Is CENTS Destructive to Action?

[SJuan9]

Very true. I had this mindset that I had to strictly comply with CENTS with any venture I came up with and nothing ever happened. On my current venture, I developed the product, planned out the logistics, set review times to adjust course along the way and LEAPED.

Doing so has been the best time in my life! The actual learning has been exponential and the lessons can be applied to anything you decide to engage the marketplace with later on. Do I currently tick off all the boxes to comply with CENTS? No. But is there a need and hence a market which I can engage? Most Definitely.

For me CENTS is a great framework (pure GOLD, to be honest) and an ultimate destination to strive for when developing and implementing your business/es. It can't be taken as an excuse to not start executing.

 

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[Readerly]

Here's a great example of someone taking action, not overthinking, not worrying about CENTS for now:

How To Make $1,000 Starting A Shopify Store From Scratch

 

[The-J]

No because doing it takes like 10 minutes and, if you know that the CENTS commandments can be fulfilled with effort down the line, then it shouldn't get in the way to make the decision.

Let's say I wanted to start a business selling a supplement that helps people with their problem. I found my market on Amazon, on Facebook, and in convenience stores.

Control - Low, but not non-existent, because we're on multiple channels. No single point of failure. I may or may not own my own formula: if I do, more points here. This will go up the more I work on it.

Entry - Amazon: low. Facebook: medium (it takes some know how to media buy). Convenience stores: medium (takes some know how & some balls to talk to the number of people you need to talk to). Being ubiquitous: high. Entry barriers, in this business, will go up the more I work on it.

Need - I've identified the need in this example: it helps a group of people with a specific problem they have. Good.

Time - We're good here, too. I can sleep and make sales. There is a necessary variable time investment, mainly in dealing with the Facebook buy (can hire out), the amazon account (can hire out), and dealing with c-store stuff and warehouses and stuff (can hire out). Also goes up the more I work on it.

Scale - clearly is there. Amazon's the world's biggest retailer, Facebook has 1.9 billion people on it, and in this example, I'd be in c-stores all over the country.

The question then becomes, ok, what are my requirements? Ultimately you need to solve all of the CENTS requirements fully, but you don't have to from the start. If you know that you can gain more control and entry over time (which are the most likely to be poor when you start), then it really shouldn't stop you.

 

[Consolation]

People are afraid to take action without having all the answers. They don’t realize no one has all the answers when they start. I should know. I was one of these people.

#metoo

 

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[Valhalla]

Just out of curiosity, if CENTS was a weighted mathematical formula, would the elements be of equal weight (20% each)? What would the end score represent to you? Is it inane to attempt to place a number on something so qualitative?

 

[MJ DeMarco]

Just out of curiosity, if CENTS was a weighted mathematical formula, would the elements be of equal weight (20% each)? What would the end score represent to you? Is it inane to attempt to place a number on something so qualitative?

My weighting...

NEED and Scale most important. If you make billions working your a$$ off, you just bought time. Control is a risk factor, you can violate control for years and get away with it. Entry is a competitive measure that impacts need and scale.

10% CONTROL
15% ENTRY
40% NEED
10% TIME
25% SCALE

 

[Vigilante]

Over the years I've read thousands of introductions here.

A common thread I've seeing follows the following format:

A) I have 3 ideas, X,Y, and Z.
B) None of them meet CENTS.
C) X is missing entry, Y is missing scale, and Z is missing a mix of both.
D) I don't know what to do.

The end result is the person does NOTHING.

The problem with this mentality is that it causes you not to engage the market.

And market engagement (CENTS OR NOT!) is what causes you to personally grow, gain skills, and even uncover newer or better opportunities.

Just because something isn't initially CENTS, doesn't mean you should ignore it. CENTS can come into play after years of engagement, not in your first week.

Also, if you're just looking to scrub up some WINS and some small cash profits, CENTS is probably the last thing you should be looking at --- but just NEED.

Folks, don't complicate this. CENTS exists as a guiding framework for entrepreneurs who are looking to do things bigger than they've ever done. But if you've never done DONE before, I wouldn't let it stop you from starting.

Do something. Anything. Small wins, small profits. Take swings at the plate, learn how to make contact. Once you're ready to go into the deep end of the water, CENTS can be insurance policy that your effort pays life-changing wealth VS bill-paying profits.

TLDR; Don't let CENTS stop you from striking out into the world and grabbing your first small win.

I sold a company for seven figures that started from zero.

It met the commandments of

Need
Time and
Scale.

It violated the commandments of Control and Entry. Knowing this helped me recognize where my business was vulnerable. Even if your business doesn't check off all of the checkboxes, you can still put your SWAT ANALYSIS through each of CENTS commandments to understand your market position.

 

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[jcvlds]

My weighting...

NEED and Scale most important. If you make billions working your a$$ off, you just bought time. Control is a risk factor, you can violate control for years and get away with it. Entry is a competitive measure that impacts need and scale.

10% CONTROL
15% ENTRY
40% NEED
10% TIME
25% SCALE

Interestingly, it’s somewhat aligned to the 80/20 principle.. focus on 2 of the 5 that matter 65% of the commandments equation.


Sent from my iPhone using Tapatalk

 

[TheExecutioner]

Over the years I've read thousands of introductions here.

A common thread I've seeing follows the following format:

A) I have 3 ideas, X,Y, and Z.
B) None of them meet CENTS.
C) X is missing entry, Y is missing scale, and Z is missing a mix of both.
D) I don't know what to do.

The end result is the person does NOTHING.

The problem with this mentality is that it causes you not to engage the market.

And market engagement (CENTS OR NOT!) is what causes you to personally grow, gain skills, and even uncover newer or better opportunities.

Just because something isn't initially CENTS, doesn't mean you should ignore it. CENTS can come into play after years of engagement, not in your first week.

Also, if you're just looking to scrub up some WINS and some small cash profits, CENTS is probably the last thing you should be looking at --- but just NEED.

Folks, don't complicate this. CENTS exists as a guiding framework for entrepreneurs who are looking to do things bigger than they've ever done. But if you've never done DONE before, I wouldn't let it stop you from starting.

Do something. Anything. Small wins, small profits. Take swings at the plate, learn how to make contact. Once you're ready to go into the deep end of the water, CENTS can be insurance policy that your effort pays life-changing wealth VS bill-paying profits.

TLDR; Don't let CENTS stop you from striking out into the world and grabbing your first small win.

I agree that Action is necessary. If you are a person with several ideas, however, I think its important to work through each one to see which one might make more CENTS/sense. I think first and foremost you need to be sure you are fulfilling a NEED while being in control of your time. I would really feel like I was wasting my time not trying to develop my business based on a need. All businesses evolve so the way you approach your business and apply CENTS would too!

 

[Valhalla]

My weighting...

NEED and Scale most important. If you make billions working your a$$ off, you just bought time. Control is a risk factor, you can violate control for years and get away with it. Entry is a competitive measure that impacts need and scale.

10% CONTROL
15% ENTRY
40% NEED
10% TIME
25% SCALE

If this is mentioned in the books or previous posts, apologies, but for the Need criteria, how does this apply to luxury goods? No one needs a platinum watch but there is demand. So are these two terms interchangeable once you have established there is demand?

 

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[MJ DeMarco]

No one needs a platinum watch but there is demand. So are these two terms interchangeable once you have established there is demand?

Need and desire are synonymous.

No one needs a $550,000 Lamborghini Aventador SV ... people desire it. Obviously luxury goods need rarity and quality combined with luxury branding.

 

[LamboKing]

This was one of my issues after reading TMF , had a few ideas, but none of them seem to come to fruition because of fear being commoditized in a crowded market:

1.) An idea to sell professional websites.
2.) A community for urban music producers, but thought the market was too commoditized and low profit margins.
3.) Apps. Apps for parking, the marijuana industry, dating (like tinder before tinder). Again I thought app development was commoditized and tough to pierce through in a crowded market.​

I took your advice in unscripted and decided to sell. I sold just about everything from tools to gamecube controllers (if a snail desired salt, you better believe I was ready and learned a lot during this journey). So in the last year, I’ve done $6k+ in sales through eBay, and about $8k-10k+ offline and other platforms. Also made about $2k selling a website to a local business (thanks @Fox for the motivation and helpful tips in his post).

But the step has been where to go after this point, because I don’t really have a product or service (just have been buying and flipping items unless you count the web design deal). I built up sales experience, now just have to develop and market the right product/service?

 

[Fox]

This was one of my issues after reading TMF , had a few ideas, but none of them seem to come to fruition because of fear being commoditized in a crowded market:

1.) An idea to sell professional websites.
2.) A community for urban music producers, but thought the market was too commoditized and low profit margins.
3.) Apps. Apps for parking, the marijuana industry, dating (like tinder before tinder). Again I thought app development was commoditized and tough to pierce through in a crowded market.​

I took your advice in unscripted and decided to sell. I sold just about everything from tools to gamecube controllers (if a snail desired salt, you better believe I was ready and learned a lot during this journey). So in the last year, I’ve done $6k+ in sales through eBay, and about $8k-10k+ offline and other platforms. Also made about $2k selling a website to a local business (thanks @Fox for the motivation and helpful tips in his post).

But the step has been where to go after this point, because I don’t really have a product or service (just have been buying and flipping items unless you count the web design deal). I built up sales experience, now just have to develop and market the right product/service?

Take those sales skills and get it in front of something people need.

You got the skills, now get a business model that can scale.

 

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[LamboKing]

Take those sales skills and get it in front of something people need.

You got the skills, now get a business model that can scale.

Thanks @Fox I have the salesman skill, just have been stuck finding that business model that can scale.The 2k web client took about 2-3 weeks with minimal follow up, but I think what closed the deal was the tip I took from you where when they ask for a price, see exactly what features they want/need.

Anyways appreciate all the advice, will keep pushing forward!

 

[JackieZ]

Whenever I am feeling a bit down or depressed I realize there is one thing that can help me feel better - a win. Building up winning momentum is one of the most important things you can do in life.

 

[Amoney21]

As someone that is new here, and is currently listening to Unscripted for the 2nd time on my commutes to work, this topic definitely resonates with me. I struggled with this for about a month as I literally used CENTS as a checklist when I had ideas. My background is in software development fresh out of college, so when I saw threads like @Fox @GuitarManDan going into web design I was hooked, almost as if the ideas infected my brain... But still was hesitant and frantically trying to think of ways to separate web dev/business dev from my time. Ultimately I found this style of thinking stupid because I hadn't even started or created anything, and I eventually dove headfirst into developing an idea on the android market while going through the process of freelancing web design. All I can say from my perspective is that this place is absolutely F#$@!# gold and stumbling across TMF and Unscripted have honestly changed my life permanently. Shit even the fact that this thread exists and that MJ is critically thinking about his OWN process is mindblowing to me.

I am still a peon and in the very beginning stages of all this, but I have to say that this forum, MJ's books, and the many amazing people on here are nothing short of incredible. Not every day that you come across life changing stuff, you know? Cheers everyone, and I sincerely thank you for the action I am currently taking.

 

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[Siddhartha]

Taking action and then correcting until it meets CENTS sounds better than setting my whiteboard on-fire with idea re-writes. Sign me up.

 

[jesseissorude]

Very interesting, I was just thinking about this over the past weekend and posted a little about it in my current progress thread.

I have a business that violates Entry, but I know the industry really well.

Right when this problem occurs to me 1) this thread appears, and 2) I get to Chapter 21 in Unscripted that specifically talks about how you can get around Entry problems through exception execution.

Lately, problems have been sorting themselves out when I keep my eyes open.
Is this that dang #thesecret that lifecoaches keep spamming at me on twitter?

 

[mercenariez]

Need and desire are synonymous.

No one needs a $550,000 Lamborghini Aventador SV ... people desire it. Obviously luxury goods need rarity and quality combined with luxury branding.

I thought about the distinction a lot between wants and needs as well after reading your books because it was not 100% clear to me if you thought they were synonymous, and if so, why.

I actually ended up coming to the same conclusion that they're (usually) synonymous, but in a different way with a larger emphasis on the "why" (they are the same) part.

Consider the expensive watch: everyone would say it's a want, since people are presumably able to survive without it (it's not like food or shelter where if you don't have it you die).

But in what sense is it a need?

Here are my thoughts: when talking about things like luxury goods, we should dig deeper and look at what benefits the customer gets, and what problems these products solve, since the vast majority of purchases are in order to solve problems, or because they have the expectation that one is getting something worth more than their money.

So, what is gained by ostentatious spending? I would say things like a dopamine rush, or maybe status/prestige (there can be other things as well).

The irony is that these two things are also actually needs if you make the connection.

Consider Maslow's hierarchy: a dopamine rush is in a sense a physiological need (level 1 on his pyramid). Everyone needs to feel good. If someone feels bad too often, things like depression and poor health follow. Status/prestige? Level 4: "Esteem", or basically respect from one's peers.

TL;DR: A lot of wants are secretly needs underneath.

 

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[MJ DeMarco]

Shit even the fact that this thread exists and that MJ is critically thinking about his OWN process is mindblowing to me.

Absolutely. I fully 100% believe in the CENTS framework. But after years of watching people DO NOTHING, I also believe meaningful action, small wins, and self-development is important too.

Maybe your first business just solves a need. Great.
Maybe your second has need, and control, and entry. Awesome.
Maybe your third starts with everything but scale.

The point is, always be working and progressing.

So, what is gained by ostentatious spending?

Affirms identity. Self-esteem, illusion of respect (As you mentioned).

 

[Valhalla]

Maybe your first business just solves a need. Great.
Maybe your second has need, and control, and entry. Awesome.

I like that approach. Like most people on here, I have no shortage of ideas but it's really difficult to get one by the CENTS goaltender. For years this stifled me, as of the last year or so I've pursued ideas which don't meet all the criteria, but I'm still comfortable with, either because of low up-front costs, an easy exit strategy or opportunity for long term passive income. This also goes against entrepreneurial monogamy, however for me, at this point, is where I want to be. I'm learning, meeting new people and finding where my strengths and weaknesses lie in pursuit of that one thing that will get me where I ultimately want to go.

 

[TreyAllDay]

Agree with @MJ DeMarco. I think it depends on the entrepreneurs situation/experience. It's just meant to be a guide and you can be successful initially with only 2 or 3 checked off.

I think there is an order of importance:

1) Needs - no question, most important.
2) Entry Barriers- directly related to need (crowded markets don't NEED another supplier).
3) Scalability/Time Separation - I pair these 2 together because they're very similar. If you are starting a business that is trading your time for money indefinitely, you might as well get a job.
4) Control - least importance, but still... important.

Sometimes the degree to which a business satisfies a need can overpower the others.
Just an example - I had an opportunity 2 years ago to become a digital signage provider for a few large companies. They wanted to replace their in store signs, paying $20/sign per month x 250 signs. The system takes maybe 1 day of maintenance a month. I never thought I'd get in the business, there are suppliers out there already and not a ton of need for new options, but the opporunity came to bid on that job and that 5k a month is completely passive.

 

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[ZCP]

As I go through this, it now seems clear that getting to your first liquidation event / exit event as quickly as possible is the key. So Need and Scale seem key. Once you sell and create that success, you can re-enter with better knowledge and experience.

As you get to a certain size, reviewing your weaknesses from the model like @Vigilante said are key.

Looking at current business .....
Control .... check
Entry ...... massively huge check
Need ...... check
Time ...... extremely poor at the moment
Scale ..... smaller ceiling than I hoped

My next business will satisfy Time and Scale or I won't do it........

 

[FierceRacoon]

In my experience, it's the same with every framework, entrepreneurial or not.

There are people out there who just take action. Like this guy I worked with who just decided to start a company and spent two years working on it like crazy. He ended up shutting it down, and arguably he did make a bunch of mistakes. He also made some side cash along the way, ~100k, and met a ton of people including myself, so in the end it was not even wasted: he is now working 9-5, but is making a lot more money because of that experience.

However, those guys are rare. Other than that, the next category are smart people like myself. Those folks often have a M.Sc. or a Ph.D. in something quantitative, or in something requiring enormous attention to detail. If you are a software developer, engineer, accountant, analyst, physicist, researcher of any variety, lawyer or paralegal, even marketing specialist, you fall into this category. Then you will love frameworks because they give the world certainty. Suddenly you feel like you know, but you don't. If you are one of us smarties, the solution is to forget about CENTS and any other frameworks. Getting a mentor instead might be a good idea. Otherwise you might be under an illusion that you are making progress, while you won't be.

It's also very hard to put those idioms into context without, or even with experience. E.g. I knew a guy who kept saying, how easy it is to raise money in the Silicon Valley, that if only you have a big idea that can scale, funding is not a problem. Surely, it is relatively easy, but that is not a productive mindset when you have a startup. It was "easy", until the investors suddenly stopped giving money because they wanted progress. Suddenly they realized that a grand vision was not sufficient if the team cannot execute.

Then I know this lady, also very smart, who is struggling to make the ends meet. Literally struggling to survive. She will tell me all those theories, as to why her "real rate" is $250/hour. You know, why people "should" outsource to her because their time is more expensive, so it should make logical sense to give her the kind of work she has in mind, at the rates she has in mind. Great, except she can't make $15/hour despite her incredible analytical skills, top 1% of the population by any standard. She just has some abstract theory explaining why she is right, but there isn't a market for her skills at the rates she has in mind, or she has no way of accessing that market. Now she has 17 contacts who say they will hire her "some day", once they can afford it! Most of those contacts are early-stage entrepreneurs. The framework (how much their time is worth) doesn't even apply here, because they simply do not have $250/hour or even $50/hour to spare at the moment, let alone that her theoretical analysis is not very useful for an early-stage startup. Same story: a person stubbornly clinging to a framework instead of engaging with reality.

To elaborate on the last example, there is a barrier to entry to consulting at $250/hour, which is not just skills, but connections and experience — experience knowing how to talk people into paying you $250/hour, and then how to meet their expectations. She doesn't see that without this communication her "objective" value does not exist. Similarly, there are countless other obstacles that can invalidate a business plan. We simply cannot know in advance if something will scale or not, if something will create value or not, etc. The framework is there so that once you have 10 failures, you can look at them and create an 11-th success. It cannot be used to manufacture success at 1st attempt because real life experience is needed to interpret the framework, and to keep interpreting it day-to-day.

 

[SamRussell]

This was one of my issues after reading TMF , had a few ideas, but none of them seem to come to fruition because of fear being commoditized in a crowded market:

1.) An idea to sell professional websites.​

2.) A community for urban music producers, but thought the market was too commoditized and low profit margins.​

3.) Apps. Apps for parking, the marijuana industry, dating (like tinder before tinder). Again I thought app development was commoditized and tough to pierce through in a crowded market.​

I took your advice in unscripted and decided to sell. I sold just about everything from tools to gamecube controllers (if a snail desired salt, you better believe I was ready and learned a lot during this journey). So in the last year, I’ve done $6k+ in sales through eBay, and about $8k-10k+ offline and other platforms. Also made about $2k selling a website to a local business (thanks @Fox for the motivation and helpful tips in his post).

But the step has been where to go after this point, because I don’t really have a product or service (just have been buying and flipping items unless you count the web design deal). I built up sales experience, now just have to develop and market the right product/service?

Bandcamp is a shitty service that people use for a few bucks a month and is making a killing. Creating a cheap to use but cookie cutter community style thing for urban producers could work nicely.

 

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[Roli]

Very good point, but it's fair to say the N piece of CENTS is always necessary, right?

Need or Want, without those two you have nothing....

The point is though, like Nike says, just do it.

Fail, then do it again, only this time better.

Repeat.

 

[JunkBoxJoey_JBJ]

Here are my thoughts on CENTS:

https://www.thefastlaneforum.com/community/threads/are-you-confused-secrets-on-cents.89073/#post-787630

 

[illmasterj]

Unless I'm understanding this wrong CENTS is something you'd have in a perfect world. Reality is the world is not perfect.

I haven't stalked your story @MJ DeMarco but I'm fairly sure I've read on the forum (and possibly in your books, I don't recall), that Limos.com was your Fastlane business.

I'm sure it's changed a lot over the years but my interpretation is that it's kind of a mix of a lead generation/dropshipping business (there's probably a better term but stay with me here).

You didn't own each and every limo. You didn't employ limo drivers. So did you have complete control? No. Did you have enough of it to make "Fastlane cash". Yes.

Literally none of my businesses fully meet the CENTS criteria right now. I don't make crazy money, but I'm beginning to understand how the Fastlane works. A ton of my friends make insane money without meeting CENTS as well.

Even if you find the perfect "CENTS compliant" business model, does it begin with complete Control? Maybe you have to start by selling your Time so you can effectively learn how to sell other people's time? Maybe (almost definitely) you need to outsource manufacturing while you build your brand, reputation and revenue to be able to afford a plant/manufacturing/engineering staff?

So over the lifecycle of a company's development, it may and may not fulfil all of the criteria at all times. And that's OK.

 

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[Ernman]

I am still a peon

you ain't no peon

 

[spreng]

it feels like SEO is not really needed in terms of small businesses anymore. It definitely violates the commandment of entry with no real skills being needed, and the market is so saturated. I'm curious as to what people's advantages in the industry are...