PhaseTwo Strategies for growing business

Great story on opportunity from OUTLIERS by Malcolm Gladwell

I am about half way through Malcolm Gladwell's OUTLIERS.  First of all, let me say that, thus far, I am finding this book fascinating.  So far, it's my favorite Gladwell book to date.  But this post isn't meant to be a review of the book (I will right one once I'm finished).  However, I wanted to offer one story that I found fun and relevant to all of those current and aspiring entrepreneurs looking for and shaping opportunities.  In chapter five, Gladwell tells the story of Louis Borgenicht, a "off-the-boat Jewish immigrant living in NYC in the early 1900's.  The story recounts the start of Mr. Borgenicht's (ultimately) successful women's and children's apparel business.  This part of the story recounts his search for an opportunity after the birth of his second child.  At the time, he was making $13/week selling fish from a street cart.  He needed a way to make more money.  Here is the excerpt from the book:

The answer came to him after five long days of walking up and down the streets of the Lower East Side, just as he was about to give up hope.  He was sitting on an over-turned box, eating a late lunch of the sandwiches his wife had made for him.  It was clothes.  Everywhere around him stores were opening -- suits, dresses, overalls, shirts, skirts, blouses, trousers, all made and ready to be worn.  Coming from a world where clothing was sewn at home by hand or made to order by tailors, this was a revelation.  

"To me, the greatest wonder in this was not the mere quantity of garments -- although that was a miracle in itself --" he would write five years later, after he became a prosperous manufacturer of women's and children's clothing, "but the fact that in America even poor people could save all the dreary, time consuming labor of making their own clothes simply by going into a store and walking out with what they needed.  There was a field to go into, a field to thrill to."  

Borgenicht took out a small notebook.  Everywhere he went, he wrote down what people were wearing and what was for sale -- menswear, women's wear, children's wear.  he wanted to find a "novel" item, something that people would wear that was not being sold in the stores.  For four more days, he walked the streets.  On the evening of the final day, as he walked toward home, he saw a half dozen girls playing hopscotch.  One of the girls was wearing a tiny embroidered apron over her dress, cut low in the front with a tie in the back, and it struck him, suddenly, that in his previous days of relentlessly inventorying the clothing shops of the Lower East Side, he had never seen one of those aprons for sale.  

And this was the start of his garment business.  It's a simple story, but a good one.  The lesson here is DIFFERENTIATION.  Someone once said that the goal of any business strategy is to ensure differentiation.  While I would argue that the goal of any business strategy is to design a method for achieving your ultimate business goals, I would agree that every business goal should be firmly rooted in differentiation.   

Fun stuff...

DS

find this book fantastic.  

Book -- THE DIP by Seth Godin

I have been meaning to read this book for a while as I usually pick up Seth's books when they come out.  I find them to be quick, fun and insightful reads.  However, I was a little worried, as I read THE DIP, that this book wasn't going to live up to my expectation of Seth's other stuff.  And for a while it didn't.  

THE DIP attempts to debunk the age-old adage, "Winners never quit and quitters never win."  He was attempting to argue that this adage is a terrible piece of advice and that winners do, in fact, quit on a regular basis.  While he stated his goal very clearly in the beginning of the book, I didn't think he actually made the point in any effective way until the very end.  The middle of the book felt like a long, unfunny Abbott and Costello bit.    He seemed to argue that one should quit activities that aren't going to prove fruitful while at the same time arguing that one can never become successful if they quit.  On several occasions, I found myself asking, "Wait...should I quit or should I not quit?  I'm confused.  What are you saying, Seth?!?!"  It was a bit frustrating.  That is until I reached the end of the book and it all became clear to me (I don't know if this is because Seth was more clear at the end of the book or if I became increasingly more intelligent as I read).  

Either way, in a generous attempt to free my loyal readers from the frustrations that I felt reading THE DIP, I will quickly summarize the whole point of the book in just a few short lines:

• Point #1:  The "BEST" in any category or market has at least 10x the success of the average person/product in that category.  
• Point #2:  Therefore...be the BEST, dammit!   If you are going to spend any time, energy or money on any experience, journey or activity -- start with the Goal of becoming the BEST!  There is no excuse for mediocrity.
• Point #3:  Understand that in order to become the BEST at anything, it's going to take work and you  are going to be faced with a period of significant pain and struggle.  This period of pain and struggle is called The Dip.  Gain a full understanding of The Dip in any pursuit BEFORE starting.   
• Point #4:  If The Dip scares you, quit before you get there.  Better yet, quit before you start.  
• Point #5:  If you decide to pursue the activity or journey, commit to get through The Dip.  Never quit in The Dip.  Get through it.  All the best do. 

Now you have time to read the new Harry Potter tome... :)

DS

Book -- HOW TO GET RICH by Felix Dennis

I just finished reading Felix Dennis' new book, HOW TO GET RICH.  Felix Dennis is a Brit entrepreneur that has built a great deal of wealth since his days as a broke hippy, pushing magazines one-by-one on the dirty streets of London.  He is most well know as the founder of Maxim magazine.  

At first glance, this doesn't look like a worthwhile business read.  It could easily have been another bloated millionaire biography written by a ghost writer with very little contribution from the entrepreneur.  After reading the first couple of chapters, I thought it was going in that direction.  However, I have to say, after the first few chapters -- I was pleasantly surprised by this book and found it to be a great read.  I thought Mr. Dennis was very candid, open and genuine in the telling of his story (on several occasions he talked about his drug and whore binges).  And I firmly believe that he wrote the book himself.  After finishing, I was actually sorry it was over.  I was hungry for more of his stories.  But the book wasn't really intended as a biography -- more of an instruction manual for becoming rich.  From someone who has actually done it -- from scratch.  

While I recommend that you read this book, I will post Mr. Dennis' 8 Secrets for Getting Rich for those who don't want to spend the time reading.  While I don't think this list is helpful (because the context is important), I produce it anyway:

1. Analyze your need.  Desire is insufficient.  Compulsion is mandatory.
2. Cut loose from negative influences.  Never give in.  Stay the course.  
3. Ignore "great ideas."  Concentrate on great execution. 
4. Focus.  Keep your eye on the ball marked "The Money is Here." 
5. Hire talent smarter than you.  Delegate.  Share the annual pie. 
6. Ownership is the real "secret."  Hold on to every percentage point you can. 
7. Sell before you need to, or when bored.  Empty your mind when negotiating. 
8. Fear nothing and no one.  Get rich.  Remember to give it all away. 

Now that I've written that list, I realize how cliche it sounds.  It's a bad representation of the book.  The book is not that cliche.  But you don't have to believe me -- read it for yourself.  

Also, I did like his mantra, so I'll share that:  

"The world is full of money.  Some of it has your name on it.  All you have to do is collect it."

If this is the first thought in your head as you roll out of bed every morning, you'll probably become richer than you would otherwise. 

(by the way, one of the other things I liked about this story is that Mr. Dennis built all his wealth WITHOUT VC money...not a dime.  Awesome...)

DS