Tim: The competitive environment is very strong, in the sense that sports nutrition generally operates in a 3-6 month product cycle. So people come out with their new products. These products will be very heavily promoted through national campaigns, about say $40,000 per product per month, or more, and the reason why its lifespan is so short is that they will distribute through multiple regional distributors and these regional distributors will then have online presences and compete on the price to beat each other to the customer. And within 3-6 months the product isn’t earning a sufficient profit for any of the resellers and middlemen, so they launch a new set of products to take their places.
What I realized also very quickly is that it’s much better to be the first or the only person doing what you do as opposed to the best person doing what you do. So, if you create a new product category, or a new service for yourself, it’s much easier to distinguish yourself and the value proposition is faster to convey and therefore you won’t get more customers.
Scott: So, there’s a strong first-mover advantage.
Tim: Absolutely. It’s the first-mover advantage that establishes you as the leader in mindshare. In my particular case, rather than focus on increasing muscular size, I focused on actual athletic performance and I targeted primarily athletes of the Olympic and professional caliber and utilized some background I had in addition to taking help from people in testing organizations and athletic groups to focus on neural acceleration.
So this was a product I categorized and defined as a neural product -- a neural accelerator, essentially, that acted on reaction speed on the track among other characteristics. It was a very narrow niche but a very sizable niche at the same time. So I dominated a handful of sports and continued to sell, which generates more than sufficient income for my TMI.
And what I was going to say about the lawyers and other people who are able to create service models, whether that’s speaking or otherwise, is that there’s nothing inherently wrong with that model. The problem that emerges is when people fall victim to the public company model of indefinite quarter-by-quarter growth. So they think that since they did one speech last month and they did two speeches this month, they are not successful. It’s a very ambiguous way that they define success using financial terms. And you find that most people who take a step back and remove yourself from the collective game of make-believe for a minute, most people are working to make more money for the sake of making more money. But the purpose, the point of making that money is very poorly defined. So once you are at TMI any time that you are putting in more hours and sacrificing other activities you would like to pursue in the name of making more money, it’s a reality check.
Scott: Right. The other article I wanted to point people to and then we can start this as a starting point for discussion, is called, Time Is Money, which talks about the idea that your time, hour per hour, has some kind of value associated with it. The idea is that if your time is worth $50 an hour or $100 an hour or whatever, then you shouldn’t be doing $10 an hour work. If you want to because you enjoy it, that’s fine, but as a general practice you should be hiring a $10 an hour person to do the $10 an hour work.
Can you elaborate on that? How do you get help? Maybe some tasks can be eliminated, but a lot of the work that you are doing when you are working those 80 hour weeks still needs to be done.
Tim: Start by taking routine time consuming tasks that you personally need to perform and batch them, meaning that you perform them at set times as intermittently as possible, in between which you let them accumulate. For example, check email twice a day by using an autoresponder that tells people you are checking email twice a day and that if they need something more urgent they should call you on your cell phone. It’s a very simple approach to eliminating email consumption and interruption. Once you do those things and streamline by eliminating the 80% of tasks that are producing only 20% of the results, once you remove all that static there still are some tasks left.
The simplest way to the calculate value of your time is the following. If you make $50,000 a year, for example, you chop off the last three zeroes, and you can do this with any income and then you cut the remaining number into half. If you are making $50,000 a year, cut off three zeroes, i.e. $50, cut that into half, you make $25 an hour.
If I can pay someone, let’s just say 50% of that number, $12.50, for a task, then I realize 100% return on investment. So I have anywhere between twenty and forty MBAs in India and virtual assistants in Philippines and other places that effectively run my life for me, not only from a business standpoint, but also from a personal standpoint. If I want to plan a trip or any type of project, I will have them do all the research, all the online data gathering, any type of planning, even book it for me, and it creates an incredible amount of time.
The easiest way to find virtual assistants is to use a company, for example, Get Friday, an Indian-based company that’s also in the U.S., which enables them to handle tasks not only during your business day, but you can assign a task at 5 p.m. and then it will done and in your inbox at 9 a.m., which is nice.
Elance.com is also a very good site for finding virtual assistants and you can have this type of help for $5 to $15 an hour. It saved me thousands of hours. It may have cost me a small amount of money, but millions of dollars of additional revenue has been booked as a result of the time that I can apply to high-yield activities as a result of this type of outsourcing.