6 Relatively Easy Questions to Answer (That Have Big Implications)
In my last post, I said that if making a living from your work is your top priority, you are in a better position to do work you love for the rest of your a career. The six questions in this post are a follow-up to that point.
In the business world, the art of defining is called marketing. Marketing is the most important skill set for anyone bootstrapping a small business. I don’t care if you are a developer, a sales hawk, yoga expert, or whatever– if you want to make successful businesses, start thinking of yourself as a marketer.
Marketing is:
Defining the value proposition of a product or service.
Defining who it’s appealing to (and how).
Defining the terms on which you can bring them together.
If you get good at defining actionable steps, and how they lead to the outcomes you desire, it makes it possible for you to move forward. Defining stuff in this manner is like putting extra rungs on a ladder.
It’s a simple point, but it’s lost on so many people. I’m not sure why. Maybe people are ashamed of the things they want, or are unwilling to settle on something simple because it doesn’t feel good enough to them. Hey, we all know you are a great person who wants to change the world. How about we just start with that extra 10K you want to make next year?
Here’s 6 definitions that were critical for me:
How much money do I need to make?
Make it an easy to remember, simple number. The lower, the better.
WHAT I DEFINED: “Zero.” Talk about lowering the barrier to entry. I wanted the opportunity to work full time on my own projects so badly that I remember thinking “I don’t need to make anything.” In the worst case, I thought I could move in with a friend for a few months. That never needed to happen, but in my mind, having the opportunity to grow a business was worth such a radical move. I understand most people aren’t in a position like this. In general, the lower the number is, the better. RESULT: Ended up making more money than I would have had I stayed employed in good job. I was not sure at all that this would be the case.
How much more valuable is location independent income to me?
If you can generate your income from any location, how much more valuable is that to you than location dependent income sources? This was important for me because it put hard figures to vague desires I had in my head.
WHAT I DEFINED: 5x. For me that means making 100K at a job is just as valuable as making 20K from anywhere. The multiple will be different for everyone. Mine is pretty extreme because I value travel, meeting with entrepreneurs, and exposing myself to new opportunities and experiences so much. THE RESULT: I made a lot less money, hoped on a long-haul flight to Vietnam, and never looked back.
What does success look like for me?
This one is deceptively simple, and was one of my biggest personal hurdles when making the decision to go for my own thing. There are very powerful scripts in place that say stuff like “you are generally successful and cool person if you have a job and make six figures.” Everybody gets that. Your relatives nod their heads when you name comes up. “He’s doing well…”
It goes without saying that those people will think you are nuts to go out on your own. My parents were like “are you f*$%ing nuts!?”
WHAT I DEFINED: Success to me is waking up every morning, anywhere in the world, and spending my time on projects that I find captivating. Identifying a small group of people who have a high level of respect and investment in similar practices– and working directly with them– is a high priority as well (thank you, podcast!!!). I realized that random vague status judgments like “that guy is doing well” or “he went to a good school” were driving my decision making because I really didn’t give myself the permission to define clear alternatives. RESULT: An insanely wonderful group of people to work and interact with, and no more alarm clocks.
What is the price of my product or service, and how many units make me a living?
Define exactly how much you need to ship and support in order to support your idea of success. Let’s get there first! I love thinking about recurring revenue models. If I were to start over today, I’d start with a small community bundled around an interest that I can help people with. I’d open up a Ning site and build out a metric crap ton of products and services in there that help my members reach their goals. I’d probably talk with everyone who signs up on the phone.
Here’s the kind of math I love to do:
$17 monthly x 200 customers = $3400 monthly income
$17 monthly x 300 customers = $5100 monthly income
$27 monthly x 200 customers = $5400 monthly income
$27 monthly x 300 customers = $8199 monthly income
WHAT I DEFINED: If I can get 20 pieces of cat furniture on the shelves of every Petco store nationwide, I’ll buy one of these. RESULT: Fail.
What is my product, and why is it valuable?
Write a sales letter for your product, wether you intend to use it or not. If you have never written a 3,000 word sales letter, you should do so, immediately. It’s a fantastic exercise, especially if your product or service doesn’t exist yet (writing the letter is the easiest way to bring it to life!).
Go head and find a sales letter out there that you like. I love Sean Ogle’s Location Rebel sales letter. It’s fun to read and extremely clear. Don’t make it too hard on yourself– I would literally just copy somebody’s existing text into a document file and start to replace the value propositions, features, and social proof elements with the stuff related to my product. You can get the same kind of value from super specific blog posts. For example, this blog post set off a chain of events that will conservatively generate over 100K in profits in 2012.
WHAT I DEFINED: Conceptualized a bunch of bombs, but only spent 3,000 words on them. RESULT: A few big wins.
Do I feel like my brand is going to pigeonhole me?
Ok, this is a cheat, I didn’t actually ask myself this question. I had to learn this one by trial and error.
Your answer should be YES!!!! YES! I feel restricted by my branding. YES! I feel like I won’t be able to express my broad range of interests via my narrow, and focused approach. YES! I’m almost certain I’ll get tired of talking about such a narrow topic!! YES!!! The branding that lowers my customer acquisition costs and makes my value proposition clear to my clients makes me feel weird! YES! Dan, I get your point…
This one is especially difficult for really smart ambitious people. It’s why slightly-dumb guys like me find it easy to get in to the game. Smart people love to be involved with broad and ambitious ideas– philosophy, politics, gender issues– and the institutions that are players there.
Where the rubber hits the road on this stuff is always at the most basic level. Do the work. Write the article. Call the client. Help your client. Define, in a sentence, what you are doing, and why.
Easy, right?
Cheers,
Dan
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