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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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A lesson in clarity…

Category : outsourcing

So, yesterday I posted my outsourcing / VA job requirements on eLance, Guru.com, and GetaFreelancer.com. How did it go?

Results: Zero responses on eLance and 5 ill-suited responses on GetaFreelancer.com. Before I delve into each one of the above, I would like to complain about Guru.com. I was unable to make even one submission. For whatever reason, my submission is in limbo, not having been posted. I will try again, and then give up with Guru.com if I can’t make it work.

Are these poor results the fault of the responders or a black mark on the reputation of the outsourcing web sites? Heck no. The fault lies squarely with me. I simply did not word the job specification clearly enough or post it in the right places to solicit the sort of responses I was looking for.

So, I’m following the good advice of my new friend M @ The Four Hour Trial Blog and using his advice to see if I can solicit much better responses simply by being clearer about what I want.

For example, it’s too vague to say you need “Search Engine Optimization (SEO)” or “Blog Marketing”. Specifically say what you want posted where, in what quantities, and in what time frame, with what particular measurable result, and your results should be much better. That might mean shrinking the task or splitting it into multiple tasks (as it did in my case), but that also means more qualified respondents as well as a greater likelihood of success.

Also, I was given advice to:

  • Make sure to select escrow service as a way of implying trust in this anonymous Internet environment…
  • Repeat the post in different categories and sections with different titles so as to attract different people who might be keying off the title and section as an indicator of interest. I’m therefore going to post the description in 5-7 different places on eLance and do the same on Getafreelancer.com where it makes sense…
  • Create a separate task for doing some of the parts that are unrelated to the other tasks. Rather than have one outsourcer stretch and do two jobs in a mediocre way, the advice is to have two outsourcers do individual jobs very well. This might mean higher cost, but also better results.

I’m giving the above a try today and I’ll let you know shortly of my (hopefully much better) results!

Beginning the Outsourcing journey

Category : outsourcing

My first New Year’s Resolution was to outsource some of the tasks that were making my current business consume 60+ hours of my time per week.

Now, for me, outsourcing is really hard to do. For one, I believe that I’m the only one that can do some task well, so I tend not to delegate to others. Second, it takes time and effort to find and manage the outsourced contractor. Finally, I’ve had mediocre luck in finding good resources, so I tend to say to myself “well, it’s just better if I do it myself”. WRONG. The only way to get to the 4HWW goal is to buckle up and learn how to outsource well.

In addition to the book, I read a great post at 43 Folders called Enlightened Outsourcing that really helped pull things together. In particular, the lesson learned is: find out which tasks are readily outsourcable and easily defined, define the task WELL, and set the constraints in a narrow fashion so you know for sure whether it’s working or not. I know, obvious advice, but hard to execute well without experience.

The outsource-able task the promotion and marketing of events to get attendees to our events. I decided to focus the first outsourcing task on just the first of these events.

As a first step, I defined my task. I managed to get some feedback from other FHWW bloggers (Thanks a ton, M @ The Four Hour Trial!). I then simultaneously posted this task on eLance, GetaFreelancer.com, and Guru.com. Total cost:$20. It would have cost even less, but I chose to post on eLance as a “Featured” project to increase the odds of getting a good response.

I haven’t yet gotten any responses or feedback as the job has just been posted, but I would like your feedback. Do you have any good examples of well-crafted outsourcing posts that got good results? Any experiences with this sort of outsourcing?

Happy New Year! My Resolutions

Category : life balance

First, I would like to wish all readers a Happy New Year! I hope this will be a year of satisfaction, wealth, productivity, and less work for you all! But most of all, I hope this is a year of the Four Hour Work Week for myself, readers, and anyone else going down this path.

I think the timing of reading the book meshes quite well with the beginning of the year. Maybe it’s not coincidental — picking up the book in the first place was motivated by having more time on my hands due to the holiday season (more time to read) as well as being a very retrospective time of the year. (What can I work on / improve / eliminate in the year ahead?)  Regardless, I am really looking forward to making serious progress on my goals, and I have to say, reading the blogs of other 4HHW bloggers really is helping.

4HWW Resolutions for the Business

First, I have to continue working in my existing business, which is right now generating 90% of my income (the other 10% coming from investments and interest). But the goal will be to reduce the time requirement for that down to 20-30 hours per week from the 40-60 now. The primary way I plan to do that is by strategically outsourcing certain parts of the business.

One of the big parts that is consuming lots of my time is marketing some of our events and attracting attendees to a number of our upcoming events. This is something that is urgent and important (Quadrant I Covey), but not something that requires such an expensive resource as me to perform. I think this would be ideal for off-shore, outsourced resources (perhaps located close to the regions to be contacted). I’ll have to start my search on eLance.

Once that’s outsourced, the next activity is around delivery of some of the services and training, which I think can also be done through partners and other resources, leaving me to do sales and business development, my forte. But the big goal is to get the company sold in 2008. This will leave me to pursue the other businesses, which I think will be more aligned with my ongoing entrepreneurial drive, desire to enter the product business, and achieve the time (life/work) balance I seek.

More importantly, I want to start my other businesses in 2008. There are two businesses I am most interested in running. One is a Web 2.0 company that, if it actually manages to work and get traction, I could build into something with real value and potentially sell to one of the majors. The other has absolutely nothing to do with the IT industry and can potentially also prove to be very lucrative.

Oh, and I have an idea for a simple product (a fad, really) that I’d like to test market and develop a prototype. But I’ve never developed anything like it, so I need to gather some experience in doing that sort of product.

Is this too much to all be done in one year? Let’s find out.

4HWW Resolutions for this Blog

First, I want to learn from other 4HWW bloggers and hope that the community can continue to motivate me to my goals and increasing efficiency. In particular, I’m following the blogs of the Four Hour Trial (which looks very interesting – I think I might even ask for some advice!) and the Four Hour Work Week Journal, which seems to be just starting.

I will then endeavor to post what I learn about time savings, outsourcing, product development, marketing, and work/life balance. Hopefully this will encourage all to do the same.

And while this might be a long shot, I’d like to earn at least $5k in first-year revenues from the blog. This would be around $400-$500 a month in revenues, which would be from my primary revenue sources:

  • Google Ads (click on the links if you are interested in what they offer!)
  • Amazon.com Affiliate sales (buy they books if you want to help me out)
  • Cafepress Items (buy my items if you like the designs)
  • Adbrite (not quite yet set up)
  • Pay-to-Blog (I’ll try that soon, and let you know how that goes!)

If each of these contributes $100 or so a month, I’ll get there.
4HWW Resolutions for MADFUN

  • Restart my music hobby. I want to learn how to play guitar and mandolin (maybe banjo) as well as other instruments. I’ll see if I can get the weekly music lessons going and see how far I can get.
  • Enter an MBA program. This is the big “muse”. While not a revenue-earning muse as referred to in 4HWW, it is a good investment in myself. I found a good weekend MBA program that might be suited for my particular profile as an entrpreneur. It will take 2 years, but if I can prove I can run 4 businesses, complete an MBA, have MADFUN, and still have a life, I think this 4HWW concept will be well proven.
  • Continue my dance hobby. I love to dance. I’ll see if I can squeeze it in at least 2 nights a week
  • Cook more at home, take cooking lessons. Home cooking is not only more economical, but also healthier than the alternatives. I love to cook, so I will make it a goal to cook as frequently on my own or find a means to outsource the parts that are time consuming (groceries?) and see if that helps to optimize the schedule.
  • Leave weekends as free as possible. The end goal of the successful four-hour-a-weeker.
  • Expand my contacts and personal / business network. This is all a stepping stone to the next big thing. If I can succeed on the above, I will then take my efforts one notch further.

Resolutions for Me

So, what does this all mean? I’m being quite ambitious, and some of the above may have to fall by the wayside. After all, the idea is more revenue, less time, more enjoyment, less stress (eustress, not distress, remember?). But can that be done? I’m still less than 30 days into this experiment. But 2008 is when it all kicks in.

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.