Summary of Unscripted by MJ DeMarco

Chapter 40: The Seven P’s of Process: Go From Idea to Productocracy

The seven P’s are plan, proof (soft), path, prototype, proof (hard), productocracy, propagate.

1. Plan

This step is merely assessing if your idea makes CENTS. Then, you need to make sure you have a market to buy.

2. Proof (soft)

Now you need to make sure your idea can actually work before spending thousands on something nobody wants. This step is also called “validation”.

You can validate in five different ways:

1. Language patterns: we already talked about it. However, it’s not because you are coming up with a solution to a complaint that people will pay for it.
2. Channel research: if a similar product you want to sell has a lot of reviews on Amazon, you can speculate it sells well and that there is demand.
3. Search volume: log into Google keyword planner and see if people are looking for a service/product you want to sell.
4. Interview the market: find a group on Facebook with your audience, place an ad, and see what it yields. Or do what was said above, where you call 40 professionals to see if they’d be interested in the solution you want to create.
5. Market simulation: the idea is to create a landing page where you sell the product even if you don’t have it. You can whether collect email addresses of people that are interested in your product, or “sell it” (then refund). Getting an email and getting money are two different things. Ideally, you should get money.
   The other idea is to build a dummy version of your product. That works well on Instagram where it is picture-based. Finally, you can also pay an influencer to talk about your product.

3. Path

Now that you know your idea has potential, we will design a path that will lead to your first sale.

Your path is basically identifying the main things that need to be done in order to have your operation running.

Let’s say you want to make and sell a board game. The path would look like this:

1. Source board game manufacturer
   • Secure product samples, cost estimates
   • Negotiate pricing
   • Evaluate financials
2. Create the boardgame
   • Graphic design, theming, and branding
   • Card creation
   • Board creation
   • Humor testing
   • Prototyping
3. Operation
   • Create the LLC
   • Get insurance
   • Get a bank account
4. Website creation
   • Find a hosting company
   • Design hosting
   • Find a mailing list software
5. Launch
   • Find influencer
   • Get press releases
   • Marketing plan

As you can see, launching a new board game only has five major action blogs, each being divided into smaller sub-tasks.

What matters most is to identify what is critical to do (like finding a manufacturer) and what isn’t (printing business cards).

You won’t be capable to do everything yourself. You will have to outsource some of it, and learn what you cannot outsource (sales).

4. Prototype

This is the part where you build the minimum viable product. If you build an app, that’s the beta version.

Basically, you should learn what you need to learn to build your product as you are building it. No need to learn Python if you are asked to learn Javascript.

Expect a lot of learning and trial and error.

Second, you should build a product the market will ask you to build. Nothing is better than to reverse-engineer the solution you envision.

The prototyping phase is the hardest phase of entrepreneurship. It is the moment when one spends months, if not years, creating a product. It is hard and suddenly, any other ideas seem more attractive than the one you are currently working on.

This is called the shiny object syndrome.

Don’t give in and stay with your idea.

Motivation can fade. Giving up seems like the right thing to do. This is normal.

Only those that persevere will win.

5. Proof (hard)

Once your prototype is ready, you can launch it in the market and see. What you are looking for is hard-proof, and hard-proof is a sale. When you get it, your entire life changes… Goodbye 9-5, you will provide value by yourself.

The customer life cycle starts now until Propagation.

This cycle is when strangers are turned from being oblivious to loving your product.

It has 7 steps:

1. Awareness: exposing your product to your target customer
2. Evaluation: providing the customer with enough information to make a decision
3. Onboarding: when strangers become prospects (through following an IG account, signing up to a mailing list, etc)
4. Purchase: when the prospect buys your product and becomes a customer
5. Use: monitor how your customers use your products: eg: they buy more/less, ask for new options, etc.
6. Engagement: building relationships with your customer (discounts, special offers, new products, asking for feedback)
7. Discipleship: Your customers become loyal ambassadors for your brand, bringing you more customers.

Every time you push your product into the market, you are going to get one of these three reactions:

1. An echo: it can be a question, a comment, a tweet. Any reaction that isn’t sales.
2. Diffusion: if nothing happens, don’t panic. Make sure you didn’t make a mistake somewhere. Check your channel. Are you advertising to the right audience? Then check your reach. Maybe you simply didn’t reach enough people. Finally, check your message. Most likely than not, your copy sucks, your photos too, and your website is lame.
3. A conversion: congratulations, you have gone further than most people dream of. It’s time to get back to the act, adjust, assess mode and see how expensive it was to acquire a customer, how you can improve your product, acquire more clients, etc.

6. Productocracy

So you made a sale. Great.

But does your customer love your product? Plenty of people sell, only to be asked for refunds later on.

If your product has sold because of effective marketing and not because of delivering value, then you will not reach a productocracy.

You reach a productocracy when one-time buyers are converted into life-long customers and tell all their friends about what you sell.

If your customers are unhappy, it is your job to keep on changing/improving the product until they are satisfied.

The three signs of a productocracy are:

• Reorders or renewal
• Private emails with positive feedback
• Public reviews or praise from strangers

7. Propagation

Propagation is the final stage, and the one where the money starts pouring in.

Propagation is simply exposing your product/service to more and more people.

Attention, only productocracies reach this level. If your product does not satisfy, it will not propagate – simply because you need word-of-mouth for it to propagate.

Propagation is accomplished by:

1. Reach expansion: it is simply putting your product in front of more eyes through ads, blogging, etc. If your product is a real productocracy, don’t hesitate to give a free sample. People getting your product for free will tell their friends who will buy it.
2. Channel expansion: if you are selling your product on Amazon, you should start selling it on eBay, Rakuten, on your own website, and maybe even opening a brick-and-mortar shop.
3. Expansion of network: can be partnering, networking, or getting influenceable people to recommend your product.

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Chapter 41: Make Execution Better: 13 Best Practices

#1: Expect Difficulty and Deviation

Difficulty is self-explanatory. You don’t make millions solving easy problems.

Deviation is the idea that by listening to the market and adjusting, you’ll end up doing something completely different than what you had thought of at the beginning.

That’s ok. What matters is to have a viable CENTS business. Nothing else.

#2: Be Monogamous

Developing a productocracy takes time, commitment, and focus. You are neither Elon Musk nor Richard Branson. Focus on one thing first. Once you make millions, then maybe you can start exploring other options.

#3: Balance Is Bullsh*t

Extraordinary results demand extraordinary actions. You won’t get there by “having a healthy work/life balance”. It’s all in, or all out.

#4: Environment Is Everything

If your environment depresses you and disgusts you, move. Find that city, country, group, cafe where you can give your best and that inspires you to struggle.

If your friends have bad influences, ditch them.

#5: Gatekeepers Are Dying – Don’t Ask for Permission

Youtube, Amazon, Etsy, eBay, and more empower you to do anything you want where there used to be gatekeepers.

If you fail at the X-factor audition, practice and publish your music on Youtube.

The market is the ultimate judge.

#6: Build a Brand Likened to a Personality

A brand is more than just a logo. It is how the business acts, its values, the way it cares about customers.

The strongest brands play a role in the identity of their customers: Apple, Nike, Louis Vuitton, Lamborghini…

#7: Consistency Builds Brands

A brand is earned. It is by showing (and actually doing it) that you care about your customers that they will grow your brand.

#8: Sell or Be Sold

Sales is the most important skill you could develop. Think about the number of people you are going to have to sell to: colleagues, partners, banks, investors, your spouse, your kids, your employees. As such, learning how to sell is a must.

Here are some strategies to help you out:

• Tell a story. People prefer dealing with people than with faceless corporations.
• Humanize your corporation: post photos of yourself or of people working for you, engage on social media, etc.
• Appeal to self-interest, meaning, and purpose: the quicker the customers learn what’s in it for them, the quicker the sale, which is why you are not selling features – you are selling benefits!
• Build a community.
• Prioritize social proof: the best selling method is word-of-mouth, hence the need to get testimonials on one’s homepage.

#9: Shelve Your Personal Biases

It’s not because you hate Facebook ads that Facebook ads don’t work. Your perception is not reality. Business is complicated enough as it is. Don’t try to be right, try to be rich.

#10: To Hell With SEO

If the only way you survive is thanks to SEO, you don’t have a business. People shouldn’t buy from you because you are first ranked in Google. They should buy from you because they love you!

Also, the truth about SEO is that it works when people go to your website organically, meaning when your website is providing something they value. So focus on value, not on SEO.

#11: Avoid Fads. Choose Trends.

Fidget spinners are fads.

Blockchain is a trend.

#12: Avoid Politics in Your Business

#13: Not Everyone Loves Coffee

You will be criticized no matter what you do.

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Chapter 42: The Four Unscripted Disciplines: Design, Then Ensure Your Future

Remember the TUNEF framework:

1. The FTE, which we talked about.
2. 3 Bs: Beliefs and the 8 beliefs scams, Biases and Bullsh*ts
3. MP: Meaning and Purpose: the Why: the core driver
4. FE: Fastlane Entrepreneurship: growing a fastlane business with the CENTS framework
5. Kinetic Execution: Act, Assess, Adjust
6. The Four Disciplines: comparative immunity; purposed savings; measured elevation; consequential thought.

We arrive now at the last part: the four D’s.

While making money is difficult, keeping it is harder.

The 4 D’s and the discipline to respect them complete your unscription process.

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Chapter 43: Comparative Immunity: Well-Dressed Slaves Are Still Slaves

Screw the Joneses

Comparison is the path of perpetual misery.

So don’t compare yourself, as you will always find someone who is richer, better looking, etc.

Instead, be grateful for what you have.

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Chapter 44: Purposed Saving: Prepping For a Lifetime of Passive Income

Your three objectives of purposed savings are lifetime passive income; early retirement to pursue your dream; and tax relief.

Lifetime Passive Income

As we said, the best way to reach passive income is through the money system. Four or five million at a 2% interest rate is between $6 500 and $8 300 per month passively. Enough to live anywhere you want.

In order to structure this system, you need to have money and in order to have money, you need to earn it – and not spend it.

Early Retirement and Dream Pursuit

When money isn’t a problem, you can do whatever you want without time or financial constraints.

Tax Relief

You are going to have to pay taxes – a lot. Save for that.

Financial reconstruction: Purposed Saving

Financial reconstruction enables you to develop good financial habits. It consists of five retooling phases: reframe, reform, reduce, reallocate and remind, reward.

1. Reframe

Change the name “money” for value-voucher as we said earlier. Understand that one euro earned now is a euro that will create a lifetime of interest. Every euro saved is a freedom fighter.

2. Reform

Cancel every subscription that is sucking money out of you.

3. Reduce

Pay off debt.

4. Reallocate

Get some money into your money system every month.

5. Reward

Reward is when you treat yourself for having flexed your muscle and not spent a dime.

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Chapter 45: Measured Elevation: Reward and Enjoy the Ride

The truth about money is that most people are broke – even those making six figures a year. And that’s because they spend everything.

As such, what you need to do is knowing how much you can spend maximum per month and not go over.

Don’t forget to reward yourself. Made $15k on a deal? Buy yourself a $1k phone. Made $10 million? Get a Lamborghini.

But no need to rent the most expensive suite in Vegas.

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Chapter 46: Consequential-Thought: Protecting Your Life

While you need a process to build events, one event can kill a whole process.

Consequential-thought is the foresight into the consequences of our actions and knowing that our choices are unfairly weighted toward the bad ones.

The truth about life is that it is not “fair”. You can take 10 years to build your dream house and accidentally burn it because you didn’t pull out the cigar.

The other way around is not the case.

Eg: it takes one shot to be a heroin addict.

The same thing goes for everything else in your life. Negative relationships or situations will eventually attract an event that will destroy everything you have carefully built.

This is why you need to think about the consequences of your actions before you act – why you need to become a consequential thinker.

You always have a choice, because you are the one that decides how you react to events.

In fact, where you are right now is where you have chosen to be. It may hurt, but it is the truth. Choice is our most powerful weapon.

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Part 5: A New Dawn: Never Work Again

Chapter 47: Welcome to F*ck You

Once you have united the five components of the Fastlane – namely belief, meaning and purpose, a CENTS business, execution, and discipline – you reach the “f*ck you” level where you can just do whatever the f*ck you want.

Fail to add one of the components and you will fail. All five are required.

Now, there are five types of people that will fail, each missing one component.

1. The competent self-destructor missing belief: your ideas are always dismissed, or you think you need to be greedy and scammy to make it work.
2. The wanderer missing meaning: you get discouraged and struggle to find out why you’re doing all this, and don’t do it as a result.
3. The “pay the bills” entrepreneur missing a CENTS business: your business pays the bills but won’t buy you freedom.
4. The idea entrepreneur missing execution: these people are committed to the idea of wealth, but not to the one of execution.
5. The gambling rockstar fallen from grace missing discipline: you can’t save the money you’re earning.

Which one are you likely to be?

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Chapter 48: Your Last Business Ever (If You Want to)

The Unscripted Money System

It’s made of three pots:

1. The “f*ck you” pot

This pot is for the money you can afford to lose, namely:

• stock investment
• angel investing
• poker
• casino
• etc

2. The home pot

This pot is optional and serves to pay for your dream house, which will be the biggest expense in your life. The author recommends not to have a mortgage but understands that one could still get one if it makes sense financially to have the paycheck pot paying for it.

3. The paycheck pot

It’s the money system, the most important pot as it’s the one giving you money without you having to do anything.

The purpose of the paycheck pot is not to grow it, but to rent it out so you get a regular income.

Once 5% on the paycheck pot covers your lifestyle, technically the rest is f*ck you money. You can invest your paycheck pot into anything that gives you a stable and predictable return. These are:

1. Stock Dividends: it’s companies paying off dividends. They are not obliged to, and the dividend they pay varies according to the economy and cashflow.
2. REIT Dividends: these are dividends from corporations that manage real estate and perceive rent. It’s like being a landlord without the pain of having a tenant.
3. ETF: Equity-traded-fun: it’s a fund that buys a bunch of stocks and evolves with their performances.
4. MLP Partnership Income: similar to dividend stocks.
5. Bond Interest: payment from loans you make to companies, countries, or cities.
6. Loan Interest: similar to bonds
7. Managed Income: payment from a pool of financial instruments that can be a mix of all of the above.

Before you proceed, you should observe the seven rules that ensure your capital remains safe.

Rule #1: The rent rule

Every time you cede your money to get some dividend, demand rent, not hope. You absolutely cannot afford to lose your capital, or to maybe eventually receive these 3% you signed for. Whatever you’re receiving must be a sure deal.

Rule #2: The snap rule

The world economy is not stable. As such, whatever you invest your money in should remain highly liquid and sellable at the snap of your fingers.

If you see a financial storm arriving, you should be able to sell your assets in the hour that follows.

Eg: REITS, bonds, ETFs… can be gotten rid of instantly. Real estate cannot (selling a house takes time).

Rule #3: The apocalypse rule

The biggest and only threat to your paycheck pot should be a global financial apocalypse and nothing else.

Meaning: your investment should be kept in banks “too big to fail” where, if they did fail, such failure would unleash worldwide financial apocalypse.

Big banks often means “big scrutiny” and “minimum transparency”. Indeed, financial scams often come from tiny banks that can trick the regulators by operating in the shadow.

Big banks cannot afford to scam their customers.

Rule #4: The three months in three years rule

This rule states that if, over a period of three months or less, any asset appreciates and enables you to cash in gains that represent three years of dividend, sell to take the gains, and buy back once it crashes (and you still trust the investment).

Eg: If you buy a stock for $100 USD that has a 5% yearly dividend and the stock appreciates to $116 USD in less than three months, you should sell and take the profit.

Money now is always better than money later.

Rule #5: The Admiral Ackbar rule

If you see stocks with 18% dividends, it’s probably a trap. This rule states that things too good to be true are scams or traps.

Rule #6: The 1% rule

Avoid any fund with a management fee greater than 1%.

Rule #7: The ostrich rule

The rule states that you should not invest in businesses that have no future or are built out of fads (RadioShak, Kodak, Crocs).

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Chapter 49: Unscripted

Congratulations.

You are now Unscripted.

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