Rating: 7 / 10
Altucher's perspective is incredibly interesting. I think that this books has some gems. But also some coal. I haven't read any of his other books (yet), but it felt as if the core message of those books also was the core message of this book.
You want to become an idea machine. You want to be a top-righter in the idea matrix (Idea Machines, Great Artists, Successful Entrepreneurs). An idea-machine person builds many bridges into the world of dreams.
How do you become one? You exercise your idea-muscle. Write down 10 ideas every day. Doesn't matter which kind, or if they're bad or good. Just write down 10.
These are some of the key principles that are spread throughout the book.
We get to pick the hierarchy in which we want to find status. When someone tries to pick a fight, it's a primitive form of status clinging. They feel that their status isn't high enough. So we can ignore them.
Take care of these four areas of your life. Aim for at least one percent improvement a day.
Physical: Sleep well, eat well, and exercise (maybe just taking a walk).
Emotional: Be around people who love you and who you love. Ignore everyone else. Don't engage with someone who is bad to you.
Mental: Write down 10 ideas every day.
Spiritual: Don't complain. Practice gratitude. Distance yourself from anxiety by saying "I notice I'm feeling anxious".
"Do this Daily Practice every day for six months, even just a tiny bit, and I guarantee your life will be completely different — for the better".
Don't worry about finding your passion. You'll be passionate about what you get/are good at. Don't limit yourself to one passion.
Starting idea: start an "Information product". People will pay for these things: "Get Paid, Get Laid, Lose Weight".
Could be a newsletter or any other kind of information product.
Why? Gives you monopoly. If you have your own twist, it's a niche and you can dominate it before building into other marks. It's has scalability — so you can earn while you sleep. It brands you. If you become an expert, then you are so for life. People associate your name with the niche.
You can test ads on Facebook or something to test if people click and buy. This is not limited to Facebook. You can use any Ad network.
Books you can read: Breakthrough Advertising, The Architecture of Persuasion, or Act Now (by Kevin Harrington).
Free is not bad. You want to write for free as much as possible and for as many sites as possible to build up your brand. But don't always do it.
Try coming up with 10 ideas you can write newsletters about.
Everyone is an entrepreneur. The only skills you need to be one is an ability to fail, an ability to have ideas and to sell those ideas, the courage to execute on those ideas, and to be persistent so even as you fail you learn and move on to the next adventure.
Or be an entre-ployee. Go beyond your job description. Deliver value.
Having ideas is like a muscle. You have to work at it all the time. It can atrophy.
Ideas are the currency of life. Not money — because money can run out. Money gets depleted until you go broke. But good ideas buy you good experiences, buy you better ideas, buy you better experiences, buy you more time, save your life. Financial wealth is a side effect of the "runner's high" of your idea muscle.
Write down 10 to twenty ideas every day.
Just take a waiter's pad and write. Maybe read beforehand. Don't write too much — keep it short. Just a list.
10 ideas, no less. 4-5 is easy. But above that it gets hard. That's when your brain starts sweating. That's when it gets good. That's the most important part.
If you can't, you're putting too much pressure on yourself. Perfection is the enemy of the idea muscle. Perfectionism is your brain trying to protect yourself from harm — from coming up with bad ideas. Shut off your brain. Allow yourself to come up with bad ideas.
How do you know if an idea is good?
You won't, you don't, you can't, and you shouldn't.
Don't put pressure on yourself to have good ideas. Practice doesn't make perfect, but it makes permanent. So later when you do need good ideas, you can easily have them.
How to execute ideas
Write down 'first steps'. Only that. You don't know what happens after your first step. So don't limit yourself.
No idea is so big that you can't take the first step. If you can't; make it simpler. Don't worry if the idea is bad. It's just practice.
How do I find out if my idea is good?
You have to try multiple ideas and see which ones create excitement among customers and employees, and you can see that people are legitimately using it and excited by it.
Don't be afraid to test, fail, test, fail, try again, repeat, improve, test, fail again, and keep improving. The way to keep improving is to keep coming up with ideas for your business and for other new businesses.
As your idea muscle improves, so will your ability to "fail quickly" — which is much more crucial to hone than executing quickly.
When you you quit on an idea?
You'll know when you shut it down for the right reasons if you keep the other legs of the daily practice in mind (physical, emotional, mental, and spiritual).
How to keep track of ideas?
James throws his out. If it's good, you'll probably remember them and build on them later. But sometimes he finds a good idea in an old list. You should probably just do what fits you.
Which kinds of ideas should one have?
James doesn't only get business ideas. The key is to have fun with it, or else you won't do it. Here's a few ideas:
The most important thing is to come up with ten ideas.
Should you give your ideas away for free?
Ideas are infinite. When you come up with ideas for someone else, always give all the ideas away for free if you think they are good ideas.
Do not develop a scarcity complex around your ideas. Ideas are infinite. But when you start to define your capacity of good ideas, then they instantly become finite for you.
Operate with an abundance mentality, and be grateful for the ideas that you get. Then they'll be infinite, and they'll keep flowing.
Give your ideas for free, and then when you meet others, give more ideas. And if someone wants to pay you and your gut feels this is a good fit, then give even more ideas.
What to do if your ideas keep failing
Sometimes you win, sometimes you don't. All you can do is prepare. So make sure that you prepare, and that you are persistent. If you win, you win. If you lose, you lose.
Selling is natural and necessary. We all do it. So here's a few ways to become better at selling
Be a friend
Learn to say no
Never take no for an answer
Underprice (for example doing a free guest post, which can very much help you in the long run).
Be the source
It's not just about your product. It really isn't. You're not just offering a product. You are offering is your product, services, employees, experiences, ideas, your other customers, and even your competitors. So sell them all.
When you are good at what you do, the product or service you offer is just the way people build the first link to you. It's the top of a huge pyramid.
Sell the dream
Let the people know who you are
Relax and breathe
Lose the "Uhhh. Yeah. Uhhh. Mmm-Hmm. Uh-Huh's"
Remember the four (6) U's
Have and show desire
Learn how to handle objections
Common objections and their solutions:
Being a leader happens right now. It's something you can do without money, without authority, and without anybody. But first, you have to lead yourself. It's a mindset.
Desire more success for others than for yourself
Say "Yes, and..."
Follow the "30-150" rule (AKA the vision rule)
30 150 is a tribe. You can know everyone then.
When you have 150 people, you can know of everyone — but not know everyone. So it's now based on mutual trust. X trusts Y, Y trusts Z and so on...
A good leader tells a visionary story. "We are delivering the best service because..."
Be OK with change
Know the importance of dignity.
Know there's always a good reason and a real reason for everything, and share it
Care about your health
Love what you do
Know how to lead yourself
Don't use powerpoint
Wear comfortable clothes
Remember to pause
Always Be Storytelling
Always be Vulnerable
Don't be a child
Let the other side help you
Make sure your list is bigger than theirs
Know your secret value
If it's not easy, then walk away
Realize that options equal freedom
Think, "It's not me, but what I can do for you"
Know that infinite patience brings immediate results
Negotiate with your gut
Negotiate with your heart
Be aware of the secret negotiation
Prepare everything; script nothing
Remember that the best negotiation is no negotiation
Ask "How can I help others get ahead" rather than "How can I get ahead". Connect people who can benefit from each other is an incredibly useful skill to have.
You build a network by:
Eight Skills You Need to Become a Super-Connector
Often, it's a combination of sub-talents that make you uniquely a master in that one field.
16 hours of work a day just doesn't work. Be concentrated in fewer hours, and then balance out what you do. With this is meant 4 hours on ONE thing. You can probably do more. I'm not sure if I agree here, because I've always been able to do way more. But I'm just noting down the ideas of the author.
Study history — know your industry. Study the people who came before you.
Study your failures. Everyone wants to blame someone. But the key is to study your failures. Take notes about both your wins and losses. You have to think about everything.
Get the repetitions in. You have to be persistent. Remember your experiences, study your failures, note what you did right and what you did wrong, and remember it all for future experiences.
You want to really believe that you can be the best — against all possible rational evidence to the contrary, against everyone trashing you simultaneously. And you must realize that there's a way out. You always have to keep going. You can overcome any obstacle.
Be persistent. Persistence creates luck. It gets you experience. Ask yourself what you can do to move forward, right now — in that moment in time.
There's a gap between what you want, and what you have. That gap is your excuses. So instead, look at it like this: 'is that all it takes?'. All it takes to close the gap is to be creative and to work your way through the excuses.
You don't need money to start. You don't need 'equipment' to start (you can find a solution!)
For YouTubers/content creators: Just get into the rhythm of making a video and uploading it. Then, write down ideas every day about more and more fun videos you can do. It's a quantity game. Quantity gets you feedback which helps you get quality. How will you know if your ideas are bad if you never put them out there?
You do have time. You are good enough. You don't need a degree:
Google's head of HR has even announced that graduates' GPAs are a waste to look at. And that more and more of their hires have no college degrees at all.
Put your work out there. The distribution is there to reach the world no matter what your field is. You validate yourself now through your work.
You don't need to be in Silicon Valley to create a software business.
Don't feel that you have the network? Put in the work to get it. That excuse cheats you of many potential good friendships. Building a network from scratch requires time. Start with just one person. They build exponentially, so for every person in your network, you can reach all of the people in their network — and so on.
Your ideas are never too crazy.
Don't think that you have enough talent? It was widely agreed that the best chess player ever, Bobby Fischer, didn't have that much talent. He was above average, but maybe not world class. This is what he did:
If you combine the ideas that trends give birth to with an understanding of demographic trends, there are trillions of dollars waiting to be made.
Most trends are based on two important ideas:
James then lists these trends
When things are confusing, when you can't understand how or why whether or not you should be making money, it's time to switch focus.
Get down on your hands and knees and scrub
You do all the initial hard work
Provide free content on the front page
Give away as much for free as possible so you can get that e-mail address
Diversify your distribution
Don't just get (for example) traffic from one place. Don't put your eggs in one basket.
Don't spend time worrying about competition
It doesn't matter if you know anyone
They key is to anticipate what the people you're aiming to serve might want, show them how it will cost them nothing but they will get get huge benefit from it, and then just simply do it. Make it as easy as possible for the other side to say yes before you ask them. If you want someone to say yes, show them exactly what "yes" looks like and show them that it is already made.
You might not be the best at one thing. But you might very well be good at two things. Combine them and you're the one to do it.
Make it a business you would use
Reading news never made anyone rich, but it is very common in the hedge fund business for professional investors to call one another and exchange ideas. (this is a random note based on a story given in this part of the chapter, so I'm noting it here. But the title still counts for itself!)
ABD — Always be Deal Making
Nothing is a straight line
You'll know when to quit
Build community by hand and in person
Saying in Argentina: "When the CEO is looking, the cow grows fatter". A business builds the fastest when the CEO is looking at it because he or she sees a thousand details.
Perseverance is like a fire that needs oxygen. Love is the oxygen for perseverance. You can love it. Users can love it. Partners can love it. Investors can love it. There are a lot of sources of love. But ultimately, you create value for people and that's how you build the love. Think of your business as the delivery mechanism of that love. Then, love + perseverance = abundance.
This is a great chapter. Basically a FAQ on starting and building a business. Obviously I can't just copy and paste it, even though I'd want to. But here are some of the best points, in my opinion
First build a product, then get a customer, then get friends and family money (or money from revenues, which is cheapest of all) and then think about raising money. But only then.
Get customers first. Patent later. Don’t talk to lawyers until the last possible moment.
How do I market my app? Friends, and then word of mouth.
Should I build a product? Maybe. But first manually see if your product works. Then think about providing it as a service. Then productize the commonly used services. Too many people do this in reverse and then fail.
What if nobody seems to be buying my product? Then change to a service and do whatever anyone is willing to pay for.
What do I do when a customer rejects me in a B2B business? Stay in touch once a month. Never be angry.
In a B2C business: release fast. Add new features every week.
How do I get new clients? The best new clients are old clients. Always offer new services.
What if my client asks you to do something not in your business plan? Do it, or find someone who can do it, even if it’s a competitor.
Should I ever focus on SEO? No.
Should I do social media marketing? No.
Should I ever talk badly about a partner of an employee even though they are awful? Never gossip. Always be straight with the culprit.
I have lots of ideas. How do I pick the right one? Execute on as many as possible. The right idea will pick you.
What are some telltale signs of an amateur businessperson? Doing any of these things:
What are some signs of a professional?
Should I pay taxes? No. You should always reinvest your money and operate at a loss.
What should the CEO salary be? No more than two times that of your lowest employee if you are not profitable. This even assumes you are funded. If you are not funded your salary should be zero until your revenues can pay your salary last. The CEO salary is the last expense paid in every business.
When should you give a raise? Rarely.
Should you take the offer to buy your company? Yes. In cash.
What is the only effective e-mail marketing? Highly targeted e-mail marketing written by professional copywriters and the e-mail list is made up of people who have bought similar services in the past six months. Corollary: If you have zero skills as a copywriter, then everything you write will be boring.
Should I give stuff for free? Maybe. But don’t expect free customers to turn into paying customers. Your free customers actually hate you and want everything from you for nothing so you better have a different business model.
Should I blog? Yes. You must. Blog about everything going wrong in your industry. Blog personal stories that you think will scare away customers. They won’t. Customers will be attracted to your honesty.
When should I say no to a client? When they initially approach you.
When should I say yes to a client? Every other conversation you ever have with them after that initial no.
When should I give up on my idea? When you can’t generate revenues, customers, interest, for two months.
Why didn’t the VC or customer call back after we met yesterday and it was great? Because they hate you.
Why didn’t the above call back after we met yesterday and it was great? “Yesterday” was like a split second ago for them and a lifetime for you. There’s the law of entrepreneurial relativity. Figure out what that means and live by it.
Should I hire a professional CEO? No. Never.
Should I hire a head of sales? No. The founder is the head of sales until at least $10 million in sales.
My client called at 3 a.m. Should I tell him to respect boundaries? No. You no longer have any boundaries.
I made a mistake. Should I tell the client? Yes. Tell him everything that happened. You’re his partner. Not the guy that hides things and then lies about them.
My investors want me to focus on one thing. Should I listen to them? No. Diversify in every way you can.
Should I quit my job? No. Only if you have salary that can pay you for six months at your start-up. Aim to quit your job but don’t actually quit your job.
I have too much competition. What should I do? Competition is good. It shows you have a decent business model. Now simply outperform them.
I have a lot of website traffic but no revenues. What should I do? Sell your business. There’s only one Google. (Well, there’s two or three Googles, if you count Facebook and Twitter. But you’re not any of them).
I have no traffic. How do I get traffic? Shut down your business.
Should I hire a PR firm? No. Do guerilla marketing. Read Newsjacking and Trust Me, I’m Lying. PR firms screw up from beginning to the end. The first time I hired a PR firm, instead of sending me my contract they accidentally sent me their contract for Terry Bradshaw. He was paying $12,000 a month. Was it worth it for him?
My competition is doing better than me across every metric. What should I do? Don’t be afraid to instantly shut down your business and start over if you can’t sell the business. Time is a horrible thing to waste.
I have been in business now for six years and my business doesn’t seem to be growing. It’s even slowing down. What should I do? Come up with ten ideas a day about new services your business can offer. Try to get a customer for each new service. I know one business in this situation that refuses to do this because their VCs are telling them to focus more. You’re going to go out of business otherwise.
If an acquirer asks me why I want to sell, what should I say? That you feel it would be easier for you to grow in the context of a bigger company that has experienced the growing pains you are just starting to go through.
Should I even start a business? No. Make money. Build stuff. Then start a business.
This is a story about a guy who writes an insane amount of books. He writes 2000 words a day. In the front of each book he has various things he gives away for free if people sign up for his e-mail list.
His advice is to "take a concept you're interested in, and break it up into a lot of parts and write a book about each part".
Each book gets him more e-mail subscribers. More e-mail subscribers gets him more book sales. And so on.
You can't invest yourself to wealth — not even Warren Buffett did that.
He made fees on his hedge funds and reinvested those for the initial part of his wealth. Then he used the money people put into his insurance companies, invested that, and kept 100 percent of the profits, and that's how he made billions.
Compounding, by itself, will never make you rich. There are better ways for your money to work for you than compound interest.
Write one page a day. About 300 words. A paragraph or two.
Peter Thiel highlights the four qualities of a good business. Note that he's not valuing a business. His goal is to make a great business. Not just that — a world-changing business. And those are impossible to put a value on.
His four attributes are monopoly, scalability, network effect, and brand.
Capitalism is about profits. If everyone is competing, prices quickly go as tiny as they possibly can. So competition is anti-capitalist.
Instead: find your niche, find a small or nonexistent market where you can enter and dominate 80% of the market, as if you were a monopoly.
Can you "make money while you sleep"? Is it possible for you to add customers at almost no additional cost or effort while you are sleeping?
How easy is it to scale?
The more people who use a service, the more valuable it is. If your friends are on Facebook, you have to use Facebook to communicate with them. So they have to sign up. And now their friends have to as well.
People would prefer to buy an item on Amazon rather than on someones personals site (even if it is more expensive on Amazon) simply because Amazon is known as a trusted site.
This is one that James added.
It doesn't matter if you have the above four items. If you had a company based on horse-and-buggy cab services, then you'd go out of business in the early 1900s as everything moved over to cars.
Warren Buffett is a great example of a demographics investor.
It's about the businesses that even idiots can run successfully.
Find a business that satisfies the "three D's"
Death, Divorce, and Debt.
And there is added another:
Companies get 'paralyzed' when they have to make critical decisions, and then their value goes down.
People, Process, and Product.
A company will fail if the people running it are no good, if the process is inefficient or too expensive, and if the product is poor or doesn't stand out.
It (always) starts with the people.
It's more of an art than a science. But you could look at the above three models.
Ask yourself what the company would look like when it's turned around or made better.
Ask yourself what size of the market and how much would be dominated by it. Is it scalable? How much? What's the value of the additional markets it can scale to?
Then, how much money can be made out of this company in a certain period of time, minus what has to be put in to keep it running/turn it around?
Then halve that number. And again. That makes it as safe as possible.
The same can be done for stocks.
If you're selling a company, you should do the reverse. Demonstrate how much money the buying company can make given the status of your company as a monopoly combined with their customer base. Always use the bigger customer base to value your company. Then halve and halve.
You make money by buying stocks and holding them forever.
Which stocks? Pick them using these guidelines
Don't put all your money into stocks. General guidelines:
No more than 3% of your portfolio in any one stock. But if it goes past 3%, you can keep it. Warren Buffett: "If you have Lebron James on your team, you don't trade him away".
No more than 30% of your portfolio in stocks (unless some of them grow)
Bubbles don't mean anything. Don't read the news. The news has no idea about how the financial world works.
Don't invest in your friend's business idea. Unless the CEO has started and sold a business before. And if it in a sector with a strong demographic headwind behind it. And it has revenues and/or profits. And you are getting a really good deal.
Cash is great to have. It's good to have some laying around (or in the bank). Makes you less stressed.
Invest in yourself.
You can simply make a blog. That could be a business.
Invest in experiences rather than possessions.
Books. Reading is the best return on investment.
You don't have to save money with each paycheck. It's better to just make more streams of income so you don't have to worry about going broke.
Money is just a side effect of health (referring to the Daily Practice). So if you make more than you can spend/use, just forget about it.
Invest with someone smarter than you.
Remember that cash is king.
For wealth creation: Invest in hard-to-value companies that focus on ideas.
For wealth-preservation: Invest in dividend aristocrats (companies raising their dividends for twenty years in a row or more).
Allocate correctly. Volatility is OK.
For private investing: Invest in at least TWO people smarter than you. Or else say no.
The S&P 500 Index is proven to the the best hedge.
Investing in you is the best hedge against hyperinflation.
Never invest in anyone else's ideas of investing.
Never invest because of tax reasons.
A big mistake everyone makes is this math "If I save a dollar it's the same as if I make a dollar".
No. If you have 1000$ to your name, then you can only save 1000$. But the maximum you can make is infinite.
Focus on the infinite.
Probably avoid Day Trading.
Antifragile: a system that gets stronger as it gets hurt. Don't just be resilient (staying the same when you get hurt). Gain from it.
Nassim works on his personal antifragility. For example, he walks 20 hours a week. Not miles or kilometers, but hours. Our ancestors walked constantly for millions of years, but now we drive to the gym and walk two miles on the treadmill.
Read The Four-Hour Work Week.
Basic idea: build a successful business, figure out what you can outsource or what unprofitable (or barely profitable) clients you can fire, and then use your extra time to explore new ideas.
Combining two ideas. Just like how Larry Page combined how academics ranked the value of their papers and search engines, creating PageRank — which is how Google ranks pages.
The 80/20 Rule
Basic idea: 20% of your effort will result in 80% of your profits.
The 1% Rule
Aim to improve 1% every day.
Read The Four Agreements by Don Miguel Ruiz
Read the book, but here they are as well:
Don't buy things, buy experiences.
Don't do anything you don't want to do.
Don't try to please people.
Run, don't walk. There is never a right moment, so just run to get there. (develop a sense of urgency).
Don't wait for them to say yes. Who do you need approval from? Say yes to yourself, and everyone else will say yes later.
Honesty compounds until your word becomes The Word.
Don't consume bad things. Meaning both not consuming unhealthy food, and not consuming news (drama, gossip, etc).