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The Four Hour Body and You Like many of your Tim Ferriss fans out there, I've been very keen to try the Four Hour Body lifestyle change. I'm overweight by quite a few pounds, so I made a New Year's resolution to shed some pounds....

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Improvements and Fixes to WP E-CommerceImprovements and Fixes to WP E-Commerce Like many of you, I am a user of the WP E-Commerce plug-in for Wordpress as well as a Gold Cart upgrade customer. While WP E-Commerce has many excellent features and does wonders for the Wordpress-based...

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Credit cards: a lifeline for cash Hi all. It certainly has been a while since I've last posted. That's because in many ways the 4HWW concept has been shot given the urgency of making ends meet and scrambling to get whatever dollars are...

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Version 0.2 of Show User Level Content Plugin Now Available Making an update to the Show User Level Content Plugin ... finally on version 0.2 This version should allow multiple hide statements in the same post. This is a test of that functionality. The first...

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More on Banking... A while back I posted about business banking accounts, and asked the community what their thoughts were on the best ones for FHWW'ers. I never really did get a good response, but the post is out there,...

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My Time Freedom Goal: MADFUN

Category : life balance

So, the first question people ask when I tell them I’m shooting for 4-hour work weeks (via the 4 hour work Day) is: “What do I plan to do with that extra time?!”

Of course, the first answer is: “Start other businesses”. The idea is to become a parallel entrepreneur. That can only happen with effective time management.

But there’s more to it than that. If it was work, work, work, even with good time management, life is just no fun. The idea is to lessen work so as to focus on living.

So, what do I want to do other than just expand the revenue opportunities? Have MADFUN. That’s what. What do I mean by that? Here you go:

Music – I am a musician and want to do more of it. If I’m not working, I should be playing, composing, and sharing more music.

Academics – I plan to enroll in a Weekend or Executive MBA program. With my extra time, I should be able to get more education, degrees, and opportunities! There’s no better investment than education.

Dance – I love to dance. It’s great exercise. It’s great social activity. It’s great stress relief. It’s great fun. Why not? So, with the free time, I should be Dancing.

Food – I love to cook. I need to find time to enroll in cooking classes, expand my cooking talents, and cook more.

Uninterrupted Family Time – When not having personal fun, have family fun, and make sure that every day has some Family time.

Networking – If I still have free time and not devoting it to work or any of the above true muses, I should be networking to increase my connections, knowledge, and opportunities. Networking increases opportunities.

So, there you have it. Increase available time, and allocate it to new businesses. When not doing new businesses, have MADFUN. In that way, maintain a proper work-life balance and spend more time with the family as well!

Amazon.com reviews… shills?

Category : book

There have been some comments in the Amazon.com forums that seem to imply that many of the reviews of the 4HWW Book (especially the five-star positive ones) are posted by paid shills, fake reviewers, or otherwise are unrepresentative of the actual reader population. Is this true? I have no idea. It’s hard for me to verify. I for one posted a 4-star review, but it never appeared on Amazon.com (grumble).

I feel that the book does its purpose: help change the mindset that 40 hours a week is necessary to run a successful business and maintain high income. However, I can easily see how many of the ideas in the book are shallow and immature, and as well, one can tell that Tim Ferriss does prefer to bend the rules rather than follow them (the win-by-default kickboxing incident, anyone)? However, is this truly bad? While breaking the rules in an unethical or immoral (or illegal) way can never be condoned by anyone, any good entrepreneur knows that the “conventional wisdom” or common knowledge is rarely wisdom and is too common.

Sometimes it pays to break the rules and play outside the lines. However, is this the case with the Amazon.com reviews? Is it fair to use Amazon.com as a marketing tool (rather than a reader-led consumer-oriented site)? Is it ok to pay reviewers in the way that many are paying bloggers? Are we facing an ethics battle for the soul of the Web?

Also, I was pointed to the PodTech interview with Tim and comments that are less than favorable. I posted a comment on the blog, but not sure if it will appear. Here it is:

    “Wow. It sure looks like the tide is turning against Tim Ferriss (or am I just noticing more of the skeptical posts). I for one have found the book interesting enough to try it myself and see if it will have any impact on my life. I am even baring my experiences for the world to see on my blog (at http://www.fourhourworkweekdiary.com). If it is a hoax, if it is a sham, if it is a failure, the world will see, and I will be responsible (and ethical) enough to show it. If it has merit, however, I want to find that and share it too.I believe that the core lesson in the book is one of time management and rethinking the 40-hour workweek. I think there’s merit in that. As for the rest and Tim’s claims about himself, that’s for Tim to defend. Just like you all, I take self-motivated claims with a grain of salt. ”

I don’t want to pass judgment here. If the reviews are all real, then we have to acknowledge the popularity of this book. And if you believe me, I’ve contributed to some of the positive Amazon.com reviews. I am NOT a shill. I haven’t received a penny or any sort of back-scratching from anyone to say diddly poop about this book. And if I get ticked off or bored, I’ll just drop the site altogether.

Just comment on this blog and let me know. Do you think the Amazon.com reviews are real? Do you care? Does it matter? What do you think of folks that game the blogging / web-based economy for their marketing purposes? Is this to be expected? commended? frowned upon? worth penalizing? I’d like to know.

I guess I’m not alone!

Category : Getting Started

I just got a comment in my first blog post that I’m not the only one documenting their attempt to travel down the 4-hour work week path. The fellow from The Four Hour Trial tells me that there are others like me and him that are going down that path. He mentions there are others like me who have posted their efforts on the 4HWW Blog in the Case Studies section, but I haven’t yet seen those posted.

So, this is a call to all you 4HWW bloggers. If you are blogging your activities, let me know! Post a comment on my blog and I’ll touch base and comment on what you’re doing as well! Let’s form a little community and increase our voice in the space.

Keep bloggin, and keep working… less!

More playing with numbers

Category : revenue

Following up on the last post where we identified the target market by identifying pricing and market size most appropriate for Bought Products, things get better when we observe the power of monthly revenue.

Ways to Make $5M a year - Take 1

# of Products Sold Price Per-Product Monthly Revenue Consumables (3x per year)
1 $5,000,000 $416,667 $1,666,667
5 $1,000,000 $83,333 $333,333
10 $500,000 $41,667 $166,667
50 $100,000 $8,333 $33,333
100 $50,000 $4,167 $16,667
500 $10,000 $833 $3,333
1000 $5,000 $417 $1,667
5000 $1,000 $83 $333
10000 $500 $42 $167
50000 $100 $8.33 $33
100000 $50 $4.17 $17
500000 $10 $1 $3.33
1000000 $5 $0.42 $1.67
5000000 $1 $0.08 N/A

But, let’s take another twist. Let’s keep the price constant and instead think of how the numbers of customers change when we move to monthly, or any repeated sale per year.

Ways to make $5M a Year - Take 2

$ per sale # of Customers Monthly Customers # of customers (3 sales/yr)
$1 5,000,000 416,667 1,666,667
$5 1,000,000 83,333 333,333
$10 500,000 41,667 166,667
$50 100,000 8,333 33,333
$100 50,000 4,167 16,667
$500 10,000 833 3,333
$1,000 5,000 417 1,667
$5,000 1,000 83 333
$10,000 500 42 167
$50,000 100 8 33
$100,000 50 4 17
$500,000 10 1 3
$1,000,000 5 N/A 2
$5,000,000 1 N/A N/A

What makes this interesting is that consumable products… that is, products that provide only a short term value that then need to be replenished have excellent prospects.

To make $5M in revenue, all one needs to do, for example:

  1. Find 10,000 customers and sell them something for $500 once,or…
  2. Find 100,000 customers and sell them something for $50 once, or …
  3. Find 100,000 customers and sell them something $17 three times in a year, or…
  4. Find 8,333 customers and sell them something for $50 a month, or…
  5. Find 20,000 customers and sell them something for $21 a month, or..

You can see how that goes. Play with the numbers and use them to help determine whether your bought product strategy makes sense. Next step: figure out what product to sell, whether it’s a consumable or a one-time sale, or a monthly recurring revenue source. Personally, I like the 10,000 customers $500 a pop or 20,000 customers $21 a month plan… Hmm.

Playing the Numbers

Category : revenue

This post is a little exploration of the magic of numbers and an understanding of how the idea of Products that are Bought map to desired revenue targets.

First, the revenue target. Let’s say for the sake of example that we want to run a $5M a year gross revenue business (that’s just top-line, not including the cost of goods, overhead, taxes, etc.).

There are lots of ways we can make $5M in a year, if we’re selling products (remember, we don’t want to sell services if we want to be a four-hour-a-weeker):

$5M a year product business
Number of products sold Price per-product
1 $5,000,000
5 $1,000,000
10 $500,000
50 $100,000
100 $50,000
500 $10,000
1,000 $5,000
5,000 $1,000
10,000 $500
50,000 $100
100,000 $50
500,000 $10
1,000,000 $5
5,000,000 $1

Now, this might seem like a trivial, brain-dead exercise. So, what am I proving, that I know how to multiply? Well, I think the insight is a bit more profound than that.

First, we can achieve $5M a number of ways, but some might be easier than others. Selling one thing for $5M will get us there fast, but just how much work will it take and how much will that $5M item cost? If it’s a physical item, there might not be much margin left after all is said and done. If it’s a service being provided, forget it, you’re talking 35% margins at best.

On the flip side, selling 5,000,000 things at $1 each also doesn’t make sense. First, to actually sell 5 million of anything you need to reach a much larger audience, which means significant marketing and distribution costs, not to mention the cost of fulfillment. $1 items are sold retail and probably in mass markets. That means that the distributors take their cut, not to mention the cost of the product, so you’re also down near 35% margins at the end of the day.

For product based companies that have products that are sold, not bought, I think the sweet spot is in the green zone above.

Anywhere from selling 1,000 products at $5,000 a pop to 100,000 products at $50 a pop seems to be the best area to target. Although at the edges (in yellow) are a bit tougher. It’s harder to develop bought-products that sell for $5k than it is $1k. I can think of plasma/LCD TVs that are in this range.

But I think for our purposes, finding products in the $100-$500 range that are bought seems to be sweeter. In fact, selling 10,000 of something at $500 a pop seems pretty realistic. And there might be products that have low cost of goods and low cost of delivery and distribution that can keep us in the 50% margin or better area.

So, I am going to focus my efforts on building a business where I can sell 10,000-50,000 of something for $100-$500 a pop. And do it as a “bought” not sold business focusing the efforts on marketing and low-cost distribution.

It gets even better… monthly revenue.

Where the dollar analysis gets better is if we think of the $5m figure as an annual figure divided by month. What if instead of selling individual products for $100-$500 a pop we instead sold a monthly subscription for those products. Then, instead of selling 50,000 $100 items, one can instead sell 50,000 $9-a-month subscriptions. Do the math. It actually is even better than $5M. Or, 10,000 $42-a-month subscriptions. Or somewhere in between, like 25,000 $19-a-month subscriptions.

What makes subscriptions or monthly revenue better is that it’s continuous and predictable. That means sales can be self-sustaining as long as the products continue to provide value.

The key now to figure is what market has a reachable audience of around 100,000-500,000 so that achieving a 10% penetration with bought-products that sell for $100-$500, whether one at a time or on a monthly basis. Then, come up with a compelling product for that market and an effective means to market and distribute to that market, and the $5m business is not that far away…. all for four hours a week.

More thoughts on applicability: Sold vs. Bought

Category : Getting Started

Yesterday, I talked about how the concept of the reduced work week as envisaged by Timothy Ferriss’ Book mostly applies to repeatable, products or productizable services. But I think there’s more to it than that. Even in the product realm, not all product-based companies lend themselves to greatly reduced time and effort with the result of maintained or increased revenue.

Products that are Sold vs. Products that are Bought

Having been in the startup and consulting business for a while, I know that everything a company offers has a “sales cycle” — that is the amount of time it takes to go from interest in a product to actual receipt of payment or purchase order for that product. Some products have very short sales cycles of minutes (such as books on amazon.com or items on eBay) whereas others have very long sales cycles (especially large consulting projects sold to large companies that involve lots of decision-makers).

There have been tomes written about sales cycles and the such, so no point in going into that here. The real insight is that to achieve the sort of work/time balance proposed by the FHWW book, one needs to strive for a business in which products are bought vs. products that need to be sold.

What’s the difference?

A product that is bought requires that a company make its product easy to understand, easy to find, and easy to purchase. The emphasis is on marketing — increasing the awareness of a product, its value, and differentiating it from others in the market so as to facilitate the sale. But the sale is not facilitated by a person — it doesn’t take someone calling you up and convincing you of those merits to make the sale happen. Rather, users who are interested make the move to purchase the product. The customer is in control of the sales cycle and as such all a company can do is focus on marketing, order processing, support, and improving the quality of the product.

On the flipside, a product that needs to be sold is one that requires a person to communicate a products benefits. A sales person needs to find leads, qualify them, make the pitch, differentiate the product, prepare the proposal, and then shepherd this proposal through the close. For individual sales, the aspects of the proposal and close might be simplified, but the remainder is the same. Sales-oriented products require people involved, which means it requires time. Reducing the work week to 4 hours in these instances can have a significant, detrimental impact on revenue.

The punchline: go for Products that are Bought, not Services, or Products that need to be sold

The aspiring 4-hour-a-week entrepreneur or employee not only needs to shy away from services that require in-person delivery, but also products that require in-person sales (whether really in person or via phone). If you can’t make that transition, I can’t see how the reduced-hour workweek can be a reality unless you outsource the sales process itself. Even in the case where sales is outsourced, you’re just automating an inefficient task. You’re better served simply trying to change the way the product is offered. If you can find a way to make it so it’s bought rather than sold, you’re gold.

Quick note on blog test: this is my first attempted use of a trackback, and using the instructions at the Optiniche blog by Teli Adam, I think I’ve managed to make it work. Maybe.

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Applicability of the four-hour work week

Category : Getting Started

The more I read the book and think about how to apply it to my own life, the more I wonder about just who this four-hour work week is most appropriate for. For sure, if you have a product company that can operate on semi-auto pilot with subcontractors and outsourcers performing the responsibilities of fulfillment, order management, customer support, and sales/marketing then I can see how the automation possibilities easily lends itself to a shorter work week.

But how about businesses that require in-person delivery specifically by the person they are contracting with? For example, I have a hard time seeing how doctors or dentists can take advantage of four-hour work weeks. Maybe if they were simply office managers that had other doctors working for them, but if you were a doctor’s patient, would you want that outsourced? It certainly seems to be hard to apply the lessons learned in the book to those situations.

Service vs. Product

Basically it seems that the core challenge in applying the four-hour work week is that you have to be in a product business vs. a service business for this to make sense. A service business entails anything that is sold with the unit of work being delivered by a person rather than the unit of value delivered by a product. Furthermore, services have low repeatability. That is, if you deliver the service once and it takes a certain amount of effort, then delivering the service again will take a similar amount of effort.

On the contrary, with a product, the cost to build and develop the product is amortized across all the sales of that product. The cheaper it costs to build the product, the greater the revenue potential in sales. And if the product has no incremental cost once it’s built, then you can sell it literally millions of times without any additional cost (information products are a good example).

Now, this is something that Timothy Ferriss talks about in his book, so there’s no new ground discussed here. But the core is that most people are stuck in service businesses or in a service organization part of a product business. To change the work week requires either completely changing what you do for a living or structuring your work such that you no longer deliver the service, but either supervise others who deliver the service or productize the service offering such that there’s no longer an element of human delivery.

Buying People vs. Buying Brand

Another key issue is that is the value being bought from the company a function of the people who deliver that value (in which case, the cost of delivery is going to scale with the cost of labor), or is it a function of the brand (in which case, cheaper products and services can be offered at a premium given the value of the brand). To successfully become a four-hour work weeker, one needs to transition from becoming the sole delivery of a labor-driven value proposition to a manager of others who deliver the labor-driven value proposition to the sales of products that sell value based on brand, not on labor.

If you’re on the service side trying to live the four hour week, I see this as the fundamental challenge to face: either leaving the service business altogether, or productizing it in such a way that people buy the services at a premium based on your brand, and the labor is then outsourced to others who deliver at low cost.

The journey continues…

Category : Getting Started

Ok, so now that I’ve gone ahead and bastardized this site with gratuitous Capitalism (thanks for the first few orders, already, btw!), it’s time to continue the FHWW journey.

I’m going to be traveling west, so while I’m out there, I decided to sign up for a few MeetUps that can help catalyze the journey from 16 hour a DAY mono-entrepreneur to 4 hour a week parallel entrepreneur. That requires radically changing my time management and approaching inefficiencies through outsourcing.

In my next post, I’ll take things as the book suggests. Starting with D for definition. Come along. Let me know where I’ve got it wrong.

Moichendize! Moichendize!

Category : merchandise

Say the above with a Joizy accent and you know what I’m talkin about. I’ve got goods that I’m sure you’ll love. In particular, a nice line of apparel that plays off the theme of getting more from your time.

Some goodies:

Find more goodies on the DFHW Gear Page. (Note that the prices are not showing up properly. Click to get the right one.)
Purchase and be proud! Show off your time mastery. Buy a T-Shirt as a New Year’s Resolution. Become an NR in the NY! Let me know your thoughts about the merchandise, and happy to keep on producing as long as there’s demand.

So, where have I been? Upgrading, that’s where!

Category : Uncategorized

So, getting a blog started is certainly a bit more work than signing up and just going for it.

Well, it CAN be that simple if you’re blogging just as a past time, but if you want your blog to return value for your time investment, you have to put a bit more into it. Since we’re all about the money-return on time, that’s where I have been.

First, the original blog was hosted on wordpress.com’s servers. While this greatly simplified the install and management tasks, the big downside is that the wordpress.com hosted servers don’t allow you to generate revenue from your blog. Since that’s one of the things I do want from my blog, I needed to move my site to a hosted provider.

After spending a short amount of time picking the right provider, I downloaded the WordPress software and installed it on the host. The I spent a day configuring it to behave like the site I had hosted on wordpress.com. Themes. Widgets. Pages. Importing. Exporting. You know the drill. I should have outsourced that. But glad I learned how to do it.

The money-making part

Next, the revenue part. Having been in the industry a while, I know that there are a few things you can do to generate blog-driven revenue. Google Ads is one (signed up, waiting for approval). Next, I have had some ideas for merchandise and gear related to this blog that I want to sell. The next post will detail all about that. After that, set up the FeedBurner configuration for the newsfeed, get Google Stats set up, and assorted to dos.

Yes, that took way too much time, but I’m now set to make this blog a success. I look forward to carrying you all with me on this journey!