The Problem with Automation

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The Problem with Automation post image

I get a lot of general questions about automation and scalability from first time entrepreneurs.

People who already have a lifestyle businesses don’t use those words as much. If you already have a business, you are more likely using terms like ‘hiring somebody,’ ‘building a product,’ or ‘evaluating tools or services’ to employ.

An over-focus on automation and scalability from day one will hurt your chances of getting a business off the ground. Getting your hands dirty with the nuts and bolts of every transaction and customer is critical to understanding your market and business.

9 times out of 10, an ‘automation mindset’ is unnecessary during your first year in business. I see people going nuts trying to develop automation plans and software systems for businesses that generate less than a 100 grand a year or haven’t launched yet.

In those cases you’d probably do better with a coffee or two than with ‘automation.’

A few weeks ago I was browsing a membership site that generates 100’s of thousands of dollars annually. It has 100’s of members. As far as I could tell, none if it’s payment systems were automated.

So what’s up with all the talk of ‘you can’t interact with your prospects because it doesn’t scale?’

My guess: automation, and “automated business models,” has been co-opted by online marketers and presented to noobs as business opportunities. Bleh.

“Build a Scalable Business That Makes Money While You Sleep!!!!” and so on…

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How to (Really) Automate Your Business

  1. Identify and understand a repeatable process that generates income. You’ll be more successful doing this if you do it yourself. It’s difficult to do with contract firms, eg, hiring some developers in India or Indiana to build you a web application.
  2. Identify something you’d rather be doing (this is the hardest part…). Some examples: building your next product or service, Starting a non-profit, going traveling, playing in a rock band, writing a novel, catching up on the Sopranos, writing a blog, founding a start-up, etc.
  3. Because you can’t help but to free your time up for that new thing, put somebody else in charge of that process. In many cases it could be a piece of software or a third party service firm.

I’m not trying to be cute: I haven’t been impressed with more than a handful of automation trips, techniques, systems, or tools ever. Most of them are relatively simple and hyper specific to particular businesses.

The real trick is finding something better to do. If you are motivated to do so, finding other folks to take care of your business is relatively easy.

*  *  *

90% of business folks who I hear struggling to get themselves out of their business are actually struggling with finding something better to do.

*  *  *

Marketing speak about automation mostly hurts aspiring entrepreneurs.

It makes them put up auto-responder emails to prospects they haven’t cultivated. It inspires them to omit phone numbers on their websites because “they don’t want to pick up the phone.” It prevents them from launching a consulting product 6 months before their membership site ships because “consulting doesn’t scale.”

It inspires them to ‘automate’ cash flows they haven’t started yet and don’t fully understand.

The way to start a successful business is to pick up the phone fast and respond to emails within a few hours. If you want to stay in business, you should consider doing it forever. Just because you don’t want to be Johnny-on-the-spot for the rest of your life doesn’t mean your business shouldn’t be.

If I would have insisted on an “automted cash machine” setup from the outset of my business I probably would still have a job. Talking to customers and doing the dirty work was critical for me to understand what I was doing.

Because I un-automated my business, I was able to hire somebody to take care of it for me. That person is also smarter and better at it than me.

It happens. If you’ve got something better to do….

Meanwhile, on a tropical island somewhere, I’m doing such a volume of un-automated grunt that automation marketers would *gasp* in horror.

So it goes!

Cheers,
Dan

PS, I know this article is a bit sloppy conceptually, your critical thoughts and automation resources welcomed!

PPS, if you liked this article and want to hear directly from me, go ahead and drop your name into the form below:

Published on 10.31.11
  • http://www.facebook.com/matjnewton Matthew Newton

    Dan. So true.

    As I always tell people “it’s not about automation, it’s about systemisation”

    and “success is in the process”

    and yes I like to quote myself

  • http://wagefreedom.com Tom

    Dan—outstanding counterpoint to one of the main tenets of ol’ man Ferriss’ book–what was the name of it again?

    Cultivating relationships and actually learning your business are two basic reasons for not sweating automation early on. Better to count on simplifying later (assuming the business is viable btw) than optimizing too soon. The latter consideration can end up being another hurdle standing in the way of even getting started.

  • http://twitter.com/JohnMcIntyre_ John McIntyre

    Perhaps the desire to automate comes from the same place as the desire for a “get rich quick” scheme. Rather than hard work, people are interested in short cutting the process, rather than looking at automation as something to do AFTER the hard work. 

    I’m new to this, and this is something I’ve been learning recently. It’s great to hear from people doing it that automation isn’t the aim; a profitable business is, automation or not.

  • http://twitter.com/davidpfahler David Pfahler

    Great point, Dan. I think automation is something you have to keep in mind before you start your business, making sure that what you do eventually leads to something that is automatabe. But of couse, to get something of the ground you better do it quick and dirty.

  • Steven Moody

    There’s probably a middle ground here.  The automation story is great for people who are self employed and lack any hope of creating a scalable business.  Automation should be on your mind, but it shouldn’t prevent you from taking action.

  • http://www.mattpaulson.com Matthew Paulson

    Business automation has really gotten a bad name by scammers on Flippa. I started doing everything by hand in 2006. Five years later, 95% of the work in my business is automated. Develop processes that work, then automate them.

  • http://www.tropicalmba.com Dan

    Also many people are starting these businesses to “live the dream.” So if the dream for them doesn’t involve telephones, and they start out that way, they are, in general, hurting their chances of eventually living the said dream, as you are now sir. :)

  • http://www.tropicalmba.com Dan

    I’m pretty sure you just summed this whole damn thing up in 2 sentences. ha!!! You might not have enough BS in you to be a blogger! ;)

  • http://www.tropicalmba.com Dan

    Word to that.

  • http://www.tropicalmba.com Dan

    Especially dirty! 

  • http://www.tropicalmba.com Dan

    Ya know Tom one of the most overlooked parts of 4HWW was the case study (I think it was with french sailor shirts?) where time advocated getting on the phone until an in-depth FAQ could be developed… in my experience “in depth faqs” take a long time to create! :)

  • http://www.tropicalmba.com Dan

    haha… prefer the term system too ! 

  • http://aliswhere.wordpress.com/ Alasdair Plambeck

    Have you read Seth’s latest book (We Are All Weird)? I think some of the arguments he makes in that book go hand in hand with what you are saying about not automating.

  • http://www.tropicalmba.com Dan

    Not yet… the last 3 books or so I fell like are 200 pages too long. You think I should read it? 

  • http://aliswhere.wordpress.com/ Alasdair Plambeck

    Maybe if you have some time. I don’t think it is groundbreaking. It’s basically about the erosion of normal (if there ever was normal) and how you should focus on catering to the weird. Hard to do if you are fully automated…

  • http://www.tropicalmba.com Dan

    word. I think i’ve come to terms with not being normal ! :D

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