Thread: The Commandment of Entry: A Clarification

Good job man. It always amazes me how some people read MJ's book and they still don't "get it". Any venture worth your time and effort is going to be a pain in the a$$. During the process you are going to have the urge to quit because there is no light at the end of the tunnel, this is normal for any venture worth while.

For example I wanted to start an internet company with a friend who also read MJ's book. And the FIRST thing he told me was "dude that takes crazy programming skills." I swear I wanted to Bit** Slap him soooo hard. Right then and there i knew i will NEVER start a venture with this guy even though we were good friends. He is looking for the easy way, the event, he doesn't want sacrifice, he doesn't want to do intense research, he doesn't want to buy a few books on amazon and read them. Even though we go way back, i will NEVER start a venture with this guy.

Its funny because my same friend wanted to start a t-shirt company too. I told him that violated the commandment of NEED and ENTRY. Here again he told me "Dude people need our t shirts and ours will be special." Here again my head was going to EXPLODE and I said no. Even though my friend read MJ's book, he still doesn't "get it". And I see this all the time with other people that read his book. They don't want to stop buying clothing they cant afford. they don't want to stop eating fast food and work out, they dont want to read etc. For a lot of people MJ's book will be nothing but pure mental masturbation but for the others who "get it" it will be one of the best books to read.

"oh shit" is 100% right. Any venture worth while is going to have you saying "damn that sounds hard and painful".

It seems the most worthwhile things in life are the ones that take a commitment. Getting into a relationship? Takes time, money and commitment. Starting a business? Time, money, commitment. Going back to school? Time, money commitment. Children? Time, money, commitment. Career? Getting good at ANYTHING? There's a correlation here! Even my lazy ass can see it. :P

Now, for the execution...

A lot of people don't understand that "That's too hard" is actually the opportunity. The difficulty of solving the problem is actually what creates the *Fastlane* opportunity. If it is easy to solve, why would anyone need what you have to offer?

from How to Make Wealth

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one. Not just because it was more valuable, but because it was harder. We delighted in forcing bigger, slower competitors to follow us over difficult ground. Like guerillas, startups prefer the difficult terrain of the mountains, where the troops of the central government can't follow. I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I'd be delighted, because something that was hard for us would be impossible for our competitors.

This is not just a good way to run a startup. It's what a startup is. Venture capitalists know about this and have a phrase for it: barriers to entry. If you go to a VC with a new idea and ask him to invest in it, one of the first things he'll ask is, how hard would this be for someone else to develop? That is, how much difficult ground have you put between yourself and potential pursuers? [7] And you had better have a convincing explanation of why your technology would be hard to duplicate. Otherwise as soon as some big company becomes aware of it, they'll make their own, and with their brand name, capital, and distribution clout, they'll take away your market overnight. You'd be like guerillas caught in the open field by regular army forces.

One way to put up barriers to entry is through patents. But patents may not provide much protection. Competitors commonly find ways to work around a patent. And if they can't, they may simply violate it and invite you to sue them. A big company is not afraid to be sued; it's an everyday thing for them. They'll make sure that suing them is expensive and takes a long time. Ever heard of Philo Farnsworth? He invented television. The reason you've never heard of him is that his company was not the one to make money from it. [8] The company that did was RCA, and Farnsworth's reward for his efforts was a decade of patent litigation.

Here, as so often, the best defense is a good offense. If you can develop technology that's simply too hard for competitors to duplicate, you don't need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice. [9]

thanks for the post!
i confess that i have doubts about the commandment of entry, but your topic open my mind!

Originally Posted by townhaus

Use difficulty as a guide not just in selecting the overall aim of your company, but also at decision points along the way. At Viaweb one of our rules of thumb was run upstairs. Suppose you are a little, nimble guy being chased by a big, fat, bully. You open a door and find yourself in a staircase. Do you go up or down? I say up. The bully can probably run downstairs as fast as you can. Going upstairs his bulk will be more of a disadvantage. Running upstairs is hard for you but even harder for him.

What this meant in practice was that we deliberately sought hard problems. If there were two features we could add to our software, both equally valuable in proportion to their difficulty, we'd always take the harder one. Not just because it was more valuable, but because it was harder. We delighted in forcing bigger, slower competitors to follow us over difficult ground. Like guerillas, startups prefer the difficult terrain of the mountains, where the troops of the central government can't follow. I can remember times when we were just exhausted after wrestling all day with some horrible technical problem. And I'd be delighted, because something that was hard for us would be impossible for our competitors.

This is not just a good way to run a startup. It's what a startup is. Venture capitalists know about this and have a phrase for it: barriers to entry. If you go to a VC with a new idea and ask him to invest in it, one of the first things he'll ask is, how hard would this be for someone else to develop? That is, how much difficult ground have you put between yourself and potential pursuers? [7] And you had better have a convincing explanation of why your technology would be hard to duplicate. Otherwise as soon as some big company becomes aware of it, they'll make their own, and with their brand name, capital, and distribution clout, they'll take away your market overnight. You'd be like guerillas caught in the open field by regular army forces.

One way to put up barriers to entry is through patents. But patents may not provide much protection. Competitors commonly find ways to work around a patent. And if they can't, they may simply violate it and invite you to sue them. A big company is not afraid to be sued; it's an everyday thing for them. They'll make sure that suing them is expensive and takes a long time. Ever heard of Philo Farnsworth? He invented television. The reason you've never heard of him is that his company was not the one to make money from it. [8] The company that did was RCA, and Farnsworth's reward for his efforts was a decade of patent litigation.

Here, as so often, the best defense is a good offense. If you can develop technology that's simply too hard for competitors to duplicate, you don't need to rely on other defenses. Start by picking a hard problem, and then at every decision point, take the harder choice. [9]

Wow. Awesome wisdom right there from a legend.

wow....great read. Though it did kinda just burn out my current operation...but hey better to learn that I'm violating entry and learn from it and not waste anymore time and money then continue, right? Besides...I did learn quite a bit from this venture right now. Thank-you so very much for posting this.

Thanks townhaus... that post deserves its own thread, to be honest. But the main takeaway is this simple line:

"A startup is a small company that takes on a hard technical problem."

THIS IS WHAT A FASTLANE BUSINESS IS! MJ found the problem he needed to tackle, tackled it, then got on the Fastlane. There are SO MANY of these it's ridiculous. It doesn't even have to be novel; it just needs to GET OUT THERE. What's the hard part? Actually doing it.

"Viable businesses move slowly and NEVER take off overnight."

... Thank you for this post and especially what I quoted. It is EXACTLY what I needed to hear right now! I am working on something difficult - but sometimes it feels frustrating and overwhelming. This forum is great for getting the inspiration to keep pushing ahead.

This is an awesome post! It really helps to drill home some points. I've been in business for a while and studying entrepreneurship in school and on the side whenever I get a chance.

I do have one question though.

I am familiar with barriers to entry and having a competitive advantage, but I still don't exactly understand how it plays out. I mean can you give more examples of how you can create a barrier to entry with anything involving an online business? Like how can you create these barriers to entry?

I think one of my strengths is that I constantly keep myself up to date with changing technology and look to grasp and understand the leverage points quickly; Whether it's SEO, EMail Marketing, Facebook, Pinterest, anything. And I'm having good success with that.

I guess I just can't really wrap my head around how you can create a barrier to entry. I can understand creating assets like an EMail list and taking yourself out of the business so that it can run without you if you ever want to sell it, but it seems like a barrier to entry with the pace of innovation today is tough to achieve.

But once again, great post and responses. Any input on this would be awesome.

I am familiar with barriers to entry and having a competitive advantage, but I still don't exactly understand how it plays out. I mean can you give more examples of how you can create a barrier to entry with anything involving an online business? Like how can you create these barriers to entry?

Usually, the barriers to entry already exist even before you set up the business. For example, setting up a Web site is easy, but setting up a payment scheme that you can fully control is not. If you get past the barriers to entry, then congratulations! Most will not. Creating a barrier of entry is pretty much impossible unless you have a large market share. Try becoming successful with a search engine nowadays. It probably will not work. Thank Google.

This is exactly what I needed to read this morning. Thanks for the great post!

A lot of people don't understand that "That's too hard" is actually the opportunity. The difficulty of solving the problem is actually what creates the *Fastlane* opportunity.

Completely true especially on the internet where barriers to entry are so low. I dont even want to get involved in a project now if it takes less than 4 months to "build" whatever your doing whether it be software, website, database, or even better a website with great software involving a hard database to build.

Use something like madeinchina dot com. Very tough site to build, and you need suppliers in all countries (very hard to do, you may need connections which 99% are to lazy to do that part), you need to quality control them so people dont get scammed, but wow once you accomplish a goal like that you are going to be making ALOT of money and it will last for a long time. International trade so you need some serious lawyers, again even better you just kept away 75% of potential competitors right there alone.

Even if someone else is a market leader, you and them will go at it here and there but you will both be making so much it wont matter. But to be on the bottom with 40,000 competitors offering what you are, your basically selling lemonade on the side of the street next to a 5 year old doing the same thing. Working hard at selling lemonade wont do much for you, if your going to work hard might as well work smart and hard.

But this is why everyone needs to save their money, you cant build madeinchina for the costs of setting up a lemonade stand but every entrepreneur needs to start by selling lemonade. As your working, learning, save and always be thinking about the next move. Be realistic, if you dont have the money to start madeinchina dont do it either because you will fail.

Originally Posted by lookingahead

wow....great read. Though it did kinda just burn out my current operation...but hey better to learn that I'm violating entry and learn from it and not waste anymore time and money then continue, right? Besides...I did learn quite a bit from this venture right now. Thank-you so very much for posting this.

A lot of times, people will go into an operation knowing that there are a million other people in that space. As MJ said in his book, he'd be hard pressed to be exceptional among 10,000 competitors, but he could be exceptional among twelve. You could be exceptional among 100, even. The only way to get big money out of violating entry is to get there first, and that's pretty much impossible, since getting there first means, by definition, overcoming a HUGE barrier to entry. If you get there first and there was no barrier to entry, if history is any indicator, you won't make it.

And you're welcome. My biggest inspiration for this post was my due diligence of a business space (lead generation) that I am pursuing. What I'm doing will not be the first, but I intend for it to be the best (at least for a large enough segment of the market so that it can be successful).

Originally Posted by theBiz

Completely true especially on the internet where barriers to entry are so low. I dont even want to get involved in a project now if it takes less than 4 months to "build" whatever your doing whether it be software, website, database, or even better a website with great software involving a hard database to build.

Use something like madeinchina dot com. Very tough site to build, and you need suppliers in all countries (very hard to do, you may need connections which 99% are to lazy to do that part), you need to quality control them so people dont get scammed, but wow once you accomplish a goal like that you are going to be making ALOT of money and it will last for a long time. International trade so you need some serious lawyers, again even better you just kept away 75% of potential competitors right there alone.

Even if someone else is a market leader, you and them will go at it here and there but you will both be making so much it wont matter. But to be on the bottom with 40,000 competitors offering what you are, your basically selling lemonade on the side of the street next to a 5 year old doing the same thing. Working hard at selling lemonade wont do much for you, if your going to work hard might as well work smart and hard.

But this is why everyone needs to save their money, you cant build madeinchina for the costs of setting up a lemonade stand but every entrepreneur needs to start by selling lemonade. As your working, learning, save and always be thinking about the next move. Be realistic, if you dont have the money to start madeinchina dont do it either because you will fail.

Very interesting, and great insight. But madeinchina was probably built step by step, generating revenue little by little over very many years. VCs probably would have thought MIC was a great idea but would not have thrown $3 million at it just because of its potential. Every project has start-up costs (Internet projects often have much lower costs, even when hiring people to do all of the database stuff) so you're right about that. But aren't the costs simply another barrier to entry that need to be overcome in order to bring a Fastlane to life? MIC was a slow growing project. No one could garner all of the connections, hire all the lawyers, get all of the quality control mechanisms in place instantly. I'd imagine that MIC barely had any of that when it first started making money, but put them in place to cement its position in its space.

Originally Posted by MJDeMarco

A lot of people don't understand that "That's too hard" is actually the opportunity. The difficulty of solving the problem is actually what creates the *Fastlane* opportunity. If it is easy to solve, why would anyone need what you have to offer?

I think this video fits this thread very well:

Dermalogica's Founder on Overcoming Challenges in Business | Video | Entrepreneur.com

'the challenge is the opportunity'

Also: I lied. I didn't need a custom-built Web site for this... but I will later.

what kind of site did you go with?