Keller says that to taste huge success, narrow your concentration to one thing, and where your success varied, the focus had too. Always approach a “go small” strategy to succeed at anything you want. The author emphasizes on the fact that extraordinary results are directly determined by how narrow you can make your focus. You need to focus on doing fewer things for more effect instead of doing more things with side effects.
The Domino Effect
A domino effect can lead to extraordinary results in your life. Success is built sequentially. It’s one thing at a time. Success Leaves Clues. No one is self-made and no one succeeds alone. The one thing is the fundamental truth in the lives of successful people. According to the author the Six Lies between You and Success are: 1. Everything Matters Equally 2. Multitasking 3. A Disciplined Life 4. Willpower Is Always on Will-Call 5. A Balanced Life 6. Big Is Bad
Everything Matters Equally
“The things which are most important don’t always scream the loudest.” – Bob Hawke
We prioritize everything uniformly in urgent circumstances. As a result, we respond accordingly. But that doesn’t bridge the gap between you and success. However, achievers always effectively prioritize their tasks. Most to-do lists are survival lists—getting you through your day and your life, but not making each day a stepping-stone for the next so that you sequentially build a successful life. Instead you should focus on a success list that is deliberately created to achieve extraordinary results. If your to do list contains everything under the umbrella then it will divert you from your one thing. You can start with as large a list as you want, but develop the mindset that you will eliminate the redundant tasks and end with the essential one. There will always be just a few things that matter more than the rest, and out of those, one will matter most. Doing the most important thing should always be the priority.
Multitasking is a lie because you either can’t or won’t do either well. It’s not that we have too little time to do all the things we need to do, it’s that we feel the need to do too many things in the time we have. While multitasking switching between tasks deteriorate the focus level. Secondly, you have to activate the “rules” for whatever you’re about to do. Thus you can’t focus effectively on more than one task at once. According to some research estimates workers are interrupted every 11 minutes and then spend almost a third of their day recovering from these distractions. Researchers further added that we lose 28 percent of an average workday due to multitasking.
A Disciplined Life
Discipline in your lifestyle is essentially training yourself to act in a particular way. But you can become successful with less discipline than you think because success is about doing the right thing, not about doing everything right. So you should devote your energy and discipline to that one task only. Doing right things, can liberate from monitoring unnecessary things in life. Those with the right habits seem to do better than others just by maintaining the required discipline in one thing.
Willpower Is Always on Call
Willpower is always on will-call is a lie. Crediting willpower for the success we observe should not mislead you. So, if you want to get the most out of your day, do your most important work—your one thing before your willpower is drawn down.
A Balanced Life
A balanced life is a lie. Gambling with your time may result into non recoverable losses. Expecting all things done in life is foolishness. When the things that matter most get done, you’ll still be left with a sense of imbalance. So it is wise to choose the most important things in life and dedicate all time and energy to it.
Big Is Bad
Big is bad is a lie. No one knows their limit for achievement. So, it is not worth to worry about this. Your actions today determine your future. We over think, over plan, and over-analyze our careers, our businesses, and our lives; that long hours are neither virtuous nor healthy; and that we usually succeed in spite of most of what we do, not because of it. We can’t manage time. The key to success isn’t in all the things we do but in the handful of things we do well. If you can honestly say, “This is where I’m meant to be, doing exactly what I’m doing,” then all the amazing possibilities for your life become possible.
The Focusing Question
Voltaire once said, “Judge a man by his questions rather than his answers.” Quality of an answer is directly determined by the quality of the respective question asked. If you ask the right question, you get the right answer, but wrong question will result into wrong answer. If you ask the most powerful question, the answer can be life-changing. The Focusing Question can lead you to answer not only “big picture” questions like Where am I going ? What target should I aim for? But also “small focus” ones as well like What must I do right now to be on the path to getting the big picture? Where’s the bulls-eye?. Therefore, our choices and actions determine the extraordinary results in life.
The Path to Great Answers
Extraordinary results require a Great Answer. Most satisfying answer always reside outside your comfort zone. When moving toward a goal, the first thing to do is ask, “Has anyone else studied or accomplished this or something like it?” The research and experience of others is the best place to start when looking for your answer. A simple formula for implementing the one thing and achieving extraordinary results is to set a purpose, priority, and productivity.
Live with Purpose
Once we get what we want, our happiness sooner or later diminishes because we quickly become accustomed to what we have acquired. Happiness happens on the way to fulfillment. Dr. Martin Seligman, former president of the American Psychological Association, asserted that there are five factors that contribute to our happiness. These are- positive emotion and pleasure, achievement, relationships, engagement, and meaning. Financially wealthy means having a purpose for your life. Happiness happens when you have a bigger purpose than having more fulfills, which is why it is said happiness happens on the way to fulfillment.
Live by Priority
Purpose without priority is powerless. The truth about success is that farther away a reward is in the future, the smaller the immediate motivation to achieve it. Connect today to all your tomorrows. Breaking a big goal down into the steps needed to achieve it helps in planning better to achieve extraordinary results. This requires visualizing the process thoroughly. In one study, those who wrote down their goals were 39.5 percent more likely to accomplish them.
Live for Productivity
Productive action transforms lives. The most successful people are the most productive people. To enhance your productivity, devote your time proportionately. Three things of time block to achieve extraordinary results are: 1. Time block your time off 2. Time block your ONE Thing 3. Time block your planning time The most productive people design their days around doing their ONE Thing. Block time as early in your day as soon possible. The author suggests blocking four hours a day.
The Three Commitments
To achieve extraordinary results you require three commitments. First, is to seek mastery. Second, is to pursue best ways of doing things. Last, is the attitude of being accountable for everything you do to achieve your ONE Thing. The path of mastering is the combination of not only doing the best you can do, but also doing it in the best possible way.
Anders Ericsson observed that “the single most important difference between these amateurs and the three groups of elite performers is that the future elite performers seek out teachers and coaches and engage in supervised training, whereas the amateurs rarely engage in similar types of practice.”
The Four Thieves
The Four Thieves of Productivity according to the author are: 1. Inability to Say “No” 2. Fear of Chaos 3. Poor Health Habits 4. Environment Doesn’t Support Your Goals The way to protect what you’ve said yes to and stay productive is to say no to anyone or anything that could derail you. When you say yes to something, it’s imperative that you understand what you’re saying no to. You can’t please everyone under the sun, so don’t try. Rather you should focus on adequate management of your personal energy so as to sustain the productivity. High achievement and extraordinary results require big energy.
The Highly Productive Person’s Daily Energy Plan include: 1. For spiritual energy: Meditation and pray. 2. For physical energy: Eat Healthy, exercise, and have a sufficient sleep. 3. Emotional energy: Hug, enjoy, and laugh with loved ones. 4. Mental energy: Set goals, plan, and calendar 5. Business energy: Time block your ONE Thing. The people surrounding you must support your goals because no one succeeds alone and no one fails alone. Pay attention to the people around you. When you clear the path to success—that’s when you consistently get there. When you know what matters most, everything makes sense but when you don’t know what matters most, nothing makes sense.
This book is a guide for those who are conscious regarding their habits and struggle with their habits, cravings and willpower. The author has also mentioned ways to create and change a particular habit is icing on the cake.
Habits work in 3-step loops: cue, response, reward.
The root of all habits lies in a 3-step loop: Cues are combinations of stimuli. These repetitive cues triggers long term changes in the brain’s structure. So this repetition and coordination becomes independent of conscious decision making.
Responses are the chain of thoughts that brain begins to expect and crave for rewards as soon as cue arises.
Rewards are the pleasant/ unpleasant emotions that these cravings begin to drive responses that deliver the reward.
Change your habits by REPLACING just one part of the loop: The routine.
Duhigg calls this -“The Golden Rule“. Naturally, the more often you reinforce a habit, the more it gets embedded in your brain. The golden rule of habit change says that-” to change a habit, it is important to keep the cue and the reward the same, while inserting a new routine into the habit loop.”
Charles Duhigg used an example of Bill Wilson, a recovering alcoholic to illustrate his argument. His newfound faith in Christ led him to create Alcoholics Anonymous.
Your most important habit is willpower, and you can strengthen it over time in 3 ways.
Duhigg also explained the significance of “willpower” in creating a habit. Duhigg says willpower is by far one of the most significant habits, as it helps us do better in all spheres of life. While quoting an example of coffee the author says that you’ll probably get grumpy if you can’t have it on a particular day. Therefore switching the routine with everything else in motion can trick your mind to adapt to the new one.
Here are 3 uncommon ways in which you can grow your willpower capacity over time: 1. Maintain discipline, because persistently delaying gratification will boost your willpower. 2. Plan in advance to deal with worst scenarios. 3. Preserve your autonomy because tasks assigned by someone else, will exhaust your willpower muscle much quicker.
How to create a Habit
1. Identify the desired response. Firstly, focus on one task at a time because new habits need willpower and willpower is limited. Don’t bite off more than you can chew. Secondly, plan/prepare in advance to make the new response easy to complete. 2. Select a cue. Choose one or more of the following to establish as a cue for your response: – Location: Somewhere unique that supports this habit. – Timing: A regular time each day / week brings consistency. – Emotional state: Is the emotional factor behind this new habit excitement? Anger? or Anxiety? – Other people: Who will trigger the new habit? a spouse? a colleague? a friend? – Directly preceding sensation, thought or action: What series of steps will trigger this response? Is it another habit? Finally, visualize the cue and plan out your response to it in your head.
3. Design some carrots. -Treat yourself with rewards that makes you feel happy. -Establish support networks to keep yourself motivated. -Visualize your desired outcome and remind yourself of it often. -Write a clear visualization of your end goal, print a photo, save a video etc. -Track progress and celebrate small wins to create a positive cycle of belief. 4. Set up some sticks. -Commit yourself to your new resolution on paper because those who write down resolutions are 10 times more likely to complete them. -Track streaks of completed responses as the threat of breaking a long streak is a powerful motivator. Make a public commitment to those whose opinion matters but won’t judge you if you fail. 5. Practice your new habit cycle every day for 30 days. -The structural changes that underlie habits are triggered only by perpetual consistency.
How to change a Habit
Changing a habit is not about hitting bull’s eye. Every individual’s response and behavior differs in dealing with changing/ acquiring a habit. 1. Choose the existing response that you want to change. For instance, web browsing, smoking, waking up late, nail-biting, stuttering etc. 2. Experiment with rewards. -Rewards are often obvious in retrospect but difficult to uncover. -Don’t put yourself under pressure to change in this period. -Adjust your responses to test different rewards and determine the craving that is driving your routine. – To create momentary awareness jot down first three emotions on your mind. -Set a timer for 15 minutes. Give the response and reward time to take effect. -Review your notes and ask yourself if you still feel the same urge. If no: you have found the reward that satisfies your craving. If yes: the reward is something else, try again.
3. Isolate the cue. Like rewards, cues are often obvious in retrospect. -Each time you feel the craving, make a quick note of: – Where you are – What time it is – How you feel – Who else is around – What you’ve just been doing or thinking about
4(a) Eliminate the cue. -Many cues are directly within our control. -The quickest way to stop a response is to simply eliminate the cue. -Eliminating cues is powerful because it requires no willpower. 4(b) Design an alternative response that delivers the same reward – If some cues are not possible/ practical to eliminate then adopt major external changes for instance starting a new school, getting married, moving home, changing job etc.
Thus, all you require to change a habit or adapt a new one is willpower, dire perseverance and consistency. You just have to align your three loops viz cues, response and rewards and everything will fall into order.
So, what’s the new habit that you’re going to welcome?
This book has four parts. In all parts of the book the author suggests various ways/ principles to make people like you and how to win people to make your way of thinking. Moreover, these principles are escorted with some quotes mentioned in the book to taste the real essence of these principles.
Part 1: Fundamental Techniques in Handling People
Principle 1: Don’t criticize, condemn or complain
“Criticism is futile because it puts a person on the defensive and usually makes them strive to justify themselves.”
Principle 2: Give honest and sincere appreciation
The deepest principle in human nature is the craving to be appreciated.
Principle 3: Arouse in the other person an eager want
Of course, you are interested in what you want. But no one else is. The rest of us are just like you: we are interested in what we want.
Part 2: Six Ways to Make People like You
Principle 1: Become genuinely interested in other people
There is only one way under high heaven to get the best of an argument – and that is to avoid it.
Principle 2: Smile
There is nothing either good or bad, but thinking makes it so.
Principle 3: Remember that a person’s name is to that person the sweetest and most important sound in any language
The average person is more interested in his or her own name than in all the other names on earth put together.
Principle 4: Be a good listener. Encourage others to talk about themselves.
If you want to know how to make people shun you and laugh at you behind your back and even despise you, here is the recipe: Never listen to anyone for long. Talk incessantly about yourself. If you have an idea while the other person is talking, don’t wait for him or her to finish: bust right in and interrupt in the middle of a sentence.
Principle 5: Talk in terms of the other person’s interests
The royal road to a person’s heart is to talk about the things he or she treasures most.
Principle 6: Make the other person feel important—and do it sincerely
If we are so contemptibly selfish that we can’t radiate a little happiness and pass on a bit of honest appreciation without trying to get something out of the other person in return – if our souls are no bigger than sour crab apples, we shall meet with the failure we so richly deserve.
Part 3: How to Win People to Your Way of Thinking
Principle 1: The only way to get the best of an argument is to avoid it
There is only one way under high heaven to get the best of an argument – and that is to avoid it.
Principle 2: Show respect for the other person’s opinions. Never say, “You’re wrong.”
You cannot teach a man anything; you can only help him to find it within himself.
Principle 3: If you are wrong, admit it quickly and emphatically
Any fool can try to defend his or her mistakes – and most fools do – but it raises one above the herd and gives one a feeling of nobility and exultation to admit one’s mistakes.
Principle 4: Begin in a friendly way
A drop of honey catches more flies than a gallon of gall.
Principle 5: Get the other person saying, “yes, yes” immediately
Socrates kept on asking questions until finally, almost without realizing it, his opponents found themselves embracing a conclusion they would have bitterly denied a few minutes previously
Principle 6: Let the other person do a great deal of the talking
If you want enemies, excel your friends; but if you want friends, let your friends excel you.
Principle 7: Let the other person feel that the idea is his or hers
Principle 8: Try honestly to see things from the other person’s point of view
There is a reason why the other man thinks and acts as he does. Ferret out that reason – and you have the key to his actions, perhaps to his personality.
Principle 9: Be sympathetic with the other person’s ideas and desires
Three-fourths of the people you will ever meet are hungering and thirsting for sympathy. Give it to them, and they will love you.
Principle 10: Appeal to the nobler motives
The way to get things done is to stimulate competition. I do not mean in a sordid, money-getting way, but in the desire to excel.
Principle 11: Dramatize your ideas
Principle 12: Throw down a challenge
All men have fears, but the brave put down their fears and go forward, sometimes to death, but always to victory.
Part 4: Be a Leader—How to Change People without Giving Offense or Rousing Resentment
Principle 1: Begin with praise and honest appreciation
Beginning with praise is like the dentist who begins his work with Novocain. The patient still gets a drilling, but the Novocain kills the pain.
Principle 2: Call attention to people’s mistakes indirectly
Principle 3: Talk about your own mistakes before criticizing the other person
Admitting one’s own mistakes – even when one hasn’t corrected them – can help convince somebody to change his behavior.
Principle 4: Ask questions instead of giving direct orders
People are more likely to accept an order if they have had a part in the decision that caused the order to be issued.
Principle 5: Let the other person save face
I have no right to say or do anything that diminishes a man in his own eyes. What matters is not what I think of him, but what he thinks of himself. Hurting a man in his dignity is a crime.
Principle 6: Praise the slightest improvement and praise every improvement. Be “hearty in your approbation and lavish in your praise.”
Praise is like sunlight to the warm human spirit – we cannot flower and grow without it. And yet, while most of us are only too ready to apply to others the cold wind of criticism, we are somehow reluctant to give our fellow the warm praise of sunshine.
Principle 7: Give the other person a fine reputation to live up to
If you want to improve a person in a certain aspect, act as though that particular trait were already one of his or her outstanding characteristics.
Principle 8: Use encouragement. Make the fault seem easy to correct
Be liberal with your encouragement, make the thing seem easy to do, let the other person know that you have faith in his ability to do it, that he has an undeveloped flair for it – and he will practice until the dawn comes in the window in order to excel.
Principle 9: Make the other person happy about doing the thing you suggest.
So the key to being a leader and master of the art of human relations is to adapting these principles in your life is to practice them. This will change your attitude towards life and people without arousing resentment.
Peter Thiel segregates progress into two distinct forms viz Horizontal progress and Vertical progress. Horizontal Progress refers to small incremental progress in a field in terms of economic activity. Companies following horizontal progress simply imitate others. Thiel calls this pattern one to many. Vertical Progress refers to achieving dimension shifting progress in a field i.e. a progress which gives the company unique competitive advantage. It is achieved either by inventing something novel, or by tremendous unusual improvement in a field. According to Thiel this pattern is referred as “Zero to One.”
Party like It’s 1999
In this chapter, the author highlights the psychology of both the entrepreneurs and investors behind dot com bubble in the late 1990s. Entrepreneurs and investors took four learnings from this event: 1. Incremental changes are the safe path. 2. Lean and Flexible 3. Improve on competition 4. Product is more important than sales
Thiel advocated and asserted that entrepreneurs and investors took the wrong learning from the dot com bubble. Therefore, Thiel listed following learnings: 1. It is better to risk boldness rather than negligible things. 2. It is always better to have a bad plan rather no plan. 3. Competitive markets destroy profits. 4. Sales matter as much as product. Thiel wants the reader to think for themselves because reactions to past mistakes can be as wrong as the mistakes made. So, try to adopt a pragmatic approach.
All Happy Companies Are Different
According to Thiel, one of the biggest economic lie told by the economists is that the state of perfect competition leads to market equilibrium. The reality is, there is no perfect competition, and it eats away from the same pool of potential profits. Let’s consider the case of Google. It is advocating responsible business ethics since its outset. However, it’s made possible due to the fact that Google enjoys a monopoly in the internet search market. In contemporary times, we seldom hear someone saying let me Bing that? Non-monopolist exaggerates their uniqueness by describing their target market as the intersection of various smaller markets. In contrast, monopolist disguises their monopoly status by describing their target market as the union of large sectors. Monopoly is the condition of every successful business.
Ideology of Competition
It’s not only the economists that are fooled by competition; our society is driven by it! Bright students at a young age start competing for admissions to elite institutions. Once they reach there, competition intensifies. Once they land at prestigious jobs, competition reaches new heights. This vicious circle continues until the intensity of competition reaches to a level that sucks life out of them. Competitive attitude leads to a situation of war, which can turned out to be a costly business both in terms of time and resources. So it is always advisable and worthwhile to avoid war. In the case that war is worth having, and then you should strike hard and end it quickly. There are no half measures in war.
Last Mover Advantage
One of the ways to escape competition is to build a monopoly, but it should be defensible.
The characteristics of a Monopoly as listed by the author are: 1. Proprietary Technology 2. Network Effects: As the number of users increase, it makes the product as a whole more valuable. As more people join the network, it becomes more valuable and further enhances the monopoly position. 3. Economies of Scale: Firms get stronger as sales grow because fixed costs can be spread over a larger quantity of sales. 4. Branding: Every company has a divine right to monopoly with their branding. A strong brand connection and faith built over time with customers is a powerful way to obtain monopoly.
So Thiel advises startups to start with small, well-defined target demographics which are clustered in a small geographical area. Large markets come with cut-throat competition. For instance, Amazon started by selling books, then moved into DVDs and CDs before it became a store of everything. Lastly, avoid disruption because Media is obsessed by disruptive technology. Disruption attracts the attention of competitors as well as regulators.
You Are NOT a Lottery Ticket
This chapter discusses the four different attitudes to future: 1. Definite optimism: Future can be predicted and it will be better. 2. Indefinite optimism: Future can NOT be predicted but it will be better. 3. Definite pessimism: Future can be predicted and it will be worse. 4. Indefinite pessimism: Future can NOT be predicted and it will be worse.
Only hardwork and smart work makes you luckier. Victory awaits him who has everything in order. Western world is in a state of indefinite optimism right now, compared to definite optimism of the Renaissance, Age of Enlightenment and Industrial Revolution period. Lack of concrete plans make people to hold a portfolio of various options. This is the dominating viewpoint of Western world now. Thiel advocates for the definite optimism. That’s how great companies will be built.
Follow the Money
In this chapter Thiel introduces the well-known Pareto Principle also known as the power law or 80/20 rule. Italian economist Vilfredo Pareto showed that 20% of population owned 80% of the land in the country like in business management field wherein 80% of your sales comes from only 20% of your clients. In order to maximize process efficiency, you should focus on 20% of the opportunities which would return 80% of the gains. Whenever you plan to spend some time taking an action, think of the 80/20 rule. That is, take fewer actions with bigger impact.
This chapter states that secrets are the magic ingredient which makes a business great. Great companies might become a source of conspiracy because when you share your secret the recipient becomes a fellow conspirator. In order to uncover secrets, you should be looking for them. Many say there are no secrets left in the world to discover and that’s exactly why they won’t be finding any. If you ever come across a secret then you either keep it to yourself, or you share it with others. The author suggests that it is always better to keep some secrets rather than telling everybody everything you know.
This chapter focuses on the Founding principles because it is difficult to change them once set. Co-founders It is very important to have a strong foundation. You would not start a company with a stranger. Complementary skill sets and personalities of founders matter, but how well founders know each other and how well they work together matter.
The dealignment in the following three dimensions leads to conflicts in startups: 1. Ownership- who legally owns company’s equity. (founders, employees and investors) 2. Possession- who controls day to day operations of the company. (founders and employees) 3. Control – who formally govern company’s affairs (board of directors and founders) So adequate representation of each stakeholder in your startup should not be ignored.
Boardroom of a Startup The author suggest a board of 3 is ideal for private companies. It is because it is easier for directors to communicate, reach consensus and to exercise oversight in smaller boards. However, it is quite easy for small boards to object management easily.
Cash is NOT King You should avoid cash incentives and bonuses because it will encourage short term thinking rather than long term value creation. In such scenarios equity is considered a preferable medium so as to keep all stakeholders aligned for long term vision. So either by taking the lowest salary or a modest one, a CEO should also set an example.
Thiel quotes a noticeable story of Aaron Levie, CEO of Box. Four years after founding Box, he paid himself lower than everyone else, lived in a one bedroom apartment 2 blocks from the office. Thus, this shows good CEOs lead by example.
The Mechanics of Mafia
Thiel advocates that you should focus on hiring like-minded people with similar interests and similar passion regarding the problem domain you’re working on. In order to foster a strong culture, Thiel proposes attention to these 4 dimensions: 1. Imagery 2. Slogans: Catchy-phrases and inside jokes help foster stronger relations among the team members. 3. Advocacy: Is your company actively publicizing its efforts towards your problem? 4. Obsession: Are team members obsessed regarding solving the problem?
If You Build It, Will They Come?
This chapter focuses on measures to increase your sales. Advertising doesn’t make you buy a product instantly, but it creates recurrent subtle impressions which will drive sales in future. If you have invented something but you haven’t figured out a way to distribute it, you have a bad business on your hands.
How to sell a product? For assessing effective distribution one need to keep an eye on two metrics. viz Cost of Acquiring a customer (CAC) and Customer Lifetime Value (LTV). To have a profitable business, you’ll need to satisfy this equation: LTV > CAC Lifetime value extracted from a user should be higher than the cost of acquiring them.
Distribution Spectrum Depending on the value of each product/service you sell, your distribution effort would fall somewhere in the below mentioned spectrum: 1. Complex Sales Deal Size: $1m – $100m Target: Government, Public Corporations etc. If the deal size ranges from $1m to $100m, CEO needs to be involved at every such deal. 2. Personal Sales Deal Size: $10k – $100k Target: Consumer or Companies
3. Dead Zone Sales Deal Size: around $1k Target: SMEs Since, the target audience is likely to be small businesses rather than individuals, conventional forms of advertisement is hard to exploit as well. 4. Small Sales Deal Size: around $100 Target: Individuals or businesses. Traditional sales and marketing channels are effective for this type of deals. 5. Viral Sales Deal Size: around $1 Target: Individuals. This will be achieved by leveraging network effects.
This is called the “power law of distribution” i.e you need to pursue channels which determine majority of your sales.
Man and Machine
Thiel’s outlook regarding AI is optimistic as, he beliefs, man and machine have complementary skill sets and will build the future by working together. Palantir – Thiel’s new company is adopting a hybrid approach, which uses AI/ML driven techniques to gather and analyze data, but relies on human analysts to provide causal explanations and unique insights. Machines can’t replace humans instead it will empower them.
Thiel states that the Clean-tech bubble failed to deliver results because these companies failed to answer any of 7 questions which every business needs to answer. 1 – The Engineering Question Is it possible for you to create path breaking technology/ innovation instead of incremental improvements? 2 – The Timing Question What is the correct time to start your particular business? 3 – The Monopoly Question Are you starting with a defensible market share for your product? 4 – The People Question Do you posses the required competent team? 5 – The Distribution Question Do you have the right approach to deliver your product apart from creating it? 6 – The Durability Question Will you be able to sustain your position in the market in coming 10-20 years? 7 – The Secret Question Do you posses a unique idea that others don’t see?
If you don’t have reasonable answers to these seven questions then you’ll run into failure. But if you nail all 7, you’ll master fortune and success.
The Founder’s Paradox
If you have extreme character qualities you’ll find yourself in the company of such people, which will further enhance those qualities. The paradox of being a founder is that they might seem poor and rich, genius and idiot or hero and villain at the same time. So be tolerant of the extreme qualities of founders, this is how they can lead companies beyond mere instrumentalism.
Conclusion: Extinction or Singularity
According to Thiel, there are only 2 possible options for existence of humanity.
First one is that, we’ll go into a horrible decline with the extinction of humankind due to global warming, populist politics, nuclear war and global famines. The other option is, the rate of advancement of technology will keep accelerating leading to an exponential take-off. Nobody can predict the future, but we all play our parts to shape the earth.
In this Mike Michalowicz starts with asking you to imagine that you are in the market for a pumpkin. Once your eyes caught a sight of an enormous pumpkin at the pumpkin patch. Not the “for sale” kind, but the one surrounded by velvet ropes and photographers. Now imagine that pumpkin is your business; so large that the media takes notice, so successful that people travel miles to do business with you, and so inspiring that books are written about you. Mike takes the strategy of growing world-record pumpkins and applies the same to principles of business in a commanding style.
The book talks about being different. Being unique is itself implies being appealing and magnetic. You don’t need to do more to be the best. You need to do the things differently.
The Pumpkin Plan is propelled vividly by Mike Michalowicz in seven steps. STEP ONE: Identify your biggest natural strengths. STEP TWO: Sell, sell, and sell. STEP THREE: As your business grows, fire your small-time, rotten clients. STEP FOUR: Never, ever let distractions take hold. Weed them out fast. STEP FIVE: Remove the less promising clients and recognize your top clients. STEP SIX: Focus your entire attention on your top clients. Nurture and protect them and find out what they want and provide the same if it aligns with your company’s goals. If possible, then replicate the same service or product for the rest of the top clients. STEP SEVEN: Watch the humongous growth of your company.
Find the right seed
Don’t waste your time planting seeds that may or may not work.Then focus your attention, money, time and other resources on that niche until all of your entrepreneurial dreams come true.
Michalowicz correctly identifies, one of the biggest problems in small businesses is that– owners trying to please everyone. Small business owners sometimes take on projects that are outside their area of expertise. Michalowicz explains that you need to really define your area of expertise and don’t diverge from it ever. He describes this right seed as the sweet spot – the place where your best clients and the best part of your business meet. When you figure out the one thing that you do really well, it’s like the right pumpkin seed.
The author explicitly explains the essence of “Sweet spot”. It is the intersection of your top clients, your unique offering, and your ability to systematize it.
Entrepreneurs are one who identify the problems, discover the opportunities and then build processes to allow other people to get things done. They don’t do the work. If you want to grow a prize-winning pumpkin, you have to plant a prize-winning pumpkin seed. Therefore, focus on thinking prize winning business seeds.
Approach your customer
The Pumpkin Plan is not an “if you build it, they will come” kind of plan. This is a “build it, then build a paved road to your client’s door, then give them a luxury bus ride (while serving them breakfast using only the finest china) to your door” kind of plan.
A Pumpkin Planner’s success is not in having better answers but in asking better questions and defining the problem.
The key to humongous growth is to indulge in competition reasonably well. Ask yourself what is the one area of your business that you can dominate? Your brain goes to work as soon as a it receives a question in the form of stimuli. Good, bad or indifferent. Be effective regarding your questions because it will determine the quality of your answer. You cannot scale your business if you do most of the work. In fact, a Pumpkin Planned business require that you refrain from doing unnecessary tasks and focus on bull’s eye. Take a minute to ponder at the possibility of this question in your business? Systems do not simplify the results rather systems simplify the process of getting there.
More is not better, people. Better is better. You need to shift your mindset away from the quantity game. You need to stop killing yourself for scraps.
You need to stop wasting so much time on the clients who are high maintenance, who never pay on time, the clients who always change the scope of the project, and the clients whose calls you dread. Every small business has clients who drain energy and use valuable resources with little or no return.
There are three types of clients mentioned below based upon their importance: 1. Good clients 2. Non-existent clients 3. Bad clients.
As George Carlin once said, “Anyone who drives slower than you is an idiot, and everyone who drives faster is a maniac.”
So just focus on forging relationships with the people who are going just your speed. Therefore the goal is to focus on your best clients.
Michalowicz also mentions some techniques to fire clients: • Eliminate services • Prioritize service calls (when good clients call they should get serviced first) • Raise prices • Refuse to two-time – explain that you have an agreement with a major client that prohibits you from servicing them. These may sound harsh, but can be extremely beneficial.
The Tourniquet Technique
The beauty of the Pumpkin Plan is that once you kill off the diseased and unfit clients and shift your attention to your most promising clients, you have the opportunity to cut all expenses that don’t serve your top clients – everything from phone lines to parking spaces. It makes cutting expenses so much easier. You can see what has to go and because you’re trying to grow a massive, prize-winning pumpkin, you have the emotional leverage to get real with your P&L and stop the bleeding.
According to the author this is called the Tourniquet Technique.
Cash is the lifeblood of any business. Michalowicz talks a lot about how we are always waiting to land the next client. “This next one will change things.” But the problem is that if we land them, we run out and hire new staff, get a bigger office, a new show room, a new car. We spend what we earn be it plain and simple. But when we run out of cash, the trouble begins.
The Pumpkin Plan requires you to cut the expenses that are associated with the clients that you fired. Michalowicz gives few ideas to stop the bleeding. For instance, going through your profit and loss statement line by line is the most relevant. Taking a good hard look at every expense is the key. In addition, cutting staff, giving up the office, missing that national conference etc. Furthermore creating an org chart for each position is also valuable. This helps eliminate any confusion and helps establish roles and responsibilities
Once you’ve passed the early stages of entrepreneurship, success isn’t a quantity game anymore. It’s the quality of service/ product to your best clients.
Would you be willing to fire a majority of your clients?