This is part 2 of my notes from The Boron Letters. The next chapters (5 to 8) get into how to make money and how to get rich.
Chapter 5 Become a student of markets / a student of reality
This one is about how to make money by observing 'the markets'. And it's a good one.
Usually, when someone asks me what is the #1 big secret to making money I tell them they should get involved in whatever excites them the most.
Money, in my opinion, especially big money, is most often a by product of enthusiasm.
Note that he doesn't mention passion or doing what you feel passionate about. It's doing something that interests you. And why? Why might this be some fundamental truth about entrepreneurship?
I think the answer is this: if you do something that interests you then you are likely to keep doing it for a long time. Doing one thing for a long time allows your efforts to compound. And this matches with the "How to get rich without getting lucky" thread, where Naval writes
All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
Holy shit. A pattern is beginning to emerge (as Prof. Mintz would say).
The 2nd piece of advice is about becoming a "student of markets".
The very first thing you must come to realize is that you must become a "student of markets". Not products. Not techniques. Not copywriting. The most important thing you must learn is what people want to buy.
And you do this by paying attention to what people already do buy. This advice matches with the YC motto of "make something people want".
The 3rd and related advice is about reality. Going by what people do and not by what they say (in a survey for example).
If you want to be a top notch marketing
manperson you have to know how it is. How it really is. Not how people (or you) wish it was or how they think it is. No. You must become a "student of reality"
To find out what people buy, we could also look at what people search for (as Sabba noted about VEED on his IndieHackers pod). And this can be done with keyword research using one of the SEO tools. That would be the modern day equivalent of the "Direct Mail List Book" the author mentions.
Chapter 6 How to sell the most hamburgers
The hamburger stand thought experiment
In a contest to see who would sell the most hamburgers, what advantage would you most like to have on your side?
The possible answers could be: superior meat, sesame seed buns, location, price.
The real answer is a STARVING CROWD. That is the only advantage you'd need to sell the most hamburgers.
[A starving crowd that is not vegetarian, just sayin]
But point taken. Markets. Demand. That's what matters most.
What I am trying to teach you here is to constantly be on the look out for groups of people (markets) who have demonstrated that they are starving (or at least hungry!) for some particular product or service.
Selling a book on how to invest money
The author walks down ten possibilities for a customer list to promote a book on how to invest money. Starting with bad ideas to ending with the best option.
Possibility #1: any body whose name and address you can get from the phone book.
Bad idea. All IndieHackers know this. All the way down to the best option:
Possibility #10: Your own customer list. People who have bought something from you before. (provided they are satisfied customers)
Other good options in the middle are:
High income people who have bought something by mail before (doesn't matter what).
Wealthy people who have bought another product similar to yours before and have paid big money for it. And have recently made the purchase.
A customer list that your 'list broker' tells you is working like crazy for offers similar to yours.
I am not sure what a modern day equivalent of a 'list broker' is but how about any service whose incentives are aligned with yours?
For a variety of reasons, many lists that should work don't. Who knows why? It really doesn't matter why. What matters is that a list is or is not responsive. And the best way to know what lists are hot is to have a good relationship with a good honest broker. In fact, if you have a good relationship with a good broker one of the things he will do (because it is to his financial advantage) is to keep an eye out for hot lists that are likely to work for your offers.
Chapter 7 Recency, Frequency, Unit of Sale
There are three guidelines to use when picking a list of people to promote your product to:
Recency - The more recently a person has purchased (by mail) something similar to what you are selling, the more receptive
he they will be to your offer.
Frequency - The more often a person buys a particular item, the higher
his their desire for that type of product or service.
Unit of sale - a person who recently spent a $100 on a product is a hotter prospect than someone who has only paid $10.
The recency one feels counterintuitive. If someone has already bought something similar to your product, aren't they done. Their needs are satisfied, their problem solved so why would they buy your solution also?
Perhaps not. The point the author is making is that recency is the most important factor of all.
[Lesson] Be on the lookout for ads and direct mail pieces that you see over and over. What this means is that whoever is running the ad has hit a nerve.
Today this could mean be on the lookout for marketing strategies that are working for others (with a business model and context similar to yours). Be on the lookout for distribution channels that are working.
[Lesson] Go by what people do. Not what people say. This is a repeat lesson but in the context of recency/frequency/unit-of-sale, it all focuses on people who have actually bought something.
Sell people what they want to buy
Lastly, there is a bit of ranting about clients not letting him do his job his way (write copy for them) or being reluctant to pay their bills.
Chapter 8 What to do when you are tired
If you halt forward progress every time you feel a little tired or irritable or whatever, then you are suffering from a lack of discipline. On the other hand, if you keep pushing when you are chronically tired or really sick, then you are a fool.
[Lesson] What to do when you don't feel like working is to start working anyway. Then pay attention to what your brain and body is telling you. After working for a while, you truly feel worse then stop and quit. If you just feel a little crummy, keep plugging along.
[aside] The mention of V-8. That reminds of mill hill deli. And also drinks on airplanes. It is preferable to the sugary beverage. Though it can be a little salty.
[Lesson] This lesson is repeated again, on purpose. Be skeptical of what people say. Be skeptical of surveys. Believe in numbers.
The truth can be determined NOT by how people use their mouth but rather how they use their wallet.
The author goes on to say "If it looks like a duck, walks like a duck and quacks like a duck - guess what? It's probably a duck!"
[aside] Hey! that's
duck typing in programming languages (e.g. Ruby, Python). An
object is of a given
type if it responds to methods of that type and can be used when that type is expected, etc.
[Personal Observation] The author has used the N-word twice now, and called someone a slave, casually. In 1984 (20 years after the civil rights act). People who are great successes and whose business advice is highly regarded are not automatically assumed to be humans with good characters. If you knew them in real life, no guarantee that you'd end up friends with them. And yet, this is not required. To learn from them. You want to take their advice and emulate them. But to an extent. A paradox to hold in your head.
[Lesson] Author believes that people are more likely to buy when they are at an emotional turning point in their lives. Examples being when they just had a baby, just gotten married, lost a loved one, just filed bankruptcy, just gotten a raise, just purchased a new car, home.
Yeah. This is what targeted advertising is all about on the Internet.
He goes through an example with numbers (including profit and cost of getting a scientist to write such a report for him to sell) of selling a report titled "How to Raise Your Child's IQ Before It Is Even Born!" to a list of names of pregnant women. Yeah that'd work. Useful or not.
Also he observes his mental state by the end of this writing -- concludes that he feels better and is glad he decided not to rest.