Being an entrepreneur is going to shake your life. You will go from the kind of person who gets a paycheck every two weeks to the kind of person who only eats what he kills. Don’t worry. It will all be OK. But it will take you naked to the jungle, and you have to come out alive.
James hasn’t gotten a stable paycheck since 1997. Here are some lessons he’s learned that will help you skip a lot of the mistakes that beginning entrepreneurs make.
Take Baby Steps
Explore what side hustles are out there, investigate what your value might be to others, whether through the traditional job market or through contract work or by letting your curiosity or your hobbies lead you into new territory. Try different side hustles. For example, make an online course, take a photography class, anything that interests you.
Start small. Start easy. Don’t get stressed about “building a business.” Learn the skills, get one client, scale, repeat.
Diversify
Nobody can get rich from a job. You can’t build real abundance. To illustrate, the average multimillionaire has seven sources of income.
If you want to be an entrepreneur, this is a good reason to go for it. But bear in mind that being an entrepreneur is just one source of income. To maximize your chances of becoming a millionaire, you need to diversify your portfolio (whether they’re your investments, products or services) as much as possible.
Take Back Your Time
Most eight-hour jobs mean you work two hours a day tops. The rest of the day is spent sitting around in meetings, chatting with coworkers you don’t like, taking coffee breaks, commuting, and doing nothing.
Being productive is not about sitting behind a desk so you get a promotion. Being productive is about using time to make a better you.
Three Ways to Make a Billion-Dollar Business
Here are three business models you can experiment with until you find one that delivers the rewards—emotional and financial—you seek.
Model #1 The Access Economy Model
The three parts of the access economy model are:
- Excess: Some people have an excessive amount of an item, call it X.
- Want: Some people want X.
- Platform: A platform in the middle helps people who want X discover it, buy it, transact securely, have customer service, deal with security, keep track of good customers and bad, etc.
The access economy model is applied to many industries:
Ride-Sharing—Uber: Some cars have an excess of empty seats. Some people want access to those empty seats to get from one location to another. But they don’t want to drive the car themselves. They want to be picked up. Uber is the platform in the middle that connects the drivers with excess to the people who want access. It uses GPS to help the passengers and drivers find each other, and the platform sets the price, deals with customer service, makes sure the transaction is secure and the cars are reliable, etc.
Rental properties—Airbnb: Some people have empty houses. Others might want to stay at an empty house instead of getting a bunch of hotel rooms. Airbnb is the platform that connects them.
Model #2 The God ➔ Humans ➔ Data Model
Thousands of years ago, if you got sick, you’d often pray for help or go to your shaman to see if they could cure you with the help of whatever god you believed in. Decades later, you’d go to your local doctor and he’d say, “Take two aspirin and call me in the morning.”
Now we sequence the genome of a disease, and we sequence the genome of a patient to determine what diseases they might be susceptible to. We use AI to analyze CT scans to determine if someone has cancer. We use AI and data to determine not only diagnosis but what medicines might be the best cures.
Understanding that industries evolve in this manner, we can look for opportunities in the gaps between these transitions. It’s always worth asking: What industries or practices have not yet taken that final leap from humanism to dataism? And, given the eventual evolution of all things to dataism, what gaps in business models still exist and can be filled by our services or products?
Case on point: after Bitcoin was created, there eventually became a need for Bitcoin exchanges, then Bitcoin brokers, then programmers who could create applications on top of Bitcoin. In medicine however, there are still many opportunities for the use of AI in diagnosis and treatment.
Model #3 The Bottom One-Third Model
Jim McKelvey, the co-founder of Square said, “Nobody wants to create a business serving the bottom third of an industry. Everyone competes for the top third. If you can find a business model that serves the bottom third, you could be the only player in the space, and that’s worth billions.”
There will always be industries that have a “bottom third” that aren’t being catered to. Amazon increased their book sales significantly when they allowed writers who weren’t able to get a publisher to self-publish. The rise of television was a way to provide entertainment for the many who couldn’t afford to go to live outdoor entertainment. As technology develops, there will always be ways to provide more services to people who were before considered unserviceable in a population.
Understanding these three business models and their nuances will give you access to billions or even trillions of dollars’ worth of opportunities. James wish he had fully understood these business models twenty-five years ago. And now as he does, he’s putting all three to use in his own businesses and investments. You can do the same.
The 30/150/Millions Rule
The 30/150/Millions Rule took eighty thousand years to make, but it allowed humans to go from the middle of the food chain to the top of the food chain. The important thing about this rule is that it applies to leadership and organizations and where you fit within them as well as how to do well in an organization or business or industry or any kind of group.
Thirty is the number of people we can directly know. Nomadic tribes were thirty people. At this size, members of the community all know each other and they know which members of the tribe can be trusted. Jane knows Mike. Jane trusts Mike to go on a hunt. Mike befriends Mary to gossip about Jane. This works in groups up to about 150 people. If we don’t have 150 people to talk about, then we feel the need to read gossip magazines and follow social media influencers to keep up with people like Kim Kardashian and Barack Obama, etc.
This rule applies to businesses too. When the number of employees is between 30 and 150, the use of internal newsletters, awards, and specific job titles helps make the organization run smoothly. Here a little bit of hierarchy goes a long way. Since we can’t possibly know everyone personally, we need other ways to assess their reliability—whether we can trust them.
But what really helped humans rise to the top of the food chain took place about ten thousand years ago. It’s a tool that enabled complete strangers, living thousands of miles apart, to work together: stories. If you tell a good story and two people from opposite sides of the world trust that story, then they can work together. Hence religion. Hence politics. Hence labels.
What Makes A Good Story?
A brand is a powerful story. If you can craft a story about your product or service that connects with others, you’re in business.
As outlined by Joseph Campbell in The Hero’s Journey, the arc of the hero roughly has:
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- A reluctant hero: Luke Skywalker wanted to go to other planets but felt obligated to stay on his uncle’s farm.
- A call to action: Peter Parker’s uncle is killed in front of him and he realizes he could have stopped the murder if he had used his powers.
- A journey: We meet new friends, and we encounter bigger and bigger problems. Buddha meets the initial monks who want to be his disciples and warring nations are constantly trying to disrupt the peace he has created in his grove.
- A final encounter with the biggest problem of all and the defeat of it: Luke Skywalker destroys the Death Star.
- A return home to tell the tale.
Bonus: 10+ Rules for Living a Good Life
- Always go to the place least crowded. Success is found where nobody else is.
- Being secretly good to people = superhero. Being famous for the sake of being famous = loser.
- Good relationships = good life. Bad relationships = bad life.
- If you do what you’ve always done, you’ll get what you’ve always gotten.
- Sleep and rest.
- Bad things will happen. Treat them like opportunities
- Don’t feel sorry for yourself ever. See above.
- Be creative every day.
- Live life as if today might be your last day.
- Hara hachi bun me, which means “eat 80 percent of your capacity.” Because people only realize they are full about twenty minutes after they are full.
- READ.
- Buy convenience.
- Don’t read the news.
- Everything worthwhile requires skill.
- If someone doesn’t like you, then ignore them.
- Don’t believe something just because everyone else believes it.
- Don’t outsource self-esteem.
- Facts are irrelevant. Facts aren’t as useful as possibilities.
- There’s always a good reason and a real reason. When someone gives you a good reason, a reason that is impossible to argue with, it might be true and important. But always ask what the real reason is. There is always a real reason.