Perfect. This could kick my outsourcing up to a new level. I can have a nice, clean division of labor:
Honey will take care of my business affairs, and YMII can attend to my personal life—pay my bills,
make vacation reservations, buy stuff online. Happily, YMII likes the idea, and just like that the support
team at Jacobs Inc. has doubled.
HONEY HAS completed her first project for me: research on the person Esquire has chosen as the
Sexiest Woman Alive. I’ve been assigned to write a profile of this woman, and I really don’t want to
have to slog through all the heavy-breathing fan websites about her. When I open Honey’s file, I have
this reaction: America is f*cked. There are charts. There are section headers. There is a well-organized
breakdown of her pets, measurements, and favorite foods (e.g., swordfish). If all Bangalorians are like
Honey, I pity Americans about to graduate college. They’re up against a hungry, polite, Excel-proficient
Indian army.
IN FACT, in the next few days, I outsource a whole mess of online errands to Asha (from the personal
service YMII): paying my bills, getting stuff from drugstore.com, finding my son a Tickle Me Elmo.
(Actually, the store was out of Tickle Me Elmos, so Asha bought a Chicken Dance Elmo—good
decision.) I had her call Cingular to ask about my cell-phone plan. I’m just guessing, but I bet her call
was routed from Bangalore to New Jersey and then back to a Cingular employee in Bangalore, which
makes me happy for some reason.
IT’S THE fourth morning of my new, farmed-out life, and when I flip on my computer, my e-mail
inbox is already filled with updates from my overseas aides. It’s a strange feeling having people work for
you while you sleep. Strange, but great. I’m not wasting time while I drool on my pillow; things are
getting done.
HONEY IS my protector. Consider this: For some reason, the Colorado Tourism Board e-mails me all
the time. (Most recently, they informed me about a festival in Colorado Springs featuring the world’s
most famous harlequin.) I request that Honey gently ask them to stop with the press releases. Here’s what
she sent:
Dear All,
Jacobs often receives mails from Colorado news, too often. They are definitely interesting topics.
However, these topics are not suitable for “Esquire.”
Further, we do understand that you have taken a lot of initiatives working on these articles and
sending it to us. We understand. Unfortunately, these articles and mails are too time consuming to be
read.
Currently, these mails are not serving right purpose for both of us. Thus, we request to stop sending
these mails.
We do not mean to demean your research work by this.
We hope you understand too.
Thanking you,
Honey K B
That is the best rejection notice in journalism history. It’s exceedingly polite, but there’s a little
undercurrent of indignation. Honey seems almost outraged that Colorado would waste the valuable time
of Jacobs.
I DECIDE to test the next logical relationship: my marriage. These arguments with my wife are killing
me—partly because Julie is a much better debater than I am. Maybe Asha can do better:
Hello Asha,
My wife got annoyed at me because I forgot to get cash at the automatic bank machine … I wonder
if you could tell her that I love her, but gently remind her that she too forgets things—she has lost her
wallet twice in the last month. And she forgot to buy nail clippers for Jasper.
AJ
I can’t tell you what a thrill I got from sending that note. It’s pretty hard to get much more passiveaggressive
than bickering with your wife via an e-mail from a subcontinent halfway around the world.
The next morning, Asha CC’d me on the e-mail she sent to Julie.
Julie,
Do understand your anger that I forgot to pick up the cash at the automatic machine. I have been
forgetful and I am sorry about that.
But I guess that doesn’t change the fact that I love you so much….
Love
AJ
P. S. This is Asha mailing on behalf of Mr. Jacobs.
As if that weren’t enough, she also sent Julie an e-card. I click on it: two teddy bears embracing, with
the words, “Anytime you need a hug, I’ve got one for you…. I’m sorry.”
Damn! My outsourcers are too friggin’ nice! They kept the apology part but took out my little jabs.
They are trying to save me from myself. They are superegoing my id. I feel castrated.
Julie, on the other hand, seems quite pleased: “That’s nice, sweetie. I forgive you.”
DESPITE THREE weeks with my support team, I’m still stressed. Perhaps it’s the fault of Chicken
Dance Elmo, whom my son loves to the point of dry humping, but who is driving me slowly insane.
Whatever the reason, I figure it’s time to conquer another frontier: outsourcing my inner life.
First, I try to delegate my therapy. My plan is to give Asha a list of my neuroses and a childhood
anecdote or two, have her talk to my shrink for 50 minutes, then relay the advice. Smart, right? My
shrink refused. Ethics or something. Fine. Instead, I have Asha send me a meticulously researched memo
on stress relief. It had a nice Indian flavor to it, with a couple of yogic postures and some visualization.
This was okay, but it didn’t seem quite enough. I decided I needed to outsource my worry. For the last
few weeks I’ve been tearing my hair out because a business deal is taking far too long to close. I asked
Honey if she would be interested in tearing her hair out in my stead. Just for a few minutes a day. She
thought it was a wonderful idea. “I will worry about this every day,” she wrote. “Do not worry.”
The outsourcing of my neuroses was one of the most successful experiments of the month. Every time
I started to ruminate, I’d remind myself that Honey was already on the case, and I’d relax. No joke—this
alone was worth it.
At a Glance: Where You Will Be
The future is here. It’s just not widely distributed yet.
—WILLIAM GIBSON, author of Neuromancer; coined term “cyberspace” in 1984
Here is a sneak preview of full automation.
I woke up this morning, and given that it’s Monday, I checked my e-mail for one hour after an
exquisite Buenos Aires breakfast.
Sowmya from India had found a long-lost high school classmate of mine, and Anakool from YMII
had put together Excel research reports for retiree happiness and the average annual hours worked in
different fields. Interviews for this week had been set by a third Indian virtual assistant, who had also
found contact information for the best Kendo schools in Japan and the top salsa teachers in Cuba. In the
next e-mail folder, I was pleased to see that my fulfillment account manager in Tennessee, Beth, had
resolved nearly two dozen problems in the last week—keeping our largest clients in China and South
Africa smiling—and had also coordinated California sales tax filing with my accountants in Michigan.
The taxes had been paid via my credit card on file, and a quick glance at my bank accounts confirmed
that Shane and the rest of the team at my credit card processor were depositing more cash than last
month. All was right in the world of automation.
It was a beautiful sunny day, and I closed my laptop with a smile. For an all-you-can-eat buffet
breakfast with coffee and orange juice, I paid $4 U.S. The Indian outsourcers cost between $4–10 U.S.
per hour. My domestic outsourcers are paid on performance or when product ships. This creates a curious
business phenomenon: Negative cash flow is impossible.
Fun things happen when you earn dollars, live on pesos, and compensate in rupees, but that’s just the
beginning.
But I’m an Employee! How Does This Help Me?
Nobody can give you freedom. Nobody can give you equality or justice or anything. If you’re a
man, you take it.
—MALCOLM X, Malcolm X Speaks
Getting a remote personal assistant is a huge departure point and marks the moment that you learn
how to give orders and be commander instead of the commanded. It is small-scale training wheels for the
most critical of NR skills: remote management and communication.
It is time to learn how to be the boss. It isn’t time-consuming. It’s low-cost and it’s low-risk. Whether
or not you “need” someone at this point is immaterial. It is an exercise.
It is also a litmus test for entrepreneurship: Can you manage (direct and chastise) other people? Given
the proper instruction and practice, I believe so. Most entrepreneurs fail because they jump into the deep
end of the pool without learning to swim first. Using a virtual assistant (VA) as a simple exercise with no
downside, the basics of management are covered in a 2–4-week test costing between $100–400. This is
an investment, not an expense, and the ROI is astounding. It will be repaid in a maximum of 10–14 days,
after which it is pure timesaving profit.
Becoming a member of the NR is not just about working smarter. It’s about building a system to
replace yourself.
This is the first exercise.
Even if you have no intention of becoming an entrepreneur, this is the ultimate continuation of our
80/20 and elimination process: Preparing someone to replace you (even if it never happens) will produce
an ultrarefined set of rules that will cut remaining fat and redundancy from your schedule. Lingering
unimportant tasks will disappear as soon as someone else is being paid to do them.
But what about the cost?
This is a hurdle that is hard for most. If I can do it better than an assistant, why should I pay them at
all? Because the goal is to free your time to focus on bigger and better things.
This chapter is a low-cost exercise to get you past this lifestyle limiter. It is absolutely necessary that
you realize that you can always do something more cheaply yourself. This doesn’t mean you want to
spend your time doing it. If you spend your time, worth $20–25 per hour, doing something that someone
else will do for $10 per hour, it’s simply a poor use of resources. It is important to take baby steps
toward paying others to do work for you. Few do it, which is another reason so few people have their
ideal lifestyles.
Even if the cost is occasionally more per hour than you currently earn, the trade is often worth it. Let’s
assume you make $50,000 and thus $25 per hour (working from 9–5, Monday through Friday, for 50
weeks per year). If you pay a top-notch assistant $30 per hour and he or she saves you one full 8-hour
shift per week, your cost (subtracting what you’re being paid) is $40 to free an extra day. Would you pay
$40 per week to work Monday to Thursday? I would, and I do. Keep in mind that this is a worst-case
cost scenario.
But what if your boss freaks out?
It’s largely a non-issue, and prevention is better than cure. There is no ethical or legal reason for the
boss to know if you choose non-sensitive tasks. The first option is to assign personal items. Time is time,
and if you’re spending time on chores and errands that could be spent better elsewhere, a VA will
improve life and the management learning curve is similar. Second, you can delegate business tasks that
don’t include financial information or identify your company.
Ready to build an army of assistants? Let’s first look at the dark side of delegation. A review is in
order to prevent abuses of power and wasteful behavior.
Delegation Dangers: Before Getting Started
The first rule of any technology used in a business is that automation applied to an efficient
operation will magnify the efficiency. The second is that automation applied to an inefficient
operation will magnify the inefficiency.
—BILL GATES
Have you ever been given illogical assignments, handed unimportant work, or commanded to do
something in the most inefficient fashion possible? Not fun and not productive.
Now it’s your turn to show that you know better. Delegation is to be used as a further step in
reduction, not as an excuse to create more movement and add the unimportant. Remember—unless
something is well-defined and important, no one should do it.
Eliminate before you delegate.
Never automate something that can be eliminated, and never delegate something that can be automated
or streamlined. Otherwise, you waste someone else’s time instead of your own, which now wastes your
hard-earned cash. How’s that for incentive to be effective and efficient? Now you’re playing with your
own dough. It’s something I want you to get comfortable with, and this baby step is small stakes.
Did I mention to eliminate before you delegate?
For example, it is popular among executives to have assistants read e-mail. In some cases this is
valuable. In my case, I use spam filters, autoresponders with FAQs, and automatic forwarding to
outsourcers to limit my e-mail obligation to 10–20 e-mail responses per week. It takes me 30 minutes per
week because I used systems—elimination and automation—to make it so.
Nor do I use an assistant to set meetings and conference calls because I have eliminated meetings. If I
need to set the odd 20-minute call for a given month, I’ll send one two-sentence e-mail and be done
with it.
Principle number one is to refine rules and processes before adding people. Using people to leverage a
refined process multiplies production; using people as a solution to a poor process multiplies problems.
The Menu: A World of Possibilities
I am not interested in picking up crumbs of compassion thrown from the table of someone who
considers himself my master. I want the full menu of rights.
—BISHOP DESMOND TUTU, South African cleric and activist
The next question then becomes, “What should you delegate?” It’s a good question, but I don’t want
to answer it. I want to watch Family Guy.
The truth be told, it is a hell of a lot of work writing about not working. Ritika of Brickwork and
Venky of YMII are more than capable of writing this section, so I’ll just mention two guidelines and
leave the mental hernia of detail work to them.
Golden Rule #1: Each delegated task must be both time-consuming and well-defined. If you’re
running around like a chicken with its head cut off and assign your VA to do that for you, it doesn’t
improve the order of the universe.
Golden Rule #2: On a lighter note, have some fun with it. Have someone in Bangalore or Shanghai
send e-mails to friends as your personal concierge to set lunch dates or similar basics. Harass your
boss with odd phone calls in strong accents from unknown numbers. Being effective doesn’t mean
being serious all the time. It’s fun being in control for a change. Get a bit of repression off your chest
so it doesn’t turn into a complex later.
Getting Personal and Going Howard Hughes
Howard Hughes, the ultrarich filmmaker and eccentric from The Aviator, was notorious for assigning odd
tasks to his assistants. Here are a few from Donald Bartlett’s Howard Hughes: His Life and Madness you
might want to consider.
1. After his first plane crash, Hughes confided in a friend that he believed his recovery was due to his
consumption of orange juice and its healing properties. He believed that exposure to the air diluted the
juice’s potency, so he demanded that fresh oranges be sliced and juiced in front of him.
2. When Hughes was partaking of the nightlife in Las Vegas, his aides were charged with approaching
any girls he took a liking to. If a girl was invited to join the Hughes table and agreed, an aide would
pull out a waiver and agreement for her to sign.
3. Hughes had a barber on call 24/7 but had his hair and nails trimmed about once a year.
4. In his hotel-bound years, Hughes was rumored to have instructed assistants to place a single
cheeseburger in a specific tree outside his penthouse room at a 4:00 P.M. each day, whether he was
there or not.
Such a world of possibilities! Just as the Model-T brought transportation to the masses, virtual
assistants bring eccentric billionaire behavior within reach of each man, woman, and child. Now, that’s
progress.
Without further ado, let me pass the mic. Note that YMII performs both personal and business tasks,
whereas Brickwork focuses solely on business projects. Let’s start with the important but dull stuff and
move quickly from the sublime to the ridiculous. To give a true taste of what to expect, I have not
corrected non-native-sounding English.
Venky: Don’t limit yourself. Just ask us if something is possible. We’ve arranged parties, organized
caterers, researched summer courses, cleaned up accounting books, created 3D drafts based on blueprints.
Just ask us. We could find the closest kid-friendly restaurant to your house for your son’s birthday,
finding out costs and organizing the birthday party. This frees up your time to work or hang out with
your son.
What can we not do? We can’t do anything that would require our physical presence. But you would
be surprised as to how small a set of tasks that is in this day and age.
Here are the most common tasks we handle:
scheduling interviews and meetings web-research following up on appointments, errands, and
tasks online purchases creation of legal documents website maintenance (web design, publishing,
uploading files) that doesn’t require a professional designer
monitoring, editing, and publishing
comments for online discussions posting job vacancies on the web document creation
proofreading and editing documents for spelling and formatting
online research for updating blogs
updating the database for Customer Relationship Management Software
managing recruitment
processes updating invoices and receiving payments voicemail transcription
Ritika at Brickwork added the following:
market research financial research business plans industry analysis market assessment
reports preparing presentations reports and newsletters legal research analytics website
development search engine optimization maintaining and updating databases credit scoring
managing procurement processes
Venky: We have a forgetful client who has us call him all the time with various reminders. One of our
clients on a custom plan has us wake him up every morning. We’ve done the legwork and found people
who fell out of contact after Katrina. Found jobs for clients! My favorite so far: One of our clients has a
pair of trousers that he really likes that aren’t in production anymore. He’s sending them to Bangalore
(from London) to have created exact replicas at a tiny fraction of the price.
Here are a few other YMII custom requests:
Reminding an overzealous client to pay his current parking fines,
as well as not speed and collect parking fines.
Apologizing and sending flowers and cards to spouses of clients.
Charting a diet plan, reminding client on it regularly, ordering
groceries based on the specific diet plan.
Getting a job for a person who lost his job due to outsourcing a
year back. We did the job search, did the cover letters, did the
resume tuning, and got the client a job in 30 days.
Fixing a broken windowpane of a house in Geneva, Switzerland.
Collecting homework information from teacher’s voicemail and e-
mailing it to the client (parents of the kid).
Research on how to tie a shoelace meant for a kid (client’s son).
Find a parking slot for your car in some other city even before you
make the trip.
Ordered garbage bins for home.
Get an authenticated weather forecast and weather report for a
particular time in a particular place on a particular day, five years
ago. This was to be used as supportive evidence for a lawsuit.
Talking to parents in our client’s stead.
Here’s another real example of personal outsourcing from reader David Cross, who got a personal chef
at home for less than $5 per meal. Just thinking of the possibilities is enough to make you start drooling.
He explains:
I wanted to find someone to prepare food I love. I trained as a chef but I am often so busy and as I am
the only one in the house who really cooks, I often don’t have time to prepare the food that makes me
feel the healthiest so I wrote the attached ad and dropped it on Craigslist.
This was a very tight focus—ultraspecific—I had just two applicants in two months—one who was a
2/10 match but the guy we just OK’d was a Hare Krishna follower for many years, lived in India, and his
sample menu proved he knew what he’s doing so we just started him.
The food is absolutely awesome. The hourly rate is *extremely reasonable,* he’s a five-minute detour
when either of us are in town to collect food and I now have delicious Indian food for less than $5 a
meal and it’s as good as anything I’ve ever eaten anywhere.
I’m going to progress to other cuisines now… Thai, Italian, Chinese, etc., and it means when I do have
time to cook I’ll enjoy doing it that much more as I am not the only one cooking!
Indian/Asian Vegetarian Cook Needed
Date: 2007–06–07, 12:25PM PDT
Hello.
We are a local, international family who love Indian and Asian vegetarian food. We are looking for a
cook experienced in this wonderful cuisine to prepare delicious, fresh, healthy, authentic Indian/Asian
vegetarian meals for us.
If you’ve cooked a curry once or twice or need to follow recipes, this position is probably not for you,
but if you know Indian vegetarian cooking in depth and can prepare delicious, healthy, fresh, authentic
Indian vegetarian food then we’d like to hear from you. This could be an ideal opportunity if you are
Indian, Pakistani, Punjabi, etc., and are looking for a great way to apply your experience and love of
Indian vegetarian food, cooking and culture. Knowledge of Ayurved and how this relates to food and
diet is a plus though not essential.
Please reply with details of your experience and some dishes you could prepare. If we like what you
have to offer, we’ll arrange for you to cook a sample meal or two which we will pay you for and then
we’ll see what works out for us all.
This is a part-time position. You will be self-employed and responsible for your own taxes, etc. We’ll
pay you an hourly rate we will agree with you plus grocery bills for the food you prepare. You can
prepare food in your own place and we can arrange to collect it from you, possibly for us to freeze for
later eating. We will work with you to come up with menus and schedules that work out for you and
us.
Thank you for your interest.
Basic Choices: New Delhi or New York?
There are tens of thousands of VAs—how on earth do you find the right one? The resources at the
end of this chapter will show you where to look, but it is overwhelming and confusing unless you have a
few criteria determined in advance.
It often helps to begin with the question “Where on Earth?”
Remote or Local?
“Made in the USA” doesn’t have the ring it used to. The pros of jumping time zones and visiting thirdworld
currency are twofold: People work while you sleep, and the per-hour expense is less. Time savings
and cost savings. Ritika explains the former with an example.
One can give the remote personal assistant in India their assignment when they are leaving work at the
end of the day in New York City, and they will have the presentation ready the next morning. Because
of the time difference with India, assistants can work on it while they are asleep and have it back in their
morning. When they wake up, they will find the completed summary in their inbox. These assistants can
also help them keep pace with what they want to read, for example.
Indian and Chinese VAs, as well as most from other developing countries, will run $4–15 per hour,
the lower end being limited to simple tasks and the higher end including the equivalent of Harvard or
Stanford M.B.A.s and Ph.D.s. Need a business plan to raise funding? Brickwork can provide it for
between $2,500–5,000 instead of $15,000–20,000. Foreign assistance isn’t just for the small time. I know
from firsthand discussions that executives from big five accounting and management consulting firms
routinely charge clients six figures for research reports that are then farmed to India for low four figures.
In the U.S. or Canada, the per-hour range is often $25–100. Seems like an obvious choice, right?
Bangalore 100%? It’s not. The important metric is cost per completed task, not cost per hour.
The biggest challenge with overseas help will be the language barrier, which often quadruples backand-forth
discussion and the ultimate cost. The first time I hired an Indian VA, I made the fundamental
mistake of not setting an hour cap for three simple tasks. I checked in later that week and found he had
spent 23 hours chasing his tail. He had scheduled one tentative interview for the following week, set at
the wrong time! Mind boggling. 23 hours? It ended up costing me, at $10 per hour, $230. The same tasks,
assigned later that week to a native English speaker in Canada, were completed in two hours at $25 per
hour. $50 for more than four times the results. That said, I later requested another Indian VA from the
same firm who was able to duplicate the native speaker results.
How do you know which to choose? That’s the beautiful part: You don’t. It’s a matter of testing a few
assistants to both sharpen your communication skills and determine who is worth hiring and who is
worth firing. Being a results-based boss isn’t as simple as it looks.
There are a number of lessons to be learned here.
First, per-hour cost is not the ultimate determinant of cost. Look at per-task cost. If you need to spend
time restating the task and otherwise managing the VA, determine the time required of you and add this
(using your per-hour rate from earlier chapters) to the end sticker price of the task. It can be surprising.
As cool as it is to say that you have people working for you in three countries, it’s uncool to spend time
babysitting people who are supposed to make your life easier.
Second, the proof is in the pudding. It is impossible to predict how well you will work with a given
VA without a trial. Luckily, there are things you can do to improve your odds, and one of them is using a
VA firm instead of a solo operator.
Solo vs. Support Team
Let’s suppose you find the perfect VA. He or she is performing all of your noncritical tasks and you’ve
decided to take a much-deserved vacation to Thailand. It’s nice to know someone besides you will be
manning the wheel and putting out fires for a change. Finally, some relief! Two hours before your flight
from Bangkok to Phuket, you receive an e-mail: Your VA is out of commission and will be in the
hospital for the next week. Not good. Vacation FUBAR.
I don’t like being dependent on one person, and I don’t recommend it in the least. In the world of high
technology, this type of dependency would be referred to as a “single point of failure”—one fragile item
upon which all else depends. In the world of IT, 15 the term “redundancy” is used as a selling point for
systems that continue to function if there is a malfunction or mechanical failure in any given part. In the
context of VAs, redundancy entails having fallback support.
I recommend that you hire a VA firm or VAs with backup teams instead of sole operators. Examples
abound, of course, of people who have had a single assistant for decades without incident, but I suggest
that this is the exception rather than the rule. Better safe than sorry. Besides simple disaster avoidance, a
group structure provides a pool of talent that allows you to assign multiple tasks without bothering to find
a new person with the qualifications. Brickwork and YMII both exemplify this type of structure and
provide a single point of contact, a personal account manager, who then farms out your tasks to the
most-capable people in the group and across different shifts. Need graphic design? Covered. Need
database management? Covered. I don’t like calling and coordinating multiple people. I want one-stop
shopping and am willing to pay 10% more to have it. I encourage you to be similarly pound-wise and
penny-foolish.
Team preference doesn’t mean that bigger is better, just that multiple people are better than one
person. The best VA I have used to date is an Indian with five backup assistants under him. Three can be
more than sufficient, but two is toeing the line.
The #1 Fear: “Sweetheart, Did You Buy
a Porsche in China?”
I’m sure you might have your fears. AJ certainly did:
My outsourcers now know an alarming amount about me—not just my schedule but my cholesterol, my
infertility problems, my Social Security number, my passwords (including the one that is a particularly
adolescent curse word). Sometimes I worry that I can’t piss off my outsourcers or I’ll end up with a
$12,000 charge on my MasterCard bill from the Louis Vuitton in Anantapur.
The good news is that misuse of financial and confidential information is rare. In all of the interviews I
conducted for this section, I could find only one case of information abuse, and I had to search long and
hard. It involved an overworked U.S.-based VA who hired freelance help at the last moment.
Commit to memory the following—never use the new hire. Prohibit small-operation VAs from
subcontracting work to untested freelancers without your written permission. The more established and
higher-end firms, Brickwork in the below example, have security measures that border on excessive and
make it simple to pinpoint abusers in the case of a breach:
Employees undergo background checks and sign NDAs
(nondisclosure agreements) in accordance with the company
policy of maintaining confidentiality of client information
Electronic access card for entry and exit
Credit card information keyed only by select supervisors
Removal of paper from the offices is prohibited
VLAN-based access restrictions between different teams; this
ensures that there is no unauthorized access of information
between people of different teams in the organization
Regular reporting on printer logs
Floppy drives and USB ports disabled
BS779 certification for accomplished international security
standards
128-bit encryption technology for all data exchange
Secure VPN connection
I bet there is a fair chance that sensitive data is 100 times safer with Brickwork than on your own
computer.
Still, information theft is best thought of as inevitable in a digital world, and precautions should be
taken with damage control in mind. There are two rules that I use to minimize damage and allow for fast
repair.
1. Never use debit cards for online transactions or with remote assistants. Reversing unauthorized credit
card charges, particularly with American Express, is painless and near instantaneous. Recovering funds
withdrawn from your checking account via unauthorized debit card use takes dozens of hours in
paperwork alone and can take months to receive, if approved at all.
2. If your VA will be accessing websites on your behalf, create a new unique login and password to be
used on those sites. Most of us reuse both logins and passwords on multiple sites, and taking this
precaution limits possible damage. Instruct them to use these unique logins to create accounts on new
sites if needed. Note that this is particularly important when using assistants who have access to live
commercial websites (developers, programmers, etc.).
If information or identity theft hasn’t hit you, it will. Use these guidelines and you’ll realize when it
happens that, just like most nightmares, it’s not that big a deal and is reversible.
The Complicated Art of Simplicity:
Common Complaints
My assistant is an idiot! It took him 23 hours to book an interview! This was the first complaint I
had, for sure. 23 hours! I was heated up for a shouting match. My original e-mail to this first assistant
seemed clear enough.
Dear Abdul,
Here are the first tasks, due at the end of next Tuesday. Please call or e-mail with any questions:
1. Go to this article http://www.msnbc.msn.com/id/12666060/site/newsweek/, get the phone/email/website
contacts for Carol Milligan and Marc and Julie Szekely. Also find the same info for Rob
Long here http://www.msnbc.msn.com/id/12652789/site/newsweek/.
2. Schedule 30-minute interviews for Carol, Marc/Julie, and Rob. Use www.myevents.com
(username: notreal, password: donttryit) to book them in my calendar for next week any time between
9–9 ET.
3. Find the name, e-mail, and phone (phone is least important) of workers in the U.S. who have
negotiated remote work agreements (telecommuting) despite resistant bosses. Those who have
traveled outside the U.S. are ideal. Other keywords could include “teleworking” and
“telecommuting.” The important factor is that they negotiated with difficult bosses. Please send me
links to their profiles or write a paragraph describing why they fit the profile above.
Look forward to seeing what you can do. Please e-mail if you don’t understand or have questions.
Best,
Tim
The truth is—I was at fault. This is not a good debut demand, and I made fatal mistakes even before
composing it. If you are an effective person but unaccustomed to issuing commands, assume that most
problems at the outset are your fault. It is tempting to immediately point the finger at someone else and
huff and puff, but most beginner bosses repeat the same mistakes I made.
1. I accepted the first person the firm provided and made no special requests at the outset.
Request someone who has “excellent” English and indicate that phone calls will be required (even if not).
Be fast to request a replacement if there are repeated communication issues.
2. I gave imprecise directions.
I asked him to schedule interviews but didn’t indicate that it was for an article. He assumed, based on
work with previous clients, that I wanted to hire someone and he misspent time compiling spreadsheets
and combing online job sites for additional information I didn’t need.
Sentences should have one possible interpretation and be suitable for a 2nd-grade reading level. This
goes for native speakers as well and will make requests clearer. Ten-dollar words disguise imprecision.
Note that I asked him to respond if he didn’t understand or had questions. This is the wrong approach.
Ask foreign VAs to rephrase tasks to confirm understanding before getting started.
3. I gave him a license to waste time.
This brings us again to damage control. Request a status update after a few hours of work on a task to
ensure that the task is both understood and achievable. Some tasks are, after initial attempts, impossible.
4. I set the deadline a week in advance.
Use Parkinson’s Law and assign tasks that are to be completed within no more than 72 hours. I have had
the best luck with 48 and 24 hours. This is another compelling reason to use a small group (three or
more) rather than a single individual who can become overtaxed with last-minute requests from multiple
clients. Using short deadlines does not mean avoiding larger tasks (e.g., business plan), but rather
breaking them into smaller milestones that can be completed in shorter time frames (outline, competitive
research summaries, chapters, etc.).
5. I gave him too many tasks and didn’t set an order of importance.
I advise sending one task at a time whenever possible and no more than two. If you want to cause your
computer to hang or crash, open 20 windows and applications at the same time. If you want to do the
same to your assistant, assign him or her a dozen tasks without prioritizing them. Recall our mantra:
Eliminate before you delegate.
WHAT DOES A good VA task e-mail look like? The following example was recently sent to an Indian VA
whose results have been nothing short of spectacular:
Dear Sowmya,
Thank you. I would like to start with the following task.
TASK: I need to find the names and e-mails of editors of men’s magazines in the US (for example:
maxim, stuff, GQ, esquire, blender, etc.) who also have written books. An example of such a person
would be AJ Jacobs who is Editor-at-Large of Esquire (www.ajjacobs.com). I already have his
information and need more like him.
Can you do this? If not, please advise. Please reply and confirm what you will plan to do to
complete this task.
DEADLINE: Since I’m in a rush, get started after your next e-mail and stop at 3 hours and tell me
what results you have. Please begin this task now if possible. The deadline for these 3 hours and
reported results is end-of-day ET Monday.
Thank you for your fastest reply,
Tim
Short, sweet, and to the point. Clear writing, and therefore clear commands, come from clear thinking.
Think simple.
IN THE NEXT several chapters, the communication skills you develop with our virtual assistant experiment
will be applied to a much larger and obscenely profitable playing field: automation. The extent to which
you will outsource next makes delegation look like finger painting.
In the world of automation, not all business models are created equal. How do you assemble a
business and coordinate all its parts without lifting a finger? How do you automate cash deposits in your
bank account while avoiding the most common problems? It begins with understanding the options, the
art of dodging information flow, and what we will call “muses.”
The next chapter is a blueprint for the first step: a product.
Go with the Flow
Here is a flowchart of 4HWW from reader Jed Wood, who has used it for faster decision making,
more output with less input, and more time with his wife and children.
Q&A: QUESTIONS AND ACTIONS
1. Get an assistant—even if you don’t need one.
Develop the comfort of commanding and not being commanded. Begin with a one-time test project or
small repetitive task (daily preferred). I advise using domestic help for language-intensive tasks and using
foreign assistants in the early stages to improve the general clarity of your communication. Pick one
from each group and get started.
The following sites, split up geographically, are useful resources.
U.S. and Canada ($20/hour+)
http://www.iavoa.com (International Association of Virtual Office Assistants). Global directory that
includes the U.S.
http://www.cvac.ca (Canadian Virtual Assistant Connection)
http://www.canadianva.net/files/va-locator.html (Canada)
www.onlinebusinessmanager.com
North America and International ($4/hour+)
www.elance.com (Search “virtual assistants,” “personal assistants,” and “executive assistants.”) The
client feedback reviews on Elance enabled me to find my best VA to date, who costs $4/hour. Similar
marketplaces with positive reviews include www.guru.com and www.rentacoder.com.
India
www.tryasksunday.com ($20–60 per month for 24/7 concierge, free one-week trial). AskSunday is one
of the sophisticated new kids on the personal outsourcing block. Their site was nominated the #2 website
of the year in 2007 by Time magazine. Just dial a 212 (NYC) area code and get routed to well-spoken
assistants in India and the Philippines. I use this service 80% of the time, as most tasks take less than 10
minues to complete. For longer projects, there are teams available for $12/hour.
www.b2kcorp.com ($15/hour+) From Fortune 10 oil companies and Fortune 500 clients to Big 5
accounting firms and U.S. congressmen, Brickwork can handle it all. This is reflected in the costs of this
pure suit-and-tie operation—business only. No flowers for auntie.
www.taskseveryday.com ($6.98/hour for a dedicated virtual assistant) Based in Mumbai, available via
phone and e-mail from the U.S., UK, and Australia. Must choose between 20 or 40 hours per week and
pre-purchase hours.
www.yourmaninindia.com ($6.25/hour+) YMII handles both business and personal tasks and can work
with you in real time (there are people on duty 24/7) and complete work while you sleep. English
capability and effectiveness vary tremendously across VAs, so interview yours before getting started or
assigning important tasks. Important: Following the publication of the first edition of this book, there
have been some complaints of lower quality and up to four-week wait lists to become a client.
2. Start small but think big.
Tina Forsyth, an online business manager (higher-level VA) who helps six-figure-income clients achieve
seven figures with business model redesigns, makes the following recommendations.
Look at your to-do list—what has been sitting on it the longest?
Each time you are interrupted or change tasks, ask, “Could a VA
do this?”
Examine pain points—what causes you the most frustration and
boredom?
Here are a few common time-consumers in small businesses with online presences.
Submitting articles to drive traffic to site and build mailing lists
Participating in or moderating discussion forums and message
boards
Managing affiliate programs
Creating content for and publishing newsletters and blog postings
Background research components of new marketing initiatives or
analysis of current marketing results
Don’t expect miracles from a single VA, but don’t expect too little, either. Let go of the controls a bit.
Don’t assign crap tasks that end up consuming rather than saving time. It makes little sense to spend 10–
15 minutes sending an e-mail to India to get a price quote on a plane ticket when you could do the same
online in 10 minutes and avoid all the subsequent back-and-forth.
Push outside your comfort zone—that is the entire point of the exercise.
It is always possible to reclaim a task for yourself if the VA proves incapable, so test the limits of their
capabilities. Remember Brickwork’s suggestion: Don’t limit yourself.
3. Identify your top five time-consuming non-work tasks and five personal tasks you could assign
for sheer fun.
4. Keep in sync: scheduling and calendars.
If you decide to have an assistant schedule appointments and add things to your calendar, it will be
important to ensure what you both see is updated. There are several options:
BusySync (www.busysync.com) I have two Gmail accounts: one private account for me and one for my
assistant, where general e-mail is sent. I use BusySync to synchronize her Google Calendar with iCal
(Mac calendar) on my laptop. I have also used SpanningSync (www.spanningsync.com) successfully for
the same purpose.
WebEx Office (www.weboffice.com) Share your calendar online while masking personal appointments.
Can be synchronized with Outlook, and also offers document sharing and other assistant- or teamfriendly
features. I suggest you compare this to synchronizing your Outlook with an assistant’s Google
Calendar.
COMFORT CHALLENGE
Use the Criticism Sandwich (2 Days and Weekly)
Chances are good that someone—be it a co-worker, boss, customer, or significant other—does
something irritating or at a subpar level. Rather than avoid the topic out of fear of confrontation, let’s
chocolate-coat it and ask them to fix it. Once per day for two days, and then each Thursday (M-W is too
tense and Friday is too relaxed) for the next three weeks, resolve to use what I call the Criticism
Sandwich with someone. It’s called the Criticism Sandwich because you first praise the person for
something, then deliver the criticism, and then close with topic-shifting praise to exit the sensitive topic.
Here’s an example with a superior or boss, with keywords and phrases in italics.
You: Hi, Mara. Do you have a second?
Mara: Sure. What’s up?
You: First, I wanted to thank you for helping me with the Meelie Worm account [or whatever]. I really
appreciate you showing me how to handle that. You’re really good at fixing the technical issues.
Mara: No problem.
You: Here’s the thing. 16 There is a lot of work coming down on everyone, and I’m feeling 17 a bit
overwhelmed. Normally, priorities are really clear to me 18 but I’ve been having trouble recently figuring
out which tasks are highest on the list. Could you help me by pointing out the most important items when
a handful need to be done? I’m sure it’s just me, 19 but I’d really appreciate it, and I think it would help.
Mara: Uhh … I’ll see what I can do.
You: That means a lot to me. Thanks. Before I forget, 20 last week’s presentation was excellent.
Mara: Did you think so? Blah, blah, blah …
LIFESTYLE DESIGN IN ACTION
THE BEST TIMES TO SEND E-MAIL
You’ve suggested people check e-mail only a few times a day. Here’s a twist: I reply to e-mails
when it’s convenient, but I time it to arrive when it’s also convenient for me. In Outlook you can
delay e-mail delivery to any time of day. For example, when I return e-mails at 3 p.m., I don’t want
my staff instantly zinging me responses or clarifying questions. (This also prevents e-mail chats.) So I
hit send, but it’s delayed to arrive later in the evening or at 8 A.M. when my employees arrive the
next day. This is how e-mail was meant to be! It’s mail, not a chat service.
—JIM LARRANAGA
14. To leverage global pricing and currency differences for profit or lifestyle purposes.
15. Information technology.
16. Don’t call it a problem if you can avoid it.
17. No one can argue with your feelings, so use this to avoid a debate about external circumstances.
18. Notice how I take “you” out of the sentence to avoid finger-pointing, even though it’s implicit.
“Normally, you make priorities clear” sounds like a backhanded insult. If this is a significant other,
you can skip this formality, but never use “you always do X,” which is just a fight starter.
19. Take a little bit of the heat off with this. The point has already been made.
20. “Before I forget” is a great segue to the closing compliment, which is also a topic shifter and gets
you off the sensitive topic without awkwardness.
Income Autopilot I
FINDING THE MUSE
Just set it and forget it!
—RON POPEIL, founder of RONCO; responsible for more than $1 billion in sales of rotisserie
chicken roasters
As to methods there may be a million and then some, but principles are few. The man who
grasps principles can successfully select his own methods. The man who tries methods,
ignoring principles, is sure to have trouble.
—RALPH WALDO EMERSON
The Renaissance Minimalist
Douglas Price was waking up to another beautiful summer morning in his Brooklyn brownstone. First
things first: coffee. The jet lag was minor, considering he had just returned from a two-week jaunt
through the islands of Croatia. It was just one of six countries he had visited in the last 12 months. Japan
was next on the agenda.
Buzzing with a smile and his coffee mug in hand, he ambled over to his Mac to check on personal e-
mail first. There were 32 messages and all brought good news.
One of his friends and business partners, also a cofounder of Limewire, had an update: Last Bamboo,
their start-up poised to reinvent peer-to-peer technology, was rounding the final corners of development.
It could be their billion-dollar baby, but Doug was letting the engineers run wild first.
Samson Projects, one of the hottest contemporary art galleries in Boston, had compliments for Doug’s
latest work and requests for expanded involvement with new exhibits as their sound curator.
The last e-mail in his inbox was a fan letter addressed to “Demon Doc” and praise for his latest
instrumental hip-hop album, onliness VI.O.I. Doug had released his album as what he termed “open
source music”—anyone could download the album for free and use sounds from any track in his or her
own compositions.
He smiled again, polished off his dark roast, and opened a window to deal with business e-mail next.
It would take much less time. In fact, less than 30 minutes for the day and 2 hours for the week.
How much things change.
Two years earlier, in June of 2004, I was in Doug’s apartment checking e-mail for what I hoped would
be the last time for a long time. I was headed to JFK Airport in New York in a matter of hours and was
preparing for an indefinite quest around the world. Doug looked on with amusement. He had similar
plans for himself and was finally extricating himself from a venture-funded Internet startup that had once
been a cover story and his passion but was now just a job. The euphoria of the dot-com era was long
dead, along with most chances for a sale or an IPO.
He bid me farewell and made a decision as the taxi pulled from the curb—enough of the complicated
stuff. It was time to return to basics.
Prosoundeffects.com, launched in January of 2005 after one week of sales testing on eBay, was
designed to do one thing: give Doug lots of cash with minimal time investment.
This brings us back to his business inbox in 2006.
There are 10 orders for sound libraries, CDs that film producers, musicians, video game designers, and
other audio professionals use to add hard-to-find sounds—whether the purr of a lemur or an exotic
instrument—to their own creations. These are Doug’s products, but he doesn’t own them, as that would
require physical inventory and upfront cash. His business model is more elegant than that. Here is just
one revenue stream:
1. A prospective customer sees his Pay-Per-Click (PPC) advertising on Google or other search
engines and clicks through to his site, www.prosoundeffects.com.
2. The prospect orders a product for $325 (the average purchase price, though prices range from $29–
7,500) on a Yahoo shopping cart, and a PDF with all their billing and shipping information is
automatically e-mailed to Doug.
3. Three times a week, Doug presses a single button in the Yahoo management page to charge all his
customers’ credit cards and put cash in his bank account. Then he saves the PDFs as Excel purchase
orders and e-mails the purchase orders to the manufacturers of the CD libraries. Those companies
mail the products to Doug’s customers—this is called drop-shipping—and Doug pays the
manufacturers as little as 45% of the retail price of the products up to 90 days later (net-90 terms).
Let’s look at the mathematical beauty of his system for full effect.
For each $325 order at his cost of 55% off retail, Doug is entitled to $178.75. If we subtract 1% of the
full retail price (1% of $325 = $3.25) for the Yahoo Store transaction fee and 2.5% for the credit card
processing fee (2.5% of $325 = $8.13), Doug is left with a pretax profit of $167.38 for this one sale.
Multiply this by 10 and we have $1673.80 in profit for 30 minutes of work. Doug is making $3,347.60
per hour and purchases no product in advance. His initial start-up costs were $1,200 for the webpage
design, which he recouped in the first week. His PPC advertising costs approximately $700 per month
and he pays Yahoo $99 per month for their hosting and shopping cart.
He works less than two hours a week, often pulls more than $10,000 per month, and there is no
financial risk whatsoever.
Now Doug spends his time making music, traveling, and exploring new businesses for excitement.
Prosoundeffects.com is not his end-all-be-all, but it has removed all financial concerns and freed his
mind to focus on other things.
What would you do if you didn’t have to think about money? If you follow the advice in this chapter,
you will soon have to answer this question.
It’s time to find your muse.
THERE ARE A million and one ways to make a million dollars. From franchising to freelance consulting,
the list is endless. Fortunately, most of them are unsuited to our purpose. This chapter is not for people
who want to run businesses but for those who want to own businesses and spend no time on them.
The response I get when I introduce this concept is more or less universal: Huh?
People can’t believe that most of the ultrasuccessful companies in the world do not manufacture their
own products, answer their own phones, ship their own products, or service their own customers. There
are hundreds of companies that exist to pretend to work for someone else and handle these functions,
providing rentable infrastructure to anyone who knows where to find them.
Think Microsoft manufactures the Xbox 360 or that Kodak designs and distributes their digital
cameras? Guess again. Flextronics, a Singapore-based engineering and manufacturing firm with
locations in 30 countries and $15.3 billion in annual revenue, does both. Most popular brands of
mountain bikes in the U.S. are all manufactured in the same three or four plants in China. Dozens of call
centers press one button to answer calls for the JC Penneys of the world, another to answer calls for the
Dell Computers of the world, and yet another to answer calls for the New Rich like me.
It’s all beautifully transparent and cheap.
Before we create this virtual architecture, however, we need a product to sell. If you own a service
business, this section will help you convert expertise into a downloadable or shippable good to escape the
limits of a per-hour-based model. If starting from scratch, ignore service businesses for now, as constant
customer contact makes absence difficult. 21
To narrow the field further, our target product can’t take more than $500 to test, it has to lend itself to
automation within four weeks, and—when up and running—it can’t require more than one day per week
of management.
Can a business be used to change the world, like The Body Shop or Patagonia? Yes, but that isn’t our
goal here.
Can a business be used to cash out through an IPO or sale? Yes, but that isn’t our goal either.
Our goal is simple: to create an automated vehicle for generating cash without consuming time. That’s
it. 22 I will call this vehicle a “muse” whenever possible to separate it from the ambiguous term
“business,” which can refer to a lemonade stand or a Fortune 10 oil conglomerate—our objective is more
limited and thus requires a more precise label.
So first things first: cash flow and time. With these two currencies, all other things are possible.
Without them, nothing is possible.
Why to Begin with the End in Mind: A Cautionary Tale
Sarah is excited.
It has been two weeks since her line of humorous T-shirts for golfers went online, and she is averaging
5 T-shirt sales per day at $15 each. Her cost per unit is $5, so she is grossing $50 in profit (minus 3% in
credit card fees) per 24 hours, as she passes shipping and handling on to customers. She should soon
recoup the cost of her initial order of 300 shirts (including plate charges, setup, etc.)—but wants to earn
more.
It’s a nice reversal of fortune, considering the fate of her first product. She had spent $12,000 to
develop, patent, and manufacture a high-tech stroller for new moms (she has never been a new mom),
only to find that no one was interested.
The T-shirts, in contrast, were actually selling, but sales were beginning to slow.
It appears she has reached her online sales ceiling, as well-funded and uneducated competitors are now
spending too much for advertising and driving up costs. Then it strikes her—retail!
Sarah approaches the manager of her local golf shop, Bill, who immediately expresses interest in
carrying the shirts. She’s thrilled.
Bill asks for the customary 40% minimum discount for wholesale pricing. This means her sell price is
now $9 instead of $15 and her profit has dropped from $10 to $4. Sarah decides to give it a shot and
does the same with three other stores in surrounding towns. The shirts begin to move off the shelves, but
she soon realizes that her small profit is being eaten by extra hours she spends handling invoices and
additional administration.
She decides to approach a distributor 23 to alleviate this labor, a company that acts as a shipping
warehouse and sells products from various manufacturers to golf stores nationwide. The distributor is
interested and asks for its usual pricing—70% off of retail or $4.50—which would leave Sarah 50 cents
in the hole on each unit. She declines.
To make matters worse, the four local stores have already started discounting her shirts to compete
among one another and are killing their own profit margins. Two weeks later, reorders disappear. Sarah
abandons retail and returns to her website demoralized. Sales online have dropped to almost nothing with
new competition. She has not recouped her initial investment, and she still has 50 shirts in her garage.
Not good.
It all could have been prevented with proper testing and planning.
ED “MR. CREATINE” BYRD is no Sarah. He does not invest and hope for the best.
His San Francisco–based company, MRI, had the top-selling sports supplement in the U.S. from
2002–2005, NO 2 . It is still a top-seller despite dozens of imitators. He did it through smart testing, smart
positioning, and brilliant distribution.
Prior to manufacturing, MRI first offered a low-priced book related to the product through ¼-page
advertisements in men’s health magazines. Once the need had been confirmed with a mountain of book
orders, NO 2 was priced at an outrageous $79.95, positioned as the premium product on the market, and
sold exclusively through GNC stores nationwide. No one else was permitted to sell it.
How can it make sense to turn away business? There are a few good reasons.
First, the more competing resellers there are, the faster your product goes extinct. This was one of
Sarah’s mistakes.
It works like this: Reseller A sells the product for your recommended advertised price of $50, then
reseller B sells it for $45 to compete with A, and then C sells it for $40 to compete with A and B. In no
time at all, no one is making profit from selling your product and reorders disappear. Customers are now
accustomed to the lower pricing and the process is irreversible. The product is dead and you need to
create a new product. This is precisely the reason why so many companies need to create new product
after new product month after month. It’s a headache.
I had one single supplement, BrainQUICKEN® (also sold as BodyQUICK®) for six years and
maintained a consistent profit margin by limiting wholesale distribution, particularly online, to the top
one or two largest resellers who could move serious quantities of product and who agreed to maintain a
minimum advertised pricing. 24 Otherwise, rogue discounters on eBay and mom-and-pop independents
will drive you broke.
Second, if you offer someone exclusivity, which most manufacturers try to avoid, it can work in your
favor. Since you are offering one company 100% of the distribution, it is possible to negotiate better
profit margins (offering less of a discount off of retail price), better marketing support in-store, faster
payment, and other preferential treatment.
It is critical that you decide how you will sell and distribute your product before you commit to a
product in the first place. The more middlemen are involved, the higher your margins must be to maintain
profitability for all the links in the chain.
Ed Byrd realized this and exemplifies how doing the opposite of what most do can reduce risk and
increase profit. Choosing distribution before product is just one example.
Ed drives a Lamborghini down the California coast when not traveling or in the office with his small
focused staff and his two Australian shepherds. This outcome is not accidental. His product-creation
methods—and those of the New Rich in general—can be emulated.
Here’s how you do it in the fewest number of steps.
Step One: Pick an Affordably Reachable Niche Market
When I was younger … I [didn’t] want to be pigeonholed … Basically, now you want to be
pigeonholed. It’s your niche.
—JOAN CHEN, actress; appeared in The Last Emperor and Twin Peaks
Creating demand is hard. Filling demand is much easier. Don’t create a product, then seek someone
to sell it to. Find a market—define your customers—then find or develop a product for them.
I have been a student and an athlete, so I developed products for those markets, focusing on the male
demographic whenever possible. The audiobook I created for college guidance counselors failed because
I have never been a guidance counselor. I developed the subsequent speed-reading seminar after
realizing that I had free access to students, and the business succeeded because—being a student myself
—I understood their needs and spending habits. Be a member of your target market and don’t speculate
what others need or will be willing to buy.
Start Small, Think Big
Some people are just into lavish dwarf entertainment.
–DANNY BLACK (42″), part-owner of Shortdwarf.com 25
Danny Black rents dwarfs as entertainment for $149 per hour. How is that for a niche market?
It is said that if everyone is your customer, then no one is your customer. If you start off aiming to sell
a product to dog- or car-lovers, stop. It’s expensive to advertise to such a broad market, and you are
competing with too many products and too much free information. If you focus on how to train German
shepherds or a restoration product for antique Fords, on the other hand, the market and competition
shrink, making it less expensive to reach your customers and easier to charge premium pricing.
BrainQUICKEN was initially designed for students, but the market proved too scattered and difficult
to reach. Based on positive feedback from student-athletes, I relaunched the product as BodyQUICK and
tested advertising in magazines specific to martial artists and powerlifters. These are minuscule markets
compared to the massive student market, but not small. Low media cost and lack of competition enabled
me to dominate with the first “neural accelerator” 26 in these niches. It is more profitable to be a big fish
in a small pond than a small undefined fish in a big pond. How do you know if it’s big enough to meet
your TMI? For a detailed real-life example of how I determined the market size of a recent product, see
“Muse Math” on this book’s companion site.
Ask yourself the following questions to find profitable niches.
1. Which social, industry, and professional groups do you belong to, have you belonged to, or do
you understand, whether dentists, engineers, rock climbers, recreational cyclists, car restoration
aficionados, dancers, or other?
Look creatively at your resume, work experience, physical habits, and hobbies and compile a list of all
the groups, past and present, that you can associate yourself with. Look at products and books you own,
include online and offline subscriptions, and ask yourself, “What groups of people purchase the same?”
Which magazines, websites, and newsletters do you read on a regular basis?
2. Which of the groups you identified have their own magazines?
Visit a large bookstore such as Barnes & Noble and browse the magazine rack for smaller specialty
magazines to brainstorm additional niches. There are literally thousands of occupation- and
interest/hobby-specific magazines to choose from. Use Writer’s Market to identify magazine options
outside the bookstores. Narrow the groups from question 1 above to those that are reachable through one
or two small magazines. It’s not important that these groups all have a lot of money (e.g., golfers)—only
that they spend money (amateur athletes, bass fishermen, etc.) on products of some type. Call these
magazines, speak to the advertising directors, and tell them that you are considering advertising; ask them
to e-mail their current advertising rate card and include both readership numbers and magazine backissue
samples. Search the back issues for repeat advertisers who sell direct-to-consumer via 800 numbers
or websites—the more repeat advertisers, and the more frequent their ads, the more profitable a
magazine is for them … and will be for us.
Step Two: Brainstorm (Do Not Invest In) Products
Genius is only a superior power of seeing.
—JOHN RUSKIN, famed art and social critic
Pick the two markets that you are most familiar with that have their own magazines with full-page
advertising that costs less than $5,000. There should be no fewer than 15,000 readers.
This is the fun part. Now we get to brainstorm or find products with these two markets in mind.
The goal is come up with well-formed product ideas and spend nothing; in Step 3, we will create
advertising for them and test responses from real customers before investing in manufacturing. There are
several criteria that ensure the end product will fit into an automated architecture.
The Main Benefit Should Be Encapsulated in One Sentence.
People can dislike you—and you often sell more by offending some—but they should never
misunderstand you.
The main benefit of your product should be explainable in one sentence or phrase. How is it different
and why should I buy it? ONE sentence or phrase, folks. Apple did an excellent job of this with the iPod.
Instead of using the usual industry jargon with GB, bandwidth, and so forth, they simply said, “1,000
songs in your pocket.” Done deal. Keep it simple and do not move ahead with a product until you can do
this without confusing people.
It Should Cost the Customer $50–200.
The bulk of companies set prices in the midrange, and that is where the most competition is. Pricing low
is shortsighted, because someone else is always willing to sacrifice more profit margin and drive you
both bankrupt. Besides perceived value, there are three main benefits to creating a premium, high-end
image and charging more than the competition.
1. Higher pricing means that we can sell fewer units—and thus manage fewer customers—and fulfill
our dreamlines. It’s faster.
2. Higher pricing attracts lower-maintenance customers (better credit, fewer complaints/questions,
fewer returns, etc.). It’s less headache. This is HUGE.
3. Higher pricing also creates higher profit margins. It’s safer.
I personally aim for an 8–10x markup, which means a $100 product can’t cost me more than $10–
12.50. 27 If I had used the commonly recommended 5 x markup with BrainQUICKEN, it would have
gone bankrupt within 6 months due to a dishonest supplier and late magazine. The profit margin saved it,
and within 12 months it was generating up to $80,000 per month.
High has its limits, however. If the per-unit price is above a certain point, prospects need to speak to
someone on the phone before they are comfortable enough to make the purchase. This is contraindicated
on our low-information diet.
I have found that a price range of $50–200 per sale provides the most profit for the least customer
service hassle. Price high and then justify.
It Should Take No More Than 3 to 4 Weeks to Manufacture.
This is critically important for keeping costs low and adapting to sales demand without stockpiling
product in advance. I will not pursue any product that takes more than three to four weeks to
manufacture, and I recommend aiming for one to two weeks from order placement to shippable product.
How do you know how long something takes to manufacture?
Contact contract manufacturers who specialize in the type of products you’re considering:
http://www.thomasnet.com/. Call a related manufacturer (e.g., toilet bowls) if you need a referral to a
related manufacturer you cannot find (e.g., toilet cleaning solutions). Still no luck? Google different
synonyms for your product in combination with “organization” and “association” to contact the
appropriate industry organizations. Ask them for referrals to contract manufacturers and for the names of
their trade magazines, which often contain advertisements for contract manufacturers and related service
providers we’ll need for your virtual architecture later. Request pricing from the contract manufacturers
to ensure the proper markup is possible. Determine the per-unit costs of production for 100, 500, 1,000,
and 5,000 units.
It Should Be Fully Explainable in a Good Online FAQ.
Here is where I really screwed up in my product choice with Brain-QUICKEN.
Even though ingestibles have enabled my NR life, I would not wish them on anyone. Why not? You
get 1,000 questions from every customer: Can I eat bananas with your product? Will it make me fart
during dinner? On and on, ad nauseam. Choose a product that you can fully explain in a good online
FAQ. If not, the task of travelling and otherwise forgetting about work becomes very difficult or you end
up spending a fortune on call center operators.
Understanding these criteria, a question remains: “How does one obtain a good muse product that
satisfies them?” There are three options we’ll cover in ascending order of recommendation.
Option One: Resell a Product
Purchasing an existing product at wholesale and reselling it is the easiest route but also the least
profitable. It is the fastest to set up but the fastest to die off due to price competition with other resellers.
The profitable life span of each product is short unless an exclusivity agreement prevents others from
selling it. Reselling is, however, an excellent option for secondary back-end 28 products that can be sold
to existing customers or cross-sold 29 to new customers online or on the phone.
To purchase at wholesale, use these steps.
1. Contact the manufacturer and request a “wholesale pricelist” (generally 40% off retail) and terms.
2. If a business tax ID number is needed, print out the proper forms from your state’s Secretary of
State website and file for an LLC (which I prefer) or similar protective business structure for
$100–200.
Do NOT purchase product until you have completed Step 3 in the next chapter. It is enough at this
point to confirm the profit margin and have product photos and sales literature.
That’s reselling. Not much more to it.
Option Two: License a Product
I not only use all the brains that I have, but all that I can borrow.
—WOODROW WILSON
Some of the world’s best-known brands and products have been borrowed from someone or
somewhere else.
The basis for the energy drink Red Bull came from a tonic in Thailand, and the Smurfs were brought
from Belgium. Pokémon came from the land of Honda. The band KISS made millions in record and
concert sales, but the real profit has been in licensing—granting others the right to produce hundreds of
products with their name and image in exchange for a percentage of sales.
There are two parties involved in a licensing deal, and a member of the New Rich could be either.
First, there is the inventor of the product, 30 called the “licensor,” who can sell others the right to
manufacture, use, or sell his or her product, usually for 3–10% of the wholesale price (usually around
40% off retail) for each unit sold. Invent, let someone else do the rest, and cash checks. Not a bad model.
The other side of the equation is the person interested in manufacturing and selling the inventor’s
product for 90–97% of the profit: the licensee. This is, for me and most NR, more interesting.
Licensing is, however, dealmaking-intensive on both sides and a science unto itself. Creative contract
negotiation is essential and most readers will run into problems if it’s their first product. For real-world
case studies on both sides, ranging from Teddy Ruxpin to Tae-Bo, and full agreements with actual dollar
amounts, visit www.fourhourblog.com. From how to sell inventions without prototypes or patents to how
to secure rights to products as a no-name beginner, it’s all there. The economics are fascinating and the
profits can be astounding.
In the meantime, we will focus on the least complicated and most profitable option open to the most
people: product creation.
Option Three: Create a Product
Creation is a better means of self-expression than possession; it is through creating, not
possessing, that life is revealed.
—VIDA D. SCUDDER, The Life of the Spirit in the Modern English Poets
Creating a product is not complicated. “Create” sounds more involved than it actually is. If the idea is
a hard product—an invention—it is possible to hire mechanical engineers or industrial designers on
www.elance.com to develop a prototype based on your description of its function and appearance, which
is then taken to a contract manufacturer. If you find a generic or stock product made by a contract
manufacturer that can be re-purposed or positioned for a special market, it’s even easier: Have them
manufacture it, stick a custom label on it for you, and presto—new product. This latter example is often
referred to as “private labeling.” Have you ever seen a massage therapist’s office with its own line of
vitamin products or the Kirkland brand at Costco? Private labeling in action.
It is true that we’ll be testing market response without manufacturing, but if the test is successful,
manufacturing is the next step. This means we need to keep in mind setup costs, per-unit costs, and order
minimums. Innovative gadgets and devices are great but often require special tooling, which makes the
manufacturing start-up costs too expensive to meet our criteria.
Putting mechanical devices aside and forgetting about welding and engineering, there is one class of
product that meets all of our criteria, has a manufacturing lead time of less than a week in small
quantities, and often permits not just an 8–10 x markup, but a 20–50 x markup.
No, not heroin or slave labor. Too much bribing and human interaction required.
Information.
Information products are low-cost, fast to manufacture, and time-consuming for competitors to
duplicate. Consider that the top-selling non-information infomercial products—whether exercise
equipment or supplements—have a useful life span of two to four months before imitators flood the
market. I studied economics in Beijing for six months and observed firsthand how the latest Nike sneaker
or Callaway golf club could be duplicated and on eBay within a week of first appearing on shelves in the
U.S. This is not an exaggeration, and I am not talking about a look-alike product—I mean an exact
duplicate for 1/20 the cost.
Information, on the other hand, is too time-consuming for most knockoff artists to bother with when
there are easier products to replicate. It’s easier to circumvent a patent than to paraphrase an entire
course to avoid copyright infringement. Three of the most successful television products of all time—all
of which have spent more than 300 weeks on the infomercial top-10 bestseller lists—reflect the
competitive and profit margin advantage of information products.
No Down Payment (Carlton Sheets)
Attacking Anxiety and Depression (Lucinda Bassett)
Personal Power (Tony Robbins)
I know from conversations with the principal owners of one of the above products that more than $65
million worth of information moved through their doors in 2002. Their infrastructure consisted of fewer
than 25 in-house operators, and the rest of the infrastructure, ranging from media purchasing to shipping,
was outsourced.
Their annual revenue-per-employee is more than $2.7 million. Incredible.
On the opposite end of the market size spectrum, I know a man who created a low-budget how-to
DVD for less than $200 and sold it to owners of storage facilities who wanted to install security systems.
It’s hard to get more niche than that. In 2001, selling DVDs that cost $2 to duplicate for $95 apiece
through trade magazines, he made several hundred thousand dollars with no employees.
But I’m Not an Expert!
If you aren’t an expert, don’t sweat it.
First, “expert” in the context of selling product means that you know more about the topic than the
purchaser. No more. It is not necessary to be the best—just better than a small target number of your
prospective customers. Let’s suppose that your current dreamline—to compete in the 1,150-mile Iditarod
dogsledding race in Alaska—requires $5,000 to realize. If there are 15,000 readers and even 50 (0.33%)
can be convinced of your superior expertise in skill X and spend $100 for a program that teaches it, that
is $5,000. Bring on the Huskies. Those 50 customers are what I call the “minimal customer base”—the
minimum number of customers you need to convince of your expertise to fulfill a given dreamline.
Second, expert status can be created in less than four weeks if you understand basic credibility
indicators. It’s important to learn how the PR pros phrase resume points and position their clients. See
the boxed text later in this chapter to learn how.
The degree to which you personally need expert status also depends on how you obtain your content.
There are three main options.
1. Create the content yourself, often via paraphrasing and combining points from several books on a
topic.
2. Repurpose content that is in the public domain and not subject to copyright protection, such as
government documents and material that predates modern copyright law.
3. License content or compensate an expert to help create content. Fees can be one-time and paid up
front or royalty-based (5–10% of net revenue, for example).
If you choose option 1 or 2, you need expert status within a limited market.
Let’s assume you are a real estate broker and have determined that, like yourself, most brokers want a
simple but good website to promote themselves and their businesses. If you read and understand the three
top-selling books on home-page design, you will know more about that topic than 80% of the readership
of a magazine for real estate brokers. If you can summarize the content and make recommendations
specific to the needs of the real estate market, a 0.5–1.5% response from an ad you place in the magazine
is not unreasonable to expect.
Use the following questions to brainstorm potential how-to or informational products that can be sold
to your markets using your expertise or borrowed expertise. Aim for a combination of formats that will
lend itself to $50–200 pricing, such as a combination of two CDs (30–90 minutes each), a 40-page
transcription of the CDs, and a 10-page quickstart guide. Digital delivery is perfectly acceptable—in
some cases, ideal—if you can create a high enough perceived value.
1. How can you tailor a general skill for your market—what I call “niching down”—or add to what is
being sold successfully in your target magazines? Think narrow and deep rather than broad.
2. What skills are you interested in that you—and others in your markets—would pay to learn? Become
an expert in this skill for yourself and then create a product to teach the same. If you need help or want
to speed up the process, consider the next question.
3. What experts could you interview and record to create a sellable audio CD? These people do not need
to be the best, but just better than most. Offer them a digital master copy of the interview to do with or
sell as they like (this is often enough) and/or offer them a small up-front or ongoing royalty payment.
Use Skype.com with HotRecorder (more on these and related tools in Tools and Tricks) to record these
conversations directly to your PC and send the mp3 file to an online transcription service.
4. Do you have a failure-to-success story that could be turned into a how-to product for others? Consider
problems you’ve overcome in the past, both professional and personal.
The Expert Builder: How to Become a Top Expert in 4 Weeks
It’s time to obliterate the cult of the expert. Let the PR world scorn me. First and foremost, there is a
difference between being perceived as an expert and being one. In the context of business, the former is
what sells product and the latter, relative to your “minimal customer base,” is what creates good products
and prevents returns.
It is possible to know all there is to know about a subject—medicine, for example—but if you don’t
have M.D. at the end of your name, few will listen. The M.D. is what I term a “credibility indicator.” The
so-called expert with the most credibility indicators, whether acronyms or affiliations, is often the most
successful in the marketplace, even if other candidates have more in-depth knowledge. This is a matter
of superior positioning, not deception.
How, then, do we go about acquiring credibility indicators in the least time possible? Emulating the
client-grooming techniques of some of the best PR firms in New York City and Los Angeles isn’t a bad
place to start.
It took a friend of mine just three weeks to become a “top relationship expert who, as featured in
Glamour and other national media, has counseled executives at Fortune 500 companies on how to
improve their relationships in 24 hours or less.” How did she do it?
She followed a few simple steps that created a credibility snowball effect. Here’s how you can do the
same.
1. Join two or three related trade organizations with official-sounding names. In her case, she
chose the Association for Conflict Resolution (www.acrnet.org) and The International Foundation for
Gender Education (www.ifge.org). This can be done online in five minutes with a credit card.
2. Read the three top-selling books on your topic (search historical New York Times bestseller lists
online) and summarize each on one page.
3. Give one free one-to-three-hour seminar at the closest well-known university, using posters to
advertise. Then do the same at branches of two well-known big companies (AT&T, IBM, etc.) located
in the same area. Tell the company that you have given seminars at University X or X College and are
a member of those groups from step 1. Emphasize that you are offering it to them for free to get
additional speaking experience outside of academics and will not be selling products or services.
Record the seminars from two angles for later potential use as a CD/DVD product.
4. Optional: Offer to write one or two articles for trade magazines related to your topics, citing
what you have accomplished in steps 1 and 3 for credibility. If they decline, offer to interview a
known expert and write the article—it still gets your name listed as a contributor.
5. Join ProfNet, which is a service that journalists use to find experts to quote for articles. Getting PR
is simple if you stop shouting and start listening. Use steps 1, 3, and 4 to demonstrate credibility and
online research to respond to journalist queries. Done properly, this will get you featured in media
ranging from small local publications to the New York Times and ABC News.
Becoming a recognized expert isn’t difficult, so I want to remove that barrier now.
I am not recommending pretending to be something you’re not. I can’t! “Expert” is nebulous mediaspeak
and so overused as to be indefinable. In modern PR terms, proof of expertise in most fields is
shown with group affiliations, client lists, writing credentials, and media mentions, not IQ points or
Ph.D.s.
Presenting the truth in the best light, but not fabricating it, is the name of the game.
See you on CNN.
Q&A: QUESTIONS AND ACTIONS
For this hands-on chapter, the Q&A is simple. In fact, it’s more like a Q.
The question is, “Did you read the chapter and follow the directions?” If not, do it! Instead of the
usual Q&A, the end of this chapter and the following two will feature more extensive resources for
taking the action steps described in detail in the text.
COMFORT CHALLENGE
Find Yoda (3 Days)
Call at least one potential superstar mentor per day for three days. E-mail only after attempting a phone
call. I recommend calling before 8:30 A.M. or after 6:00 P.M. to reduce run-ins with secretaries and other
gatekeepers. Have a single question in mind, one that you have researched but have been unable to
answer yourself. Shoot for “A” players—CEOs, ultrasuccessful entrepreneurs, famous authors, etc.—and
don’t aim low to make it less frightening. Use www.contactanycelebrity.com if need be, and base your
script on the following.
Unknown answerer: This is Acme Inc. [or “the office of Mentor X”].
You: Hi, this is Tim Ferriss calling for John Grisham, please. 31
Answerer: May I ask what this is regarding?
You: Sure. I know this might sound a bit odd, 32 but I’m a first-time author and just read his interview in
Time Out New York. 33 I’m a longtime 34 fan and have finally built up the courage to 35 call him for one
specific piece of advice. It wouldn’t take more than two minutes of his time. Is there any way you can
help me get through to him? 36 I really, really appreciate whatever you can do.
Answerer: Hmmm … Just a second. Let me see if he’s available. [two minutes later] Here you go. Good
luck. [rings to another line]
John Grisham: John Grisham here.
You: Hi, Mr. Grisham. My name is Tim Ferriss. I know this might sound a bit odd, but I’m a first-time
author and a longtime fan. I just read your interview in Time Out New York and finally built up the
courage to call. I have wanted to ask you for a specific piece of advice for a long time, and it shouldn’t
take more than two minutes of your time. May I? 37
John Grisham: Uh … OK. Go ahead. I have to be on a call in a few minutes.
You (at the very end of the call): Thank you so much for being so generous with your time. If I have the
occasional tough question—very occasional—is there any chance I could keep in touch via e-mail? 38
LIFESTYLE DESIGN IN ACTION
OVER THE MOON
My 13-year-old daughter would like to be an astronaut when she grows up. Last year she had an
extreme challenge to deal with. The phrase from Apollo 13 “Failure is not an option” sort of became our
motto. I got the idea of contacting the commander of Apollo 13, Jim Lovell. It didn’t take much to find
him and he sent her a wonderful letter about his ordeal just to get into the Apollo program, not to
mention dealing with a crippled spacecraft. His letter made a big difference to my daughter. A couple
months later, we were able to take things a little further by getting her VIP access to a shuttle launch.
—ROB
TOOLS AND TRICKS
Confirming Sufficient Market Size
Compete (www.compete.com) and
Quantcast (www.quantcast.com)
Find the number of monthly visitors for most websites, in addition to the search terms that generate the
most traffic for them.
Writer’s Market ( www.writersmarket.com )
Here you’ll find a listing of thousands of specialty and niche magazines, including circulation and
subscription numbers. I prefer the print version.
Spyfu ( www.spyfu.com )
Download competitors’ online advertising spending, keywords, and ad-word details. Consistent and
repeat spending generally indicates successful advertising ROI.
Standard Rate and Data Services ( www.srds.com )
Check out this resource for annual listings of magazine and company customer mailing lists available for
rent. If you’re considering creating a how-to video for duck hunting, check out the size of customer lists
from hunting gun manufacturers and related magazines first. Use the print version in libraries instead of
paying for the somewhat confusing online access.
Finding Products to Resell or Manufacturing
Affiliate Networks: Clickbank ( www.clickbank.com ),
Commission Junction ( www.cj.com ), Amazon Associates ( www.amazon.com/associates )
No inventory, no invoices. Experimenting with products and categories through affiliate networks such
as Clickbank and Commission Junction, which pay you 10–75% of each purchase, is a fast method for
doing a proof-of-concept using similar products. It’s often worth setting up accounts at both just to
observe how bestselling items are being sold and promoted.
Amazon Associates averages 7–10% commissions, but bestselling books are excellent for testing target
markets for more elaborate informational products. For all of the above: Do not get into bidding wars
against other affiliates using expensive general keywords or overexposed brand names. Go niche or go
broke.
Alibaba ( www.alibaba.com )
Based in China, Alibaba is the world’s largest business-to-business marketplace. From MP3 players for
$9 each to red wine for $2 per bottle, this site is the source. If someone here doesn’t make it, it probably
can’t be made.
Worldwide Brands ( www.worldwidebrands.com )
Offers an extensive how-to guide for finding manufacturers willing to dropship product to your
customers, which allows you to avoid pre-purchasing inventory. This is where Amazon and eBay power
users find not just drop shippers, but also wholesalers and liquidators. Shopster (www.shopster.com) is
also a popular option, with more than 1,000,000 dropship products to choose from.
Thomas’s Register of Manufacturers ( www.thomasnet.com ) (800–699–9822)
Searchable database of contract manufacturers for every conceivable product, from underwear and food
products to airplane parts.
Electronics, DVDs, Books ( www.ingrambook.com , www.techdata.com )
Housewares and Hardware ( www.housewares.org , www.nationalhardwareshow.com ) (847–
292–4200)
For these product categories and related talent (on-screen demonstrations), also consider attending local
or state fairs.
Consumables and Vitamin Products ( www.expoeast.com , expowest.com )
Finding Public Domain Information to Repurpose
Be sure to speak with an intellectual property attorney before using apparent public domain material. If
someone modifies 20% of a public domain work (through abridging and footnotes, for example), their
“new” complete work can be copyrighted. Using it without permission would then be a punishable
infringement. The details can get confusing. Do the beginning research yourself, but get a pro to look
over your findings before moving ahead with product development.
Project Gutenberg ( www.gutenberg.org )
Project Gutenberg is a digital library of more than 15,000 pieces of literature considered to be in the
public domain.
LibriVox ( www.librivox.org )
LibriVox is a collection of audiobooks from the public domain that are available for free download.
Recording Seminars or Phone Interviews with Experts for CD Downloadable Products
HotRecorder ( www.hotrecorder.com ) (PC), Call Recorder (
http://ecamm.com/mac/callrecorder/ ) (Mac)
Use these programs to record any inbound or outbound phone call via computer using Skype
(www.skype.com) and other VoIP programs.
NoCost Conference ( www.nocostconference.com )
Provides a free 800-number conference line, as well as free recording and file retrieval. Normal phones
can be used for call-in, so no computer or web connection is required for participants. If you’ll have a
Q&A, I suggest soliciting attendee questions beforehand to avoid issues with muting/ unmuting of lines.
Jing Project (www.jingproject.com) and DimDim (www.dimdim.com)
If you’d like to record the actions on your screen for video tutorials, both of these free programs will get
the job done. If you need advanced editing features, Jing’s big brother Camtasia is the industry standard
(www.camtasia.com).
Licensing Ideas to Others for Royalties
InventRight ( www.inventright.com ) (800–701–7993)
Stephen Key is the most consistently successful inventor I’ve ever met, with millions in royalties from
companies like Disney, Nestlé, and Coca-Cola. He is not high-tech but specializes in creating simple
products, or improving on existing products, and then licensing (renting) his ideas to large corporations.
He comes up with the idea, files a provisional patent for less than $200, and then lets another company
do the work while he collects checks. This site introduces his fail-proof process for doing the same. His
techniques for cold-calling alone are invaluable. Highly recommended.
Guthy-Renker Corporation (www.guthyrenker.com) (760–773–9022) GRC is the 800-pound
infomercial gorilla. It brings in more than $1.3 billion per year in sales with mega-hits like Tony
Robbins, Proactiv Solution, and Winsor Pilates. Don’t expect more than a 2–4% royalty if you make the
cut, but the numbers are huge enough to make it worth a look. Submit your product online.
Searching Patents for Unexploited Ideas to Turn into Products
United States Patent and Trademark Office (www.uspto.gov)
(800–786–9199)
Licensable Technologies Developed at Universities (
www.autm.net ; see “view all listings” under “Technology
Transfer Offices” )
Inventors Groups and Associations (call and ask if members
have anything to license) (
www.uiausa.org/Resources/InventorGroups.htm
Becoming an Expert
Prof Net via PR Leads (www.prleads.com) and HARO (www.helpareporterout.com)
Receive daily leads from journalists and TV and radio producers looking for experts to cite and interview
for media ranging from local outlets to CNN and the New York Times. Stop swimming upstream and
start responding to stories people are already working on. HARO offers select leads at no cost, and you
can mention my name with PR Leads to get two months for the price of one.
PRWeb Press Releases (www.prwebdirect.com) The press release is dead for most purposes, but
using this service has some serious search-engine benefits, such as appearing at the top of related Google
News and Yahoo! News results.
ExpertClick ( www.expertclick.com )
This is another secret of the PR pros. Put up an expert profile for media to see, receive an up-to-date
database of top media contacts, and send free press releases to 12,000 journalists, all on one website that
gets more than 5 million hits per month. This is how I got on NBC and ended up developing a primetime
TV show. It works. Mention my name on the phone, or use “Tim Ferriss $100” online, to get a
$100 discount.
LIFESTYLE DESIGN IN ACTION
Bon Jour Tim,
I was in Barnes & Noble at the help desk this past Saturday, April 25, waiting for an employee to get a
book for me (Tropic of Cancer if you must know). While I was waiting, I noticed a copy of 4-Hour
Workweek on the counter that someone else had ordered. Not one to be shy, I reached over the counter
and started reading their copy. As you might guess, I had the employee go back and get me my own
copy. Haven’t finished Tropic of Cancer but finished your book …
… On Monday I got a yes when I asked my boss to work two days remotely per week. I start next
week.
On Monday I also booked the most stunning apartment in Paris for the month of September, at a cost
of half of the rent I pay in Southern California. I plan to increase my remote time now through August so
that September will be an easy ask to leave for remote work. If the answer happens to be no (which I
now doubt), I will be prepared to quit my job.
Now at work on my Income Autopilot project.
Tim: amazing. My life has changed in three days. (Plus, your book was funny as hell.) Thank
you!!! —CINDY FRANKEY
21. There are a few limited exceptions, such as online membership sites that don’t require content
generation, but as a general rule, products require much less maintenance and will get you to your
TMI faster.
22. Muses will provide the time and financial freedom to realize your dreamlines in record time, after
which one can (and often does) start additional companies to change the world or sell.
23. Distributors are sometimes also referred to as “wholesalers,” depending on the industry.
24. It is illegal to control how much someone sells your product for, but you can dictate how much
they advertise it for. This is done by including a Minimum Advertised Pricing (MAP) policy in your
General Terms and Conditions (GTC), which are agreed to automatically when a written wholesale
order is placed. Sample GTC and order forms are available at www.fourhourblog.com.
25. The Wall Street Journal, July 18, 2005 (http://www.technologyinvestor.com/login/2004/Jul18–
05.php).
26. This was a new product category that I created to eliminate and preempt the competition. Strive to
be the largest, best, or first in a precise category. I prefer being first.
27. If you decide to resell someone else’s higher-end products like Doug, especially with dropshipping,
the risk is lower and smaller margins can suffice.
28. “Back-end” products are products sold to customers once the sale of a primary product has been
made. iPod covers and car GPS systems are two examples. These products can have lower margins,
because there is no advertising cost to acquire the customer.
29. “Cross-selling” is selling a related product to a customer while they’re still on the phone or in an
online shopping cart after the sale of a primary product has been made. For a full marketing and direct
response (DR) glossary, visit www.fourhourblog.com.
30. This also refers to owners of copyrights or trademarks.
31. Said casually and with confidence, this alone will get you through surprisingly often. “I’d like to
speak with Mr./Ms. X, please” is a dead giveaway that you don’t know them. If you want to up the
chances of getting though but risk looking foolish if they call the bluff, ask for the target mentor by
first name only.
32. I use this type of lead-in whenever making off-the-wall requests. It softens it and makes the
person curious enough to listen before spitting out an automatic “no.”
33. This answers the questions they’ll have in their head: “Who are you and why are you calling
now?” I like to be a “first-time” something to play the sympathy card, and I find a recent media
feature online to cite as the trigger for calling.
34. I call people I’m familiar with. If you can’t call yourself a longtime fan, tell them that you have
followed the mentor’s career or business exploits for a certain number of years.
35. Don’t pretend to be strong. Make it clear you’re nervous and they’ll lower their guard. I often do
this even if I’m not nervous.
36. The wording here is critical. Ask them to “help” you do something.
37. Just rework the gatekeeper paragraph for this, and don’t dillydally—get to the point quickly and
ask for permission to pull the trigger.
38. End the conversation by opening the door for future contact. Start with e-mail and let the
mentoring relationship develop from there.
Income Autopilot II
TESTING THE MUSE
Many of these theories have been killed off only when some decisive experiment exposed their
incorrectness…. Thus the yeoman work in any science … is done by the experimentalist, who
must keep the theoreticians honest.
—MICHIO KAKU, theoretical physicist and cocreator of String Field Theory, Hyperspace
Fewer than 5% of the 195,000 books published each year sell more than 5,000 copies. Teams of
publishers and editors with decades of combined experience fail more times than not. The founder of
Border’s Books lost $375 million of investor funding with WebVan, 39 a nationwide grocery delivery
service. The problem? No one wanted it.
The moral is that intuition and experience are poor predictors of which products and businesses will be
profitable. Focus groups are equally misleading. Ask ten people if they would buy your product. Then
tell those who said “yes” that you have ten units in your car and ask them to buy. The initial positive
responses, given by people who want to be liked and aim to please, become polite refusals as soon as real
money is at stake.
To get an accurate indicator of commercial viability, don’t ask people if they would buy—ask them to
buy. The response to the second is the only one that matters. The approach of the NR reflects this.
Step Three: Micro-Test Your Products
Micro-testing involves using inexpensive advertisements to test consumer response to a product
prior to manufacturing. 40
In the pre-Internet era, this was done using small classified ads in newspapers or magazines that led
prospects to call a prerecorded sales message. Prospects would leave their contact information, and based
on the number of callers or response to a follow-up sales letter, the product would be abandoned or
manufactured.
In the Internet era, there are better tools that are both cheaper and faster. We’ll test the product ideas
from the last chapter on Google Adwords—the largest and most sophisticated Pay-Per-Click (PPC)
engine—in five days for $500 or less. PPC here refers to the highlighted search results that are listed
above and to the right of normal search results on Google. Advertisers pay to have these ads displayed
when people search for a certain term related to the advertisers’ product, such as “cognitive supplement,”
and are charged a small fee from $.05 to over $1 each time someone clicks through to their site. For a
good introduction to Google Adwords and PPC, visit www.google.com/onlinebusiness. For expanded
examples of the following PPC strategies, visit www.fourhourblog.com and search “PPC.”
The basic test process consists of three parts, each of which is covered in this chapter.
Best: Look at the competition and create a more-compelling offer on a basic one-to-three-page website
(one to three hours).
Test: Test the offer using short Google Adwords advertising campaigns (three hours to set up and five
days of passive observation).
Divest or Invest: Cut losses with losers and manufacture the winner(s) for sales rollout.
Let’s use two people, Sherwood and Johanna, and their two product ideas—French sailor shirts and a