Someone once asked Somerset Maugham if he wrote on a schedule or only when struck by inspiration. “I write only when inspiration strikes,” he replied. “Fortunately it strikes every morning at nine o’clock sharp.”

That’s a pro.

Welcome to the 10th edition of the Flyby Book Club. The current pick is The War of Art by Steven Pressfield, and is a fiery five-minute read.

In my opinion, this book should be required reading for all entrepreneurs, artists, and anyone working in a creative field. Any time I’ve lost momentum in the past, this is the book I’ve picked up, and it’s always sent me soaring in the direction I’ve needed to go— Laser focus on the work that matters.

This book is about the fundamental forces that take shape when we go about pursuing any calling and also the one which holds us back— Resistance.

Resistance, shortly put, is anything that keeps us from doing our work and can take any number of forms— obvious ones like procrastination, video games, social media or subtle ones like too many side projects, always fighting fires or doing work that doesn’t really move the needle much but is considered “urgent.”

Here’s a sample of the list of activities that attract Resistance according to the book:

1) The pursuit of any calling in writing, painting, music, film, dance, or any creative art, however marginal or unconventional.

2) The launching of any entrepreneurial venture or enterprise, for profit or otherwise.

3) Any diet or health regimen.

…

Anything that needs to be done that leads to us evolving to our higher self will naturally evoke Resistance. It’s an invisible force that tries to hold us back and keeps us at the same level that we are currently on.

Throughout the book, we come to see Resistance for what it really is — Fear. Whether it’s fear of failure, fear of what others will think, fear of rejection, or the biggest one of them all — fear of success, they are all just traps that keep us from reaching our highest potential and doing what we need to get done most.

The way out of this trap is to follow the fear and flip it upside down, right into the ground. By tackling the very thing we are most afraid of getting done.

Rule of thumb: The more scared we are of a work or calling, the more sure we can be that we have to do it.

The antidote to this Resistance is what Pressfield calls— Turning Pro. When we turn Pro, we get to work and stop Resistance in its tracks.

Turning Pro is a state of mind. One where we get down to business and focus on putting in the work, the process, the inputs, taking it one day at a time, and giving it our best.

It’s about putting yourself in the mindset of a professional, or how we think a professional, as an ideal, would operate and bringing that mindset into our own day-to-day attitude. A simple way to do that is to just use any notable experience from your day job and put that same fiery work ethic to use for your passion, art, venture, calling, and smash Resistance down into the ground.

In short. Commitment.

But this also doesn’t mean getting attached to the outcomes and trapping yourself in a perfectionism loop. The emphasis is on the inputs, on craft and mastery, on moving in the direction of progress and taking action.

It’s about putting in the work consistently, without overthinking things or taking things personally, and trusting that the magic will come.

To do this, we also need to take a step back and view our work separately from US.

The professional loves her work. She is invested in it wholeheartedly. But she does not forget that the work is not her. Her artistic self contains many works and many performances. Already the next is percolating inside her. The next will be better, and the one after that better still.

Check out the chapter You, Inc., in the book for a valuable framework on how to think about this. It’s especially valuable for anything that requires “sales.” I often refer back to it when I find myself getting over-identified with my work.

As we’ve seen many times in this newsletter, it’s about focusing on the process with discipline and an eye toward continuously improving. The results will eventually arrive. And in style.

Overcoming fear is the key to turning Pro and defeating Resistance.

There’s no mystery to turning Pro. It’s a decision brought about by an act of will. We make up our mind to view ourselves as pros and we do it. Simple as that.

Once Resistance is defeated, we get a glimpse of the higher realms of our truest potential. A sample of the life we are capable of living, and much much more. I’ll let you read the book to find out what this is. It goes deep, and I mean deep.

Check out the book. It’s a short one that packs a powerful punch. The real benefits come from applying it to the work that matters most to you immediately, by simply, turning Pro.

I’ve read it several times and will be re-reading it again, no doubt.

If you need to get your personal flywheel of progress spinning again or just in the right direction, get to work.👊

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The professional cannot take rejection personally because to do so reinforces Resistance. Editors are not the enemy; critics are not the enemy. Resistance is the enemy. The battle is inside our own heads. We cannot let external criticism, even if it’s true, fortify our internal foe. That foe is strong enough already.

Welcome to the final book club review of the year (2023).

This month's book was Mindset by Carol Dweck. One that was truly mind-blowing. 

This post is a nifty 9-minute read. I tried to keep it shorter than usual and will continue shortening these posts going forward.

First, a quick poll:

Alright, let's get into it.

I'd say this is probably one of the most important books anyone can read. That’s why it’s on my list of Top Six Books for New Entrepreneurs.

Whether you are an entrepreneur or not, this book smacks a solid shift in orientation that can send you soaring to your highest potential.

So, check it out if you haven't already.

Mindset is about the two types of mindsets that people can pick up. The fixed mindset and growth mindset.

A fixed mindset is one that suggests ability (knowledge, skill, talent, personality) is fixed and can't be improved.

A growth mindset says that all these areas (including ability in the arts, sports, business, science, anything) can be improved with the right effort and attitude.

A fixed mindset puts people in a lack. 

People with a fixed mindset keep trying to defend their fixed traits. For someone who believes they are naturally talented, learning new things or improving their skills would be a blow to their ego. Why would you need to improve something you are already naturally good at? This keeps them from reaching their full potential and causes them to always be defensive in order to try and make themselves look good and feel better. Other people tend to not get along with them either.

A growth mindset puts people in abundance.

People with the growth mindset treat everything as a challenge, as an opportunity to learn, grow and better themselves. Mistakes are part of the process and can show us areas we would need to work on and improve. Scale this attitude over time with focused effort and optimizing strategies, and you will no doubt reach greater and greater heights. It's also worth noting that the growth mindset applies to everything, from math to art, to sports, to social skills. Anything can be improved upon.

The author doesn't dismiss "talent" altogether. Some people do start out with a certain advantage in certain areas, but unless they keep putting in the work to grow, they will reach a plateau and be surpassed by someone with a growth mindset in that field. Think tortoise and hare, except the tortoise is also increasing its speed as it learns more and becomes faster and faster.

"Do people with this mindset believe that anyone can be anything, that anyone with proper motivation or education can become Einstein or Beethoven? No, but they believe that a person's true potential is unknown (and unknowable); that it's impossible to foresee what can be accomplished with years of passion, toil, and training."

Personally, I do think this is very much possible, as long as you are following your inclinations and climbing the right mountain, and not just doing something to prove a point or live someone else's best life. It would just be a matter of going all in on whatever you want to be great at and genuinely enjoy doing (with the right strategies, of course).

The one "talent" growth mindset people have is being able to figure out how to construct this mountain for themselves:

"Howard Gardner, in his book Extraordinary Minds, concluded that exceptional individuals have "a special talent for identifying their own strengths and weaknesses." It's interesting that those with the growth mindset seem to have that talent."

Really, the difference comes down to defending what you know (since you think it can't be changed) or challenging yourself to improve (since everything can be improved).

This belief gives us a love for learning, growing, and self-improvement in all areas.

And that is all you need to reach the top of your potential while enjoying the climb.

"You can see how the belief that cherished qualities can be developed creates a passion for learning. Why waste time proving over and over how great you are, when you could be getting better? Why hide deficiencies instead of overcoming them? Why look for friends or partners who will just shore up your self-esteem instead of ones who will also challenge you to grow? And why seek out the tried and true, instead of experiences that will stretch you? The passion for stretching yourself and sticking to it, even (or especially) when it's not going well, is the hallmark of the growth mindset. This is the mindset that allows people to thrive during some of the most challenging times in their lives."

Amen.

Let's go through a bunch of areas the book covers where this applies (it has more as well, so read the book for the whole story).

Sports

"Did you know there was once a strong belief that you couldn't physically train for golf, and that if you built your strength you would lose your "touch"? Until Tiger Woods came along with his workout regimes and fierce practice habits and won every tournament there was to win."

The same concept applies to sports. Talent is overrated, yet that's what most people (including many experts) think is what makes a difference. In some sports, genetics (e.g., height, body type) can make a difference, but other than that, it really all comes down to effort and practice. The best athletes are the ones who love the practice and are continuously improving. The growth mindset ones. That's what puts them at the top of the top. In the fixed mindset, one tends to start off ahead but then hit a plateau, fearing effort as it would be seen as a challenge to their "natural ability and gifts." Thus never reaching their full potential.

The book gives several examples of both mindsets in various athletes across different sports. Check it out if you are into sports; I found it to be a super fascinating read.

"Are there sports you always assumed you're bad at? Well, maybe you are, but then maybe you aren't. It's not something you can know until you've put in a lot of effort. Some of the world's best athletes didn't start out being that hot. If you have a passion for a sport, put in the effort and see.

Sometimes, being exceptionally endowed is a curse. These athletes may stay in a fixed mindset and not cope well with adversity. Is there a sport that came easily to you until you hit a wall? Try on the growth mindset and go for it again."

The concept is repeated here in the sports context, but really, as we've seen, it applies to everything:

"Athletes with a growth mindset find success in learning and improving, not just winning."

It's about character and the mindset of a champion, that is, the mindset of learning, improving and focusing on reaching your highest potential. Scale this to other areas of life, and you'll become a solid growth mindset all-rounder.

Business

Of course, this plays out big time in the business world. 

The book covers different CEOs and leadership styles in detail, and no surprise, the growth mindset leaders were thriving, empowering their colleagues, and focused on evolving as a unit, whereas the fixed mindset ones were always trying to cover their mistakes, make themselves look good, and prove their worth, thus leading to people not wanting to work with them and profits going down.

Organizations themselves can have a fixed or growth mindset; this comes from the culture and whether failure is encouraged or reprimanded. Some fixed-mindset organizations never admit to their mistakes, costing them their reputation and also financially. One such example in the book was Enron. A company that went from boom to bust.

This is in contrast to growth mindset organizations, where employees feel like they want to be part of the team, have a sense of belonging, and feel a personal sense of dedication to the mission.

If you've ever wanted to quit a job, chances are there was fixed mindset management in place, and if you ever plan on hiring people, make sure to build in a growth mindset culture, starting with leadership. Check out the book for details on this.

If you are an entrepreneur starting out, this mindset is even more of a top priority. It’ll point you in the direction you need to go rather than trying to keep up appearances. And if you are flying solo, then this is even more important, as you will no doubt have some gaps in your knowledge. But the growth mindset will help you learn how to cover them over time, know the areas you might need to eventually hire for and embrace the challenge. 🔥

It's the same with launching a product.

If it doesn't take off, someone with a fixed mindset would get defensive and blame the market for "not getting it" or come up with some other reason, such as bad timing or lack of capital, or perhaps put themselves down for creating a lame product. Not true. With a growth mindset, you would know that the launch is just the first step. Then it's about getting feedback, learning from it, improving your product, perhaps trying different marketing strategies and creative ways to spread the word and keep going till you are able to shape your product into something that is a success, even if this means pivoting entirely. We discussed this in detail in Making Hits📀💥.

Relationships

This book covers relationships as well; while this isn't the core theme of this newsletter (or is it?), this passage was too valuable not to share:

"So far, having a fixed mindset has meant believing your personal traits are fixed. But in relationships, two more things enter the picture—your partner and the relationship itself. Now you can have a fixed mindset about three things. You can believe that your qualities are fixed, your partner's qualities are fixed, and the relationship's qualities are fixed—that it's inherently good or bad, meant-to-be or not meant-to-be. Now all of these things are up for judgment. The growth mindset says all of these things can be developed. All—you, your partner, and the relationship—are capable of growth and change."

🤝

As far as parenting goes, it's about the language and attitude towards development. This same thing applies to teachers and coaches as well. We saw this a bit last week in a tennis lesson, with the two different styles of coaching and how failure and success were viewed (winning vs improving).

I also found it interesting to learn about how much impact praise had on development and how the style of praise impacts a child's mindset. Praising ability (e.g., smart, talented, fast) puts them in a fixed mindset. Praising effort (e.g., practice, work, strategies) puts them in a growth mindset.

Here are some examples of praising effort from the book:

"I like the way you tried all kinds of strategies on that math problem until you finally got it. You thought of a lot of different ways to do it and found the one that worked!" 

"I like that you took on that challenging project for your science class. It will take a lot of work—doing the research, designing the apparatus, buying the parts, and building it. Boy, you're going to learn a lot of great things." 

"I know school used to be easy for you and you used to feel like the smart kid all the time. But the truth is that you weren't using your brain to the fullest. I'm really excited about how you're stretching yourself now and working to learn hard things." 

"That homework was so long and involved. I really admire the way you concentrated and finished it."

Now, if only we could go back in time and give this type of feedback to our younger selves. But, it’s never too late to start now, and begin again.

The same applies to coaching and how feedback is given.

Developing the Growth Mindset

Can the growth mindset be developed? Absolutely. According to the book, just knowing that this mindset exists is enough to break people out of the spell of the fixed mindset.

"One day, we were introducing the growth mindset to a new group of students. All at once, Jimmy—the most hard-core, turned-off, low-effort kid in the group—looked up with tears in his eyes and said, "You mean I don't have to be dumb?" From that day on, he worked. He started staying up late to do his homework, which he never used to bother with at all. He started handing in assignments early so he could get feedback and revise them. He now believed that working hard was not something that made you vulnerable, but something that made you smarter."

What's important to remember, though, is that it's not just about working hard at a problem or project but having the attitude of continuous improvement, trying new strategies, experimenting, and stepping out of your comfort zone. This is the growth mindset and, in terms of entrepreneurship, a necessary prerequisite for innovation.

As the author suggests, developing a growth mindset is a journey and a process itself. We all have a fixed mindset in certain areas; the first step is becoming aware of when it shows up and then replacing it with a mindset of growth over time. One that is rooted in lifelong learning, embracing challenges, persisting in the face of setbacks, welcoming effort in pursuit of mastery, learning from feedback, finding inspiration in others doing great things, and encouraging them as well.

In the end, the question to remember is this:

What would you like to have? Loads of validation of what you already know to be true and what you are good at? Or loads of challenge, learning, and breaking through the barriers of what you thought was possible?

For me, it's definitely the latter.

It's the beginner's mind, the challenge, the pursuit of greatness by embracing the process, the practice, and the tiny moments, all colliding together into the sudden symphony of excellence and creativity.

Right here in the present moment.

💥

Happy New Year, everyone. 🎉

Let this year be full of growth, learning, and meaningful challenges. Because that's what moves us forward.

Onwards.

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With your feedback, I can improve the newsletter.

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Welcome to the 8th edition of the Flyby Book Club. 📖

This month's post reviews The $100 Startup - by Chris Guillebeau and is a sizzling 16-minute read.🔥

This was the first time I'd read this book, and I was pleasantly surprised. If you read this as part of the club (or otherwise), reply back with how you found it, or use the buttons below! 👊

I thought it was quite good and covered a wide range of topics, mostly dealing with taking the first steps into the vast ocean of entrepreneurship, but it also covered growth and scaling a business without getting too big (employees, investors, outside funding, etc.).

Stuff that would be useful for any kind of bootstrapped entrepreneur.

Here's my review:

The last book, "Anything You Want," had the premise of building your own utopia (whatever that might mean) while delivering value to people.

This book is a bit more niche and has a slightly different yet related premise.

Freedom X Value.

Personal freedom (e.g., freedom from a job, to do whatever you want) while at the same time delivering value to customers. Where "value is created when a person makes something useful and shares it with the world."

This also has the constraints of starting out with a small budget (<$1000) but generating enough income to match your lifestyle (>= $50k). I found many parts very similar to The Four-Hour Workweek, and overall, this is an inspiring concept and mindset. Even if you don't want to make it your life goal and want to aim bigger, this can be a legit launchpad, and many of the concepts remain the same.

The goal in the book is not to scale into a huge operation but rather create a business that can fund your lifestyle and not require any employees or investors. The way to do this is by, of course, delivering value to customers. I'm all for this approach, and since the time this book was published, there are countless more ways to achieve this now.

The author calls this type of startup a microbusiness, but I don't see it that way. I'd say a lot of these concepts have the potential to scale into something bigger while at the same time keeping your operations small if you are smart and strategic about how you go about it. I've covered my thoughts on this subject in "How to Build a High-Growth Tech Startup (all by Yourself)."

"Microbusinesses aren't new; they've been around since the beginning of commerce. What's changed, however, is the ability to test, launch, and scale your project quickly and on the cheap."

Yup, and it's only getting quicker.🏃‍♂️

Passion & Skills💖🎯

The book focuses on building a business around your passion or skills. 

"Many people are interested in building a business that is based on a hobby or activity they are especially enthusiastic about. As we'll see, not every passion leads to big bank deposits, but some certainly do."

The equation in the book is:

Passion or skill + usefulness = success

The formula listed here is the intersection of passion (or skill) with usefulness. Take something that you are super interested in or know a lot about and find a way to make it useful to the world.

"Not everything that you are passionate about or skilled in is interesting to the rest of the world, and not everything is marketable. I can be very passionate about eating pizza, but no one is going to pay me to do it. Likewise, any individual person won't be able to provide a solution to every problem or be interesting to everyone. But in the overlap between the two circles, where passion or skill meets usefulness, a microbusiness built on freedom and value can thrive."

This is exactly the equation we saw in Book Club #2 - How I Built This.

I'm definitely all for that and wouldn't do it any other way. I would actually go a step further and add scratching your own itch to the mix. My equation would be:

Passion X Skill X Scratch your own itch.

For me, my primary passion+skill used to be software (games and graphics, to be specific), but now I’m adding entrepreneurship and writing to the mix. I plan to keep adding to this list throughout my life as I go about my journey in pursuit of mastery. The book has a couple of examples of apps as well, for example:

"Elsewhere, Brandon Pearce was a piano teacher struggling to keep up with the administrative side of his work. A programming hobbyist, he created software to help track his students, scheduling, and payment. "I did the whole project with no intention of making it into a business," he said. "But then other teachers started showing interest, and I thought maybe I could make a few extra bucks with it." The few extra bucks turned into a full-time income and more, with current income in excess of $30,000 a month."

That sounds like the definition of Scratch your own itch if you ask me. Solve a legitimate problem in your own life by creating a product and then marketing it to the world.

This book also introduces the core concept of Skill Transformation. That is, taking some skills you have, combining them with new skills, and using them to build a business.

I think this is super interesting and something every entrepreneur actually needs to become super comfortable with.

Going from passion+skill → business will almost always require skill transformations and learning a bunch of new skills. Otherwise, you would be hanging out in the hobby or employee zone. For me, this skill transformation is the fun part and really my personal why behind initially wanting to get into entrepreneurship (and also writing this newsletter). I like learning new things, and I think this is the best way to go about it while also delivering value at scale. I suppose that's similar to what this book is talking about (freedom X value). But for me, the freedom to pursue the process is the goal itself. It's kind of a self-reinforcing loop (we'll slope on down to another example of this later in this post; stay tuned!🎿).

The book gives a great example of skill transformation in Scott Adams, who writes the popular Dilbert comic:

"I succeeded as a cartoonist with negligible art talent, some basic writing skills, an ordinary sense of humor and a bit of experience in the business world. The "Dilbert" comic is a combination of all four skills. The world has plenty of better artists, smarter writers, funnier humorists and more experienced business people. The rare part is that each of those modest skills is collected in one person. That's how value is created."

He took his interests and skills and combined them together into something that brought unique value to the world. This is differentiation and how you make the competition irrelevant. In short, creating a blue ocean for yourself and swimming in uncontested waters.

Hustling⏳

One of the core skills needed, according to the book, when turning your passion into a business is Marketing. Or, as Chris calls it→ Hustling. 

The author describes this as a sliding scale.

• All marketing + No product = Scam ( Avoid 👎)

• All product + No marketing = Hobby ( Quicksand 🏜️)

• 50% product + 50% marketing = Hustle (Yes! 💪)

Personally, I tend to skew more towards the product side, as this is where I find my flow, but I am starting to pick it up on the marketing side as well now. I'll be discussing marketing in more detail soon in the premium posts as I'm starting to get more into this. #WatchOut!💥

"The vast majority of case-study subjects I talked with built their customer base without any paid advertising at all; they did so largely through word of mouth."

As we've seen over and over in this publication, this book also suggests that the goal should eventually be word of mouth. But you do have to get that initial traction somehow. That's where hustling comes in, and really, what's at the core of it → Building something worth talking about.

This brings us to the copy or how your product is framed.

When selling your product, you want to convey the emotions users will feel rather than features. This is to allow users to picture your product in their lives and more clearly imagine how it would fit in. 

"More than anything else, value relates to emotional needs. Many business owners talk about their work in terms of the features it offers, but it's much more powerful to talk about the benefits customers receive. A feature is descriptive; a benefit is emotional."

It's really about making the customer the hero in their story. As we discussed in writing your own story.

Here are a couple of examples from the book of going from features to benefits:

V6 Ranch: Horse rides and campfires → Stay with us and become a cowboy (or a cowgirl) 

Higher Ground Yoga: Private yoga classes for busy women → Relax and prepare for the day through a personalized, guided practice

And here's one from me:

Startup Flyby: Notes, thoughts, stories about entrepreneurship → Think Big. Follow your dreams. Move the world forward.

I'm working on some new ones as well.💡

Taking Off🛫

The book mentions how the subjects in the case studies all had a common experience. Getting started was much harder than keeping the ball rolling and growing.

"Over and over, the subjects of our case studies discussed how growing the business wasn't nearly as hard as starting the business. "It took a while to find something that worked," a common statement began, "but once we were rolling, we gained traction and quickly took off."

Like this example of Purna, who started with a personal blog and then shaped it into a resource for mastering Excel, making a six-figure income.

"Purna started his website several years back, but for a while it only contained posts about his family and life in India. In 2009, he settled in and got more serious, chronicling a series of tips and tutorials about using Excel to become more productive. Crucially, he didn't target Indians, but instead reached out to interested prospects all over the world. He also didn't depend on advertising revenue, something that very few people in our study mentioned. Instead, he created products and services himself, offering downloadable guides and an ongoing training school. 

He was also a good copywriter. Updating spreadsheets can sound like incredibly tedious work, but Purna positioned the core benefit away from numbers and toward something far more powerful: "Our training programs make customers a hero in front of their bosses or colleagues." Not only would their work become easier, Purna said, but other people would recognize and appreciate them for simplifying a complicated process."

We discussed this strategy in detail in Making Hits 📀💥. Check it out for a deeper dive.

"Take it from Purna: If spreadsheets can be made sexy, surely any business can find a way to communicate a similar message."

Once you've got a business, then it's about applying "tweaks" or improving on what's working and what's not working. The trap many business owners fall into is that of maintenance mode, where the business is chugging along but not improving (we saw this in the E-Myth revisited). The author suggests setting aside some time every day to focus on improving the business.

I like to do this pretty much all the time, as discussed in The Telephoto Lens. 📸

As far as tweaks go, here are the main one to grow your business (specifically revenue):

1. Increasing Traffic — Bringing more eyeballs to your business.

2. Increasing Conversion — Converting more eyeballs into customers.

3. Increasing Price — Either by add-ons or delivering more value and raising the core price.

And, of course, this one from the Happy Knit case study that stood out for me:

"Every order sent by mail includes a personalized thank-you note from an employee, encouraging customers to call if they need help with a pattern, plus free samples of other products. If an item is back ordered because of a computer glitch, an employee will call the customer proactively to apologize and ask if she would like a substitution. 

"Be nice to people and provide a great service" may not sound like much of a differentiation, but all these things add up. Whether you have a retail store or not, you could learn something from Happy Knits."

This is exactly what we discussed in Customer Service IS the Marketing.

"The first $1.26 is the hardest, so find a way to get your first sale as quickly as possible. Then work on improving the things that are working, while ignoring the things that aren't."

So, if you haven't started yet, then what first step can you take to get off the ground?

Note: This doesn't have to mean launching right away, but even just getting started on building your product or service and getting it ready for launch. (see The Three Pathways to Entrepreneurship)

After that, it's just improve, improve, improve.🚀

Launch🚀

Speaking of launch, the book discusses launch strategy. 

I think this is interesting, and I'll do a deep dive on this topic in a premium post soon, but let's give it a quick spin for now.

The book talks about treating your launch like a Hollywood movie. Or, to be exact, a Blockbuster. Building hype, pre-selling, teasing, and then launching in style! 

I'm actually not too keen on this approach. Firstly, as described in the book, it can be overly stressful. Second, this tends to get people stuck up on the launch and then quickly wanting to move on to the next thing, putting all your hopes on a big success on day one, or leading to a huge spike of initial customers, overwhelming you, then leading to a drop, making you want to try and replicate it like a dopamine spike. Nah.

I think growth should be a gradual process. Even courses and one-time products should be treated as part of a core business and marketed on an ongoing basis, focusing on the details and creating a product so good that people can't help but get enough of it. I like this more zen approach of just doing a softer launch and then continuing to improve your product from there. I'll discuss my philosophy in a separate post.

That being said, doing a little teaser and pre-marketing probably isn't going to be the worst thing, especially if you already have an audience somewhere.

With a launch, you want to create an offer that people can't refuse. As the author describes — Picture running a marathon; if you reach the middle, would you rather have a slice of refreshing orange or a sluggish donut? For most runners, the orange would be the way to go. This is what your offer should be like. Something that naturally attracts customers (orange) vs repelling them (donut).

"Build something that people want and give it to them." ← That's it right there. Entrepreneurship in a nutshell.🌰🐿️

Going Global🌏

Once you launch, then it's about scale.

"Nev Lapwood was a classic ski bum. He lived in Whistler, British Columbia, and worked "off and on" in restaurants at night while snowboarding during the day. Life was basic but good…until the limited employment ended when Nev was laid off. Needing to make ends meet, he began offering snowboard lessons, a part-time gig that was highly valued by his students. 

Teaching students in person on the Whistler slopes was fun and rewarding, but it also had a number of built-in unavoidable limitations: lots of competition, relatively few clients, and limited times of year when he could work. Nev knew that people all over the world wanted to learn about snowboarding—what if he could teach them all virtually without needing to be in the same place? Getting his act together, Nev worked with a couple of close friends to create Snowboard Addiction, a worldwide series of snowboarding tutorials. 

It was an instant hit, drawing customers from twenty countries and making $30,000 in year one—not bad for a ski bum. (Since Nev had never been that focused on making money, that was the highest annual income he had ever had at that point.) The next year, he put more thought into the business, scaling up with affiliates and a broader range of products. The result: just under $100,000 in net income. Nev was still on the slopes during the day but worked closely with his new partners during the downtimes to scale the business even further. The next plan was foreign language translation: Snowboard Addiction went out around the world in nine languages, with more versions scheduled to roll out based on customer demand."

Nev took his passion for snowboarding and went from local (teaching) to global (information product + physical add-ons). He put in the work to build a kickass product and then scaled it throughout the globe.

Soon, his product was taking off, allowing him to free up his time to do what he liked best. Snowboarding. This was his passion, which he turned into a product, which allowed him to put more time into his passion, developing the skills even further, allowing him to improve and create even better passion products, creating an unstoppable self-reinforcing loop of passion at scale (Here it is! As mentioned at the top of the post. Cha-ching! 🛎️).

Not bad, indeed.

"Naturally, the growing business had its challenges. An untrained and accidental entrepreneur, Nev had to learn a lot about strategy, accounting, and marketing. Stickers that were ordered from China arrived months late and in an unusable condition. Just two years in, however, the business was on track to earn at least $300,000."

There's also a lot of skill-building and transformation going on here. "Nev had to learn a lot about strategy, accounting, and marketing." As we discussed, this is the heart of entrepreneurship. Take the skills you have, in this case, snowboarding, and combine them with new skills (branding, marketing, sales) to create something of value for others.🏂

Learn. Apply. Grow. Repeat.

Product → Service 🛠️ Service ← Product

This is similar to the concept discussed in the book about turning a Service into a Product. This is super interesting and perhaps an easier onramp for anyone wanting to get started with entrepreneurship. 

If you are already providing a stellar service, then think of a way to turn that intro a product and scale it on the internet.

This can take many forms, but we can use the course example again. For example, if you are teaching people a skill in real life, like the piano teacher example we saw earlier. Then, this can easily translate into a product that can scale independently of your time.

Spend some solid time building a kickass product and then launch it. After that, you'd just be left with marketing and customer service. But if you already have clients from your service business, then they would very likely be interested in buying the product and being your first customers. If the product is really as good as you say it is, then they might just tell their friends about it, triggering the magical word-of-mouth loop!🎡

This concept can translate to a job (skills) as well. If you have a job or any domain in which you've spent time gaining expertise, find the areas that could be turned into a product. This could either be a course or something that uses those skills in the product itself. Or, the best way— find a problem you had in that domain and scratch that itch!

The key aspect of skill transformation would be what skills you are most interested in learning. In the piano example, there could be several options; the target would depend on your inclinations, timeline, and goals.

1. Learning the new skills of speaking, presentation, and video editing and turning the existing skills of composition, music theory, scales, chords, etc, into a video course. See Year of the Tiger for an example of this.

2. Learning the new skills of computer programming or app development and taking the existing music skills into creating an app that helps people learn to play piano in a unique way or something similar. This doesn't need to be a big enterprise, and you could choose to keep it as a small app. See Deja-Vu.

3. Learning whatever is needed to create a physical product that you feel is missing in the market. This is how Vic Firth started his drumstick business. He was practicing for a concert but found that the sticks he could buy at the time weren't holding up. So he went full inventor mode and decided to come up with a better drumstick. His sticks are a stronghold in the market today. (this probably wouldn’t fit the criteria of this book, though.)

The book provides the inverse, too. Turning a product into a service. I'm much less inclined towards this, but it might be a viable option for some.

"After relocating to Toronto, the idea was to build a small business helping other people make the adjustment to raw foods. Being a software engineer (and a self-described geek like Brett Kelly in Chapter 4), Nathalie programmed a database, set up an app, and built her own website. The first incarnation was Raw Food Switch, which correctly represented the concept but seemed a bit boring. One day Nathalie noticed that the same letters—and therefore the same website—could be rendered as Raw Foods Witch, leading to a new theme. Dressing in character with a pointed black hat for photo shoots, she rebranded the whole business around herself. Nathalie created programs, one-time products, and individual consultation sessions in the same way we've seen others do throughout the book. Raw Foods Witch grew into a $60,000 business after the first year."

Start with a product (e.g., blog, website, newsletter) to establish expertise in a domain, and then sell consultancy services to whoever is looking for said expertise. Again, it's not my M.O. I like to create things at scale, but this might be suitable depending on your personality and inclinations. It's all about constructing the right mountain for yourself.🧗

There are loads more examples and case studies in the book. Definitely give it a spin if something in here caught your eye.👁️

Overall, this book is rock solid and a constant source of inspiration, especially if you want to get into entrepreneurship. It felt a lot like the Four-Hour Workweek but without the focus on outsourcing. This book actually has a discussion about the pros and cons of outsourcing; the people surveyed all fall into two camps. Pro Outsourcing and Against Outsourcing. I'm definitely on the do-it-yourself and aim-for-mastery side, so I tend to do things myself (with a little assistance from ChatGPT every now and then). But everyone can decide whatever works best for them.🌞

If you haven't yet set up a business and have been wanting to do it for a while, or if you have a service and want to turn it into a product, or if you are already running a business and are looking for some useful tweaks, check out this book. It's surprisingly good.

The core message again is that anyone can become an entrepreneur. You don't need large amounts of capital, or have to quit your job, or even take any unnecessary risks. It's more about focusing on building something of value and scaling it as you see fit. 100% Agree. See "The Three Pathways to Entrepreneurship" for a deep dive into this.

And then, as your business takes off, you can channel some of the profits toward social causes as well. For example, 1% of the profits from paid subscriptions to Startup Flyby go towards cleaning up the planet by removing carbon from the atmosphere. I plan to increase this % as more people start subscribing. You can figure out your own way of helping out, and as the book shows, sometimes this can even be the core mission of the business and building a social enterprise.

That's it for now, and see y'all next time. If you liked this post, please share it with a friend, and better yet, upgrade to the paid subscription. We'll be going deep into many of these topics over the coming months.

You're going to love it! 💌

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Welcome to the review for the 7th edition of the Flyby Book Club.

This post is about a 20-minute read and took me about 20+ hours to produce. 

It's one heck of a doozy!

As I hinted towards in The Lifeblood, a lot of this book is about the perils of being obsessed with money and why that shouldn't be our primary purpose in life. The author shares his story and what he would do otherwise if he had the chance to start over (both in life & in business). He lays out his successes and failures for us to analyze and pick apart.

A lot of it is written with a satirical undertone, and much of it is quite absurd and perhaps isn't meant to be taken seriously (or is it?). That being said, there are some very insightful nuggets of entrepreneurial wisdom in there, hidden behind all the comedy. The author was an entrepreneur, after all, that's how he got rich, that's how he would do it again, and that's what he's teaching here, because he just can't help it.

But he was also a poet, which, other than the glaringly obvious deeper meaning behind the text, makes parts of the book somewhat confusing and perhaps takes a few readings to extract the real meaning behind the words. That's what I've tried my best to do here. While this is primarily an entrepreneurship book, it’s also so much more.

I don't agree with a lot of the stuff in this book. Some of it made me quite annoyed and is downright cringe! And a lot of it is up for debate and challenge. Lots and lots of challenge. Maybe it's the "I know best” tone, or maybe it was all just satire, or poetry, hard to tell. Either way, it's another case of an author sharing how they did things, but that doesn't mean it's the only way, especially with how fast the world is evolving. You always have to think for yourself and make your own judgments and decisions. That's the real skill worth honing on. Regardless, there is no doubt some seriously valuable stuff in this book (and also some comedy gold), so it is definitely worth a read.

This post is for paid subscribers only, so please upgrade if you would like to continue reading.

A lot of the post is my own thoughts, mixed in with notes from the book, so it's more of a hybrid, or a prius style of post — that is, thoughts combined with a review. Hopefully, it's not too confusing, like the book.

In the end, though, I think this has turned out to be possibly one of the best posts in the book club so far. So, upgrade now if you aren't already a paid subscriber. It might just change the trajectory of your life (or at minimum, the trajectory of your weekend! *wink*).

Well then, my friends, start your engines because, in a gold-plated nutshell, here's how to get "rich"! 💸

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This is the review for The Lean Startup by Eric Ries. 

Apologies for the slight delay. I've been slowly recovering from some kind of weird space virus and had a hard time getting through the book and writing the review. I didn't want to rush it out and skimp on quality, so hence the delay.

The post is about a 15-minute shot of solid insights. There are multiple sections, so you can read them one at a time or all together. Whatever you prefer. Hopefully, it's all straightforward in my current state of fogginess and doesn't come across as an incoherent fuzzy lumpkins… gulp!

Let me know what you think using the comments below.

Speaking of length, what is the ideal length of a post for you?

There are two ways to look at the process of entrepreneurship and building your product.

As if you were building a car or a rocket.

A car has two feedback loops. The internal engine, a complex piece of machinery, must be built and perfected before the car can even start. Then, there's the other feedback loop. The one between the steering wheel and the driver. Without this second feedback loop, nobody would be there to start the engine or drive the car (let's ignore self-driving cars for now).

A rocket, on the other hand, is self-guided. It has complex machinery in the engine but also steering systems to guide it to its destination, likely some planet in outer space. A tiny miscalculation can cause it to go thousands of miles off-course and miss the destination completely.

The book's central thesis is that people treat entrepreneurship as if they are building a self-guided rocket with no one on the other end. Whereas it needs to be treated as a car, where half the job is on the product side, and the other half needs to be honed alongside the customer.

I thought this was an insane insight. The message here is that you don't need to completely perfect and finish every detail of your product before shipping it. This can take years, and you might even end up with something nobody wants (more on this in a second). It's OK to start scaling the product once the core functionality is solid (i.e., the main engine) and then start rapidly iterating from there alongside customers (i.e., user feedback). The way I think of it is treating your product as a T.V. series rather than a feature film. You spend a bunch of time perfecting the pilot and then launch it. Once it's out, you see what resonated with the audience and iterate on the next few episodes from there.

But.. speaking of a feature film, what if you are building something harder to ship in parts, and the entire product is supposed to be consumed in one sitting? E.g., A video game, novel, or precisely a feature film/movie. I would say it's still possible to pull this off. In that case, it's about running the lean methodology with your marketing strategy. That is, extract the parts of the product that can be released earlier as promotional material and then keep chugging along on the core product. For example, suppose you are building a video game. In that case, you can post teasers and behind-the-scenes, making-of videos on social media to get people more interested in your journey. This way, you build fans long before your product ships and will likely have a more successful launch. Another option would be to start a development blog to share your wisdom. I’m kind of doing that here but on the entrepreneurship side.

If you can ship in parts, however, the core idea here is the MVP or minimal viable product. There's also a comparison to film production here, where movies have a pre-production stage. For example, in a Pixar Movie, which is 3D rendered, the final render takes a lot of time, including sound, animations, rendering, voice acting, editing, etc. So, the studio goes through pre-production, where the story and characters are fleshed out with hand-drawn storyboards and temp voiceovers. This allows them to make most of their “mistakes” earlier in pre-production before they get to the more time-consuming production stages. Big video game productions work like this, too.

An MVP for a software product is similar. It's the initial set of all the core features but lacks the sophistication and polish of the final version. This is then tested with live users, and feedback is incorporated as the product is iterated upon and improved.

In short, it's the practice of Thinking Big but starting small and filling in the gaps as you progress alongside your users. It's building the engine and working with the driver to perfect the car.

The book's author was working on a startup that combined 3D Avatar and virtual world technology from video games with the spicy social effect of IM chats. This is exactly what we learned in the last book club, Blue Ocean Strategy. You take two completely different ideas from different industries and combine them to form a new category. This book discusses taking that strategy to the market and what happened.

They decided to treat the IM integration as a separate add-on so users could integrate it with their own IM client. Based on their research, this was the more sensible thing to do. Their team spent months building out the MVP and polishing the app's first version. When they launched it, there were crickets. Turns out, no one was interested.

They brought in focus groups to see what was going on. They thought the avatars were fun, but none of the testers were interested in connecting the app to their own IM client, as that would be weird, and they didn't perceive the app as 'being cool.' They were happy to play with random strangers, however. This is a lot like how modern multiplayer games work today, but the team was running under the assumption that no one would want to download another IM client. They thought most people would tolerate a max of 1 or 2, but their target market, mainly teenagers, all had 7-8 IM clients. So, much of the dev time and code for the IM stuff was wasted. This is what the book is trying to avoid: waste. In fact, this whole methodology is based on the concepts of lean manufacturing, which is to identify and eliminate waste and operate more efficiently.

While this all makes sense, and I was on board so far, I didn’t quite agree with the author's other core premise that, as entrepreneurs, "we don't know what the customers want."

Let's zoom out and try and analyze what I think happened here.

As we've seen in previous posts many times, there are two ways to go about taking your product to market. One is serving the market at scale, and the other is scratching your own itch. The author here is talking about the first path, where you are separate from the customer and are building something with the market in mind. In this case, you are indeed running on assumptions and can run into a case where the audience simply doesn't care about your product because they have a different idea about how things should be. This is what happened in the book, but it’s also not the only way to do things.

The approach I use is scratching my own itch. That means I'm primarily building a product for myself first and then sharing it with the world by taking it to market. In this case, you know exactly what the customer wants because you are the customer. External input is still valued and taken into consideration, but the vision is firm and doesn’t need to be market-tested. This only works if you genuinely want to use the product and have built it for yourself out of some necessity, not if you are trying to project yourself into the market mind, which can lead you to have flawed assumptions about what the user wants.

An example of a chat app similar to the one discussed in this book, which was born from a scratch-your-own-itch mindset, was Slack. The team was also initially building a product for a target market and decided to develop their own messaging system on the side to communicate effectively across regions. In this secondary case, they were the customers themselves and could fine-tune the chat app to their needs and knew exactly how to shape it. Their core product developed for the market (a video game) flopped. So, instead, they took the tool they made for themselves to market and turned it into a billion-dollar success. This is the power of building something you actually want to use yourself. We also discussed these two approaches in Book Club #2 - How to Build Your Calling.

So, in the case of building a product for external customers, a lot of this methodology of rapid testing and iteration is quite useful, but most of it can be skipped if you are scratching your own itch, as you'll naturally end up doing it without much thought. Using the car analogy, you can think of it as building yourself a car where you are also the driver. That's scratching your own itch. You are so interested in driving this car that you end up creating the best damn car possible. You just have to switch gears every now and then from car engineer to car driver. This is the craftsmen's or the artist's way of doing things. Of course, others would also likely find your creation valuable once you take it to market. It's just a matter of finding them. And if you find other passionate drivers, you can take their input aboard if it aligns with your vision.

Versus, if you were building a car for the audience and were lukewarm about driving it yourself, then you are trying to serve the market at scale, and the lean startup methodology would come in handy. This would be akin to the scientific approach of testing, experimenting, and seeing what sticks and what doesn't. In this case, the methods in the book are like giving you a powerful flashlight in the dark so you know where to look. But the way I see it, scratching your own itch is like turning the lights on. So, if I had to choose, I would say building something for yourself first makes much more sense. Maybe this is easier to pull off if you are flying solo; I'm not sure. But to me, it's the only way to fly.

A lot of the book goes into great detail about how to approach this rapid testing and validated learning methodology. I skimmed over a lot of it as it's not how I'm currently doing things. But if you are trying to build something for external customers who are not you, check it out. There’s also a section on when to pivot and when to persevere; have a look if you are interested.

The gist is testing out what works and what doesn't as quickly as possible with your target customers. If you've ever run digital ads, you'll be familiar with A/B testing different ad sets and getting the performance metrics for each set. Then you can decide which sets works better and put more money into them. This is basically the same concept but on the product side. You A/B test different features with customers and deploy several iterations to learn what works as fast as possible. Under this methodology, the main goal is validated learning.

The key to validated learning is measuring using actionable metrics instead of vanity metrics. Vanity metrics are those that look good on the surface but don't really add much to your core business and bottom line. Actionable metrics are the ones that actually move the needle and can improve your business substantially.

Let's take an example of a newsletter. A vanity metric would be the Subscriber Count. If one newsletter boasts 10,000 subscribers, you would assume it's more valuable than another with 2,000, right? Not necessarily. The actionable metric here is Open Rates. That is, how many people actually read the emails.

If newsletter A has 10,000 subs but an open rate of 9%. That's effectively 900 people who are reading the newsletter. Versus, if the one with 2,000% has an open rate of 50%, then it has effectively 1000 people reading the newsletter. Newsletter B is more valuable than A.

Subscriber counts are the vanity metric, and open rates are the actionable metrics. Further actionable metrics would be read-through/completion rates, forwards, or the number of other publications referencing your articles. This would be a better target to optimize for. It's how you build a sustainable business rather than a good-looking shell.

In this case, some ways to do that would be to improve the content, make the newsletter more interesting, and send a "re-engage" email every so often. Another option would be to prune out people who haven't been reading the emails for a long time. While this would hurt the vanity metric of subscriber count, it would increase the open rates and lead to a more engaged audience. This, in turn, would generate more revenue per customer if you chose to monetize the product at some point.

It's the same for an app, with total downloads being the vanity metric compared to active users being actionable. Or if you have a revenue-generating product, then revenue per customer or paid subscription rates would also be actionable.

Can you think of some vanity vs actionable metrics for your own product? How can you move from measuring the former to optimizing for the latter?

As a side note, it was challenging for me to get through many of these sections, which discussed ideas about not being the customer yourself. Maybe it was just because of the space flu, but I was tempted to just drop this book down and put it away permanently.

This is what I used to do before starting the book club. If a book didn't grip me at the start, I would move on to the next. Many people who read a lot of books recommend this approach. Turns out this would have been a huge mistake. Since I had to write this post, I powered through and finished it, and I'm super happy I did. It had some solid insights throughout that even apply to my own stuff. Also, I would have completely missed the growth section, which is up next, had I done this. This was an awesome chapter, in my opinion, and opened up some very fruitful areas of research for me.

Lesson learned. The strategy I'm applying now is to skim the boring chapters and always finish a book if I pick it up. I've found there's always something to learn, even in a book you didn't like at the start or in areas which might be boring.

Let's move on to my favorite section of the book. Growth! 

Or, more accurately. Sustainable Growth. The book defines this as when:

"New customers come from the actions of past customers."

For this, the book provides the three engines of growth.

These are sticky, viral, and paid. Each of these can be considered independent engines that can be set in motion to drive sustainable product growth. The term outside of this book for this concept is Flywheel.

The first, and in my opinion, the most valuable, is the sticky engine. This is where you focus on adding long-term value and user retention. Keeping users coming back by continuously improving the product or just making something so damn good that users can't picture their life without it. This includes products that have a steep learning curve and hence make it hard to switch from (e.g., 3D art packages, databases, etc.) and also stuff where there is user-generated content and sharing involved. Most subscription services would also fall into this category. This is why subscribers continue to pay and subscribe. It requires building a product with purpose and attention to detail. This is also what sparks word-of-mouth growth. We covered this in more detail in Book Club #1 - How to Be Remarkable.

The data to measure here is churn rate vs growth rate. You want the churn rate (number of users leaving) to be less than the growth rate (number of users coming in). If there is more growth than churn, then this would signal positive compounding over time.

The second engine is the viral engine. That is, generating network effects or products that skyrocket on their own. This is different from word of mouth. Although that can definitely cause a product to go viral, the book is talking about engineered virality. Specifically, making it so the product can't help to spread itself just as a side effect of someone using it. The example in the book is Hotmail. When it first came out, growth was slow. Soon after, the team added a short and subtle message with a link at the end of each email sent using the service: "P.S. Get your free email at Hotmail." This started the fireworks, and within 6 months, they gained a million new users. Eighteen months later, with 12 million subscribers, they sold to Microsoft for $400 million. I still have a Hotmail address myself. This shows you how sticky they were as well.

Other examples not in the book are logos, which make it obvious what the brand is, e.g., Starbucks coffee cups, McDonald's or designer shopping bags, and the TikTok logo on every video generated and shared from the platform. Again, this only works if the product is sticky and "cool." Otherwise, no one is going to care what the logo represents. The name of the game is "being cool." We'll look into this in a future post. But as a side note, if you are scratching your own itch, you already know what’s cool because it's cool to you, and you are the customer.

At the heart of viral growth is the viral coefficient (K). This is a number that represents the virality of the product. Here is a reconstructed chart from the book showing this. To learn how to generate a chart like this, see my guide to data analysis using chat-gpt. This saved me a good hour or so of scratching my head with math equations and doing some python gymnastics.

As you can see in the graph, if K < 1, the product will eventually fall flat and stop growing. K = 1 would be linear growth, and anything above 1 would indicate exponential growth. Every new user who signs up will bring in a friend or more.

The final engine of growth is the paid engine. This one is quite simple: generating new customers by spending money on advertising. This is also what most new brands default to. For this to be sustainable, the ad spend must come from the revenue. This would mean existing customers are funding future growth. Otherwise, the growth isn't sustainable, and the business will eventually run out of money. For this to be the case, you want to combine this with a sticky product so that the advertising spend brings in long-term customers. This can be tracked using a customer's LTV (lifetime value). If this number exceeds the ad spend, the book suggests that the product will grow. For example, if the LTV is $10 and it costs $5 to acquire a new customer, then paid advertising is a valid approach. I'd also add that you’ll need to create captivating ads with great stories and copy. Consumers are generally quite sick of ads, so only high-quality ones stand a chance of capturing attention.

The book suggests focusing on one engine at a time. Otherwise, it will be hard to measure. Once you've mastered one engine, you can move on to another. The way to optimize and fine-tune this is, of course, by measuring this data. This would depend on the product and category in question and which analytics you have access to. From those, you can likely create your own tables to measure this stuff or find a service that provides this.

Regarding which one to focus on, I'd say the most important are stickiness and word of mouth. Then, once you know you have a good product, add some hints of virality. Finally, experimenting with paid ads. You can also use paid ads or other techniques to attract initial customers. You will need *some* kind of initial growth to kickstart the network effects, after all. But be careful about relying on this as an engine before the revenue per customer is more than the cost of advertising, as the business can eventually run out of money. 

The book doesn't mention this, but organically growing your brand on social media can be a great free way to grow. This costs time and some creativity to make your content engaging. But it's likely a skill worth investing in or hiring for. The platform you choose will depend on the type of product. Video content does better on IG/TikTok. Text is better on Twitter. This is the same as a paid acquisition, but you aren't paying for it (unless you hire someone to do the work).

For me, the holy grail would be to build an extremely sticky product, something people love so much that they share it with their friends (word of mouth), but not engineering it to be viral too soon. Many products that try to go viral too fast either can't handle the huge traffic or get thrown into the category of fads (e.g., the many social media apps that cropped up and then just "disappeared" - Vine, clubhouse, threads?). So, for me, stickiness is a more critical factor, combined with word-of-mouth growth. If both these are met, then the third engine (advertising) would just be adding fuel to the fire. But without stickiness, the business wouldn't last very long.

I'll add some books on stickiness to future book club sessions.

That's it for now. I hope you enjoyed the review.

The book has more sections about innovation in large organizations, management, and team dynamics. But I didn't find those relevant or very interesting, so I skipped them. Feel free to check them out if you are interested in that stuff.

Reading a book like this, which covers pretty much everything about building a startup, gives you a pretty good idea of where your interests lie. For me, I enjoyed the building a sticky product/brand, validated learning, and growth elements the most. But, I wasn't very interested in the team building, raising capital, or "building something where I'm not a user" sections. So, I'm optimizing my life to align with the elements that interest me. You can do the same— follow your interests and delegate the rest, or set stuff up in a way where those things aren't really even a consideration. I'm doing a bit of both.

Overall, even though some parts were hard to power through, it was a great book in the end, and I highly recommend it to all entrepreneurs. Especially if you have a tech-based business. But I'm pretty sure every business has some kind of tech or data in it these days and could benefit from the insights here.

Check it out.

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This is the review for the fifth edition of the Flyby Book Club — Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne.

This post is about an 8-minute read.

You can find the rating I gave on the main book club page.

There are two types of markets— red oceans and blue oceans.

Red oceans are shark-infested waters full of competition, price wars, and thin margins. This is the land of commodities and cookie-cutter products. When someone creates a product just to make a quick buck or because someone else is doing something without adding any unique value to the world, they are usually swimming in the red ocean. This is akin to going pro in a highly competitive sport. The rules are defined, and all you need to do to get ahead is to see what others at the top of the game are doing and copy that. Of course, this is going to be a fierce battle of the sharks. While some people might enjoy this structure, the advantage in business is that you can set your own rules entirely and potentially sidestep the cutthroat dynamics altogether. All it takes is a little bit of creativity.

That is the territory of the blue oceans. These are the pure and unadulterated waters. This is where you find differentiated products and uncontested market space. A blue ocean product creates and captures new demand. That's the core of this book, and it's also in the subtitle— How to Make the Competition Irrelevant and Create Uncontested Market Space.

The answer is simple, and if you think about it, quite obvious — Innovation. Creating something novel where there isn't anyone else to compete with. If you build something that didn't exist before, there can't really be any competition, can there? You'll have a category of one. Eventually, the waters might turn red as copycats and competitors start showing up… sure, but they'll always be one step behind the innovator. They'll really just be competing with each other in their own red oceans, whereas the innovators will always be swimming ahead in the cool blue. It's about challenging the status quo instead of being the status quo.

Now this doesn't mean innovation for innovation's sake. That can often lead to high costs or a product nobody wants (We discussed this in Book Club #2). The book makes it clear that the focus here is on Value Innovation. That is, innovating on value while at the same time reducing costs.

"Effective blue ocean strategy should be about risk minimization and not risk-taking."

Value Innovation involves thinking creatively and from first principles in both the input (production) and the output (selling) side of things. Or, more simply, there is a component of addition (new elements) and reduction (costly components) to the process.

These components can be used to modify the value curve of a product against the industry and potentially catapult it from the red ocean into open blue waters. The book defines the value curve as — 

"a graphic depiction of a company's relative performance across its industry's factors of competition."

This is similar to the value attributes we discussed in Book Club #3.

You list each attribute or market factor for your product across the industry in a chart and then modify them (eliminate, reduce, improve, create) to invent an entirely new product. But.. instead of targeting existing customers, you are also targeting non-customers who were not even interested in the market before.

The first example in the book is Cirque du Soleil. The founder combined the existing concept of a circus with elements from theater to create an entirely new genre and broaden the target market to much more than just circus goers. Adults who were just looking for a fun night out were now suddenly interested. Pulling this off involved adding and removing several attributes to the circus' value curve. They eliminated several factors like animal acts, star performers, and concurrent arenas. They also added themes, an element of refinement, lights, and an artistic component. You could say they borrowed the latter from the theater world, so it’s a bit like blending the two value curves across industries. They ended up with a circus performance priced on the high-end entertainment side of things and still going strong today. This was all done in an industry that was arguably dying.

The value curve or "Strategy Canvas" would look something like this. I've reconstructed it based on the book to give you a rough idea.

The book describes a four actions framework to keep in mind when building a value curve to pursue value innovation, i.e., raising value while reducing costs. 

• Eliminate: “Which of the factors that the industry takes for granted should be eliminated?” i.e., What isn't necessary? (Simplify)

• Reduce: “Which factors should be reduced well below the industry’s standard?” i.e., What can I streamline give my brand a cost advantage?

• Raise: “Which factors should be raised well above the industry’s standard?” i.e., What can be done to improve the product?

• Create: “Which factors should be created that the industry has never offered?” i.e., What can I add that the market didn't know it needed before? (Innovate)

Really, this is just tweaking the attributes up and down in the value curve to lower costs and improve user experience simultaneously. It's like a DJ trying to create an entirely new sound from existing pieces of work.

We can see a similar mixing of ingredients across industries later in the book with Southwest Airlines. They combined the speed of traditional airlines and the convenience and price of automobiles to disrupt the airline industry. They reduced costs (and price) by focusing on essentials and greatly improved user experience by going over the top on customer service, branding, and speed.

"The speed of a plane at the price of a car—whenever you need it."

I recommend creating your own strategy canvas for your product and adjusting the values as you see fit to fine-tune the details. This will help bring clarity to areas you can simplify and ones you can innovate on.

You can make these charts in Excel, but I find it a bit annoying and hard to customize, so I decided to try out the GPT-4 Code Interpreter instead. I got it done in record time, had a blast, and was completely blown away. If you aren't aware, the code interpreter can run, execute and debug Python code in a sandboxed environment and can be used for things like data processing, analysis, visualization, etc, and output the results to an image. In fact, all the pictures in this post are AI-generated. I'll create another post detailing the behind-the-scenes workings of this soon. Stay tuned!

Anyway, back to our dive into the deep blue ocean… 

We can see this in action again later in the book in the Wine industry. This is an industry supposedly known to be fiercely competitive and exclusive. There are high barriers to entry due to the aging process involved in creating the wine. A market observer of the US wine industry would notice that existing wine brands prided themselves on tradition and the long histories of the vineyards, chateaus, and wine estates. All this would make it sound like the bloodiest red waters you could find. Perhaps, but not if you approach the problem from first principles and apply the innovation lens. Enter Yellow Tail Wine— An Australian wine brand that decided to enter the US market… in style. They challenged the status quo and simplified everything about their wine to create a unique and remarkable product.

They eliminated the aging process (this reduced costs), simplified selection (just a red and a white), fixed pricing, and designed a fun/trendy brand (yellow kangaroo on the cover with a bold outback theme). Furthermore, both wine bottles looked the same, just with a different label, thus reducing their cost per SKU. Traditional wine manufacturers used different bottles for each variant. The lack of aging, which would have been regarded as inferior, made the wine taste sweeter than usual, but this was instead a hit. The wine industry indeed mocked them, but the market said otherwise. With the simplicity of price, taste, and selection, Yellow Tail soon became a market leader in the US wine industry. An industry that was ripe for disruption. This is usually the case in any industry where things are supposed to be done a certain way. Yellow Tail not only captured wine drinkers frustrated by the complexity of existing wines but also brought in customers who were previously interested only in cocktails or beer.

As I mentioned before, much of this comes down to first principles thinking. Instead of thinking about how things are usually done, it's about deconstructing them down into their essence and then reconstructing the product back up with only the essentials, and a bit of added spice and personal touch. Kind of like a chef creating a new recipe from existing ingredients.

We can see this again later in the book with the NABI bus company.

Most bus manufacturers at the time were competing over the initial price of the buses. Realizing that buses have a 12-year lifecycle and that it didn't make sense to compete over the initial price when the shelf life was so long, NABI created a new type of bus entirely. This had a higher initial cost but was more durable and cost-friendly over the lifetime of the bus, thus saving the municipalities purchasing them more money over time.

They broke down the construction into individual parts and analyzed what made sense with this goal in mind. Instead of steel, which was heavy, prone to rust, and hard to repair, they went with fiberglass, which was rust-free and lighter while at the same time being cheaper, faster, and easier to repair. The lighter weight also made it more fuel efficient and environmentally friendly. It also allowed them to pack more space inside the bus.

With this new type of construction, they carved themselves a blue ocean in the bus market by targeting both differentiation (environmentally friendly, design, more spacious) and lower costs.

While not in the book, Tesla and SpaceX would be two modern examples of this type of thinking and strategy in action. Both compete in highly competitive and hard-to-enter markets (automobiles and rockets), look at things from first principles, and build them up again using only what makes sense.

The book suggests a good strategy has three characteristics: focus, divergence, and a compelling tagline. 

• Focus is the vision or what the product stands for. These are the factors that are the most important for the brand to focus on.

• Divergence is breaking away from the status quo and differentiating your product. It's thinking about what makes sense and what doesn’t.

• A compelling tagline is the pitch to the market about why they should buy. This is where branding comes into play.

The book has several other examples of blue ocean products scattered throughout, which show these characteristics. Here are a few of them:

• The Phillips tea kettle added a water filter to the mouth of the kettle to prevent limescale from getting into the tea. Suddenly, everyone needed a new tea kettle. That's one way to create demand. Solve a complex problem with a simple solution.

• Dyson vacuums eliminated cleaning bags to create a premium and unique product. While the cleaner itself was more expensive initially, customers would no longer have to buy cleaning bags, thus potentially saving money over time while also enjoying a nicer experience throughout.

• Starbucks, which added an emotional experience to coffee drinking and converted non-coffee drinkers into die-hard aficionados.

• Callaway created a golf club with a large head called Big Bertha, making it easier for beginners to strike the ball. This lowered the learning curve and made the entire sport less intimidating to the golf curious. I recently found out about inkless printers, which are a similar concept.

• Nintendo Wii added a sports and fitness component to the industry they were already in— video games and brought in people interested in the home fitness aspect or multi-player sports. That's precisely why I ended up buying one as well.

The book details multiple more examples. I recommend checking it out.

Another key way many of these blue ocean products lower costs is to reduce or eliminate advertising. That is, by focusing on word-of-mouth growth and igniting network effects. This was the subject of Book Club #1 and something we have seen over and over again in great brands. Building something so good that happy customers do the marketing for you. The less time and money you have to spend on advertising, the more you can spend on improving the product, thus building even more fans.

In short, the product is the marketing.

To recap, here are the differences between red and blue ocean strategies:

And that's a wrap!

Overall, this was a great book, full of examples, charts, graphs, and insights. Give it a read if you haven’t already. (Oh, and check out the appendix for some fascinating industry histories and timelines.)

Until then, see you next time!

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This is the review for the fourth edition of the Flyby Book Club.

Quick update: I've created a separate page with all the book club reviews so far and added a rating for how valuable I thought the books were. You can view them all here. 

This one scored the highest so far. 10/10. Why? Because it changed the way I see the world.

Let's find out how.

Since the book was very dense, I've focused on the top three things I found the most valuable (although there were many more). Give the book a read if you haven't already. It's a short one and full of actionable insights.

This post is about a 12-minute read. I usually say grab a hot coffee or beverage, but I'm experimenting with giving up caffeine, and it's summer. So maybe let's just grab a glass of crisp blue water for the ride.

The E-Myth

Last time on Startup Flyby, we discussed writing your own story. This can conjure up images of great valor, strength, and climbing the metaphorical mountain of entrepreneurship as you conquer your fears and succeed in your goals. You are, of course, the hero in your own journey, so this is how it should be. But, as the book describes, it doesn't always play out this way.

The core idea is that when you take on the quest, there are not one but three competing personalities involved inside of you. Most people are fighting the battle with the wrong leader at the helm. These three personalities are the technician, the entrepreneur, and the manager.

Many people start a business with the intention of building something with the skills they have already acquired. This is totally fine and exactly what got me started as well. But… there is a risk of getting too zoomed in on that work and missing the bigger picture. The technician is the part of you that is really good at a particular set of skills. In the book, the technician is a baker baking pies, who then starts a pie shop. The baker was so zoomed in on perfecting the pies that she couldn't zoom out and focus on the other stuff which goes into growing, scaling, and even running the business.

Now for a software or digital startup, you could argue that the work you do itself has leverage. That is, you could write the code once and then deploy your army of 0's and 1's to go to work for you. That's true, and there's definitely a huge advantage, but only as long as you manage the three personalities properly.

Many years ago, I had quit my job for the first time to build my first "startup." Unfortunately, there was a problem. The technician was in charge. At that point, I didn't have any deep knowledge of the entrepreneurship process or journey. The technician within me thought the solution to all the problems would be, to well… write more code. Because that's the only thing the technician knew how to do. I lacked the entrepreneurial skills to turn that software into a product that people would want. I ended up with a very complex piece of software that served no real purpose other than to satisfy the technician's own curiosity. What I had was not a business but a very passionate hobby.

And without the managerial order, I ended up never shipping it, ran out of savings, and went back and got another job. But hey, all the interviewers were impressed with what the technician had built, so I got a step up in my career. Not quite entrepreneurship, but better than doing nothing, right? As the book suggests, the technician is the perfect employee.

Then a few years later, I came across a book that awakened the entrepreneur within me. It was always present. It's there within us all. Only the entrepreneur within would even think of giving up the stable comfort of a job in search of something better. But as the author suggests, there was just a glimmer of it at that point. It was in the background, waiting to be let out, developed, and coaxed into a true and real entrepreneur. Since then, I've been going deep into everything I can get my hands on to improve my knowledge about the various skills needed to make this a reality. Just like the technical skills, this is a lifelong journey of learning and improvement. We are all students of the game. The entrepreneur is the visionary within us, and looks at the world from the lens of the world. It's the part of you that goes beyond yourself and translates your vision into a product that can help others and perhaps even change lives. It's the part of you which takes the technician beyond its comfort zone and into the depths of the unknown. Indeed, only an entrepreneur would be willing to embrace such discomfort. We might as well give it a fighting shot.

There's one problem, however… the visionary always lives in the future. While the technician is too zoomed in, the entrepreneur can be too zoomed out, always thinking bigger and bigger. This also makes it susceptible to distractions and shiny new projects. For example, maybe you were already working on a solid business idea, but then some shiny new tech emerged. The visionary will almost always want to "check it out," perhaps lose sight of the current business, or worse, drop everything and chase the glitter for no valid reason other than to satisfy its own curiosity. While the technician gets too focused on the tiny details of one thing, the entrepreneur can get easily distracted or lose sight of the intermediate steps involved. Hopping from one prototype to another without any of them taking off. This can probably work great if you already have a big business and large resources to allocate. But in the start, this needs to be kept in check so your first few solid ideas can take flight, one step at a time.

Enter the third personality described in the book — The Manager. The manager is the glue between the entrepreneur and the technician. The manager brings a sense of order to the chaos and allows each personality to thrive. Nobody likes the manager, of course. The technician just wants to do its thing, and the visionary the same. But without the bridge or the glue, nothing would ever get done. The manager lives in the past, a snapshot of the future, and guides the technician to meet the vision which was agreed upon with the entrepreneur. But there's a risk here too— If you are stuck in the past, you might miss the opportunities right in front of you. Sometimes, it genuinely makes sense to pivot and go in the direction the market wants us to. Only the entrepreneur can make that decision.

What we really need, then, is the balance between all three personalities and allow each of them the time and space to thrive. The entrepreneur to create a vision, the technician to build it, and the manager to keep both on track and translate the vision into actionable results. 

"The fact of the matter is that we all have an Entrepreneur, Manager, and Technician inside us. And if they were equally balanced, we'd be describing an incredibly competent individual. 

The Entrepreneur would be free to forge ahead into new areas of interest; The Manager would be solidifying the base of operations; and The Technician would be doing the technical work. 

Each would derive satisfaction from the work he does best, serving the whole in the most productive way."

While author suggest this is challenging to achieve in a single person, I think it can be done. Perhaps more so in areas where your work has leverage and can scale on its own (e.g., software, books, music, video, podcasts, courses, etc.). Even for a one-person business, though, there's work I would always delegate (accounting, taxes, legal, etc.). But for physical or service businesses, such as the pie shop in the book, I would agree with the author in nurturing the entrepreneur within and delegating the rest of the tasks, or the ones you least enjoy doing. This is definitely necessary where the work doesn't have leverage and needs to be done every time. The book goes into great detail about how to achieve this. I highly recommend reading it regardless of which category you are in.

I would also add that now with AI and perhaps in the future with Robots! You can have an additional level of leverage that can be used to your advantage.

The Franchise Prototype

The way to achieve cohesion, according to the book, and become a mature business is the franchise prototype. I was about to skip this part since I'm not really interested in starting a franchise, physical product, or service business at the moment. But I decided to give it a read, and I'm glad I did... because it blew my mind.

The author is talking about treating your business as a "prototype" that can be developed as an individual unit and replicated. This is precisely what I was thinking above, with the work having leverage. It's basically the process of treating any business like a piece of software. The prototype here is not for the product but the business itself. By establishing order, protocol, and guidelines in a single unit, the business can be automated, replicated, and scaled, just like a piece of code. You can either run it in one location or scale it over and over again. This frees the entrepreneur from working in their business to working on their business with the same passion, care, and dedication they had towards their craft as a technician.

It's a game of consistency. The author gives the example of McDonalds (among others). Every store in any location is basically a clone of the others, all the way from the branding to the menu to the time it takes to get your food. They applied the assembly line model to the food industry to establish automation and precision. I don't particularly eat at McDonalds anymore, but as a child, I was hooked. According to the author, it's because of this consistency and getting the same experience every time that makes people fans. I'd say it was actually all the variable toys, but the colorful branding definitely played a big part in it.

If you treat the business itself as a product, then you can apply continuous improvement and everything you've learned to optimize as a technician to the business itself and turn it into something which can grow and scale and have a better chance of being a runaway success. Just like a piece of software, the prototype needs to be honed, polished, free from any glitches, and work consistently in all situations. You have to go to work on turning your business into the best possible business it can be. It's about having a passion for the intricacies and details of building something great!

The book describes this as the process of Innovation, Quantification, and Orchestration. Start with an improvement to an existing solution (innovation), measure the results (quantify), and translate these into a system that puts everything into action (orchestrate). Then repeat. This is what the author calls the Turn-Key Revolution. Treating the business as a system that can be improved, measured, and set into flight. Can you think of other areas where this concept applies?

The system itself is held together by the organization chart. This is a way of dividing responsibilities among the business to prevent chaos. You create roles for functions that the business would need to fulfill and then assign them amongst the existing members (or to yourself if it's just you). If you get overwhelmed, you can hire others to fill whichever role is neglected (while also working on improving the role itself). You'll also know what to look for since you've already been doing the role. This was quite interesting and something I hadn't thought of before. I'm already giving this a try, even with this newsletter, just to improve my organizational skills. I've found it quite valuable to mentally separate all the functions which go in.

Even if you don't have employees, it's a way to structure your routine and ensure each personality gets enough time to do their job. It's about mapping the three personalities within yourself to the business and creating a separation of the roles. The book describes this in detail with an example of a flow chart (eg: COO, VP Operations, VP Marketing etc), along with details of the operation manual. Check it out if you are interested. I might cover all this in a Part 2 if there’s interest. Let me know in the comments below.

The franchise prototype is essentially the act of treating everything as a well-oiled machine, from the product to the people to the marketing to the business itself. This free's your time to work on improving the business rather than constantly fighting the battle in the trenches. It's a level of detachment and taking a step out, which perhaps can be challenging for many, but also perhaps prove more valuable in the long term. As the author says —

"Your business is not your life. Your business and your life are two totally separate things.”

The Game

Finally, the third concept that stuck with me was of the various games being played. The author suggests thinking of your business as a game to be played. You set the rules so that other people want to keep playing. Your business is like a world you create. The structure of this world will stem from your belief systems. My beliefs are different from the author's, so I didn't quite agree with all the rules listed in the book and would set them up differently, but the concept that a game is being played was very interesting and this game theory aspect is something I've thought about many times before. What you want to do is design a positive sum game where everyone wins. This is where thinking long-term comes into play.

And if you are in a job, then you are a player in someone else's game. They set the rules, and you have to follow them. If you don't like the rules or the game being played, you leave. It's the same when you start a business, except you get to design the game and the rules to your taste. Then other people can decide whether they enjoy playing your game and following your rules. Otherwise, they would leave to play a different game or perhaps start their own game, just like you did.

And just like the world you are building within your business, there is the world within you that needs to be built and nurtured. This is the inner game.

It's this mindset of the warrior that is at the core of it all, and it stems from what the book calls your Primary Aim. It's asking, "What do you want your life to look like?" or writing your own story and then working backward. But working backward smartly, with all the tools presented here, and continuously learning and optimizing to increase the chances of getting where you want to go while enjoying the process and everything you encounter along the way.

Just as above, where we discussed treating your business as a piece of software, you can think about your life like that as well. Creating a template for your ideal vision and then being able to replicate it into something worth emulating. You can do so by living your best life.

"Great people have a vision of their lives that they practice emulating each and every day. They go to work on their lives, not just in their lives."

This is fascinating. Treating yourself with the mindset of continuous improvement and something which can be molded into something greater. Just like any great product or business. This time, you are the prototype. It's the mindset of success, doing what's right, and always striving for improvement. Continuously growing, innovating, evolving, and setting forth to conquer your inner demons and changing yourself and the world in the process. This is where the inner game comes into play. You need to start winning the inner game first in order to be able to win the outer game. The beliefs of the world of your business will stem from your own beliefs and mindset, so improving those will naturally improve your business as well.

Boom.

Innovate (improve), Quantify (measure), Orchestrate (set into motion), and Repeat.

The rest will take care of itself.

It's only a matter of time.

And that's a wrap.

Great book. Very little fluff. I highly recommend it. I wasn't expecting too much when I picked it up, but this turned out to be one of the best business books I've read.

Again, I didn't agree with everything, but there's a lot of really great stuff in there, and I found myself thinking deeply about things on several occasions while reading and taking notes. 

I'll definitely be applying many of these strategies to my own life and will be re-reading this book as I grow and evolve. Like I've said before, re-reading books that have had an impact on you is always a good idea. As you build your knowledge and reach different stages of life (and business), you'll be able to see things from higher perspectives and discover novel insights.

Check it out and hit reply with what you thought the most valuable insight for you was (or use the buttons below).

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This is the review for the third edition of the Flyby Book Club, and possibly the best one yet. I’ve also referenced a bunch of other books and previous premium posts to form deeper connections to the topics discussed here.

This post is a 13-15 minute long read, so block out a wee bit of time if you can.

Especially if you haven’t already read the book.

Read more

This post is the field report for the 2nd edition of the Flyby Book Club - How I Built This by Guy Raz. This got a bit delayed as I ended up with just too much to cover. After chopping most of it out, I’ve left only the stuff that fits a singular theme. If you like this post, I might cover the rest in a future post or two. Please let me know what you think after reading it!

This post is about an 8-minute read, so grab a hot drink and sip in.

The previous post was about following your heart, or in other words, your calling. The book starts off by describing the same approach but in a slightly different way. Here, it starts with passion.

Passion is at the heart of many great businesses, especially when building something new. The more you have for the product you are building, the more you’ll be motivated to keep going when the going gets tough.

But when you simply follow your passion without any intention of turning this into a business, that is known as a “hobby.” If you take your hobby and turn it into a product that scratches your own itch, that would make you a “tinkerer.” You are adding value to your own life, but the market isn’t aware of your inventions (yet). If you take that product you’ve been tinkering with to market (or plan to), you would then be in the territory of entrepreneurship. This can become your calling.

For example, Lisa Price had a deep passion for fragrances and essential oils. This became her hobby, and after a bunch of experimentation, she began tinkering with turning these into the perfect skincare products that would match her skin type. Eventually, she thought about taking them to market but wasn’t sure if anyone else would be interested. There’s only one way to find out. With a gentle nudge from her mom, she started taking her lotions to a local flea market. It was a success, and they always sold out. From there, it expanded beyond the neighborhood, a lot in part due to word of mouth and repeat customers. Ultimately, her company Carol’s Daughter, was acquired by L’Oreal. Seems like the market was interested after all. In this case, passion became the calling, just like the baker in the previous post.

As the book says — “the intersection of personal passion and problem-solving is where good ideas are born, and lasting businesses are built.”

The first two phases of hobbyist and tinkerer can be quite calm and enjoyable, relaxing even. The last step of taking your product to market can indeed be a roller coaster. The book showcases many examples of this. But if you hear the call, the best way to experience it is to get on the ride yourself. Depending on the type of product, though, you might also need a bit of capital to fund your venture.

Where do you get this form? If, like me, you are using the bootstrapping approach, this can be anything from personal savings or using income from your job to invest in yourself (and your business). With a top-quality revenue-generating product and some word-of-mouth advertising, you might just be able to create a self-sustaining business without needing any external funding. See Flying Solo - How to build a high-growth tech startup (all by yourself) for more details from a tech-based angle.

Daymond John (the shark) continued his job as a waiter at Red Lobster for 6 years into the process of launching and scaling his company - FUBU. The founder of Sam Adams Beer used savings from his consulting job to start his business and invest in himself. He realized he could always go back and get another job at any point, so he decided to go for it. There are many ways to go about this. Whatever makes sense for your situation is the right one for you. Check out The Three Pathways to Entrepreneurship for more insight on this.

There’s also another not-so-obvious approach, however. Creating a side hustle to fund your primary business. This is what the founders of Airbnb had to do to keep their business alive. The bnb part of the business was deep in credit card debt, and they needed a way to get out of it. The business wasn’t generating enough revenue, and investors weren’t interested at the time, so they had to take things into their own hands. With their back’s against the wall, they created an Obama-themed cereal called “Obama-O’s” to sell to hosts. This was a hit with the elections going on at the time. They decided to spin this off into a limited edition product and built a website for the range of themed cereals. This allowed them to generate $20k to pay off their debts and also piqued the curiosity of their first investors. Of course, it can also be that the side hustle takes off, and you decide to pivot and make that the primary business altogether. Had they gone all in into the cereal business, though, Airbnb, as we know it, might not exist today. But… the market was still interested, and the bnb was their calling, so they kept going.

No wrong answers. It’s totally up to you and your vision. See Deja-Vu - A short story about looking up, for a few more ideas about side hustles.

The book talks about raising capital from external sources and investors as well. This isn’t my go-to approach, and I haven’t needed to look into that as of now, so I skipped that part. But check it out if you are interested or in that position.

Once your product is out, you are in the territory of iteration. You launch your first version and get as much feedback as possible to get a read on the market response. Are people enjoying your product, are the reviews positive, and most importantly, are they sharing it with their friends?

This was indeed the case for Five Guys—an unconventional burger joint off the beaten path. The location they found was underwhelming. You’d have to travel outside of the main streets to find them. But.. people loved this, and combined with the focus on quality, gave them an edge over other fast-food restaurants at the time. This resulted in a word-of-mouth form of growth, which caused them to be packed every day by lunchtime. The founders used their savings to bootstrap the business and didn’t have money for advertising. So, this was really the only approach they could use. And it worked. We discussed this in How to be Remarkable—in short, build a unique product worth talking about.

Iteration can be in two stages— private and public. Prototyping in private is when you are still in the hobby or tinkering stage. This lets you firm up your vision and hone in on what it is that you are trying to build. If you are scratching your own itch, then the goal is to maximize the value you add to your own life with your product.

For example, the founder of Allbirds started out wanting to make leather shoes, but then he visited a tannery and realized it was really quite gross. So, he decided to make the shoes out of Merino wool which was famous in New Zealand instead. At that point, this was the only brand doing shoes like these. All this prototyping was done in private and took about 5 years. The founder was also part of the national football team of New Zealand, so this was, in a way, a side hustle. Once the shoes launched, they were an instant hit, and now you can find similar-looking training shoes at almost every major shoe brand, whom you could say were “iterating” in public.

When you iterate in public, you get live user feedback and improve from there. Sometimes, you might even need to pivot completely. This can make the distinction between your passion and your calling more clear. You might start off with one passion, but if your goal is to build a successful business and the market is telling you to go in a completely different direction, then that might just become your new calling and overtake your passion.

For example, Stewart Butterfield had a passion for massively multi-player video games. His first company Flickr was a spin-off of a video game he was building. Once it got acquired by Yahoo, he decided to use the windfall to create another game called Glitch. After months of work and effort into building it, it turned out it had no traction. So he decided to shut it down. After announcing this, however, he realized that the tool they had built for inter-office communications was better than the game itself and worth sharing with the world. This became his calling, which spawned from his passion for video games. They took the product to market as what is now known as Slack—a multi-billion dollar messaging app.

In this case, he started with a passion and went all in. Once the market spoke and told him it had no legs, he followed his calling. Entrepreneurship. Instead of going back to the hobby or tinkering stages, he decided to power through and follow the winds.

Which begs the question... What if your passion is simply to build a successful business... And you just want to make THAT your calling from the start? Well, in that case, you can use the scientific approach of serving the market at scale. 

This is what happened during the Gold Rush in San Francisco around the 1850s. Everyone was rushing to mine for gold. While most failed, the ones who were much more likely to succeed were the ones serving the rush of miners as they tried to find their gold.

Domingo Ghiradelli moved to San Francisco from Italy just to mine gold at first. He didn’t succeed at that, as the competition was fierce, but he decided to think outside of the box and serve the source instead. He started selling mining supplies and sweets straight to the miners, eventually pivoting to chocolates. The bank Wells Fargo launched in San Francisco simply as a place for the miners and merchants to store their funds. With all that gold flying around, there would surely be demand for a place to store it. Another such brand was Levi Strauss. The founder started by creating dry goods, fabric, and mining supplies, specifically to serve the miners. A few years later, he pivoted to Denim Jeans. All three brands are still in business today, more than 150 years later.

While none of these founders were successful in mining for gold directly, they definitely found it. This adjacent, somewhat scientific approach of serving the gold rush can also be a viable approach and have less competition. Think of what the current trends are and what everyone wants to do, i.e., what’s hot? E.g., AI, Newsletters, Social Media, etc. Build something which serves those industries and creators instead. If you are looking for definite problems needing solutions, you can simply serve the source and do it with a passion.

Next month’s book will investigate this concept in more detail. I’ll be revealing it soon. Stay Tuned.

Whether it’s your passion, calling, or both, the process is really the same. There’s a quote in the book which sums it up well and applies to everything we looked at above—

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Welcome to the first edition of the Flyby Book Club— Purple Cow by Seth Godin!

This post is about a 6-minute read.

I tried to keep it light and packed with insights, so let me know what you thought using the feedback form below.

Imagine walking past a field with a sea of endless cows grazing into the sunset. Now imagine one of those cows was purple. What would you do? Well, if this was the 90s, you’d probably tell your friends about it and drag them along to see it. Today, in 2023, most people would probably just take their phones out and blast a selfie with said cow on social media. That’s what this book is about. Creating a product so remarkable that people want to tell their friends about it.

This doesn’t mean painting a cow purple and drawing people in with gimmicks or hype. It means the cow is actually purple. The purple cow isn’t an afterthought or add-on you come up with at the time of launch. It’s the art of building things worth noticing right into the guts of your product. It’s about the substance and having the wow factor built in. It means, simply, creating a product that is worth talking about.

I totally agree with this philosophy. The more outstanding your product is, the less marketing you’ll have to do. The product itself becomes the marketing, and you end up with a thriving business in the long term. Instead of spending money on expensive ads, you can use those resources to improve the product and create something people will want to share on their own, thus doing the marketing for you. For bootstrapped entrepreneurs with no external funding, this is really the only option, I would say. But even if you do have funding, it can only run so far if the product doesn’t have legs.

Back in the 90s, product launches were dominated by big-budget commercials and marketing-first style development. An example in the book was Cap’n crunch. The character and ads were developed before the product (which was just a bag of standard, run-of-the-mill sugary corn puffs). This blew my mind (mainly because I was indeed hooked on these characters cereals). The product didn’t even really matter back then. It was the ads doing all the work. Today, this approach wouldn’t work. Consumers are overloaded with choices and are pickier with where they spend their limited attention and resources. The ads *might* hook you in, but only a solid product can get you to stay. The better use of resources is to re-target that ad spend into developing a better product, improving the design, or in some way, bringing people genuine value.

If you do just want to get the word out about your product, you can run a few targeted ads. This would mean highly focused marketing to certain “sneezers”— communities of people who are on the cutting edge and will likely tell others about your product. After that, if the product really is remarkable, it should cross the chasm and spread. This means sneezers tell their friends. Their friends agree that this is indeed something cool and not just another random sneeze. The rest of the population starts adopting the product, and you might just end up going viral. After that, how long you stay at the top depends on the specifics of the purple cow. Once it gets old, you’ll have to go back to the innovation drawing board.

And on the other hand, if you aren’t getting any results from your ads, that might mean you need to improve your product instead or re-target who is seeing your ads. Ideally, save the ad budget for when people are spreading your product, and 1+1=3. This is how you ignite network effects. Continuous innovation mixed with a bit of viral marketing. Not continuously running ads no one cares about.

Who are these “sneezers” the book mentions? People with a certain Otaku about a particular industry, i.e., “Something more than a hobby but not quite an obsession.”

A market with otaku already has a high degree of innovators. They’re open to trying new things and telling their friends about them. This includes markets with existing hobbyists or connoisseurs, such as hot sauce, coffee, anime, games (Can you think of a few more?). Targeting communities like these with a remarkable product can make it easier for your product to grow, as there is already an inherent “sneeze factor” in them. I’d say take it a step further and try and have a way to build otaku into whatever product or industry you are in. Make it so that people become raving fans and get obsessed with the details of the product, however mundane it might seem on the surface.

To do this, you will need a certain level of otaku about your own product and industry as a founder. This is where novel insights come from. The more you actually care about whatever you are working on, the more it will show in the end results and iterations. The best way to do this is by scratching your own itch. But, if you happen to be in a business where you just don’t have the passion, there are two ways to go about it— You can either project yourself into the market mind and try to see things from their perspective and understand their experience. Or you can use the scientific approach of launching your product and getting honest user feedback. Then you can improve based on what your users are suggesting. Combine the two (or three), and you might just end up with a few thousand fans.

But where do you start? Notice the purple cow just has one attribute which is different than a regular cow— the color. The rest of the cow is effectively the same. This is interesting. You only need to exceed in one area to get noticed. This can be the product, customer service, usability (UX), user interface (UI), delivery, packaging, experience (Can you think of a few more?). But, the more attributes you improve, the more likely people will become fans and want to share your product with their friends.

An example in the book was Band-Aid. This was a boring safe product that had been around forever while seemingly having a monopoly over the market. Until a competitor (Curad) came in and put a spin on the concept. They created bandages with characters printed on them, and Boom! Suddenly, all the kids (including me) wanted the cool new bandages, and social proof was through the roof. This was just one attribute that was changed (design), which led to the capture of market share from a firmly established market leader.

There was a quote from the book which stood out to me on this topic —

“The best design solves problems, but if you can weld that to the cool factor, then you have a home run,” - Mark Schurman of Herman Miller.

It really does just come down to making things that are cool. If something is cool, then people want to share it. This is valuable to keep in mind when designing and building your product. How can you add an inherent cool factor to whatever it is you are creating?

One way is to study the greats and learn their way. The book gives the example of Lionel Poilane, the “best baker in the world.” Lionel was a French baker who was obsessed with remarkable. According to the book, he kept improving, did extensive research, interviewed over eight thousand! bakers about their technique, acquired a bunch of bread cookbooks and studied them, set his own rules, and changed the game entirely. At the time the book was published, he sold $10 million worth of bread in the year. Apply the same tenacity to your own field, and you’ll soon find yourself in the ranks of the elite. In short— learn, practice, grow, repeat. Side note: This story itself was worth the price of the admission for me. Check it out on page 58. If you did already, then read it again!

Sometimes, if you’ve already been in business for a while, this might even mean asking yourself what you would do differently if you had to start over. Or, as the book says— If you could create a competitor product to your own, what would it be? Having had this newsletter for almost a year now, I can think of many ways to enhance it if I were to start again. I could either create a spin-off newsletter and have it overtake this one or integrate my learnings right back here and keep improving it slowly.

But this doesn’t mean you want to get obsessed with your competitors. That puts you in a reactive state and robs you of your own creativity. As Walmart was quoted saying in the book— “You can’t out-Amazon Amazon.” It’s about taking your own unique voice, product, skillset, features, design and turning that into a purple cow. It’s about learning and improving until you can set your own rules and change the game entirely. It’s about becoming the “best baker in the world” in your own industry. It’s about creating a product or service that will make the world genuinely scream—

If you read the book, I’d love to hear your thoughts. Hit reply and let me know. Otherwise, I highly recommend reading it. It’s a quick and fun read, and while the book was written in the early 2000s, the lessons still hold up today. It also has a lot of interesting case studies and examples (I only scratched the surface in the post above).

I’ll get back in the next few days with the next book in the Flyby Book Club. Until then …

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