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Time or Money: The conclusive thread to how much you should invest?

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Anything related to matters of the mind

NeoDialectic

Successfully Exited the Rat Race
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Feb 11, 2022
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After writing my thread on Idea Generation To Execution: Fastlane Millionaire's Step By Step Guide, @fastlane_dad and I have received A LOT of public and private questions that allude to some form of “What is the right amount of testing I should do before making a large investment” or “How much time or money should I be willing to invest into my venture”.

It is a difficult question to answer without context because so much of it depends on both the venture itself and the person's goals/values. Here are a few variations:
  • Some ventures DEMAND a lot of investment right away (time and/or money) and without an insane amount of investment, the idea is dead in the water. Think Uber. It’s impossible to start making profit without a good amount of societal buy in where the city is covered by both drivers and customers.
  • Some ventures require near zero investment and the success is purely based off a trade of money for value. The investment may even only need to be made once the value is paid for. For example things like web services.
  • Some people have substantially more time than money
  • Some people have substantially more money than time
  • Some people jive with the quality approach to business
  • Some people jive with the quantity approach to business
The list is never ending and then there are blends of all of these. All these are valid approaches. Most successful business abide by some basic form of CENTS and other principles that MJ espouses. So things like providing value to the customer should be fundamental to all businesses regardless of the archetype of the business. But the details can be done in never ending combinations.

So if the Louis Vuitton model, the Uber model, and the Walmart model all work well enough to make billion dollar companies, how are you supposed to know which one to do for your business? There are advantages and disadvantages to all models and after a lot of thinking on the topic, I think it just comes down to picking a model that you jive with best. One that you don’t mind the disadvantages as much as you revel in the advantages. That may mean you pass on a good idea if they right way to execute it doesn't jive with your requirements.

This will probably be a multi-part series thread, with @fastlane_dad taking the reins at times too. We are also open to anyone with experience adding their own ideas to the topic! Maybe by page 100 we will have something conclusive :rofl:

The only common threads that I have been able to identify that reliably predicts whether someone will succeed is the willingness to learn, adapt, and persevere. You do different approaches again and again until you succeed. The point of this thread may end up morphing, but without further ado, here is the first brick.

The Venture Capitalist Way

You test the market with one thing, and if the market doesn't like it, you move onto the next thing. No skin off your back. You thought you were laying gold bricks, but it turns out no one wants your gold. A product/service that is a true productocracy will have it's own gravity surrounding it. You will have to do very little push. You will know it when you hit it.

I think a big portion of starting entrepreneurs are young people that have a lot more time than they do money. So good advice to them could be to start at near zero financial investment with testing and scale up from there. It would be prudent for them to follow some kind of systematic testing process. Generally people think of virtual products when they think low investment, but that is far from the only way. One of the points of my step by step idea guide thread was to show that you can substitutes lack of funds with creative low investment solutions even for physical products.

However, let's say you have done your homework and you don't want to waste another month testing the market. Let's say that the initial order of widgets costs $5,000 and while no one likes losing money, you don't mind risking it and when the business fails you have plenty more $5k's to keep investing in new ideas..... Well then it may be smart to just send it! Get the product made and start selling. Time is money afterall, and you may be short on time but have plenty of money. Depending on how hungry you are, it may even be prudent for you to test 5 ideas at the same time throwing $5k at each!

Then there is everything in between. The correct rate of investment vs testing will be one where failures leave you standing and immediately ready for more.

Another way to think about this. If you know anything about Venture Capital (or angel investing or private equity, or etc..), you will know that they invest in 10 startups, knowing that most will fail and 1 will be a success that pays for the rest of them and their kids private school. Successful Venture Capitalists never invest all their funds into one company. Treat your business life as your portfolio. Each of your ideas are startup and you are the investing Venture Capitalist. Know that for you to be successful you may have to go through many iterations(startups). So as a Venture Capitalist investing in your life, invest in each one the amount that will allow you to play the averages game and survive long enough to statistically guarantee victory. If you are a $1,000 fund, that may be a little. If you are a $100,000,000 fund, be generous with the amount of investments you make and how much you give each one. You are funding the next Uber afterall! Keep in mind that unlike multiple people with entire teams behind them, you are just one person. These startups should bias towards one at a time rather than 10 at a time!
 
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fastlane_dad

8 Figure Fastlane Graduate
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Jun 20, 2017
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DEDICATION - DON'T ABANDON THE SHIP JUST YET

On the flip side, the counter argument is carefully prodding your idea through the test of CENTS - and then learning and evolving with your project. Don't abandon the ship quite that fast to try out 'various ideas'.

I see too much of 'moving on quick' to new ventures, and greener pastures - without fully even diving into testing your market out! People quit on themselves faster then we quit on others - and my answer MANY times to those around me - is twisting the business idea on the head, and letting them know it's not the product many times - but the attempt at marketing.

While 'quick to fail' and 'invest a bit into 5 projects' might work - MANY instances of success I've seen is where the owner devotes all their heart and soul into the business and acts AS IF failure is not an option.

This might have something to do also with the barrier of entry - heck if you pick a super easy one (drop-shipping alibaba garden hoses) - well of course it's easy for you to move on from that 'idea' - you haven't invested much into that! Neither does it solve any pain points - you haven't worked with any manufacturers to put a new spin, developed a prototype and stuck to see your product through.

If you go all in on the product / solving a pain-point / providing value - you seamlessly DO NOT need to skip around and instead next step is focusing on an angle of marketing and promotion that resonates with finding your crowd. Yes - it will and does happen that supposedly sometimes there is just NO MARKET for the product you are selling - but that should of been at least somewhat eliminated in the 'idea' stage (Preliminary Research Framework).

A lot of what I see and then advise, especially to novices and advocate - is hey, give your plan a fair chance. Focus on your product and the pain point it solves. Try various marketing angles. Learn how to promote and make an attractive website. Don't be in a rush to 'move on'. Move on only when many times you see no other option to call it a day.

In the past 15 years @NeoDialectic and I started probably close to a dozen businesses and 'grand ideas'. Only about 25% of them turned into a money making venture. 1 of those turned into a true fastlane success. The funny thing now that we look back - the ideas and businesses we abandoned were not because they were 'bad ideas' - we just didn't see results fast enough, and moved on to the new shiny object. When we discuss ALL of our previous endeavors, we have zero doubts in our mind that ANY ONE of them could have had a level of success and sales we would of been proud and happy with.

There are more then one way of going about working, developing, testing and marketing your new FASTLANE idea. The point here is to try and think things through (and get feedback and advice) - on your idea / product / research so that you do not have to skip around ship every month looking for a 'new gig to get into'.

Sure as a marketer, and an entrepreneur - even if your idea is 'BRAND XYZ of colored pencils' - my mind naturally gravitates towards advising you on how to position your product to have a shot at sales (maybe stand right outside of art school...etc). Many times you do not need to reinvent the wheel on the product side to see success. It's all a fusion of product / marketing / promotion - that you should ideally map out of have a rough plan - as you will encounter stumbling blocks on each forefront many times over.
 

Mathuin

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Great posts guys, thanks!
 

fastlane_dad

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How has this thread fallen through the cracks?? Awesome value here!
Thanks! @NeoDialectic and I try and put a lot of time and effort into some of the posts here - and many times the goal becomes showing 'fastlaners' that there never a one-ultimate way to think about business, or a one-size fits all solution to all.

Many times there are many lenses to view business with - and ironically they can all paradoxically be CORRECT!

Quick to FAIL - and STICKING to IT (dedication) - have all become 'buzzwords' in the entrepreneur community. I feel like the up and coming student of the fastlane is always confused - which is the way? The truth is they are all the ways. You must develop a framework that works for you and your business, and know when it's right to follow what strategy, and how to develop a knack for when its time to double down with investment (time/money) - OR throw in the towel and move on.

We have experienced both - throwing in the towel and moving on (probably a dozen or so times) , but also serving up a fat juicy platter of DEDICATION , that led to going all in on building up our fastlane business that eventually got sold. So both are right - at different times.

Looking back though it's always funny to witness or see the ideas and business plans we THREW in the towel on, turned into massive success(es) by someone else.

Not to say we couldn't have done the same with some of those businesses - they just for one reason or another were not the right fit for us at that particular time, with the particular funds or time to invest that we had.
 

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