Born Entrepreneur - Stories, Thoughts & Analysis

How Come That Idiot’s Rich and I’m Not?

by Robert Shemin (Author)

About a month ago I read this book pretty much cover to cover sitting in Borders Bookstore. Here are the key takeaways I took from it and have tried to implement in my own life. My responses to these points in are italics:

• have one goal only

  To build recurring revenue to sustain myself during a 2month travel to Australia and SE Asia. My plane leaves in mid-December, 2008.

• have a charm to remind of goal

  When my sister was in Vietnam, she sent me this amazing handmade dragon lantern. During the shipment a number of the dragons broke off. Today, I took one of those broken dragons (about the size of a quarter) and tied it to a hemp string and have hung it around my neck as my ‘charm’. Perfect, especially since the Asian dragon is symbolic of power!

• find some heroes to emulate and copy what they do daily

  The way Tim Ferriss lives his life is an inspiration to me. He’s totally changed the way I think about the intersection between business life and personal life. I’ve been reading his blog a lot lately and staying up to date on his tweets via twitter.  I’m still trying to find more ‘heroes’ so-to-speak. I have been a longtime fan of Extreme Makeover: Home Edition, which is pretty much led by Ty Pennington. I look up to his zest for life and his urge to help people. So, perhaps I will add him to my list.

• start tracking daily money in and out down to the penny

  hmmm…I don’t know about this one. But i have definitely started to be more aware. I’ve cut the spending on credit cards down to nil, so I’m just using my debit card for everything now. I’ve made an effort to move my auto billing for things like cell phone, internet, and auto insurance to my debit card, because I realize I had just forgot about all those auto bills, and my debt was racking up. This way I can see it all the time.

• a vision without a map is worthless

  I have created an action item list for the 4 endeavors that are in front of me at the moment. I was sure to give myself deadlines for each item, and was especially sure to only put items on the list that help me reach my ONE goal.

• start a plan by first looking at the end goal

  I’ve found that it’s a lot easier to get through a list of tasks when I keep reminding myself WHY I’m doing it. Forgetting the end goal in my experience is the worst mistake I can make. If I do, I lose a LOT of motivation. Otherwise, the tasks seem to fly through and it keeps my excitement level high.

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So, I’ve been realized that other than holding on to some shares of Microsoft since my 16th birthday, I really know very little about the stock market—and picking winners.  I figured I’d lessen the gap of knowledge a bit by picking up a couple books on investing in the stock market.  Here’s what I learned from the first one:

You Can Be a Stock Market Genius Even if You’re Not Too Smart: Uncover the Secret Hiding Places of Stock Market Profits
by Joel Greenblatt

1. increase # of stocks to decrease risk. (seems obvious, i know…but there was this cool set of statistics mentioned the book that shows the risk going down 75% when you have 4 stocks and all the way up to something around 80 stocks.  never seen it written out in statistics like that, rather than simply saying “don’t put all your eggs in one basket”)
   
2. Buy spin-off companies.  (This is was the biggest point of the authors.  Says this is where the guaranteed cash is. There’s proven statistics on it)
3. invest in companies that might be acquired soon
4. invest in good companies that are coming out of bankruptcy.
5. invest right after corporate restructuring has been announced
6. look for cool concept stores and invest in their public parent company (if there is one)
7. the Wall Street Journal is the best source for investment news.  (I guess this makes sense given that the WSJ Online is one of the few successful subscriber based periodicals online. Now that you know what tips off a good investment you can make sense of the news.)
8. Look into investment newsletters (but it costs some cash to subscribe)
1. Outstanding Investor Digest - the best
2. The Turnaround Letter

So I’m going to start reading the financial news more, watch the announcements, etc.  Mainly looking for company spin-offs as the authors seemed so confident as money makers.  Was searching for a website or blog that specialized in making announcements like this, but have yet to find one.  My first investment may not be for a little while, but I’ve got my ETrade and Zecco accounts all ready to go.

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Trump: How to Get Rich by Donald Trump

I just read this book in one sitting. It was a casual, fast read. I didn’t have super high expectations as the reviewers on Amazon only rated it 3/5 stars. There were a few good nuggets of wisdom, though, just as I had hoped. Here are my favorites:

Manage people tip

• “People have different ways of achieving results. I enjoy figuring out how each of my key employees excels. If people are your resource, you’d better try to learn something useful about them. Being able to do so is what makes a good manager a great one.”

Be an informed world citizen

• “Perhaps one of the reason I’ve been able to sell and rent apartments to people of so many foreign nationalities is that I’ve made an effort to understand where they’re coming from.”

Be detail oriented (I still need to work more on this one)

• “If you don’t know every aspect of what you’re doing, down to the paper clips, you’re setting yourself up for some unwelcome surprises.”

Public speaking (tailoring your speech to your audience)

• On winging a speech 5 minutes before showtime: “all in all, it was a valuable lesson in public speaking. Think about your audience first. The rest will fall into place.”
• Never read off your note cards. You can have the best written speech, but the audience will feel it’s contrived.

Comparing yourself to others’ achievements. Don’t do it.

• “Comparing ourselves to others is a waste of time. I’ve heard people say, “well, Mr. Lucky had a million dollars before he was thirty and I’ve worked just as hard as he has.” Well, Mr. Lucky has nothing to do with you, your possibilities, your success, or your failure. Don’t let anyone else be your yardstick. That’s taking power away from yourself in a big way.”

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Winning Retail by Willard Ander & Neil Stern

1. Display your lamps like Pottery Barn. Show your lamp in a mock up of a living room. “Here’s how to make your living room beautiful.” This allows Pottery Barn to sell the complete solution rather than just a product. Selling the benefit rather than just the commodity.

2. If you’re truly going to have a customer-comes-first approach to retailing, then you have be ready to hire a team that’s knowledgeable and highly motivated to provide solutions and help make shopping easy and enjoyable for customers.

3. Do little things that show the customer that you truly understand them and that you’re putting them first.

4. To win over the long-term stores must be best at something—not just good at everything. They have to meet the min standards in ALL areas, excel in SOME areas, and be best in ONE area.

5. Beware that customer perceptions may be totally different that management’s perceptions. Ask your customers to be sure.

6. Customers are very focused when they shop—they typically do not care about most of the messages we are bombarding them with.

7. Management needs to realize that in order to sell more products, the company has to become more relevant in customers’ lives. This means selling more products to existing customers and reaching new customers as well. Introduce new product designs, new colors, and experiment with new materials. This will help you move from being a seller of products to being a lifestyle brand.

8. Live a customer-centric business lifestyle. Customers are becoming less patient. They don’t want to wait for floundering stores to improve. It’s more important than ever for stores to be constantly adapting and testing new prototypes.

9. Hot Topic’s splashy merchandise grabs lots of headlines, but what really makes the company revolutionary is its speed-to-market capabilities. They don’t’ operate a massive central warehouse. They don’t bother with things like vendor rebates or ad planning so there’s no need to order merchandise far in advance. Within days or just a couple of weeks of seeing certain trendsetters wearing something, Hot Topic can have a version of that style on its sales floors.

10. Put your customers in control. Empower them. Trust their intellect. Make your store easier to shop by providing key information. Giving them power makes them come to see a retailer as an advocate rather than an adversary. Let the customers help themselves. Provide them with the tools to answer their questions.

11. Try to avoid talking too much about creating a wonderful “customer experience.” Some customers feel that an experience is “what you get when you don’t get what you expect.”

12. Be sure to help the customer figure out what to buy.

13. The winning retailers in the future will be master of technology, able to effectively use these tools to streamline costs and better server customers. Retailing is still a combination of art and science though. Developing balance between merchants’ instincts and the vast array of technological advances will further separate winners and losers in the future.

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The Power of Six Sigma by Chowdhury

1. The goal is not simply to improve quality for the sake improving quality, but to make customers happier and add money to the bottom line.
2. Most companies think improving quality costs money, so it’s a trade-off, a tug-ofwar between your customers and your accounts. They ask themselves, How much quality can we afford to give the customers and still make a profit? But Six Sigma companies flip that.
3. Focus more on people that are already IN your store, or are current customers. Don’t just spend lots of money getting people in there. Make sure it’s worth their time. Spend money on that. If you keep THAT guy and get his friends you don’t need to advertise nearly as much.
4. Never tell people how to do things. Tell them what you want done and they’ll surprise you with their ingenuity in getting there.
5. Pick the problem that’s giving the most trouble, the one that’s costing the company the most, the one that’s making customers unhappy—the one that will reward you the most if you can fix it.
6. Be sure to assign very specific jobs to the people on your team. This eliminates confusion and lack of direction. Guarantees that the job gets done. Even the Red Cross advises rescuers on the scene to point to a specific member in the crowed to get a blanket, to another call 911, and so on. Otherwise, everyone just stands there. Finally, put it all in writing and pass it around. If everyone can see who’s doing what and when, that breeds accountability.
7. The main thrust of Six Sigma is to reduce errors and waste in every kind of business endeavor to please customers and fatten the bottom line. You do that not simply by cranking up quality control, but by taking a step back, defined where the underlying problems—within the business process, or operation—and eliminating them. The key do doing all that, is measuring where you are and where you want to go, analyzing the data, improving trhe situation, and controlling the activity after you fix it to make sure you don’t slip. And you do that by giving everyone on board very specific jobs and rewards—recognition, promotion, bonuses—for doing them well. The Black Belt, especially, needs to be given all the resources necessary to focus solely on making the Six Sigma projects a success. The power of Six Sigma is that everyone throughout the corporation is speaking the same language.
8. Six sigma is the answer to the old phrase, “we just need to do things better.” Six Sigma is about doing better, but with an actual measureable process.
9. The DMAIC methodology breaks down as follows:

a. Define the project goals and customer (internal and external) requirements.

b. Measure the process to determine current performance.

c. Analyze and determine the root cause(s) of the defects.

d. Improve the process by eliminating defect root causes.

e. Control future process performance.

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11 Immutable Laws of Internet Branding by Laura Ries

1. Brands are cold, silent, lifeless. Be the Donald Trump. Be the Steve Jobs. As the CEO you can make your brand famous if you become famous.
2. When building an Internet brand, you have to think category first and brand second. Customers are not primarily interested in companies, in brands, or even in websites. They are primarily interested in categories.
3. If you want to be the leader in a category, you first have to tell the prospect what the category is.
4. Be a global brand. Amazon means books in all countries. Books.com means books in only English speaking countries. But it is still important to have a national identity as well. Ex. Rolex is a global brand with a Swiss identity. Volvo global brand with Swedish identity. Maybe be the global brand with the Austin, TX identity.
5. Divergence is consistent with nature—nature tends towards chaos. All-in-one (convergent) type products/brands will always be there, but it makes more sense to go with nature. Convergent solutions drive like a boat and floats like a car.

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22 Immutable Laws of Branding by Laura Ries

1. Good things happen when you contract rather than expand your business. Become a category killer, here are the steps:
1. a. Narrow the focus.
1. b. Stock in depth. A typical Toys R Us carries 10,000 toys versus 3,000 toys for even a large department store
1. c. Buy cheap. Toys R Us makes its money buying toys, not selling toys.
1. d. Sell cheap. When you can buy cheap, you can sell cheap and still maintain good margins.
1. e. Dominate the category.
2. Good things happen when you narrow the focus. Dominoes started out selling pizza and sub sandwiches. Little Caesars sold pizza, friend shrimp, fish and chips, and roasted chicken. Papa Johns sold pizza, cheese steaks, sub sandwiches, friend mushrooms, fried zucchini, salads, and onion rings. Then they contracted the menus and became category killers.
3. The best way to create news is to announce a new category, not a new product. Examples:
1. a. Rollerblade -first inline skate
1. b. Samuel Adams- first microbrewed beer
1. c. Saran Wrap – first plastic food wrap
1. d. Tide – first detergent
1. e. Time – first weekly news magazine
4. Quality, or rather the perception of quality resides in the mind of the buyer. If you want to build a powerful brand, you have to build a powerful perception of quality in the mind. Contracting your brand will allow you to do this—conveys you as a specialist.
5. If you’re in a category with a lot of competitors deliberately start with a higher price. Then ask yourself, what can we put into our brand to justify the higher price?
6. Run up a red flag whenever you hear the words, “why should we limit ourselves?” You should limit your brand. That’s the essence of branding. Your brand has to stand for something both simple and narrow in the mind.

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101 Home Office Success Secrets by Lisa Kanarek

• Have a one page fact sheet available. When a reporter calls Alan Caruba, public relations counselor, editorial consultant and lecturer, he has a one page, up to date and accurate fact sheet ready to fax. He uses the sheet as a pre-interview piece, to give the reporter a feel for his background and expertise, or as a post-interview piece to provide the repeater with additional information. Caruba always offers to send the sheet, even if the reporter hasn’t requested it. Make sure it faxes well! Recommend to include information ranging from your company’s history, to what you are selling or doing. Also include your credentials.
• Follow the 13-13-12-12 Cold Call Plan.With the odds in his favor, Joe Charbonneau, president of Presentations Inc., and a master speaker, plays a numbers game to increase his sales. He knows that although he would like to, he and his staff will not close every sales call they make. To increase his company’s closure rate, he devised a comprehensive sales method that he calls the “13-13-12-12 Plan.”