Think Big, and Then Think Bigger Than That.

[Kak]

If someone without industry experience wanted to help oil companies solve a massive problem like this. How could they potentially get started? I feel the only way would be to get connected with someone high up in the oil industry, and see where they need help in their offshore drilling operations.

Your question becomes “how do you propose they do it?” (whatever “it” is) And then “how does that compare to what they do now?” And then “Why is it better?” If you can answer those questions honestly and blow their doors off with value, you have something you can build a team around.

You are dead on asking the right kind of questions... AND you are dead on with your answer...

People.

This is why I talk about leadership being paramount. Don’t get me wrong, you need to know what you are talking about and have an idea of a problem that you want to solve and the opportunity in the change, but you’ll never know as much as someone that has spent time living in the industry. Don’t even concern yourself with knowing as much as that person, just find a way to work together. There are always ways to create profitable win-win relationships with others. At that point it becomes a search for key people.

 

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[The Racing Driver]

Your question becomes “how do you propose they do it?” (whatever “it” is) And then “how does that compare to what they do now?” And then “Why is it better?” If you can answer those questions honestly and blow their doors off with value, you have something you can build a team around.

You are dead on asking the right kind of questions... AND you are dead on with your answer...

People.

This is why I talk about leadership being paramount. Don’t get me wrong, you need to know what you are talking about and have an idea of a problem that you want to solve and the opportunity in the change, but you’ll never know as much as someone that has spent time living in the industry. Don’t even concern yourself with knowing as much as that person, just find a way to work together. There are always ways to create profitable win-win relationships with others. At that point it becomes a search for key people.

Leadership. This is where I'm going wrong and what I need to work on. I have no problem thinking big, but my results in business and type of actions I take are anything but big.

I've been trying to be as efficient with my time as possible, but there's only so much you can do in a day. I can only learn so much in a short time about advertising, photography, web development, and other stuff for an e-commerce store I’m building.

But if I gathered the right people, there's so much more we could achieve as a team, and I'm sure that's where I need to direct my focus towards.

There are a few big "its" I want to improve in this world, one has to do with road safety. I'm starting to see ways I can already start developing my ideas. Thank you for helping me see these new possibilities.

 

[MTF]

I can see many opportunities to think big when it comes to offline businesses, but not that many when it comes to online businesses. Any ideas how to think big in the online world? No matter what idea I come up with, it feels like yet another "me too" little online biz, not a proper "think big" venture.

 

[Kak]

I can see many opportunities to think big when it comes to offline businesses, but not that many when it comes to online businesses. Any ideas how to think big in the online world? No matter what idea I come up with, it feels like yet another "me too" little online biz, not a proper "think big" venture.

Why limit yourself to an online business? Of course there are many many ways to make money online... however that's where the bandwagon is parked right now.

Is there opportunity in knowing that fact? Potentially.

The internet, in my opinion, should be viewed as a tool for business, not a complete business.

 

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[Kak]

I can only learn so much in a short time about advertising, photography, web development, and other stuff for an e-commerce store I’m building.

You hit the nail on the head. My quote of you is what a current lack of leadership looks like.

Entrepreneurs need to, at some level, be jacks of all trades. When you are in a position that you don't have enough time in the day to lead the company, it's way too much. Show me a CEO taking his own product photography and ongoing web dev and I'll show you a guy that wanted the big title on his business cards.

Obviously be able to discuss direction intelligently on these topics. But this stuff is the difference between multimillion dollar revenues and a company the makes low 6 figures. Efficiencies, life hacking and power diets are only going to get you so far.

There's a lot of talk about the trappings of a job... there are also trappings of small businesses. Don't end up trapped. Keep growing through leadership.

 

[MTEE1985]

Show me a CEO taking his own product photography and ongoing web dev and I'll show you a guy that wanted the big title on his business cards.

Bump for this thread because it is so valuable. As much as we discuss not trading your time for money, it is incredibly important to know the value of your time. If you have a million dollar business than it’s $500 per hour. If doing a specialized activity can generate that then strongly consider hiring out anything that costs less.

As @Kak points out above, not only does the jack of all trades CEO simply like the title, he is not efficiently running his business. A CEO running a company is closing deals, making processes more efficient and generating extra revenue wherever possible, not wasting time on something that can be done by a $20 an hour intern. (Unless you are in the bootstrap phase obviously)

 

[Kak]

Bump for this thread because it is so valuable. As much as we discuss not trading your time for money, it is incredibly important to know the value of your time. If you have a million dollar business than it’s $500 per hour. If doing a specialized activity can generate that then strongly consider hiring out anything that costs less.

As @Kak points out above, not only does the jack of all trades CEO simply like the title, he is not efficiently running his business. A CEO running a company is closing deals, making processes more efficient and generating extra revenue wherever possible, not wasting time on something that can be done by a $20 an hour intern. (Unless you are in the bootstrap phase obviously)

Thanks for the bump boss!

If you have a million dollar business, it's $500 per hour... Yes and no...

If you spend 10 hours per week to make 1m per year. Your time is worth closer to $2000 per hour.

If you spend 20 hours to make 20 million... Closer to $20 grand per hour.

The biggest takeaway from this is to avoid the entrapment where you can't afford another resource, so you do it yourself. Your revenue growth will begin to decline. Your time input will inflate.

Build things on a solid foundation of scalability... It will BORE the hell out of you in the beginning, but you'll thank yourself later when things take off like a rocket and your bases are covered.

Do everything you can to afford more resources. Pay yourself LAST. The health of the business is so much more important than the watch you wear and the car you drive. In the beginning, small sacrifices mean a lot more. Don't be a consumer and kill your golden goose. Wait, and affording things will eventually not be an issue.

 

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[ChrisV]

Start thinking BIG!

We’re gonna call you “Big Kak" from now on

 

[SDE]

We’re gonna call you “Big Kak" from now on

I prefer ''Badass''

 

[Kak]

I prefer ''Badass''

Meh. Kak is fine.

 

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[ChrisV]

When I worked for Walmart corporate, they forced us to take the "but" thinking out of our vocabulary.

What inevitably follows the "but" is a reason why something can't happen.

"But they had an edge..."
"But it snowed last week and that's why sales are down"
"But I don't have the capital"
"But I work full time"
"But he was born into money"
"But I've never done that before"
"But they've been doing this for 20 years"
"But they have first market movers advantage"
"But that would be a lot of work"
"But I am not sure how to do that"
"But they got lucky"

What if the founder of Walmart had said "I want to do this but KMart is already doing it..." because they were.

"Buts are for Butts"

c’mon let’s patent that

 

[ChrisV]

When I worked for Walmart corporate, they forced us to take the "but" thinking out of our vocabulary.

What inevitably follows the "but" is a reason why something can't happen.

"But they had an edge..."
"But it snowed last week and that's why sales are down"
"But I don't have the capital"
"But I work full time"
"But he was born into money"
"But I've never done that before"
"But they've been doing this for 20 years"
"But they have first market movers advantage"
"But that would be a lot of work"
"But I am not sure how to do that"
"But they got lucky"

What if the founder of Walmart had said "I want to do this but KMart is already doing it..." because they were.

or we can start calling people But-heads, But-holes, or But-lickers

oh man we’re gonna make a gazillion

 

[MTEE1985]

Meh. Kak is fine.

I hope everybody is reading between the lines here at what Kak is saying...people that have this level of success and play the game at a high level aren’t some mythical creature. The difference is they have a mindset that ANY deal is a deal they can go after and win, and there is no limit to what they can achieve.

Check out “the magic of thinking big” by David Schwartz, it’s an oldie but an incredible tool on mindset and eliminating limiting beliefs. Spend enough time around people who are extremely successful and you’ll notice they are normal people at the end of the day. They are more focused, driven, competitive among many other things but not born with any special advantage.

Not to be cliche but (here comes a cliche quote) “Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won't feel insecure around you.”

Ask yourself today, what could I do that would be huge? What is a goal, a challenge, an industry that is so giant it scares the sh*t out of me? Then ask yourself, how could I accomplish that? Who would I need to be? How would my day look? What if everybody went after the elephant instead of shrinking back their whole lives like 99.99% do? The reality is, we are all going to die at some point...when you are on your deathbed are you going to look back and say “I wish I had smaller goals and dreams?” I certainly hope not.

 

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[YoungPadawan]

I like the tags. Lol
Good stuff

 

[Andreas Thiel]

I have read that over and over again, for example in "Abundance" and "BOLD" (Peter Diamandis with his Massively Transformative Purpose) ... but that idea seems pretty dangerous to me.

How do you survive the walk through the "Desert of "Desertion" if it drags on for decades? Is stairstepping the right way to execute ... to increase your "Line of Super Credibility"? Doesn't it inherently mess up your odds when there is a huge payout far in the future with an incredibly small possibility of reaching the goal?

To me it seems like signing up for another "Rich at 65" recipe, unless there are elements in the suggested process that I am not seeing.

 

[MTEE1985]

I have read that over and over again, for example in "Abundance" and "BOLD" (Peter Diamandis with his Massively Transformative Purpose) ... but that idea seems pretty dangerous to me.

How do you survive the walk through the "Desert of "Desertion" if it drags on for decades? Is stairstepping the right way to execute ... to increase your "Line of Super Credibility"? Doesn't it inherently mess up your odds when there is a huge payout far in the future with an incredibly small possibility of reaching the goal?

To me it seems like signing up for another "Rich at 65" recipe, unless there are elements in the suggested process that I am not seeing.

Well the simplest response is to look at all the billionaires in their 30’s or 40’s let alone the multi-millionaires. Same elements, same processes, larger scale and more zeros.

The other element to look at is more of a personal view, for some, they’d rather spend their life working toward something huge than achieving on a micro scale. Generally it is not a financial goal being chased but rather an impact or a legacy.

 

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[Andreas Thiel]

Well the simplest response is to look at all the billionaires in their 30’s or 40’s let alone the multi-millionaires. Same elements, same processes, larger scale and more zeros.

The other element to look at is more of a personal view, for some, they’d rather spend their life working toward something huge than achieving on a micro scale. Generally it is not a financial goal being chased but rather an impact or a legacy.

Thinking in terms of UNSCRIPTED , I see little evidence of "Same elements, same processes, larger scale". You can strike out less often, it is a bigger gamble (it takes a lot longer until you have your first customer and see hard proof of your productocracy) and so on.

I am not saying that it is bad advice. I just feel that this "insight" comes with just as many pitfalls as it opens up opportunities. Plus: "stairstepping towards a huge goal" seems to be a different kind of process that I would like to understand better.

 

[Kak]

Doesn't it inherently mess up your odds when there is a huge payout far in the future with an incredibly small possibility of reaching the goal?

I would argue the exact opposite.

Odds of what? Success? What is success?

The only thing you are considering is barrier to entry. There is far more to a functioning business than low competition.

Most "think big" ventures I would argue are well capitalized from the very beginning. And... if your idea is good enough, some founders even get a pre-revenue salary. This is not to say that you are doing this for that salary. It's normally small and intended to keep your focus on the funded business.

Small businesses kind of have a tough go. They have to FIGHT HARD and duke it out. Larger businesses have real resources, that makes a huge difference in the likelihood of long term success.

Have you ever seen "The Profit" on CNBC? I would call these businesses small. You watch and think the owners are idiots, but the fact of the matter is, running a small business isn't easy and capital is tight. Then Marcus buys them and there is all of a sudden some new money, they can afford resources, they turn the corner in short order.

I also think that "small business" is at an all time high. It's a bubble. There are like 8 local granite businesses within 10 minutes of my house. There are probably 8 ATV dealerships within 10 minutes of my home. There are probably 30 nail salons and barber shops within 10 minutes of my home. Dentists offices, small pet supply stores, tires, weird one off shops selling cup cakes or something else obscure, self storage, I could go on and on. It's not just here, it's everywhere. Go in to one of those establishments, I've noticed the owner is almost always there... probably because they have to be. Because they can't afford not to be. The world is becoming Amazon and small business is getting more and more competitive.

All this to say. There are pros and cons of both, but I like my "odds" better long term playing big, and then playing bigger than that. Stick your head out the top side of the cloud for a clearer view.

 

[Kak]

I have read that over and over again, for example in "Abundance" and "BOLD" (Peter Diamandis with his Massively Transformative Purpose) ... but that idea seems pretty dangerous to me.

How do you survive the walk through the "Desert of "Desertion" if it drags on for decades? Is stairstepping the right way to execute ... to increase your "Line of Super Credibility"? Doesn't it inherently mess up your odds when there is a huge payout far in the future with an incredibly small possibility of reaching the goal?

To me it seems like signing up for another "Rich at 65" recipe, unless there are elements in the suggested process that I am not seeing.

Dangerous how? Please explain the danger.

I am not recommending stairstepping your way to credibility. I am suggesting you become credible enough, and I don't say this lightly, to raise money and earn more credibility as you build what will become the business. By the end of the process you will already be the most credible in your industry. There is NO ONE more credible than me, literally on the planet, to run my government business. I know the in's and out's of how it all works like no one else, even my right hand man. No one does what I do. I am the expert on the issue.

You are assuming an "incredibly small" chance of pay out. Why? Are you suggesting the railroad above won't work? It's so capitalized, so big of a venture, that it almost has no other possibility than to work. When it does, the only competition is the automobile and airplane for the foreseeable future. Also, good luck on the eminent domain doing a second line on the same route, the government will never let that happen. You essentially have a monopoly. That entrepreneur's great grand kids are going to be rich.

Now... the desert of desertion is HARD in any business and I'm always dealing with something from the desert. I'm starting to think it might build some character some wisdom. The answer is you have to stay strong, and I mean VERY strong. It is tough, but worth every moment.

 

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[Andreas Thiel]

I am not recommending stairstepping your way to credibility. I am suggesting you become credible enough, and I don't say this lightly, to raise money and earn more credibility as you build what will become the business. By the end of the process you will already be the most credible in your industry. There is NO ONE more credible than me, literally on the planet, to run my government business. I know the in's and outside of how it all works like no one else, even my right hand man. No one does what I do. I am the expert on the issue.

You are assuming an "incredibly small" chance of pay out. Why? Are you suggesting the railroad above won't work? It's so capitalized, so big of a venture, that it almost has no other possibility than to work. When it does, the only competition is the automobile and airplane for the foreseeable future. Also, good luck on the eminent domain doing a second line on the same route, the government will never let that happen. You essentially have a monopoly. That entrepreneur's great grand kids are going to be rich.

Now... the desert of desertion is HARD in any business and I'm always dealing with something from the desert. I'm starting to think it might build some character some wisdom. The answer is you have to stay strong, and I mean VERY strong. It is tough, but worth every moment.

I think the railroad will work out ... the part that I was not sure about was earlier when they decided to get into the business. But now I see that way of thinking does not make much sense.

Probably I also fell into another trap in my thinking process.
The one thing that I am struggling with might not have anything to do with goals being big or small, but with the prerequisites for running a business in general.
My personal Master Plan revolves around accomplishing a liquidation event alone first, then working on my social / networking skills, teaming up and only after that going for the big idea.
I have tried to play the thought of directly going for big ideas for decades and never managed to come up with even a first step that seemed within reach.

Reading about the way you think about things, I now assume there is another hyperreality thing going on and I need to do some quality mental hygiene or I will fail even with the one-person-endeavor. Probably outreach and networking need to be part of the equation earlier and with a higher priority.

 

[Kak]

I also think that "small business" is at an all time high. It's a bubble. There are like 8 local granite businesses within 10 minutes of my house. There are probably 8 ATV dealerships within 10 minutes of my home. There are probably 30 nail salons and barber shops within 10 minutes of my home. Dentists offices, small pet supply stores, tires, weird one off shops selling cup cakes or something else obscure, self storage, I could go on and on. It's not just here, it's everywhere. Go in to one of those establishments, I've noticed the owner is almost always there... probably because they have to be. Because they can't afford not to be. The world is becoming Amazon and small business is getting more and more competitive.

By the way... There is a "THINK BIG" trend here. What are the masses doing? A large amount of them are starting small businesses. The ones that E-Myth talks about. The average "entrepreneur" doesn't think scale. What do they need? How can you serve them?

Because... While the tire shops, and nail salons are small businesses, they get their tires, tools, nail chemicals from medium or large businesses.

 

[MTEE1985]

I have tried to play the thought of directly going for big ideas for decades and never managed to come up with even a first step that seemed within reach.

Thank you for your openness and honesty, the world could use a lot more of that.

Keep in mind that a big business isn’t just started directly, it begins with the idea and execution on a smaller level, the difference is in exponential vs. linear scale.

Since Unscripted was referenced we can take MJ for example, he could’ve stayed local to Phoenix or Arizona and had a nice small business but he chose to exponentially expand nationwide.

@Kak is referencing above the idea of selling shovels during the gold rush. Would you rather have the 150th nail salon in town or be one of the 5 distributors they buy from? Or one of the 2 manufacturers supplying the distributors in 25 different states?

As he states, the opposite of conventional thinking is the simpler path to view. I look at dropshipping where all these people think they have it made because they think the manufacturer is doing the work, but what about the manufacturer? They have hundreds of salespeople out there in the form of websites selling their products for them, so really, the joke is on who?

You’re 100% correct that a mindset shift is required, and that networking would be a great start. The only way to change your view is to be around people who have that “think big” view. You know the old adage that you can post a job for $100,000 and get 5 resumes, then repost the same job for $40,000 and receive 50? Just like that. Don’t be one of the 50.

 

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[ALC]

The way you think is very interesting @Kak , i'm myself afraid of thinking that big to be honest.
Like becoming the manufacturer or the middle man of a type of business instead of thinking of opening hundreds of small shops.

The way you have to think to open this kind of big businesses however is way different and for sure not for everyone.

 

[Kak]

The way you think is very interesting @Kak , i'm myself afraid of thinking that big to be honest.
Like becoming the manufacturer or the middle man of a type of business instead of thinking of opening hundreds of small shops.

The way you have to think to open this kind of big businesses however is way different and for sure not for everyone.

Not the "middle man" the SOURCE! Become the source of something they want or need. A retailer is the middle man.

Think this through, there are probably a lot of people who agree with you, therefore they are forgoing opportunity to serve the right customer and instead going after the same customer everyone else is... How is that easier? The path of least resistance it IS NOT.

I've opened the small amazon shop. I quickly learned I was swimming with other guppies, and we were all jockeying to become the biggest guppie.

I think you might find a far rockier road in the small business arena going forward, and I encourage you to think bigger. Often thinking bigger IS the path of least resistance. The likelihood of actual success is greater when you think big. I believe most of these small business folks build themselves a job.

What is there to be afraid of? That is ridiculous. One day, 100 years from now, none of this will matter, because you'll be dead.

 

[ChrisR]

I read recently (entrepreneur magazine) that VC firms typically won't even bother with conventional ideas no matter how big they are. That most if not all VC's only want to deal with the next facebook or amazon types of ideas even if it's more risky but may have a bigger pay off. What if someone wanted to get funding for a huge chain of restaurants, movie theaters or something like that?

Has anyone heard anything like this or is that article full of crap?

 

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[Andreas Thiel]

I read recently (entrepreneur magazine) that VC firms typically won't even bother with conventional ideas no matter how big they are. That most if not all VC's only want to deal with the next facebook or amazon types of ideas even if it's more risky but may have a bigger pay off. What if someone wanted to get funding for a huge chain of restaurants, movie theaters or something like that?

Has anyone heard anything like this or is that article full of crap?

I think the gist that I am observing is that investors look mostly at
1. the track record of the founders and
2. (growth) metrics of the business

The idea itself seems to be interesting in "special" kinds of pitches like business plan competitions. Traditional ideas with exceptional branding and growth seem to be the safer bet with VC, while pitching a brilliant idea without soft or even hard proof is less promising.

One example source for that evaluation:
What would you like to know about VC and getting external funding? Ask and I will answer.

Then again, you can go for the big idea and the promising track record and exceptional co-founders.

 

[Kak]

I read recently (entrepreneur magazine) that VC firms typically won't even bother with conventional ideas no matter how big they are. That most if not all VC's only want to deal with the next facebook or amazon types of ideas even if it's more risky but may have a bigger pay off. What if someone wanted to get funding for a huge chain of restaurants, movie theaters or something like that?

Has anyone heard anything like this or is that article full of crap?

Well yes and no.

Conventional businesses mean conventional competition. VCs aren't going to be the traditional place a restaraunteur goes looking for capital. Usually they are started with with an angel round or loans.

The problem is, no one "starts" a chain of restaurants, they snowball it or buy them. One by one. Its scalable, but linear at first. You need to do something different if you want exponential growth.

I'd say VC look for that exponential scalability. If they looked for amazons and facebooks only they wouldn't make any money. So that part is untrue.

Remember it is their job to find good investments. Make yourself a good bet.

 

[Lucid Tech]

I read recently (entrepreneur magazine) that VC firms typically won't even bother with conventional ideas no matter how big they are. That most if not all VC's only want to deal with the next facebook or amazon types of ideas even if it's more risky but may have a bigger pay off. What if someone wanted to get funding for a huge chain of restaurants, movie theaters or something like that?

Has anyone heard anything like this or is that article full of crap?

In VC, the size of the opportunity is one of the biggest criteria. Because roughly 90% of their investments go bust, each investment by necessity must have greater than a 10x potential return. If they are investing in businesses that can only return 5x, the math simply doesn't work.

Even if you have a great team, great idea, good track record, but the best possible return is 3-5x... what's the point? Over time the expected return is negative.

Every firm is different, has different criteria, and a different area of focus. But to assume all VC funds ignore conventional ideas with huge potential simply because they aren't groundbreaking? That's crap.

Sure you'll have the occasional VC firm like Founders Fund whose stated mission is to exclusively focus on groundbreaking, revolutionary ideas.

But the partners there are already rich. Billionaire rich. They care less about returns and more about building the future.


Restaurants and movie theaters are not good industries for venture capital.

If you've never run a restaurant but go to a VC asking for funding for a chain of them, you'll be laughed out of the building.

Alternatively, if you have 5 successful restaurants and want to expand to 50, then you shouldn't be talking to a VC fund in the first place. You should be talking to private equity, strategic partners in the same industry, or getting non-dilutive loans if your cash flow can support it.

VC wants early-mid stage investments with the chance for huge returns. It's like gambling. You're looking for the 50-100x needle in the haystack.

PE wants safer, stable investments that are already cash-flowing and can expect a 30%+ IRR through leverage, bolt-on acquisitions, etc.

 

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[Kak]

In VC, the size of the opportunity is one of the biggest criteria. Because roughly 90% of their investments go bust, each investment by necessity must have greater than a 10x potential return. If they are investing in businesses that can only return 5x, the math simply doesn't work.

Even if you have a great team, great idea, good track record, but the best possible return is 3-5x... what's the point? Over time the expected return is negative.

Every firm is different, has different criteria, and a different area of focus. But to assume all VC funds ignore conventional ideas with huge potential simply because they aren't groundbreaking? That's crap.

Sure you'll have the occasional VC firm like Founders Fund whose stated mission is to exclusively focus on groundbreaking, revolutionary ideas.

But the partners there are already rich. Billionaire rich. They care less about returns and more about building the future.


Restaurants and movie theaters are not good industries for venture capital.

If you've never run a restaurant but go to a VC asking for funding for a chain of them, you'll be laughed out of the building.

Alternatively, if you have 5 successful restaurants and want to expand to 50, then you shouldn't be talking to a VC fund in the first place. You should be talking to private equity, strategic partners in the same industry, or getting non-dilutive loans if your cash flow can support it.

VC wants early-mid stage investments with the chance for huge returns. It's like gambling. You're looking for the 50-100x needle in the haystack.

PE wants safer, stable investments that are already cash-flowing and can expect a 30%+ IRR through leverage, bolt-on acquisitions, etc.

Rep+ Good post

 

[MTEE1985]

You're looking for the 50-100x needle in the haystack.

Well said. In Unscripted speak, they buy a whole bunch of gum balls hoping for a gold one.

Another thing to keep in mind is for them to achieve 50-100x return doesn’t require the next Amazon or Facebook. A major limiting belief hurdle I’ve had to get over was thinking that a big idea meant literally one of the biggest companies in the world, it doesn’t. If they invest $100,000 for 5% of a company that becomes worth $100,000,000 they now have a 50x return in a company that is legally defined as “micro cap”.

If you’re a WSJ subscriber there was an article yesterday highlghting Reid Hoffman who confounded LinkedIn. Early in his career he invested $37,500 in Facebook and received tens of millions in return. Then 6-7 years ago he met the founders of Stripe and passed on the opportunity. These guys have their home runs and their strike outs just like everybody else, we just read about the home runs 10x more than the misses.

To your question @ChrisR I agree that they won’t look at conventional, but they WOULD look at a conventional area/market done in an unconventional way. They like sexy, but they love making money.