The simple mechanics of capitalism in Mansehra, Pakistan: Local products that people want, marketed efficiently.
The other title I considered for this post was “Acres of Diamonds.” If you haven’t read this classic late 19th century speech by Russell Conwell, you should. The above version is abridged but the unabridged version is very much worth the ten minutes it takes to read.
My personal expertise is in the systematic processes necessary to Make More and Work Less, but there is something that must happen before one figuratively sells the farm in anticipation of acquiring the New Mobile Lifestyle. (It’s an important point that I’ll cover in more detail in the September 18th Work the System workshop.)
There has to be a viable product or service that people will trade for money.
Let’s be pragmatic about the process of finding freedom and wealth. Here’s the dirt-simple formula. All four steps are mandatory:
- Create or otherwise get control of a product or service that has value to others
- Carefully analyze the inner workings of the product/service, and then figure out a way to outsource the production
- Make the product/service – and the marketing of it – as efficient as possible
- Personally become expert at on-going maintenance and off-site management, while constantly searching for new offerings
Here’s where too many born-again New Mobile Lifestyle enthusiasts go wrong: They start with prodigious enthusiasm and then, as if that enthusiasm were plenty enough, fulfill step one with a new product or service that is of marginal quality or is unproven. Not paying close attention to step one in order to hyper-focus on the process steps – steps two through four– guarantees failure.
But with a shift in big-picture thinking, there’s great news for those of you who are starting without a solid product or service: An existing, conventional, static-location “boring” business can be wildly profitable…and if you pick the right endeavor and are smart, you won’t have to be there every minute to manage things. People are pulling this off all the time, all around you!
Select a proven product or service and then systemize things properly and your chances of breaking free rise geometrically. Don’t assume you must create a new product from the get-go. Real-world innovation usually comes along spontaneously after a long and deep submersion in the particular field. It’s hard to shortcut the reality of that fact. Be patient.
There is a good chance the greatest opportunity is in your own back yard.
Especially in this down-economy, there is an array of existing products and services that are under-developed and under-sold: business services of all kinds, restaurants, retail outlets, recreation services, publishing, small products, services that are unique to narrow markets, and on and on. Just look around for an existing business that is struggling due to poor leadership, has a decent product or service and has some cash flow. Be sure it’s a business that will not perennially require your presence and that has recurring revenues and recurring processes. Think systems.
It especially strikes me how many small businesses are inefficiently managed. Remember that in any 5 year period, 80% of all small businesses go out of business. It is here that opportunity lies. Secure one of these marginal businesses before it fails and then systematically fix the problems. My bet is you can find one close by.
A struggling business has an anemic bottom line which means it will be available to you for little or no down-payment.
And what about you? Do you have a viable product or service? If not, get out of your head and start poking around your neighborhood. There’s opportunity everywhere.
I haven’t used this product, but it seems to me (and my IT guy Dan) that Robert Granholm’s The Backup Informer product gets it right.
(8/1/2010: Today I found David Walsh’s latest video which exactly reflects my thoughts re the importance of product over process.)
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Photo by Sam Carpenter, November 2005
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You really nail it by calling out what I call the “Passion Patrol.”
They seem to start out at Step 0, where enthusiasm and passion somehow magically transform into profit. Sort the South Park underpants gnome’s model: 1. Be Passionate!!! 2. ??? 3. Profit!!!
I’m finding through my own effort to create and market a product that the amount of “trench work” is phenomenal. Way more than people think. Or maybe I’m doing it all wrong?
“Passion Patrol.” I very much like that. It’s good to give this semi-neurosis a name. The belief that passion alone will take one to freedom is most rampant in our Western culture: a product of our educational systems where positive attitude is cultivated as much (or more) as deep thinking and hard work. It’s not that a great attitude isn’t necessary. It is. But in the real world it’s just another COMPONENT of success, such as as critical thinking and working hard. In any case, without the non-emotional mechanics working properly, no amount of great attributes will lead to success. It’s hard to watch the “Passion Patrol” flounder and ultimately become frustrated with themselves and the world. Hard reality can’t be ignored. Thanks Dave!
I can empathize, Dave. I had begun to wonder whether there is something wrong with me that I have not been able to create my own product in two weeks flat, as the various gurus would have you believe is possible. Then I was reading about creativity recently in an introductory text book on child and adolescent development: the evidence is that it takes a minimum of ten years immersion in a field to be able to make an original contribution! I think that Sam has hit upon an important issue here.
Sorry, the creativity topic was in a text on lifespan development.
Cheers.
Regarding your point about backyard opportunities. I’ve often had similar thoughts about “bricks & mortar” businesses.
I see poorly run businesses almost every day. Yet they survive. Year after year they continue so they must be making some money for the owners. With a system view I see all kinds of ways they could be run better and become more profitable.
Unlike an on-line business there’s a certain “concreteness” to such a business. It has defined boundaries in which you can operate, allowing a more hands-on feel.
On days when my on-line traffic has disappeared because of some change by Google I’m tempted myself.
Thanks Lyle. I agree. The amazing thing is that so many brick & mortar businesses DO survive. This is good news for a new systems-oriented manager because, as he or she takes over the control one of these previously mismanaged businesses, there is a lot of room to tighten things up and make a serious profit.
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