We’ve been spending a lot of time over the past few weeks talking about the “business fundamentals”, or the everyday habits that we believe entrepreneurs should be practicing.
In keeping with that theme, we’ve decided to revisit some specific concepts that we’ve spoken about on this show in the past, and that we have seen at the core of so many successful entrepreneurial stories.
On today’s podcast, we’ll be sharing four frameworks for how to get started with a profitable business idea in 2021.
We’ll be exploring each of these philosophies, as well as citing some specific examples of how each of these frameworks have been used successfully by the entrepreneurs that we have featured on this podcast in the past.
Listen to this week’s show and learn:
- Why you need more than a good business idea to succeed. (11:10)
- Some examples of successful “rip, pivot, and jam” businesses. (19:05)
- How you can find entrepreneurial opportunities while working at a job. (29:40)
- What you can learn from the 1,000 True Fans theory. (34:50)
- Why it pays to become a “Deal Master”. (40:19)
Mentioned in the episode:
Before the Exit – Our New Book
Partner With Us
The Dynamite Circle
Tropical MBA on YouTube
Post a Remote Job
The Smoking Tire
The Mutiny Fund
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Dan & Ian
Dan: All right, Happy Thursday morning, everybody. Welcome, thanks for clicking on the TMBA pod. I’m here joined, as always, by my business partner, the Bossman, otherwise known as Ian, how are you doing?
Dan: This week’s episode is going to be a continuation from last week Ian where we got a lot of questions from the audience about business ideas. And I thought it would be cool for us to fire up the mics today and just hang on some frameworks for thinking about how to get started with new, more profitable business ideas. Walkthrough some examples we know in real life of how this works, and maybe who knows what will come out if we just sort of hang out on this idea for an episode. Maybe some listeners today will walk with some profitable ideas that can go to work for them in their entrepreneurial journey.
Before we jump into all that just some stuff at the top here, I’ve been getting texted kind of all week. There’s almost like a 2021 ‘location reckoning’ happening. I don’t know if you’ve noticed this in your inboxes. But people are like, ‘Where are you going to be? What’s going on in Austin? Are you coming to Thailand’, and I thought I would just talk a little bit about 2021 location stuff. Because, having spoken with so many listeners from all around the world, it does seem like we’ve got a pretty good deal here in Austin, Texas, for the pandemic itself, and certainly relative to many other places in the United States. And as the weeks roll on, as people get more comfortable with COVID, and safety practices, I’m seeing more and more entrepreneurs starting to get together in-person to swap ideas and, heaven forbid, meet some new people. So that’s all to say that a lot of listeners have asked me what I’m up to in the first few months of 2021. Austin is the answer. And Austin has been a pretty amazing place. We’ve talked about it a lot on the show. I thought I’d just reiterate. What an amazing place for entrepreneurship here in Austin, Texas.
Ian: Yeah, it’s a great place to be during a pandemic, obviously too Dan. You know, the policies are a little bit looser. And not to say that they’re less safe, but you can go to parks and be outside and meet with people. Like, that’s a legal thing that you can do in the state of Texas, which I find to be acceptable. Man, I don’t know about you, but like, basically, we’re entering year two, because this started basically about a year ago, the pandemic. And so we’re like entering year two, and I’m like, ‘Uh, could this be like, could this be like the same thing three or four years from now?’ Could we be on like your five of this and just be like, yep, couldn’t really travel couldn’t really do much like, you tell me man because we’re entering your year two. And it seems like we haven’t made much progress. I mean, these vaccines are rolling out. But now I’m hearing about second and third strains. When can I go to Spain?
Dan: Somebody tell me. It’s interesting. Speaking of in the future, I recently received my Thai Elite visa which is one of the biggest investments I’ve ever made in my life, Ian, and I know a lot of listeners of this show like to spend a lot of time in Thailand. For me, it’s typically in every winter kind or routine or a habit that so many of us in the listenership we all go there and we meet each other and have business ideas like we’re gonna have today on the show except we do it in person in cafes. I genuinely feel like even though I won’t get to use that visa here for the next few months for sure. I have hope that that was a good investment and that’ll pay off for us in the business over the next five years.
Ian: First of all, for those that don’t know, what is the Thai Elite visa, what does it afford you? How much does it cost?
Dan: Yeah, and I’m going to drop some information about it because I know like second passports or visas are such a big issue in the community. This is something I had been eyeing up for years and there was a price increase at the end of this year for the Thai Elite visa, which at the minimum level allows you access to the country for about six years. Basically meaning you can just show up, you don’t have to check into immigration, you go through the speed aisle, they have some cool little perks like access to you know the priority line at the airport, they pick you up in a big van when you show up and they do some kind of VIP stuff. But most people are into it for the unfettered access to the Kingdom.
And I think the other thing that people don’t really realize about Thailand is, it is relatively easy to be earning abroad and living in Thailand and establish a tax residency there that isn’t too oppressive on your primary business. And so there’s a lot of benefits, not just access, but benefits for entrepreneurs as well who are interested in spending a lot of time in Thailand. So the entry-level price for the Thailand Elite visa, as of the end of the year was around 16 to 17,000 US dollars. Sounds like a big price but there are two elements to it. You can offset that cost over the course of six, six and a half years, just with visa runs and logistical expenses. However, there are also potential tax breaks as well involved. And so for a lot of people that invest in this visa, it is genuinely a profitable endeavor. The other thing I’ll mention is, you know, I brought this investment up to a friend of mine who’s very, very good with money. And I thought for sure he would knock it down as a crazy idea. And he, being an immigrant himself said, ‘There’s really no price you can pay on that kind of access to a place you love’. And one of the cool things about the Thai elite is it has a long track record. It’s not some new fancy idea that the government recently came up with. It’s been around for many, many years, and people have been having success with it. And you can google around and check it out. But I bring it up because you know, people ask personally about our locations and what we’re up to and the basic gameplan for 2021 is to keep those fingers crossed for an all-time amazing DCBKK in October but, in the meantime, we’ll be hunkered down here in Austin, Texas meeting as many entrepreneurs as possible. Before we do this, are there any DJ updates you want to drop in here?
Ian: Yeah, we can give a couple of basic updates. So DJ is Dynamic Jobs. It’s a site that we’ve been operating for the past couple of years, but now we’re starting to develop the software side of things. So January has been really interesting, man, as you know, we might double, triple, quadruple our revenue from the month before.
Dan: Double is what you would say and quadruple is what I would say. So let’s just call it a clean triple.
Ian: I’ve been asking around within our team. It’s like, ‘Hey, man, do you think this is real? Or is this just January, everybody’s like hiring?’ It’s gonna be a ride this year, dude, I’ll tell you that right now. On the software side of things, though, which our guy Simon is working on, it’s interesting, because, you know, a lot of our revenue is coming from services. Essentially, what we’re trying to build is the software side of things, which is the SaaS. And that is that it is also growing, but not as fast as services are. So here’s the interesting thing, I guess, for me, is that like, ‘Yeah, all this stuff is growing, but it’s not necessarily like the future of the company’, if that makes sense. We got to figure out a way to pivot this revenue growth that we’re having into our product growth, basically.
Dan: It is fascinating. It’s like that classic conundrum where, now all of a sudden, you’ve sold all these services, and now you got to support them, which is awesome. But now that means that you don’t have the same operational bandwidth to maybe build new products or to put new things out into the world. And I think a lot of people can relate to that push pool of like, you got to keep the lights on. But also, you want to find ways to be focused on product development, which is, you know, the future of the company.
Ian: And I think somebody smarter than me is listening to this podcast saying, like, ‘Oh, you don’t want to go into this SaaS, this software type business’ or whatever. There’s like the next evolution, I’m sure, past that. But like me, and you figured out a long time ago, services and client work weren’t for us, so we made a product business when we first started. And now here we are doing services and client work. And part of the reason we’re doing that is to like, learn about the industry, like solve problems.
Dan: I will say this, though, there’s like a little bit of a different quality about this DJ services work we’re doing. So, for example, a classic service, for us, one of our best selling services right now, is if you want like a technical person, or like a high level, anybody in your team, you come to us, you get on the phone, you pay us 4600 bucks, and we go get that person, that’s basically the service. And it feels a little bit different than the contract manufacturing service we used to do back in the day, or a lot of marketing services that we see in the community, which is that it’s pretty clear what’s happening, which is we’re getting you that person and you say yes or no. It’s pretty specific in that way. Our clients have been pretty great. And they also have like, a lot of profitable and adjacent problems around. So overall, I’d say I’ve been pretty happy with that recruiting service we’ve been doing.
Ian: Yeah, as I said, the reason we’re doing it is because we’re learning and because it’s helping to keep the lights on? Do I think that we’re gonna be doing like that style of recruiting a year or two from now? Potentially ..
Dan: Potentially, yeah.
Ian: But I don’t think it’s gonna be our primary business, that’s for sure. Again, just getting back to my head exploding here is – we’ve got like this little business that’s growing really fast, but not necessarily in the direction that I’m trying to push it and you’re trying to push it, which is like services on the software side.
Dan: You know you’re onto something when the business is telling you what’s going on, and you’re not telling it. It is weird, you know, at a certain point, you have these business ideas, and you hire your first employee, and you do all this stuff. And at a certain point, there’s a morning, you’re all gonna wake up, and I’m sure many of you have been there, where you just look at the numbers, you log into LogRocket, you look at Google Analytics, you look at someone who sent you an email and you say, ‘My God, this thing is a lot bigger than what I did the last few weeks’, it’s got a momentum of all its own. And that’s when you move from, you know, that hamster wheel concept of having to push everything along to a true flywheel where the systems, the people, the processes, they just hum along without your inputs.
Ian: So that’s what’s going on Dan. And we can do a deeper dive on that another day.
Dan: All right Ian. I’m excited to talk about today’s episode concept, which is all about generating new business ideas, something that, to me, was like this crossing of the Rubicon ability where I remember, you know, earlier in my life wanting to make money so much. And assuming that somehow that money was attached to a business idea, right? Like, I need, ‘the business idea’, that was the thing.
Ian: Gotta have an idea man, because how can you make money without an idea.
Dan: Exactly, because I needed the money very badly. And so all of that anxiety about money was just focused on this thing called ‘a business idea’. And I just thought that, well, when one of those comes along, these money problems will be sorted out, well, I turned out to be pretty wrong about that. And today, we want to present an alternative approach and framework to thinking about profitable business ideas, and how they can solve that money problem that might be at the core of your career.
Well, Ian today, we’re going to talk about four frameworks, most of which we talked about before, but the theme of these January episodes for us has been really the fundamentals. And we talked about how, for Kobe Bryant, focusing on his footwork, not necessarily the fancy new techniques, or whatever, but basic fundamental footwork was how he spent a large deal of his training. It’s the same deal in business. It’s the fundamentals. Do you ever have this feeling where when someone gives you a simple and elegant answer, and you’re sort of wished it were more complicated and interesting? How do you lose weight? ‘Oh, well, you exercise and you eat better?’, ‘Oh, can you tell me about some kind of keto thing?’ It’s like these simple fundamentals sometimes get overlooked for fancy new ideas. It’s the masters who understand the basics.
All right, so let’s get into these four fundamental classic frameworks. So again, the topic this week is, for those of you wanting to workshop, a business idea, a lot of folks looking to get started with their first thing of their own. The first framework we’re going to talk about with some depth is called Rip, Pivot, and Jam. Rip, Pivot and Jam is kind of what it sounds like. It means you identify an idea that’s already working in the marketplace. That is the Rip part, doesn’t quite mean rip-off. That’s where Pivot comes in. there’s a bunch of different ways you can pivot an already profitable idea. Again, you’re not trying to be a good idea person in a woodshed somewhere, you see something that’s profitable, then you pivot it towards a new geography, a new market, a new approach. And the jam part is, you know, you just work your ass off for you with basically every resource you can commandeer, because part of what we talked about on the show and part of what we’re seeing with Dynamite Jobs and just our colleagues and listeners is that, you know, building a business isn’t rocket science, Ian. But I do think the layperson might underestimate the amount of resource and intensity that goes into getting something off a hamster wheel into a flywheel. In fact, I think a lot of people who self identify as entrepreneurial and entrepreneurs also misunderstand how much resource it takes. In other words, there’s plenty of businesses that can be hamster wheelly forever. And that’s fine. It’s the amount of energy to get from hamster to fly. Like that was something, we talk about the 1000 day principle, we talked about, you know, an incredible amount of hustle and energy.
Ian: And by layperson, I was hoping you’re gonna say, ‘Us’, use us as the example’. Because I think we underestimate how long these things take too. But like you said, there is a day when you wake up, and you’re like, ‘Holy cow’, part of that is like putting your ideas out there, your products out there, your business out there for long enough that people start to catch on to it. Rip, Pivot Jam, this has been a long-standing idea here at the TropicalMBA. And when you’re trying to dig up ideas of businesses that kind of go into these different categories that basically every single one of them goes into Rip, Pivot, Jam.
Dan: Yeah, you can always identify that precedent case, repositioning that value towards a different end consumer in a different way. And then the enormous amount of effort to deliver on that promise, that is basically three-part framework to almost any business idea.
Ian: That to me is what’s interesting about this concept here s, basically, if you started one company, zero companies or like five companies, at some point, you’re going to be pivoting and jamming. And maybe it’s not like the whole business, maybe it’s just like a portion, an idea, a service, like something small that you do this with.
Dan: So I’d like to give some examples here. But first, you know, pulling on the catalogue. One of the things that Kevin Kelly, the founder of Wired Magazine, has often said that always stuck with me is this idea of – if your environment is rich enough, then the concept of discovery is equivalent to the invention. If you have this amazing library, in your home, and you pick up a couple of books, and you start knocking around ideas, eventually you’re going to realize that, ‘Oh my gosh, like this science book has something very importantly similar to this religious book, or to this cooking book’. And now all of a sudden, I just made a connection. And that connection is really interesting. Like, what if we took this scientific approach over here to this cookbook, you know, and, and all of a sudden, you’re starting to see things. And this idea of being in a rich environment. Honestly, I think that is often the thing that aspiring entrepreneurs will get wrong – they won’t prioritize this idea of getting yourself in a sufficiently rich environment. Instead, what they’ll do is they’ll work a corporate job. And then, at night, they’ll go on to the web and Google around about entrepreneurial ideas. And then they’ll try to do something based on that environment of a Google search.
Ian: I’ll give you an example of how this is happening for us right now, Dan, which is like we’re trying to uplevel the types of people that we’re hanging out with on a daily basis, you know,
Dan: Which is why I won’t be hanging out with you tonight.
Ian: Exactly. Not that the people in your life aren’t good enough. But what are you learning that’s related to where you’re going? And so, for us, it’s this SaaS business, right? So it’s like, you gotta get yourself in an environment where other people are doing things that are light years ahead of you.
Ian: And part of that, you know, on this show, we talked a lot about, location, I made, I made the pitch to our dear friend, not too long ago, and I’m hoping that he’s listening to this show, that his environment, his location, isn’t conducive to what he’s up to in terms of online business. If you were to move to Austin, you would literally bump into these people five times a day, even during COVID times.
Dan: Right. And so this idea of like, where do you find your rips Ian, I think that there are really interesting places online, you can look at things like ad spend is a classic one. You can walk through funnels that you see on social media, ‘Is a profitable funnel, what’s going on?’ These are interesting, but not nearly as interesting as hey, if you sit down with someone who’s running a business similar to what you’d want to do, you can ask them like, ‘Hey, what’s an idea that you think would be profitable right now that you’re not going to get to?’ Entrepreneurs will donate these ideas, these rips to you, so to speak. And then your job is simply to identify what your unique take or your pivot is going to be on that. How about we give some examples of how this can work?
Ian: Sure. previous shows like that we’ve recently done. ShipHero, Aaron Rubin.
Dan: ShipHero is such an interesting example of when you’re in a sufficiently rich environment, which is Aaron was running a business, okay? So it’s one of these things like the rich get richer, like, once you get into the entrepreneurial world, you’re gonna find that there are so many business ideas that you don’t know what to do with them. And one of the ways they come about is by interacting with frustrating business services. It became clear to Aaron that there had to be a better way to do pull and pick operations and warehouses, you know because he had to deal with them for his product business. And this is where so many Rip, Pivot, Jams come from is like, you’re like, ‘If only this business service did it this way, I now have the resources to do it. Therefore …’ ShipHero, boom, he is absolutely doing an amazing job with that product. Let’s take a look at Mark Brenwall who came on the show earlier in the year with a business called WODNation. One of the things he identified was a super active Facebook group. And he thought, ‘Well if I bought that Facebook group, and then built products for that Facebook group, I could have myself a really successful business’. That’s ultimately what he did. One of the things you can think about as you’re looking for rips, and you want to maybe say this is a positional pivot, maybe we’re wedging stuff into the concept here Ian, but ….
Dan: The idea is that there are a lot of things in the world that are valuable, that isn’t necessarily attached to a business. And so a Facebook group with lots of people passionate about a topic is a great example of something that’s very valuable, this is what entrepreneurs do; they see the margin in that value. They say, ‘Man, if like that Facebook group, were attached to a good brand that had good products, like it would be awesome business, right?’ I put it out this way. Maybe the specifics will help the listeners to realize that there are opportunities like this of things that are valuable or interesting, or that I attract people with interest, money, and the willingness to get involved, that aren’t necessarily businesses yet. And all those things are opportunities for us every day.
Ian: Yeah, and for the entrepreneur, taking that thing that you can see value in, maybe it’s that Facebook group, there has to be more than just that, because it is where it is right, as a Facebook group. it’s not being monetized. There are great conversations happening. So there’s value there. How can you take that to the next level where money is exchanged? Or where resources are exchanged for money? Or where some kind of money is involved in that interaction? It’s got to be that interaction plus something. That’s why it’s Rip, Pivot, Jam.
Dan: Partially, if you’re listening to this, and you’re sort of still having trouble figuring out what that idea is going to be for you. If it is true that Rip, Pivot, Jam is just sort of this approximation of sort of how these things come about, then it might be true that you know, getting that more rich environment might be that first step, that first business deal that you take on.
Ian: I’ll give you an example, Dan of like, in the online job space. Since we started this jobs platform, there have been like 10 or 100 other job sites, basically, where they list remote Jobs. And there’s also been like, all these like Facebook and Slack groups, where people are basically looking for jobs, but everybody just keeps copying each other. And it’s just like fun to watch, you know because they’ll see somebody with like a Slack group with like,1000 people talking about how nobody has a job in there. And they’ll be like, ‘Oh, man, that’s awesome’. And then they’ll rip it basically and then they’ll have another Slack community with like this same people are talking about how they don’t have a job in it. But there hasn’t been any innovation, you know, nothing has changed. You know, there’ll be another like aggregate job site. And it’s like, well, nothing’s changed. I think sometimes people just expect, like, oh, if I have the traffic, like, I’ll figure out a way to monetize it, but you’re just copying 10 other people that haven’t figured out how to monetize this Slack community, you got to look towards the person that’s figured out how to make money in that situation. And part of that is like talking to those people that own those businesses, you know, like, ‘Hey, how much money are you making?’ That’s like, a tough thing to ask somebody was definitely worth it. Because if they’re not making any money, it takes you a year and a half to build that community. You’re gonna be in the same position.
Dan: When you see, especially in the tech space of people making a lot of money, like one of our guests is here, Jessie Hanley from BentoNow, I think saw a lot of email marketing and automation tools out there and said, ‘Well, why are these things so expensive, like I’m a coder, I can build something that isn’t some premium corporate big-dollar product or whatever’. And that became bento now, so that’s another way you can look at pricing. I mean, the idea of technology is that it should increase the amount of value you get for the price you pay, you know. In the internet marketing space, it’s typically the opposite. You hear people say, ‘Raise your prices, find out the way to charge the maximum or whatever’. Well, in technology, it’s often like, well, maybe you’re in a position where you can leverage technology to deliver a whole lot more for a whole lot less. And that can often be a really strategic way into a business idea as well.
Ian: In terms of like BentoNow too, Jesse’s got a huge advantage, too, because he’s agile, the people that he’s competing with have been in the space for like years, they have teams of like, 50 to 100 plus people. And like, that’s a big ship to move. And Jesse’s able to kind of like, solve some problems a little bit more elegantly and more quickly. So there’s definitely an opportunity there like to go up against the big players, you know, the downside of going up against the big players is that they have a lot of resources. And so you got to be careful of who you’re picking a fight with. And kind of related to that idea of picking a fight with these companies with seemingly endless money. A lot of them aren’t making money. So meaning their whole idea is to go into debt, basically. So when you pick a fight with somebody like that, that has unlimited resources, and they’re like shooting for debt, and as an acquisition, you’re up against the giants and that strategy might not work for you, if you’re a bootstrapped, because you might not be able to catch enough wind in revenue where you can actually compete with them.
Dan: Yeah, well, and that’s exactly why this concept of, in some ways, I wish I didn’t have to say rip so many times. It reminds me of ‘rip off’, right, which it is. But you know, it’s not suggesting that you rip off anybody, I just feel like I gotta say that, but I think it’s important that the concept means you have a precedent case that works financially for you. So you’re actually digging into what the financial cases is for the business and how it would work at your scale. And that’s part of the beauty of it is that you don’t need to figure all this stuff out the hard way these examples exist all around you.
One example that was discussed on the show this year was Ian Horley with Hubsnacks, basically decided that for him, personally, he was ready to productize his service business and saw what WP curve was doing for WordPress users and thought, ‘Well, I can do that for HubSpot users’. And that’s just the sort of calculation, the concept of rich rip and jam can lead to tremendously successful businesses as well with Hubsnacks.
Often, you know, that pivot is something that you come up with, I remember, you know, just a simple, fun business idea. One of the great businesses to own Ian is a beverage business. We started visiting Europe back in 2015, just as something fun to do in the summertime. And we started enjoying non-alcoholic beer on the beach in the middle of the hot day with all these amazing European cool people around us. And I thought, ‘Man, this is so cool. This is such a cool beverage. I can’t believe people aren’t into this stuff in America, you know like this is a big opportunity’. And sure enough, you got a local company like Athletic Brewing, absolutely crushing it with an amazing product. And certainly, these sorts of ideas are everywhere when you put yourself in a sufficiently rich environment and you continue to hang around with people that understand and operate on these fundamentals. The idea that that is simply a geographic pivot ‘Hey, like this kind of product is huge in this geography, there’s no reason why I can’t be huge in this one. I’m just going to put my own personal you know, unique touch to it and jam it out’.
Ian: You got to be careful, though, because you mentioned that geographic constraint, Dan, a lot of times like that geographic constraint is the reason why it’s successful somewhere and not somewhere else. I’ll flashback like 10 years, we did these TMBA seminars. And one of the ideas that I remember from this is a guy had like this scooter cover, basically. And he had been to Europe too. And he’s like, ‘Oh, man, these things are everywhere. It’s like a scooter cover. And it has like a lock and all this stuff’.
Dan: That’s right.
Ian: And I was like, ‘Yeah, that works in Europe because everybody drives a scooter. In America, like no one drives a scooter. So not going to work’. You gotta be careful who you Rip, Pivot, and Jam on.
Dan: Alright Ian. Let’s talk about just three more frameworks. They all can be mix and match, of course, but what I want to talk about is called the ‘Takeover Technique’. This Takeover Technique really emphasizes this idea of that sufficiently rich environment, which we’ve been talking about, and understanding that the fundamentals of entrepreneurship are fundamentally ‘know-hows’, they are things that you feel in your bones, we can talk intellectually about rip, pivoting and jamming. But until you actually do it a bunch of times, and see how it can sort of exist everywhere around you, it’s hard to really know it. These are things that you start to feel in your practices. And the Takeover Technique leverages that idea, which essentially suggests that you can be entrepreneurial, doing anything.
An entrepreneurial employee is one who puts the aims of the organization above their own individual aims. It doesn’t mean that they’re a martyr to the company. Importantly, it means that, because they’re not primarily interested in their own personal fate, they are able, so they get rid of the fear of losing their income, right? Those sorts of entrepreneurial employees are then able to see the true mechanics and hear about them from the people who understand them – customers, and leadership in the company – they’re able then to see the true mechanics of what makes the company work. Once equipped with the true mechanics of the company, then they can start to manipulate them and potentially improve, or at least show a great deal of competence over-controlling them.
Once all that’s done, now, all of a sudden, you’ve found yourself some real power. And I think if you can do this in an entrepreneurial organisation, where you can rise up to the top, that’s wonderful training wheels for doing it in your own company, you’re also going to find yourself exposed to a tremendous amount of opportunities to spin off a similar company, a different market, become the leader of a division of the company to have the powerful people in that company invest in your new company, which is originally what we did Ian. There’s a bunch of different ways that, when I talk to people who are doing the whole, ‘I got a normal job, I come home and Google entrepreneurial things’, I keep saying to myself, ‘Isn’t it a smarter move just to get a better job, one where you can really learn entrepreneurship?’
Ian: So Dan, when I’m like, comparing and contrasting. I’m thinking about getting into entrepreneurship, just the first two points that we’ve talked about – Rip, Pivot, Jam, and the Takeover Technique. The Takeover Technique is the one that resonates with me the most because I think, partially, that’s in my history, but also, because it’s the one that you have skin in the game with. I’m really worried about Rip, Pivot, and Jam as like a first-time entrepreneur, because I can Rip, Pivot and Jam, and like, not get feedback or not get like a whole bunch of money for like, years and years and years and tell myself that I’m an entrepreneur, essentially. Whereas with the Takeover Technique, you actually are working alongside other people in these companies. And you’re having to prove yourself you’re having to push through these problems, and you’re meeting resistance, but you’re also meeting success. And you’re in a situation where you’re in a high contact board essentially.
Dan: I’ll say this too, and I could be wrong, but I believe that your force in organizations is typically highly correlated to the force you can have running your own organization. And we talked about this concept of exit velocity, which is you know how much skill set, cache, relationships, and resource do you have when you exit your last job? And if the answer is ‘Well not much’, the better question rather than like, ‘I should go be an entrepreneur because I sucked at my jobs’, it’s probably like, ‘Well, why weren’t you able to be entrepreneurial in your career?’ Why weren’t you able to get a better job, to have more flexibility to help your company launch new products, and understand how that all goes down?
Typically, when you dig into the story of successful entrepreneurs, you’re gonna find a successful entrepreneurial career that immediately preceded it. Back to this idea of – can we talk about a more rich environment than already an entrepreneurial organization, right? And you can Rip, Pivot, and Jam that whole experience, let’s just smash the two ideas together, Ian. At a certain point, you’re going to be working for that organization saying, ‘Hey, there’s something in the marketplace here that can be done better. And this organization can’t do it for some mechanical or some important reason. I’m going to Rip, Pivot and Jam it’. In fact, the founding of our first product business was essentially that, which is we worked in an organization that was contract manufacturing, there was a great deal of resource focused on clients. And all the platform was there to be focused on building products, but no one was using the resource in that way. So Rip, Pivot, Jam. Fifteen years later, here we are speaking on the internet about it still.
So to review, we’ve talked about Rip, Pivot, Jam, the Takeover Technique. Number three is understanding the dynamic of 1000 True Fans. This is of course, this idea Ian that if you have say 1000 people paying you $100 a year, that’s $100,000 a year to produce your art, to produce your tweets, to sell your courses, whatever it is. Not necessarily a great deal of wealth, but it’s a damn good start. And that’s the idea. We’ve also broken this down on the show to say you could think about it different ways, get out your napkin and write down 100 true customers, or 10 true clients, or even one or two true clients, depending on what it is you’re doing. Ian, I think this kind of business model is increasingly possible with tools that exist and especially the way I’ve seen this go down all across essentially, when Twitter increase their character limit Ian, I saw entrepreneurs with 1000 true fans business model, really take advantage of the fact that people were going to Twitter for long-form content, and that long-form content sells expensive stuff.
Ian: Dan, like the most obvious example of this to me, and the one that has basically, fans in the title of the URL, is ‘Only Fans’. And I don’t know if you’re familiar with this site, some of you might not agree with it. But, basically, it’s turning your Instagram account, and these are a lot of times like racy accounts, like into a private subscription service, essentially, where you can like own your fans and like, you can show them photos or videos or whatever it is that you’re up to on the internet. But this to me is like the definition of 1000 true fans. It’s taking your Instagram account that maybe had like 20,0000 or 30,000 followers and like monetizing it directly for 1000 people.
Dan: Yeah, and we had some examples on the show this year, you have Matt Farah doing it with ‘The Smoking Tire’. Interestingly enough monetizing his YouTube fame into a high-end parking solution for luxury car owners. You saw Amanda Cook on the show this year talking about how she takes a message for location-independent founders, Amanda has a message, for example we have a message here for location-independent founders, she has a message for founders of wellness brands. You see it with Taylor Pearson, followed Taylor Pearson on Twitter, follow his wonderful website at Taylor Pearson dot me, sold a variety of different things against this sort of concept of him having fans, like people looking to Taylor to … I think he’s done a great job of giving less smart people like myself access to really smart ideas. That’s what Taylor Pearson is really good at, and eventually worked himself to founding ‘The Mutiny Fund’ which is a similar concept, but a much bigger payoff, which is this idea of, he’s going to give less smart people like myself access to smart investment opportunities through his fund.
Ian: I’m not gonna give away Taylor’s numbers, I’ll talk about somebody else. You take VCs for an example. The Twitter platform is like the best thing that could have ever happened to VCs because they get to talk about this stuff all day long. And when they say something that resonates with someone that has a $100 million fund, and that person invests in them, it’s game over, you know? I mean, you only need so many of those, right? I mean, you don’t even need 1000.
Dan: I think we mentioned earlier, it’s like this concept of like you’re looking for rips, you’re looking for stuff. It’s like, there’s a certain point, like after the Twitter character limit that went up that the nature of Twitter changed, you know, and like, it was like, months after, and I was like, going on there. And I was like, ‘Something’s different around here. Why are people tweeting so much?’ You know, I’m a little bit slow to the game. It’s like, ‘Oh, because they’re making so much money off of it. That’s why they’re doing it’.
Ian: That’s right. I mean, you know, this doesn’t necessarily work for people that are like reviewing headphones, although I’m sure you can have an Amazon affiliate page. But like, guys like Brent Beshore, guys like Taylor, guys that are like VCs, essentially, like, every character, I would love to get like, through their Twitter, like every character is worth, like, probably hundreds of dollars.
Dan: Our good friend, Noah Kagan just featured a headphones reviewer, basically, an electronics reviewer. And I’m telling you what, it’s the numbers look pretty good Bossman.
Ian: I don’t doubt it.
Dan: The bottom line is just because you didn’t get in on the early days of podcasting or personal blogging doesn’t mean that you, too, can’t develop a brand, or a persona, or some kind of perspective that can build your own 1000 True Fans. And again, you can do this with the Rip, Pivot, Jam concept. But it’s never been an easier time to do this stuff. And every day there are more and more success stories. And that’s part of this, too, is about belief that if you get yourself into these relationships and environments, that the opportunities and the abundance will keep on coming. And it’s kind of like this imperative because I hate to be a little bit, you know, dark about it. But it is true that there does seem to be this like segmentation in society, Ian, there’s like, the earners that are like jumping on board with leverage web technologies and realizing ways to find 1000 people with the right kind of pocketbook that find the right kind of product-market fit. And then there’s kind of like the rest of society that’s just doing stuff that everybody’s been doing for a long time. And that’s becoming less profitable, more commoditized, and more automated by technology. So there’s never been a more important time to get on the bandwagon if what you want to do is make a great deal of wealth.
Final bit, I want to just toss out this idea of becoming a deal master. We’ve done a bunch of episodes about this concept. If the concept of finding value or precedent cases is a little bit vague. One of the easiest ways to get yourself into the entrepreneurial mindset and business idea mindset is simply finding margin. Where does it exist? How can you find it? What are reliable systems that you can do to find margin?
So we’ve talked about the example of trading automobiles on the show, for example, there are ways you can search out automobiles that are undervalued on Craigslist, and other platforms, resell them for more, even drive them in the interim. There are opportunities like this with any asset class all around. I got into watches many years ago, Ian, you click around a few times on the web, and now all of a sudden, there’s all kinds of watch trading opportunities going on online. The opportunity is probably to sell the course, actually, that teaches people how to check out watches. We had Rob Barber on the show who does this with domains. You take asset plus a little bit of knowledge, focused knowledge, plus a little bit of systemic deal flow review, and building, so you got to figure out how you’re going to review a lot of deals, and what the system for reviewing them is, you bundle those three things together. And you’re a deal master. And that’s pretty much the quickest way into business.
Ian: The idea essentially is – how do you get deeper into these networks? Because, you know, the surface level stuff is like ‘I bought something on Craigslist and then I sold it on eBay for like 15%’. That’s okay, that’s a lot of hustle. Essentially though what happens when you become a deal master is you get entrenched, like deeper and deeper into these networks. You know, we’re watching this show that I highly recommended to you, is one of my favorite Shows of All Time. ‘Operation Odessa’. Like these guys are my heroes in a different life, right? So it’s like, you gotta watch this show. I’m not gonna give it away if you haven’t seen it before. But basically, it focuses on these three characters, and they do some insane deals together. They don’t have like a bunch of proprietary IP or anything like that. They’re just purely hustlers looking for margin that is deeply entrenched in relationships.
And I’ll give you a heartbreaking example of this that happened to me yesterday, Dan, I got a call about five vintage Porsches. And the cool thing about that call was the reason I got it is I actually own a vintage Porsche now, that I got, that I unburied from my neighbor’s yard. And so I have a little bit of insight and understanding into these cars and says, somebody called me and they said, ‘Hey, I got these five Porsches’, I go to their house, literally a container full of parts, all these Porsches. But I’m in a unique position now, because I have a little bit of domain expertise, and so I got to kind of figure out if there was margin in this deal. The reason I’m telling you that story, Dan, is if you’re going to become a Deal Master, on the surface, it just looks like a couple of percentage points, you know, ‘buy low, sell high’. But the real advantage here is like getting deeply entrenched into these relationships, where you get real deals, where you can like 10 or 20X extra money.
Dan: That’s cool. And ultimately, you know, this is just an idea of how to get into business sooner rather than later. I think the big wins are getting in as a deal master and then using some of the other techniques to figure out, ‘Okay, this is how margin is systematically representing itself. Now, how can I build margin? How can I build value and then sell that?’ And that’s pretty interesting. I mean, a classic example is – there’s a common example of finding margin where people sell cars that have technical problems, and technical problems are expensive to fix, but you have a cheaper way to fix them. So now they’re worth more to you than they are to other people.
But now, the interesting part is like, ‘Okay, now that I know how to do this, maybe now I can sell that value of the technical problems for cheaper, maybe now I can sell a course on how to flip watches because I’ve flipped, you know, 100 of them or whatever’. That’s kind of that concept of coming in and figuring out how to, like build value out of your ability to systematically spot margin.
Ian: Yeah, and like you said eventually, a lot of times for deal masters like it becomes about writing the course or selling the book, or like figuring out a way to like, leverage your time even more. But if you’re like just getting into business. I think this is one of the best things that you can do. Because there’s a lot of friction, you have to ask people for money, you have to negotiate with people, it’s very uncomfortable for a lot of people.
Ian: And so I think it is a great way to get some skin in the game early and learn about how these transactions happen. Even if they’re at low volume, low scale, low margin, all that stuff is still worth it, like having these conversations with people. Because if there’s one thing I’ve learned, like in these deals, Dan, just dealing with cars and things like that is that basically, people fit into five or six different archetypes. And like the reason people are buying or fell into money, that’s also like five or six different archetypes. And you have to do like 20 or 30 deals to figure out what these patterns are. But once you start to establish what the patterns are in the deal master world, your doors are wide open. You can spot a deal a mile away, you can spot a buyer a mile away, everything gets much easier, but you do have to put in, as we said at the beginning to show kind of your time and learn the fundamentals to getting along in this type of business.
Dan: And we’ll close it with that, Ian, and I really liked that you bought it back to the fundamentals. And especially that idea of being in the game and doing awkward things. There’s part of me that thought, ‘Man if this doesn’t feel at least a little bit awkward to you as you’re doing these things, and you don’t know those patterns and archetypes through hard-won in person or on the phone or email, whatever, through hard-won real interactions with people, you’re probably leaving a tonne on the table in terms of your entrepreneurial progress and health fast you can go along.’ Typically there’s a high correlation between entrepreneurs who are seeing a lot of success and their and their willingness to put up with a lot of that interpersonal pain that we feel when we challenge ourselves in situations to try and persuade someone to try and do a deal, to try and let us have some margin from it. All these sorts of things are what’s required often to get business done, and certainly to move it along a lot faster.
And again, if I were to take this idea of ‘being in the game’, and putting yourself through awkward situations, this is the reason why that Takeover Technique, which was number two today, this is often the reason why people aren’t willing to execute that strategy, because, ‘Oh, well, you know, like, finding ways to like be a true player in this organization would be like, awkward, I would assert myself and people might critique me and stuff’. And it’s like, ‘Well, yeah, they are going to critique you’. And I’ll tell you, they’re going to critique you when you run your own business, too’. I’ll share a little personal anecdotal, sometimes, you know, someone will critique us on what we’re doing. And I’ll sit there and my cars, I’m like driving to the grocery store or something or going around, and I’ll be like, ‘Man, that kind of hurt’, that hurt that they said that negative thing about us. Is it worth doing something about it is one concept is one idea? And the next idea is like if one person is saying it, if a lot of people are saying it, that’s something that you have to get used to if you’re going to run a business, and you have to find a positive way to approach that. And, you know, in the Takeover Technique, I think a lot of people say, ‘Okay, well, I don’t like feeling that way. And so what I’m going to do is start my own business and get free from all that’. And although that’s certainly possible, I think it’s probably a much better strategy to embrace that. And to find that there’s a true value in having those difficult conversations with people in terms of moving product forward, moving organizations forward, and doing amazing things in your life. So I encourage you all to go out and do that.
Ian: Yeah, and the other thing that I’ll mention is like the highest performers that I know in my life are always looking for someone to tell them the truth. And that’s kind of where this starts. So again, like if you go back to the Takeover Technique, and you put yourself in these situations or the deal master where it’s awkward or whatever. A lot of times, what you’re looking for is like truth in the situation. And if you can become comfortable with people telling you the truth, what they’re thinking, feeling, seeing. And then you can either adapt or not, but at least know the truth and be comfortable with that. I think that that’s a lot of groundwork for becoming a successful entrepreneur.
Dan: The truth is, I had a good time doing this today, Bossman. Hope you all enjoyed some of these ideas. If you have any frameworks for how you come up with business ideas or any questions based on today’s episode, feel free to reach out to us directly. We’re Dan and Ian at TropicalMBA dot com. Well, I think it’s time for us to get back to work Ian.
Ian: Alright, let’s do it.
Dan: Let’s go have some awkward conversations. Thanks for joining us this week on the podcast. We’ll be back next week as always at 8 am Eastern time.