ring to round out (no pun
intended) the look.
As the silence hung, Sam wondered if her question
crossed a line or if it was just “Yo Adrian” thinking.
The deli owner finally spoke, almost sounding
remorseful. “We get a lot of old people asking for it. You
know, grandmas and stuff. So I found you on the interwebs.
Came up on the first page.”
Sam threw the phone a puzzled look. “Older people are
asking you for vegan soup?”
“Yeah, yeah...” he said but broke into a negative, “but I
don’t think they like it. I had a few tell me they want it for
their grandkids. Mrs. Carlucci told me her grandkids won’t
eat anything with meat in it. And if they can’t eat at
Grandma Carlucci’s, they won’t visit Grandma.” A pause,
then louder, “Can you imagine that? How do you go to
Grandma Carlucci’s and not eat her meatballs? They’re to
die for. Those grandkids of hers, they should lop off their
damn fingers for showing such disrespect.” He scoffed. “No
meat, my God, what’s this world a-coming to?”
Sam didn’t comment but thanked the man and took his
order. It was their first wholesale account, but more
importantly, it hinted at just how many tentacles they had
working for them.
After Sam hung up, she uttered under her breath,
channeling her husband’s piss-poor impersonation of Al
Pacino, “No shit, effin’ grandmas.”
Cheba le at cio:
Wels (PlRlels CUS OMe
S I RATEGY
FIRE WHEN YOU TIRE
of
¥ ears ago, I remember a customer in California who
would call several times a week and occupy hours of
customer service time. When billing rolled around, she’d be
back on the phone contesting every line-item, bit-by-bit,
minute-by-minute. After several months of dealing with this
melodramatic client with too much time and obviously not
enough work, I asked the rep to investigate her average bill
size. It amounted to about twelve bucks. Specifically, I was
paying someone five hours at $25 an hour to “manage” this
person as a boss and as a customer.
I whipped out my “nice but firm” writing style and ended
the relationship. Keep your $12.87; I’ll stop spending $125
trying to earn it.
Fun fact for business owners: Every current and
potential customer is your boss. The bosses pay you for
work, or in our case, for our relative-value. However, what
isn’t often considered is how much value do our bosses
bring to us? If it isn’t enough, fire them. When they bring
you more trouble without the marginal benefit for that
trouble, dump them.
What few realize is that business transactions are a
mutual agreement between two parties and then a value
exchange. When one party is aggrieved, and the balance
goes out of whack—on either side—someone must fire the
other. If you’re paying me $20, you expect at least $20 in
value. If I come up short, I get fired, and you go to another
company. But on the flip side, if you’re yielding $10 in
revenue but costing me $50 in expenses and/or ball-busting
drama, you’re going bye-bye.
Because most consumers have been bombarded with the
conventional wisdom the customer is king, many customers
go instant asshole, then instant apeshit when something
isn’t right. The customer is king mentality has given them a
license to treat business owners and their employees like
used cat litter. This happens often on my forum. When it’s
clear a user is trolling my forum to distract and disrupt,
posting such statements as “You’re all wasting your time”
or “You'll never get rich,” I have no problem removing
them. They’re not visiting my forum for enlightenment or
business building.
In another example, I once had a paying customer call
me a fraud in several forum posts because I didn’t return
his email within two hours. Mind you, he sent the email at
6:27 in the evening. Because I eat dinner like every other
human on the planet, his request for a refund was not
answered within his expectation profile,S°9 which turned
out to be “as soon as I fucking send it.” After waiting an
hour, he decided to have a temper tantrum. When I read his
request (about three hours after his first email), I promptly
refunded his money. Then I promptly banned him. Sorry,
but your $59 doesn’t give you the right to libel me while
dropping a stink-bomb inside my house—in the words of our
most loved/hated ex-President, You’re fired! Refund? Hell
yeah, how fast can I do it?
But MJ, that isn’t SUCS as you preach, you’re a
hypocrite!
No, champ. When I tire, I fire.
Don’t believe the lie. Customers aren’t kings, they’re
presidents—and presidents can be booted out of office with
just one vote... yours.
KEY CONCEPTS
e« Your boss is your customer, and they can fire you,
but you can also fire them.
e Fire problem customers when the value they bring
sinks below their cost.
Caves elt ei
Vinle (nN SIGs Slave eG
THINK CONSEQUENTIALLY AND EXPOSE PROCESS-KILLING CHOICES
&
| n 2012, a medical-device CFO making $200,000 a year
thought he’d score some internet points by videoing
himself berating a Chick-fil-A employee at a drive-through
window. The two-minute YouTube video went viral and
stoked a national outrage. When the dust settled, he was
fired from his job. The man also lost over $2 million in stock
options and, as of March 2015, is now unemployed and on
food stamps.
One bad decision can invalidate thousands of good ones.
Pete Rose bet on baseball, and his life was forever
changed. Tiger Woods crashed his Lincoln amid a marital
infidelity cover-up, and things were never the same.
Michael Richards, known for playing Kramer from Seinfeld,
used racial slurs during a stand-up comedy routine and lost
his reputation instantly. Bill Buckner erred in the World
Series, tarnishing an outstanding baseball career.
What’s the common thread in all these stories?
One event can destroy a process. Even one you didn’t
intend. An action lasting minutes can kill a process that took
you decades to build. The process builds the event (I finally
got my CFO dream job!) while an event (Let’s berate this
minimum wage employee!) tears the process apart.
Yes, one reckless decision can ravage your life or destroy
your business in an instant. A one-night stand can kill a
marriage. An inappropriate slap on the butt to an employee
can destroy a career. And a drunk driving accident can ruin
lives. An action that spans mere minut es destroys a lifetime
of process, killing livelihoods, relationships, and
reputations. Think about that for a minute. One impulsive
decision (or mistake) has the staggering power to invalidate
thousands of well-planned ones. Your dream house took two
years to build, but one carelessly placed cigar burnt it
down.
The event kills the process. But the reverse does not
apply. One positive action cannot erase thousands of
negative ones. Eating broccoli for one day won’t help you
lose the weight that took years to accumulate.
The unfortunate’ reality of the event/process
dichotomy?29 is that the consequences of our actions are
unfairly weighted toward the bad ones. In Jeff’s case, if
some of his customers discovered that he had pejoratively
stereotyped them as “soy-boys,” it would jeopardize their
business.
Your defense for exploiting process-killing choices is
consequential-thinking. Consequential-thinking
extrapolates consequences while assessing risk and
probability. Think before you act! Before embarking on a
risky action, ask the questions: What are this action’s worst-
and best-case consequences and their reasonable odds?
Are these outcomes worth the risk? A re you betting the
house to win a free hamburger? To be edgy? Are you
risking your health to inflate your ego? A proactive mind
answers these questions in seconds. Once _ reviewed,
catastrophic threats to your process can be exposed, and
bad decisions can be avoided. In effect, consequential-
thinking brings hindsight into the present.
KEY CONCEPTS
e One event lasting minutes can destroy a process that
took years to build, but the reverse does not apply.
e« Poor decisions are weighted negatively and can be
process-killers.
¢ Consequential-thinking extrapolates consequences
while assessing risk and probability, bringing
hindsight into the present for better decision-
making.
JOST VAINIC Walls ane AE I all=
OEEIGE
THURSDAY MARCH 15TH, 2018 - 5:12 PM
(3 DAYS LATER)
“Who died?” Sam asked her husband when she returned
home from the grocery store. Jeff was hunkered down at
the corner of the kitchen table, now their de facto office,
grimacing at his desktop. Bella greeted Sam, tail wagging
furiously, followed by an intensive sniff of the food haul
hoping to find a treat.
Without looking up from his screen, Jeff replied, “No one
died.”
Bella barked a rare bark as Sam unpacked the paper
bags. Bella clung to her heels, still hopeful for a goody. Jeff
sat silent, keyboard clacking away. He let loose a harsh
breath. And then another.
After the groceries were put away and Bella got her
treat, Sam lingered over to her husband. She slowly slid the
chair out and sat. She pulled the back of his desktop screen
and asked, “All right, what’s going on?” His eyes shifted up,
but his head didn’t move. “Well, right now, I’m trying to stop
the bleeding. I’ve placed some pay-per-click ads at Google.
We’ve gotten some clicks but no orders. I’ve already burned
through $200. I’m not sure why we aren’t selling anything:
our ad copy, our website’s design, the wrong market. Not
sure, this stuff is a fucking science. I’m having a déja-vu
when I tried to sell T-shirts.”
“Ts it anything to be really worried about?” Sam asked. “I
mean, we keep selling soup, our customers love our
product, and we’ve made progress.”
“Yeah, I know. It just feels like it’s always ten steps
forward, nine steps back.” He sighed. “Guess it’s just
another day at the office.”
Sam nodded and then asked, “You know, March Madness
started today. Might be a good distraction for you.”
He huffed. “I could care less about that nonsense right
now. Not sure I will ever care about it again.” He swiveled
the computer around and pointed to the screen. “We’ve got
to figure out how to get here.”
Sam moved closer and recited what she read: Veggie
Con —The Plant-Based Convention. She looked at Jeff.
“Well, that looks promising, and you know we love Vegas...
It says they expect over 30,000 attendees and 200
exhibitors.”
Jeff leaned back, folding his arms. “Yes, very promising,
except we can’t afford to exhibit. I’ve spent the last two
weeks trying to figure out how to make it financially worth
the risk. Cleaning out our retirement accounts and
spending every dime of profit we’ve made thus far is just
too big a risk. We’d be going all-in without a safety net.”
Sam sat quietly for a moment and then wondered aloud,
“Is it one of those Leap of Zeroes? Something we need to do
to move forward?”
Jeff answered quickly. “No, not at a five-figure price tag.
It would be great to go, but the cost is neither reasonable
nor necessary.”
“Wow, that’s insane. Obviously, that’s not startup-friendly
when you have to be a millionaire to get a booth.” She
hesitated for a long moment as if unsure of something. She
finally spoke. “I’ve been having some struggles as well.
Getting influencers to try our soup is like pulling teeth. I
send several dozen emails a day. Instagram, ‘Twitter,
YouTube, even started using some of the influencer
platforms. Mostly everyone ignores me, which is frustrating
because we know how well free sampling has worked for
us.”
Jeff rubbed his temple, a hint he’d not only heard Sam,
but he was still trying to solve their trade show dilemma.
“On the bright side,” Sam continued, “Becky said she
would take over your craft-fair duties as long as it isn’t
more than twice a month. I told her we would pay her ten
percent of whatever she sold. Based on the last six shows
you did, that’s about $150 for six hours of work.”
Jeff nodded, eyes still locked on his screen. “I don’t think
my niece is vegan,” he stated and then continued, “People
ask if I’m vegan, and when I say no, it seems a bit
contradictory. It probably comes across as a money grab to
them, just some carnivore trying to make a buck on a
trend.”
“Well, I could see why,” Sam replied. “Our soups are
based on my story and my love of animals, not necessarily
yours. And no, Becky isn’t vegan, your sister told me she’s a
pescatarian. She only eats fish. But yes, moving forward, we
should probably keep you away from the public. Some
vegans might not like hearing that my husband likes dining
on ground animal organs encased in pig’s intestinal lining.”
Jeff pursed his lips and finally looked up from his
computer, contempt darkening his eyes. With a disgusted
scowl, he shook his head. Sam snickered. “Oh, I’m sorry,
darling, I meant to say that you like sausage.”
CAPER 8s
THE TRIANGULATED VALUE
SRA Gy
RELATIVE-VALUE CASTING: DON’T QUIT THREE FEET FROM GOLD
&
"| “here's an old motivational story about a miner who quit
digging three feet from gold. He had the right idea,
location, and tools, but he gave up when his early
excavation uncovered nothing. As a result, he sold his mine
to another miner who continued the dig. And well, you
know what happened next.
Thousands of entrepreneurs suffer the same fate every
year. They have the right business idea and the tools to
unearth gold; they just misjudge the “adjust” in the 3A
Method*®°® and fail. Hence, giving up too early. Not because
they lack motivation, but because they fail to triangulate
their offer and understand the sales system. Nothing is
worse than working on an idea and quitting only to learn
later that another entrepreneur executed it perfectly into a
multi-million-dollar enterprise.
If you have a great idea and the makings of a hit,
relative-value casting will expose it within the sales system.
It will also confirm a quitting decision, the hard verdict that
says, “Yes, it’s time to quit and move on to a new idea.”
Relative-value casting is like fly-fishing, the process of
casting a line in the water over and over. You can have the
tastiest bait in the world (your relative-value), but without
the right sales system, you’ll never catch any fish. Yes,
escaping the rat race is like fishing. In effect, this “sales
system” is your business system,°!9 the machine that
converts relative-value into a profit.
Here are the five components of the sales system.
1. Relative-Value (The Bait)
2. The Message or Offer (The Hook)
3. The Channel (The Boat)
4. The Reach (The Frequency or Depth)
5. The Closing/Conversion (The Fishing Pole)
RELATIVE-VALUE (THE BAIT)
The bait, your relative-value, is your product or service. The
four components that follow should confirm (or triangulate)
relative-value, a venture worthy of commitment. If one of
them is deficient, the system breaks down, and no fish are
caught. The result is a false flag on failure where you might
judge your idea isn’t worth a continued pursuit.
CHANNEL (THE BOAT)
Your boat is the marketing, retail, or wholesale channel and
is needed to take you to sea, or the market. If you think
about the TAM in terms of a body of water, the boat gets
you access to fragments of the market, like a fishing hole.
Different boats take you different places on the sea. Without
a channel, you can’t reach the fish and present them with
the bait. So are you leveraging the right channel with the
right targeting measures? Or is there a better medium to
reach your audience? If you’re advertising a facial cream on
a gun and knife forum, it’s the wrong channel. If your
Facebook ads target “all adults over twenty-one,” you’re
targeting the wrong audience. You must continuously test
varied channels and targeting options by using the 3A
Method; acting, assessing, and adjusting. Your product
might not suck, but the channel and the audience it hits do.
MESSAGE (THE HOOK)
Your hook is your offer. It is the messaging and presentation
of your relative-value (the bait). If your product rocks, but
your message is deficient or flawed, or the hook is too
obvious (pushy, exaggerated), you fail. Probably the most
common false flag of failure is your message. Your copy is
weak, the photos blurry, your call to action doesn’t exist.
Your design and UI look like they were done with
GoDaddy’s web tool. The fact is that many great products
die because of flawed offers and poor presentations:
messaging failure. In the end, you could hit the right
medium and saturate the right reach—but a_ poorly
constructed offer sinks the boat before you get started. I’d
guess most launch failures are from failed messaging, not
from failed products!
REACH (THE LINE)
Your line is your reach and market penetration for your
relative-value offer. If you have a great product combined
with a great marketing message, but your line doesn’t go
deep enough, not reaching enough fish, you fail. If your ad
had only one hundred impressions or thirty-two clicks, your
conclusions will stem from an inadequate sample size. No
matter what the industry, conversions need large samples.
Just because you burned through one hundred dollars at
Amazon and nothing happened, it doesn’t mean failure.
Ensure your sample size is adequate to warrant conclusions
about its data. I’d recommend at least 5,000 impressions
and/or 500 clicks. The right channel and the right
targeting, but the wrong reach, might falsely flag failure.
CONVERSION (THE FISHING POLE)
Your specialized-unit is offered at the right channel and in
the right quantities. You’ve got a fantastic offer, and your
customer is hooked. The problem is, your fishing pole
breaks, and the customer swims away. Your fishing pole
reels in the catch with a conversion, or your ability to close
the sale. For websites, this would be the order process, or
perhaps a store policy. Did someone want your value but
didn’t want to pay for shipping? How easy is it to go from “I
want this” to “I bought this”?
Countless entrepreneurs have a great idea with a strong
value-skew.°°2 But when they fail to triangulate that value
with the right CHANNEL (boat), MESSAGING (hook),
REACH (line), and/or CONVERSION (pole), that great
product goes unseen, and hence unbought. Your
specialized-unit’s true-value can’t be proved (or disproved)
unless you “3A” these four components.
Looking back at my past business failures, I succeeded in
producing relative-value, but failed at _ relative-value
casting. I failed in acting, assessing, and adjusting each
component.
It really is like fly fishing ... you might cast your line a
hundred times before snatching a bite. Never quit until
you’ve thoroughly “3A’d” this system. Do so, and you won’t
abandon a gold mine with three feet left to dig.
KEY CONCEPTS
Marketing to potential customers requires a five-
point sales system with each component working
synergistically.
The five components to a selling-system are 1)
relative-value (bait), 2) message (hook), 3) channel
(boat), 4) reach (depth), and 5) conversion (pole).
A failure in one or more of these components will
result in no sales, and possibly a “quitting three feet
from gold” scenario.
If all five of these components are tested with the 3A
method, it will determine moving forward or
quitting.
Clave Melee)
inte SCA DAS ave Gip
CATCH FISH: CRAFT HOOKS AND SELL MORE WITH SCAIDA
&
A fter I earned my finance degree from college, I
realized that a number-crunching job, even
temporarily, was worse than bathing in muriatic acid. So I
stayed and got a degree in marketing. It was then I learned
one of the oldest marketing formulas in existence, and yes,
it still is relevant today. While a lot has changed, behavioral
economics and what motivates humans has not.
As entrepreneurs, half our battle is creating something
people want. The other half is convincing them to buy it.
When casting your relative-value,5®° one piece of the sales
system is your hook, the messaging that shifts a potential
customer to a buyer. With a producer mindset,?23 I’m
always observing other business owners and their actions.
More often than not, small-business owners rarely wander
outside of their self-centered bubble. As a result, they craft
toothless hooks. Instead of selling solutions and benefits,
they sell features and _ self-aggrandizing jargon. We
objectively e-enable compelling technology with backwara-
compatible collaboration for mission-critical apps in native
environments! Remember, no one cares*?*.
As consumers, we buy things to solve needs. We
participate in transactions to fill voids. You don’t buy a
McDonald’s Happy Meal, you buy a screaming child quiet.
You don’t buy a drill; you buy a hole. You don’t buy a
Lamborghini; you enhance an ego. You don’t buy a piece of
software; you buy a_- convenient’ solution. As
problemologists,’2° we must demonstrate*®? our solution,
not the facts and features of the solution. Does the fact that
you are the largest cannabis laboratory in Colorado solve
my problem? It doesn’t until you translate that feature into
a benefit.
Compelling hooks and the entire sales process can be
scaled down into a simple, acronymized model called
SCAIDA.
[SC] SELF-CENTERED
Going back to Ptolemy®2*, the earth-centric astronomer,
everyone is the center of their universe. As such, people
don’t care about your business—they only care about what
it can do for them. Your entire offer must lead and then
linger in the spirit of pure, unadulterated self-centeredness.
What can your business do for me? How will it make my life
sexier, more comfortable, or more livable? In historical
marketing parlance, it’s called WIIFM, or what’s in it for
me?
[A] ATTENTION
You Won’t Believe It: See How Time Has Ravaged
These 67 Gorgeous Celebrities of the Last Century...
Ever see a Click-bait headline like that and then get stuck
clicking 67 times to see the entire list? LOL, I have. And it’s
all because of A, Attention. Grab attention with a
compelling, benefit-oriented headline or a shocking picture
that lures eyeballs. In my case, the image was a time
ravaged celebrity, and the benefit was curiosity. Since I
grew up in the last century, I was praying not to find
Phoebe Cates on the list. Whew, she wasn’t!
Anyway, with Attention, the goal is to grab your
customer’s attention with your offer’s primary benefit. If
there are many benefits and value-skews*?2, focus on the
top one, more commonly known as your USP, or unique
selling proposition.
[I] INTEREST
The art of creating more Jnterest in your offer happens
when you stack value-skews. Interest is where you expand
on the benefits of your offer beyond the primary one. Make
what’s in it for me more compelling than the primary
benefit. Leave the customer declaring, “Wow, not only do I
get my main issue solved, but also get X, Y, and Z!”
Example: “Wow, not only do I get email leads for my
business, but the phone calls are free?” If possible, don’t
describe; demonstrate by offering a free trial, a free
sample, or a video walkthrough.
[D] DESIRE
Desire drives up the Interest with more value-adds on top
of your primary and secondary offer. Desire could be free
bonuses, discounts, extended trials, sweepstakes entries, or
add-on upgrades. Wrap up all these extra bonuses by telling
the potential customer how these other benefits will help
them, on top of the primary benefit. “Wow, I can get a 15
percent discount if I pay yearly instead of monthly?” Solidify
Desire with a slew of positive testimonials.
[A] ACTION
Action is a call to close the sale. Nowadays, the most
effective way to do this is through a scarcity statement.
Limited time only! Offer expires in two days! Only 100
spots are available! Only 500 in stock! Then stack your
scarcity statement with a FOMO (fear of missing out)
through social proof, peer testimonials, and user raves from
satisfied users. Social proof creates a FOMO element, but it
also strengthens Desire because it’s an uncompensated
third-party validation.
Fail to hook your offer with SCAIDA and you'll fail to get
bites. The sales-system collapses. Combine this fact with the
other casting elements, and you see why most businesses
fail. There are multiple points of failure that go beyond the
value you create.
Your customer is Self-Centered: grab his Attention with a
benefit-oriented headline or an impactful picture; generate
more Interest by stacking more benefits; build Desire by
demonstration and how your relative-value solves problems
proved by positive testimonials; take Action and close with a
scarcity statement and more raves...
... Congratulations, you just got a degree in marketing,
and it didn’t cost you four years and $50,000.
KEY CONCEPTS
e An ineffective hook cripples the sales-system.
e An effective hook deploys SCAIDA; an appeal to Self-
Centered interests, an Attention grabber, an
elevation of Interest and Desire, and a call to Action
through scarcity and/or FOMO.
e An effective hook translates features and facts to
benefits and solutions.
Calle Nels) 20
Wale Sea PE avai hon
PINES | Le
MOST OF YOUR SUCCESS WILL COME FROM THE LEAST OF YOUR
CHANNELS
U
. - ‘ 7
~ e-
[ote Pareto Principle is the idea that 80 percent of X is
caused by 20 percent of Y. In business, Pareto applies
to sales channels: 80 percent of your sales will come from
20 percent of your marketing effort. Namely, the
Asymmetric Traction Principle: the majority of your
company’s growth will happen from a minority of your
strategy. Your most significant revenue sources will come
from just a few channels—the rest will be minuscule or
worse, be a crash and burn.
Back to our fishing metaphor: Some boats take you to
better fishing holes within your market.
There are eight major marketing channels you can use
for growing your business, and within those eight, you’ll
find dozens of subsets. The good news is there are
hundreds of marketing options available for
experimentation. The bad news is, only a few of them will be
responsible for your growth. Yes, you’re looking for needles
in haystacks. Those eight major marketing channels are:
BUSINESS DEVELOPMENT / JOINT VENTURES / PARTNERSHIPS
Influencers, affiliate relationships, and joint ventures with
other companies.
Application: A YouTube influencer agrees to review my
book or accepts it freely.
DISTRIBUTIVE MARKETING
Channels, distributors, and other wholesale or retail firms
who sell your product.
Application: Selling my audiobook on Audible.
EMAIL / TEXT MARKETING
Sending potential or existing clients new offers and sales.
Application: Text messaging a client who abandoned
their shopping cart, and messaging customers about new
products/offers.
PUBLIC RELATIONS
Free media, press releases in major media, podcast
interviews, and contributing articles to media outlets.
Application: Writing for MarketWatch or Forbes while
plugging my forum.
SEARCH ENGINE AND REVIEW MARKETING
Target favorable rankings in the search engines and review
services for a particular keyword.
Application: Yelp, Google
ONLINE ADVERTISING
Paying to advertise to a target audience, pay-per-click
advertising, display ads, pixel remarketing.
Application: Google, Pinterest, Facebook, Instagram,
Etsy, etc.
ONLINE CONTENT OR VALUE MARKETING
Content marketing, blog articles, online tools, forums,
blogs, free calculators.
Application: The Fastlane Forum and
GradeMyBusinessIdea.com
OFFLINE MARKETING
Direct marketing (mail), billboards, vehicle marketing
Application: Mailing a potential client a free sample
Using the 3A Model,®°° your job as an entrepreneur is to
find those channels that work best for your business. This
process involves a lot of trial and error as you cycle through
the media and triangulate your bait®®® with varying
experiments.
In my first business, most of my revenue came from
three channels: search engine marketing, business
development (affiliates) and pay-per-click advertising. In my
publishing company, most of my income comes from three
channels: Amazon, audiobooks, and content marketing, via
community development through my forum. In every
instance, I didn’t find (or build) these channels instantly, but
over time, exposed through a series of trials and failures.
Not every channel or marketing medium will yield a
positive ROI. Suppose your expectations are set too high,
and you quit after evaluating just one or two channels. In
that case, you risk a failed casting,5®° followed by a false
flag on relative-valueS?® or a Productocracy.®’! For
instance, advertising on Facebook can be a complicated
task. Campaign management is a career in itself. If you give
up after spending $100 and conclude that your product
sucks, your conclusion is likely flawed.
Additionally, as you cycle through channels, you’ll want
to target the larger road opportunities. Interstates,
freeways, and boulevards are better than roads, lanes, and
driveways. If you spend two weeks schmoozing a YouTube
vlogger with 100 subscribers, you’re targeting a driveway
that will likely have little effect. Conversely, the YouTube
channel with 1,000,000 subscribers is a freeway. Focusing
on the bigger roads ensures asymmetric yields®2! on your
effort that move the needle?®’ faster. A purchase order
from Bob’s Hardware store on Maple Avenue is different
from a purchase order from Walmart.
Whenever I get an interview request, I first decide: Is
this an interstate or a driveway? Because podcasting has
become ubiquitous, most interview requests I get nowadays
are driveways and not worth my time. I only do interstates,
freeways, and boulevards.+
When in doubt, go bigger. Every business is different.
Uncovering the best channels for driving traffic and
customers is part of being a problemologist.?29 And
because marketing is dynamic, this process is infinitely
iterative. What works today at driving customers to your
business won’t work tomorrow. Yes, effective marketing is
like peeled fruit.$®!
KEY GONCEPTS
e Pareto’s Principle applies to marketing strategy: 80
percent of your sales will come from 20 percent of
your effort.
¢« There are eight general marketing strategies for
reaching your market, each representing dozens,
sometimes hundreds of options, all of which need to
be Acted, Assessed, and Adjusted.
¢« Be preferential to larger audiences to improve
chances of asymmetric yields.
BU RINING SO Ue
SUNDAY APRIL 1ST, 2018 - 12:05 PM
(17 DAYS LATER)
It was the longest, most hellacious week the Trotmans could
remember.
And it wasn’t over.
Sam was lying on the couch, staring at the ceiling. Jeff
was in his office, which now commandeered the entire
kitchen table. Family meals, when they had any, took place
on the couch or stooled at the kitchen counter.
Gripping Pinky, her stuffed animal companion, Sam
snarled from behind the couch, “It’s never over! I just
finished Saturday’s orders, and now there’s another
fourteen sitting there!” She was exhausted. They’d
postponed their Saturday board meeting to Sunday, but it
looked as if Sunday’s rescheduled meeting was also in
jeopardy.
Earlier that week, Jeff had pressed his wife to have their
weekly weekend conference at a restaurant, forcing them
out of their routine. But as Friday passed into Saturday, it
became clear that neither had the energy to groom
themselves, much less leave the house. And Sam was
struggling with late-term pregnancy irritations; frequent
urination, swollen ankles, heartburn, and difficulty getting
comfortable.
The hectic week started with Jeff re-listing his
Kickstarter with a different angle, unbeknownst to Sam.
Instead of focusing on the soup, which he couldn’t do
since no one had invented taste through a computer screen,
he focused on their story behind the soup. After revealing
Sam’s struggles to find healthy vegan options in soups, he
described her love affair with animals, the primary reason
she was vegan. In his Kickstarter brief, he described Heroic
Kitchen’s mission: donating a piece of the profits to a
rescued animal at a real rescue sanctuary. His wife had
already found dozens of rescue shelters that wanted to be
part of it. As he reviewed the many animals who needed
sponsorship, a job normally reserved for Sam, he was
overwhelmed with grief.
Every animal had a shocking story.
A cow tagged in the ear as G32, now named Houdini,
had escaped the slaughterhouse gauntlet. Several sick pigs
dumped like trash next to a pig farm. There were even
some chickens. Jeff wanted to pick them all, but he could
only select one.
He ended up choosing Mookie, a golden retriever who
only had two functional legs and one that needed
amputation. Saved from the Yulin Meat Festival in China,
Mookie’s story struck Jeff like a brick in the face. Not
knowing dogs were a delicacy in another culture and often
tortured for “flavor,” he was sickened to learn the about
Mookie’s story and his rescue. The details were so horrific
that Jeff felt his heart implode as if were being sucked into a
black hole.
Jeff contemplated Mookie’s photo submitted by the
rescue. The dog’s haunted eyes bored sorrow and betrayal
into Jeff’s soul, a vanquishing that made him nauseous.
After a moment, he had to look away, fearful the traumatic
photo would besiege his dreams. He needed to see no more
— Mookie would be chosen for help.
In his Kickstarter brief, Jeff relayed Mookie’s story,
walking a fine line between the horrific details and the
emotional rescue. Mookie now had a real story of hardship
and heroics, and that story made him real with a heartbeat
and a will to live. Suddenly the world wanted to donate to
his well-being through the magic of soup.
He’d reached the project goal in a matter of hours.
He had once experienced a similar process at the craft
fair; a dismal failure was reversed into a profound success
by a mere shift in tactics.
Sam, now up from the couch, shuffled to a chair at the
table. She fell into her seat, her head propped on her hands
which she elbowed on the kitchen table. She woozily
pleaded to her husband beside her, “Can you take care of
today’s orders? I need a break.”
Jeff nodded smirkingly and stood up, walking to the
pantry.
Sam heard rustling until he approached with a bottle
and placed it on the table.
“Champagne? At noon? While I’m 38 weeks pregnant?”
She looked up at him. “Did you snag a big account today?”
He stood above her and nodded at the bottle. “This is
just sparkling spritzer, but to answer your question, no.”
Perplexed, she continued, “We hit new sales records for
a weekend?”
“Yes, but that’s not what this is for.”
“You inked a joint-venture with Beyond Burger or
Impossible?” He mashed his lips and shook his head. She
whacked him on the knee with the back of her hand. He sat
down and smiled with the asset still under lockdown. “Well,
tell me!” Sam admonished, plopping her head back into her
hands as if it were a pillow.
Jeff revealed his big Kickstarter success. “Could be
thousands of cans, hundreds of cases!” he reported, giddy.
Sam managed a half-smile and said flatly, “It’s great
news. Fantastic, actually.” She paused. “But I’m _ so
exhausted with the hospital—even desk duty—that the last
thing I want to think about right now is more work, even if
it is ours. There’s never a break with this business; it runs
twenty-four seven and never closes.”
Jeff remarked, “Yeah, isn’t it wonderful? We’re making
money every day of the year. This is what DeMarco was
talking about. DeMarco! Remember him? The Unscripted
thing? It won’t be like this all the time, this is just our
process, remember!?” He didn’t wait for her to answer,
adding, “We’re building our business system with poly-pay,
or whatever DeMarco called it.”
Sam remembered when and why it had all started.
“Polymorphic pay,” she corrected. “Of course I remember.
I’m just burned out.” Her hooded eyes sank heavier as she
leaned back and cradled her belly.
He continued, “If this Kickstarter thing goes as planned,
we’re looking at thousands of dollars. And Mookie, our
sponsored rescue dog, will have the money for surgery.”
She nodded—another anemic smile as if unimpressed
with his news.
Jeff repositioned himself in front of her and sat in the
chair backward, leaning on its back. It creaked in
opposition. “But that’s not the big news,” he said as if he’d
had too much caffeine.
She attempted to perk up, raising her forehead. “Yes,
more news?”
“Yes.”
The silence hung again. Always the numbers guy, Jeff
continued, “Our sales just went over $100,000. And with
today’s orders, our monthly cash flow generation just went
over $6,000 per month. That’s not even with the Kickstarter
thing. Sales have gone up every month, and I’m not talking
about a few hundred bucks. Last week I ordered another lot
with our co-packer, and I only had to charge 20 percent of
it. Because we’re not spending a fortune on advertising, our
net margin is 48 percent. Better, our reorder rate is 19
percent.”
“Nineteen?” Sam mumbled weakly. “That doesn’t sound
good.”
“Actually, it is wonderful. Remember, Samantha, when
people buy soup, they don’t eat it right away. It often sits in
the pantry until rainy weather, the flu, or something. If
we’re at 19 percent already, it probably is a lot better.” He
held up aé_ stack of papers. “These are customer
testimonials, people who love our soup, or love that we’re
making a difference with rescue animals.”
She feigned another weak smile and tried to muster joy
for the moment, but the numbers to Sam were just that—
numbers. She felt a kick in her belly, and she gasped, her
grip firming on his.
Jeff motioned to her belly. “My darling wife, let me put it
in perspective for you.” He cradled his hands around her
face, caressing her cheek as if he was consoling a sad child.
He said calmly, “Our business has made enough money—
and has been making enough money for the last two
months—that you can quit your job.” He leaned in, louder.
“TOMOrrow.”
ClmAle Helri 2)
THE COMMITMENT & BALANCE
PIUINES | Le
EXPECT COMMITMENT TO WEAR THE MASK OF IMBALANCE
W henever I hear, “Thank God it’s Friday,” I can only
shake my head in disappointment. What a tragedy:
Thank God that five days of my life are over, only so I can
get drunk the next two days so I can forget about repeating
the same five nauseating days next week.
In Buddhism, “the middle way” is about a balanced
approach to life, that an optimum existence is a path found
between materialism and spirituality. While I believe this to
be true, I don’t believe you can find a “middle way” in
today’s rat race culture. When you’re sacrificing five days of
work for two days of freedom, is that a balanced approach
to life? Nope, more like unfair and unbalanced.
The Commitment and Balance Principle affirms that if
you want to live the “middle way” for most of your life, you ‘ll
need to embrace commitment, and sometimes that
commitment can wear the mask of imbalance, at least
temporarily. Before Buddha found the middle way, he
practiced asceticism. The extreme imbalance of minimalistic
living (and nearly dying) is what compelled his discovery of
the middle way. In a lot of ways, our journey will be similar,
but without the dying!
When I was building my web company, there were many
twelve-hour days, sometimes lasting weeks. Sometimes I
would decline dates, parties, and nights out. And yes, some
of my relationships temporarily suffered. Likewise, when I
wrote my first book, I checked myself into a beach condo
and wrote for thirty days. It was eat, write, sleep, lift. This
book as well: I disappeared for weeks straight and needed
heavy drinking and illicit drugs to get me through it. Okay,
just kidding about the drugs, but not kidding about the long
hours. In short, balance was nowhere—I was living like the
ascetic Buddha.
When something is a commitment, things can go
unbalanced. Does Elon Musk (and his multiple divorces)
give you fuzzy feelings of a balanced life? Probably not. The
truth is, today’s top producers lead anything but balanced
lives. But yesterday’s top producers probably do. For
instance, think balance and unfocused priorities is how
Michael Phelps won twenty-three Olympic gold medals?
How about Michael Jordan and his six NBA championships
and four MVPs? These guys lived and breathed their
profession. But today, after their prime, I’m betting they live
pretty balanced lives.
Exceptional results come “from _ extraordinary
commitments that culture will label as unbalanced. When
people preach “balance,” they’re talking about a balance
amongst culturally endorsed priorities. Everyone wants six-
pack abs, the big bank account, and the creative freedom to
do work that matters. The problem is those same people
also want to eat McDonald’s every day. They want to watch
every Bachelorette episode. And they want to buy all the
hot brands—all while cashing a government welfare check.
For them, “imbalance” is an implied threat to priorities,
priorities which are either frivolous or comfort-seeking. If
“imbalance” means giving up the ice cream, then balance
represents the status quo.
I have no idea who won last year’s World Series. Yet
there are people in my life who can recite entire lineups
and baseball stats from teams fielded in 1976. Unless
you’re a player or a professional gambler, watching a
meaningless baseball game that has no impact on your life
is a terrible waste. As they say, the most important things in
your life seize your time. When meaningless bullshit is your
priority, balance is like a goal stuck in wet cement.
Prioritize your priorities beyond rat race coping
mechanisms. Please do so, and suddenly its weekend
cheese might feel like a cheap joke. Today I lead a “middle
way” life the way I want. How? I was committed and willing
to meander into the world of the imbalanced.
KEY CONCEPTS
The rat race makes balanced, or “middle way” living
nearly impossible.
Commitment can often cause things to go
temporarily unbalanced.
Embrace unbalanced periods of your life to seek
lasting balance.
Your actions express your priorities.
GhaleNe [lelay ee
Wile SlelirPsDilmec el: PN Kose
SI RAnEGY
DON’T QUIT YOUR DAY JOB UNTIL YOUR BUSINESS MAKES YOU
&
| get several dozen emails per week regarding my books.
Most of them are encouraging, but every week, a few
have me concerned. The worrisome messages are the ones
that demonstrate reader impetuousness and malformed
expectations. Bluntly speaking, just because you read one of
my books doesn’t mean you should quit your job or drop out
of college. Such actions reflect a reader who is not process-
driven but event-oriented.
Quitting college to start a business is an event.
Quitting your job to start a business is an event.
Starting a profitable business is a process.
My recommendation? Don’t quit your job unless you’ve
got the following four guidelines flashing green.
1. Existing sales with adequate profit margins
2. At least a six-month runway (cash flow) to support an
owner paycheck
3. Scale and growth potential (Can revenue increase
10X within the next twelve months?)
4. Evidence of a Productocracy
Quitting a job (or college) is a huge decision. In my
opinion, reading a few books about business isn’t a license
to make reckless decisions. In short, don’t quit your day job
until your business makes you quit your day job. The
Trotmans are at the precipice with rising sales and a
verified Productocracy. Quitting won’t endanger their living
situation, or their business. Your family’s basic living
essentials shouldn’t be part of your risk equation. Starting a
business while homeless and starving might light a fire
under your butt, but trust me, the Hollywood ending is
unlikely.
KEY CONCEPTS
¢ Quitting your job or college is an event, launching a
profitable business is a process.
e Don’t quit your day job until your business forces
you.
e Existing sales, six months of cash flow, scale
potential, and evidence of a Productocracy are all
green lights to quitting your job.
CAR EER 9S
Wiehe SWCiR Ue eAUMIOIN| Sava Gy
PUT IT IN A STORY: IF YOU CAN MAKE THEM CARE, YOU CAN MAKE THEM
BUY
&
L. ike many pounds worldwide, the animal shelter in
Maricopa County, Arizona, is jam-packed and
overflowing. Hundreds of dogs wait to be adopted weekly.
Dozens more are euthanized for no reason other than
overcrowding and indeterminate temperaments. Simply too
many dogs, not enough adopters.
And yet, when any dog is offered for adoption on
television (say a local morning show) and given a backstory
—strayed, abandoned, abused, or whatever else—the phone
rings off the hook. The dog waited in a cage to be adopted
for eight weeks but had no takers. But put her on
television? The dog would only have to wait eight minutes.
The backstory transforms the dog from a faceless number
on a clipboard to a creature with depth and sentience.
Bottomline: attach a powerful story to your company and
its products, and you will sell more. Stories are how we
make sense of the world. And when the right story
resonates with your customer’s identity, either through
their humanity or their ego, you create positive value-
skew®32 and a more compelling argument for their sale.
Stories and their powerful effect on buying psychology
have been proven.
One such experiment came from SignificantObjects.com,
which demonstrated how narrative can impact any object’s
perceived-value. At Significant Objects, everyday thrift-
store items were purchased cheaply and then resold on
eBay, except with one difference: A powerful story was
linked to the objects. As a result, items purchased at an
average of $1.25 were sold for many times more, nearly
$8,000 in total. A one-dollar jar of marbles was given a
story and sold for fifty dollars. A one-dollar wooden apple
core was given a story and sold for over one hundred
dollars. And dozens more.
Perhaps the most iconic use of storification comes from
the J. Peterman company, which started as a mail-order
fashion catalog in 1987. As Peterman explains...
How did we do it? By breaking all the rules. Our ‘Owner’s Manual’
catalogue only featured one item per page, we used paintings of
items versus photography, and each item was accompanied by
intensive romantic copy. These were all things the “experts” said
we couldn’t do.+
By tying each product to a story, or as Peterman
explains, “romantic copy,” each product carried a unique
value-skew. For instance, here are some of the words
behind the story of a simple flannel shirt: “symphony,”
“yarn-dyed plaid,” “cheeky,” “sumptuous,” “immensely
cozy,” all tied together in a cute little narrative. This is how
a company can sell a hundred dollar flannel shirt that looks
no different from something you find at Kohls for fifteen
dollars.
You cannot underestimate the power of story for
creating skew and making people possibly care. With
Ptolemying,®?4 we already identified that no one cares.
Putting a story to your business can weaken this truth
because our egoic selfishness likes having our identity
validated while being a part of the narrative. J adopted that
dog on television!
Quite possibly, the most important page on your website
isn’t what you’re selling—it’s the story revealing WHY you
are selling it. Studies have proven that the “About Us” page
is one of the most frequently visited pages on a website. I
estimate my forum’s “about us” page has been hit more
than two million times.
Tell your audience WHY you are in business and give
them a story they can identify with. If consumers identify
with either you or your product, you will sell more and stack
your skew.
KEY CONCEPTS
Attach a powerful story to your company or its
products, and you will sell more.
Storification can invalidate Ptolemying and make
people care about your business.
The “About Us” page is one of the most frequent
visited pages that buyers read.
A good backstory for your product/company is a
value-skew.
WHAT IS SEEN CANNOT BE
UNSEEN
TUESDAY, APRIL 3RD, 2018 - 12:04 AM
(2 DAYS LATER)
Samantha didn’t quit her job, at least not the next day.
Despite her employer, who was about as ruthless as a
Scrooge before the “undigested bit of beef,” Sam did the
honorable thing. She gave her two-week notice and still
worked. She wouldn’t abandon her patients or co-workers.
Once Janice, Sam’s ‘I can’t live without my bacon’ co-
worker found out, she questioned Sam at her locker. “Are
you transferring to another hospital after the baby is born?
Or moving to private practice?”
“T’m getting out of nursing,” Sam quipped. “Remember, I
said that Jeff and I are starting a business selling plant-
based soups.” Janice furrowed her brow and glowered with
confusion. Sam read the look and clarified. “Like the soup
you asked the recipe for?”
“Oh yes,” she said, leaning on the locker, “the creamy
one with potatoes and bacon?”
“Yes, but there’s no bacon in it.”
Janice shook her head, perplexed. “But how does it taste
like bacon?”
Sam sighed and then feigned a half-smile. “You didn’t
read the recipe I gave you?”
Janice shrugged and smiled sheepishly, a mist of sweat
embracing her plump reddish face. Sam guessed her
systolic blood pressure was a shade north of 160.
Sam raised her index finger and lifted an eyebrow.
“Smoked paprika, Janice, smoked paprika.”
While Sam soldiered through her Monday at the
hospital, Jeff started the week with a failure. Two weeks
ago, he’d paid for a halfpage advertisement in the local
weekly shopper called Windy City Green Living. As the
sales rep said, “Our magazines are distributed for free at all
grocery stores countywide.” Jeff couldn’t refuse the
opportunity and promptly charged $1,500 on his credit
card. Heroic Kitchens would have a half-page ad in a
magazine that focused primarily on green, sustainable
living. The ad was beautifully done (in-house by the
publisher), complete with a coupon code for tracking. It hit
the stands last Tuesday, but by the weekend, Jeff knew it
was a failure. Only seven orders. It reminded him of his T-
shirt fiasco—he’d spent $1,500 to make twenty bucks. With
his wife teetering on exhaustion, he secreted the failure
from her.
But redemption wasn’t far behind.
His next gambit was unconventional, crafty, and perhaps
a bit devious. It was an ingenious strategy that involved
hiring a private investigator. Well, not a traditional PI, but
an online records PI, someone who had access to firewalled
records and data. Again, all unbeknownst to Sam. Not
because he needed her approval but because he liked
surprising his wife, like the time he offered free samples at
the craft fair. It rained money then, and he hoped this tactic
would cause money to rain as well. He also wasn’t sure
she’d approve, and frankly, he didn’t care. It was time to be
bold and intrepid. As her due date approached, she
shouldn’t have been working as hard as she was.
As for the private investigator Jeff hired, it was about
one thing: mailing addresses, specifically, the physical
addresses of social media influencers in the health and
fitness space, primarily plant-based. Because this data was
mostly withheld or not widely available, a PI legal “special
access” to certain records was needed.
After Sam complained about the struggles of reaching
influencers, he reasoned he’d hit them with blunt force: a
FedEx package containing a soup sampler kit. Jeff
speculated that for anyone who received an unexpected
FedEx package, the delivery would warrant special
attention. Even torn open in curiosity and intrigue. For Jeff,
the spectacular conversion rate on free soup samples was
too hot to ignore. The more that people tried it, the more
sales they got, or in the case of influencers, they might plug
Heroic Kitchens to their followers. He also knew that people
with plant-based interests wouldn’t throw away a perfectly
good can of soup.
The tactic worked brilliantly.
Within ten days, the tactic resulted in two “shout-outs”
from influencers on YouTube and Instagram. Analyzing the
numbers, Jeff hypothesized that it had a 66 percent success
rate since he had only sent three FedEx packages.
Combining with nearly 1,000,000 followers, the two shout-
outs from these two channels (which only amounted to
about 90 seconds) sold nearly 28 cases, 869 cans to be
exact. Jeff had paid $55 for the online investigator and $129
for the FedEx packages. The tactic drummed up nearly
$5,000 in new business and 640 new customers. Many of
which would hopefully reorder, or better, storm into their
local Sprouts or Whole Foods demanding that they supply
Heroic Kitchens.
After Sam endured her final late shift at Mercy Hospital,
Jeff rewarded her with the good news. It took them three
days to fill the order, and that was with Jeff’s niece’s help.
Once Sam settled into an at-home groove and distanced
herself from hospital drama, her stress slowly faded despite
a baby kicking at the gates. As she typed away at her
computer, she commented, “I work almost as much as I did
as a nurse, but this doesn’t feel like work.” She said, “The
hours fly by, and I know we’re making progress on our
goals. Every time we sponsor a new animal, I love knowing
we’re making a difference.” She rubbed her belly. “And a
happy mommy means a happy baby.”
Their unborn baby was days away. Maybe hours.
Still, Jeff persevered with his day job. Since starting the
business, his view of his job and its work improved. So much
that he was in line for a promotion, a promotion he didn’t
want.
While his business sucked up his lunch hours and most of
his free time, it gave his job meaning. And his life. It
impressed him that trivial matters like baseball games and
who won some stupid reality TV show had no place in his
life. He had a more important purpose. Not just a common
purpose, like taking care of your family, but it was a cause
that made a difference in the world. It was a mission that he
could see transcending years, if not decades. His job that he
once hated played a role in this equation, and it made it
tolerable. Thoughts of giving his resignation crossed his
mind, but he told himself he needed to win a major store
Shelf first. Heroic Kitchens was making sales, but they
weren't in any big retailers.
When Jeff arrived home from work that evening, he
found Madison at the kitchen table playing on her iPad.
“Hey sweetie, I have your dinner.” Maddy looked up. Her
father had two bags of Burger King and held out one of
them. Since BK started offering the plant-based Impossible
Burger, Sam and Maddy found it to be acceptable fast-food.
Maddy, also vegan like her mother, stood up and grabbed
her bag, the jingles on her iPad still tolling. “Thanks, Dad,”
she said softly while maintaining focus on her screen.
“Where’s your mother?” Jeff asked.
Maddy gestured to the back of the couch and made a
shushing motion to her lips. She whispered, “Mommy cried
herself to sleep.”
“What?” Jeff’s eyes burned with concern. “Did she tell
you why?”
“She was looking at the sick animals who needed help. It
made her sad. She said she had to pick two tonight but
couldn’t.” Maddy shrugged and then turned heel to go to
her bedroom.
“Hey,” Jeff said before she could leave, flashing her an
anticipative simper. Maddy smiled sheepishly and returned
to her father. He rustled her hair and kissed her forehead,
whispering, “Thanks pumpkin, good night.”
After Maddy retreated into her bedroom with her dinner,
Jeff peered over the mountain of cushions and saw his wife
sound asleep, eyes twitching in full REM. Her eyes were
red, and tissues littered the floor. Nestled between her belly
and her chest was a stack of sponsorship applications.
Animal rescues around the country were asking Heroic
Kitchens to sponsor their animals. Each paper detailed a
rescued animal who needed help, complete with their story
and a photo. His wife promised she’d pick two animals for
their next co-packing order. Ugh, another thing to do
before bed, Jeff thought.
He grabbed the applications and walked to the kitchen,
putting his wife’s Impossible burger in the refrigerator.
After plating his fries and double-bacon cheeseburger, a
real one, not that plant-based crap, he sank into his chair
behind the kitchen table.
He let loose an exasperated sigh. He had already worked
eight hours that day, and another few remained. The co-
packer was expecting the order tomorrow morning. With
each order they sent to their co-packer, they would change
their rescue animal. His wife picked. He wrote the copy. The
information would then be sent off to a freelancer in
Southeast Asia who would redesign the label. While this
was cumbersome, it was one of their skews. Each soup label
featured a rescue animal complete with a brief introduction
and a photo. The animal’s full report would be QC coded to
their website, which would encourage email acquisition,
coupon distribution, and brand loyalty.
After a long Monday, he was exhausted like his wife. But
two animals needed to be selected. He flipped through the
pages quickly, looking for any notation that she’d made a
sponsor decision before falling asleep.
Nothing.
He sighed again and then took a bite of his burger,
followed by a handful of french fries. The chair creaked as
frustratingly adjusted his sit. He just wanted to relax and
shower off the workday, so he considered picking blindly.
Before he could just grab any application, a photo
caught his attention.
At first, he couldn’t recognize what he was looking at, so
he started to read. It was about a pig named Sniff who was
rescued from a pig farm in North Carolina. Well, not really a
pig farm, but on the dirt-road leading from the farm. As he
started reading, his heart felt mortally wounded. The pig’s
body was smothered in a dirty pink, a tapestry of open
sores, abrasions, and wounds. Found nearly dead and sun-
dried in a ditch, Sniff had squirmed off an NFFS truck, a
cute acronym that meant “not fit for slaughter.” The truck
transported sick hogs for euthanasia, a death sentence of
neglect or lethal injection, a fate no better than the
slaughter guillotine that awaited the healthier hogs. But
Sniff had other ideas. As the truck left the farm, it was
speculated that he managed to get his emaciated body
through the truck’s fence-gates, wriggling himself free of
the bed and falling into a roadside culvert. Two days later,
as the vultures circled for the coming feast, an animal
activist found Sniff. Presumed dead, the activist noticed the
pig’s nostrils sniffing when touched. In that moment, Sniff
was born, or one could say, reborn. Now at Shady Acres
Rescue forty miles away, Sniff was still struggling to recover
from his trauma and the sickness which got him on the
“NFEFS” truck.
Jeff shook his head and moved on.
The next was a meat cow called Spock. But Spock was
born deformed and unable to grow into an official “meat
cow.” At just a few months old, Spock was purchased from a
cattle farmer. The rescuer reported that the farmer
complained, “I got no use for deadstock, you can haul him
out here for ten bucks.” It took a second for Jeff to make the
connection, but deadstock must have been livestock that
was worth nothing. In other words, also destined for the
NFFS truck. Two photos were included in the application.
One was a full-body picture of Spock standing awkwardly
while eating. His hindquarters appeared to be
disproportionate to his front legs as if afflicted with
cerebral palsy.
Jeff flipped the page and reviewed the other photo.
It was a heads-only portrait.
He locked with Spock’s eyes in the photo.
Spock’s almond-shaped eyes were intensely black but
shimmered in a glassy reticence as if he was still unsure of
his fate and the new humans charged with his care. Jeff
studied the photo as Spock’s eyes continued to bore into
him.
He laid the application on the table and swallowed hard,
turning away. Then he glanced back at Spock’s picture, the
cow’s eyes still locked onto his own.
He never gave much thought to cows, or as they called
them, cattle. His wife always argued that cows and pigs
were just as intelligent as their Bella. That they exhibit
emotions, joy, and fear. They smell, taste, feel, and that they
even mourn for their babies. Worse, they feel pain. He
looked away from Spock’s picture again hoping to sever the
new neural connection.
But it was too late.
He heard his wife’s voice echoing in his head. There’s no
way to humanely kill something that doesn’t want to be
killed—if it’s not your life, it’s not yours to take.
He cursed to himself, Damn it Samantha, quiet!
Next to Sniff and Spock’s application sat his dinner, a
bacon cheeseburger... a real one. He lifted the bun and
glared. Sniff could have been the bacon and Spock the
burger. Literally. Except whoever sat slaughtered and
processed on his bun didn’t have the fortunate opportunity
to receive a name. Or a story. Or the luck to have escaped
the genocide of their species.
Like a dam bursting in his head, he suddenly understood
his wife.
He wasn’t eating meat for a necessity like an Inuit in the
Alaskan tundra; he was eating it for pure _ flavor.
Convenience. An entertainment apparatus at a tailgating
party.
Sweat misted on his forehead as his mind didn’t like his
dissonance exposed to the light, but his soul knew. Smelling
the burger, Bella begged next to his chair, giving her best
plead. Her tongue dolloped in drool while her dark almond
eyes glared in anticipation. As he gazed into Bella’s
innocent eyes, he saw no difference from Spock’s. Then he
thought the unthinkable. Bella’s fate in another culture
could be the same as those animals he aimed to save,
destined to be guillotined so some hurried consumer can
have their drive-thru dollar meal. How could he participate
in this closed-door insanity? He loved animals just as much
as his wife. If he couldn’t slash Sniff or Spock’s throat, how
could he pay someone to do it for him? His wife’s didactic
lectures, which always landed on his deaf ears or erupted in
a contentious spatter, suddenly made sense.
His wife cried herself to sleep, and now Jeff was
struggling to hold the tears at bay. To Jeff, veganism was a
dogmatic topic they danced around. But reading these
stories, looking at the photos, it now meant something else.
He gave the rest of his burger to Bella, who gobbled it
up in three seconds. Picking up the pen, he marked Sniff
and Spock’s sponsorship applications.
They would be Heroic Kitchen’s next two sponsor
animals.
And Jeff would become their biggest cheerleader.
CHAPTER 94
ine BURNIE RIDGES
PIRIINES, | Le
BURNT BRIDGES CAN'T BE REBUILT
A t some point, after your business starts growing, your
job will become an impediment. And it will be time to
quit. At first, it might seem like a good idea to tell your boss
to shove it. It might seem tempting to walk into his office
and kick him in the ass with your steel-toed boots, causing a
stir. But it isn’t.
The Burnt Bridges Principle is a reminder that most new
business ideas are unearthed from jobs and it is always
best to leave your job on good terms. My first profitable
business idea was spawned from my low-wage job. And if
you have a job, it’s likely your business will be related to
your work. If so, you don’t want to slam any doors on your
future business. Perhaps your current employer will
become a customer? Or can your co-workers become
potential hires?
If it’s time to quit your job, congratulations. But please,
leave the steel-toed boots on the floor. Starting a business
after being arrested for assaulting your boss is, well,
starting off on the wrong foot.
KEY CONCEPTS
e Most new businesses are spawned from jobs, or
opportunities discovered in a job.
e Always keep bridges open in case you can leverage
your past career contacts.
Cll Mela os
nia (GOING VeiDe SIRs ey
CONSIDER “GOING WIDE” TO EXPAND YOUR TAM (AND YOUR PROFITS)
&
S ince I adopted a plant-based lifestyle, eating at fast-
food restaurants has become near impossible. Up until
recently, most chains offered few, if any, meat-free options.
Then in August of 2019, Burger King started selling
Impossible Whoppers, a plant-based hamburger. Suddenly I
found myself rolling to Burger King a few times per month.
This itself was rare because when I did eat meat, I rarely
ate fast-food.
The next quarter, Burger King reported record-breaking
sales exceeding expectations, which, according to the CEO,
was fueled by the new plant-based burger.+ Congratulations
to Restaurant Brands International (the owner of Burger
King), who figured out that “going deep” wasn’t the only
way to improve sales.
“Going deep” is an attempt to improve market share by
enticing your total addressable market??? with a new offer
or a new product. For example, if Burger King offered a
new burger topped with a fried egg, they’re trying to get
more meat-eaters to eat more frequently at Burger King. In
that equation, I and other vegetarians are not part of the
total addressable market.
Conversely, “going wide” isn’t about expanding market
share but about expanding the TAM. When Burger King
offered their new Impossible plant-based Whopper, their
total addressable market suddenly blew up to include
vegetarians and some vegans. In other words, their
available market expanded by millions of people. If four
percent of the US population is vegetarian as some studies
claim, that’s more than 13 million people who just jumped
into their TAM. How would you like to wake up one day and
discover that 13 million more people might buy your
product?
GOING "DEEP" GOING "WIDE"
Entice more market share from Expand
existing TAM the TAM
THE "GOING WIDE" STRATEGY
In an example closer to home, I’ve only written books
about business and finance. My TAM is limited to individuals
with these interests. However, I also plan to write in other
genres, from thrillers to general non-fiction. If my
publishing company sells in these categories, suddenly my
TAM will widen substantially. Going deep would be writing
more books about entrepreneurship—going wide would be
writing a murder mystery. Simply put, “going wide” is like
opening a dam and expanding your sales pool.
When you’re in the trenches of business, “going deep” is
often seen as the only way to improve profits. J need to sell
more widgets! I need to sell more widget variations! True,
but also look to go wide. Can your business system®!9
leverage operations and economies of scale to offer another
product that would expand the TAM? If the carrying cost of
“going wide” is financially justified, consider it a wise move.
KEY CONCEPTS
« “Going deep” is tempting your existing TAM with a
new offer or a new product.
¢« “Going wide” is expanding your TAM with a
complementary product that can leverage your
existing business system with economies of scale.
Consider “going wide” once your business system is
in place and scaling economies are present.
Chae GER. 76
Wels PURO Se (Baie
SRA lEGy
BE LED BY PURPOSE, NOT PASSION
&
B y twenty-five, I had five business failures banked. Five.
Common themes underlaid those failures: I was either
chasing money, following passions or both. As I got lost
deep into the Desert of Desertion,’°’ only one thing got me
out: I was purpose driven.
Purpose is the primary driver behind motivation and
perseverance. Without an intense Purpose, a great rat race
escape is unlikely. A Purpose is the camel that gets you
through the desert. A strong Purpose—a why—fires
motivation, steels determination, and jerks you outside of
your comfort zone. When hard, uncomfortable, or thankless
work becomes part of the process, and it will, Purpose
breaks through that muck. Purpose is the engine to persist
when the prevailing emotion is to resist.
As for your Purpose, it can be anything. From the
superficial, I want to prove my parents wrong, to the
altruistic, I want to save the whales. Whatever it is, it must
be strong enough to compel steady action and get you
through the Desert of Desertion when a severed feedback
loop isn’t firing passion.
For me, my ultimate fear in life was waking up at 5:30
AM and then having to drive to the train station and waiting
in frigid weather. Then I’d ride a crowded commuter train
into Chicago, navigate a caffeinated swarm, hitch an
elevator to the 57th floor of some obscure skyscraper, and
then sit there for the next eight hours selling insurance.
The reward of this mundanity would be to repeat it for the
next four days, for the next forty years. Writing it now gives
me anxiety.
It was that story, that vision, that gave me a Purpose—an
avoidance purpose that compelled me to work. It forced me
to expose my missteps, from ignoring markets to selfish
inclinations. It drove me to make the sacrifices that needed
to be made. In other words, nothing else mattered.
Think of it this way: You’re tied to railroad tracks. A train
approaches, each second thunders louder. The violent
vibration against your back intensifies as death advances.
The ropes binding you to the rails tighten as you struggle to
break free. Fear floods your veins with adrenaline. You can
now see the locomotive’s fog light, brighter and brighter.
Louder and louder. And in a few moments, the train will
strike you dead. Unless you find a reason and a purpose to
move.
At that point as the train approaches, I’m guessing you
won’t have a problem with motivation or distractions.
Nothing else will matter. Not season five of Game of
Thrones, not the thankless job, not the unpaid car payment.
Why? Because at that moment, your life has clearly
identified its Purpose. To live. To survive. Or you might think
of your family, and your Purpose is not to survive for
survival’s sake, but to spare them the grief. In our story,
Sam wants to save animals. Jeff wants freedom from
mundane work and fears an empty life. Both are valid. Your
Purpose doesn’t matter, only that it’s as intense and urgent
as the approaching train. With this disposition, it’s
impossible to dither.
If you don’t look at life this way, you don’t stand a
chance. Except it isn’t a train that threatens your life—it’s
time. You’re born, and then you die. Regrettably, most
peoples’ life purpose is comfort.?° They don’t seek to break
free from the tracks; they want you to give them a pillow
and a Netflix subscription. Let me die in comfort. And in
today’s culture, it is far too easy to be comfortable. It’s a rat
race construct.
If you need help finding a meaningful purpose, try this
thought experiment: You win $5 billion. After five years,
you’ve traveled the world, bought everything, tried
everything, and provided for family and friends. After years
of hedonic pleasure, what would be next in your life? What
would you do? Your answer might shine a light on your
Purpose. Get a Purpose and Unscript or get a job and
muddle.
KEY CONCEPTS
e Astrong Purpose—a why—is the only motivational
fire you can count on to get through the Desert of
Desertion.
e A weak purpose compels dithering and makes you
bribable to comfort and excuses.
e« The “billionaire thought experiment” can help you
uncover your purpose.
Chaves aes)
ele POROWS pelle s
STRATEGY
CARRY POROUS BELIEFS TO EXPOSE YOUR POISON PENS
&
| n 2017, I went vegan. You read that right. Even reading
it now has me coiling in disbelief. Had I foreseen the
future in 2015 and told myself this, I would have hit the
floor laughing. Vegan? As in PETA, kale, and tofu? Ha Ha—
me balling on an NBA team seemed more likely. But it did
happen. How? Porous beliefs.
Years prior, my dietary style was Paleo (high protein
[meat] and low carb). Still, as I continued to rack up high-
risk factors for heart disease, as well as an observation of
my body’s behavior after eating particular foods, it became
clear I needed more investigation. What I discovered, both
nutritionally and humanely, was so shocking (and heart-
wrenching) that the shift was pretty easy. More concerning
was my own hypocrisy: Was I, the author and professor of
Unscripted, following a Script simply because Well, that’s
how it’s always been done?
Beware of what you believe because it is your flight-plan.
If your belief is a poison-pen*? it will write a tale not of your
liking. For example, if your poison pen is a belief in Santa,
you might embarrassingly divulge to your third-grade
classmates that your show-and-tell toy was a gift from Santa
Claus. Believe that Jim Jones is the messiah, and you'll
travel to Guyana and drink the Kool-Aid. Poison-pens can
be, well, poisonous.
In all these cases, porous beliefs could have saved you
from embarrassment, repeated failures, and death. A
porous belief is anything that you believe to be true but is
open to critique and investigation. Simply put, your beliefs
—no matter if they’re religious, nutrition-related, or
political—are weakly held and unlocked, or porous to new
information. And such information leads to new beliefs
(canceling the old ones) and, eventually, truth.
Porous beliefs are the only way to give truth a chance.
Everything must be questioned, even your most sacred
convictions. If you want the truth of God, you won’t find it at
a Christian church, a Jewish synagogue, a Muslim mosque,
a Buddhist temple, or at a particle accelerator. The truth is
found at all five.
You’ve never been conditioned to seek the truth; you’re
conditioned to confirm your biases. This is why you watch
the same news stations, read the same blogs, and attend
the same church. You’re not seeking the truth; you’re
seeking to confirm your belief. Known as a confirmation
bias in cognitive science, this is why political derision is the
worst it’s ever been. Today’s media no longer reports the
truth; they’re reporting narratives and confirming biases.
For example, if you believe former President Trump is a
racist xenophobe who was a Russian agent, you’re tuned
into Rachel Maddow. If you think he was the second coming
of Ronald Reagan, you’re watching Sean Hannity. The
problem is, you’re not going to get the whole truth at either
—but likely bits and pieces from both.
When your beliefs aren’t porous, the truth will bounce
off them.
A solid belief is immune from new information, no matter
how pertinent. Worse, such new information suffers from
another failure in cognitive mechanics: the backfire effect.
It has been psychologically proven that our convictions
actually get stronger when we’re presented with conflicting
evidence adverse to our beliefs. This is why political
arguments on Facebook are pointless, regardless of
evidence. Facts bounce with impunity—you could have
video proof of a politician slaughtering puppies, but voters
wouldn't care. Nope, that’s my guy.
Truth is not pushed to your iPhone in an alert. It’s not
found on Yahoo’s home page. It’s not that trending news
story curated on Facebook or Twitter. In today’s culture, the
truth is an enemy to the rat race and the ruling elite, which
wishes to keep the scam alive. The fact is, if you’re not
seeking the truth, you’re not getting the truth.
Your evolution as a human being, not just in business,
relies on porous beliefs. If you’re not changing every few
years,°4 it’s because your beliefs are behind concrete.
Truth bounces like it fell on a trampoline. And truths are
always the best basis for decision-making. If you want to
change your life, start auditing your beliefs to expose
poison-pens. What beliefs are causing problems in your life?
I challenge you to get a notebook and journal every choice
you make for the next week, including the belief that
compelled it. Then beside each choice, write down its payoff
and its short- and long-term consequences. Years ago when
I contemplated suicide, a belief-audit exposed the poison
pen that put me there.
BELIEF AUDIT:
e Poison Pen: Network marketing and business
training programs purchased from late-night
infomercials can help me succeed.
e Action: I joined a network marketing company.
e Payoff: I’m part of a team! I’m the CEO of my
business!
e Short-term consequence: I haven’t made any
money. Moreover, I’ve wasted six months and
alienated a lot of friends.
¢ Long-term consequence: I’ve been doing this
business for two years and have nothing to show for
it. Inow have a closet full of unused products I can’t
sell.
Here’s a thought audit exposing a poor dietary habit.
BELIEF AUDIT:
e Poison Pen: The food I eat really doesn’t impact my
health.
e Action: I ate a pint of ice cream.
Payoff: It was delicious; I felt great while eating it!
Short-term consequence: Felt some guilt, got
really tired and bloated after, and had acid reflux all
night.
e Long-term consequence: Obesity, low self-esteem,
unhappiness, low energy, higher medical bills,
diabetes.
Believe whatever you want—but please, believe it only
after you have investigated all available information and
audited your beliefs. Seek the truth, not a confirmation of
your biases. As Mark Twain famously said, “What gets us
into trouble is not what we don’t know. It’s what we know
for sure that just ain’t so.”
KEY CONCEPTS
e A porous beliefis anything that you believe to be
true but is open to critique and investigation.
e Most people aren’t interested in the truth; rather,
they are seeking to confirm biases, which is why they
watch the same news programs, visit the same
websites, and go to same church.
e If you are the same person today as you were five
years ago, it’s likely your beliefs are not porous, but
concrete.
e The best foundation for decision-making is truth, not
belief.
e Truth isn’t curated to mainstream news: if you’re not
actively seeking the truth, you’re not getting the
truth.
SENDING alle iNXlele Wie Glee
SATURDAY, APRIL 7TH, 2018 - 7:00 PM
(4 DAYS LATER)
“The deep-fried Brussels sprouts, the sautéed asparagus,
and the teriyaki tofu steak.”
The waiter wrote the order, nodded, and retrieved the
menu from Jeff. He snuck a glance at his wife, who was
leaned back in her booth, stunned, eyes wide as limes. Sam
giggled. “Tofu steak?” she recited incredulously, face
plastered with skepticism. She flicked her head back and
forth, channeling her best impersonation of a southern
Black woman who took shit from no one. “You trying to get
something from me later?”
Jeff turned and smiled, an expression not of lust or
laughs but of love and adoration. Sam saw his eyes gloss
over, and her chuckle faded into a warm smile. She felt
Jeff’s hand on her knee under the table. This seemed more
than a horny husband. “What is it?” she asked.
“T’m now plant-based. For good.”
Sam laughed and slapped the table. “You, vegan?” She
quickly glanced at the date on her phone and then said, “A
late April Fool’s joke?”
“Don’t label me as a vegan,” he corrected, eyeballing his
wife. “I am a plant-based libertarian who owns guns.” A
pause, then “And no,” he shook his head, “it’s not an April
Fool’s joke.” He stared at her wondering if she’d believe
him. He added, “I wouldn’t do that to you.”
Sam’s smile melted into disbelief. Jeff didn’t yield into
laughter or a devious grin, his face was chiseled in
seriousness. After locking eyes in a silence, Sam realized it
wasn’t a joke. Three seconds later her tears erupted.
Watching his wife sob, Jeff himself had to hold back his own.
Twenty minutes later, Sam was told the story and how
he’d crossed the chasm. Her veganism was a combative
issue in their marriage. Jeff tolerated her shopping list, and
Sam tolerated his “flesh eating,” as she’d call it. Outside of
occasional barbs between each other, they learned to live
with it. Neither expected anyone’s mind to change.
Once her tears abated, Sam placed her palm on his wrist
and whispered, “I’m proud of you, Jeff—how you’ve grown
as a man, how you’ve grown our business, and how—”
Before she could finish, the waiter interrupted them with
their food.
After dinner and the _ shock of Jeff’s’ dietary
announcement, they got down to business. Since Sam had
quit the hospital and was now Heroic Kitchen’s only full-
time employee, Jeff received daily updates in real-time via
text message as they happened. “We picked up another
wholesale account!” and “We_- snagged _ Derlinger
Distributors!” were the two big messages Sam had sent for
the week. The wholesale account was a small chain of plant-
based grocery stores in the Northwest. The _ other,
Derlinger’s, was a medium-sized distributor that had a
small slotting in the health food section at all Kroger stores.
It also got them listed on Vitacost, Kroger’s online health
store. When Jeff got home from work that day, Sam
reported the details nonchalantly. He wondered if she knew
that Kroger had over 3,000 stores in 200 cities. It was an
account that Jeff had been working on for months and
during his lunch breaks.
When Jeff questioned her lack of enthusiasm on such a
big deal, Sam clarified. “I read the contract. It says we
grant them the option, but not the right to put our brand on
their customer’s shelves, including Kroger.”
“Meaning?”
“Meaning that they don’t have to do anything. They
simply carry our brand and can distribute it to their buyers
if they’re interested.” She paused to let him assimilate it.
Then, “In other words, we ain’t going to wake up next
month and find our soup in 3,000 stores.”
“Damn. Why you got to be such a buzzkill?”
“There’s more. They also want us to change our labels.
They think they’re amateur, too earthy, and lacking
cohesion. They said the smiling cow thing is overdone, and
that it also implies dairy, something really stupid to do ona
plant-based brand.”
Jeff finger quoted, “‘They said?’ You spoke to Dicky,
didn’t you?” Dicky was Derlinger’s VP of sales, a trust fund
brat heir to the Derlinger Distribution Empire, a big fish in
Cedar Rapids, Iowa’s small pond.
“Yes,” Sam answered. “He was really helpful. Knows a lot
about the industry, what’s liked by buyers, and what isn’t.
Said he’s been in the business for 20 years.”
“20 years?” Jeff scoffed, “He’s only 30 years old!”
“Well, this thirty-year-old happens to be in charge of
$100 million in wholesale volume a year and wants us to
make our sponsored animal a larger part of the label.” Jeff
shook his head. Sam added, “And change the entire color
scheme of all three of our soups.”
“Three?!” Jeff cursed. “We have two.”
Sam remarked, smiling, “Not if we want Derlinger to
Carry us.”
ChiAr WER 7s
Wiehe Wallet Sri mss Saya ey
OBSERVE NEGATIVE ECHOES: THREE AND YOU’RE OUT!
&
S ix months after The Millionaire Fastlane was released,
it was painfully clear: the book cover I designed and
loved, sucked. Countless people in my target audience
voiced distaste about the design. Colored in lime green and
tangerine orange, countless folks commented. From
“ignore the cover” to “hideous,” the evidence in my 3A
Method*»°° revealed a big problem. Instead of allowing my
ego to justify its desire to be right (these people are wrong
and don’t know good design when they see it!), I embraced
change®*? and swapped the cover for a new one. Nearly ten
years later, I’ve never heard another complaint about it.
It’s inevitable. You can’t avoid it, and you simply can’t
stop it.
Your product sucks.
Your website stinks.
You're a scammer.
You're this, you’re that.
While Assessing in the 3A Model, you'll eventually hear
negative feedback about your product or _ business.
Whenever you counter a negative market echo about your
product or business, it’s either meaningful- or trivial-
invalidation. While cash-validation®’* proves you offered
perceived-value,°*© meaningful- and trivial- invalidation
proves you do not. Money fails to move into your pocket
because you either failed in your skew presentationS?? or
failed elsewhere.
After encountering a negative echo, your first job in the
Assess component of the 3A Method is to determine what
kind of invalidation it is. Meaningful-invalidation has
actionable intelligence. As the owner of a _ publishing
company with myself as its primary author, a negative echo
with actionable intelligence might be, “Not interested; you
lost me at the foul language,” or “Your stuff is too verbose.”
Whenever identical patterns emerge with negative
echoes, it’s likely a skewing opportunity to improve your
value array. Remember, removing negative skew*?° is
value-skewing. To determine this potential, I use a three-
strikes scale: one meaningful invalidation is a curiosity, two
is a concern, and three is critical. Hit three strikes, and it’s
time to reconsider the tactic and Adjust. If three people
withheld their money because of the same gripe, you could
bet many others did too. Assessing, then Adjusting to
meaningful-invalidation allows positive skew to accumulate
and stack atop your offer. More skew equals more sales.°°?
While one opinion isn’t a consensus, it can reflect it.
In another example, if you’re advertising a new party
game you invented, a meaningful-invalidation could be
“looks boring” or “too complicated.” Not a fun thing to hear
after you spent six months and $6,000 from your 401(k).
Instead of getting angry, probe further. Why did she say it
looked boring or complicated? Even if you don’t hear back
from the negative echo, it could indicate a problem in your
packaging, advertising, or presentation.
The other type of invalidation is trivial. Trivial-
invalidation contains zero actionable intelligence and can
be ignored. These negative echoes usually fall into the
category of cynics or coffee-haters.?’’ In one instance, one
happy reader recommended my book to his friend, who
replied, “Meh, millions of people tried that business shit and
failed.” This ignorant statement harbors nothing actionable
other than proving my bias that most people are absolutely
beyond saving. And that’s great because the rat race needs
its rats. In other cases, the intelligence cannot be used. For
example, over the years many people professed that they
originally passed on reading The Millionaire Fastlane
because of the title. This negative echo was something I
couldn’t fix without losing the central theme of the book.
The fact is, you could create the most fantastic product ever
invented, and many people in your target audience still
won't like it. And those folks tend to be the most vocal.
Identify what’s actionable and meaningful in your
Assess®°° routine, then discard the rest. And while the
haters are hating Monday through Friday, you’ll be
Unscripting...
KEY CONCEPTS
Whenever you counter negative feedback about your
product or business, it’s either meaningful- or trivial-
invalidation.
Meaningful-invalidation is factual and potentially
actionable; trivial is opinion and not.
Three meaningful invalidations are critical and
should compel corrective action.
Adjusting meaningful-invalidation creates more
positive skew.
Clave Mela 22)
ine Cl SER Ra ODE BING
SI RAEGy
USE OBSERVED MODELING TO EXPOSE TRADE SECRETS AND BEST
PRACTICES HIDING IN PLAIN SIGHT
of
M ost mainstream gurus who have carefully cultivated
a public brand are full of shit. At least, the shit they
sell. If you want to learn from these gurus, stop buying
what they SELL, and start studying what they DO.
Years ago, when I developed a front-facing user interface
(UI) for my ground transportation and travel business, I
modeled it off the most trafficked travel businesses like
Expedia and Travelocity. I knew that these big, well-funded
companies tested the best converting UI variations. The
winner of their tests was whatever they consistently
presented on their website. I simply modeled it. In effect, I
was able to reap the rewards of their work and on their
dime.
What works best and what doesn’t is right in front of
your eyes. Study it, then model it. Take any highly
competitive industry with deep-pocketed budgets, and you
can easily “extract” the best-practices by observed
modeling. Then you can extrapolate those results to your
business.
Again, want to learn guru secrets? Don’t buy their shit;
study how the sell their shit. If you see the same ad on your
Facebook feed for months, you can bet that variation makes
money. Observe the copy, the photo, and the landing page.
Assess how you likely fit into their target audience. By
reverse-engineering every public-facing ad component,
you'll unlock the best practices for what is working and
what isn’t. Likewise, see the same infomercial on television
over and over? Again, you can assume it’s making money.
Observe every nuance, and suddenly, you’ll know what
works in the infomercial business.
As an author, observed modeling works fantastically. If
you search the web for writing’s best practices, you'll
discover much conflicting information. One writing “expert”
says you should never use adverbs. He haphazardly shuffled
the cards. She frantically called the police. Another expert
Says avoid passive voice and don’t swear. Fuck that. ;-)
Observed modeling reveals the best practices. Any time
you read a best-selling author who has sold millions of
books through a prominent New York publishing house,
you’re getting what works and what’s acceptable. When
that book hits the shelf, multiple editors have reviewed it.
And not just any editor found on Upwork, but the best
editors. If John Grisham wrote, “He cleverly avoided the
question,” you can bet for damn sure that using adverbs is
acceptable.
Winning formulas aren’t a secret. They’re advertised in
broad daylight for all to see. Look at the best, observe,
reverse engineer, and model. Assess, adjust, repeat.S°°
KEY CONCEPTS
e Best practices and trade secrets often hide in plain
sight.
e Observing and modeling highly successful processes
can help you mimic the same success without the
trial, error, or cost.
Cle Melnt Oe.
meiNCUwwBGMENI SiR AEG y
SIDELINE YOUR BIASES AND WIPE YOUR TEARS WITH MILLIONS
&
S ome years ago, I made a million-dollar discovery on my
forum. As the website grew, it eventually became
beneficial to monetize that traffic with advertising. Most
users didn’t care, but others did. One publicly complained
about the ads. A few others followed, voicing the same
opinion. It was a meaningful-invalidation that went beyond
three strikes.°9® Embedded underneath the complaints was
an opportunity®?’: disgruntled users said they’d be happy
to pay for an ad-free forum.
I thought the suggestion was ridiculous. Why? My
personal bias scoffed, “Wuh? I’d never pay to surf a forum
ad-free, so why bother? I don’t mind ads!” Despite my
sentiment, I listened to my users. I offered an ad-free
version of the forum for a mere $7.99 a month for anyone
interested. On top of ad-free viewing, I also added several
other benefits, including what many felt as more important:
privacy and less dreampreneur noise. In one decision—
merely using the 3A Method*S°°—I found a 7-figure fortune
hiding underneath my forum pages. Had I allowed my bias
and my desire to be right, I’d be poorer today. Simply put: It
pays to test your wrongheadedness.
In another example, observed modeling®?® proved that
interruptive pop-up lightboxes are more effective than any
list-building strategy. Get your free report! Join our list and
get a free coupon! After nearly twenty years of web surfing
and probably 20,000 pop-ups, I can’t recall ever giving my
email address to one of these interruptions. They don’t
work on me, and I hate them. Yet, despite my hatred and
disdain for the strategy, the concept is widely used, and still
today. The verdict is clear: It works. My opinion, null and
void. My ego, bruised.
You see, when it comes to execution, your personal
biases do more damage than good. In another story found
within my forum pages, a young fitness consultant wanted
to break free from the time-for-money trade. While she
earned a decent income, she was overworked doing email
consultations that fell outside her consultancy scope. She
asked the group for suggestions. From automating to
scaling to reforming her clients’ expectations as a fitness
consultant and not as a therapist, dozens of tips poured in.
Many of them useful.
Sadly for this woman, her biases ruled her world, and
she let them dictate her actions, or I should say inactions.
She flat-out rejected every suggestion, preceded by a
personal excuse as to why it wouldn’t work. Every
recommendation was dismissed, countermanded, or
excused away based on her personal worldview and biases.
Her conclusion bordered on the ridiculous, tantamount to
saying because I don’t use supplements, so neither does
any woman on the planet.
Look, business is hard enough. Don’t make it any harder
by letting your personal tastes and narrow frame of mind
corrupt the real world. Your perception is rarely the reality.
When it comes to wealth and freedom, a debt-free dream
house and a Lamborghini parked in the garage does
wonders to assuage a bruised ego. Accept wrongness and
get rich or believe your rightfulness and stay poor.
KEY CONCEPTS
e Personal biases can often prevent good ideas and
best practices from being executed.
e Your perception is rarely the reality.
Wine Wa evNC le (POM eS S10) Ulele
SUNDAY, APRIL 15TH, 2018 - 8:00 PM
(8 DAYS LATER)
On April 15th, Tax Day, Samantha would give birth to the
family’s second child. While they awaited the infant’s arrival
at the hospital, Jeff was seated at his wife’s bedside. Sam
gripped Pinky while practicing her breathing. As she
huffed, Jeff’s phone was blowing up with text messages. She
shot Jeff an annoyed look. “Just tell everyone I’m doing fine.
And turn that damn thing off!” She pointed to the hospital
sign admonishing cell phones to be silenced.
Jeff shook his head, beaming. “Uh, actually, those are
orders.” He turned his phone around and swiped the list.
“See?” After scrolling through several, he put the phone
away and added, “No texts from family, at least yet.”
For the next two hours, Jeff would keep an eye on his
silenced phone. Their health insurance was a worthless
Obamacare bronze plan. Funny how the ‘Affordable Care
Act” made my health insurance anything but affordable, he
thought. Hopefully enough orders would ring through cover
the hospital co-pay. He hated to divert any attention from
his wife and her labor, but Jeff was fascinated. The business
had reached a new threshold of activity.
Earlier that week, Heroic Kitchens had _ started
sponsoring several plant-based and animal rights podcasts.
And before he and his wife left for the hospital that
morning, he got word that another campaign went live:
Heroic Kitchens would sponsor the Earthy Earthlings Edict
—a weekly email newsletter with over 630,000 subscribers
interested in sustainable living. His bet was on the podcasts
doing better than the newsletter. He couldn’t have been
more wrong. In a matter of hours, they’d sold over 3,000
cans, mostly tied to the newsletter.
The podcast sponsorships also did _ well, but
comparatively speaking, $1 spent in podcast advertising
yielded $3.50 in profit, but $1 spend in eNewsletter
sponsorship yielded 10X—$37.00. Once Jeff learned that a
simple email was generating thousands in business, he sent
emails to their homegrown list. Because their rescue
animals were QC coded on their soup labels, they would get
dozens of subscribers per day. On a whim, Jeff sent their
email list a five percent off coupon, and the response
amazed him. Dozens of orders poured in—at a mailing cost
of nothing.
Between the marketing initiatives and their in-house list,
the numbers sparkled neon green in Jeff’s head. His
fascination grew into delight as he marveled at the
mathematical power of the system he and his wife created.
He pinched himself and nothing changed. It was not a
dream. Spend $1 here earn $3.50—that’s a 350 percent
return. Spend $1 there, and it turns into $37, or a 3,700
percent return. Of course, he could spend $1,500 and only
earn $90 as he had with his Windy City Green Living
newspaper advertisement. Still, every channel, every
medium that reached their audience, essentially rolled the
dice on creating another money printing press.
At that moment, Jeff was hit with resounding clarity.
He understood how millionaires and billionaires became
millionaires and billionaires: They weren’t buying indexed-
funds and hoping for eight percent a year, they were
hunting for printing presses that generated asymmetric
returns. They would sell products and services and reap a
ridiculous ROI, hour by hour, day by day, month after
month.
Jeff was not used to earning money unless he was at
work. And he certainly wasn’t used to making 3,700
percent on a money investment. And now that their
business was a legitimate enterprise, he knew it had to be
worth a lot of money... the kind of money that would have
taken them decades to save.
Sam moaned in pain and kicked him out of his
mathematical trance.
He was in a hospital delivery room.
The rhythmic beeping of medical machinery and the
odor of hospital sterility jogged his memory. The last time
he had been here was with the birth of his nine-year-old
daughter Madison. Back then, their lives were upside down
and lifeless. Utter distress and bleak futures. While he was
proud when Madison was born, the moment suffered in a
raw emotional undercurrent. Between the thankless jobs,
the rising costs, the foresight of a hopeless future filled with
nothing but weekend distractions, the memory felt impure,
soured by circumstances. Madison’s birth was but an hour
old, and there he was, consumed by uneasiness. He
snapped out of the memory but couldn’t help but feel a flit
of sadness and regret, a heartache that he didn’t give his
precious newborn daughter the moment. And the guilt that
he’d allowed it to happen. Nine years ago, the rat race had
stolen this moment from him. Now the rat race was on its
heels. Retreating. If the rat race was a game of chess, he
felt like he’d just taken its queen.
He returned his attention to Sam and scooted closer,
grinning. He reached for her hand and began to slowly
caress her fingers. Her pain-filled face cracked with a smile,
and she pantomimed him a kiss. Her face was drawn and
pale, her long blond hair wirey and scattered, but her eyes
were twinkling with joy and anticipation, a luminescence
that Jeff had seen more frequently since she left nursing.
Jeff hoped she was feeling the joy he was. It was profoundly
different. It had depth. Velocity and longevity. He knew his
children would have parents who wouldn’t miss a moment.
And that he was the author of his family’s story, not a job,
not Wall Street, not some economic forecast from some
central banker.
Jeff would not think about business for the rest of the
night.
He’d absorb the moment, the hour, the evening with his
wife, and anxiously await the second time he would become
a father.
When his son Micah was born, no words could describe
his elation.
It was an emotion he never knew existed.
Qnvae Wels’ 10),
mE tGE OO SIN GARART lINiES>
SRAieGy
THE FIVE LEVERS OF JOY: MAKE HAPPINESS AN EASY CHOICE
of
C) ne of the happier moments in my life continues today.
No, it wasn’t a marriage or the birth of a child; it was
self-sufficiency. I remember the day like it was yesterday. I
had recently moved from Chicago to Phoenix, and it was a
beautiful sunny day in January. Meanwhile, in Chicago, it
was cold and snowing. As I left the bank after making a
deposit, it hit me that I had acquired the skills and
wherewithal to never need a job again. In hindsight, this
was the moment that my “happy switch” flipped ON. And
get this—I was still (relatively) broke. Twenty plus years
later and that happiness still remains. And now today, it has
luminesce and is more impervious to externalities like
politics, one-star book reviews, and _ social media
loudmouths.
This might be hard to believe, but you too have a “happy
switch.” And at any moment, you can turn it on. The
problem is most people need an external stimulus to move
this switch. For example, your happiness switch might flip
ON when you get a job promotion or win money at the
casino. But shortly after that, it flips OFF again, only to wait
until the next external provocation.
This dance between happiness and the external
environment is the wrong way to live.
Ultimately, happiness is a choice. It evolves from the
inside, not the outside.
I realize this is easy for me to say when my stomach is
satiated, my bank account is full, and my bills are paid. But
the truth is, I’ve made happiness an easy choice. How? I
focused on what makes happiness likely. Specifically, you
can make happiness such an easy choice that your “happy
switch” has no choice but to be on. There are five
“research-supported” levers of joy and a fulcrum to target if
you want happiness to be your “new normal.”
The fulcrum is a present moment awareness. It is an
understanding that both past and future thoughts are mind
fragments, and that the only time that exists is now. Eckhart
Tolle, the author of The New Earth: A Guide to Spiritual
Enlightenment, calls this the Now. If you live to 65 years old
and each second represented a “now,” you would have
enjoyed 2,051,244,000 Nows. The question is, how many of
those moments were spent dwelling on the past or hoping
for a future? How many Nows were enjoyed in pure
happiness? Probably not many.
For example, even been to your kid’s recital or baseball
game, but your mind is at next week’s meeting? Have you
ever cursed a sunset as it blinded your drive home from
work? Have you ever relived an old sightseeing video on
your smartphone while realizing you don’t even remember
being there? Life is chaotic. And amid all that chaos, living
in the Now is nearly impossible. As such, happiness
becomes a moving target in the future, fleeting and all too
often, rare. Our brain makes happiness a tough cat to catch
because we’re always thinking fr actally.
If you’re not familiar with fractals, they are recursively
chaotic systems driven by an infinite feedback loop. Think of
it this way: If you multiply any number by half (0.5), you’d
never get to zero. Each outcome just becomes smaller and
closer to zero, but zero, numerically, always remains
unreachable.
In life, a fractal thought is a future precondition that
must occur before you grant yourself happiness, usually
starting with a “when.” When I get my dream job, when I
get out of debt, or when I get married. Someday" is a
fractal thought. As a result, anxiety and unhappiness are
the distance between now and what you want in the future.
Namely, you rob the present. The chasm between those two
states is the ever-moving fractal, like a Mandelbrot set.
The problem is fractal thinking makes happiness
conditional to a variety of prerequisites. You haven’t given
yourself the right to choose happiness. Because the fractal
is recursive and driven by a feedback loop (your new car,
new gadget, or whatever else sparked joy), it perpetuates
itself in a Pavlovian response. The fleeting moments of joy
we experience in our consumption and vanity goals are
transient happiness, the cheese, the impetus for our rat
raceP> existence. Ever feel invigorated buying a new car,
and then just weeks later, the joy fades, but the five years of
payments remain?
Sadly, the permissive moment of transient happiness
only temporarily stops the fractal from moving deeper into
the rabbit hole. After the faux happiness fades, the anxiety
returns because we’re now on the hunt for the next
happiness condition. You got the Mercedes C-Class, but now
you’re gunning for the S-Class.
Furthermore, fractal, anxiety-producing thinking doesn’t
end with just a “when.” For instance, how much money is
enough? When the answer is “more,” it’s a fractal mind-
fragment because “more” is unattainably infinite. When
you’re always moving the goalposts, the search for
fulfillment never ends. The end result is your life punctuates
with fleeting moments of transient happiness while pure
happiness peeks over a distant horizon. You’re working
hard for milestones and goals, but misery bridges the
chasm between the achievements.
The truth is, most people are imprisoned in a time
machine dreaming of a future that may never come. Others
are stuck in the past, reliving old wounds that steal the
seconds, the extinguishing moments of Now.
Whenever your mind dwells on the past or future, the joy
of Now is lost. Anxiety, fear, or impatience becomes the
baseline. Or moments are hollowed out while you’re
smothered in your smartphone. Ever go to a concert, and
everyone is watching and recording it through their
smartphone? Instead of enjoying the moment’s full sensory
experience, absorbing the sights, sounds, and smells, the
moment is cheapened when viewed through a_ two-
dimensional facsimile that can only be marginally
experienced in the future. It’s the ultimate waste of the
moment; sacrifice 100 percent of the Now to enjoy 25
percent of it later.
Life’s past anxieties and future chaos can only be tamed
with moments of appreciation in the Now. Pure, lasting
happiness occurs in the present when transient happiness
is not present. Even if you’re focused on a happy memory,
the thought of that memory happens Now. If you’re thinking
about a dreamy future, the same thing: the idea occurs in
the Now. Now is the only place where pure happiness can
switch on. And any thought that takes you away from the
Now is a raincheck on joy.
That said, the first happiness lever is gratitude. Embrace
the process?’29 and your current station in life. No matter
what it is, feel it, live it, and don’t let it pass without your
appreciation. Anytime I walk into a grocery store and see
aisle after aisle of food choices, I am smacked senseless
with gratitude. Be happy about the awesomeness
surrounding you: a warm bed, a hot shower, a house that
gets you out of the stormy weather with food on the table.
You can do all of that and still be excited about the future.
Yes, stop and smell the coffee but also the dirty mop water.
The second lever is family and friends, specifically,
positive relationships with people who support your goals.
Show me someone rich in good relationships, and I’ll show
you someone who is pretty darn happy. Please don’t mistake
“family” to automatically mean blood relatives. In many
cases, as reported on my forum, some family members can
be toxic to happiness. Some are even abusive. You can’t
choose your blood in such cases, but you can choose what
you do about it. All relationships are a choice that impacts
your story.®? Your “family” is your support network, not
necessarily that stepbrother who called you a loser for 25
years.
The third lever is freedom, or autonomy—the ability to
feel in control of your life, to stockpile options, mobility, and
whatever else you want to do. This is what caused my
happiness switch to permanently flip. And scientists agree
where evidence now supports autonomy’s significance in its
happiness role. The Journal of Personality and Social
Psychology cited “autonomy” as_ the number-one
contributor to happiness. When you’re flipping off strangers
from your car because another commuter cut you off in
rush hour traffic, you have no autonomy. According to data
from the US Census Bureau and the Centers for Disease
Control, New York City was ranked as the unhappiest
American city. Yes, the home of Broadway, Central Park, and
Times Square isn’t fostering happiness. Could a lack of
autonomy be inflaming the misery?
The fourth lever comes from fulfillment or purpose.
Broadly speaking, fulfillment is contribution and self-
development. It’s the feedback loop®*® and knowing that
you’re making a difference and doing meaningful work. It’s
having an active dream and the autonomy to pursue it. It
knows that You today are better than You yesterday. It’s
when the “whens” are not flashes of happiness but times of
euphoric elation layered atop existing joy.
And finally, the fifth lever is your health. Physical well-
being. Neglect your health, and the other levers become
severely marginalized, or worse, disappear. If you’re sick or
bed-ridden, nothing else tends to matter. Don’t make a
fortune only to lose your health. To live unbalanced for
short periods is expected. Living unbalanced for forty years
is not.
While it isn’t within the scope of this book, significant
research proves these dimensions of happiness. The
psychological self-determination theory (SDT) supports
autonomy (freedom) as well as connectedness (family) as a
critical factor in happiness. Studied by researchers Richard
Ryan and Edward Deci from Rochester University, SDT
posits that the best forms of motivation and engagement,
including persistence and creativity, come from our
experience of autonomy, competence, and relatedness.
Specifically, Deci and Ryan postulated that these needs,
when Satisfied, enhance self-motivation and mental health
(well-being), and when thwarted, do the _ opposite.t
Basically, intrinsic improvement and growth (fulfillment),
autonomy (freedom), and relatedness (family) are core
constituents of happiness.
Moreover, research also shows that freedom has a
significant impact on health and morale. In one study, Yale
psychologist Judith Rodin encouraged nursing-home
patients to exercise more control over their choices, from
the environment to facility policies. As a result, 93 percent
became more alert, active, and happier“. Some lived longer.
Another researcher, Angus Campbell, author of the Sense
of Well-Being in America, concurs with autonomy’s
Significance and perhaps knew before all of us.
Commenting on a University of Michigan study, he stated:
“Having a strong sense of controlling one’s life is a more
dependable predictor of positive feelings of well-being than
any of the objective conditions of life we have considered.”
Much of this research also explains why specific jobs are
incredibly fulfilling and why everyone doesn’t need to be
entrepreneurs. If your job provides autonomy,
connectedness, and a feeling of competence, you’ve made
your happy switch an easy flip.
GRATITUDE of
RELATIONSHIPS
AUTONOMY
PURPOSE THE HAPPY
HEALTH weourrens
THE "NOW"
rr
PRESENT MOMENT AWARENESS
THE FIVE LEVERS OF JOY
Happiness is a choice, but let’s be honest. Not all of us
have the mental fortitude of the Dalai Lama, Gandhi, or the
Buddha. When your low-paying, low-fulfillment job feels like
a mandatory prison sentence, the happy switch becomes a
difficult flip. For the rest of us who want better odds at
happiness, make a commitment to your Now, while
targeting the five levers to flip on your happy switch:
gratitude, autonomy, purpose, selfdevelopment,
relationships, and health. The seconds are dripping away.
You likely have millions, if not billions of Nows remaining.
Don’t wait to be happy; choose to be happy.
KEY CONCEPTS
Happiness is a choice, a switch in your head that can
be flipped on at any time.
Fractal thinking is a raincheck on happiness based
on “when” something happens, like “When I get my
dream job, I will be happy.”
Transient happiness is the temporary joy felt from an
external stimulus, buying a new car, or
accomplishing a goal.
Pure happiness occurs in moments of present
moment awareness, or the Now.
The five levers that influence happiness are
gratitude, autonomy, purpose and improvement,
supportive relationships, and health.
Pure happiness, which is transcendent and lasting,
can only happen in the Now.
Sale Delt OV
tae VEAP Gere AINGIN
Pl UUINES |b
ACCELERATE WEALTH: GROW YOUR NET WORTH BY THE BUSINESS
MULTIPLE
H ere’s an interesting fact: If you invented a household
product, your net worth would increase by a factor of
16 for each dollar of profit you earned—or 1600 percent. If
you earned a $200,000 a year profit, you’d be a
multimillionaire. How? The average multiple for businesses
in the household goods industry sells at a 16 multiple. In
other words, for every dollar you profited, your net worth
would go up by a factor of 1600 percent.
The truth is, the rich don’t get rich because they save
nickels and dimes from their Starbucks celibacy. They don’t
get rich because they’re paid well from their cushy job.
They get rich because they enjoy recurring asymmetric
returns,°?! 300 percent, 500 percent, 1600 percent,
sometimes every month. They get rich because they tap into
the Wealth Acceleration Principle, an economic reality
called the valuation multiple which gives business owners
the power to explode wealth. In public finance, it’s called a
PE, or a price to earnings ratio. I call it a wealth-
acceleration factor.
As I write this, Netflix’s PE is 87. That means that
Netflix, as a business, is worth 87 times its profits, or
earnings. Doing that math, that’s about $230 billion. If you
want to own a piece of Netflix through shareholder
ownership, the share price you'll pay is “87 times earnings.”
If a billionaire wanted to buy Netflix, they’d need to start
their bid at around $230 billion as it is the asset’s market
value.
Likewise, any small business you own will also be subject
to a PE valuation, often called “the multiple.” Multiples in
private enterprises range from 1.5 to as high as 30 or more.
For example, the first time I sold my business, I sold it ata
multiple of about 4.5. The second time was around 3. This
means that anytime I grew my company’s bottom line,
profits, my net worth accelerated by a factor of 300 to 450
percent. As a business owner, any time you grow your
business, you receive a net worth gain equivalent to the
industry’s average multiple. Here is a sample of average
industry multiples:4
INDUSTRY
Advanced Medical Equipment & Technology
Advertising & Marketing
Apparel and Accessories
Freedom old
Legal Services
Maintenance and Repair Services
Management Consulting Services
Commercial Printing Services
Computer Hardware
Constructing and Engineering
Construction Materials
Consumer Publishing
Corporate Financial Services
Department Stores
Distillers & Wineries
Employment Services
Vegetable, Fruit & Nut Farming
Food Retail & Distribution
Other Food Retail & Distribution
Healthcare Facilities & Services
Household Products
IT Services and Consulting
Medical Equipment, Supplies, and Distribution
Non-Alcholic Beverages
Personal Products
Recreational Products
Software
MULTIPLE
24.81
11.10
12.58
15.52
9.73
9.73
9.73
10.07
11.76
8.22
10.75
10.07
20.56
11.22
15.54
9.73
13.81
9.75
9.47
12
16.10
11.79
21.35
17.58
21.35
13.36
24.35
While smaller companies have much smaller multiples,
these figures represent how large (and outrageous) some
multiples can get. Still, the numbers are impressive.
Moreover, the more significant the impact your company
makes, the larger the multiple becomes. For example, if you
start a business in the personal products industry, say
deodorant or facial cream, and your business succeeds,
expect your net worth to grow at a substantial rate.
According to the chart, a large personal products business
sells at a 21 multiple or a wealth acceleration factor of
2,100 percent. Of course, a smaller company with a few
million in revenue likely won’t sell at 21X profit, but
perhaps five or ten. Still, where can you get 500 and 1000
percent returns?
Don’t believe me?
Native Deodorant, a small start-up with just a few
employees, was recently bought by Proctor and Gamble for
$100 million—in all cash. Native didn’t disclose profits
before the acquisition, but if its earnings were a mere
$5,000,000 a year, the multiple would be 20.
For online businesses, the average multiple tends to be
in the two to five range. Assuming an average multiple of
three, it means your net worth will rise by 300 percent any
time you improve your enterprise’s profitability. Yes, a
whopping 300 percent! Know any investments that have
the opportunity to grow 300 percent in one month? One
year? A business can—and it is the same mathematical
magic that powers a strong Unscripted offense?!? and
asymmetric returns®?! Once you wield this power, saving
$10 a week and hoping for eight percent a year just seems
awfully ridiculous, about as absurd as marathoning across
Canada.
KEY CONCEPTS
e The rich get rich because they enjoy asymmetric
returns, 300%, 500%, sometimes 1000% every
month on their marketing initiatives—spend $1, earn
$10.
e The valuation multiple is a business metric which
prices business assets.
e Depending on your business and your industry, the
valuation multiple also is your wealth acceleration
factor and can be as low as 150 percent or as high as
10,000 percent or more for public enterprises.
e Smaller companies start with smaller valuation
multiples.
e Anytime you grow your company, your net worth
increases by a factor of the multiple, sometimes
more (The reverse applies as well.)
Glave Mela Wee
mE BI GrISie SiR AheG,
GROW YOUR LIST, GROW YOUR PROFIT, GROW YOUR VALUATION
of
[= late 2020, Insider Inc., parent of Business Insider,
announced it was buying a controlling stake in digital
media startup Morning Brew for a whopping $75 million.+
The interesting thing about this story is Morning Brew is
just a list of email addresses. Specifically, it’s a newsletter
with 2.5 million readers (and over $20M in revenue) spread
out across three different industries.
No matter what your business, from an internet software
service to a new Asian restaurant, the bigger list you have,
the bigger your paycheck will be. A list is a big part of your
asset’s valuation. In digital marketing, the old adage (ten
years being “old”) is “tell me how big your list is, and I'll tell
you how well you’re doing.”
Any business, from a global operation to the local coffee
shop, absolutely must have a website. While sales are its
primary goal, your secondary goal for your website must be
list building. If you haven’t yet, start immediately capturing
email addresses or phone numbers. How? The same
Unscripted logic applies to list building: offer value. In
direct-marketing circles, a free value offering is called a
lead magnet. It could be a newsletter, a free resource, an
extended trial, a discount, or a contest entry.
And yes, compelling copy is critical. Because consumers
covet their phone numbers, much less their email
addresses, asking them to relinquish personal contact
details is a skill in itself and worthy of your next best book
to read.S®© While some consumers might see email/text
marketing as intrusive or annoying, make no mistake: it is
the fastest and easiest way to generate a lot of money fast.
My friend owns a personal grooming company that
employs various tactics to capture email addresses: from
Spin-to-win popups to exit coupons. His favorite capture
magnet is a $10 gift card popup on exit, which in his words,
astonishingly has converted as high as 70 percent. When
explaining the conversion rate, he divulged that a gift card
frames perceived-value much better than a standard $10
coupon. Both are the same, but their perceived-values are
not. In another example, a forum user once reported that
his text message marketing conversion rate on _ his
abandoned shopping cart was a staggering 43 percent. Yes,
you read that right: 43 percent!
My lists total over 100,000 email addresses. If I hit that
audience with a relative-value®2® offer, I’m guaranteed to
convert those email addresses into cold hard cash. For
instance, let’s say I host a two-day seminar for $1,000 and
blast my list with the date, time, and price. I’m guaranteed
to generate $100,000 in a matter of days, assuming I limit
my seminar to just 100. While I have no plans on hosting a
seminar while joining the ranks of a guru hustler, can you
see why coaching workshops and “secret seminars” are
such a big hit in the internet market racket? Professional
list builders are monetizing their list.
In the end, your lists are a big part of the asset you’re
building. They can be monetized, sold, and receive a
valuation. You own them like you would a money-printing
press in your basement. If (or when) you ever sell your
business, the size of your list can dramatically impact your
top-line offer.
That said, don’t confuse list building with growing your
social media account. The Millionaire Fastlane’s Facebook
page has approximately 160,000 likes. In 2013, a post on
this page would reach 30,000+ people within a day. In a
blatant money grab to force me to advertise, the mobsters
at Facebook now show that same post to 300 people. Gee
thanks. In short, a list owned by Facebook and a list owned
by you are two different things. Remember, if one
megalithic corporate entity can squash your business in a
matter of minutes, you’re job proxying.°2’ Yes, big social
media presences have value, but they’re not as important
as what you own, monetize, and can sell. A bigger list draws
bigger profits, which draws a bigger valuation.
KEY CONCEPTS
e No matter what your business is, collect email
addresses as they are a valuable asset.
e Email marketing has been a “fruit tree” marketing
tactic since the internet was invented and continues
to offer the best bang for your marketing buck.
e Don’t confuse your private email list with social
media followers—you own the list, or you own
nothing.
VIVA LAS VEGAS
SATURDAY, JUNE 16TH, 2018 - 11:42 AM
(62 DAYS LATER)
“Becky just graduated; we can hire her,” Sam said, cradling
Micah while nursing him with a bottle. With two months of
full-time work under Sam’s belt, Heroic Kitchens had grown
beyond a two-person operation.
“Let’s not,” Jeff bounced back, too fast for Sam’s
comfort.
“Why not? You have an issue with your niece? She does a
good job at the fairs, and she needs a job.”
“Because,” Jeff stated, finger quoting the air, “‘needing a
job’ and being my niece does not qualify her for the
position. And neither does her status as a vegan.”
“Again, she’s pescatarian,” Sam corrected.
“Look, Samantha, our first employee is a pretty big deal.
And we’ve built us a business that is really starting to take
off.” He turned into the table and flipped through Neve, the
raggedy notepad he’d used for his entire life. “Our revenue
this month is on pace to be over $28,000. At a 37 percent
net margin, that’s over $10,000 in profit. Throw in my
salary at my job, and we'll make almost $15,000 this
month.” He swiveled, facing his wife. “We’ve never made
that much before... ever.”
He flipped to the next page, holding up a hefty $510,000
written in black marker and underlined. “At our current
sales, profit, growth rate, toss in your salary, our business is
already worth over a half a million dollars.”
Sam flashed disbelief. “Excuse me? How do you figure?”
She walked to the crib and laid Micah under a blanket,
glaring back.
“T do this stuff all day at work: valuations, audits,
numbers. And I’m telling you, our business is already worth
a half-million.” He shook his head. “The point is, we can’t
hire my niece, at least not as our operations manager.
We’re not running a hobby or a charity. We’re onto
something big here, and we shouldn’t treat it like a
lemonade stand.” He paused, then gestured to the crib.
“We now have two children to care for.”
“Didn’t you say our margin last month was 43 percent?
Why did it go down to 37?”
“Nothing to worry about. As we continue to add
wholesale accounts, it will continue to go down. The margin
on wholesale is half that of retail.” Jeff then added, “Plus
your salary.” He tossed his notebook back on the counter
and then lamented, “But we still can’t afford the trade
show.”
Sam flashed a mercurial smile.
He noticed. “Please tell me you didn’t already hire
Becky.”
“No, no.” She grabbed a seat next to him. “But I do have
a surprise.”
Jeff didn’t like surprises and preferred to be the one
giving them. He led in with an “And??”
“We’re going to the trade show. I got us a space.”
Jeff gawked, ready to blurt something, but Sam muzzled
his mouth with her finger. “And it will only cost us $3,000,
not $30,000.”
Jeff lurched his head back, unable to disguise his shock.
“What, how? There are no spaces for $3,000, I checked.
And double-checked! What on earth did you do?”
Sam laughed. “I picked up the damn phone. You forget
we have a full-time employee now.” She gave her husband a
crafty wink. “Anyhow, I called Tottingham’s Tofu; they have
a booth. You know we use them in our Udon soup for one of
our ingredients. I phoned Shirley, their sales manager, and
asked if they could rent us a space... within their space. Like
a sublease.”
Jeff shot his wife a sly look, impressed with her creativity.
It was a formidable match to his private-investigator/FedEx
gambit that had yielded dozens of influencer shout-outs.
“Holy hell, you sub-leased a trade-show booth? I never
thought of something like that.”
“Yes, and they agreed, especially since we use their tofu
in our soups. They saw it as a win-win. When we succeed,
they succeed. And they get three thousand dollars.” She
paused and then added, “And get this, they gave us enough
room so we can set up a sampling station.” Sam whacked
him on his thigh, butt unavailable since it was seated. “So
get ready to saddle up and go to Las Vegas... you’re going
to be a busy boy...”
Jeff smiled and licked his lips like a salivating dog.
Sam stood and glared him down. “Sure you don’t want to
hire your niece?”
CHAPTER 104
Wile Pali 7AN) Be elie x
S RAG y
PICK UP THE DAMN PHONE
&
[ote Undercover Billionaire on CNBC chronicles a
successful entrepreneur who is dropped in a small
town with no resources and tasked with creating a million-
dollar business in ninety days. The billionaire who accepted
the challenge was Glen Stearns, the founder of a national
mortgage company. While the billionaire came up short on
the challenge (he created a barbecue restaurant with a
$750K valuation), it was enlightening for culture to see that
“no money” and “no skills” isn’t truly a barrier to success.
The only barrier is the crap in your head.
That said, the show was a big topic on my forum. Every
episode was discussed. One forum user, Kyle Keegan, the
host of the Kill Bigger Podcast, was so impressed by the
show that he sought to meet the billionaire at the
restaurant he’d created. When he made the suggestion to
the forum community, mostly everyone dismissed the idea,
including myself.
A few weeks later, the meeting would happen. Kyle and
several other Fastlane Forum members would meet the
billionaire in Erie, PA. How does an average Joe hook up
with a billionaire for lunch and talk shop? Quite simply, he
didn’t do what was conventional. Conventional would have
entailed sending an email, which Kyle did. But a day later,
Kyle did what most wouldn’t: he picked up the phone and
started dialing.
In today’s technology chaos, sometimes going “old-
fashioned” is how you get above the noise. Sadly, too many
young people nowadays don’t know how to use the phone.
Worse, it is feared as if it were a bloodthirsty demon. Fact
is, a phone call is always treated more urgently than an
email, as is an in-person visit. Also, sending a FedEx to
reach a prospect is another method of contacting the right
people free of noise. And if your competition isn’t using
these tactics, it might give you an advantage. Sometimes if
you want unconventional results, you have to do what is
unconventional, or what might be considered “old-school.”
KEY CONCEPTS
e Don’t be afraid to pick up the phone when
appropriate.
¢« Your competition likely isn’t using the phone, why
shouldn’t you?
e A phone call, handwritten postal letter or courier
packages, and other “old-school” tactics have more
urgency and sometimes work better for getting
above the noise.
CHAPTER 105
THE WIN-WIN STRATEGY
USE WIN-WIN ANALYSIS TO SOLVE SEEMINGLY UNSOLVABLE PROBLEMS
&
V{ ears ago, when I owned a B2B (business to business)
service for ground transportation companies, I wanted
to place a full-page advertisement in a trade magazine. I
don’t remember the exact amount, but it was expensive—
too expensive for a small company that was yet to eclipse
$1M in revenue.
To solve my problem, I deployed a Win-Win Analysis.
A Win-Win Analysis is simply one question: Is there a
third-party agreement, a joint venture, or an
unconventional deal that can solve this problem and be a
“win-win” for the partner? Oftentimes there is.
To solve my problem—I can’t afford a _ full-page
advertisement—I had a talk with the managing editor for
the magazine. Instead of an ad, I offered to write for the
trade magazine on various internet topics. In those articles,
I was able to mention my company several times, using
examples and results. It was a win because I didn’t have to
pay for advertising, but my company also got full-page
exposure. The trade magazine won because they now had
valuable, publishable content, free of charge. Win-Win.
The next time you encounter a problem, ask the Win-Win
question. That $30,000 trade show booth you can’t afford?
You might be able to get it done with just a few thousand.
KEY CONCEPTS
¢ Use Win-Win Analysis to solve seemingly unsolvable
problems.
e For a Win-Win Analysis to succeed, look to involve
third parties who might mutually benefit.
Glebe els (Gls
Pale NM OMOG | Ze iain
SRAnEGY
STOP ASKING FOR PERMISSION AND GIVE GATEKEEPERS THE BIRD
&
was in second grade. I don’t remember the exact
circumstances, but the class was on a field trip. Before
returning to school, we ate lunch at a Mexican restaurant.
Later that day, the stomach pains hit. If I didn’t act fast, I’d
shit my pants at my desk. Worse, if my classmates
discovered my bowel blooper, my childhood would be
ruined. Without thinking, I jumped up from my seat and
bolted to the bathroom.
When you want something bad enough, you don’t ask for
permission. You don’t raise your hand and patiently wait to
get called on. You get up and do it. From toilets to dreams,
life is the same way. No matter what your dream is, put
your damn hand down. You don’t need permission to live it
from anyone. Act now, apologize later.
After I sold my ground transportation business, I was
discussing a new competitor with a colleague. This new
competitor put a spin on the industry and had just launched
in New York. We unanimously speculated that the business
wouldn’t survive due to numerous regulatory hurdles. That
new competitor was Uber. Our opinions didn’t reflect the
market and proved us horribly wrong. Uber shockingly
didn’t wait for regulatory approval; they acted and
apologized later.
Closer to home, I had a neighbor who dreamed of being
an author. But instead, she was a mailbox watcher. She
spent her time sending query letters to publishers and
literary agents. Her action wasn’t needled action?®’ or
focused experiments thrust into the marketplace. Her
action was about asking... asking for permission and a “yes”
from an esteemed gatekeeper. By doing so, she denied
herself agency—the power to act and live her dream. She’s
been on the Ask Train waiting for years, praying for a
blessed reply from a stranger who holds the keys to
everything she wants. In other words, she’s still dreaming...
Had I waited for a publisher’s permission to write my
book, I would never have made it to market. I didn’t let a
stranger perched in a Manhattan skyscraper stop me.
Remember, one rejection doesn’t make a market consensus.
When Lindsey Stirling tried out for America’s Got Talent,
she was chastised by Piers Morgan. “You’re not good
enough...to get away with flying through the air and trying
to play the violin at the same time.” Sharon Osbourne piled
on: “What you’re doing is not enough to fill a theater in
Vegas.” Stirling ignored the gatekeepers, and instead, was
led by the marketmind?’’ proving a Productocracy,°’! a
decision that made her millions.
We live in a fantastic time. The Internet has given you,
the ordinary citizen, profound upward mobility. The internet
has democratized agency for the world, neutering once-
powerful gatekeepers and returning it to the people. Yes,
Saint Peter is asleep, and the Pearly Gates are open. Thanks
to the web, the ivory towers, which once courted the
exalted grantors of permission, are crumbling. If you have
the talent and the desire, approval or consent is no longer
needed. The keys to your dream await in open pastures:
your website, YouTube, Instagram, Amazon, and any other
medium with an audience.
There’s only one gatekeeper to target: the marketmind.
Fear—not gatekeepers—is the only thing that conceals
talent. If you sing, sing to the marketmind and see if it
claps. If you tell jokes, tell jokes and see if it laughs. Throw
yourself overboard into the marketmind and let them react
to your value. Gatekeepers can suppress talent like a cork
in a bottle, but talent always pressurizes in the marketmind,
eventually bursting.
Millions of adults live like they’re still stuck in grade
school, raising their hands, waiting to be called upon to go
to the bathroom. Instead of asking for bathroom
permission, they’re asking for permission to live their
dream. They’re waiting for someone to pick them out of a
hat and say, “Yes.” Don’t crap your pants with your dead
dreams; stand the hell up and get moving.
KEY CONCEPTS
e You don’t need anyone’s permission to live your
dream.
e The Internet has democratized talent and value,
giving anyone the ability to go from zero to hero.
e Target the marketmind and let it tell you how good
or bad you are.
e« Great talent, or value, pressurizes in the marketmind
and eventually blows up.
male Mela (ey
THE WEAKNESS & TRIPWIRE
Saline Gi
HIRE WEAKNESSES WHILE LAYING TRIPWIRES TO FORETELL
INCOMPETENCE
&
W henever Van Halen, the legendary rock band, went
on tour, they were known to give their tour
promoters high-maintenance contracts with many specific
requirements and stipulations. The most infamous request
is known as the brown M&M clause: Each promoter at any
venue was instructed to remove ALL brown M&Ms from the
backstage candy dish. Failing to do so gave Van Halen the
right to cancel the concert while still receiving the full tour
price. When this story first surfaced, it was instantly
presumed to be a case of celebrity rockstar divas. Until this
day, that rumor still persists.
The truth is, Van Halen was serving up a ¢tripwire, a
method that detects potential incompetence and/or
oversights. If you’re tech-savvy, think of it as a honeypot. As
David Lee Roth said, whenever this minor stipulation was
ignored, they knew that they could expect other problems
in more critical areas like sound, lighting, and visuals.1 A
brown M&M meant, Of shit, better double-check every
instrument, every connection, and every detail.
Like a touring rock band, business is a team sport. Even
if you’re the only employee. At some point, you’ll need to
hire or contract outside help from people who are more
skilled than you. And when you do, a tripwire is necessary
to determine if you’re hiring someone with an attention to
detail or attention to just getting by. For instance, whenever
I post a job on a freelancing website, I always include a
tripwire in my project description. For example: With your
bid, please include in ALL-CAPS if you prefer Star Trek or
Star Wars (or neither) and why.
When a bid is submitted, and this information is missing,
the application is immediately denied. If this person cannot
follow your simple instructions in the project brief, how will
they perform with the actual project?
When decided when and who to hire, optimally, you
should focus on your strengths and hire out the
weaknesses. If you can code but can’t sell, hire someone
who has the gift of sales. If you have a growth mandate (and
the resources created by it), you should always hire your
weaknesses away. And by “hire,” I don’t just mean
employees. It can be contracted freelancers or companies
found around the world. My publishing company doesn’t
print books; it outsources the job to publishers in Michigan
and Wisconsin. My editors? All freelancers.
While I’ve never run a business with many employees, I
regularly leverage more talented people than I. From
cartoonists to voice actors to designers, I’ve hired them all.
And in each instance, it’s always the better alternative than
“doing it myself.”
While I believe you can learn anything, weaknesses take
longer to hone. Had I tried to learn how to draw cartoons,
my timetable would have tripled, or the final product would
have been diminished.
Accept your entrepreneurial role as a problemologist??°
who project-manages solutions. As the famous UK
entrepreneur Felix Dennis once alluded, his job as an
entrepreneur wasn’t to do spectacular things; it was to hire
those who can do the spectacular things for him.
KEY CONCEPTS
¢ A trip-wire is a hiring tactic that can help detect
incompetence or a lack of attention to detail, saving
you a hiring mistake.
e Hire your weaknesses, work your strengths.
CHAPTER 108
thE GREAT DISHiW ASTER
Pl tINES 2 Le
HOW YOU DO WHAT’S MEANINGLESS IS HOW YOU DO WHAT’S
MEANINGFUL
U
. - ‘ 7
~ e-
As a young man, I had some cruel jobs. By “cruel” I
meant as if God kept playing a joke on me. There was
the job in the frozen floral warehouse where I would learn
all about daisies, orchids, and alstroemerias. Then I worked
at Sears as a stock clerk for a good five years, not in the
hardware or electronics department, but the linen and
drape center. That’s when I learned about valances,
tiebacks, pleats and priscillas. I won’t go on, but I hope you
get my point.
In each case, I hated these jobs. But I made damn sure I
would try my best and then do my best. Looking back, I
realize this mentality is what prepared me for more
tremendous success. At Sears, I was the best stock clerk
and towel folder; nicely squared, tight corners, and the
linen lines perfectly aligned in unison. When I worked
among the roses and carnations, I did the best at what the
job demanded. But wait, there’s more. I was even a great
dishwasher, like, the Michael Jordan of dishwashers. While
Jordan drained jump-shots, I was draining sinks with not a
smidgen of streaks or residue.
There’s an old saying (I couldn’t find the rightful owner
as many claim it) behind the Dishwasher Principle. It goes
like this: How you do anything is how you do everything.
Particularly, how you do what is meaningless is how you
will do what is meaningful. If you’re taking shortcuts and
cheating your way to a law degree, that is how you will
practice law—with shortcuts and cheats. And when you
discover that it doesn’t work in successful law practices,
you'll be disadvantaged and unprepared.
Wherever you are today, you’re never too good to do the
grind. Nowadays, there are too many small people with big
egos. Social media and the culture of likes and upvotes have
inflicted many people (mostly young people) with a warped
sense of superiority and an unhealthy aversion to
character-developing work. All of that can be wrapped up
with a tight little bow called entitlement. When the
sheltered college world is left behind, they enter the real
world, expecting an entry-level job with a penthouse office
and a penthouse paycheck. This attitude works at one thing
only: keeping you enslaved to the Scripted rat race® of
economic Slavery.
Let’s be honest. The ideas in this book and their
application won’t be easy. And much of it you will hate. On
your Unscripted journey, how you do the meaningless
things, stuff you likely don’t want to do, is how you will do
what you want. Even today, a decade beyond official
Uncripted liberation, I still do things I hate. As a publishing
company owner, I hate dealing with shipping and logistics.
While these duties might take only a few hours per week, I
still do them because they support my purpose.°9® More
importantly, doing what I hate allows me to do what I love:
To write with creative freedom, to live passionately without
restriction or reason, and to contribute in ways I could
never imagine.
Once you outline your halfway vision from the 1/5/10
Planasy,°!2 everything you do—even the unsexy jobs—
brings you closer toward your goal. Don’t just do the work;
kill the work.
Remember, strive for excellence and give goodS’”? a
great chance. Confront the work as a personal challenge
and a litmus test for advancement toward better outcomes
and better pay. Take pride that you’re writing the chapters
of your life.S2
Whatever you’re doing, approach it with these three
things in mind: 1) effort, 2) pride, and 3) optimism. Do it as
if it were your own. I don’t care if you’re driving for Lyft,
waiting tables, or shoveling horse manure; give it the best
you have, do it well, and know you’re grinding coal to make
a diamond. What you do does not make you, but how you do
it. If you’re a great dishwasher now, I'll bet you'll be a great
surgeon later.
KEY CONCEPTS
e How you do the meaningless is how you will do the
meaningful.
¢ If you cheat your way into an opportunity, you likely
will cheat your way managing the opportunity.
e Give your best effort in all that you do with pride and
optimism, even work that is boring or tedious.
NEW MONEY, OLD HABITS
WEDNESDAY, JULY 25, 2018 - 715 PM
(39 DAYS LATER)
“Uh, since when does a flight for two to Las Vegas cost
$1,200?”
Sam was standing at the foot of kitchen sink grimacing
at her phone. Visa had texted her about an airline purchase.
Jeff was at the kitchen table, back to the wall, the light of
his desktop computer glaring in his face.
He looked up, gloating. “First class, baby.” He gestured
to the luggage on the seat next to him. “And a new tri-fold
for my new suit. I can’t style in 1D wearing some crap from
Walmart.”
Sam furrowed her brow and pouted, “First class?” Jeff
paid her no mind, not even a glance.
She pirouetted and stormed off into the bedroom. A
commotion ensued as if she were rifling through a
magazine. A moment later, Sam emerged and marched
back to the table dropping a pile of papers in front of Jeff. It
shocked him from his computer trance. He glared at the
documents and shot his wife disgust. “What the hell?”
Sam grabbed the top sheet. “This is our credit card
statement. See that? That shows we owe $13,200.” She
slammed it down and picked up another. “See this one? It
says we owe $4,931.”
“Why are you going through our bill pile? I’m in charge
of the money.”
She responded with another slam, the thuds getting
louder. “This one, from the hospital for having a baby,
$3,900.” Another thud. “This is our business insurance due
next month. $1,935. It doubled because our revenue
doubled, as did our employees.” Slam! “These are health
insurance quotes for a family of four—every one is like a
fucking mortgage Jeff.” She crossed her arms. “Need I go
on?”
Jeff sat startled and frozen. He let the moment marinate
and then slowly, deliberately turned his computer toward
Sam and pointed. On the screen was a banking page, open
to their business checking account. He pointed and said,
“$81,000.” He smiled as if he’d just checkmated a Russian
grandmaster. “That’s more money than we’ve ever had
since we’ve been married. Hell, when we lost most of our
401(k)s in 2008, that was only $3,000!”
Expecting Sam to dance about the news, Jeff waited. But
only stern dissatisfaction steamed from his wife. The silence
lingered. Back in the day, Jeff always had an impulsive taste
for haughtiness: the Lincoln Navigator, the Louis Vuitton
purse, his BMW. Any reason to celebrate was always a
reason to spend. It’s why they would never save or
cheapskate their way to millions. Unless, that is, they lived
until the year 2190.
He waited until her scowl melted, but it only dissolved
into an empty glare.
Finally, tone softer, Sam said, “Jeffrey, I appreciate the
update on our money situation, but $81,000 isn’t enough to
ride off into the sunset in a Rolls Royce. So why are you
flying across the country like it is?”
He raised an eyebrow as if she’d just uttered a numerical
falsehood, like 1+1=5.
But she hadn’t.
She was right.
The large number dazzled Jeff as did the valuation
numbers he knew. While the figures were promising, it
wasn’t near their Escape Number which accounted for the
real numbers... like the cost of living, the cost of expensive
woodworking tools, and the cost to retire thirty years early
without starving yourself. Why was he acting like he was a
millionaire?
He scoffed, turning the computer back around. He
started clicking away and then muttered, “Fine, I’ll get
them refunded and go coach.” Sam didn’t move, but her
eyes did a blinking glance at the chair with the suitcase. He
nodded at it. “Including the suit.”
Sam, now with a self-satisfied smile, dug in gloatingly.
“Go ahead, you can Say it.”
“Say what? That we’re not rich?”
“You know...”
Jeff sighed exasperatedly and then shook his head. Then,
tone slow and deliberate, he said in a singsongy voice,
“Samantha thank you for reminding me that you’re always
right.”
She smiled, enjoying the banter. “Well, Jeff, if that was
true, we wouldn’t have $81,000 in the bank and a business
worth a half-million dollars.” She slapped his shoulder
playfully. “It could be worse: you could be in the garage
sharpening knives.” She winked and trotted away, throwing
him an air-kiss.
GriAr Wem 109
Vine DIDEROT MriINGhe lie
CONSUMPTION IS VIRAL: STUFF BEGETS MORE STUFF
* [re first extravagant gift I bought for myself to
celebrate a net worth milestone®®? was a metallic silver
1999 Lamborghini Diablo. Even twenty years later, this car
still turns heads and sells for hundreds of thousands of
dollars. While I was proud of my achievement, I knew I was
opening a Pandora’s box of new spending. The Diderot
Principle asserts that the more stuff you have, the more
stuff or carry cost, your stuff needs. And stuff costs money.
Here’s what also came with my new Lamborghini:
$250 oil changes every few months
$2,500 tires every few years
$5,000 in miscellaneous maintenance per year
$20 to $50 every time I valet parked
$250 for every wash, wax, and detail
$100 in gas on every fueling
$4,000 yearly state license registrations
$2,000 to $4,000 a year in insurance
$12,000 for the dreaded clutch every 10 to 20,000
miles
Stylish stuff often has a stylish price tag, both in
purchase and use. Moreover, such garishness always
demands equal garishness. Going back to my new
Lamborghini, I remember having to upgrade my clothes
because it felt a bit odd showing up to the club style
challenged. People expected Supreme and Prada, not Sears
and Payless. In a more realistic example, if you upsize to a
bigger house, you also upsize your expenses. More rooms,
more furniture, more space, more air to heat and cool,
more home, more taxes. Consumption spirals into more
consumption, and often continuous, repeat consumption.
While I learned this concept years ago and thought it
was something I alone recognized, it turns out it’s been
known for centuries. Stuff causing more stuff was first
observed by Denis Diderot, a mid-sixteenth-century French
philosopher who penned an essay on the regrets of parting
with an exquisite gift. The luxurious gift caused Diderot to
evaluate the rest of his possessions, which suddenly seemed
tawdry and out of place. Long story short, Diderot went into
debt trying to upgrade the rest of his possessions—his desk,
chair, art—with equally adulated items.
Centuries later, this behavioral phenomenon is known as
the Diderot Principle: the likelihood that new stuff,
especially stuff that exceeds our current complement of
possessions, can spark a fire of spiraling consumption. The
Diderot Principle also posits that we tend to identify with
our possessions and strive to keep those relationships
cohesive. Namely, people who drive Lamborghinis likely
won't be comfortable driving it in Walmart jeans.
It doesn’t matter what it is—a new puppy, a new
computer, or a new pair of shoes—all consumption begets
more Diodetic consumption. And consumption creates
expenditures, which likely conjures the ultimate thief of
freedom, debt. In short, consumption grows the rat race
walls taller and more inescapable.
While there’s nothing wrong with rewarding yourself for
a job well done, even a Lamborghini, just know you’re
buying more than just a car. You’re buying the car and all
the stuff that comes with it.
KEY CONCEPTS
e Consumption is viral, creating more consumption.
e Consumption, especially from affluence, will spawn
more consumption, either in maintenance, or
complementary items.
e Known as the Diderot Effect, consumption increases
as it aims to match equal affluence.
e Consumption requires production and can steal
freedom.
nll Mela ihe
elle (COIRIN BIR EAE S Tava) eG 1
INVEST IN CORNBREAD BEFORE SPLURGING ON CHAMPAGNE
of
| n 2007, after I sold my company for the second time, the
new owners moved the business from Phoenix, Arizona,
to a hot tech district in San Francisco. I’m sure the rent
increased by $30,000 per month, not to mention labor costs
and everything else from coffee to cubicles. Since I knew
my old company’s inner workings, I never understood this
reasoning, other than wanting to “look the part” of a
technology company. Phoenix is not devoid of IT talent or
office space.
Anyhow, it felt like déja vu. You see, the first time I sold
the company nearly six years earlier, the exact same thing
happened: a fast move to San Francisco, increased costs,
and increased things that didn’t seem to matter. I know
foosball tables and unlimited Pringles in the lunchroom are
good for employee morale, but you know what isn’t good for
employee morale? Layoffs, pink slips, and bankruptcy. Sadly,
years later, despite a different economy, a different team,
and a different vision, the outcome would be indifferently
the same: bankruptcy.
When starting and growing your company, cornbread
must come before champagne.
Cornbread is any expense that can positively impact your
bottom line, directly or indirectly: a new software program,
a new advertising expense, a new employee. Any
expenditure that has no meaningful or measurable effect on
the bottom line is a champagne expenditure.
Every dollar you earn or invest in your company should
go into cornbread. Until you reach the _ business’s
maturation stage, it shouldn’t be spent if it cannot grow the
bottom line. Extra expenditures, such as marble doors,
custom-branded mousepads, and that fancy neon light for
your logo, can wait. Preservation of cash and its ultimate
redirection into market validation and then growth are the
only things that matter.
But when cash flow ramps up, so do the temptations.
Stuff begets stuff, and the Diderot Effect?!99 can inflict
businesses just as it does people. Corporations are owned
by people, so the same behavior travels downstream. If
your business card says “CEO” (but you haven’t made a
dime in profit yet), does your new CEO identity demand a
Tag Heuer watch and a red pin-cushion mahogany chair?
Are you flying from New York to Los Angeles in business
Class because that’s what CEOs do? It’s champagne and a
threat to your growth.
When cash is tight, growing a company is impossible.
More sales, traffic, and users demand more resources.
Every dime of revenue (and profits) should be reinvested
into your company to fund whatever growth challenges
await. There is a time and a place for champagne. It just
isn’t the third mile of a marathon.
KEY CONCEPTS
e Champagne expenses are unnecessary business
expenditures, while cornbread is necessary and
usually directly attributed to revenue-generating
activities.
¢ Newly growing businesses are susceptible to
champagne, creating a similar Diderot effect.
¢ Growing a company is nearly impossible when cash-
flow is tight.
e All profit should be invested in cornbread, make
champagne expenditures a reward for milestones.
FIQWAIOIINAG (eiUIL Ee (Psy IN [ake jays nilete lL
SATURDAY, OCTOBER 20, 2018 - 11:15 PM
(87 DAYS LATER)
Girls, Girls, Girls...
As Motley Crue blasted their ears, the air was thick with
doused cigarettes and stale beer. A young woman, not much
older than twenty-one, was parading her hips in front of
Jeff, mostly skin aside from red lace panties about as thick
as his pinky finger. He was drinking at a back table at some
nondescript strip club in a not’ so_ nondescript
neighborhood. If Las Vegas had a manufacturing district, he
was in it. Seated next to Jeff was Dale, one of Tottingham
Tofu’s sales managers, his trade-booth partner that
weekend.
Per Dale’s recommendation, they were there to
celebrate a successful trade show. With his wife managing
the business at home and Becky partying on the strip with
some old college friends, Jeff was planning on dinner alone.
Dale had suggested a night out. Jeff obliged, not knowing a
“night out” meant a sordid strip club. He feared upsetting
his joint venture partner, who was the means-and-the-
method behind their unlikely trade show appearance.
Dale remarked, “We’ve never done this well at the
Veggie Con.” He held up his Heineken to toast. Jeff clinked
Dale’s bottle and took a sip of his whiskey, his third of the
night. Dale continued, “The soup sampling station really
attracted them like flies.” He gestured to his cellphone on
the table. “My assistant messaged me and said we
generated nearly a hundred more leads, double last year’s
count.” Dale’s phone lit up with a call, brightly displaying
the phrase “The Wifey” on the screen. He pressed “Decline”
and sipped his drink once more, his eye crinkled in
deviousness. Dale continued, “I’m on commission, so your
company’s presence really helped.”
Jeff nodded and smiled weakly. “Yeah, we did great too.
Secured six new distributors and sold a boatload. My wife’s
going to be ecstatic when I give her the news.”
Dale sold him an appraising look, lifting his head and
narrowing his eyes.
Jeff took another nervous drink of his whiskey.
His attendance at a strip club wouldn’t bother his wife.
What bothered him was the crapshoot of alcohol. His
drinking history suggested a fine line between harmless
giddiness and demolished inhibitions, taking with it all
critical thinking.
He looked around the interior of the gentleman’s club
and realized a gentleman wasn’t in sight. He remembered
his wife’s rant about “gentlemen” being code for douche.
Most of the post-dinner crowd looked like they’d just
finished mowing lawns or digging ditches. He and Dale
were the only men dressed business-casual; the rest were
dressed slob-casual. He refluxed the cheap whiskey, the
bile/acid combo burning his throat.
“Why here?” Jeff said. “A strip club next to an abandoned
factory? Surely there’s got to be some nicer places in
Vegas?”
The dancing blonde in front of him winked as she
continued her suggestive gyrations. Dale angled into Jeff’s
ear and whispered, “I’ve hooked you up.” He grinned, eyes
glimmering with wit. Then, “Prostitution is illegal in Clark
County, but I hear this place is geographically challenged.”
Dale coughed a laugh, then nudged Jeff under the table. “If
you know what I mean.”
Before Jeff could react, the blonde sat next to him. She
reached under the table and began stroking his inner thigh.
A skinny brunette with mustardy meth-teeth and a corpse-
like body strutted from around the corner. She nuzzled
herself next to Dale, who promptly gave her a kiss on the
forehead. The blonde whispered in Jeff’s ear, “My name’s
Jade.” She motioned to Dale and said, “Your friend here just
paid us quite handsomely to give y’all a very special
dance...” She nodded to the back of the bar where a sizable
blood-red curtain concealed an archway, “Let’s go, cutie,”
Jade tittered while caressing the corner of Jeff’s ear.
Jeff quickly shot his trade show partner a confused
grimace. “Go ahead,” Dale said, snickering, “take a load
off.” He slapped his left hand on the table snickering while
the other hand fondled the brunette’s waist-long hair.
Jade’s hand meandered from Jeff’s thigh to his groin, her
caress intensifying. She winked him a “come hither” look,
and for a moment, he considered it. Her lavender perfume
assaulted his senses in what should have been a welcome
scent in the club’s stink of mop water and cigarettes. As Jeff
grappled with the situation, Jade suddenly stood and
grabbed his hand. After pulling him up, she escorted him
toward the red curtain to the great unknown beyond. The
bass thumped “I Wanna Rock Right Now” by Rob Base as
Jeff’s heart sped. After a few steps, Jeff stopped, despite the
tug on his arm. Jade abruptly halted as if she’d walked into
a wall, nearly falling off her high heels. The sensual,
seductive smile on her face evaporated. She sneered,
“What the fuck? You coming or not?”
Jeff unhooked from Jade’s hand. He said, “No, but thank
you. You can go.”
She shrugged. The sneer morphed to a smile once she
realized she’d just gotten paid for a “dance” she didn’t need
to perform. She spun and quickly shuffled off. Jeff returned
to the table and opened his wallet. After he flipped a
hundred-dollar bill onto the table, he stated, “I appreciate
the dance and the drinks, Dale, but I have work to do.”
He grabbed his whiskey and took one last sip, lilting his
head to the grimy ceiling tile. It was browned by cigarette
tar as old as the Reagan administration and caked with
some unknown black goo that was probably syphilis
incarnate. He faced Dale and his brunette friend, who were
both were painted with confusion. Jeff thought about
saying, “Tell the wife I said hello” or something to that
effect, but instead, he stood silently zipped. After a moment
of awkwardness, he then said flatly, “See you tomorrow at
the booth.” He turned and left the building.
Cale iiels: 11
its = 1D Aa ell aie Gi
IDENTIFY RISKS THAT CREATE DARES
&
A te three vodka tonics, I felt light and free. I’d just
met a woman on an internet date, and the meeting
went fantastic. Eye contact, engaged conversation, a few
hair-flips; my ego was surging with confidence. I hopped
into my 850-horsepower Viper and started the drive home.
Five minutes later, my car was wrapped around a twenty-
foot date palm, destroyed. But my life, luckily, was not.
What happened? With a hot ego and lowered inhibitions,
I thought I’d street-race a throaty Mustang. I throttled
hard, spun out, and crossed into oncoming traffic,
broadsiding a tree. In hindsight, I failed to recognize a
DARE, or a Downside Asymmetric Risk Event.
If you haven’t noticed, asymmetry is a big theme behind
a great rat race escape. A Downside Asymmetric Risk Event
is when your choices have best- and _ worst-case
consequences that are unevenly skewed negatively:
minimal upside, colossal downside. It is a failure at
consequential-thinking.5®© When I’m street-racing on a
crowded city street in a car sauced with nitrous, my upside
is a fleeting burst of adrenaline and a superficial ego boost.
Ten seconds of fun, eh? The downside is I crash and kill
myself. Or someone else. The downside is catastrophic and
lasting, perhaps eternal. The risk of this action (street
racing) and its outcomes are disastrously asymmetrical.
Remember, one poor decision can invalidate thousands of
good ones.
Whenever you fail to identify a DARE, which could be a
literal dare: J dare you to jump off the cliff I dare you to eat
the whole bag of marijuana gummies, you're playing
Russian Roulette. Your lousy decision loads the gun. While
there’s a decent chance you can escape the consequences
of your poor choice, there’s also a chance you'll blow your
head off. While none of us would willingly play Russian
Roulette with a loaded gun, you are whenever you make
poor choices. A DARE becomes a bullet.
Remember that medical-device CFO who thought he
would video himself chiding a Chick-fil-A employee at a
drive-in window? A DARE loaded the gun. His upside was
some likes and comments from anonymous strangers on
YouTube; his downside was losing his career and life
savings. He spun the barrel and lost. Remember, as
Unscripted entrepreneurs, we’re trying to manipulate
probability and have asymmetry work for us, not against us.
However, the real danger of DAREs are risks that are
hidden or not easily forecasted—or asymptomatic risk. For
instance, if you’re speeding on the interstate from Colorado
into Kansas with a broken taillight and a pound of weed in
your trunk, your DARE is asymptomatic and _ very
asymmetrical. The catastrophe is not easily seen: getting
stopped by police and thrown into jail for months, perhaps
years.4
Similarly, the new buzzword worthy of clickbait
headlines on financial websites nowadays is this concept
called FIRE—or Financial Independence Retire Early. With
a ten-year bull-market behind us, this movement is based
on the compound interest scam?®—living frugally during
your youthful working years while saving and investing
most of it in the stock market. The hope is to “retire early”
and continue living the same frugal existence based on
presumed growth rates and systematic withdrawals.
Participants call this financial independence—I call it
financial dependence. Why? The risk is asymptomatic and
asymmetric. If the stock market crashes or goes into a
three- or five-year recession, retirement turns into a
reckoning. OMG, my life savings are gone! OMG, my
withdrawal calculations didn’t account for three years of
negative returns!
While I respect the movement’s central tenet, freedom,
denial of reality is best served asymmetrically. There is a
100 percent certainty that the stock market will eventually
crash, and with it, life savings will too. While most markets
eventually recover, most people can’t survive the duration.
Freedom is the right neighborhood—relying on the stock
market for that freedom is the wrong house. Newsflash:
changing the prison warden doesn’t change the prison.
Swapping your slave-owner from a corporate job to Wall
Street doesn’t change slavery. In other words, FIRE is a
DARE. Bullet, meet barrel.
As an Unscripted Entrepreneur, stock market crashes or
economic recessions are not DAREs. If the stock market
crashed tomorrow by 50 percent or didn’t earn positively
for the next thirty years, my lifestyle wouldn’t change. I
don’t have to update the resume and hunt for a job. There
is no DARE. In fact, during the COVID-19 pandemic, my
income didn’t drop. It went up.
Bet on it: The better you manage—or preferably,
eliminate—asymmetrical and asymptomatic DAREs, the
better life you will have. Life as an entrepreneur is filled
with risk. The question is, are the chances you’re risking
worth the best- and worst-case outcomes? Are you risking
everything for twenty minutes behind a red curtain at the
back of a sleazy strip club? What kind of probabilities°9
and expected values®°® are you dealing with? Think
consequentially for a few seconds, and you will expose the
DARES. And avoid the stupid games that have stupid prizes.
KEY CONCEPTS
A Downside Asymmetric Risk Event is when your
choices have consequences with a minimal upside
but a colossal downside.
DAREs often involve literal dares: I dare you to jump
off the cliff.
DARE risks are usually asymptomatic, they are
hidden or not easily forecasted.
Consequential Thinking can help expose DAREs.
Financial Independence Retire Early, or FIRE, isa
DARE with asymptomatic risks.
Don’t risk everything for twenty minutes of pleasure
behind the red curtain.
Crier ala2
THE BACKSEAT PRINCIPLE
BAD PEOPLE OPEN TROUBLESOME ROADS
W ren I was sixteen years old, I had an odd friend
named Dave. Dave scared the crap out of me
because he was unpredictable—one minute he seemed
friendly and supportive, and the next he’d look at you with a
homicidal scowl. One day while I was at his house, he
cursed at his mother, calling her names I won’t repeat here.
His mother didn’t discipline him; she simply shook her head
and walked away. My eyes gaped like saucers. Later that
same day, Dave caught a rat in the backyard and burned it
alive on a leaf pyre. I objected in spirit but kept quiet, not
wanting to be Dave’s next victim. After the sick deed, I gave
an excuse and left. It was the last time I saw Dave because I
decided it would be the last time. Even in my youth, I
sensed something off. Disastrous. My intuition knew I didn’t
want to hitch a friendship with this guy. And sure enough, I
was right. I read about Dave in the newspaper some years
later; he murdered a police officer.
The Backseat Principle asserts that every person who is
in or enters, your social circle puts you one degree away
from their consequences. The question is, can you identify
and remove people who are liabilities to your goals? Will
you allow the negative inertia of someone to carry you to
dark places? Or will you be a proactive CEO of your
choices?
Be wary of who you invite into your life. Start looking at
people as if you were a backseat passenger in their car. Get
into the wrong car, and once in a while, you'll find yourself
on their detours and united to their second-order
consequences. What if I’d remained friends with Dave and
happened to be with him when he killed a cop?
You can’t escape the rat race and Unscript from the
world’s economic religion’® tethered to human liabilities
who insist on keeping you in it. Are the people in your life
driving you to mediocrity, or worse, exposing you to DAREs?
Plll Or are they driving a route to growth and winning?
Don’t let one sordid transgression at a seedy strip club in
Vegas destroy your business or your marriage. Likewise,
don’t let one poorly placed comment with a joint venture
partner endanger the relationship. While Jeff might not
have approved Dale’s behavior, he wasn’t privy to Dale’s
Marriage arrangement. Perhaps they had an open
relationship? The fact is it was none of Jeff’s business. Still,
Dale opened a green-lighted road that Jeff wouldn’t
willingly drive. People, both good and bad, pave the streets
on our map. If your map is tarred with many troubled roads
because of the people you’re hanging with, eventually you'll
find yourself stuck on one of them. And troublesome roads
only lead to one place... trouble.
KEY CONCEPTS
e Every person in your social circle puts you one
degree away from their consequences.
¢ Look at new friends and/or business associates as
you would being a passenger in a car they drive: If
they crash, you might go with them.
¢« Bad people inflict second-order consequences into
your life.
Crue Mele, Ws
els OMA ere lee AMICON)
SI RATEGY
CARRY LOW EXPECTATIONS TO PROVOKE HIGH SATISFACTION
&
C onfession: I’ve been on hundreds, perhaps thousands
of Internet blind dates. Yes, I was a serial dater years
ago in the pre-Tinder era when it wasn’t so mainstream. On
each “date,” my expectations for the meeting were simple:
meet another human being and have a good conversation.
This standard of expectation made all my dates/meetings
enjoyable, if not interesting. When pictures didn’t match
reality, I didn’t get angry. If twenty seconds revealed that
this woman was not the woman of my dreams, but more
likely the woman of nightmares, I made the most of it—
laughed, drank, tried to learn something. Expectations
were always exceeded. Heck, a man in a pink dress could
have shown up, and I still would have had a good time. Not
because I liked being misled, but because my expectations
were set so low. I made satisfaction the probable, likely
outcome. I was there to meet another human being, and the
violation of that expectation is only to be stood up!.
The chasm between expectation and reality is a
disappointment. If you want less disappointment and more
satisfaction in your life, lower your expectations. While you
might not be able to control reality, you can control your
expectations. It’s a potent weapon in your arsenal of brain
tricks, and another influencer within the happiness
levers.5!0!
For much of my life, I’ve held low expectations; for
myself, for friends, and for any future outcome. While some
might mistake low expectations for pessimism, it is about
maximizing satisfaction while minimizing disappointment.
Lowered expectations do two things: First, it mentally
prepares you for it if it does happen, and second, it makes
satisfaction more likely. More satisfaction equals more
happiness.
Think about the last time something happened that
exceeded your expectations. How did you feel? Overjoyed,
excited, surprised? Conversely, how about the last time you
felt disappointed? What was your expectation versus the
outcome? The difference between all results and your
feelings about those outcomes is a matter of expectation.
Change your expectation, and you can change satisfaction—
and keep that happiness switch on.
KEY CONCEPTS
e MJ was an online serial dater back when it was for
nerds and losers.
e Low expectations, which you can control, ensure
high satisfaction while preparing you for the worst.
e The gap between expectation and reality is
disappointment.
e Exceeded expectations creates transient happiness.
rieycta ele | aysnes (alle Tes) |)
TUESDAY, JULY SOTH, 2019 = 215 PM
(283 DAYS LATER)
Jeff stood at a towering glass window overlooking Woodfield
mall, the late-afternoon sun beating down on his face. He
was on the 17th floor of the Schaumburg Tower in an
unfinished office suite. Bare metal girders shelled various
cubes and walls, but mostly, the floor was empty. With no
tenant to pay for utilities, the air was oppressively humid.
His wife had texted that she would be ten minutes late, but
it was now looking like twenty.
Earlier that day, Jeff had scheduled the 5 PM meeting
with his wife, telling her it was about “a big business deal.”
He stressed her attendance was imperative. She must have
thought it was about a new distributor or joint venture
partner based on her giddy reaction.
Across the empty floor, Jeff heard the elevator ding open.
He glanced but couldn’t see inside. Keys jingled, but no one
exited. As the door started to close, he shouted, “Sam? Back
here.”
The door reversed back open, and Sam peered out,
dumbfounded. Jeff tried to rein in his glare. He hated
tardiness.
She drifted out cautiously. She was dressed business
casual in a maroon sport jacket with a black satin
undershirt and a matching mid-length skirt. Scanning the
barren floor, she asked, “I thought we had a meeting here?
Something about a big deal?”
Jeff faced her from across the room and spread his arms
outward as if he was showcasing a prize on The Price is
Right. “This is the big deal.”
She strolled cautiously closer, her eyes narrowing.
“Come again?”
“We’ve outgrown our townhouse.” He grinned and then
fanned out his hand again. “Say hello to the new corporate
office for Heroic Kitchens.”
She surveyed the floor and then frowned. “I see an
empty room with no offices or desks. You rented this place
without asking me?”
Jeff corrected, “Leased.” He strolled to the corner of the
window. “This can be your office. You get a view of the mall.
And in the other corner, we’ll put my office.” He faced his
wife, her expression still hard as granite. He continued,
“This place can handle a total of ten employees. And with
Monica, we’re now at five.”
Monica, who had been hired the week before, would be
their fourth full-time employee. She was a recent college
graduate with a degree in marketing and a passion for
Heroic’s mission. Better, Monica was vegan and owned a
YouTube channel with over 250,000 subscribers. She had
experience as a vlogger, influencer, and marketer. Her
channel already was responsible for thousands of dollars in
sales, and it was how she’d gotten on Jeff’s radar. They’d
interviewed more than a dozen candidates, but Monica was
a lion among kittens. Charged with taking Jeff’s job,
marketing and operations, the move allowed Jeff to focus on
scaling challenges. Commercial office space was the first of
such challenges.
Ten months ago, when Micah was born, Heroic Kitchens
had been in a few dozen stores nationwide, and most of
their sales were direct-to-consumer via their website and
Amazon. After Micah’s birth, Jeff cashed in all his vacation
hours and exercised the company’s paternity leave. It gave
him a full month to work on the business while Sam dove in
as a full-time mommy. It was her life’s dream—the dream
she’d mapped out in the 1/5/10 Planasy she’d drafted three
years before. While his wife still worked part-time, it was on
her terms. Better, she was making more than her old salary
at the hospital for a quarter of the work. Sam trusted him
with the finances, and Jeff trusted her on everything else.
When Jeff returned to his job, he gave his resignation
and quit two weeks later. Initially, he’d wanted to quit once
their revenue reached $2,000,000, but that would have to
wait for the other $300,000 to catch up. Surprisingly, that
would only take a few more months to happen.
Once the Trotmans found their optimum operational
groove, the results were astonishing. Sam went back into
the commercial kitchen to experiment. And experiment she
did, coming out with a new flavor, a plant-based Clam
Chowder. Once it was lined, engineered, and co-packed,
ready for sale, they messaged their customer list (now over
100,000 strong) about the new flavor. That email generated
over $80,000 in sales in one day.
More than a year after they signed with Derlinger
Distributors, they were finally shelved in all Kroger stores.
That blew things up. Big.
Jeff found himself working every day, from order
fulfillment to customer service to managing retail and
wholesale accounts. There simply weren’t enough hours in
the day, and they needed to hire. The problem was it wasn’t
going to happen from a 1,200 square foot townhouse.
Sam glared at her husband, standing in front of the
large office window. From the 17th floor, she could indeed
see Woodfield Mall and its empty parking lot. Like many
malls around the world, it was dying a slow death. Her
chest felt queasy as she thought again of her husband’s
impetuousness, a trait which she both loved and hated. In
this case, she wasn’t sure which.
Sam faced the window, happy to know her husband
couldn’t see her antipathy. She spoke sternly at Jeff’s
windowed reflection as if it would soften the blow. “We can’t
afford this. This is going to cost us thousands.”
“Yes, $6,000 a month, but the landlord gave us a great
deal. It’s a three-year lease, and they will help with the
build-out. We can have it done in just a few weeks. They also
Sam interrupted, quickly turning from the window, “Six
grand every month? Are you fucking insane? That’s four
times the rent at our townhouse!” Her face seethed red.
“No, it’s not nuts, that’s the going rate for offices of this
size and in this area,” Jeff said flatly. “And to your point, yes,
we can afford it.”
His face stiffened as he didn’t appreciate her aloof
tardiness and now the cursing attitude. He’d managed
millions at the job he’d just quit. She carried on, scoffing,
“Like we could afford those first-class tickets you bought for
the trade show in Vegas? How about the Lincoln Navigator
we had repossessed, or that T-shirt business you bombed
on?” Sam shook her head, eyes unsettled and now teary.
But Jeff didn’t bite as he would have two years ago. He
veered over and grasped her shoulders. “Hey, what’s
wrong? You should be happy.” She took a deep breath and
then stewed for a minute, her face trembling as if she faced
a demon.
As the tears welled, she turned back to the window
again, choosing to look at her husband through its
reflection. Tone bitter and brooding, she said, “I am happy.
That’s just it. I’ve never been happier in my life. I’m with my
kids all day, even if I’m working. I get quality time with my
husband, and geez, you don’t even complain about money
anymore. I’m helping animals, I have a worldly mission,
everything is just fucking awesome.” She sniffed, “And my
husband is vegan.” She shook her head in disbelief and
then sighed a whirlwind. “Oh yes, I’m living the dream I’ve
always wanted.”
Jeff stood back and shook his head, puzzled. She’d
spoken two “fucks” in less than two minutes—something
deeply emotional was stirring. He asked, “Then why the
crying and acting like you just got put back on a graveyard
shift?”
She sniffled and then raised her hands as if she gave up.
“This!” she said, focusing on the empty, unfinished concrete
floor. “I mean, this isn’t cheap.” She shook her head
disgustedly. “I’m just afraid of you—or us,” she corrected,
“making a wrong decision and having to go back to the way
things were.”
“So you don’t trust me?”
“Jeff, I’ve always trusted you, and that’s the point. This
isn’t about some pricey plane tickets that can be refunded.
This isn’t about making a mistake on some dumb T-shirt
business. This is big. And you know how you like to act first
and ask questions later. If we screw this up, it could send us
right back where we started.”
Jeff was speechless as he stood in front of his wife,
dumbfounded. Scarcity mindset? he wondered quietly. Sam
didn’t wait for his retort and lingered to the window again,
continuing her avoidance. The silence lasted for an eternity,
except for a police siren, which passed on the road below,
followed by two more.
Finally, Sam turned and faced him, her eyes blood red
and lips trembling. “I... I...” but she didn’t finish and turned
around again.
Now getting impatient, Jeff asked, “What on earth is
going on, Sam?”
Another silence.
He prodded, “Samantha?”
In the eerie quiet, she mumbled, “Pinky.”
Unsure if he heard her, he repeated, “Pinky? Your old
stuffed animal?”
She didn’t answer and stood motionless, her back still to
her husband.
Jeff strode over to her and tapped her on her shoulder,
his impatience turning to disorientation. He said softly,
“Hey, Pinky’s at home exactly where you left her.”
She quickly turned to face him, and what Jeff saw
frightened him. Gone were his wife’s tears. Her jaw was
clenched, and her cheeks were flushed a blood red. Her
bright blue eyes were now a shadowy green. She vigorously
shook her head, seething in anger. Her voice thick and
petulant as if she was a teenager, she said, “NO SHE’S
NOT.”
Jeff shrugged, bewildered.
Sam sighed and then relented, “When I was ten years
old, we had a lamb at our ranch named Pinky. My father
came home with her one summer, and I instantly fell in love
with her.” She gazed vacantly at the floor. “She was this
cute little fluffy furball, and I spent most of the summer with
her. One of her eyes was bright pink, which is why we called
her Pinkie. We weren’t sure if she was blind in that eye, or if
it was just some genetic defect.” She paused to sigh, her
face maintaining its hardness. “I remember she had these
long and curly eyelashes, almost cartoonish. She used to fall
over and wriggle on her back like she was dancing to La
Cucaracha. Her little legs would flop around like she was
playing the air drums. She loved getting her belly rubbed,
and it was her way of asking for one.”
Jeff let her talk, but he wasn’t sure where she was going
or how this had anything to do with renting an office.
Sam carried on, simmering in the thought. “When Pinky
was hungry, she’d give you this tiny, adorable squeal and
her lips wouldn’t even move. I remember thinking that she
sounded like a dolphin.” She paused and bit her tongue,
face tightening. “Anyhow, I guess it was my fault. When my
father brought her home, he said not to get my hopes up,
that Pinky would only be visiting for the summer. So, I spent
every day with her, knowing that my pops was probably just
doing another trucker or a rancher a favor. A ten-year-old
doesn’t think about the reasons, I just saw that I finally had
a pet.” She finally looked up at her husband, her anger
morphing into revulsion. “My parents wouldn’t let me have
any pets, not even a cat.”
Jeff felt his eyes start to well when he realized his wife
was Sharing something she’d never shared. Sam continued,
the horror in her eyes losing its battle with remorse and
sorrow. “For three months, I nursed Pinky with bottles of
fresh milk. The Alstons up the road had dairy cows.” She
looked oddly at Jeff as if this fact was common knowledge.
“Pinky and I, we’d play hide-and-seek in the haystacks,
fetch, we’d even nap together whenever my father was on
the road.” She paused, two tears escaping both eyes. “It
was one of the happier summers I could remember, at least,
until Pinky disappeared.”
Jeff finally spoke. “Your father made good on his promise
and returned her?”
Sam didn’t move but her face drooped, her eyes glazing
over vacantly as if she just aged ten years. She continued,
“That’s what my mom said, yes.” She wiped a tear on her
blouse. “I cried myself to sleep for days. I wouldn’t eat.
After three days locked in my room, my Pop ordered me to
the supper table because it was Thanksgiving. After
finishing the meal, I asked to be excused so I could go back
to my room. When my father gave me a stern no, I blew up.
I told him I hated him and wished him dead. I yelled and
yelled, demanding to know where he took Pinky.” Sam
shook her head, hatred now burning out her tears. She
looked at Jeff and said, “And you know what that bastard
said? He just looked at me with this sick expression, I can
see it as clearly as if it were today. With this self-satisfied
grin, this gleam in his eye as if he got some type of joy from
teaching his daughter a lesson, he said, ‘Samantha, you just
ate Pinky. That’s life—and life don’t give two cents about
your feelings.’ And then he snickered and smiled while
forking another slab of Pinky into his mouth, chewing
obnoxiously and sucking gravy off his fingers as if it was his
last meal before a death sentence.”
Jeff’s eyes flared, his heart feeling like a cinder block just
dropped on his chest.
“After that, I vomited all over the dinner table. I
remember seeing bits of partly digested meat and green
beans splattered all over the dinner table. The odor was
horrible, and I wondered what part of my best friend did I
puke on the table? Her belly I rubbed so many times?” She
shook her head, the anger returning. “My mother just sat
there like an obedient shrew while my father continued
eating and slurping. He made me clean it up before I could
go back to my room.”
Jeff tried to hold back his sobs but couldn’t. He drifted to
his wife and embraced her, causing her to erupt in tears.
He whispered, “I’m so sorry, sweetie. I never knew.”
After a tearful silence, she pulled back. “My relationship
with my parents was never the same. Then they dragged
me into church a week later where the priest gave a
sermon on love and compassion.” She scoffed sarcastically.
“My motherfucking father had as much compassion as a
starving wolf in a hen house. His workshop was wall-to-wall
bucks and antelope that he killed sport hunting.” Jeff
thought about Sam’s earlier rants about hunters and
gentlemen. “The hypocrisy pissed me off so bad, I glared at
him the whole time.” She fled from the memory and looked
up at her husband. “When I didn’t go to his funeral, my
mother disowned me, which is why she wasn’t at our
wedding. Stuck up for that asshole till his last breath. She’s
a wretch who married a wretched excuse for man.”
Sam stepped back and collected herself, the weight of
the heavy memory lightened. Wet mascara shaded her with
a black pallor. She pulled a tissue from her purse and wiped
her face. She spoke plainly, “I’m sorry, but whenever I’m
happy, I expect to have my heart broken. I wake up every
morning waiting for someone to wake me from this dream,
waiting for someone to shake me into reality, waiting for
someone to drop the bomb and say that none of this is real,
and it will all disappear. I’ll go back to the hospital, you’ll go
back to your job, and we’ll see each other for a few hours a
week. And the kids get their part-time parents.” She paused
and then confessed, “I’m sorry. I’ve just got this bad sense
that the summer is ending, and my heart is about to be
broken again.”
The sun was now setting, her husband standing in a
blinding sunbeam. He took a deep breath and moved back
into her space. It took Jeff a moment to figure it out, but
Samantha was terrified of having her happiness disappear
in the dark of night, like Pinky did those many years ago.
From childhood trauma to early relationships, she was used
to having her joy stolen. Interrupted. Snatched away like an
insect in a Venus flytrap. When her mother no-showed their
wedding, it soured the event. For her, the bigger financial
burden of commercial office space must have jolted her fear
into overdrive.
Jeff studied her and then put a finger to her chin.
“Sweetheart, our summer can last the rest of our lives. This
life we created isn’t going to be Pinky.” Sam wiped a new
tear away from her cheek and looked up at her husband,
sniffling, the setting sun drowning out his face.
“Hey, I got this. This office is the right decision, both
financially and for our business.” He paused. Then he said,
“IT know how busy you’ve been with Micah, but I’ve been
busy too. I don’t think you understand how much our
business has grown since our little boy was born.” He tooka
step back, smiling. “Do you know why I don’t talk about our
money problems anymore?”
She shook her head weakly.
Jeff continued, loud enough that his voice echoed on the
empty floor. “Because we have no money problems. We’re
out of debt. Everything is paid, your student loans, my
loans, all the start-up costs for the business, everything is
paid for. Even with all the investment into the business, I’m
still able to save tens of thousands of dollars a month.” He
paused, waiting for her to react, but her face was still
traumatized from the tears. He knocked playfully on his
skull and gave her a dumbfounded look. “Are you listening
to what I’m saying? You’ve trusted me to handle the money,
and I have. Not only is our business worth several million,
I’ve saved close to a half-million dollars. At the rate we’re
saving and the value of the business, we’re nearly at our
Escape Number and could technically retire in a few years.”
He threw her a pointed look. “So, Mrs. Cleaver, the dream
that you’re living right now ain’t going nowhere, and it soon
will be in our own home. Summer will continue until we’re
old and with grandkids.”
She blushed and wiped more of the blackness that
drizzled her face. Apologetically she said, “I just get scared
anytime I see you spending money on things I don’t
understand. After we got married, you spent money like we
were rich.” Her face finally broke a weak smile. “Girls from
Idaho generally don’t need Louis Vuitton purses. I’d rather
have an ATV.”
Jeff chuckled then nodded. “I get it, but I’ve also learned
a ton about myself in this process.” He lost himself in a
moment, then continued. “I realize that all my impulsive
spending, the Navigator, that purse, I bought all that stuff
to medicate my own unhappiness. A bribe so to speak. But
now”—he hesitated and walked toward the window—“it’s
different because we can afford these things. And we aren’t
medicating our boring lives, we’re celebrating how great it
has become.”
He appraised the view out the window over the freeway.
“Sometimes I wonder where we would be if we’d just
accepted the inertia of our lives. Micah probably wouldn’t
be here. We’d both be miserable.”
“Or divorced,” Sam added quickly. “We never saw each
other.”
He turned back to his wife, conviction in his voice. “Our
business can afford this, but more importantly, we must
afford it if we want to keep growing. Our mission for our
family and our mission for the animals depends on it. We
can’t take our foot off the pedal now.”
She nodded, her worry relinquishing the fight.
After they faced each other in silence, Sam nestled up to
her husband, embracing him tightly as if he was the only
thing between her and life itself. As they hugged, Jeff heard
her crying again. But this time her tears had a different
resonance. It wasn’t tears of stolen dreams or slaughtered
play friends; it was joy. She kissed him on the temple and
then whispered into his ear, “I love you.”
CHAPTER 114
ele Per Sle VlelnvANC
S I RAnEGY
BELIEVE IT, DEFINE IT, SET THE GOAL, SHIFT THE IDENTITY, AND FORGE A
NEW YOU
&
| na 1995 interview, Steve Jobs said, “I’m convinced that
about half of what separates’ the — successful
entrepreneurs from the non-successful ones is pure
perseverance.”! I agree, but like many short platitudes
extracted from billionaire interviews, the statement speaks
of an effect, not a cause. It’s like saying, “I’m convinced that
about half of what separates the successful chefs from the
non-successful ones is a wood fired oven.” Insightful, but
not very helpful if you don’t have access to the oven. In
other words, what exactly causes perseverance and the
motivation to carry forward when things get tough?
Expectancy theory suggests that we’re motivated to act
and make decisions based on the expected result of our
behavior. For example, if you know washing the dishes
might get you a back rub from your wife, you’ll likely be
motivated to act. While this theory might have relevance in
simple matters of cause and effect, it doesn’t when it
involves audacious goals in the future. Namely, when a
process?29 is required, the expectancy theory won’t help
you lose weight, start a business, hit your Escape
Number,*!° or achieve your 1/5/10 Planasy.°!2 Kind of hard
to eat celery over donuts when your decision packs no
immediate visible outcome. Eating donuts, on the other
hand, has immediate gratification. Without a_ positive
feedback loop to fire passion, perseverance and willpower
will simply wither away.
Unlimited motivation and perseverance for
transformative goals is more like a recipe rather than a
simplistic concept. Like yeast is needed for dough and
dough is needed for pizza, each ingredient in the motivation
recipe works synergistically to create the result. And that
result is a “new you,” someone who is strikingly different
from the day you started. Looking back at my own
Unscripted journey, the Perseverance Strategy is what got
me through the Desert.?°’ The good news is, if you follow
the principles and strategies in this book, you already have
most of this recipe.
Belief is the first ingredient and it is the launchpad. Fix
your poison pens*? so you truly believe you can escape the
rat race. There’s a reason why this book is somewhat
mathematical. I don’t need to convince you that 100,000
units is larger than 40 years or 40 hours. I don’t need to
convince you that it is impossible to work 6,000 years. Of
course, Belief is more than simple math. Ultimately, your
inside game determines the outside game. Examine these
divergent thought-forms below. Which mindsets will help
you hit your escape number?
99% MINDSET versus 1% MINDSET
e Someday VS. Today
e Wage or Salary locus VS. Profit locus
e Net Consumer (rat) VS. Net Producer (scientist)
e Freedom old VS. Freedom young
e Defense (Expenses) VS. Offense (Income+Asset)
e Specialized-skill VS. Specialized-unit
Better skills = more money VS. Better product =
more money
e More time = more money VS. More units = more
money
e Optimize salary/wage VS. Optimize relative-value
Money is king VS. Time is king
Time builds wealth VS. Income and assets build
wealth
e Symmetric, monomorphic pay VS. Asymmetric,
polymorphic pay
e Positively charged to $ VS. Negatively charged to $
e Selfish, inward thinking VS. Selfless, outward
thinking
Resist change VS. Embrace change
Luck VS. Probability
Ideas have value VS. Execution has value
The process should be fun VS. The process should be
challenging
e Event, short-game focus VS. Process, long-game
focus
Balance VS. Commitment
After I spoke with that young man who owned a
Lamborghini Countach, my belief shifted from resigned
mediocrity, to committed advancement. I didn’t know it, but
I had the first ingredient to perseverance, Belief.
The second ingredient in perseverance’s recipe is
Purpose.?96 Without a strong purpose, a driving “why”
behind your behavior, you will be at the mercy of fleeting
willpower. And willpower is a horrible motivator. In my case,
my Purpose was fear-driven. I knew I’d rather die rather
than suffer in a meaningless job for 60% of my life. With a
powerful Purpose, I had perseverance’s second ingredient.
The third ingredient is a strong Goal that stretches your
comfort zones, expands your skills, and hones you into a
new person. Your goals set the pace and it is why we
established your 1/5/10 Planasy and its Escape Number
many pages ago. It is your GPS and your lighthouse in a
barren sea. Thanks to my new beliefs, I always had goals
(and later, the 1/5/10 Planasy) that stretched my limits.
The final ingredient is your Identity, a critical piece of the
puzzle that we haven’t discussed. If your Identity isn’t
aligned with who you need to become, you likely will
struggle. If you have a challenge ahead of you, whether it’s
starting a business or hitting an Escape Number, your
identity must shift to who you want to be. “Old you” isn’t
good enough to reach your goals— new beliefs, a strong
purpose, and a big goal must create a new identity and
driving transformation toward a “new you.” For most
people, identity is a construct based on the past, past
experiences, past traumas, and past careers. Instead,
fabricate your identity based on the future.
For example, I’ve always loved a good steak and a meat-
packed pizza. As such, going plant-based in 2017 was the
hardest thing I did in my life. To accomplish my drastic
dietary shift, I immediately knew that I needed to do two
things:
1) Shift to a future, growth-identity and
2) Build effective anchors.
The first step is to shift from an Old You status quo
identity to a New You growth identity. An Old You identity is
something based on the past while the future is regarded as
an optimistic construct. I enjoy meat but I’m trying to eat
plant-based. Or, perhaps, more suitably, I’m an engineer at
Intel and someday I’d like to quit and start my own
business. Conversely, a New You identity is future-based,
what you will become, with the Old You regarded as a
negative figment of the past. I’m a vegan who once ate
meat. Or, I’m an entrepreneur who is temporarily working
at Intel as an underpaid engineer.
Whenever you swap a past identity for one that is future
based, you lay the groundwork for change. Because our
identity seeks harmony with reality, a growth identity
adjusts your thoughts and actions toward the desired
change. Our identity abhors incongruence, and you will
likely keep your actions aligned with it. If you identify as a
financial expert, you might avoid credit card debt and other
money mistakes not congruent with financial expertise.
Conversely, if the identity already matches with reality,
then change becomes a matter of convenience or
circumstance. Excuses, easily made. The process never
builds,S!?” and talent is never driven.S!?9 You will always
be “an underpaid engineer at Intel who someday would like
to start a business.” Your identity asserts there is no
urgency to change. Someday becomes never.°!4
For my dietary change, the first thing I did was identify
as vegan. While I ate meat merely days earlier, it didn’t
matter because, at that moment, I shifted to my New Me
identity. Moving forward, if someone offered me pizza, I
refused because I identified as vegan, not as a “pizza lover
striving to go vegan.”
The second tactic that made this happen was effective
anchors.
An anchor is something traumatically associative with
Old You. For me, I heartbreakingly watched factory farming
atrocities and how animals are kept inhumanely caged and
then slaughtered. After watching a pig fight for its life
before meeting its butchery, the anchor was seared into my
brain. Add a lingering threat from my doctor who wanted
me on a lifetime prescription for cholesterol pills, and my
identity shifted. Effective anchors, and boom—I’m plant-
based for life. My shift was hard, until it wasn’t.
Identify who you want to be and how it relates to the big
goals you cited in your 1/5/10 Planasy.°!!9 Drastic changes
in your life start subtly with a shift from a status quo
identity to one of growth. And please, avoid the word
“aspiring.” Don’t be an aspiring screenwriter; you are a
screenwriter. Don’t be an aspiring comedian; you are a
comedian. Don’t be an aspiring Unscripted®? Entrepreneur;
you are one. After my short encounter with my stranger in a
Lamborghini, my identity instantly changed to an
entrepreneur. And it took a whopping ten years for that
identity to match with reality.
Unlimited motivation and perseverance is not a concept,
it’s a recipe.
Believe you can escape the rat race.
Define a compelling Purpose.
Set a Goal that stretches comfort zones.
Shift your Old You identity into a transformative New You
identity, and you'll persevere through anything.
KEY CONCEPTS
Expectancy theory, which proposes that behavior is
based on the expected result of our actions, doesn’t
work for distant goals that involve a process.
Perseverance has a recipe which combines multiple
principles and strategies and is responsible for goal
achievement, the process behind the transformation
from Old You to New You.
Beliefs that foster an Unscripted 1% existence is the
first step to perseverance.
The second ingredient to perseverance is a strong
purpose that supplants fleeting willpower.
Perseverance’s third ingredient is an audacious goal
like a 1/5/10 plan or an Escape Number.
A strong goal acts like a GPS or a lighthouse for
behavior.
The fourth ingredient for perseverance is an identity
shift from who you are to who you will be with
effective anchors to bolster the change.
Your identity seeks congruence.
A growth identity puts forth effort for congruence; a
status quo identity does not.
Don’t be an “aspiring” anything—be it.
Clave Bela, ls
Tee INAS AAR hy
S IRAieGy
RAISE A FINANCIAL ARMY: START SAVING FOR YOUR LIFETIME PAYCHECK
&
C reating a specialized-unitS!® of relative value isn’t
easy. Building a business system to sell thousands,
perhaps millions, of those units is even harder. Even startup
entrepreneurs with prior success and endless streams of
venture capital financing are not guaranteed to succeed.
Again, entrepreneurship is like baseball and you'll likely
need to strike out a few times before getting a hit. While
you wait for your business to hit that asymmetrical growth
curve, you can still progress on your rat race escape. How?
Start building your money-system*!° today.
If you have fifty bucks, you can be the proud owner of a
third-party business system by the end of the week,
perhaps as soon as tomorrow. Instead of blowing $50 on
some trendy shirt that will be out of style next spring, you
could buy a money-system investment, say a dividend-
paying company. Your fifty bucks (no matter how you
acquired it) suddenly becomes polymorphic pay. And as
long as that company remains profitable and outlives you,
you get a lifetime paycheck.
Think how powerful that is.
You can wear a $50 shirt a few times or get an income
for the rest of your life. Moreover, your investment doesn’t
require you to punch in for work, submit reports, fix toilets,
or contribute to the company or investment in any way.
Returns are paid regardless of your status—you’re only
limited by what you can afford.
The problem is your lonely $50 investment might only
pay four percent annually, or $2 a year. That won’t move the
meter. Worse, this instant business system requires
something many people lack: the discipline for saving
massive amounts of money. If you bought 50,000 shares
instead of just one, suddenly a measly two-dollar return
turns into $100,000 a year, completely passive.
Unfortunately, 50,000 shares could cost millions. Like
our business, this third-party business system isn’t effective
unless it obtains leverage from scalable mathematics.
Pounding the pavement for hours or salaries?!” isn’t going
to cut it. Our business must be the leverage, which in turn
can fund a money-system and get us moving toward our
Escape Number.
Once I escaped my expensive sports car blunder, I
started saving money from the standpoint of raising a
financial army. I knew that every dollar I saved was another
soldier fighting for my freedom. Even in today’s low-interest
economy, every 100 pennies saved to your financial
battalion, three to six procreate yearly. Accumulate enough
soldiers and the compounding weapon ignites. Instead of
enjoying six cents per year, it’s $60,000.
And finally, one buck saved today is one you won’t need
to earn tomorrow. Indentured time (time lost fighting the
enemy) shifts to free time.
As for raising your financial army, it begins like
everything else: a belief shift. First, make every dollar spent
fall into one of four categories:
1) BASIC LIVING EXPENSES
Food, shelter, transportation, insurance—in the early stages
of business, your household should be run lean, like a fine-
tuned infantry. And “basic” living expenses should mean the
used Honda, not the new Tesla.
2) DEBT REDUCTION
If you’re towing a lot of debt, don’t worry. Anytime you
reduce your debt, you make progress on your Escape
Number. While raising a financial army is offense,?!3
defense is protecting it. When you carry debt you can’t
afford, you create traitors: your soldiers defect to the
enemy and then fight to enslave you. And then they
procreate, unleashing new insurgents. The net effect is a
triple-negative: 1) you lose a soldier, 2) the enemy gains
one, and 3) the enemy creates more in the future.
If excess money isn’t needed for living expenses or can’t
be reinvested in your business, pay off high-rate credit
cards or loans. Start stealing soldiers from your foe. If your
bank charges 20 percent interest on your credit cards, you
automatically earn 20 percent by eliminating the debt.
Killing debt pays instant interest. The debt is no longer
giving birth to new soldiers. Treat debt you can’t afford like
a zombie virus.
5) CORNBREAD BUSINESS EXPENSES
It cannot be said enough. Your business anchors net worth
acceleration through asymmetric returns, not pennies
pinched from canceled cable TV subscriptions or Starbucks
celibacy. If one dollar invested in your business yields ten
dollars tomorrow, why bother with rat race investments?
Massive wealth doesn’t come from annual eight percent
stock market returns; it comes from annual 800 percent
returns from your business. If your business is a
Productocracy, it will always be the best bet for surplus
money.
4) YOUR MONEY-SYSTEM AND ITS ESCAPE NUMBER.
After these three categories have been addressed, save the
remaining funds into your money-system. And as your
business grows, so will your savings-rate. If you’re making
$80,000 a month, saving 80% isn’t unusual, nor is it
difficult. When your income blows up like Heroic Kitchens,
debt can be paid in broad, swift strokes. It might take you
ten years to pay off your debt in a job, whereas in a growing
CENTS-based business, it might take you ten weeks.
The final step for raising your army is to make it bigger
every week, even just a few dollars. Every month get closer
to your Escape Number. If you’re struggling with debt, now
is the time to penny-pinch and cut “comforting” expenses
from your life, things that not only waste your time but
imbue procrastination. Is that pile of smutty gossip
Magazines necessary? Cancel them. Is the Beemer too
Diodetic?!°9 with insurance, repairs, and gas? Maybe it’s
time for a used Prius—or take the bus, ride your bike, or
walk. Yeah, I know, not cool. But neither is working until
your eightieth birthday.
When I started my army, I created a makeshift wall
counter, which broadly displayed my net savings. Every day,
it reminded me of my purpose and my Escape Number. It
weakened temptation. I could dismiss thoughts of fancy
cars, second homes, boats, and other flashy expenditures...
at least until I could pay cash for them. While this might
seem neurotic, I was neurotically opposed to slaving at a job
for fifty years in a stiff polyester suit. I made darn sure I got
closer to my Escape Number a few bucks every day.
Altogether, your end game is to create your business
system and funnel excess profits into a money-system,
which ironically, consists of many third-party business
systems. A business system you own funds business
systems you do not. The short- and long-term goal is
identical: lifetime financial freedom?!!. When your business
kills it for the month, and you have an extra 10G flashing
green on your debit card, ask yourself this: Whose army are
you funding? Yours, the one working to liberate you from
the world’s economic religion?>° Or the one working to
keep you kneed at its altar? Saving slow for retirement is a
dumb idea; saving fast to win your freedom is not.
KEY CONCEPTS
Every saved dollar should earn you three to six cents
in polymorphic pay for life, without ownership
hassles.
Outside of your Unscripted business, look at saving
money as if you were raising a financial army.
Debt payment earns you an instant yield on the
interest charged: A debt payment costing ten
percent I n interest is like earning ten percent.
Your business is for asymmetrical returns and
creating wealth; the capital markets are for renting
your wealth which pays you polymorphically.
Every dollar earned should be directed into 1) basic
living expenses, 2) debt reduction, 3) cornbread
business expenditures, or 4) a money-system.
Once your business starts to grow, savings rates can
jump to 50 percent or more while debt can be paid
fast, often in large bulk payments.
Your end game is to create your business system and
funnel excess profits into a money-system, a
diversified basket of third-party business systems.
CONAIBE TOG GIOIG) CONG.
WEDNESDAY, APRIL 2ND, 2020 (2:45 PM)
(247 DAYS LATER)
From his 17th floor office, Jeff stared at the threatening sky
overshadowing his desk. The television hung on the wall
aired CNBC, volume muted. Jeff didn’t need to hear the
commentators. As the tickers flashed red across the screen,
the financial punditry was warning of a recession. COVID-
19, a worldwide virus, was shutting down much of the world
economy.
He tried to temper a smile.
People in poor health would die. Businesses would go
bankrupt. Savings would evaporate—jobs lost or
furloughed. But none of it would be the fate for his family or
his company. When the economy crashed in 2008, his family
took a beating as if Mike Tyson delivered the blows. Now he
was the one landing blows, and some pandemic wasn’t
going to stop the fury.
Thunder rattled the steel-encased windows as the sky
swirled in a dark steel gray. His door was open, and he
could hear that the corporate office for Heroic Kitchens
buzzed with activity.
The business was booming.
Moreover, Jeff now understood the power of real
financial freedom. With their sales exploding as retail
shelves were stocked with their soup, they were financially
independent and leading life as Fastlane Unscriptees. Jeff
would remind his wife (practically daily) about the déja-vu
their life would have endured had they not changed their
strategy and started a business. With the pandemic
showing no signs of slowing, unemployment would rise to
12 percent. Bankruptcies would skyrocket as would
suicides. Jeff learned his old employer would merge with a
new company and lay half the workforce off. There was
blood in the streets, except this time, that blood wouldn’t be
his family’s. The stock market also crashed, but this time, it
had no impact on their finances. They not only held on to
their investments, they added to them.
Once their debt disappeared, they started saving their
excess earnings, a habit learned from their days as savings-
rats. But instead of saving $100 a month from their
paycheck, they were saving tens of thousands. Better, they
weren’t suffocating under frugality’s yoke and what they
couldn’t do. Their favorite restaurant was the Garden
Buffet. Before Covid, they would eat dinner there
sometimes three or four days a week. It was _ fast,
convenient, healthy, and money didn’t matter. They could
eat there—or anywhere—every day of the year.
From the day they conceived their business nearly four
years ago, it would take them thirteen months to match
their job salaries. And only four months from there to
double it. Seven months later, they would be millionaires
based on the asset valuation of their company. Today they
were multi-millionaires many times over. And now Jeff didn’t
need to finance his dream car; he could waltz in and pay
cash.
While they still lived in their rented townhouse, Jeff and
his wife were officially shopping to become homeowners
again. But not just any home—their dream home. Better,
they agreed to put 50 percent down so their mortgage
would be easily manageable while also taking advantage of
low interest rates and mortgage interest deductions.
He glanced outside his office and saw Monica leave her
desk to sidle up to the exterior window. As she admired the
overcast kaleidoscope churning in the sky, Jeff thought how
valuable she was. Hiring Monica had instigated a quantum
leap for their business. She shared marketing operations
with his wife, saturating social media influencers with Jeff’s
blunt force “Fed-Ex” strategy. She managed newsletter and
podcast sponsorships, as well as their public relations
outreach. According to their accountant, Monica’s public
relations efforts created over $15,000,000 in _ free
advertising. With an impressive environmental and humane
mission, combined with great soup, Heroic Kitchens
received countless magazine, newspaper, and website
features.
With marketing out of the way, Jeff was able to pound the
phones and LinkedIn, calling on distributors and grocery C-
suiters from the big guys: Whole Foods, Target, Sprouts,
and other national chains. He was amazed at what he could
do once his attention turned to scale. He added retail and
wholesale accounts nearly weekly. Reorder percentages on
individuals skyrocketed from 19 percent to 24 percent to 31
percent as soup stored on store shelves or in pantries were
finally consumed. Reorders at the wholesale level were a
whopping 96 percent.
As more retail and wholesale accounts jumped to put
Heroic on their shelves, their net margin continued its slow
decline into the low teens. But Jeff expected it. There were
six employees now, many wholesale low-margin accounts,
and a lot more expenses. And new competitors and
copycats. Their brand was now nationally known, and their
soup was in over 5,000 stores, including many of those big
chains Jeff courted. With brand recognition, it became
easier to push new products into the system. They didn’t
have to convince anyone—their reputation was known.
Hard work done years ago was still paying today. With this
new power, revenue soared past $10M, then $25M, and
then $50M. They now had a chickpea snack line and were
soft-testing a new type of plant-based pizza, another
product line ripe for innovation. Costs were climbing, but so
were revenue, profits, and momentum.
The decision to rent office space was the right one. It
gave Heroic legitimacy and gave its employees a focus with
a crystallized mission. Large six-foot photos of every animal
they’d saved decorated the office walls. A great idea, but
within a year, the walls were full. As more animals were
saved, their photos were pinned to the wall outside the
elevator landing. Called the “Wall of the Saved,” the collage
featured hundreds of animals and would be the first thing
visitors saw when they exited the elevator.
Jeff snapped out of his nostalgia when the elevator
dinged.
His wife exited with the day’s mail in one hand and an
open letter in the other. With her eyes fixated on whatever
she was reading, she drifted toward Jeff’s office, almost
knocking over a flower arrangement. As her eyes lapped
left to right, her face went frigid. Jeff knew the look.
Whatever she was reading wasn’t good news.
Once in Jeff’s office, she closed the door. Holding up the
document like a dirty sock, she said to Jeff seated at his
desk, “Please tell me this is a mistake.” Jeff shrugged and
scrambled to find his glasses. When he didn’t see them, his
wife walked to his desk and laid the document in front of
him.
“The IRS—” she said flatly, crossing her arms. She
gestured to the paper. “—says we owe $220,000 dollars.”
Jeff picked up the document and examined it. Sam
continued, “When I saw a letter from the IRS, I got scared
and tore it open. I know you take care of all the money, but
nothing good ever comes from those’ bureaucratic
assholes.”
“You’re right,” Jeff said calmly.
His wife raised her eyebrow. “About them being
bureaucratic assholes? Or that this is a mistake?”
Jeff laughed. “About them being assholes.” He tossed the
paper aside on his desk. “Unfortunately, this is correct. This
is the back taxes we owe.”
She frowned and then confiscated the tax bill from his
desk. She recited, “$220,521? What are we, Fort Fucking
Knox?”
“Sam, don’t worry about it. The baddies in DC aren’t
coming to throw you in jail.” He shuffled through the rest of
the mail and continued, “I’ve been expecting this and
prepared for it. We have more than enough money. When
you owe this much, that means—” He stopped abruptly and
stared at a legal-sized envelope that had come with the
day’s mail. Without finishing his thought or paying mind to
his wife, he ripped it open like he was a ten-year-old at
Christmas. Inside was a stack of clipped documents, at least
a halfinch thick, peppered with signature stickies. He
gazed at them hypnotically. He flipped a page, then another.
His heart raced. After scanning several pages, he fell back
in his chair, mouth agape, papers still in his lap. He sat
silent, his face painted in shock as if he’d just exited the
best rollercoaster ride of his life.
Sam cocked her head and eyed him suspiciously. “Okay,
let’s hear it. You just got a love letter from the IRS saying
we owe them a fortune. You’re ripping open mail like it was
season tickets to the Cubs. Are you going to tell me what
planet I’m on?”
He ambled back behind his desk and pointed to the
couch. “Samantha, you should sit down.”
She narrowed her eyes and sat down cautiously as if a
bomb was strapped to her waist.
Once she settled in, Jeff spoke measuredly. “In the last
few weeks, I’ve been busy trying to get this business to the
next level and seeing what we need to do to get there. Part
of that involves some forecasting, predicting things in the
future, and how it fits into our overall mission.” He
swallowed hard. “We have to look at things not only in
terms of our products and the animals we save, but our
family.” Sam nodded and gave a weak smile, unsure where
he was heading. Jeff offered his palm in the air and
continued, “This office, for example. This was a big financial
decision, but we decided it was needed to move forward.
Hiring our fourth, fifth, and six employees, again, big
decisions. Adding more product lines, moving into snack
food, again, more big decisions.” He scratched his head as if
he was struggling to explain.
Sam laced a long strand of hair behind her ear. “You’re
talking about a Leap of Zeroes again?”
He gave her a quizzical look and then snapped his
fingers. “Sorry, it’s been years since I’ve read those
DeMarco books, but yes.” He stood up and walked to the
filing cabinet and opened a drawer. After rifling through it,
he removed a file and held it up. “This right here should be
our next leap for the business.”
She raised her brow. “And?”
“It’s a proposal to build a manufacturing facility. It’s
going to cost tens of millions.” He retreated to his desk and
dropped it topside.
“Millions?” Sam swallowed hard, her face flashing fear.
“Why can’t we just continue like we’ve been doing? Our
sales keep going up, we’re in thousands of stores, things
are going great.”
“It’s not that simple. Our margin is starting to get
squeezed. We have new competitors entering the space,
some of them large companies. We use a third-party co-
packer which adds to our cost; a lot of these companies
don’t. They own the manufacturing, and because they are
completely vertical, they can crush us on price. Remember
Sam, when we started this, there were virtually no vegan
soups on the market.”
“But our skew isn’t pricing, Jeff; it’s quality ingredients,
great soup, and saving animals. I don’t want to be the
cheapest soup on the shelf.”
“You're right, and neither do I. But this isn’t about price,
it’s about cost. Walmart won’t even shelve us cause our
wholesale price is way too high. If our vendors think our
wholesale price is too costly, and the rest of the space starts
to price down, it could put some significant headwinds in
our way. Nothing is stopping these big corporations from
copying our recipes, and it’s already happened twice.
Shelves are getting crowded, and the grocers watch their
margins like we watch ours.”
She folded her arms. “Walmart is not exactly the target
market for our brand.”
“Everyone deserves healthy food options, Sam, so I’d
argue it is. And that doesn’t count what we’re doing to
bring awareness to the animal trade.”
Sam reluctantly nodded and then stood up. She paced in
front of the window. After a few laps, she stopped and
groaned, throwing her husband a perplexed look. “So we
owe the IRS a ton of money, and now you’re saying that we
need to spend a ton of money on a factory?” She shook her
head and then gestured to the envelope Jeff had gleefully
torn open. “I’m going to guess that envelope is news about
some mega-loan we just got approved for? Because
everything I’m hearing right now is not good news, and I’m
not sure a huge loan is either.” She started to fidget and get
nervous, her fists clenched as she looked around wildly.
Jeff sighed and then pointed back to the couch. “Relax.
Can you please sit back down?”
“Ts it that bad?” She fell back to the couch and started
teething her lips, sensing that summer was about to end.
“No, it’s good.”
She gave him a wanting look. “Well, I’m sitting. And
waiting.”
He held up the stack of papers, grinning. “This in my
hand is a Letter of Intent from Universal Foods. They’re a
big food conglomerate out of Connecticut.” He waited for
her reaction, but none followed.
She shrugged. “New distributor?” Her husband threw
another devious grin and conspicuously hesitated. After a
lingering silence, Sam gave him an impatient glare as if
waiting for a punchline.
“No, they want to buy our company.”
“Sell our business?” She abandoned her lounge and
firmed up. “I didn’t know it was for sale! Is this what you’ve
been doing locked up here in your office?”
“No, not at all. I’ve actually had multiple conversations
with companies who are interested in buying our company,
and they’ve all been unsolicited. However, when I started
reviewing our numbers and the next steps for growth, both
for our business and our family, I figured it would be
reasonable to listen.”
Sam sat motionless, her face signaling betrayal.
Jeff continued, his tone softening. “When we started this
business, it was to set ourselves free. It was to control our
destiny. It was to do something meaningful instead of just
being good little rats who work all week while waiting for
some god-forsaken retirement forty years later. You wanted
out of nursing and to be a full-time mother. I wanted out of
audits. And by all measures, we’ve accomplished that.”
She interjected, voice stern, “But now you want to sell
and throw it all away?”
He cracked a smile and stood up, grabbing the clipped
documents which had arrived by mail. Looming over his
wife still seated at the couch, he said, “We won’t be
throwing it away. We will be pushing it into overdrive. Take
a look.”
He handed her the papers, which she promptly
snatched. He watched her narrowed eyes shuffle left to
right as she read. He waited a moment for her to hit the
words, for her to process what was happening, and for her
to make the connection on what it meant. And then, as he
expected, her mouth dropped open, and her eyes popped.
She leaped to her feet and whacked the papers on Jeff’s
shoulders. “Are you freaking kidding me? $190 million
dollars? Please tell me this isn’t one of your jokes.”
Jeff took her hand. “No joke. It’s real. The offer is $95
million in cash and $95 million in shares of their company.
They’re publicly traded, so that is real money.” He paused,
allowing her to comment, but she just stood, face still
painted in shock. “I’ve negotiated terms that our company
and its mission stay the same. Same quality ingredients,
Same animal sponsorships every month, and the same
mission.” Sam gave a worried glance outside the office onto
the floor with their employees. Jeff noticed and said, “No
one loses their job. I’ve stipulated that this office remains
open complete with relocation options if anyone is looking
for a life change.” Another pause. “This option is the best
for both our family and the company. Because like you, I
really don’t want to sign my name to a $30 million dollar
loan for a manufacturing facility.”
He reclaimed the documents from her hands and flipped
through them. He stopped at one page and pointed, “And
here it says they will hire you as a part-time consultant so
you can continue to manage the animal sponsorships.” He
paused. “The salary is $120,000 a year. I negotiated that for
you because I know how important the animal mission is to
you. It’s a total win-win.”
She rubbed her neck, eyes still wide with shock. Unable
to process the new reality, she asked, “But what will you do
without this company?”
He laughed. “We’ll net over $150 million dollars. Not
only did we hit our Escape Number, we blew it out of the
water. That means I’ll do whatever I want. Who knows,
maybe get a band together and play small jazz clubs. I’ve
always wanted to write fantasy fiction novels. Maybe I'll
start another company or invest in several. But I do know I
will be getting my dream workshop with all the best
woodworking tools.” He winked at her. “And you, darling,
you'll be getting whatever your little heart desires... that is,
assuming we agree to do this.”
Sam turned from Jeff and strode back to the couch as if
she was drunk and blind, carefully taking a seat. She sat
there frozen, staring at the carpet. It wasn’t the reaction
Jeff had thought his wife would have. Did she not want to
sell? Did she want to continue the status quo? Worry welled
up in his throat. He took a seat on the couch next to her and
put his hand on her knee.
“Well, what do you think? This is our decision, not mine.”
After a moment, she finally looked up, her eyes
swimming in tears.
“T think I have the most awesome husband that ever
lived. When, and where do we sign?”
Slate lela (ile
Pale GOs Ole MIN l=
STRATEGY
MAKE DEBT A FUNCTION OF COST, NOT AFFORDABILITY
&
| n an early version of The Millionaire Fastlane, I
mentioned that the only debt burden I carried was a
mortgage. That admission caused me to get some reader
hate mail. Some readers argued that Jf I were truly
financially independent, I wouldn’t need a mortgage. To
some degree, that’s correct, but only when judged from a
rat race perspective.
All debt decisions should be based on the cost of money,
not as a tool for affordability. You see, for the 99 percent
stuck in the rat race, debt is a tool for affordability. Namely,
if you can’t afford something, get a loan. For the
Unscripted, debt is a function of the cost of money or the
interest rate. If I can take a 30-year loan at 2.5 percent
interest and earn more on that money elsewhere in
business or investments, I’ll do it. Then, if I don’t have a fair
use for the surplus cash, I’ll pay extra on the mortgage and
earn the guaranteed rate on debt-reduction.*!!°
Debt is not a function of OMG I can’t afford this BMW
unless I get a loan, it’s a function of OMG, the money is
nearly free!
When I bought my first dream home, I put 20 percent
down. My second dream home, I paid 100 percent cash. My
third home, I put 50 percent down. In every case, I could
have paid cash for the house, which is how I gauge
affordability. My financial decisions regarding debt aren’t
based on Gee, what can I afford with the largest loan? It’s
How cheap is the loan and can I better reinvest that money
instead of paying cash?
When you know how to create asymmetrical returns,
often taking debt is the better decision. Debt is a tool, and
sometimes that tool goes on sale. Unfortunately, rat racers
use debt as a tool to increase access to more expensive
goods they usually couldn’t afford. Bottomline: If you need a
loan to afford it, you can’t afford it.
KEY CONCEPTS
e Rat racers use debt as a tool for affordability
whereas it should be used as a tool based on its cost,
or interest rate.
e Face debt decisions based on the cost of money, not
on the largest payment you can afford.
e If you can earn asymmetrical returns on cash, taking
low interest debt often makes sense.
CEArP ER 7
THE NEW HORSE STRATEGY
KNOW WHEN IT’S TIME FOR A NEW HORSE...
of
bout six months before I sold my company, I faced a
difficult decision. As technology improved and
consumer expectations changed, I knew my business had to
change.°*? In short, I estimated that my business, if it went
unchanged, had a life span of about three more years. The
changes required to keep it growing would have required
several additional employees, more capital, and yes, more
risks. Moreover, I no longer was challenged by the industry
and felt I had accomplished all I wanted to do. I also knew
that selling my ground transportation company near an
apex would supply me with enough money that I never
needed to work again. It was at that point I made the
decision to sell.
Turns out that decision was correct. A few years later,
the industry I exited would be disrupted by Uber. And the
company I sold would go bankrupt, preceding a slew of
customer complaints about poor customer service, a new
standard that replaced the excellent customer service I’d
provided. Those who managed the company were too slow
to adapt,S42 and with new priority stakeholders
(investors),?’°7 some of the value-skews®22 I’d_ offered
disappeared. Ultimately, the company had to be sold at a
fire-sale price.
The point is there might be a time when your personal
and business goals no longer match. Specifically, the 1/5/10
Planasy*°!2 you designed many years ago has mostly come
true, or it is within your grasp. Your business might be
screaming to grow, but such growth no longer coincides
with your 1/5/10 Planasy. You either need a new plan, or
you need a new direction.
Don’t fear closing one part of your life to start a new one.
KEY CONCEPTS
e Your business will have a growth inertia that must
be gauged with your own personal goals and visions
as designed in the 1/5/10 Planasy.
¢ Don’t fear getting off a horse only to learn to ride a
new one.
Cla ein iis
THE 3T FINANCIAL STRATEGY
EVALUATE FINANCIAL DECISIONS THROUGH THE PRISM OF TIME,
TROUBLE, AND TAXES
of
A s I mentioned in the prior strategy, before I sold my
company, I recognized that my existing business model
was not. sustainable as technology and consumer
expectations changed. The Adjust in my 3A Method*°°
revealed that a new business model was likely required,
which itself required more capital and employees. While
this was a secondary reason for selling, there was a more
obvious, pressing reason: I knew that money earned and
taxed at a lower tax rate TODAY is worth far more than
money earned and taxed at a higher rate LATER. If that
doesn’t make sense, it will.
Whenever you’re making financial decisions, you have to
look at your money options beyond simple numbers, namely
through the prism of time, trouble, and taxes. For example,
let’s say you enjoy $2 million a year in net profit. Life is
great, business is good, the bills are paid, and you’re
stockpiling cash for your financial army.®!!> And then
suddenly, you’re offered $20,000,000 for your business. At
first, you dismiss the offer because you’re making $2M a
year and you can earn $20M in a short ten years, assuming
things stay the same. True, but these numbers don’t tell the
whole story.
The first problem is time. Remember, time favors NOW
over LATER, just like money. Money and free time enjoyed
today is far better than ten years from now. Twenty million
dollars today is worth just that. Twenty million earned over
ten years discounted for time (using a five percent discount
rate) is only worth $12,143,000 today. So waiting ten years
to earn $20 million will cost you nearly $8 million.
And that doesn’t account for trouble, our second
variable. Who knows if your profits will be sustainable at
$2M a year? I’m sure at the beginning of 2020, millions of
businesses had a rude awakening when COVID-19
paralyzed their businesses and their profits. Waiting ten
years to accumulate your $20M is subject to trouble,
whether it’s from the industry or just the grind to earn it.
The final consideration is taxes. In the United States as
of early 2021, the sale of business assets (as of this writing)
is taxed at the capital gains rate of 15 or 20 percent. This
tax rate is far lower than earned income taxes. If you’re
profiting $2M a year, your marginal tax rate for state and
federal taxes will be near or at 50 percent. In short, you will
need more time to actually clear $20M in after-tax money.
With that in mind, let’s go back to our example.
If you accept the $20M offer for your company, not only
do you get the cash now, you only get taxed 20 percent on
it. You’ll clear $16,000,000. Wait ten years for your $20M
and you'll pay 40-50 percent in earned income tax rates. In
ten years, $20M after taxing will only be worth only
$8,895,218 in today’s dollar. Not accepting the offer will
cost you over $11,000,000 and ten years of life, assuming
all things hold equal. In other words, you’ll need close to
twenty years to get the same “after-tax” benefit of a net
$16,000,000.
TAKE OFFER
$20,000,000 today, taxed at 20 percent = $16,000,000
TAKE PROFITS OVER TEN YEARS
$2,000,000 taxed at 45% = $1,100,000 Annual Net
$1,100,000 earned for 10 yrs, discounted at 5% =
$8,895,218
As you can see, it’s almost foolish not to take the offer if
money and freedom is your primary concern. Of course, the
answer is different for everyone. You could also grow the
company by another 25 percent in two years and your
company might then be worth $30M, instead of $20M. The
“sell or keep” question is highly personal and dependent on
your 1/5/10 Planasy.°!2 Just don’t make the decision on
numbers alone—consider time, trouble, and taxes.
KEY CONCEPTS
¢ Always make big financial decisions through the
prism of time, trouble, and taxes.
e A liquidation event forces accelerated wealth due to
time and taxes.
e Passing on a liquidation event could cost you
millions, assuming conditions that stagnate or
deteriorate.
¢« Consider your 1/5/10 Planasy when making financial
decisions.
Clave Pelee Ie
THE MONOGAMY STRATEGY
STAY MONOGAMOUS IF YOU WANT A HAPPY (BUSINESS) MARRIAGE
&
A common confession I hear from young entrepreneurs
is, “None of my businesses are successful.” To which I
reply, businesses? You mean like, none of my wives are
happy? Why do you think there are no professional golfers
who also play professional tennis? Anytime someone reports
“six businesses,” that’s code for, “I have six businesses that
suck and make no money. I’m throwing shit against the wall
and hoping for something to stick.”
When you own a Productocracy that prints money—side
businesses and other distractions cannot tempt you. If they
are tempting, your business isn't profitable, or your passion
for the process has faded.
For new entrepreneurs, "trying" to grow multiple
companies is like "trying" to become a world-class violinist
with one hand tied behind your back. Remember, your
Unscripted? pursuit will meander into the realm of the
obsessive with periodic sessions of imbalance.??! If that
commitment is scattered among several interests, you won’t
end with one great result, but many mediocre ones. Ten
ventures cumulatively earning $10,000 are not better than
one that does it single-handedly. When you split your effort
among assets, you build weak assets. Weak assets don’t
scale into multimillion-dollar valuations with leverage
potential,?!” and they don’t change lives.
Monogamy seals a great marriage, both in business and
in relationships. If your time and emotional support are
shared with six other partners, can you expect a good
marriage? Will this type of relationship thrive, survive, or
die?
Don’t be influenced by these high-profile entrepreneurs
who have twenty projects going on. You haven’t sold a
company for millions, and you aren’t a Shark Tank investor.
Every investor who appears on these business shows like
Dragon's Den got there because of faithful monogamy.
Years before, they committed to one business and one only.
Only after striking it big, polygamy happens—diversification
into multiple ventures where passions are explored and
capital allocated.
Don't be a dumb-ass. Think about it. The world’s most
renowned entrepreneurs become known because they
killed it with one project, not many. They first worked "in"
their business, then they worked "on" it.
If you're new to entrepreneurship, monogamy must
precede polygamy. You have one business or none. Be loyal
to one business, skew multiple value attributes®3? Act,
Assess, and Adjust on it,5°° validate a Productocracy,°’! and
that business will be loyal to changing your life. Change
your life first, then you can focus on changing the world.
KEY CONCEPTS
“Multiple business ventures” is code for “All of my
businesses suck and make little money.”
Monogamy is focusing on one business only, like a
world class athlete would train for one sport only.
Monogamy should be a natural instinct, like finding
the partner of your dreams.
A Productocracy evolves from monogamy like a good
marriage.
Once you sell your first company for millions,
polygamy can be a consideration as you move from
entrepreneur to investor.
SalNe ele: Ve,
tae Vi Gite BREEAM:
PlUINES | Le
GET BUSY LIVING, OR GET BUSY DYING
[ote Shawshank Redemption and The Count of Monte
Cristo, two of my favorite movies, share a common
theme: Men who had a dream for freedom, a freedom that
would need to be painstakingly earned with time, courage,
cunning, and a lot of hard work. In both stories, their dream
of escape kept their souls alive and driven to do the work.
Without a dream, both men would have been dead, their
souls waiting for time to revert them to their maker.
Many people caught in today’s modern economic
religion’> are faced with the same reality. They’re empty
souls on a treadmill of time, aging in indifference,
consuming in hope, saving in anticipation, and dying in
regret: no hope, no future, and no chance of anything
changing but years on a calendar.
The thread that binds them all is a dead dream. Dead
dreams are why everyone is miserable and counting down
the seconds to the weekend. Dead dreams are how people
stay miserably stuck in the same dismal pattern, work, pay
bills, consume, and then repeat. In fact, addiction has been
weaponized to medicate misery, from the smartphone glued
to our faces to the junk food spiked with sugar to the
dopamine manipulating video games_ packed _ with
reinforcement heuristics to the TV programs and sporting
events that fill our empty lives with meaning. Unhappiness
—dead dreams—is the business model of the modern world.
Like Andy Dufraine or Edmund Dantes did in the depths
of despair, it only took one split second to change the
paradigm they faced: they made a decision to dream an
escape or die trying. Once these men decided, their life
suddenly took on new meaning, filled with hope, purpose,
and yes, even a little joy amidst prison squalor. As Andy
said, get busy living, or get busy dying.
The Living the Dream Principle affirms that you are just
a split-second away from living the dream. Resurrect the
dream from the dead, give it a vision and a probability, and
then relentlessly pursue it. If you didn’t frame your 1/5/10
Planasy*°!2 and your Escape Number®!®, go back and do it.
As soon as you establish the decision framework and a goal,
congratulations: you’re now living the dream. Yes, it’s
actually that simple. When your dream is alive and pursued,
profound stuff happens. Actions are given purpose. Goals
are created. Plans and decisions are made, visions updated.
And yes, food tastes better, jobs become intentioned and
easier, and life feels more meaningful.
Surely, you’ve heard the old saying, it’s not the
destination, but the journey. The journey of a dream pursuit
is the dream. It only needs to be alive, pursued, and made a
poignant piece of your Now. If that seems counterintuitive,
trust me, it isn’t. When I reflect on the era I spent building
my businesses, I feel great reverence and joy.
I was living the dream then. And I’m living it now.
It took me some age and gray hair to understand this,
but the only moment that exists is Now. Today. This second
and this word. You can only appreciate the Now, while
having optimism for the future. And even if you don’t reach
your dream, well, regret won’t haunt you. The regret of
failure is transient; the regret of never trying is
transcendent.
Every strategy and principle in this book are designed to
improve your probabilities for Unscripted®? success, not
just as a far-fetched dream, but an absolute reality free
from the rat race. The right mental roadmap backed by the
correct mathematics can make it happen.
Yes, this game is challenging, but you can make it easier
by focusing on the right things: Put all 120 strategies and
principles into practice, and you will move the needle on
probability,S°° expected values,®°® and better life outcomes.
Enjoy the ride, my friend. Accept the process?29 and let
the passion flow from your effortS*® and the unfolding
dream it creates. Embrace your new role as a scientist,>’
and you will discover that this’ thing’ called
entrepreneurship goes beyond business: It is the discovery
of soulful freedom, of your true purpose, and of yourself.
These are things money cannot buy.
Thank you for reading. I wish you good probability and
much happiness.
Now is the time for it to happen.
KEY CONCEPTS
Unhappiness, or a dead dream, is the business model
of the modern world.
You “live the dream” whenever you have a dream
that is alive and pursued.
The regret of failure is temporary; the regret of
never trying is permanent.
Entrepreneurship is more than a career, it’s a
revolution for your life and family.
EP NLOIGIU) =
(LATER IN 2022)
“God damn, Austin, they’re bleeding into everything!”
Charlie scoffed from his trailer at his dairy farm in Henly,
Texas, just outside of Austin. He had heard the news from
his bookkeeper, Martha.
“Says here they’re not from Austin, but from Chicago.”
She pointed to the community newspaper, her voice
strident above the window air conditioner behind her.
“Give me that.” He snatched the newspaper from Martha
and gave it a scowling look. With a cigarette perilously
hanging from his lip, Charlie lifted the newspaper to his
face and brokenly recited the article from the neighborhood
news:
Forty-two acres in Henly were recently purchased by
Jeff and Samantha Trotman, entrepreneurs from the
Midwest who founded the worldwide brand Heroic
Kitchens. Capitalizing on the sweeping consumer
shift to more plant-based foods, their company was
acquired for $190 million in early 2021 by Universal
Foods. The two vegan entrepreneurs have relocated
to the Austin area.
He dropped the newspaper from his face and glared at
Martha.
“Damn vegans! What do they want with forty acres next
to my ranch?”
“Keep reading,” Martha said flatly.
Charlie put the newspaper back to his face and
continued reading silently.
He stopped and questioned, “They also bought the
Hustle Jazz Club in Austin? What’s that got to do with
anything?”
Martha sighed and gestured to the newspaper, signaling
Charlie to keep reading. She watched as his eyes rolled side
to side for another minute. Suddenly his pale face flushed
red. He lowered the paper and grimaced, shaking his head.
He jeered, stumbling on his words, “Pinky’s Animal
Sanctuary?! They’re launching an animal rescue next to my
ranch!? For...For what do they call it?” He put the
newspaper back to his face and recited dumbfoundedly,
“for rescued pets, livestock, and other victims of the meat
trade?”
Martha merely nodded and threw Charlie a sympathetic
look as if he were a child who’d dropped his juice-box.
Because of milk alternatives, Charlie’s dairy farm had been
dying for the last decade. Without government subsidies
and high-powered lobbyists, it would have died years ago.
“Said they’re planning to do all kinds of events,
awareness projects, and social media stuff.” He shook his
head again. “This can’t be good for business.”
Martha laughed. “No, generally vegans aren’t.”
Charlie flicked her a cocked eye and headed to the
coffeemaker, tossing the paper in the trash.
“Coffee hot?”
Before Martha could answer, there were three firm
knocks on the trailer door. Martha swiveled her chair
toward the door and ballyhooed a “C’mon in!” Her tone was
curiously jovial, and it left Charlie concerned.
In walked a young couple, perhaps late thirties and
attired casually, but not dairy farm casual. The man wiped
his shoes on the doormat and introduced himself. “Charlie?
Hello, I’m Jeff Trotman.” He gestured to the woman at his
side. “This is my wife, Samantha.” Charlie simpered an
expression that one would associate with the boogieman,
not an attractive couple from the Midwest. Jeff continued,
“We’re your new neighbors.”
Martha was grinning ear to ear, relishing the scene.
Charlie didn’t move or extend a hand for a shake. After
inhaling a drag of his cigarette, he eyed them with
suspicion. His first inclination was to throw them out.
Instead, he nodded and said, “Ah yes, I just read you bought
the jazz club in town. Congrats.”
Jeff spoke flatly. “Yes, thank you, but that’s not why we’re
here.” He walked forward and offered Charlie a large
manilla envelope, unsealed. Charlie snatched it
standoffishly while eyeing Jeff up and down skeptically, as if
he’d been served a lawsuit. Charlie removed a bundle of
clipped documents from the envelope and read.
As Charlie scanned the paper, Jeff said, “That’s an offer
to buy your ranch. As you probably noticed, it’s about twice
the market value for it. And from what we’re hearing about
good old milk production, things aren’t going to get much
better.” Charlie lifted his head from the _ paper
expressionless and sized them up. Then he glanced at
Martha, who was still beaming, wondering if she had her
meat hooks in this. He continued to read and then finally
broke his silence in a deep Southern drawl more
representative of a Mississippian than a Texas cowboy.
“Well, that’s a mighty fine offer you got here. But I’m afraid
I’ll need some time to think about it.” He took one last drag
of his Marlboro and then skillfully flicked it out an open
soffit window.
After a silence, Martha stood up. She held up an
envelope and stated, “This is my two-week notice. The
Trotmans hired me to join their team at the animal
sanctuary.”
The red in Charlie’s face drained white, his mouth gaped
wide.
Jeff added, “Hendrickson’s dairy farm up Highway 5, just
like yours but slightly smaller, just sold for a third of our
offer. It is more than generous. And next year at this time,
your farm will be worth far less, especially short-staffed.
This is your once in a lifetime chance to get out of a
business that”—he paused carefully selecting his words
—“well, a business that needs government subsidies and
deceptive advertising to stay alive. This is your opportunity
to ride off into the sunset.”
Charlie narrowed his eyes at Martha in disappointment,
and then nodded back to Jeff. “I like your bravado, son, but
like I said, I’ll need some time to think about. How about
you give me a few weeks, and I’ll get back to you.”
Jeff shook his head exaggeratedly. He then smiled and
said with reserved courteousness, “I’m sorry, but this is a
now or never deal. I’ll even throw in two season tickets to
the jazz club.”
Charlie’s smirk faded. He asked, “I’m sorry, but how long
is ‘now’? A day or two?”
“Eleven minutes,” Jeff exclaimed.
Charlie jerked back, astounded. Sam flared her husband
a quick glance, not expecting the salvo. “Pardon me?”
Charlie said. “You want me to make a decision to sell my
farm in eleven minutes?”
“Yes,” Jeff said, breathing through his mouth. The air
stunk of cigarettes and noxious ammonia.
Everyone but Jeff froze wide-eyed, including his wife.
After an uncomfortable silence, Charlie put the documents
back to his face and scanned them. The tension in the office
was palpable. Martha, his chatty bookkeeper, was
struggling to maintain a flat affect and looked like she
wanted to bust out laughing. Charlie broke the silence,
urging, “This is a big decision. Why only eleven minutes?”
Jeff answered firmly, “Because you never know when a
short eleven minutes can change your life forever.” He
smiled. “And now you only have ten left.”
APPENDIX A
VARIOUS ESCAPE NUMBER CALCULATIONS
Escape Number = PTEA + Money System + POM
PTEA = The pre-tax earnings needed to purchase the
assets specified at your ten-year vision.
Money System = The pre-tax earnings which need to be
earned and then saved. This pays the yearly carrying costs
of the assets plus the yearly lifestyle and existence
expenses.
POM = An arbitrary “peace of mind” figure that allows you
to be fully immune from economic recessions and/or stock
market catastrophes.
e STEP 1: Calculate pre-tax earnings need to
purchase the assets (Cost of Assets / [1-TaxRate])
e STEP 2: Calculate your yearly carrying cost for the
assets. (Cost of Assets X 1.5%) plus $15,000 for
every child.
e STEP 3: Calculate your after-tax money-system, the
pre-tax lump sum earnings needed to be saved,
which carries the asset costs via investment income.
e STEP 4: Calculate your pre-tax POM number using
an arbitrary percentage of your money-system
divided by 1 minus the expected tax rate. A minimum
of 50% is recommended. This gives you a safety net
from economic recessions.
e STEP 5: Calculate your Escape Number by adding
the net asset cost (PTEA) to your pre-tax money-
system number, plus your pre-tax POM.
EXAMPLE #1: THE NOMAD TRAVELER
I want to travel the country in a luxury RV with my wife and
child, and visit every 50 state!
STEP 1 (Pre-Tax Earnings to Buy Assets)
Class One RV = 1,000,000
One Jeep (towed) = 50,000
After-Tax = 1,000,000 + 50,000 = $1,050,000
Pre-Tax = 1,050,000 / .60 = $1,750,000
Translation: To purchase $1,050,000 in assets, you will
need to earn $1,750,000 before taxes.
STEP 2 (Carrying cost of assets)
Asset Carry Cost (1.5% x $1.05M) = $15,750
Health Insurance = $10,000
Lifestyle/entertainment = $10,000
Existence expenses = $10,000
One Child (C) = $15,000
Annual Carry Cost = $60,750
Gross Carry Cost Pre-Tax= $101,250
Translation: You need to earn $101,250 a year before
taxes to support the assets.
STEP 3 (Calculate your money-system)
Paycheck pot = [Carry Cost ($101,250) / Expected Yield
(5%)] = $2,025,000
$2,0250,000 / [1 - 40%] = $3,375,000
Translation: You need to earn $3,375,000 to save
$2,025,000 earning 5% to generate $101,250 in yearly
passive income.
STEP 4 (Calculate your POM)
POM = Paycheck Pot X 50% = $1,012,500
$1,012,500 / [1 - 40%] = $1,687,500
Translation: Your economic POM cushion is $1,012,500
which is acquired by earning $1,687,500
STEP 5 (Calculate your Escape Number)
Escape Number = PTEA + Money-system + POM
$6,812,500 = $1,750,000 + $3,375,000 + $1,687,500
Translation: To escape the rat race and enjoy your dream
envision in your 1/5/10 Planasy, you'll need to earn roughly
$6,812,500 before taxes. This assumes you saved
$2,025,500 (earned from $3,375,000) which is invested in
passive income investments and you own your RV and car
without loans. You also have a $1,012,500 cushion (earned
from $1,687,500).
EXAMPLE #2: THE SINGLE PLAYBOY(GIRL)
I want fast cars, three houses around the world, and the
ability to do whatever I want!
Notes: WILL BE SUBJECT TO 40% TAXES AND LARGER POM FIGURES, OR 100%.
STEP 1 (Pre-Tax Earnings to Buy Assets)
House one = 3,000,000
House two = 1,500,000
House three = 1,000,000
Six luxury/sports cars = 1,500,000
After-Tax = 7,000,000
Pre-Tax = 7,000,000 / .60 = $11,666,666
Translation: To purchase $7,000,000 in assets, you will
need to earn $11,666,666 before taxes.
STEP 2 (Carrying cost of assets)
Asset Carry Cost (1.5% x $7M) = $105,000
Lifestyle/entertainment = $30,000
Health Insurance = $10,000
Existence expenses = $10,000
Annual Carry Cost = $155,000
Gross Carry Cost Pre-Tax = $258,333
Translation: You need to earn $258,333 a year before
taxes to support the assets.
STEP 3 (Calculate your money-system)
Paycheck pot = [Carry Cost ($258,333) / Expected Yield
(5%)] = $5,166,660
$5,166,660 / [1 - 40%] = $8,611,110
Translation: You need to earn $8,611,110 to save
$5,166,666 which earns 5% to generate $258,333 in yearly
passive income.
STEP 4 (Calculate your POM)
POM = Paycheck Pot X 100% = $5,166,660
$5,166,666 / [1 - 40%] = $8,611,110
Translation: You need to earn $8,611,110 to save a
$5,166,666 POM cushion.
STEP 5 (Calculate your Escape Number)
Escape Number = PTEA + Money-system + POM
$24,972,220 = $7,750,000 + $8,611,110 + $8,611,110
Translation: To escape the rat race and enjoy your dream
envision in your 1/5/10 Planasy, you'll need to earn roughly
$25 million in pre-tax money. This assumes you saved
$5,166,666 (via $8,611,110 in earnings) which is invested
in passive income investments and a $5,166,666 POM
cushion (via $8,611,110 in earnings) and you own all your
homes and cars without debt.
EXAMPLE #3: THE STARVING ARTIST/MUSICIAN
I don’t care about fast cars or big houses, my husband and
I just want to be live an artistic life free from work while
enjoying life with our three kids.
Notes: WILL BE SUBJECT TO SMALLER TAXES AND POM FIGURES.
STEP 1 (Pre-Tax Earnings to Buy Assets)
House = 550,000
Two cars = 50,000
After-Tax = $600,000
Pre-Tax = $800,000 (using tax rate 25%, not 40%)
Translation: To purchase $600,000 in assets, you will need
to earn $800,000 before taxes.
STEP 2 (Carrying cost of assets)
Asset Carry Cost (1.5% x $600K) = $9,000
Lifestyle/entertainment = $7,000
Health Insurance = $10,000
Existence expenses = $10,000
Children (3) = $45,000
Annual Carry Cost = $81,000
Gross Carry Cost Pre-Tax = $108,000 (tax rate 25%, not
40%)
Translation: You need to earn $108,000 a year before
taxes to support the assets + children.
STEP 3 (Calculate your money-system)
Paycheck pot = [Carry Cost ($108,000) / Expected Yield
(5%)] = $2,160,000
$2,160,000 / [1 - 25%] = $2,880,000
Translation: You need to earn $2,880,000 to save
$2,160,000 yielding 5% per year to generate a $108,000 in
pre-tax polymorphic pay
STEP 4 (Calculate your POM)
POM (Using 33% or .33 X $2,160,000) = $712,800
$712,800 / [1 - 25%] = $950,400
Translation: You need to earn $950,400 to save an extra
$712,800 for a “peace of mind” cushion.
STEP 5 (Calculate your Escape Number)
Escape Number = PTEA + Money-system + POM
$4,630,400 = $800,000 + $2,880,000 + $950,400
Translation: To escape the rat race even in this
minimalistic lifestyle, you’ll need to earn roughly $4.6
million before taxes. This assumes $2,160,000 is saved (via
$2,880,000 in earnings) which is invested in passive income
investments, you own your assets without debt, and you
have $700,000 saved as an economic cushion (via $950,400
in earnings.)
GIO) WIN SiClaiie Melle.
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THE FASTLANE FORUM
Want to Discuss UNSCRIPTED® Entrepreneurship?
https://www.theFastlaneForum.com
NOES
9. THE UNSCRIPTED STRATEGY
1 https://sive.rs/about
17. THE BAD MATH PRINCIPLE
1 Source: https://www.bls.gov/oes/current/oes nat.htm (May 2020 Figures)
21. THE ASYMMETRIC RETURNS STRATEGY
1 The other possibility is that this boutique owner is already a Liberated
Unscriptee and her store is a passion project!
23. THE CONSUMER/PRODUCER PRINCIPLE
1 https://www.stlouisfed.org/
~/media/files/pdfs/publications/pub_ assets/pdf/re/2011/c/foreclosure.pdf
26. THE VALUE MARRIAGE STRATEGY
1 Wolfgang and his cancer cure are fiction. But it’s quite possible a person
like him exists, or once did.
52. THE VALUE SKEW STRATEGY
1In my first book, The Millionaire Fastlane, | mentioned that you should
“ignore the competition.” While this is true in some respect, it isn’t true when
architecting value-skew.
54. THE EASY GOES HARD PRINCIPLE
11 do not recommend forums as a primary business, but they could work as
part of a business system.
41. THE HOT STOVE PRINCIPLE
1 https://www.youtube.com/watch?v=vgcdF1o0WaD0O
2 https://www.cnet.com/news/google-gpas-are-worthless/
44. THE FASTLANE STRATEGY
1 To evaluate any idea you have, visit GradeMyBusinessIdea.com for a full
CENTS business analysis. And yes, it is FREE—no email address required.
91. THE EXECUTION PRINCIPLE
1 https://sive.rs/
95. THE 3A STRATEGY
1 https://www.youtube.com/watch?v=y6909DjNLCM
598. THE BASEBALL PRINCIPLE
1 https://venturebeat.com/2018/03/31/after-40-mobile-games-david-reichelt-
hit-gold-with-color-switch/
82. THE DEMONSTRATION STRATEGY
1 https://www.theatlantic.com/business/archive/2014/10/the-psychology-
behind-costcos-free-samples/380969/
90. THE ASYMMETRIC TRACTION PRINCIPLE
1 If you are just getting started and struggling to build an audience, I would
recommend taking every interview offer you get!
93. THE STORIFICATION STRATEGY
1 https://www.jpeterman.com/Philosophy
95. THE GOING WIDE STRATEGY
1 https://www.cnn.com/2019/10/28/investing/restaurant-brands-earnings-
burger-king-popeyes/index.html
101. THE CHOOSING HAPPINESS STRATEGY
1 Ryan, Richard, and Edward L. Deci. “Self Determination Theory and the
Faciliation of Intrinsic Motivation, Social Development and Well-Being.”
January 2000.
http://selfdeterminationtheory.org/SDT/documents/2000 RyanDeci_SDT.pdf.
2 “Salmansohn, Karen. “The No. 1 Contributor to Happiness.” Psychology
Today. June 30, 2011. http://www.psychologytoday.com/blog/bouncing-
back/201106/the-no-1-contributor-happiness.”
102. THE WEALTH ACCELERATION PRINCIPLE
1 Source as Feb 2021: https://www.equidam.com/ebitda-multiples-trbc-
industries/
103. THE BIG LIST STRATEGY
1 https://www.morningbrew.com/daily/stories/2020/10/29/business-insider-
buys-controlling-stake-morning-brew
107. THE WEAKNESS & TRIPWIRE STRATEGY
1 https://www.npr.org/sections/therecord/2012/02/14/146880432/the-truth-
about-van-halen-and-those-brown-m-ms
111. THE D.A.R.E. STRATEGY
1 As I write, marijuana has not been decriminalized in Kansas.
113. THE LOW EXPECTATIONS STRATEGY
1 I was only stood up once!
114. THE PERSEVERANCE STRATEGY
1 https://vimeo.com/31813340
ALSO BY MJ DEMARCO
The Millionaire Fastlane
Crack the Code to Wealth and Live Rich for a Lifetime
Life, Liberty, and the Pursuit of Entrepreneurship
Live Music Archive
Librivox Free Audio
Metropolitan Museum
Cleveland Museum of Art
Internet Arcade
Console Living Room
Books to Borrow
Open Library
TV News
Understanding 9/11