The CENTS Business Commandments for Entrepreneurs

[AdrianB]

There is great value on this forum! I am new here, I've just bought the book UNSCRIPTED and I'm so unpatient to left working office and start reading it. I haven't understood yet what is in the INSIDERS threads, but I'm really interesting in everything people are sharing here. Hope I would also be able to contribute asap. Appreciate all the work, thank you MJ DeMarco!

 

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[Dianne Cohen]

I have been thinking about this quote all afternoon. I now want to do what I can to serve the best way possible. That was a missing link for me.

 

[Dana Taylor]

The Commandment of Scale (centS)

A productocracy’s fifth and final CENTS Commandment within the Fastlane structure is the Commandment of Scale.

Scale instructs that legacy value systems must be replicated through mass or magnitude while making a profitable impact.

The four definitive components are:

1. Legacy value system
2. Replication
3. Mass or magnitude
4. Profitable impact

First, your offering must eventually evolve into a legacy system in accordance with the four prior commandments. A legacy system carries the components of the TIME component, both physicality and detachment.

Second, your LVS must be replicable, or easily copied into multiple units, locations or chains.

Optimally, this replication should extend among hundreds or thousands, if not millions, of units. For instance, software is easily replicated. The same goes for a website service where increased users and traffic extend replication. My forum receives over 100,000 visitor sessions per month. In the ten years I owned my Internet company, I served a multitude of millions. Physical products like this book also offer replicative elements; my printer can print one million books as easily as 10,000. Replication turns one store into twenty, one duplex into a dozen, and hundreds sold to millions.

Third, replication must have either mass or magnitude. Most people think scale automatically equates to mass-market millions or operating in multi-billion market size. However, scale can also be graced through magnitude, or the gravity of your impact. For instance, if you provide housing for twenty families (not mass market), you’ve scaled by magnitude and probably are doing well—housing is a magnitudinal endeavor. Sell ten restaurant franchises for your organic, GMO-free restaurant, and again, brute-force magnitude occurs.

The fourth element in the definition is a profitable impact. The UNSCRIPTED business is about profits, not ten years from now but within your first year. Nowadays, too many businesses are labeled a success by virtue of growth or run rates. Many never make a profit for years and bleed cash like an Instagram playboy. Most start-ups birthed on the tech coast create value and make an impact. The problem is, they don’t make a profitable impact for years.

Amazon is a great example of a company that makes a phenomenal impact but largely hasn’t been profitable. Remember: Selling hundred-dollar bills for fifty bucks isn’t what we want. “Bleeding value” might grow a company fabulously and have VC’s drowning us in term sheets, but that’s not our objective. Let the deep-pocketed sultans of Silicon Valley make those gambles.

Your goal is UNSCRIPTED , which demands profitability now, not later. And if you want to create the next hot start-up reveled on TechCrunch, the better bet is doing it UNSCRIPTED where “F*ck you” opens up more possibilities.

As producers, we are in the business of serving consumers—not few, but many. However, before impacting the masses, we must first impact one—and do so profitably. If you can impact one profitably and your legacy system is replicable, congratulations, you’ve laid a scaling track.

The act of profitably impacting many is where your income (and life) makes quantum leaps. Optimally, your business solution should impact an industry large enough to impact your life. If you have a software solution appealing to hospitals, the appeal of magnitude scale exists. If any business owner could use your product, the appeal of mass scale exists.

The market size constructs the ceiling under which we limit ourselves. If your solution sells for twenty bucks and your target customer is an Internet-savvy octogenarian who owns a Corvette, the market ceiling is at your ankles. How big is that market? You can’t fill a pool with an eyedropper. Olympic swimmers don’t train in bathtubs. Swim in bodies of water large enough to take you somewhere.

Excerpt From: MJ DeMarco. “UNSCRIPTED : Life, Liberty, and the Pursuit of Entrepreneurship.”

Thoroughly enjoyed this reminder!

 

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[SD Entrepreneur]

It didn't start that way when I first identified the 5 commandments I thought were most important.

Yet, I was fortunate enough to have it form an acronym ... it was originally started as CENTS (because NEED is always the most important) and then I later decided CENTS was easier to remember, plus, If it makes CENTS, it makes sense!

Been reading this and re-reading this often, so many valuable sentences within... @MJ DeMarco I was thinking of creating a spreadsheet for everyone based on CENTS to help evaluate your business and/or business ideas. Let me know if that would be ok to do and share...

 

[Fantasy]

A lot of it comes back to when I was 20 ... I wrote the book(s) I wish I had available to me.

This one line gave a goose bump. It's so simple, that I get it now. God, for days I used to think what product I need to sell. Now I know, I just need to provide people that I truly wished was available to me during that phase of life. As most people will feel the same way... Thanks MJ for this simple yet effective thought and for the two books that changed the way I think about life and fulfillment

 

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[John Walker]

Entrification

I'm in that part of the book, but I could not find the meaning of "Entrification" what does it mean? @MJ DeMarco

 

[Rawseed]

I'm in that part of the book, but I could not find the meaning of "Entrification" what does it mean? @MJ DeMarco

I understood 'entrification' to be the process of starting your business. The process of going from idea to profit.

 

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[SEBASTlAN]

Just to play devils advocate - for Entry, you COULD still start a business that has a low barrier and succeed if you outwork/outlast those who just entered because it was easy right?

 

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[Ashish Kulkarni]

I have read TMF and I am half way through Unscripted .

Loved this thread.

I can see why you are so rich MJ. You provide so much value.

Thank you.

I know you don't need it but I am transferring Rep.

Best regards,

Ashish.

 

[focusedlife]

Yeah, I remember reading CENTS in TMF and was like "WTF? Why didn't he just use CENTS?" lol.

I guess what I was wondering about was how you identified those 5 components as critical for success?

 

[MJ DeMarco]

Just out of curiosity. If the main way you generate revenue and conduct your business is through a website and you created that website on wordpress, squarespace, etc. and did not program and code the website from scratch, doesn't that violate the commandment of control?

To an extent. It's a risk factor, but more dependent on your business than anything.

If you're in a field of controversy or political incorrectness, than yes, the risk factor becomes magnified. For example, I host an AR-15 gun forum using Xenforo and hosted on Blue Host. Both entities are control risk factors, not because the entities themselves, but because the content/business I choose to pursue. Either can change their terms and knock you out of business.

 

[Lyzmin]

Great framework to come back to when I'm evaluating business decisions.
Thank you @MJ DeMarco!

 

[MJ DeMarco]

@MJ DeMarco did you facepalm at all when you realized N-E-C-S-T could be CENTS. On my first read through of TMF some 11 years ago I never put it together that it could be CENTS either, or was it purposeful?

No, it was a brain fart. Yes, I facepalmed myself. I originally started with N(EED) because it was the most important.

 

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[RaffUnscripted]

Thought I'd start a thread based upon the CENTS Business Commandments found in The Millionaire Fastlane and UNSCRIPTED , just in case someone searches for it by search engine.

Since this concept is covered in both books, I don't think I ever posted an "official" thread on the topic. It would be nice to have a thread for it, especially for people who have never read my books and come across the concept in some other venue or dialogue.

Also, I'd like to document its existence beyond the 2 books, just in case another 21-year old wannabe coaching guru steals it and claims it as his own.

So here we go...

The CENTS Business Commandments
(As found in The Millionaire Fastlane (CENTS) and Unscripted by MJ DeMarco)

The CENTS Business Commandments is a methodology used for testing the veracity of your business idea or opportunity from an Fastlane entrepreneurial perspective. The CENTS Commandments is the foundation for a Fastlane Business found in the Unscripted Entrepreneurial Framework (TUNEF).

The purpose of the commandments is to improve your probabilities for creating a business that can change your life forever through RAPID WEALTH ACCELERATION, both income (business profit) and net worth (business valuation.)

The centerpiece of the CENTS Commandments is NEED, or relative value -- value relative to other offerings available in the marketplace. Relative value considers the entire marketplace -- a blog full of fitness tips might be valuable, but it isn't RELATIVELY valuable because there are thousands of similar blogs.

View attachment 18212

Each Commandment is as follows...

Are these (and other) graphics available for purchase/download in large format?

 

[Owner2Millions]

I honestly just saved this picture myself haha @MJ DeMarco you should trademark this. You don’t want anyone stealing it. This is what I think about for any idea that pops in my mind.


Sent from my iPhone using Tapatalk

 

[Nik@16]

The Commandment of Time (cenTs)

Imagine waking up and realizing you made more money overnight than you did in one week at your last job.

That's the power of our 4th CENTS Commandment, the Commandment of Time which abolishishes the causal relationship between your time and income. Temporal prostitution is dethroned, and income no longer requires life rations.

The Commandment of Time has two components. The first is physicality, where your value must exist in space-time separate from you. My books exist regardless of my existence. On the other hand, if you consult for a living, your income stops when you stop. There is no physicality.

The second is detachment.

Eventually in your enterprise’s evolution, you must detach from its physicality, effectively freeing your time and life. When this is accomplished, it puts you “on the clock” 24/7, giving you the ability to earn perpetually THROUGH time versus IN time.

This is how you wake up and earn a day’s wage before brewing the morning coffee.

Unfortunately, the Time Commandment is the most misunderstood and perverted CENTS Commandment. Instead of time being honored, it is worshiped. Why? Because it’s the gatekeeper to every starry-eyed entrepreneur’s wet dream: passive income.

THE MYTH OF PASSIVE INCOME

The passive-income lure sounds deliciously simple. Just upload an unedited four-page eBook to the Kindle store and, wham, watch the cash come pouring in! Unfortunately, such simplicity is about as complicated as a zero-calorie cheesecake.

For the unwashed, passive income is mystically clothed like free or easy money. It resonates like entrepreneurial welfare, where value is disrespected and money comes for nothing—no effort, no challenge, and no work. Nothing could be further from the truth. The big irony of passive income is it’s anything but passive. Every single entrepreneur I know who enjoys passive income today exercised an extraordinary and committed process yesterday. Passivity? LOL. It played no role.

Passive macro-events (and action-faking) doesn’t produce passive income. Launching a podcast, interviewing three people, and giving up a week later is not the path to passive income. Neither is uploading one badly programmed app to the Apple store and expecting thousands of downloads.

Satisfying the Commandment of Time (and getting to the point of a sustainable, life-altering passive income) takes months, sometimes years, of nose-to-the-grindstone effort. We’re talking about ten-hour days six to seven days a week demonstrated by the process-principle. Or is your expectation in line with the event-driven, 4-hour crowd?

While I’ve enjoyed passive income for nearly twenty years, its road has not been passive. In my first business, it took me several years to create passivity. Ask any of my friends and they would confirm: I’d hibernate in my office for days and not come out except to reload on the Ramen and Red Bull.

My publishing company and my forum? Again, years.

When I started my forum years ago, I was the primary content creator because I had few users. I literally commented on every thread created. That's right, every thread. Sometimes I just talked to myself. Think that was time-consuming? Or do you think I just kicked my feet up on the sofa and smoked a cigar while daydreaming about the forthcoming passive-income avalanche?

Entrepreneurs who play this game with a foremost objective of passive income are delusional. And if I had to guess, lazy.

Your business bull’s-eye is a productocracy and fiduciary entrepreneurship. Much like value is a predecessor to money, a systemized productocracy is a predecessor to passive income. Honor the Commandment of Time; don’t collapse to your knees and sacrifice your firstborn for it. With a productocracy in your corner, passive income eventually comes

 

[Brian Fleig]

Are these (and other) graphics available for purchase/download in large format?

I just now wrote it out on my whiteboard for reference.

 

[Santi M]

Ultimately I hope to leave a legacy that survives beyond my time on this planet.

I'm sure you will do it, and we will take care of it. Thank you MJ, thank you so much.

 

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[SIDI]

Just a bump. Love re-Reading this. Now to do something about it!! Thanks MJ

 

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[MJ DeMarco]

Bump.

 

[focusedlife]

How did you come up with this acronym, MJ?

Brilliant, btw.

Thank you.

 

[MJ DeMarco]

Been reading this and re-reading this often, so many valuable sentences within... @MJ DeMarco I was thinking of creating a spreadsheet for everyone based on CENTS to help evaluate your business and/or business ideas. Let me know if that would be ok to do and share...

Of course it's ok, anything that helps spread the CENTS message, just make sure it is credited to the book!

 

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[WillHurtDontCare]

If you are in the Tampa area, stop by and catch my address this Saturday to Tampa area entrepreneurs. Cigar City Humidors by BCIC Cigar was selected to display at the Tampa Entrepreneur's Showcase this Saturday at the Clearwater Library, and they asked me to speak at 2PM. I will be talking about the CENTS business commandments from my friend MJ DeMarco and his best selling books "Unscripted " and "The Millionaire Fast Lane." Come learn how Control, Entry, Need, Time and Scale all play a role in testing the veracity of your business idea.

Do you do these events often? I live in Saint Pete & would have attended had I not flown to visit my parents this past weekend.

 

[Vigilante]

Do you do these events often? I live in Saint Pete & would have attended had I not flown to visit my parents this past weekend.

Nothing on the calendar through Christmas but I am working on a local radio deal... stay tuned...

 

[RocketRose]

I have listened to both books but it is great to have this thread to refer back to CENTS and to read shared experiences. Much appreciated!

 

[Issi007]

The Commandment of Scale (centS)

A productocracy’s fifth and final CENTS Commandment within the Fastlane structure is the Commandment of Scale.

Scale instructs that legacy value systems must be replicated through mass or magnitude while making a profitable impact.

The four definitive components are:

1. Legacy value system
2. Replication
3. Mass or magnitude
4. Profitable impact

First, your offering must eventually evolve into a legacy system in accordance with the four prior commandments. A legacy system carries the components of the TIME component, both physicality and detachment.

Second, your LVS must be replicable, or easily copied into multiple units, locations or chains.

Optimally, this replication should extend among hundreds or thousands, if not millions, of units. For instance, software is easily replicated. The same goes for a website service where increased users and traffic extend replication. My forum receives over 100,000 visitor sessions per month. In the ten years I owned my Internet company, I served a multitude of millions. Physical products like this book also offer replicative elements; my printer can print one million books as easily as 10,000. Replication turns one store into twenty, one duplex into a dozen, and hundreds sold to millions.

Third, replication must have either mass or magnitude. Most people think scale automatically equates to mass-market millions or operating in multi-billion market size. However, scale can also be graced through magnitude, or the gravity of your impact. For instance, if you provide housing for twenty families (not mass market), you’ve scaled by magnitude and probably are doing well—housing is a magnitudinal endeavor. Sell ten restaurant franchises for your organic, GMO-free restaurant, and again, brute-force magnitude occurs.

The fourth element in the definition is a profitable impact. The UNSCRIPTED business is about profits, not ten years from now but within your first year. Nowadays, too many businesses are labeled a success by virtue of growth or run rates. Many never make a profit for years and bleed cash like an Instagram playboy. Most start-ups birthed on the tech coast create value and make an impact. The problem is, they don’t make a profitable impact for years.

Amazon is a great example of a company that makes a phenomenal impact but largely hasn’t been profitable. Remember: Selling hundred-dollar bills for fifty bucks isn’t what we want. “Bleeding value” might grow a company fabulously and have VC’s drowning us in term sheets, but that’s not our objective. Let the deep-pocketed sultans of Silicon Valley make those gambles.

Your goal is UNSCRIPTED , which demands profitability now, not later. And if you want to create the next hot start-up reveled on TechCrunch, the better bet is doing it UNSCRIPTED where “F*ck you” opens up more possibilities.

As producers, we are in the business of serving consumers—not few, but many. However, before impacting the masses, we must first impact one—and do so profitably. If you can impact one profitably and your legacy system is replicable, congratulations, you’ve laid a scaling track.

The act of profitably impacting many is where your income (and life) makes quantum leaps. Optimally, your business solution should impact an industry large enough to impact your life. If you have a software solution appealing to hospitals, the appeal of magnitude scale exists. If any business owner could use your product, the appeal of mass scale exists.

The market size constructs the ceiling under which we limit ourselves. If your solution sells for twenty bucks and your target customer is an Internet-savvy octogenarian who owns a Corvette, the market ceiling is at your ankles. How big is that market? You can’t fill a pool with an eyedropper. Olympic swimmers don’t train in bathtubs. Swim in bodies of water large enough to take you somewhere.

Excerpt From: MJ DeMarco. “UNSCRIPTED : Life, Liberty, and the Pursuit of Entrepreneurship.”

It is much clearer now after reading your post.
Really efficient framework, i already started to use it.

Thanks for sharing MJ !

 

[Akpama Boris]

Thank you for the massive value you provide MJ

 

[daicaviet]

deeply inside a successful business , Always re-read CENTS againt when I make confuse in my business. Thanks MJ so much from Vietnam

 

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[Vasudev Soni]

Thought I'd start a thread based upon the CENTS Business Commandments found in The Millionaire Fastlane and UNSCRIPTED , just in case someone searches for it by search engine.

Since this concept is covered in both books, I don't think I ever posted an "official" thread on the topic. It would be nice to have a thread for it, especially for people who have never read my books and come across the concept in some other venue or dialogue.

Also, I'd like to document its existence beyond the 2 books, just in case another 21-year old wannabe coaching guru steals it and claims it as his own.

So here we go...

The CENTS Business Commandments
(As found in The Millionaire Fastlane (CENTS) and Unscripted by MJ DeMarco)

The CENTS Business Commandments is a methodology used for testing the veracity of your business idea or opportunity from an Fastlane entrepreneurial perspective. The CENTS Commandments is the foundation for a Fastlane Business found in the Unscripted Entrepreneurial Framework (TUNEF).

The purpose of the commandments is to improve your probabilities for creating a business that can change your life forever through RAPID WEALTH ACCELERATION, both income (business profit) and net worth (business valuation.)

The centerpiece of the CENTS Commandments is NEED, or relative value -- value relative to other offerings available in the marketplace. Relative value considers the entire marketplace -- a blog full of fitness tips might be valuable, but it isn't RELATIVELY valuable because there are thousands of similar blogs.

View attachment 18212

Each Commandment is as follows...

I have read TMF two times, and it has completely changed the way I think about money & business. Thank you @MJ DeMarco for writing such an eye-opening book.

 

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[MJ DeMarco]

Where does being a Realtor land in all this?

The hot shot agents who make millions tend to be brokers with large organizations and foot soldiers doing the showing, selling, etc.

On the CENTS scale, a standalone RE agent doesn't score very well, but is better than most jobs since it offers a better system for wealth creation since income caps are removed (scale), if you sell $50M in homes in one year, safe to say, you probably had a good year.

TIME, it scores poorly unless you go the broker route. ENTRY is poor. NEED is average since the market is full of agents, yet, the agent system of selling real estate is still used and enforced here in the states, but is ripe for disruption.