DFHW: Living the 4-Hour Work Week

I’m going to start a new activity for this blog: brief synopses of books I’ve read or reading — some on topics relevant to the 4HWW and some on topics relevant to my MBA program. It will consist simply of the title of the book, a one paragraph summary of the main ideas, and three bullets of the most important take-aways. I figure more can be said and remembered about an important book that way than in any other lengthy discourse.

Book: Competing for the Future

Author: Gary Hamel, C.K. Prahalad

In a nutshell: A strategy for staying successful in highly competitive industries is to periodically reinvent yourself and continuously challenge your own time-proven successes (”you can’t intercept the future by repeating the past”). This books helps readers understand the full scope of evaluating the market and the company and strategies for reinventing while reducing risk.

Top Three Take-aways / Unique Insights:

• Definition of a “profit engine”:
  • Defining and understanding the served market
  • Defining and understanding the value proposition for that market
  • Determining the margin and value-added structure for services/products to the market
  • Configuration of skills and assets to yield the margins
  • Configuration of administrative and supporting systems to support continued yield

• Decomposing the Profit Engine into 4 parts, with 4 questions to be answered each
  • The Concept of the Served Market
    • What is the basic value proposition?
    • How is the market segmented?
    • What kind of customers are served?
    • Where are the customers?
    • (What customers and needs aren’t you serving?)
  • Revenue and Margin Structure Definition
    • Where in the business system do you take profit?
    • Where do the margins come from?
    • What determines the size of the margins?
    • What are the major cost and price drivers?
    • (Could profits be extracted at a different point in the supply chain?)
  • Configuration of Skills and Assets
    • What do you believe you know how to do well?
    • What physical infrastructure supports the business?
    • What kind of skills predominate in the company?
    • What is the trajectory of development spending?
    • (Might customer needs be served better by an alternate configuration of skills/assets?)
  • Flexibility and Adaptiveness
    • How alert are you to new value delivery models?
    • How easily can investment programs be reoriented?
    • How easily can infrastructure be reconfigured?
    • Which constituencies would most resist change (inside and outside the company)
    • (What is the vulnerability to market changing factors?)
• The best way to remain competitive is to be the first (or one of the first) to conceive of alternate value-delivery models, even if that means jeopardizing existing, legacy business models and profit engines. Be your own toughest competitor and challenge all your assumptions, even if in the short-term it adds more risk.

If you only had to read 10 pages: Pages 67-72

Click to Buy the Book

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Like many of you, I struggle to get things done on time that I really need to get done. I get bogged down in the grunt work when I should be focusing on the bigger picture items. You know the drill, focus on the important but not urgent, but all the while the urgent things eat up your time. If you did a Time Audit, you’d find that much of the time is being taken up by short-term activities that can easily be reduced, eliminated, or outsourced. Yet they stay on your to-do list anyways.

Why is that? I believe it’s because of the psychology of delegation. Anyone who has been doing something for a while believes that they can do a task faster, better, and less expensively than a third party. And in many ways this is absolutely correct. I have found, through my own experience, that I can perform better in at least two out of the three criteria (faster, better, cheaper) than anyone else I can get to do the task. But that is NOT the point!

If a task can be outsourced, it can be defined. If it can be defined, it can be measured. If it can be measured, you can figure out what things need to be learned to do it well. That means by definition anyone who has the time or talent to do the task can do the task. Including yourself. When you do it yourself, you are keenly aware of the requirements and the specifications for doing the job, so you can say that you’re being 100% efficient with regards to requirements-to-implementation, whereas a third-party can be very requirements-efficient, but never as requirements-efficient as the person who is in control of the requirements (that’s you). In that way, you feel that you can do it “better” than a third-party.

Likewise, outsourcing comes at a cost. Your cost is your cost of time, whereas the outsourcer’s cost is the cost of labor. Now, Tim would say that your time-cost is greater than your outsource-cost, and that’s absolutely correct. However, what’s not factored into the equation is the problem of free cash flow. Many startups and muse-focused entrepreneurs simply don’t have the free cash to hire an outsourcer. So even though the time-cost is more than the labor-cost, the cash requirements for labor-cost are higher (cash is tighter than time), so in that case you feel that you can do it “cheaper” than a third-party.

And finally, outsourcing comes at a time-efficiency cost. Just as the person who knows the requirements will be the most able to translate those requirements into reality, that person will be able to execute on it the fastest. It simply takes time to manage a third-party, check on their quality, and then integrate the results with everything else going on in the business. In this manner, because of all those time inefficiencies, if you do it yourself, you feel that you can do it “faster” than a third-party.

Let’s deflate the Better, Faster, Cheaper Bubble

The most successful companies are the ones that most effectively delegate tasks in the most economically-efficient manner while minimizing the inefficiencies inherent in delegation. Of all the constraints imposed on the business (financial, market, competition, and time), the most inflexible is time. You can remove financial constraints by borrowing, selling other products or services, selling parts of the business, or other means. You can remove market constraints by finding new products to sell, and/or focusing the business on specific niches where you are more competitive. But you can only remove time constraints by finding other people to do the work. Simply put, as the business grows larger, the time constraint issue becomes primary. All other problems can easily be solved if you can effectively and efficiently manage time.

In this way, the key to getting more out of your time and multiplying the money-return of time is to multiply the amount of time available. Perhaps for my later academic career as a business school professor, I could actually come up with an equation called the “Money-return of Time” that somehow calculates how to optimize the use of time for best revenue potential, but that’s for later. I think we all know that the best way to get more from your time is to multiply the amount of time you have to get things done and remove the inefficient activities from your time consumption. Both of these things: multiplying available time and increasing time quality requires outsourcing.

Effective outsourcing therefore means being keenly aware of the potential inefficiencies of time, quality, and cost inherent in outsourcing and coming up with a strategy to mitigate those inefficiencies. Therefore, it is not about whether to outsource, but rather how and when.

Introducing Microsourcing…

To help figure out how to outsource effectively while minimizing the time, cost, and quality inefficiencies, I’m going to introduce in my next blog post the concept of microsourcing. Simply put, microsourcing is an outsourcing strategy that focuses on chopping a task into more fine-grained tasks until you’ve reached a point of optimum, delegating that task to be performed within 24 hours, then quickly ascertaining the quality of that work, and quickly integrating that work with the rest of the activities. Doing so allows you to minimize cost, time, and quality inefficiencies and keep you focused on important, non-urgent items. Stay tuned, and we’ll explore this topic in greater detail together.

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Wow, I am deeply touched by the support by the readers of this blog. Well, onwards and forwards. I have put more thought into the outsourcing process and want to share more of my responsibilities and thoughts around Microsourcing as the approach to outsourcing.

In the meantime, I want to personally thank Billy Catherall for contributing to my Muse Fund. Any amount helps, and it provides the support needed to keep blogging for personal interest. If you’d like to ChipIn to help support this blog (and any amount is appreciated), please click on the ChipIn Widget (the nice-looking red one) on the right sidebar. Thanks!

Thanks, and let’s keep up the good work where Tim leaves off

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Update: You’re alive! So, i’ve made this post a touch more positive

When I first started blogging on the 4HWW topic, there were quite a few bloggers… but now it seems they have (mostly) all stopped blogging and their blogs are idle. What has happened? Has the bloom fell off the 4HWW flower? Have folks determined that the 4HWW is mostly hype, or have they had reasonable success and squeezed 50% of out of your schedule, as I have?

I don’t want to be a pessimist, but I want to reach out to the community, and especially to you 4HWW bloggers. What happened? Has anyone else seen any success with the concepts in the book? Do you want me to keep on journaling my experiences?

Comment and let me know if you’re alive!

Filed under: DHFW Site, book | 6 Comments »

I just read an excellent post on 37Signals called “Urgency is poisonous”. For those already familiar with Covey’s quadrants, and my previous posting on the Time Management spreadsheet, the content contained in the post might not come as a surprise. The point being made is that urgency is not only dangerous, but unnecessary, and probably a figment of our own imaginations. Are things truly urgent as they seem?

Rather than summarize what I believe is an excellent post, I encourage you all to read it. And then think, how can this be applied to the 4HWW? Clearly, Tim Ferriss shares the opinion that nothing is truly urgent. And if it is, just outsource it.

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I’ve gotten a number of harassing email messages and comments on this blog responding to my “eLance Sucks” post. My experiences are my experiences. I don’t have a bone to pick with eLance, but in my case, I simply am dissatisfied with the eLance experience and the way that eLance has treated me, a potential buyer.

Rude, obnoxious, and not appropriate comments on this blog are not appreciated if they can’t positively contribute to the discourse of trying to help folks make their 4HWW goals come true. If you are an eLancer and think my tiny little blog is impacting your business, then do the right thing and contact the eLance support department and have them reverse their ludicrous policies towards buyers.

eLance, if you are listening: if you want me back as a customer, turn on my account. I posted 5 jobs on your site. I got 2 responses. Both were incredibly under qualified. I found those job reqs on another site. But, now I can’t even return to your site because those 5 original job posts count against me. This is an insane policy.

Now, think before you respond. I am a real customer. These are real experiences. These are experiences shared by others. If you think I’m just a whiny person, then guess what, there are hundreds, maybe thousands more, like me. Think we are picky? Try looking for a job these days — the economy is tight. These aren’t the boom years anymore. Try listening to your customers and just maybe you’ll weather the storm.

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I read a fantastic post by Jed @ the Newly Rich called “Our 4HWW Workflow, Part I“. Without stealing his thunder (and idea), I encourage you to take a look at the post that diagrams a ludicrously simple, but very effective way of looking at your tasks.

Here’s a quick thumbnail of the flow. Click on it to view it at the original post location:

Thanks, Jed!

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Hi all –

Sorry for the pause in content. I’ve been working hard as well as I’ve embarked on my MADFUN exercises. Plus, I haven’t really had much to write about. Maybe I should write anyways?

In any case, thanks for the feedback I’ve gotten from you all on my eLance and Time Management posts. I hope they have helped. On the 4HWW front, I’m looking at writing and publicizing some eBooks as a passive income source. Has anyone else had any experience in successfully doing that? Ironically, if I come across some great techniques, I’ll publish them as an eBook so that you all can learn from me!

Filed under: book, muse, revenue | No Comments »

I often listen to NPR and other Public Radio stations. Do you? Doesn’t it annoy you when they have to interrupt their broadcasting to make an appeal to their audiences for donations and support?

Just like you, I find it annoying that those pledge drives interrupt the shows I like to listen to you, but at the same time, I understand why they do that. They have to somehow fund their activities, and since they don’t barrage you with advertisements, the pledge drive is the only way to make their financial ends meet. It’s actually good that they don’t rely heavily on advertisements as the non-public radio stations do, since that could also taint their independent perspective.

Like public radio stations, I write in this blog mostly for my amusement and for the information and pleasure of those who read it. While I do have many advertisements placed throughout the site, the truth is that they really don’t result in much, if any, revenue for me.

I posted a while back on the topic of blog revenue as a passive source of income, but until this blog reaches a significant traffic level, it’s pretty much all a pipe dream.

In that vein, I come to you, my faithful readers. Like NPR, I’d like to take this opportunity to pass the Tip Jar and ask for donations. I am working as hard as I can to turn this blog into a Muse and thus a Passive Income source. But until then, it’s hard for me to focus on the blog when there are other pressing financial concerns.

As such, I’d like to ask you to donate whatever you can to my cause. On the right side of the screen, you might notice a donation widget from a website called ChipIn that allows you to contribute to my Muse. If you can’t find it, I’ve also included it below:

 

 

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Anyways, without belaboring the point, I hope you can support me as I try to turn this blog into both a source of information and entertainment as well as revenue to continue to support those goals. Any amount can help as well as any feedback you might have about making this site, or my Muse attempts, any better.

 

Thank you so much and keep tuning into this station!

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Sorry, Tim. eLance sucks. And here’s why.

• Enforcing exclusivity – The big mistake is that the folks at eLance assume that I won’t be simultaneously posting the job req. on other outsourcing sites. Why wouldn’t I? I’ll be increasing the number of respondents and selecting (I presume) from different resource pools. But eLance wants you to be with them entirely or not with them at all. How do I know? Because…
• The 20% rule – If you don’t award 20% of your issued projects to eLance respondents, they’ll shut off your account. That simple. They want to force you to use them for 1 out of every 5 bids. Now, that might not seem like exclusivity to you (after all, you can award 4 of them to other sites), but it really is because….
  
• eLance penalizes canceled projects – Let’s say you don’t want to continue forward on the project at all, or more likely, you found a better resource on another site or on your own. So, you have the chance to cancel the project. All good, right? No, because eLance counts all projects towards the 20% rule. So if you start 5 projects and then find a better place to find those 5 resources, guess what… you can no longer post on eLance because your account will be frozen. This is complete bunk. So, why am I not finding resources on eLance in the first place? Because…
  
• Poor Quality of responses – I find that I get few qualified responses on eLance, at least in comparison to the other sites I’ve been bidding on. The respondents tend to respond to everything on the site, which means that you have to really filter to find the person appropriate for you. It’s like the problem with Monster.com… too many people vying for too few jobs yields very poor results. But, if that weren’t all…
• High Average Bids — The bids I get on eLance are easily twice as high if not as much as ten times as high as the ones I get on GetaFreelancer.com. Why is that? I’m not sure, perhaps because eLance respondents are mostly in the US while in GAF they are overseas, perhaps? Or maybe because of the sort of resource pool on eLance? You’d think it would be the opposite given that there’s oversupply on eLance.

In any case, I’ve now been banished from eLance because I couldn’t find any resource on that site to meet my needs. I gave them a really good shot - I posted 10 projects there. But I simply was able to find better respondents somewhere else. Sure, if I was exclusive to eLance, I would have awarded them to someone on eLance, but that premise is false. I do what any responsible buyer would do and look to multiple sources for my resources. If eLance wants to take themselves out of the running by not allowing me to include them in my sourcing pool, that just makes things worse for them. I really can’t understand their business justification for that. At least give the benefit of the doubt to the person who is responsible for building their value in the first place — the buyer.

I have had my best luck with GetaFreelancer.com, and maybe Guru.com. Anyone else have any thoughts to share? Disagree with me? Have any better luck with some other sites I haven’t mentioned? Let me know and share! I need some outsourcers for website development, product prototyping, etc,and have not been fully happy with my experiences so far.

Filed under: outsourcing | 6 Comments »