My Take (Down) of Ready, Fire, Aim by Michael Masterson

[Vigilante]

With great fanfare came great expectations. On the heels of the forum gathering this spring, a lot of trusted posters here were talking about Ready, Fire, Aim by Michael Masterson. So I picked it up.

I made it through the first several chapters before I put it down, never to return to it.

Let me say that
1. Masterson is smarter than me and
2. Masterson has built larger businesses than me and as a result
3. Masterson is richer than me

So, if that is your criteria for validation, the rest of what I have to say might not be worth much to you. I told @AllenCrawley when he aptly pointed out why I had a visceral reaction to Masterson that my posting about it on the forum was likely to draw some friendly fire. So be it.

Here's my problem with Ready, Fire, Aim.

99.9% of the people on this forum, including me, couldn't follow what he has laid out as a "blueprint" to take you from $0 to $100,000,000. You can't do it. It's billed as a road-map, but it is going to lead you to a dead end.

Why?

Masterson's reitterated premise is that his companies operate from $0 to $1,000,000 at a loss.

Stop there.

That's his first step.

So... before we move past first base, in order to score, can you do that?

He doesn't articulate in his book how you do that. How HE does that is he has people willing to throw money at him. He uses OPM (Other People's Money) or now he could finance it himself. His companies take between a year to five years to reach a million dollars. That means, he spends a year to five years... operating at a loss. Can you?

Most of the people and success stories from thefastlaneforum.com are self starters, that broke free of the corporate grind by out-thinking, outworking/out-hustling, and surviving the startup bootstrap phases to create value where a void existed in the market.

Masterson's book reminds me of the tongue-in-cheek way to retire a millionaire.
Step 1. Start with a million dollars

If you can go out and get angel funding or VC funding for a pre-launch company, than his road-map would likely work perfectly. I couldn't get past the fact that his "how to" book was marketed to the masses, and yet his road-map is passing through the eye of a needle.

A few months back, I contacted him on behalf of the forum with an invitation to do an AMA here, and received no response. There is still an open invitation (and a lot of fan boys) waiting for him here if he would like to take us up on the invitation.

His book likely has a ton of solid advice, actionable inspiration on topics such as systems, infrastructure and strategy. You can still gain value from it, like a lot of other books where you cull the wheat from the chaff and take what usable insight you can gain from it. He's smarter than I am, and his books are worth reading.

And, I wasn't looking for a step by step road map for how to build a business, even though the subhead of his book is "from $0 to $100m..." but since he presented his material as a replicatable, specific treasure map that any leprechaun could follow to the pot of gold at the end, I stopped reading his book a few chapters in when I determined that too many leprechauns likely died trying to follow his Oregon Trail.

Flame away.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Andy Black]

I listened to it a couple of times in my car. Apart from the gushing first chapter, I quite liked it. Not a roadmap, and the later chapters were less relevant for me. I then bought the book but couldn't get through it.

My take-away, and kinda my bible at the moment, is his identification of the problems of starting businesses like most of us in the forum have... and what to do about it.

I wrote it up in a post here, and it's below too.

I like that it's so simple. Make sales. Get things going. It's the stuff most of us seem to get stuck on.


Stage One - Infancy (Zero to $1M in annual revenue)


Main Problem:

• You don't know what you're doing. (lol... I can relate)

Main Challenge:

• Making the first profitable sale.

Main Opportunity:

• Continuing to sell until you have achieved a minimum critical mass of customers.

Skills needed:

1. Getting things going.
2. Selling.

My notes:

• You're trying to find a product that people need and are willing to pay for, then find the Optimum Selling Strategy (OSS) for that product.
• Once you're selling profitably, then focus on that product and scale, scale, scale.
• Stage 2 is when you plateau with this product and then start building other products to sell to your customer base.

 

[Vigilante]

Andy. How do you operate for 1 to 5 years at a loss?

If you can't do that, what difference does the rest of it make?

Step 1. Start with $1,000,000

His operating model for all startups is at a loss to breakeven through the first run rate of $1m in annual revenue.

 

[DrkSide]

Thanks for the review @Vigilante this one has been on my list for awhile but keeps getting passed up for more specific books.

His book likely has a ton of solid advice, actionable inspiration on topics such as systems, infrastructure and strategy. You can still gain value from it, like a lot of other books where you cull the wheat from the chaff and take what usable insight you can gain from it. He's smarter than I am, and his books are worth reading.

This represents most of the books that I have read. Each one provides some great nuggets to apply to my business and life but when looking at the entire book overall I was not terribly impressed.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[jon.a]

Step 1. Start with $1,000,000

I thought Step 1 was to start with $2,000,000?

 

[Vigilante]

Thanks for the review @Vigilante this one has been on my list for awhile but keeps getting passed up for more specific books.


This represents most of the books that I have read. Each one provides some great nuggets to apply to my business and life but when looking at the entire book overall I was not terribly impressed.

When I was diving deep into importing, I read 10 importing books and found them all lacking. I still recommend nubies read them all. You have to blend in the 200 extra pages of author filler with the 50 pages of substance.

The same would be true for this book. I am not saying don't read it. It's just not elevated to the guru status that was worthy of the buzz coming out of the official forum get together this past Spring.

MJ was looking an an early copy of the book I am writing. His advice for authors? Measure every single word against a scale of necessity.

 

[Vigilante]

I thought Step 1 was to start with $2,000,000?

You've always been a superachiever.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Andy Black]

Andy. How do you operate for 1 to 5 years at a loss?

If you can't do that, what difference does the rest of it make?

Step 1. Start with $1,000,000

His operating model for all startups is at a loss to breakeven through the first run rate of $1m in annual revenue.

I must admit, I didn't spot that part in it.

My wheat from the chaff is that summary of Stage 1: Make sales. Get going.

All I can remember of the rest of it is that if your business grows to, say, 7 employees then they can all still report to you. When it's 49 employees then it's a different beast (with 7 reports to each of 7 managers reporting to you), and then when there's another layer and it's 7 * 7 * 7, then it's another beast again. Those stages are so far removed from my current stage and where I actually want to go that I just noted it as interesting and filed it away.

@RogueInnovation had a great post somewhere about business planning and goals, neatly summed up as "Get going. Keep going."

I like it when things are simplified for me. "Get going. Keep going. Make sales."

 

[Vigilante]

So far removed from my current stage and where I actually want to go ...

This.

His book is on building empires.

I'm the guy who starts something, takes it from concept to reality, and births it. Someone else can pay for it's college education.

I guess I am an early stage entrepreneur.

Masterson has built multiple 9 figure businesses. He knows what he is talking about.

I on the other hand, don't know what he is talking about.

 

[Andy Black]

He knows what he is talking about.

I on the other hand, don't know what he is talking about.

Haha. Legend.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MTF]

That's funny. I've just finished reading this book as well and I have very similar views. I've already mentioned it in my thread on the inside:

I started reading Ready, Fire, Aim (again, as I didn't finish it the first time). I now remember my main issue with it - author's claims that very few businesses make any profit when they have less than $1 million in revenue. I have no idea to which businesses he refers. Actually, it's pretty hard to come up with businesses that need to reach $1-10 million in revenue before they start making a profit. Maybe I'm too accustomed to "lifestyle" businesses and small, not bloated businesses with little overhead. Still, that's why I remembered it felt aimed at big business.

I have zero entrepreneurial credibility when compared to Masterson or you @Vigilante, so I wasn't entirely sure if I missed something. Operating at a loss under $1,000,000 in revenue sounded ridiculous and wasteful to me and not applicable to virtually every single entrepreneur (except for the ones starting huge capital-intensive businesses).

I'm happy to hear I'm not the only person who doesn't care about his four stages of business growth.

In addition, I'd like to mention that Masterson doesn't deliver on his promise that his process will help you build a business that will run without you. Yes, it can happen, but according to him it won't happen until you reach Stage 4 ($50 million to $100 million in revenue and beyond).

If you're lucky to even get there, it will take you 10 years. And ONLY then he says that the main opportunity for this stage is "getting the business to run itself." He also says that entrepreneurs who reach this stage are "in the top one-one-hundredth of the top one-one-hundredth of the world's population."

In other words, if you want to follow his blueprint, then MAYBE (if you launch the right type of business, because I'm pretty sure most businesses will never reach $50 million in revenue a year) you'll be able to enjoy your freedom after 10+ (or more) years of running your business.

I can understand how his advice can be applied if someone wants to start a huge company right away (you can't really start, say, a telecom company with 10 bucks), but I'm pretty sure that his advice won't apply to 99.9% of people here.

He does share some useful tips. However, the concept on which his book is based is not aimed at your average entrepreneur who can't afford not making any profit until he crosses $1 million in revenue (which, according to Masterson, takes 1-2 years). And actually, according to him it's possible you still won't make a profit until you reach $10 million in revenue (which can take up to 5 years).

 

[csalvato]

I took "operating at a loss" to mean that after you pay yourself you are at break even, in an ideal situation -- then you can start banking profits.

Regardless of that, the rest of the strategies have nothing to do with operating at a loss. They have to do with means and methods of finding an OSS.

Ready Fire Aim has been an instrumental framework for my current business which is starting to take huge jumps.

 

[csalvato]

To add to that a bit, here is how I interpreted his notion of operating "at a loss":

1. When you start making huge revenue, all of that goes into covering living expenses and back into marketing.
2. You operate at break even or at a loss to hit that $1MM breakpoint, supporting yourself and your team so that you can hit a critical mass. It doesn't mean you're losing money.
3. You're just not putting a profit on the books of the business. You, personally, can still be living a very comfortable life.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Iwokeup]

To add to that a bit, here is how I interpreted his notion of operating "at a loss":

1. When you start making huge revenue, all of that goes into covering living expenses and back into marketing.
2. You operate at break even or at a loss to hit that $1MM breakpoint, supporting yourself and your team so that you can hit a critical mass. It doesn't mean you're losing money.
3. You're just not putting a profit on the books of the business. You, personally, can still be living a very comfortable life.

That was my takeaway as well.

 

[IceCreamKid]

my posting about it on the forum was likely to draw some friendly fire. So be it.

Friendly fire is a good thing. Even if the idea is unpopular, it gets people thinking and pushes new thought processes forward.

Csalvato recommended the book to me. I had similar thoughts as you after I finished it. The idea of operating for up to 5 years at a loss/breakeven didn't resonate with me and I highly doubt that most Americans can operate at a loss/breakeven for even 5 months.

Don't get me wrong, the book had other nuggets but I simply couldn't shake off the notion of operating for such a long time at a loss/breakeven. If the reader is willing to look past that though, there are some excellent strategies that they can use as the baseline for their business. I guess I'm just a stubborn guy who couldn't look past it.

Not trying to derail the focus of the topic, but has anyone read Peter Thiel's "Zero To One"? That's another author who seems to write from a completely different level than most of his readers. He discusses how to build empires that disrupt existing technology and carve a better future for the world.

 

[Vigilante]

To add to that a bit, here is how I interpreted his notion of operating "at a loss":

1. When you start making huge revenue, all of that goes into covering living expenses and back into marketing.
2. You operate at break even or at a loss to hit that $1MM breakpoint, supporting yourself and your team so that you can hit a critical mass. It doesn't mean you're losing money.
3. You're just not putting a profit on the books of the business. You, personally, can still be living a very comfortable life.

You have to read beyond the words he wrote to conclude that. It requires editorial license in order to conclude when he talked about operating to $1m at a loss, he wasn't talking about operating to $1m at a loss. He was. He just uses other people's money (investors, loans) to do it.

My editorial license says the quickest way to $1m is to start with $1m. That's an equally loose (and equally unstated) supposition.

Based on that, if my company makes $500k margin, and I pay myself $500k salary and have no other expenses, I am operating at breakeven? That's not the traditional definition of operating at breakeven.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Andy Black]

Not trying to derail the focus of the topic, but has anyone read Peter Thiel's "Zero To One"? That's another author who seems to write from a completely different level than most of his readers. He discusses how to build empires that disrupt existing technology and carve a better future for the world.

I don't think it's a big derail.

I literally finished "Zero to One" yesterday. I found it a lot easier to read than I thought I would, and I enjoyed it and got a few insights from it too. I also think it's very far removed from where I am currently, especially since I also don't give a fig about "startups" and exponential growth. If it comes then grand, but I'm not designing it in.

It's still worth reading... he's done a lot of thinking and writes very clearly.

 

[MTF]

Not trying to derail the focus of the topic, but has anyone read Peter Thiel's "Zero To One"? That's another author who seems to write from a completely different level than most of his readers. He discusses how to build empires that disrupt existing technology and carve a better future for the world.

I have. It was a pretty inspirational book, but each time I read business books by visionaries (Bold by Peter Diamandis being another such book), I can't shake off the feeling that an average person would do much better launching a "boring" business first and only going after these big ideas when he already has money, experience, and time to work on them.

IMO it's much easier to support your lifestyle with an e-commerce store than start a business that will "disrupt" an entire industry. In the second case, your chances of failure are extremely high. Moreover, you can start making a profit with your online business from day one, while it usually takes years to get the "BIG" business off the ground.

I can appreciate the general sentiment (bold thinking, creating massive value). However, these books should come with a warning: if you don't have any source of income, you're likely to live on bread and water for the next few years if you decide to go after a huge problem.

The issue here is pretty similar to the "make money doing what you love" discussion. I'm passionate about electric cars, but I'm not going to start a company in this industry because it will take years to make any money on it (if I even succeed in the first place). I'd rather make money with a boring, not world-changing business and live a comfortable life now than risk everything to MAYBE start making some money in a few years.

I'm aware that a successful world-changing business would probably make a person a billionaire, but if you prioritize happiness over money, then it doesn't really matter if you make six figures a year from your simple small (but freedom-enabling) business or billions from a business that requires you to sacrifice your entire life.

Maybe it sounds a bit demotivating, but very few people are Elon Musk or Peter Thiel. These guys are both geniuses and started their businesses at the right time, with the right teams of equally genius people, with the backing of equally genius investors. They also possess crazy tenacity, are willing to sacrifice EVERYTHING for their business, and in general care much more about the change in the world than money. If that's you, Zero to One is for you.

 

[throttleforward]

You have to read beyond the words he wrote to conclude that. It requires editorial license in order to conclude when he talked about operating to $1m at a loss, he wasn't talking about operating to $1m at a loss. He was. He just uses other people's money (investors, loans) to do it.

My editorial license says the quickest way to $1m is to start with $1m. That's an equally loose (and equally unstated) supposition.

Based on that, if my company makes $500k margin, and I pay myself $500k salary and have no other expenses, I am operating at breakeven? That's not the traditional definition of operating at breakeven.

It's been a while since I've read the book (which I liked), but if I recall he did not start any venture without either a partner, or an existing business platform to fund development. I don't recall him sitting around a coffee table with a laptop, no money and no partners and ginning up a business.

From that standpoint, he didn't provide much advice on how to bridge that gap (a position that the vast majority of the forum is in and needs guidance overcoming) - but I found nearly all his other insights to be valuable, especially his admonition to focus on marketing and sales (and eventually new product development).

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Andy Black]

A book I really liked was "The 7 Day Startup" by Dan Norris. It seems aimed at the level of most of us in here, and tries to get us to find a need and take action.

Dan is the first I've heard mention "Product - Founder Fit".

What business suits our current business skills and experience, and our current strengths?

 

[throttleforward]

It's been a while since I've read the book (which I liked), but if I recall he did not start any venture without either a partner, or an existing business platform to fund development. I don't recall him sitting around a coffee table with a laptop, no money and no partners and ginning up a business.

From that standpoint, he didn't provide much advice on how to bridge that gap (a position that the vast majority of the forum is in and needs guidance overcoming) - but I found nearly all his other insights to be valuable, especially his admonition to focus on marketing and sales (and eventually new product development).

I believe this was the closest he was to starting from scratch:

"Soon he had produced an entirely new type of newsletter, with an accompanying direct-mail promotion, and convinced his boss to cut him in on the profits it brought in. He had to mortgage the equity in his home to get that cut, but Michael’s stake in the newsletter was worth $1.5 million a year later. He was at the beginning of a very lucrative and successful business career."

So like many people he had to mortgage his house to get started...however many of us here are not in that position (I'd venture to guess that most of us don't have much of any equity to mortgage from our residences)

 

[Hackdroot]

I grabbed this book a few weeks ago at the local library. The book is divided into four stages of growth.

Stage One: Infancy – zero to $1 million in revenue
Stage Two: Childhood – $1 million to $10 million in revenue
Stage Three: Adolescence – $10 million to $50 million in revenue
Stage Four: Adulthood – $50 million to $100 million in revenue

Made it through stage 1 so far. There's some decent material in there, but not my favorite 'success' book. I doubt many companies in stages 3 and 4 are going to look to this book for advice.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[James Thornton]

In 2010 I signed a 6 month lease to open a shop in an expensive mall. No clue if it would work, blinded by passion.

My expenses those 6 months were 6x what I started with. Luckily I made sales!

Went on to have a mildly profitable couple years, then bailed out because they were raising rent 30% per year.

The problem? It was super slow lane. 7 days per week (72 hours) and 0% scalable.

My next blind leap was ecommerce, which also made sales (even today). Also slow lane, and getting shut down in a week.

So I just disagree with the damn title. You NEED to aim, right down a fastlane.

 

[Vigilante]

I grabbed this book a few weeks ago at the local library. The book is divided into four stages of growth.

Stage One: Infancy – zero to $1 million in revenue
Stage Two: Childhood – $1 million to $10 million in revenue
Stage Three: Adolescence – $10 million to $50 million in revenue
Stage Four: Adulthood – $50 million to $100 million in revenue

Made it through stage 1 so far. There's some decent material in there, but not my favorite 'success' book. I doubt many companies in stages 3 and 4 are going to look to this book for advice.

Possible though that someone like you that reads it in early stages then referrs back to it later when things start to scale huge.

 

[Hackdroot]

Possible though that someone like you that reads it in early stages then referrs back to it later when things start to scale huge.

Yes. That is a situation I could see happening. But for those already established companies, I just have a hard time picturing some CEO/owner of a 50mil/yr company coming into a board meeting and saying "you know guys, I read this book the other day....."

But then again, if I knew anything about how those successful types thought and behaved I probably could write my own book and not be spending the afternoon discussing the merits of other successful authors.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[theag]

I'm a big fan of the concept in the book and read / listened to it multiple times and consider it my long term game plan. I have to say I absolutely cant remember him saying that you have to lose money until you reach $1M. I always took it simply as breaking even (= taking a modest salary to cover personal living expenses) until you reach scale, in both revenue and employees that operate the company for you, and THEN start to profit.

 

[theag]

Ready Fire Aim has been an instrumental framework for my current business which is starting to take huge jumps.

This, this, this!

Looking forward to moving to stage 2 in a few months

 

[Vigilante]

I'm a big fan of the concept in the book and read / listened to it multiple times and consider it my long term game plan. I have to say I absolutely cant remember him saying that you have to lose money until you reach $1M. I always took it simply as breaking even (= taking a modest salary to cover personal living expenses) until you reach scale, in both revenue and employees that operate the company for you, and THEN start to profit.

Again, that's great, but that's not what he said. Multiple times if you reread the first three or four chapters.

If it is working for you though… More power to you. Take what you need and make it work for you.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[theag]

but that's not what he said

Maybe, but like you said, that doesnt change my takeaway.

 

[csalvato]

. It requires editorial license in order to conclude when he talked about operating to $1m at a loss, he wasn't talking about operating to $1m at a loss.

One problem I see with the perspective of many people on this forum is that a business == you.

A business is NOT you. A business is a separate entity.

You can be perfectly comfortable and even saving money year over year from the salary you pay yourself with profits....while your business loses money.

You can have the business showing a profit on the books, while you personally are losing money.

And you can be at a state where you are completely supported by your business, and it's making a profit OR a loss.

The author never once talks about the INDIVIDUAL making or losing money or buying yachts or anything like that.

He talks about what the BUSINESS does.

Without looking at a business as a separate entity to an individual, I guess I can see that it would take some editorial license to infer that viewpoint.