Monetizing Your Passion

Introduction

In the second half of 2019 I realized: the work environment didn’t suit me.

My colleagues were nice, I got along with my superiors, work was somewhat challenging…but something felt off. Something had to change.

A smart person would find this something – a new job, a side hustle, a new business – while employed, enjoying the safety net of a stable income and buying himself time.

But I wasn’t smart.

I researched and studied ways to earn money for 6 months before pulling the trigger – I had wanted to wrap up my projects properly.

On March 1, 2020, I started for myself.

6 months of preparation had gone into it: I knew all about dropshipping and day trading.

On March 2 I quit day trading.

On March 20 I quit dropshipping.

During those 6 months I hadn’t “done” anything. I had been stuck “preparing.”

Preparation, research and thinking are useful for ideation and understanding what’s possible. But it doesn’t give feedback. Only action, the “doing”, does. And feedback is what you need to figure out if something energizes you long enough to build your life around it.

To turn your passion into profit.

The next 2 years I tried different kinds of work: web design, digital marketing, consulting, coaching, just to name a few.

I eventually found my passion, my purpose, something I’d love to do the rest of my life.

But passion alone doesn’t pay.

And while I don’t need much, money is a useful resource. If I don’t want to grow or hunt for my food and have some shelter, money can buy me that freedom.

Each activity I tried, I managed to monetize. People were willing to pay me for it. And I’ve helped many others earn with their ideas, their passions, their purpose – and help build their life around it.

I’ve come to realize: whatever passion you have, your life can be built around it. You can earn money with it, if you want.

There are a few simple playbooks to turn your passion into profits. They’re simple, but not easy. They require effort. They don’t happen overnight. But it is possible.

To get paid doing something you love is a simple equation:

Find something you love
Provide it as a solution others are willing to pay for
Have a distribution channel to attract these people
Persist

This guide assumes you’ve identified your passion or purpose. (If not, read my finding your passion guide.)

In this guide I’ll focus on the next step: turning your passion into a solution others are willing to pay for. I’ll share the simple playbooks that you can use to build your life around whatever your passion is.

But before I go into those, you have to make a decision for yourself:

Do you want to be employed or self-employed?

Being employed gives many a sense of security but comes at the expense of limited upside, limited control and limited flexibility. There is no right or wrong answer; only what is right for you (personality) and your circumstances (responsibilities).

To live a comfortable life doing what you love, however, I do suggest adding a second source of income as soon as possible. This can be another job, a side hustle or investments. Whether you’re employed or self-employed, you’ll always start out with a single source of income. But a single source leaves you vulnerable: what if it disappears tomorrow?

Multiple income streams provide stronger financial security, which makes it easier to persist long enough to build your life around your passion.

Whether you want to be employed or self-employed (freelancer, entrepreneur, business owner) doesn’t affect your ability to turn your passion into your (main) source of income and build your life around it. Either way it’s possible. It simply affects other areas of your life. So, decide what works best for you.

Now, without further ado, the playbooks to make your passion profitable.

I wish you a happy, fulfilling and successful life,

Jim

Getting started – employment or self-employment

As I wrote in the introduction, you have one decision to make: do I want to be employed or self-employed?

I consider you self-employed when you’re not a full-time employee for 1 company. This ranges from freelancers and people with multiple jobs to entrepreneurs, investors and business owners.

Most people, these days, want a job and earn a stable income. They write a cold email or apply to a vacancy, then wait (pray) to be invited for an interview. Some even send the same cover letter and CV to dozens or even hundreds of companies – they spray and pray, hoping one will hit.

This approach is demoralizing and ineffective. Eventually, you’ll land a job that pays. But it’s unlikely to be a job you care about. Nor do you know how long it’ll take to land it. You’ve given up control.

I suggest 2 alternative approaches with a higher success rate that can land you the job you want. Instead of a shotgun (spray and pray), you shoot with a sniper rifle (aim and fire).

Best of all: both approaches can be used by people looking to be employed or self-employed.

1. Inexperienced energizer / Humble apprentice / Inquisitive intern (pupil)

This approach works well when you lack experience or want to switch industries.

Identify either the company you want to work for/with or the mentor you’d like to work under/with.

Study the company/mentor. Learn everything you can. Talk with the mentor, if possible. Talk with people who work there or with them. Make connections: not to get hired but to learn more.

Why do this? You want to:

Decrease the gap between your imagination and reality. Like a stock investment, you want to falsify: why should I NOT work there/with this mentor?
Increase your knowledge of the work, company and industry, and relationships (assets).
Understand needs and problems.
Increase your serendipity surface area: the more you put yourself out there (and the more people know you), the more you open yourself up to “lucky breaks.”

Optional: ask (or even pay for) if you can shadow the mentor or someone who works there for a day/week. Observe, learn and help out where possible.

Having built relationships and learnt about the people, company and industry, you can:

Apply
Help them
Do them a small favour

All you want is a foot in the door. Do any odd job. Continue to observe, learn and help where possible. Be a humble apprentice.

A person with initiative, boldness, curiosity, humility and a willingness to do the things nobody else wants to do (nor that you’ve done before) doesn’t come around very often. Skills can be taught. Traits can only be fostered.

Build relationships, be a student, become the most knowledgeable, then ask. And when the position is yours, humbly do whatever comes your way. You’re learning on the job and creating your unique position. Do that long enough and you become indispensable.

As a self-employed person the approach works the same but instead of getting on the payroll, you help from the outside. At first, you’ll likely do things unpaid. But as your relationships and skills improve and you’re able to help out with more valuable problems, there comes a time where the other person wants to hire you. They may want to hire you. That’s when you contract with them – as a freelancer – instead.

2. Experienced value-adder / Skilled solver (fixer)

This approach works well for those with valuable skills, knowledge or relationships – anything that allows you to problem-solve.

Like the previous approach, identify who you want to work with/for and learn everything you can about the people, the business and the industry. You want to be the most knowledgeable person.

But unlike the previous approach, building relationships is optional. Study from afar or talk with people: do what comes naturally to you.

What you’re looking for is a problem that you can solve. An improvement you can make.

Most problems you’ll have to uncover; others are unlikely to flat-out tell you. They may not even be aware of them. This process of uncovering problems (or areas for improvement) takes time and effort. Only knowledge and skills – your own or borrowed/rented from others – can shorten this process. That’s why you want to become the most knowledgeable person: effort compounds.

Having identified the problem you can solve (or improvement you can make), you approach the mentor/company not with a request but an offer. You flip the script: you make them want/need you more than you want/need them.

Give them your solution, a step-by-step implementation, timeline and how you’ll do it (exclusively) for him/her/them, starting tomorrow.

If they accept, you decide: become an employee or be self-employed.

Every person and business wants the same things: problems solved and a brighter future. Done for them – fast, at little to no cost and with (near-)guaranteed result.

That’s what you provide. You’ve done the work beforehand. You offer your solution. You do the work afterwards. And they’ll enjoy working with you.

Make your offer irresistible and success is guaranteed.

Best of all: even with little knowledge or few skills, you can use this approach. You just have to identify a problem (and solution) that lies within your circle of competence. And in the process of uncovering a valuable problem to solve, your knowledge and skills increase automatically.

Ideation

1. Push vs pull

This is a dichotomy I came up with for myself.

Push: start with market opportunities, then look inward. You want to push your solution into the world.

As you start with market demand, this approach lends itself better to rapid growth and scalable companies. But there is a higher likelihood to compete (others can pursue the same opportunity) and burnout is a possibility.

Push is great for brainstorming startup ideas and more suitable for ambitious personalities.

Pull: start within yourself, then look at market opportunities. You want to pull others into your world.

As you start with yourself, this approach lends itself better for slower, steady growth, side hustles and lifestyle businesses. Competition is unlikely – because you are unique – but you’ll likely have to pivot many times until you find your sweet spot. You may wonder if your labour will ever be rewarded.

Pull is great to build passion businesses and more suitable for patient, risk-averse personalities.

Push vs Pull is not a matter of one over the other. It’s about the angle you start from. Over time you’ll move to the sweet spot between the two: the point where market demands and your (unique) passion-generated solution overlap.

Starting with Push

The 3 easiest prompts I’ve found to uncover $1 million/billion dollar ideas:

Solve the problems of the rich
Democratize what the rich spend their money on
Simplify any kind of process or supply chain

Solve the problems of the rich

The rich value their time much more than their money (as we all should) AND have money to spend.

Some private, B2C (business-to-consumer) examples: pet sitting, cleaning, chauffeuring, cooking, health, finances – anything that they consider a chore.

Some B2B (business-to-business) examples: market trends, competitor research, legislative changes and political briefings – anything that condenses information that impacts their decisions.

Democratize what the rich spend their money on

The second prompt makes the luxury and convenience of the rich available to the lower and middle class. Ride sharing (Uber), home delivery (DoorDash), holiday homes (AirBnB) are some examples.

Everybody wants convenience. But not everybody can afford high-end, private support like the rich. Humans are humans in the end, however, and you can bet that the luxury and convenience the rich spend their money on, others would do the same if it’s within their budget. Democratize and you gain access to the mass market.

Simplify any kind of process or supply chain

The third prompt similarly targets convenience and works in both B2B and B2C settings. The easiest way to think about it: what takes many steps or a lot of time to complete now? How can it be simplified and/or streamlined?

International transactions were expensive, slow and complicated. Wise addressed that by having domestic bank accounts around the world. Customers transfer money in one country and receive money in another using an intuitive dashboard (no bank visit/order)…in a matter of minutes.

Zapier streamlined the integration of 5000+ web applications and workflow automation. Instead of having developers integrate each new application into your current tech stack, Zapier acts as a hub that connects everything and reduces the process to a few simple clicks.

The quality and availability of education and medical services depended on the quality and availability of teachers and doctors. Now, anyone with internet access has access to the world’s best teachers, curricula and doctors (telemedicine)…at a fraction of the cost, or free altogether.

But change – learning something new, adopting a new behaviour – takes effort. Nobody likes to spend unnecessary effort. So, for a business built around process simplification, the saved time/effort/expenses need to be enticing enough to overcome this status quo bias.

A good rule of thumb: your streamlined solution should be at least 10x better than the current dominant market solution.

Ask yourself:

What do the rich spend time on, unwillingly?
What frustrates the rich?
What do the rich spend their money on?
What have I done lately that was complicated or time-consuming?
What in my industry/job is complicated or time-consuming?

Use any of these prompts to identify a market opportunity in 1 of the above 3 categories, pick the one you care most about, talk with potential customers, offer them a solution and you’re well on your way to building a life around your passion.

But if these aren’t enough for you and you’d like to go down the Push route, here are some more prompts.

The 3 big questions

What sucks in my world?
Does it suck for many other people?
Can I be excited about solving this for a long time?

You start with the personal, identify there are others (potential market) and that you care about it enough to give yourself a chance at (financial) success.

Set a 30-minute timer and see which ideas you can come up with.

Visit the NPS graveyard

Zoom in on fragmented, low NPS (Net Promoter Score) industries. Brainstorm products that can delight historically disgruntled customers.

Example: nobody enjoys the process of getting documents notarized. Notarize lets you do it online, anywhere, anytime.

Brainstorm while building

Running a business – or simply doing your job – creates a rich problem surface area. Many of these problems are shared by other (similar) businesses and people.

Example: my mom is a real estate agent. She spent more time than she wanted on customer acquisition, especially offline. I couldn’t find a solution (service or tech) that resolved this. Talking with other agents, I realized this problem was pervasive. So, I set out to build an end-to-end automated funnel that attracts, converts and retains clients and lets agents focus more of their time on what they love: helping clients buy/sell houses.

Understand index companies

List markets that will be multiples of their current size in the future (Genomics, Cybersecurity, for example)
Brainstorm infrastructure that will take a cut of each transaction.

Become the middleman that facilitates transactions and your business will grow (or decline) alongside the market.

On a smaller scale: any kind of agent (like real estate).

On a larger scale: farmers and labour unions, payment processors such as Stripe (SMB payments) and Coinbase (cryptocurrency).

Geographic arbitrage

Identify a trend that’s big in one country/region, but not others.
Introduce that trend to the new country/region.

I’ve written an entire article about this so I won’t dive into detail here but a few examples:

Digital payments
Online job boards
Online marketplaces
Social networks

But also:

Virtual assistants (lower labour costs, 24/7 availability)
Outsourcing manufacturing (lower labour or material costs)
Outsourcing programming (lower labour costs)

Cultures may vary but we’re all human. Adapt your offering to the local circumstances and you sit on a potential goldmine.

An interesting, alternative approach: time arbitrage. Identify a trend that was big in the past – in your region or elsewhere – and reintroduce it. History doesn’t repeat itself but human nature does. Study an industry’s history, biographies and old newspapers to uncover such opportunities.

More arbitrage opportunities

Before exploring the below opportunities, ask yourself:

Do I like the industry?
Are there companies that I can get access to that already have the buyers, distribution or brand?
Is it something that will produce enough income to make it worth my while?

Example 1: businesses that serve your niche but don’t offer your product or service yet. They may offer an DIY online course while you offer private coaching. Or they offer a low-price ebook (front-end funnel) but have no high-price, back-end offer like your private coaching. A partnership allows both sides to offer more value to the same niche at no extra cost.

Example 2: look at any business and ask yourself:

What do they not have that is a natural complement?
What do customers do (1) before, (2) during or (3) after this product/service?
What do customers do if they don’t use this product or service?

Example 3: distribution monopoly. Find great products or services with bad marketing/sales/distribution. Partner, improve whatever they’re bad at and get a % of increased revenue or profit. A good place to search is page 4+ of popular categories on Google or Amazon.

Content business

What content can you give people that they want to read every single day?
How can you acquire these people profitably?

The first prompt combines content-market fit and content-creator fit: what you can write about daily that others value.

The second prompt combines acquisition and monetization: how (much) does each reader earn you and how can you acquire them at a price below that, at scale preferably.

Like every business, it’ll probably take trial-and-error and a few pivots to find the answer to the first question. But it’s a simple, flexible and cheap/free business that you can start anywhere, anytime. (Remember: it’s simple, not easy.)

The easiest way to monetize is with advertisement slots but there are other options (affiliate, products, supplementary services).

Data business

Sawdust: can your data benefit a market you’re not serving yet?

Reservation data in a neighbourhood benefits restaurants but can also benefit real estate marketplaces, developers and governments.

Pricing: can you make pricing in an industry transparent?

Enterprise software often doesn’t list its price. You can act as a potential customer, get quotes from different vendors and offer this information to other interested parties.
Local handymen – gardeners, electricians, carpenters, pool cleaners – also don’t list their prices often (some don’t even have a website!). Like the previous example, act as a potential customer, get quotes and make the prices transparent.

Starting with Pull

Starting within yourself then looking at market opportunities means creating your niche of one, which is the intersection of:

What I know about (skills, knowledge)
What I care about (passion, purpose)
What my audience wants more of (market demand)

What I know about

What am I skilled in?
What do people gladly pay me for?
What do people ask my help for?
What is the 1 challenge I solve?
Who do I love working with? How do I help them?

This gives you 1 or more skills or areas you’re knowledgeable about.

What I care about

What am I absolutely obsessed with? What could I research, break down, and share with the world daily, that would feel like play instead of work?
What am I excited to talk about?
What are all of the problems I’ve solved and topics I’ve learned about over the last 2 years?
What would I work on even if it’s guaranteed to fail?
What would I work on if success is guaranteed but would take me 25 years?
What work makes me forget to pee, eat and/or sleep?

If you’ve read my purpose guide, you should’ve identified 1 or a few areas you deeply care about (aka your passion or purpose). If you haven’t, the above prompts serve as a good starting point.

Niche of one

Next, you combine your skills and your interests to create a unique idea – your niche of one. If you have multiple skills or interests, start ideating with whichever you care most about.

Example 1: Music x LEGO

Use Lego pieces to create a song.
Feature Lego in MVs of your songs.
Create lyric videos with Lego pieces.

Potential outcomes: brand sponsorships, royalties, partnerships.

Example 2: Design x Minimalism

Virtual designer: Post 1 interior design daily. Consultation is paid.

Productivity coach: Create environments that let one thrive.
Course creator: Step-by-step interior design.

Example 3: Negotiating x Fishing

Sales: Represent many fishermen to improve bargaining power.
Barter: Trade fish for dinners. Dinners for ads. Ads for fish. Take a %.
Trainer: Teach fishing businesses to negotiate.

These are just some ideas (I’ve got many more in this guide). The possibilities, frankly, are endless.

The point of a niche of one is having 1 idea and learning how to say, do or package it in 1,000+ different ways.

What my audience wants more of

Validation of your idea comes from finding your tribe and niching down or pivoting based on market feedback. This entails two things:

Distribution
Audience

Your audience is an outcome of good distribution – meeting your audience where they are.

A great thing about a niche of one is that you combine three different audiences:

Those sharing your interest
Those sharing your skill
Those sharing your idea in a different field

This gives you many distribution options. Start with the medium you’re most comfortable with: writing, audio or video. Based on that, pick:

1 social platform (forums, social networks)
1 engagement platform (email, podcast)
1 retention platform (your website)

The social platform is where you’ll attract new people, the engagement platform how you’ll foster relationships and the retention platform serves as a database you own.

The content you produce can be the same across the 3 platforms, at first. As you gain skill and receive feedback, you can diversify.

2 content creation frameworks I find useful:

Habit first, volume second, optimization third. Start small and simple and work your way up. Effort compounds so what matters more is how long you play the game, not how hard you play it.
Effort loops. Pick the one that comes natural to you – both can work.
1. Big to small. Create the biggest piece of content you can (a guide for your website or a masterclass webinar, for example), then chop it up in smaller pieces to distribute on your social and engagement platforms.
2. Small to big. Create many smaller pieces of content, distribute them on your chosen social platform and make larger pieces of content of the ones that resonate the most/gain the most traction.

By distributing routinely, your natural audience – your tribe – will grow. You don’t pick them, they pick you. You simply create a system where more people are likely to find you – and become members of your tribe.

Product

As you distribute your idea and your tribe grows, 2 things happen:

Your audience tells you what it wants more of.
You can ask your audience what it wants more of.

Possible questions:

What would they like to learn?
What struggle have they tried to solve (and how)?
What would they be happy to spend money on?

Your content generates feedback. You use this feedback to create your premium product.

Your content also breeds trust: you’re giving them value for free. With your product, you give them more of what they want – and something they are willing to pay for.

You’ve found product-creator-market fit and created a value ladder. Some are content with your free content. Others want more and move up to purchase your premium offering. As long as you keep the content and solution engine going, your tribe will become stronger (and likely larger) over time. Effort compounds.

Congratulations, with this you’ve created your niche of one – a unique proposition based on your passion that you can build your life around.

2. Assets

Push vs pull starts with external market demands (push) or internal drivers (pull). It starts with an idea, then grows into income by investing what you own.

Assets starts with what you own, instead, then investing that into an idea suitable to that particular asset and your circumstances.

The 7 assets we all have at our disposal (to varying degrees):

Time
Knowledge
Skill
Media
Tech
Relationships
Wealth

Ask yourself:

Which assets are available to me?
What am I uniquely equipped for?
What comes easy to me?

The first prompt tells you which assets you can invest. The second and third prompt tell you what to invest these assets in.

An example: I have experience in a startup, an incubator, managing projects, managing 20-35 year olds and working cross-culturally. I enjoy helping people grow and have a lifetime goal related to it. With my current assets (time, knowledge and skills), 1-on-1 coaching of 20-35 year olds to turn their passion into a source of income makes sense.

But what if I had little time and everything else remained the same? In that case:

I can raise my prices per client, if I want to maintain earnings
I can maintain my prices and lower my needs
I can shift to group coaching (more people in less time)

But I can also start acquiring other assets:

Media: I can create asynchronous coaching resources (webinars, online coaching)
Tech: I can use tech to streamline non-coaching processes in my business, freeing up time
Relationships: I can teach others (franchise) my methodology and split their coaching revenues, or partner with others who serve a similar niche with a complementary service and receive affiliate commissions
Wealth: I can attract outside capital to invest in labour (free up my time), in media (attract higher-paying clients), in tech (streamline processes or offer my service in a lower-cost way) or any other asset

But what if I’m in college and have nothing but time? Ask yourself: What comes easy to me? (aka your passion and/or activities you that look like play to you and work to others)

Let’s say programming greatly interests you. Your parents work in or own a local brick-and-mortar store, like a bakery, hair salon or wine store. Growing up you’ve heard all their stories: what they enjoy, what they don’t enjoy, what the business struggles with. You’d like to help them.

You identify 4 areas digitization would improve their business:

Accounting
Online reservation system
Payment processing and invoicing
Inventory management

For the first 3 you find good, affordable solutions that suit your parents’ business needs. You help them to set it up. (Notice you’ve invested one asset – your time – to acquire another asset – tech.)

For the last point – inventory management – you cannot find a good solution in the market. You decide it’s worth creating. Some quick research tells you that you need to learn Python (programming language) and MySQL (database language).

You buy the most recommended beginner books for both and finish them in 1 weekend. You’ve invested time to acquire knowledge.

You set out to build the inventory management. You’re investing time and knowledge to acquire skill.

You run into problems that you can’t solve on your own. You join an online programming community and ask for help. Experienced programmers see you’re driven and offer to review your code. You’re investing time to acquire relationships. These relationships accelerate your acquisition of skill and tech.

You finish your inventory management software, implement it in your parents’ business and spend the next few months bug fixing and improving the product based on your parents’ feedback. You’ve got a fully functional product.

You turned your abundance of time into knowledge, skills, tech and partnerships…at the expense of some of your time. However, this mixture of assets offers you more opportunities and capabilities than you previously had.

You could take your tech – which is unique in the market – and offer it to similar businesses, acquiring wealth.

You could identify a new software to build, improving your knowledge and skills.

You could contact one of the experienced programmers who helped you and join him/her on his project, improving your knowledge, skills and relationship(s).

And all of it started with you having nothing but time and investing that in what came easy to you.

But what if I’m married, with children, and have no time? In that case, you take one of your other assets (most likely wealth, relationships or skills) to “buy” time.

Your knowledge, skills or relationships help you see shortcuts you can take to accelerate your journey. Wealth lets you hire expertise (paid knowledge) or outsource areas you’re weak at (paid skills).

When you know you have little time, you can ignore time-intensive activities and focus on less time-consuming ones. Or, if you still want to pursue them, use your other assets to pursue them in a different manner.

The point being: any passion can be pursued and turned into a source of income, regardless of circumstances. Knowing your assets helps you identify the path suitable to you.

If all else fails, you can always collaborate or partner with others on a joint-venture basis. “If you want to go fast, go alone. If you want to go far, go together.”

3. Effectuation

I was introduced to this methodology by serial entrepreneur Michael Girdley and realized there’s a foundation promoting and teaching it.

I like Effectuation mainly as an implementation framework but it also has an ideation component. I’ll cover the basics here. You can read the rest below.

The core of this approach is: use your available means to take action, create opportunities and solve problems, and let the big vision emerge over time. (A combination of my Assets and Pull approaches.)

The foundation summarizes effectuation as:

Ideas: advance ideas toward sellable products and services with proven customers.
Stakeholder commitments: interactions in search of self-selecting partners to co-create the venture with.
Decisions: use a set of techniques that serve as the foundation for making decisions about what to do next (see the principles below).

Imagine a chef in a traditional restaurant with a set menu. He picks out his favourite recipes to be on his menu, shops for specific ingredients and cooks his meals in well-equipped kitchens. This is the traditional way of thinking about business: causal (“to the extent that we can predict the future, we can control it”).

Contrast this with an effectual chef. He doesn’t have a menu and goes to work in a strange kitchen. He explores its cupboards, finds unspecified ingredients and cooks a meal with them.

The former chef is closer to a later-stage, product-market fit company: it sets goals, works backwards and decides its optimal path.

The latter chef is closer to an early-stage startup: there might be a foggy vision (“cooking a meal”) but its means (“ingredients”) decide its actions (“possible recipes”), which ultimately shape its goals (“the dish”). Its vision emerges over time.

The takeaway: there is a time and place for means-to-goal effectuation (early-stage) and goal-to-means causal (late-stage) methodologies.

4. Copycat

If you’re unsure what to do:

Identify your hero
Study him
Emulate him
Bonus: if possible, work under him. Proximity is power.

Alternatively:

Identify the field or industry you’re interested in.
Identify the best people as well as the overachieving underdogs in that field. Ignore the rest.
Study (1) them and (2) the history of the field.
Become the most knowledgeable person.
Emulate them.
Bonus: if possible, work under one of them. Proximity is power.

This approach lends itself well for first-time entrepreneurs, aspiring freelancers or people looking for a job (related to their passion).

It’s also a great approach if you cannot identify a passion, idea or problem to work on. Instead, you can focus on a field more broadly – exploring and slowly niching down – or simply emulate someone you admire.

Some examples of greats in different fields:

Steven Spielberg knew he wanted to make films. He made one as a showcase, worked with a mentor, studied great films, learnt everything he could about film techniques, technology and the industry’s history and surrounded himself with equally passionate and ambitious peers.
Sid Meier was passionate about game design and stumbled on a partner who could take care of the sales and marketing. He studied other great games, companies and the history of the industry, then hired equally passionate young people to bring new insights to his game design.
Ernest Hemingway and Stephen King (fiction writers), David Ogilvy and Gary Halbert (copywriters) all studied their industry and the greats. They copyworked (copying other’s work by hand) great fiction and ads to internalize what great work feels like. They also surrounded themselves with equally passionate and great writers, giving and receiving feedback and ideas regularly.
Bobby Knight (college basketball coach), Bob Dylan (musician) and Danny Meyer (restaurateur) found the fields they were passionate about, identified the greats in their respective fields (dead or alive), studied their work and travelled across the country to meet, talk or work with them. They noted their experiences and lessons from each great they met and ultimately synthesized this knowledge to create something unique.

None of these people were privileged; many were poor or from a lower social class. Some were well-educated, others weren’t. Some worked a full-time job while learning on the side, others pursued their passion to the exclusion of everything else.

All followed the above Copycat playbook, created their own curriculum, were self-taught, favoured doing over studying, did everything they could to be around or work with/for great mentors and became (one of) the most knowledgeable in their industry.

Regardless of your background or circumstances, you can follow this playbook anytime, anywhere. You can work for greats from afar; you can bring greats to you in the form of books.

If you’re unsure where or how to start, pick a person you’d like to emulate or an industry that attracts you, become the most knowledgeable (doable in 12-24 months) and emulate the best of the best…until you find a way to give whatever you do your own unique spin.

You can accelerate this process by working with/for one of the greats in your field – paid or unpaid – or finding a cluster of greats (Silicon Valley for tech startups, for example). As mentioned, proximity is power.

5. Environment

Like the Copycat approach, this one works well if you’re unsure about what to work on. Instead of the more structured approach of the Copycat, Environment is much more free-flowing. It’s about new experiences and letting yourself be inspired.

This approach can be done short-term (holiday) or long-term (emigration), while working full-time (preparing on the side), freelancing/remote work (digital nomad-style) or side hustling locally (WWOOFing or on a working holiday, if this visa option is available to you.)

But even without travelling you can gain new experiences or change your environment in such a way to be inspired.

What you want to do:

New experiences
New activities
New locations
New people

In other words: do something you haven’t done, seen or visited before.

New experiences can be things on your bucket list or attending a conference or event you haven’t been to before.

New activities can be taking a class in a sport, art or craft you’re unfamiliar with.

New locations range from visiting or living in a new country (or continent!) to visiting a new restaurant or neighbourhood in your town.

New people are self-explanatory: meeting new people on- or offline. These can be one-off meetings or become long-lasting partnerships or friendships.

The more distant any of these new “things” are from what (or who) you’re used to, the more novelty you’re exposed to and the more you’ll learn and grow.

New scenery (in any form) gives you a new perspective.

This new perspective can then be used with Push (especially strong with the Geographic Arbitrage prompt) or Pull (if you’ve learnt something about yourself).

What works in one location, field or industry is likely to succeed elsewhere too (given some adaptation to taste).

6. Purchase

An option that is available to entrepreneurial- and employee-minded people alike: purchasing (or succeeding) a business.

Best of all: you don’t necessarily need money.

For the entrepreneur: seller financing. You acquire the business, then repay the owner with the (future) profits of the business until you’ve repaid the agreed upon purchase price in full. This usually takes anywhere from 1-5 years, after which the business is 100% yours.

For the employee: business succession. You join a small business with an older owner and negotiate stock compensation or succession plans. You get paid to work, learn the ropes under the current owner (like an apprenticeship) and succeed him when he retires. You can acquire full control of his business or keep him part owner and pay him annual dividends. Many small business owners whose children won’t take over the business are open to these kinds of deals – they don’t want their business (baby) to perish.

Alternative: using other people’s money (an outside investor). They provide the money, you provide the time, skills, knowledge or relationships. This is common in real estate investing but works just as well in acquiring smaller businesses. In your circle (or your parents’) you probably know of a 50- or 60-year old with a lot of uninvested savings. Since there is trust, these are great people to do these deals with.

The benefit of purchasing a business is existing product-market fit and historical data: you can evaluate the ROI (return-on-investment) with relative certainty and earn money from day 1.

If you have an idea of the kind of work you want to do or the industry you want to operate in, but don’t know which idea to pursue (or don’t want to figure it out), apprenticing or acquiring an existing business is a great way to get started.

Finding a business to buy

The quickest and easiest way are online marketplaces like

Flippa
Empire Flippers
Acquire
Microns
Product Hunt (people here aren’t necessarily looking to sell but you can find software you’d like to own and make an offer)

These marketplaces, however, are for active sellers (and buyers), deal with online businesses and apprenticeship opportunities are unlikely.

The best way, in my opinion, is to identify the space in which you want to operate and

Local: search for local businesses (with bad marketing) on Google Maps
Online: search for products or businesses on pages 4+ on Google and Amazon (again, those with bad marketing)

Why bad marketing? So (1) you can add value to the business (if apprenticing) and (2) the business has an obvious way to grow.

The businesses you find this way aren’t all looking to sell. But if you hit up a number of them, you’ll likely find one you can do a deal (as outlined above) with.

Talking with these owners, you’ll also learn a lot about their business and their industry. You can even ask (or pay them) to shadow them for a day or a week, and observe and learn from them while they’re working. This is a quick way to decide if this business/work/industry is something for you.

What is a good business to buy

Contrarian Thinking has a great framework for this.

1. Look for a market or industry that’s:

Stale. There’s minimal innovation. Example: they still use fax machines, call-to-order or paper orders.
Old. Longstanding industries that are unlikely to die: the older it is, the more likely it’ll still be around.
Weak. There is little to no competition.
Simple. A simple but needed business model (we all need food, for example).
- A good rule of thumb: there is high demand and room for improvement.
- Examples of improvements you would like to make that haven’t been made yet:
  - Billing software
  - Customer service software
  - Outsourcing employees (virtual assistants, for example)
  - Improve the website’s conversion (copy, design, funnel)
  - Add testimonials on social media and other platforms
  - Paid digital ads
  - Newsletter/email marketing
  - Funnel with lead magnets

2. Acquisition target: look to buy protected assets where you can raise prices and add tech that allows you to combat inflation and decreased sales:

Buy businesses that cash flow with seller financing.
Resist. Focus on businesses in recession-resistant sectors by checking historical sector returns.
Raise. Focus on businesses for which you can raise the prices. Good examples are businesses that haven’t raised their prices in years while the rest of the industry has.
Tech. Can we easily, quickly and cheaply add technology to (1) simplify processes, (2) improve customer experience, (3) improve marketing and distribution and/or (4) reduce costs?

This framework is based on 3 things:

Not losing money – businesses/industries that are old and stable.
Simple to understand and operate – simplicity breeds fewer errors; inexperience and complexity kill most businesses.
Room to grow – own the business more quickly (if using seller financing) and earn an even higher ROI than projected.

Stay in the game long enough and success becomes inevitable. Be conservative in your forecasts and assessment of any business you’re looking to purchase and emphasize stable cash flow and preservation of wealth (i.e. don’t overspend) and you’ll be alright.

Validation

Some ignore idea validation. Others don’t know it’s possible. Still others don’t move unless the idea is validated.

All misunderstand validation.

It doesn’t guarantee success. Only persistence, over a long enough time period, does.

But validation is useful for 2 reasons:

It increases your confidence in the idea.
It lets you more accurately guesstimate success and compare your options. (Note: you can never predict with 100% certainty. Everything remains a guesstimate.)

You can validate an idea without having anything to show for it (pre-build) or while you’re creating your solution (building). The first is optional, the second is necessary – you need feedback to test your hypotheses and improve your solution.

But many get caught up in pre-build validation, researching endlessly until they’ve found guaranteed success. This isn’t validation. This is fear-induced procrastination. There is no perfect remedy. The closest we have at our disposal is setting a validation deadline and getting to work (i.e. start building).

My rule of thumb:

Validation by talking to others: maximum 1 week.
Validation by thought experiment or online research: maximum 1 day.

Validation techniques

1. Root cause analysis

Ask yourself: does my idea address a cause or a symptom/consequence?

Alternatively, question your idea (or solution) with any of the following 5 times:

Why?
How?
So what?

With your idea you want to solve causes not symptoms/consequences. The former is more stable and what people truly care about.

2. The Mom Test

Online research (up next) is easier and less scary. Talking with people is faster and more effective.

Think about it: our ideas and what we pursue (aka our “business”) are ultimately about providing value to people (ourselves and others).

The highest quality feedback comes from the source, in our case humans. But the quality of your feedback depends on the quality of your questions. That’s where the Mom Test comes in.

Rob Fitzpatrick wrote a great book outlining which questions to ask, why to ask them and in which order to ask them. I also like Sam Parr’s questions and process. Both did a better job than I can (at present) so check the above links to know what to do.

Some tips when talking with people:

Past over present. Focus on what they have done not what they say they will do.
Actions speak louder than words. Watch what they do, not what they say.
Zoom in. Start broad and zoom in based on signals and feedback.
Overlap. Find consistency in identified problems and desired goals.
Who-where pair. Where do the people you’re trying to serve hang out (online and offline)?
Falsify. You can never 100% validate your idea. But you can falsify your idea. Ask questions that let you falsify your hypothesis asap.

3. Online tools

Any list of validation and analytics tools I create will be outdated the next day. New tools enter the market and old tools perish.

Instead, I’ll give you pointers where to look.

Traffic and insights
- Category. Google Trends. Facebook Audience Insights.
- Competitor. SimilarWeb. Any insight tool.
Marketplaces, like Amazon, Product Hunt and Udemy or SkillShare. Useful to track supply, demand and make ROI decisions.
Bundlers
Media platforms, like TikTok, Podcast/YouTube, Quora/Pinterest and News outlets. Useful to identify trends.
Forums. Reddit/Quora/media comment sections/online groups. Useful to identify pain points and competitive solutions.
Review websites. Same as forums. Marketplaces often include review sections.
Dissecting a large company’s business model. Study their website, product lines, acquisitions, partnerships and financial statements. Useful to identify trends.
History, like Web archive and Newspapers. Study changes over time. Learn from the failures and mistakes of others.

4. Offline

Foot traffic and behaviour. Sit at the location you want to do business and observe. Online tools give data but nothing beats observation: it shows you how people behave.

I can be standing around a kiosk with 100 others for 2 hours. Traffic data suggests this kiosk is popular. In reality, it’s nothing more than a meeting spot.

Implementation

1. Customer 0

Solve your own problems and be your own/first customer. It’s the quickest and easiest path to creating a workable solution you can share with others.

You’ll more likely create something you can be proud of, too, as your taste – what you consider “great” – always exceeds your capabilities – how “great” you can make something.

2. Effectuation

I repeat the basics I mentioned in the Ideation section first. Read that? Skip to the principles

———————————

I was introduced to this methodology by serial entrepreneur Michael Girdley and realized there’s a foundation promoting and teaching it.

The foundation summarizes effectuation as:

Ideas: advance ideas toward sellable products and services with proven customers.
Stakeholder commitments: interactions in search of self-selecting partners to co-create the venture with.
Decisions: use a set of techniques that serve as the foundation for making decisions about what to do next (see the principles below).

Contrast this with an effectual chef. He doesn’t have a menu and goes to work in a strange kitchen. He explores its cupboards, finds unspecified ingredients and cooks a meal with them.

The former chef is closer to a later-stage, product-market fit company: it sets goals, works backwards and decides its optimal path.

The takeaway: there is a time and place for means-to-goal effectuation (early-stage) and goal-to-means causal (late-stage) methodologies.

Principles

Bird in Hand – Means
Affordable Loss – Focus on Downside
Lemonade – Leverage Contingencies
Crazy Quilt – Co-Creation Partnership
Pilot in the Plane – Control vs Prediction
Effectual Cycle

1. Bird in Hand

List your resources:

Who you are – personality and abilities
What you know – education and skills
Who you know – your network

Explore viable ideas based on those strengths, then take action asap.

2. Affordable Loss

Based on Bird in Hand you’ve discovered a few opportunities or goals (aka “what can I do?”).

Evaluate these opportunities based on the potential downside acceptable to you instead of the attractiveness of the predicted upside. Downside, in this case, means money, time and/or effort.

Note: what is “affordable” varies per person. Everyone’s circumstances and personalities are unique.

Seasoned entrepreneurs – like Richard Branson – minimize their potential downside and run many small experiments. If they succeed, they double down. If they fail, they learn. But they always live to fight another day.

They favour goals and actions where there is upside even if they fail.

The best entrepreneurs live by a zero-resources-to-market principle: before having a working product, they sell the idea or vision. Market research gauges interest, but selling gauges desires and pain points. Frame your talks as sales to shorten your feedback loop and reduce your risk.

3. Lemonade

Embrace surprises by remaining flexible instead of married to existing goals. Surprises are inevitable. They are not deviations from the path – they are the path.

You want a bias for action. Embrace mistakes, bad news, failures and falsified hypotheses. They give you clues to create new markets.

The best entrepreneurs understand that the future gets created through the strategy of the players (instead of waiting to be discovered). They prefer unpredictable markets that can be shaped – with pre-committed stakeholders and customer-partners – over predictable markets that fall prey to the party with the best predictive ability – often the deepest pockets or smartest people.

4. Crazy Quilt

To reduce uncertainty form partnerships with committed, long-term, self-selecting partners wanting to shape the future. Only choose those willing to put skin in the game and co-create the new market. Avoid partners unwilling to go all-in.

Ideally, you (also) figure out a way to align incentives with your customers and turn them into customer-partners.

Committed stakeholders become part of your “crazy quilt” of unique resources. This influences and morphs your idea into one a whole network of stakeholders are committed to.

No commitment? Put the opportunity on-hold and revisit it later – it might be a timing issue.

5. Pilot in the Plane

You focus on what’s within your control and ignore what’s outside of your control – by doing the doable and transforming current realities into new and unforeseen possibilities.

You believe that the future is unknowable – and neither found nor predicted – yet malleable and shaped by your actions.

You manage risk by keeping failures small and having them happen early, then building on them for future success.

6. Effectual Cycle

These principles tie together in a virtuous cycle that reduces risk:

Your means and affordable loss decide your initial actions.
Early customers and partners create new means, increasing your resources and reducing your risk.
These new commitments help crystallize the goals, setting or reinforcing your constraints.
Experiments and surprises maximize learning and change both means and constraints.
At each stage, choosing options that create more options in the future (maximizing optionality).
Goals emerge in a low-risk, incremental way.

Effectuation does not necessarily increase the probability of success but it reduces the cost of failure by enabling failure to occur earlier and at lower levels of investment.

Effectuators reduce the risk of the venture by:

Getting customers and income early
Setting affordable losses
Spreading risk to others

Summary

Start with what you can do
- Who you are
- What you know
- Whom you know
Do the doable with as few resources as possible
Make repeated small bets
Rapid mistakes maximize your learning
Find skin in the game partners
Negotiate actual commitments
You build the future: repeat until the chain of stakeholders and commitments converges to a viable new venture.
Go against the grain.

Personal example

In March 2020 I quit my job. I didn’t have anything lined up. I had pondered the decision for 6 months and prepared in various ways.

I based my decision on the downside: what’s the worst-case and what is acceptable to me?

Worst-case, I run out of money. Then what? I’d just find a new job.

I had 2 years of runway (i.e. savings) so I set that as my affordable loss (what I was willing to lose).

I thought that in those 2 years I’d be able to run many small experiments, acquire skills and become a better person and businessman (more so than if I remained employed).

Even if I failed miserably, I considered 2 years to be an acceptable gap on my resume for most employers and that I’d be able to get a job at age 30, even with my current (age 28) skills and experience.

The downside was negligible; the upside was unlimited. The decision was simple.

As you can tell, I barely considered the risk-return profile or what I needed to get started. I simply let my means (Bird in Hand) and downside (Affordable Loss) dictate my actions. My vision (empowering people) emerged over time…and continues to be refined as my means and constraints change.

Playbooks to get you started

Some playbooks I’ve either written myself or found useful (from others):

Need something more personal? Let me help you.

The next step: where to go from here

If you enjoyed this guide, then you’ll probably love my weekly newsletter. It’s totally free and I share easy, practical steps to accelerate your personal growth and build a life around your passion.

You can sign up here:

https://letters.jimbouman.com/

I don’t have it all figured out but I learn, self-experiment and do my best to walk the slow march toward greatness with you.

Jim Bouman