Trizle

Teddy tells SuperTreezy:

1. "SuperTreezy, I wish I could get new sales."
2. "But they never buy my new stuff!"

"BAM SON SLAP YOURSELF BEFORE YOU WRECK YOURSELF," SuperTreezy screams.

"YOU = OSTRICH LOVER."

SuperTreezy tells Teddy about the marketing rule:

1. Marketing is a numbers game.
2. To increases your sales, increase your ^ of pitches.

After a customer purchases something, pitch them something new; the sweet part: it's freeeeeeeeeee marketing, and, those customers give you the highest chances of converting since they're purchasing something from you at the moment (Newton's Law on momentum).

• Text/experiment with different pitches, and see what converts best.

The law of large numbers states that you'll get that sale eventually.

No pitches? "You give yourself a 0% shot. YOUSUCKATLIFE," SuperTreezy tells Teddy.

The more pitches you do = the more new sales you convert.

• Target, for instance, pitches Target membership cards after customer checkouts.
• Whole Foods pitches you healthy snacks as you're loading your stuff.
• Wells Fargo pitches you loans after you open your checking account.

"COMPANIES THAT WIN KEEP PITCHING! DO NOT TEDDY YOURSELF," SuperTreezy advises us.

That makes Teddy cry.

"LOL AT THE CRYBABY WE HAVE HERE."

Pitch something new.

(This article is for businesses looking to grow bigger.)

You've heard it: "We don't need any money because we're profitable!"

Now, imagine a bear. This bear's name is Bambeeshky Roberts.

• Bambeeshky Roberts wants to go to Sacramento.
• He's in New York.

"I DONT WANT HELP CUZ I WANT KEEP MAAAH NET WOOOOORTH," Bambeesky tells you.

So, Bambeeshky decides to walk, not relying on transportation from folks who can help him.

He walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks, and walks.

He gets to Sacramento 40 years later.

BAM! DUDE DIES!! DUDE DIES!!

OH NOES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1111one

Why Raise Money For Your Business?

Yeah, Bambeeshky got to Sac-Town-Home-To-the-World's-Worst-NBA-Team, but the guy could've been been in San Francisco, Los Angeles, Denver, Cleveland, Miami, Manchichi Island in Year 1 if he had gotten some help.

You'll get to your destination/goal/target (i.e., Revenue $X) much quicker with help -- i.e., solid investors.

Here's a $ Breakdown
Take two scenarios.

Scenario 1:

• You invest $10K into your business.
• You earn $2K in Year 1.

Scenario 2:

• You invest your current $10K and raise the rest ($990K) to get to $1M.
• You earn $200K in Year 1.

You then give your investors $150K, while you keep the $50K.

• $50K vs. $2K?
• BAM. No contest.

(Raise $10M? Even better. And so on.)

Not raising money ===> growth rates = tiny.

Growing organically -- in the best case -- will take exponentially longer to get to your goal (e.g., Revenue X).

• You'll also surrender ^$^^$^ opportunities for even more ^$^^$^^ growth too.

The world's financially strongest companies like Google, Goldman Sachs, Walmart, Apple, Coca-Cola, Blackrock, JP Morgan, and Berkshire Hathaway raised $ when they were small, kept raising $ when they got larger, will continue to do so until the end of time.

When Should You Raise Money?

Here's what could happen:

1. You raise money from investors. You fail.
2. Those investors = "OH NO. DON' T COME BACK HERE. OH NO."
3. And, other investors might be leery too.

Here's one tip: Raise $ when you have (1) a profitable idea, and (2) you've barely touched your target market.

That is, you have:

1. a profitable product that beats the S&P 500's 10% annual returns (i.e., you put $1 in, you get more than $1.10 out --  annualized basis)
2. you have a super-super-super-wide market audience that you haven't yet tapped (e.g., you've tapped less than 1% of them)

Yes, staying small is awesome if you're content with staying small; no outsiders should ever tell you to do something you don't want to do.

If you want to get large though (i.e. to Destination X), get some investors.

Raise $. Grow.

1. John's doing Task A.
2. He's also thinking about stuff -- like "what we have to do with Task A in the future".
3. He tries to juggle the two: doing Task A, while simulatenously thinking of future Task A todos.

He productivity sucks as a result.

BOO.

Thinking Slows You Down

You're multi-tasking when you're thinking.

As mentioned in a recent topic:

1. You're driving while talking on the phone.
2. You suck at doing both.
3. Your productivity in both = exponentially suckier.

When you're thinking, you're alternating between doing and thinking -- destroying your momentum to DO.

1. "I'm thinking about X."
2. "I'm doing X."
3. "I'm thinking about X."
4. "I'm doing X."
5. "I'm thinking about X."

Destroying your momentum every time because you revert to "thinking", your productivity to soar like mofro-on-stero plummets.

Try this instead.

Just focus on the task in front of you.
No thinking.

Let the freakishfatastic side of your brain -- your subconscious -- guide you to DO.

It's how top athletes get in the zone, focusing fiercely on the task in front of them.

Just focus on the task in front of you.

You'll work much faster.

Don't think. Do.

1. Bob keeps his ideas as secretive as possible.
2. "If this idea gets out, it's over!"

If Tiger Woods showed you every one of his secret techniques, he'd still beat you.

• Tiger Woods: 30 years of freakish training.
• You: S.U.C.K.

BAM. (Trizzy kids with you. You = awesome.)

If some Joe Shmoe can run with Bob's idea,  Bob doesn't have a sustainable idea.

Great ideas = built through years of experience and strenuous practice.

1. If Johnny's bored, give him more challenging tasks.
2. Still bored? Increase the difficulty.
3. Do it until he's highly engaged. (If he starts getting demoralized, lower the challenges.)

You'll design the right system for Johnny when he's working like he's playing his favorite video game.

"A number of studies have revealed that game playing triggers dopamine release in the brain, a finding that makes sense, given the instrumental role that dopamine plays in how the brain handles both reward and exploration. Jaak Panksepp, a neuroscientist collaborating with the Falk Center for Molecular Therapeutics at Northwestern University, calls the dopamine system the brain’s 'seeking' circuitry, which propels us to explore new avenues for reward in our environment."

"The game world is teeming with objects that deliver clearly articulated rewards: more life, access to new levels, new equipment, new spells. Most of the crucial work in game interface design revolves around keeping players notified of potential rewards available to them and how much those rewards are needed. If you create a system in which rewards are both clearly defined and achieved by exploring an environment, you’ll find human brains drawn to those systems."

(Discover article)

Take Froweezy. Froweezy goes through life thinking he's mister-hot-shots-to-the-max-master-of-everything:

1. 'I know what it takes to market a business.'
2. 'I know why the economy crashed.'
3. 'I know how to run banks better than their executives.'
4. 'I know what's the next hot thing.'
5. 'I know my invention will make millions.'

Froweezy, as impressive as he might be, ignores the biases that cloud his views on various subjects he doesn't understand fully -- eventually setting him up for a vicious downfall.

For instance, if you've devoted decades of your life to marketing, you know Froweezy's strategy of using word-of-mouth won't expand beyond 2 folks; if you've studied the economy for decades, you know Froweezy's target market size won't let him build his million-dollar business; if you've devoted your life to banking, you foresee Froweezy's impending cash wreckage in X months.

Our human tendency to become overconfident at things beyond our grasp wrecked us in The Gold Rush, The Great Depression, The Dot Com Bubble, and The Mortgage Crisis.

It'll wreck us in the next crisis.

Experts devote their entire lives to one subject, and those 20/30/40/50 years of knowledge they attain on their respective subjects regularly become obsolete as better insight comes to light 20/30/40/50 years later.

Our Knowledge Sucks

The experts:

• Albert Einstein: master at science; horrible at business.
• Warren Buffett: master at investing; horrible at operations.
• Bill Gates: master at software; horrible at inventory management.
• Larry Ellison: master at enterprise software; horrible at consumer electronics.
• Tiger Woods: master at golf; horrible at tennis.

Froweezy on the other hand:

• 'This is where Albert Einstein went wrong...'
• 'This is where Warren Buffett invested horribly...'
• 'This is why Bill Gates couldn't launch Vista...'
• 'This is why Larry Ellison can't build consumer software...'
• 'This is why Tiger Woods couldn't beat Y.E. Yang...'

In turn, Froweezy takes that mindset when building his business:

• 'This is where we market...'
• 'This is how we invest...'
• 'This is how we launch...'
• 'This is what customers want...'
• 'This is how we beat our competitors...'

Next thing you know, Froweezy is in line in the food stamp aisle trying to get some cash advances by texting his coked-up one-legged ostrich, who's high on PCP.

What do you know?

1. Think of a bowling ball.
2. Your entire knowledge (i.e., everything that's inside your brain right now) resides on a tiny speck of that bowling ball -- one millimeter in radius.
3. Your goal is to expand on that speck.

How do you expand?

1. Constantly learn new material.
   
2. Seek passionate experts beyond your core.

And, stay humble.

Fill the bowling ball.

• Every purchasing decision Bob makes discourages him.
• The more purchasing decisions you give him, the likelier you'll drive him away.

For instance, let's say you're selling widgets to Bob.

Do you sell by the item or by the package?

Say you sell it by the package.

• 3 widgets for $9. Ouch!

Now, let's say you sell it the item:

• It's $3 for the first one. Ouch!
• The second one is another $3. Ouch!
• The third one is $3. Ouch!

Every ouch your customer subconsciously hears pulls Bob away from the incremental purchase.

• Why does NetFlix price by the month instead of by the movie rental? You worry about one ouch point per month.
• Why does McDonald's promote its deluxe meals? You worry about one ouch for the purchase.
• Why does Verizon price its cell phone plans by the month? You worry about one ouch when that bill comes.
• Why does Apple sell its computers online with predetermined add-ons? BAM. One ouch.

Here's another way to think of it.

Think of Sales

1. 1 sale is tough.
2. 3 sales are tougher.
3. 5 sales? DANG SON

When you package you products, you worry about 1 sale; when you try upselling, you worry about 3/5/10/etc. sales.

Your chances of successfully selling every incremental item decreases every time. (It's in the study.)

Yes, you won't find a definitive answer to price your products (testing and experimenting constantly is the prime way to go about that); but, packaging your products by package could eternally change how you sell your items.

Package.

Imagine a clone.

But, that clone has stronger personnel, deeper wallets, quicker suppliers, faster innovation, and fiercer sales teams.

Defeat that competitor.

"If you choose not to innovate, you are sowing the seeds to your destruction."