Chapter 30: The Commandment of Need
Most businesses fail because they are not delivering stuff customers need.
They are selfish businesses: eg: a restaurant in a city with already 1000 restaurants.
Businesses that win are businesses that solve needs.
If you build a business for yourself, you will fail.
-> stop thinking about business in terms of your selfish desires.
Look for needs, problems, pain points, service deficiencies, and emotions.
“What business can I start with $200″ is the wrong question to ask.
The right question is “what problem can I solve with $200?”
If you want to attract money, forget about money.
Money is like a cat. It is attracted, not chased.
Money = value. Provide value -> get money.
A business that works isn’t about “doing what you love”.
It’s about doing “what other people love“, as they are the ones paying you.
When you do what you love -> your passion becomes a job -> you no longer like it.
Eg:
- Taxi drivers hate driving
- Doctors hate people
- Singers hate singing
What you need is not passion for the activity, but for the things you will buy with the money you earn.
Eg: passion: for a mansion, passion for a private jet, a yacht, a Ferrari, etc.
Chapter 31: The Commandment of Entry
This Commandment states that as entry barriers to any business road fall, or lessen, the effectiveness of that road declines while competition in that field subsequently strengthens.
Eg: e-commerce. In the early 90s, e-commerce meant buying a server, connecting it to the Internet, and hiring a bunch of engineers that could code your website -> high barriers.
In 2021, e-commerce means signing up for Shopify -> low barriers -> e-commerce is now crowded.
-> easy entry creates a lot of competition.
The only way you can violate this commandment is by being exceptional.
If you sell exceptional goods, e-commerce will work.
If you are an exceptional writer, writing (the activity with the lowest barriers ever) will make you money too.
If you are an exceptional trader, trading will work.
-> Entry is a process, not an event.
If you are in business in less than 5 minutes, you are violating the Commandment of Entry.
Another way to look at whether the business is worth it or not is to look at everyone.
If everyone is doing it (dropshipping), leave. Everyone isn’t wealthy, nor will ever be.
-> when your taxi driver is telling you about Bitcoin, it’s time to sell!
Dumb money always shows up at the end of the boom.
When everyone is in, get out. When everyone is out, get in.
If you want to be unlike everyone, you can’t be like everyone else.
Chapter 32: The Commandment of Control
You are whether in control, or you aren’t.
If you are not, you are a hitchhiker.
Hitchhikers surf on other people’s business.
They are:
- Youtube channels surfing on Youtube’s success
- Amazon sellers surfing on Amazon’s success
- Uber drivers surfing on Uber’s success
- Franchise owners surfing on McDonald’s success
None of these people have control.
The real fastlaners are Youtube, Amazon, Uber, and McDonald’s.
You need to change your mindset.
- Create MLM companies – don’t join them.
- Sell franchises – don’t buy them.
- Run hedge funds – don’t invest in them.
- Sell stock (when you go public) – don’t buy them.
- Offer dropshipping – don’t dropship
- Hire people – don’t get employed
- Collect rents – don’t pay it
Got it?
A McDonald’s franchise owner, unless he owns 100, may make 5k-10k, which is nothing extraordinary.
Fastlane money is 200k a month.
You can’t make 200k if someone has control over your business.
So, why is control important?
Because anyone controlling your business can shut it down at any time.
Eg: When Subway did their last run of the $5 sandwich, it drove most subway restaurants into bankruptcy.
-> if someone can kill your business with a finger snap, you don’t have control.
Chapter 33: The Commandment of Scale
Remember the Law of Effection?
Business is about leverage. If you can’t leverage, you’ll never be rich.
Leverage is about the market you are in.
A big market -> a lot of people to sell to. And the other way around.
The thing about business is that you only have to be right once -> choose a business that has the potential to make you rich aka don’t go open an ice-cream shop (unless you intend to franchise it ofc).
To increase scale, you whether need to sell to more people, or sell for more expensive.
-> selling to 10 people VS to 10 million people.
-> selling sandwiches VS selling Louis Vuitton bags.
There are three impediments to the Law of Effection: scale, magnitude, and source.
Scale: if you can’t sell to millions, you won’t make millions.
Magnitude: if you can’t sell one good/service for hundreds of thousands (at least), you won’t make millions.
Source: doctors, which save lives, should make millions, because they deliver a valuable service. So, why don’t they? Because they are not in control. The hospital is, so the hospital is making millions. For the Law of Effection to work, you need to be in control.
-> think scale and/or magnitude.
Chapter 34: The Commandment of Time
The Commandment of Time requires that your business be detached from your time.
To know that, answer this simple question: if you leave for a trek in the Amazonian forest for a month, can your business still make money and grow?
- Can your business be automated?
- Can you hire HR to manage it for you?
If your business requires you to be there, you’re not in the fastlane (unless you are paid 100k/hour).
Chapter 35: Rapid Wealth: The Interstates
There are three roads that are most likely to bring you wealth fast since they naturally respect the five Commandments.
1. Internet
The Internet de facto obeys the five Commandments, which is why it has made so many people millionaires.
You have seven broad categories of Internet business models.
- Subscription-based: offer data, information, software, content, against a monthly fee.
- Content-based: blogs mainly. They make money with affiliate marketing, advertising, etc.
- Lead generation: they are websites centralizing aggregated information, usually selling a service (booking.com is a lead generation website, kinda).
- Social networks
- Brokerage systems: they connect buyers and sellers together (Fiverr, eBay).
- Advertisers: like brokerage, they merge buyers and sellers together against a fee. Google, when you click on Google ads, is some sort of advertiser.
- E-commerce
2. Innovation
Innovation works in two acts.
- Manufacture a product: it’s only half the battle
- Distribute: this is where the war is at. If your product doesn’t sell, it is worthless.
Some ideas for you:
- Food
- Household products
- Health
- Information
- Personal goods (clothing)
- Automotive
Inventing isn’t as much invention as you think. Sometimes, it can simply be repackaging and in the end, it’s mostly about marketing.
Red Bull, for example, is a pure marketing company. They outsource the entire Red Bull production and focus only on ads.
3. Intentional Iteration
It means repeating a process with the aim of approaching a desired goal.
It’s the hardest road.
It’s the hardest road because it is scaling businesses that don’t scale naturally -> they must scale with people.
A supermarket, an ice cream shop, etc.
Ultimately, all businesses scale – you just need to hire people.
McDonald’s doesn’t scale well because you always need to hire a bunch of people, find real estate, etc, to scale.
Chapter 36: Find Your Open Road
Opportunities are everywhere, and you can’t see them because you haven’t been trained to.
Opportunities are rarely blockbusters like the Internet or the steam engine. Opportunities are:
- problems
- unmet needs
- simplification
- feeling
- better service
- lame companies
“BuT WhAt iF SoMeOnE Is aLrEaDy dOiNg iT?“
THEN DO IT BETTER.
Competition is everywhere. Just do it, and do it better.
-> Forget the big idea: go for better.
New ideas almost never exist. Entrepreneurs take successful ideas and improve them.
-> you need to execute like no one has.
So, how do you spot ideas for businesses?
You listen.
- I hate…
- I don’t like…
- This frustrates me…
- Why is this like this?
- Do I have to?
- I wish there was…
- I am tired of…
- This sucks…
All of this screams “problem” which screams for “opportunity“.
Chapter 37: Give Your Road a Destination
What do you want?
A Lamborghini? A 5-million mansion?
It’s time to know where you are headed and make sure the fastlane can serve your dream.
- Define your lifestyle: what do you want?
Cars, mansions…define it. - How much do your dreams cost?
Let’s say they cost 15k a month.
Divide 15k by 0.6 to price in the taxes -> 25k/month. - Set the targets: how much do you need to make?
25k per month is 300k per year.
To get 300k per year, you’d need to have a lump sum of 300 / 0.05 (you can expect 5% return of a money tree) = 6 million.
If the money comes from a business and not a lump sump, multiply the living wage by 5.
-> 15k x 5 = 75k/month.
6 million of 75k/month are your targets.
-> build a business you can sell for 6 million or that earns 75k per month. - Make it real: take action today! Focus on the next step, not on 10 years from now.
Start with making $50, then slowly but surely, grow it.
Managing a money system demands financial literacy.
You need to learn finance, accounting, and economics.
You also need to live below your means.
Part 8: Your Speed: Accelerate Wealth
Chapter 38: The Speed of Success
If you don’t take action, nothing will happen.
Business is a tough game.
Many people see price as the only differentiating variable, but there are many more:
- Execution
- Marketing
- Customer Service
- Product
- People
- Ideas
None of this is worth anything if you don’t execute.
-> Success isn’t about the idea, but about the execution.
According to Derek Sivers, ideas are multipliers of execution.
- Bad idea: 10x
- Good idea: 100x
- Great idea 1000x
Similarly:
- Bad execution: $10
- Good execution: $100 000
- Brilliant execution: $10 000 000
A bad idea with a brilliant execution is worth $100 million.
A bad idea with a bad execution is worth $100.
How well you execute is the only thing that matters to succeed.
Chapter 39: Burn the Business Plan, Ignite the Execution
Business plans are useless as they are not grounded in reality – and you never know how reality (the market) is going to react until you try your idea.
When you get out there, the market gives you feedback. Whether it’s good or not good doesn’t matter -> you can then act in accordance.
Business plans are like battle plans: they don’t survive reality.
Chapter 40: Pedestrians Will Make You Rich
When people complain about your business, there is a chance to make it better.
Safely keep and record all of the complaints you receive.
There are four types of complaints.
- Complaints of change: always happen when you change something (design, most of the time). The question is: when do these complaints become substantial?
- Complaints of expectation: your customers feel cheated as you did not deliver what you promised OR what they expected. Either way, it is your fault. Fix it by upgrading your service/product, or educating your customers.
- Complaints of void: when your customers request something you don’t have -> these are goldmines of opportunities since you can then improve your service.
- Complaints of fraud: when people complain and lie to sue you.
You won’t be able to satisfy all of your customers – be balanced!
You will explode your service by deploying SUCS: Superior Unexpected Customer Service.
Answer phone calls and emails right away, fix the problem, and your customers will be blown away.
Make an estimation of what your customers expect from you, and violate the expectation (to the positive).
-> they will advertise your company for you.
This is why you can’t be your own boss as a business owner. Your customer is your boss.
Chapter 41: Throw Hijackers to the Curb
Your business is your castle. Only invite friends – not foes.
-> a business partner is like being married. Only do business with people you can work with.
They must have the same vision, work ethic, etc.
Get the best accountants and attorneys, as they have the power to make or destroy your business.
Trust people you work with, but always verify that they are trustworthy!
In the end, there is only one person you can really trust – yourself.
When you hire employees, make sure they abide by your customer service philosophy. A disastrous support experience will always outweigh a great product.
Chapter 42: Be Someone’s Savior
If you are in business for the wrong reasons, it’s likely that your product is commoditized. If it is commoditized, you’ll only compete on one thing: prices.
Airlines and gas stations are commoditized products and services.
Get your eyes off the competition. If you are focused on them, you are not focused on your business and customers, and you can’t lead and win.
In fact, forget about the competition 95% of the time.
The 5% should be used to exploit their weaknesses.
Chapter 43: Build Brands, not Businesses
Marketing is the most powerful thing in business. Some companies have a bad product, bad customer service, but brilliant marketing – and they earn.
A brand is the best defense against commoditization because people are loyal to brands.
Brands help to differentiate yourself and make your business unique.
So, how do you build a brand?
First, get a USP: a Unique Selling Proposition. It’s one thing you do differently (and better) than everyone else.
Second: be unique. Don’t say “lose weight”. Say “obliterate fat”.
Third: be specific and give evidence: “Pizza to your door in 30 min or it’s free”.
Fourth: keep it short clear and concise
Five: put your USP into all marketing materials (vehicles, flyers, business cards, emails, etc).
Six: make it real.
No one wants to be like everyone else.
Be the Lamborghini in the market. Rise up, and make some noise.
Five ways to do so:
- Polarize: a bit dangerous, but it works. You polarize by delivering an extreme message.
- Arouse emotions: Louis Vuitton bags and Ferraris are neither bags nor cars. They are identity features.
- Be risque: sex sells.
- Encourage interaction: give people a chance to talk about themselves
- Be unconventional
To succeed in the fastlane, you need to forget yourself entirely and only serve others.
-> Focus on benefits, not features.
You don’t sell a Louis Vuitton bag, you sell emotions and identity.
So, how do you transform features into benefits?
In four steps.
- Switch places: become your customers. What do they want?
- Make a list of your features.
- Find out the advantages they have.
- Translate them into benefits. Why are they great?
You can also play with prices. Prices convey more than cost. They convey value.
High price -> high value.
Unless price is your brand, don’t let price steal it (don’t be the cheapest if it’s not your USP).
If you deliver higher value, there is no reason why you wouldn’t have higher prices.
Chapter 44: Choose Monogamy Over Polygamy
Focus on one business.
People that succeed have one company that does well instead of 10 that suck.
Focus on one thing first and then, you will be able to focus on several other hobbies.
Chapter 45: Put It Together: Supercharge Your Wealth Plan
So, what is the FASTLANE SUPERCHARGER?
- Formula: wealth is a formula made out of beliefs, choices, actions, etc. It’s a process.
- Admit that the slowlane is flawed, and give it up.
- Stop and Swap the slowlane for the fastlane.
- Time: invest your time in building your money tree.
- Leverage as much as you can.
- Assets and Income are exploded on the fastlane.
- Number: how much do you want?
- Effection: impact millions, make millions.
- Steer: make the right choices.
- Uncouple: split your business from yourself by creating a corporation.
- Passion % Purpose
- Educate yourself. Never stop learning.
- Road: test different fastlane roads and focus on solving problems.
- Control: don’t break the Commandment of Control.
- Have what others need.
- Automate and respect the Commandment of Time.
- Replicate and scale.
- Grow your business.
- Exit when it’s time.
- Retire, reward, or repeat.
The fastlane is your journey.
It’s personal.
It’s time to take action and make it real now.
For more summaries, head to auresnotes.com.
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