How to Come Up With the Idea That Will Make You Millions

When people start a business for the first time, they often do so with an idea for a particular product that they believe to be both brand-new and also acutely needed – some sort of “better mousetrap” that will put their business on the cover of Inc. magazine.

Having a brand-new product idea may be the most common way to start a business, but it’s not always the best way.


Because brand-new products usually crash and burn.

They fail for a number of reasons – weak marketing, insufficient cash flow, poor product reviews. But the most common is this: The appetite for them is much smaller than the would-be entrepreneur has imagined.

When some enthusiastic young person comes to me with a “great” new idea, I always ask about the size and variety of competition. When they say “That’s the best part! There is none!” I have to explain why starting a business with a product for which there is no proven market is a big mistake.

You might not think so from everything you see in the business media. Journalists understand the power of a good story, and the best-loved stories about entrepreneurs are those that feature the lone and courageous person with a brand-new idea that he spends all and risks all to bring to the market, against huge doubt and even criticism, only to be proven right in the end with a huge success and the fortune to go with it.

But the reality of a successful start-up business is much more like this:  READ MORE

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The Challenge of Charity: My Failure to Help Marcus and Gabriela

First I felt ashamed. Then I was hopeful. Then I was disappointed. Now I’m resigned.

Marcus and Gabriela came to work for us in 1999 after we built a second home in Nicaragua.

Marcus tended the landscaping. Gabriela kept the house. Antonio, my Nicaraguan partner, had recommended them to us. Their parents and siblings had worked for him.

They were very young at the time – in their late teens or early twenties. But they were already burdened with the responsibility of being parents. Gabriela’s husband worked in construction. Marcus’s wife worked part-time cleaning at a local restaurant.

Neither spoke a word of English, so we had to communicate in the very rudimentary Spanish I had at the time. They showed up every morning at 7:30 and worked, not energetically but dutifully, until 3:30. Then they were gone. In those early days, they left without saying goodbye.

They were shy and I did my best to relax them in that American sort of egalitarian way. But Nicaragua, like all countries, lives with its history. And the vestiges of Spanish colonialism still existed. Most upscale households in Nicaragua employ domestic workers, who are, I gathered from observation over the years, treated with respectful condescension.

I asked Antonio what I should pay them. He told me $150 a month.

“A month?”

“That’s the going wage,” Antonio assured me. ”If you pay them much more, it will cause problems in the community – for them now, and for you later on.”

I knew that he was right, but I wasn’t going to accept it…

I sat down with Gabriela and Marcus and told them that if they wanted to earn more money, I could give them jobs that fell outside of their normal duties. Marcus could give a room a new coat of paint. Gabriela could plant flowers along the side of the garden. That sort of thing.

And they could do these extra chores during their regular hours, I told them. (Which would work out just fine for me, because I didn’t really have eight full hours of work a day for them.)

I thought they would be delighted with the opportunity, but they were not. Nestor, a local friend and colleague, explained their lack of enthusiasm.

“They probably think you are trying to take advantage of them by asking them to do extra work,” he explained. “Even for extra money.”


It was another vestige of the country’s history – in this case, the years it had existed as a Communist state.

But although they were reluctant to do “extra” work, they were not averse to asking for financial “help” with family problems – a sick parent, a leak in the roof, etc. I was more than happy to give them what they needed, but I insisted that they work the “extra” hours for the extra money.

For a few years, it seemed to be working well. They used the extra money they earned to buy themselves bicycles, cell phones, and clothing.

But when I had the opportunity to visit their homes, it was clear that the extra money had bought them all sorts of things that put them in the upper economic ranks of Limon, the hamlet they lived in. Still, like everyone else in the area, they were living in simple mud and wood shacks.

Despite free-market views to the contrary, this huge gap between their homes and mine bothered me. I had to find a way to increase their income yet again so they could at least have proper windows, doors, and floors.

So I came up with a solution that was popular among charity advocates at the time: I’d give them micro-loans to start their own side businesses. My idea was that they would follow the strategy I’ve recommended for years to other would-be entrepreneurs: Start small. Test the product and the pricing and the pitch as quickly and efficiently as possible. And then, if the business starts to take off, expand.

Considering their earlier reluctance to do extra work for pay, they were surprisingly open to the idea of having side businesses, businesses that could be run by an unemployed sibling or relative while they were at their regular jobs.

I told them, stupidly in retrospect, to choose the businesses they wanted to have. (I thought that this would provide them with the extra motivation they might need to succeed.)

Gabriela decided on a children’s clothing store. Marcus decided to open up a pulperia, a rustic version of a mini 7-Eleven, in front of his house.

Two very bad ideas! READ MORE

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Breaking Big: The “Ready-Fire-Aim” Strategy That Took One Company From $8 Million to More Than $1 Billion

Thursday, November 15, 2018

Chapter 1, Part 1

The 5 Stages of Entrepreneurial Business Growth

Delray Beach, FL.- For the first half of my business career, I spent almost all of my time doing. I was an incessant innovator and that required a lot of practical thinking. But I eschewed the theoretic. My M.O. was experimentation: Begin with a hypothesis about how to make something new or better. Test it to a reliable degree. Then make adjustments.

Since I knew very little about business, I had the advantage of testing theories that were outside the box of recognized business truths. This taught me two things: Traditional practices are usually there for a good reason. And when new ideas work, they can work big.

In the year 2000, I began to write a blog (called Early to Rise) about what I had learned about business. It forced me to think more abstractly about my experience, and gave me an opportunity to step back and see patterns. And after doing that on a daily basis for five or six years, I was able to see patterns in the patterns.

One of the great pleasures of writing those daily essays was knowing that I was refuting some long-held beliefs and introducing (what seemed to me to be) new ideas about how to launch and grow businesses in the digital age.

It was then that I got the urge to host a very special, very high-priced seminar where I could explain my insights to smart and successful entrepreneurs who wanted to grow their businesses.

The goal was not financial. I could have charged little or nothing to attend. But I wanted to attract serious people, entrepreneurs with enough success in business to challenge my ideas if they didn’t make sense.

It was a four-day event and the fee was $10,000. Since this was the first time I would be charging this kind of money for my expertise, I was more than a little worried.

But I told myself that I would be okay. All around me, self- proclaimed business experts were charging $1,000 to $5,000 for seminars and getting plenty of eager people to pay up. I knew many of those experts. And most of them, in my humble opinion, were one-trick ponies – zero-down real estate gurus, direct-marketing pundits, or motivational speakers. Few of them had my depth or breadth of experience. If they could get away with charging as much as $5,000, I reasoned, I should be able to charge $10,000.

So I spoke to MaryEllen Tribby, the woman that was running Early to Riseat the time, and she helped me put it together. Three months later, she had everything set up and 30 tickets sold.

[Marketing Tip:The easiest way to create profits in your business is to sell your best customers a higher-level version of something they have already bought. MaryEllen’s marketers did that by sending out a special invitation to a limited number of Early to Risesubscribers who had already spent $2,000 on a three-day conference with various business writers. My seminar was positioned as more (four days) and better (with me only). And it sold out in a matter of weeks.]

The only thing left was to come up with an agenda that would justify an investment of $10,000 by each attendee. When I reviewed the credentials of the 30 people who had signed up, doubt once again gripped me. What could I do for them that would be worth what they had paid? The saying “Pride comes before the fall” haunted me.

Aside from the fact that all 30 had achieved a great deal in their careers, each had a different sort of business. Some were beginning new businesses. Many were growing modest-sized companies. And some had well-established $10 million to $25 million enterprises.

And if that were not challenging enough, their businesses ranged from professional services to publishing to manufacturing. Even to restaurants!

On the one hand, I had, by that time, such wide experience in business that I felt confident I could be helpful in some way to each of them individually. But this was a group event. And we had limited time.

I certainly could not dumb down the discussion to the basics of entrepreneurial success. Most of these people were well beyond that. I had to create a program that was both high level and fundamental, with ideas that were universal to all entrepreneurial businesses but also specific enough to satisfy each and every attendee.

I thought about it for several days, but I could not come up with a satisfactory approach. I called in two colleagues – senior writer Charlie Byrne and contributing business management expert Richard Schefren (both superstars in their domains) – and I explained my problem to them.

The specific question I posed was:

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Breaking Big: The “Ready-Fire-Aim” Strategy That Took One Company From $8 Million to More Than $1 Billion 

Tuesday, October 2, 2018
Delray Beach, FL


In 2010, John Wiley published a book I had written several years earlier called Ready, Fire, Aim. Of the 20+ books I’ve written on business and wealth building, Ready, Fire, Aim has had the longest tail. Although it barely made it to the bestseller lists that year, it has sold conti nuously since then.

The tail was also wide. It’s been republished in more than a dozen countries, recommended by dozens of digital newsletters and magazines, and has been used in business schools, book clubs, and even churches!

My goal with Ready, Fire, Aim was to explain my theory about starting and growing entrepreneurial businesses.

My thesis was that all entrepreneurial businesses have some commonalities in terms of the challenges they face at various stages. And I argued that if you, as an entrepreneur, recognize those commonalities,  you would have a significant advantage over your competitors and a favorable chance of success.

In looking at the way businesses develop over time, I identified four levels of business growth, based on revenue:

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A Very Rich Entrepreneur You’ve Probably Never Heard About

There are many ways to get rich as an entrepreneur. One way is to create just the right product at just the right time. A second way is to identify, and then cater to, a neglected niche market. A third way is to introduce a new and attractive marketing strategy.

He made his fortune by doing all three at the same time.

Reiman got his start by working as a freelance writer and dabbling in magazine publishing. In 1970, he noticed that two farming magazines had eliminated their soft “women’s features” and he sensed an opportunity.

He devised a prototype for a magazine called Farm Wife News. To test the idea, he rented a mailing list of 400,000 farmers from an agricultural company. He sent a copy of the prototype to a tenth of the names, offering six issues for $5. The response was so great that he abandoned the next test and sent the sales package to the entire list.

A few years later, he was publishing 11 magazines aimed at the rural market and enjoying revenues of more than $300 million. His titles, with a circulation of roughly 16 million, included Country Woman, Ranch Living, and Taste of Home.

The magazine market in the USA has always been very large. But it has also been very competitive, with dozens of publications on every popular topic. So how did Reiman do it?

The most desired demographic has traditionally been young and urban. But rather than going after them, Reiman marketed to older, rural readers.

And rather than selling advertising, he decided to make his profits solely through subscription sales and renewals.

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Government or Business?

Just as you can’t trust businesspeople to put their customers first, you can’t trust politicians to put their constituents first.

Neither libertarians nor big-government advocates have a theoretical advantage in the argument over whether it is better for the government or for private businesses to hold power. But if you look at business versus government in terms of their major contributions to American history, you can see a difference.

Arthur Bloom, the award-winning television news director, said this about the government’s efforts to destroy the Bell Telephone Company:

There are two giant entities at work in our country, and they both have an amazing influence on our daily lives…. One has given us radar, sonar, stereo, teletype, the transistor, hearing aids, artificial larynxes, talking movies, and the telephone. The other has given us the Civil War, the Spanish American War, the First World War, the Second World War, the Korean War, the Vietnam War, double-digit inflation, double-digit unemployment, the Great Depression, the gasoline crisis, and the Watergate fiasco. Guess which one is now trying to tell the other one how to run its business?

At the highest level of our economy we see big business working hand-in-hand with the government. That is because the government has always known it was in its best interest to align itself with the bankers and major business players. It is really only the entrepreneurial class that can be trusted to create more wealth for more people, but government rarely gives entrepreneurs more than a passing nod.

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10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time)

Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn’t, you try something else.

This approach lent its name to my best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.

As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.

The Ready, Fire, Aim approach obviously doesn’t apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:

• You can spend most of your time and money manufacturing a line of such collars – and only after that is done, start to think about how you can sell it.

• You can make a single collar and go down to the local flea market or your neighborhood pet shop and see if you can find a customer for it.

Most people start businesses the first way. That’s why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don’t have to worry about all the other problems that will arise in the natural course of business. You won’t have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.

Here, in a nutshell, is what I mean by Ready, Fire, Aim:

Ready: Get your product idea ready. Make it good enough to sell. Don’t worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through “back-end” marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.

That is the cycle of a successful start-up venture.

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The Wealth Value of Entrepreneurs

George Gilder says that the great entrepreneur, like the great artist or the great scientist, creates far more than he consumes.

This is one of those statements you believe or reject depending on whether you identify with the descriptor. As an entrepreneur, I want to believe that it is true. Certainly the man who starts a new business creates jobs and provides education for his employees. And in most cases, his business interacts with other businesses, propping up the economy. But I’m not sure that all entrepreneurs create more than they consume. Some, who develop shoddy businesses that are essentially thieving enterprises, can’t be contributing positively to the common good.

That said, there is a certain sense in it. Athletes and bankers do not contribute more than they consume. Neither do politicians. Teachers do. Who else?

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Confessions of a Serial Entrepreneur

Q: When did you decide to become an entrepreneur?

I think it was when I was 12 because that was the year that one was legally allowed to work for a salary. I got a job with my friend Brian in a car wash in my town. We worked Saturdays and Sundays, from nine till five, drying cars as they rolled out of the building. Since we were small we were assigned to clean and dry the inside windows. Brian did the front. I did the back. It was a very simple job, mindless really. But it was relentless. We were in and out of each car as soon as they rolled out, about one every thirty to sixty seconds. It was amazingly boring. I found myself looking up at the clock every eight or ten cars. Just three or four minutes had passed. On top of that the boss, an obese, cigar-chomping character straight out of central casting, would pillory us in order to impress his best customers. “What kind of job is that? Do it again!”

I think it was then that I thought, “I got to find a way to make money on my own.”

Brian and I eventually reached burnout. We refused to do interiors any more, we told the fat man. “We will only dry,” we announced. “And the only thing we will dry is the radio antennas.”

We were fired before the second hand of that clock made its next rotation.

I was happy to be free from the car wash but was very soon missing the $30 a week I had been making. So I came up with the idea of writing and publishing a booklet called “Excuses for the Amateur.” It was a helpful guide for my fellow classmates who were too dimwitted to come up with excuses more creative than, “The dog ate my homework.”

The excuses I listed were – and I can’t prove this since it is no longer extant – clever and mildly witty. I sold out the first edition and pocketed more than fifteen dollars, if I remember correctly. “This is what I want to do,” I thought. The next day I got hauled down to the principal’s office a personal critique of my booklet and business idea by Sister Bonecrusher herself.

In retrospect I can see that it incorporated much of what I did in my adult career: writing, direct marketing and sometimes pushing the envelope a bit too far.

Without the prospect of further editions, I put my publishing dreams on hold and got a paper route and some lawn cutting and snow shoveling jobs and before I knew it my weekly compensation as an independent operator exceeded my salaried position at the car wash.
I call this my annus mirabilis.

Q: In Ready, Fire, Aim you say that of all the forms of entrepreneurship the one you least like is retail. What sort of experiences did you have that formed that view?

A: Yes. Nearly every one. During high school I took weekend and evening jobs at a few local restaurants. I worked as a dishwasher, busboy and waiter. I worked hard – at least by the lax standards I kept at the time – but reasons unknown to me at the time I was never a standout employee. My employment as a waiter came to me thanks to my younger brother Andrew who had secured a waiting job at Scotty’s, a steakhouse about fifteen minutes walk from my house.

Scotty’s was
a traditional steakhouse in most respects. The waiters were all mature and experienced men, my brother and I being the sole exceptions. My brother was astutely condescending to the other waiters, which made them think him their equal. I was deferential, which made them realize I was just a kid who had no right to be there. While I worked diligently, whispered criticisms reached Scotty.

Scotty, I should say, was a middle-aged Jew who had decided to speak with a Scottish accent and name the restaurant Scotty. The exit interview, as they call it these days, went something like this:

Mark, me boy. Sit ye down. I’ve something to tell ye.

What is it, Scotty?

I hate to tell ye this, lad, but I have to let ye go.

Let me go, Scotty? But why? I’ve always been on time. I’ve always worked hard. I’ve never dropped a tray.

Ah, don’t make me tell ye, lad.

Tell me!

Well, if ye want to know, I’ll tell ye.

Yes, please.

The truth is, me boy, you’re a hump!

A hump?
Yes, me boy. It’s a sad fact, but you’re a hump.

I never had the gumption to ask him what a hump was. I figured that the lesson – a lesson I’d already learned at least four times by then – was that I was not cut out to be an employee.

Q. That’s very funny. And I can see how that might have soured you on your potential as an employee, but what made you decide that the retail business itself was a bad business.

A: I don’t think it’s bad for everyone at all times. But I do think that it presents the entrepreneur with all sorts of unnecessary and difficult problems.

Q: For example?

A: For one thing it requires a great deal of expense getting started. You have to buy or put money down on a building. You have to outfit that building. You have to buy inventory. And so on. Even a small retail operation – say, a local camera shop – will set you back a hundred grand or more before you open the doors.

I’ve talked in some detail about this in several of the books I wrote (as Michael Masterson) but the kind of entrepreneurial business I like is one that allows you to test the business idea as quickly and cheaply as possible. You can do this easily if you are selling products online. You can also do this in almost any sort of personal service business. But you can’t do that in retail. You have to risk a whole lot of money before you have any idea if the basic business proposition is valid.

Another thing I don’t like about retail – at least from the entrepreneur’s point of view – is that it becomes a ball and chain. Retail businesses generally rely on inexpensive and inexperienced employees to make profits. And good retail managers are few and far between. This means that despite your best efforts you can almost never get away from the business. You must be there – at least a few hours a day – every day the damn business is open.

There are other reasons I don’t like retail. Any would-be entrepreneur contemplating a retail business should read chapter X of Ready, Fire, Aim before taking the plunge.

Q: But surely you acknowledge that some retail businesses make their owners very wealthy. McDonald’s, for example. Or the Gap.

A: That is true but those are not really retail businesses, at least in the conventional sense. They are franchises. Those businesses work on a very different model. You build one store that works and you replicate it over and over again. You make money by selling the stores to others.

Q: Did you ever have an experience with a retail business that worked?

A: Yes. Several. One in particular is a painful memory because I had the chance to be an owner but demurred. It was in 1972. A close friend of mine, Michael, had an opportunity to open up a rock and roll club in Freeport, Long Island. Michael and his partner (who could have been Scotty reincarnated) bought an old bar on Merrick Road. The previous bar had been a “bucket of blood” as they called it, a gin joint for alcoholics and bikers. Mike asked me to help him renovate the building. By that time I had done a lot of work as a freelance carpenter, so I was able to help him design and build out the club into something that college kids would like. Mike gave me the option to be paid for my work or trade it for sweat equity. I chickened out and opted for the cash. It eventually became one of the largest rock and roll clubs on the island. We had national acts like Richie Havens and The Ramones.

Q: What did that tell you?

A: Sweat equity is a very good deal if you (a) believe in the concept and (b) can afford it.

Q: So it wasn’t a total loss?

A: Not at all. I learned a valuable lesson and Mike gave me a job as a bouncer. That was how I met my wife. So I have The Right Track Inn to thank for my marriage.

Q: You mentioned that your first experience in publishing was when you were twelve years old. What was your next experience?

A: I did some publishing during my stint as a Peace Corps volunteer in Chad, in Africa, from 1975 to 1977. I was assigned to teach English literature and philosophy at the University of Chad. The Peace Corps director at the time asked me to write and publish a newsletter for the in-country volunteers. I did that and enjoyed it. It was also during that period that I wrote a book in which I attempted to document some stories and songs that were kept alive by an oral tradition. That book was never published but it gave me a taste for writing books.

After I got back I responded to an advertisement I saw in some Peace Corps publication for an editorial position in Washington, D.C., writing and editing a newsletter called African Business & Trade. I got the job and spent a bit more than four years in Washington, teaching freshman at Catholic University introductory literature courses, working as an editor during the day and attending PhD classes at night.

At first it was loads of fun being an actual journalist. I had no idea what I was doing but I was mentored by a very smart guy named Michael who taught me the importance of thinking about what I was writing before I wrote it. It is mildly embarrassing to admit it now, but I had managed to finish college and graduate school as an A student without ever thinking much about what I was writing.

But eventually the novelty of writing about business wore off. One day I was writing my umpteenth article on countertrade in Nigeria when I fell asleep at the typewriter. When I woke up a moment later I discovered I had finished the paragraph in my sleep.

Q: You jest, of course.

A: No. I swear, it happened. I knew then that I had to get out of the slave-writing side of the business.

Q: So what did you do?

A: Michael had left a few weeks before then. My boss, Leo Welt, was searching for a replacement. I walked into his office and told him that I could do Michael’s job at my current salary. I have no idea why, but he accepted my offer and I became publisher.

Q: How did that go?

A: For me it was a great experience. I had to learn what the publishing business was all about. It turned out it was much more about selling ideas than it was about dutifully researching news and writing articles.

Q: So you became a marketer?

A: A very bad marketer. With Michael gone, I had no one to mentor me. Leo was too busy with his other, more successful businesses. I had to figure out how to sell these newsletters on my own. I did the best I could for the year I was there but I’m sorry to admit that I never figured it out during my tenure.

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